Spending still high in party budget

Economists have warned that public spending will fuel higher inflation. With less than ten days to go until the election, both the Coalition and the Labor Party spent yesterday playing down the dollar value of their respective policy announcements to convince voters that they were sound economic managers.

Labor leader Kevin Rudd unveiled a modest $3.5 billion in spending at yesterday’s launch compared with the Coalition’s $9.3 billion cost announcements at their launch on Monday. "Unlike Mr Howard, I don't stand before you with a bag full of irresponsible promises that could put upward pressure on inflation," he said.
 
John Howard accused Rudd of deceiving the public as to the actual cost of his promises, saying the Labor Party had not yet provided costing for maintaining economic growth. The Coalition election promises currently total $65 billion while Labor Party spending sits at $56.5 billion.
 
ANZ chief economist Saul Eslake welcomed both the major parties’ last minute restraint. "I'm not sure it is enough to avoid further increases in interest rates over the first half of 2008, but at least it's an acknowledgement that this pork-fest had gone too far," said Eslake.