Federal Election 2025: Chalmers takes aim at Coalition’s ‘savage cuts’

Jim Chalmers has blasted the Coalition’s “savage cuts” after the opposition released its election policy costings promising “a $14bn bottom-line budget improvement over the forward estimates”.

The costings forecast the budget deficits would be $7.9bn worse off than under a re-elected Albanese government for two years before climbing to at least $10bn less than Labor in the following two years.

With key savings coming from cuts to the public service and foreign aid, the Treasurer said the Coalition was offering “a recipe for higher taxes”.

“Higher taxes, savage cuts and still bigger deficits under the Coalition are in their costings today,” Mr Chalmers told reporters in Brisbane.

“Now there are savage cuts in Peter Dutton’s costings, but they are just the beginning.

“Savage cuts to training, savage cuts to housing are savage cuts to energy are higher income taxes for 14 million Australians and more student debt for students.”

Announcing the long-awaited accounting a little over an hour earlier, shadow treasurer Angus Taylor slammed Labor’s handling of the economy over the past three years and warned Australia was heading toward “$1.2 trillion of debt”.

“In contrast … what we’ve announced today is a $14bn bottom-line budget improvement over the forward estimates,” Mr Taylor told reporters in Sydney.

“But on top of that, we’ve laid out a $40bn improvement in the debt position over that same time period.”

He promised “the biggest improvement in the budget position” while spruiking the Coalition’s flagship immediate cost-of-living relief measures – cutting the fuel excise by 25 cents a litre for 12 months and a $1200 “a tax cut for first home buyers”.

But for the first two years, the budget position would be $7.9bn worse off before a $21.8bn rebound.

As for how the Coalition would achieve its budget goals, finance spokeswoman Jane Hume was clear.

“First and foremost, we will reduce government spending as a share of the economy,” Senator Hume told the same press conference.

“We will cut waste, control expenditure growth and ensure that every dollar that is spent by government is focused on delivering essential services and strengthening our nation, not growing bureaucracy.”

She highlighted the opposition’s flagship cost-savings plan to “sensibly reduce the size of the (Australian Public Service) by 41,000 over a period of five years”, insisting it would do so “through a hiring freeze and through natural attrition … while protecting the services delivery and national security positions”.

The plan would save $17.2bn, according to the Coalition.

Though, experts have said the move — which were supposed to be Canberra-based jobs — was impossible without carving into services the Coalition promised not to touch.

Peter Dutton has repeatedly said the public service cull would take place in the capital.

But pressed for details, Senator Hume contradicted her boss, saying the cuts would “focus on Canberra”.

“I should be clear, about 5000 or so of the 41,000 are people that haven’t actually been hired yet,” she said.

According to official data, some 7500 Canberra-based public service jobs were added between June 2022 and June 2024, as opposed to the 36,000 claimed by the opposition.

The Coalition would also hike visa fees to offset its proposed permanent migration cuts, which would cost the budget some $4.2bn.

It also added some detail to the nuclear policy, earmarking $36.4bn to 2035 and $118.2bn longer term.

Foreign aid cuts ‘catastrophic’

Aid groups have taken aim at the Coalition’s proposed $813.5m cut to the foreign aid budget, echoing a defining policy of Donald Trump’s administration in the US.

The consequences of the US’s decision to freeze foreign assistance plunged global humanitarian works into chaos, leaving agencies scrambling for funds.

The Coalition did clarify a carve out for the Pacific, where Australia is locked in a battle for influence with China.

“At a time of catastrophic global need, we’d hoped to see an increase in lifesaving aid, not an $813.5m cut that will likely hurt the world’s most vulnerable children,” Save the Children chief executive Mat Tinkler said.

“We welcome the decision to spare the Pacific, Indonesia and Timor-Leste.

“But Australia has a responsibility beyond our region.

“We cannot turn our backs on Africa, South Asia and investment into critical global funds, particularly at a time when children there need us more than ever.”

Meanwhile, the Australian Council for International Development said the proposal “risks weakening one of Australia’s most effective tools for peace, prosperity and stability”.

“A strong aid program is not just generous — it is smart, strategic, and deeply aligned with Australia’s national interest,” chief executive Matthew Maury said.

“We acknowledge and appreciate that the current government has held the line on aid in difficult fiscal conditions.

“We continue to urge all political leaders to work together on a long-term plan to restore aid to 1 per cent of the federal budget — reclaiming the ambition that once united leaders across the political spectrum.”