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AAP FACTCHECK - A raucous political debate has emerged over claims $347 billion has been added to spending under Labor, as both major parties sharpen their attack lines ahead of the federal election.
The coalition is accusing the government of a "spend-a-thon", sparking counter claims from Labor ministers that Peter Dutton will cut the $347 billion in essential services if elected, including Medicare.
Experts told AAP FactCheck the figure is problematic, as are both the coalition's and Labor's claims.
The sparring began last December when Opposition finance spokeswoman Jane Hume criticised Labor over four-year spending forecasts outlined in the 2024-25 mid-year fiscal update (MYEFO).
"Labor has added $347 billion in spending since the election," Senator Hume said on Instagram. "They are the biggest spending government outside of wartime or a global crisis."
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The figure was repeated by Mr Dutton in an ABC Insiders interview in early February.
"To put it into perspective, the government's spent an extra $347 billion," Mr Dutton said.
In response, a spokesperson for Finance Minister Katy Gallagher told The Nightly: "Peter Dutton has said he will cut $347 billion in spending if elected, but is keeping the detail of those cuts secret until after the election."
In a press release, Senator Gallagher added that this would include "cuts to vital services like Medicare".
Projections and parameters: $347 billion unpacked
Even in the context of a federal budget, $347 billion is a large sum - it's almost as much as Australia will likely spend on nuclear-powered submarines over the next 30 years.
But there's no sign of it in the budget papers.
Senator Hume's office told AAP FactCheck the figure is a comparison of totals in the 2022 Pre-election Economic and Fiscal Outlook (page 6), known as the PEFO, and payments forecast in Labor's latest MYEFO (p335), from 2023-24 to 2027-28.
The idea is that this shows the gap between payments forecast under the former coalition government and what's now expected after almost three years of Labor in charge.
This is not about spending that's happened, but rather money the government expects to spend - or was expected, in the case of the coalition's PEFO.
Most of what's in the budget is actually a plan rather than a record, with many policies outlaying spending over a four-year period called the "forward estimates".
These numbers change every year, partly due to new policies or the government ditching old plans, but also because of shifts in what are known as economic "parameters" in the budget.
Stephen Bartos, an expert in government finance at the University of Canberra, said the "payments" the coalition has used include both the impact of policy changes and these parameters, including inflation, population growth and exchange rates.
"[Payments are] the total of all government spending in a year," Professor Bartos told AAP FactCheck.
"In most years, government policy has far less impact on the payments numbers than other changes due to what are known as parameters."
Miranda Stewart, a tax expert at the University of Melbourne and Australian National University, said unemployment can be one parameter that affects payments, as it changes demand for federal income support.
"One issue with the coalition's figure is that it does not appear to differentiate between the effect of policy decisions and the effect of parameter and other variations that may change payment estimates," Professor Stewart told AAP FactCheck.
Chris Richardson, a leading federal budget analyst and independent economist, said high inflation has had a big impact on both spending and revenue over the past few years.
One reason is because many government support programs are indexed to inflation, meaning if inflation increases, the payment does too.
"Expenses are higher when inflation is higher," Mr Richardson told AAP FactCheck.
Coalition leaves out key context
Experts told AAP FactCheck this is essential context, because the 2022 PEFO the coalition has used as the basis for its comparison with Labor assumed inflation would peak at just 4.25 per cent in 2021-22 (p5) before decreasing to 2.5 per cent in 2025-26.
Those Treasury forecasts were used as the basis to forecast anticipated budget payments.
But the actual inflation rate had already risen to 6.1 per cent by the time Labor was elected, a figure that was reflected in the government's first budget in October 2022 (p6) and fed into payments.
Estimates of the actual spending impact of Labor's policies are much lower than $347 billion, experts said.
Mr Richardson put the total net spending increase from policy under Labor at $124 billion - including about $43 billion in offsetting savings measures - saying he prefers to measure deliberate policy decisions when assessing government spending.
David Bond, an accounting expert at UNSW Business School, attempted to replicate the coalition's calculations for AAP FactCheck.
He produced a reconciliation from budget documents that split changes in payments between policy spending and parameter variations between 2023-24 and 2026-27.
The 2027-28 financial year was not included because it relied on medium-term projections, which Treasury warns are subject to a greater level of uncertainty than the four-year period included in the forward estimates.
Dr Bond found Labor's policies accounted for $111 billion of the rise in payments in the period assessed, or about 40 per cent of the total, while changes in parameters accounted for $117 billion.
He said the more specific measure of policy-related spending, which is presented in the budget, is key context that the coalition has omitted from its claims.
"Could an argument be made that there are indirect impacts of government decisions on parameters? I would say yes," Dr Bond told AAP FactCheck.
"But if you're looking at policy decisions as things that have been introduced, then I can't see how the $347 billion could be the number."
Labor mischaracterises Mr Dutton's comments
Labor has attempted to flip the figure and attack the coalition, with Senator Gallagher, Treasurer Jim Chalmers and other Labor MPs claiming the coalition will rip $347 billion from the budget if elected, including from essential frontline services.
Asked for evidence for this claim, Senator Gallagher's office directed AAP FactCheck to public statements made by coalition members about the $347 billion, including Mr Dutton.
But while Mr Dutton has said the coalition would seek to cut some spending, he has never referenced $347 billion as the scope of any proposed cuts or implied that would be the case.
More specifically, the coalition has repeatedly ruled out cuts to services like Medicare.
"I want to make sure that we can provide further support," Mr Dutton said on Insiders.
"We've announced further support for training places for doctors, for Medicare services around mental health.
"Frontline services we want to bolster and we want to make sure that that is being delivered."
Mr Dutton also promised to price-match Labor's $8.5 billion commitment to boost bulk-billed GP visits.
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