Labor To Fund AU$10 Billion Agenda Through Cuts To Consultants And Higher Student Visa Fees

A government crackdown on consultants will help fund the bulk of Labor's AU$10 billion in election promises, while ensuring public servants take on more core responsibilities themselves, according to pre-election costings released on Monday.

Treasurer Jim Chalmers revealed the budget would be AU$1 billion better off over the next four years compared to the March budget, which forecasted deficits exceeding AU$150 billion during the same period, ABC News reported.

The updated budget figures include AU$6.4 billion in savings from reduced reliance on consultants, along with AU$740 million in additional revenue generated by raising student visa application fees. From July 1, the cost of student visas will increase to AU$2,000, up from AU$1,600, contributing to total new savings of more than AU$7 billion.

Finance Minister Katy Gallagher noted that the government spent approximately AU$100 billion annually on procurement and contracts. The AU$6.4 billion in savings from cutting back on consultants represents about 1.6% of the total annual outlays.

She also pointed out that there was still "room to make further reductions in that area."

"They don't affect programs or people, and that's a real contrast, I think, with what the opposition are saying, which is ... in the order of AU$28 billion worth of cuts and 41,000 jobs they want to sack from the public services. We've taken a different approach," Gallagher urged.

While the updated costings included no major surprises, they did confirm several significant election promises. One of the notable commitments is a nationwide 24/7 health advice and after-hours GP telehealth service backed by Medicare, which is expected to cost AU$204.5 million.

However, only AU$16.5 million of Labor's promised AU$1 billion mental health package will be delivered in the next financial year, The Guardian reported.

Rising public spending threatens AAA rating

The release of the costings coincided with a warning from one of the world's top ratings agencies, S&P Global Ratings, which cautioned that soaring public spending could jeopardize Australia's coveted AAA credit rating. S&P highlighted the nation's escalating spending on welfare, military outlays, and tax benefits as key concerns.

The agency emphasized that how the elected government funds its campaign promises and manages rising expenditures will be critical for maintaining the AAA rating.

Australia remains one of only nine countries worldwide to hold a AAA rating from all three major credit agencies.

In response to S&P's warning, Chalmers reassured that Labor had already delivered "the biggest positive turnaround in a budget of any parliamentary term ever."

He asserted that the budget was stronger as the campaign progressed and highlighted that the biggest risk to Australia's AAA rating lay with the Coalition and Peter Dutton.