Bob Brown says proposed Coalition spending cuts could cause a recession

• UPDATED Ben Packham
• From: The Australian
• August 12, 2011 2:07PM

Greens leader Bob Brown warns Coalition spending cuts could tip Australia into recession.

Picture: Kym Smith Source: The Australian

GREENS leader Bob Brown has warned a Coalition government could tip Australia into recession through massive spending cuts to fund its election commitments.

While criticising the Labor government's return to surplus timetable, Senator Brown said the Coalition's $70 billion savings plan would put thousands of Australians out of work and threaten the viability of small businesses.

He said the Coalition's spending cuts would be dramatically magnified by a revenue slump if economic circumstances deteriorated.

“If the global economy takes another significant downturn this $70 billion hole would most certainly increase, and these reckless Coalition policies could send the economy into recession,” he said in Canberra.

The opposition faces a formidable task to make sufficient budget savings to cut the carbon and mining taxes and deliver personal income taxes, as promised.

Earlier, opposition treasury spokesman Joe Hockey admitted the Coalition's multi-billion dollar savings target was a “significant number”, but was unapologetic on the need for budget cuts.

He said the necessary savings were a small proportion of the overall budget, and could be found by eliminating waste.

“The total amount that you have to find, from our perspective, it's a significant number,” he told Seven's Sunrise program.

“But ... we are going through the budget line by line, item by item.

“The government - Liberal or Labor - will spend $1500 billion over the next four years.

“(That's) a massive amount of money and therefore finding $50 or $60 or $70 billion is about identifying waste, identifying areas where you do not need to proceed with programs. We make no apologies for it.”

Senator Brown said the Coalition's savings plan would force the closure of hospitals and schools and reduce spending on defence.

He called on Tony Abbott to detail exactly where he would find the savings to make up for the incoming revenue expected from the carbon and mining taxes over the forward estimates.

He also challenged the Opposition Leader to a public debate on economic policy.

Labor frontbencher Tony Burke said the Coalition could not deliver such large savings without massive cuts to services.

“If you're going to have to find that much in cuts, you're either going to have significant increases in taxes, significant cuts to the pension. They're the only ways you can find that sort of money,” Mr Burke told Sunrise.

Mr Hockey guaranteed that under the Liberal Party, government would be smaller.

“There will be less tax, there will be less government expenditure, but you will have smaller government as a percentage of the economy.”

Julia Gillard told a community forum in Perth last night that the government was committed to introducing its carbon tax despite global economic turmoil.

“What the Treasury is telling us is, we can put a price on carbon and the economy will continue to grow,” the Prime Minister said.

“If we can cut carbon pollution by 160 million tonnes and still have more jobs, still have economic growth ... why wouldn't you do it?”

But Mr Abbott today reiterated his call for the carbon and mining taxes to be axed.

“I think the responsible thing to do is to stop hitting the economy with new taxes,” Mr Abbott told the Nine Network.”