Major party election commitments

Further information on announced election platforms

 

This section provides an overview of other aspects of the financial impact of commitments beyond the budget aggregates. Appendix E provides further detail on the PBO's method and approach.

Material differences from party estimates

Prior to polling day, Labor and the Coalition released their aggregate commitment estimates over the forward estimates.[12] The PBO's estimates are not significantly different from what the parties announced. While there are some material differences for individual commitments, when taken together these differences amount to not more than 0.1% of GDP in any given year.

The Greens did not release an aggregate assessment of fiscal impacts of commitments prior to polling day.

Overarching commitments

The Coalition and the Greens both announced overarching commitments for areas of spending or revenue. These have been included in the estimates of the fiscal impact of the party's platform if they have been determined to result in specific and material impacts.

The Coalition commitment Increase defence spending – including investing in a fourth F-35A Lightning Squadron (ECR-2025-2734), which lifts defence spending to 3% of GDP, was included as a commitment and is the single largest spending item in the Coalition's platform.

The Coalition also has a policy for taxation receipts to not exceed 23.9% of GDP. The PBO has incorporated this policy in calculating the Coalition's fiscal aggregates, but not as a specific commitment. The policy would require additional unspecified tax cuts from 2030‑31, worth around $141.3 billion over the medium term, to maintain tax receipts at or below the tax cap. The value of these tax cuts would increase from 0.1% of GDP in 2030‑31 to 1.0% of GDP by 2035‑36.

The Greens' commitment to ensure that 1% of the Federal Budget goes towards nature was assessed to be met by existing expenditure and party commitments and not included as a discrete commitment.

Commitments funded through balance sheet financing arrangements

Over the past decade, there has been a significant increase in the use of balance sheet financing arrangements (such as loans, equity injections and guarantees) to fund policy priorities. All major parties announced commitments involving the use of balance sheet financing arrangements during this election campaign.

The budget impacts of these commitments can be understated when looking at the fiscal or underlying cash balance impacts alone.[13] The headline cash balance impact, presented in Tables 2‑1 and 2‑4, as well as in the appendices for each party, provides a better indication of the cost of the initial contribution. Greater use of balance sheet financing arrangements will usually result in headline cash balance impacts that are lower (indicating a deteriorating budget position) than the underlying cash balance impacts.

Figure 2-8 shows the difference between the headline and underlying cash balance impacts, known as the 'wedge'. The wedge is due to net cash flows from investments in financial assets for policy purposes, which are included in the headline cash balance but not the underlying cash balance.

Figure 2-8: Level of net cash flows from investments in financial assets for policy purposes, baseline and by party

Source: 2025 PEFO and PBO analysis.

 

For the 2025 election, Labor announced 4 commitments involving the use of balance sheet financing arrangements. Together they result in the headline cash balance impact being $2.8 billion lower than the underlying cash balance impact over the forward estimates period, reducing slightly to $2.5 billion lower over the medium term. This is primarily driven by the commitment Delivering 100,000 homes and 5% deposits for all first home buyers (ECR-2025-1344), with some volatility in the mid-2030s as the concessional loans for housing concludes.

The Coalition announced 16 commitments relating to balance sheet financing. Of these commitments, 9 involved the use of balanced sheet financing arrangements while 7 commitments reversed current measures that use balance sheet financing arrangements. They result in the headline cash balance being $18.3 billion higher than the underlying cash balance over the forward estimates period, but $12.0 billion lower over the medium term.

The Greens platform included 16 commitments involving the use of balance sheet financing arrangements. These result in the headline cash balance being $184.1 billion lower than the underlying cash balance impact over the forward estimates period, and $356.8 billion lower over the medium term. The largest of these commitments, Government-owned property developer (ECR-2025-3265) drives the majority of the wedge. This effect is driven primarily by the equity funding allocated for the purchase of land and construction of dwellings.

Commitments without a material budget impact

The purpose of this report is to identify commitments that have a material impact on the fiscal position. Commitments that are not material are not generally included in this report. Reasons that an announcement would not be material for the purposes of the report include commitments that:

  • Introduce regulatory or legislative changes alone where they can be administered using the current regulatory arrangements.[14] Departments are resourced to undertake this kind of work as part of business-as-usual activity. The Greens' commitment to ban political donations from certain industries and to introduce truth in political advertising laws are examples of regulatory changes.
  • Involve a minor increase in departmental expenses and this increase could reasonably be expected to be absorbed, or is already provided for, in existing agency budgets. An example is the Coalition's commitment Skills in School Strategy. The PBO notes that where there are a large number of such commitments they may, when taken together, impact on delivery cost or service delivery.
  • Are in the PEFO baseline and the decision to implement the proposal was authorised by the Government prior to the start of the caretaker period. Both Labor and the Coalition announced commitments which were already included in the budget baseline, such as Labor's Flinders HealthCARE Centre and the Coalition's matching commitment.
  • Would have no material impact because they reallocate funds from a measure that is already in the PEFO baseline.

Commitments funded through reallocation of existing resources

Where a commitment results in no additional cost for the budget, but has material components, it would be considered material for the purpose of the report. This includes commitments for additional expenditure (or savings) where the party specifies that they would be offset by a corresponding saving (or expense), and commitments which reallocate funds across different programs which are in the PEFO baseline, but not yet contractually committed.

For example, Labor's Upgrade to SciTech Discovery Centre reallocates $102.8 million in funds from within the Modern Manufacturing Initiative and the Coalition's Creative Australia – redirect towards Melbourne Jewish Arts Quarter and supporting broadcasting reallocates $18.0 million in funds from Creative Australia.

The number of fully offset commitments and the total estimated cost offset by party is shown in Table 2‑3. More detail, including a full list of offset commitments, is provided in each party's chapter of the report.

Table 2-3: Commitments fully funded through offsets, by party

Party

Number of fully offset commitments

Estimated cost offset from existing resources over the forward estimates ($ million)

Labor

4

186.4

Coalition

10

62.1

Source: PBO analysis.

Implementation of election commitments

All Commonwealth spending must be supported by the Australian Constitution. Costings prepared by the PBO assume that policy proposals are within the Commonwealth's constitutional power to implement. If a proposal is altered to strengthen the constitutional support, this may change the financial implications. The PBO is generally not in a position to assess whether a measure is likely to be constitutional or not.

Departmental costs associated with implementing a commitment are included in each costing unless otherwise specified. In some cases, based on either the specification of the policy or the PBO's assessment that the commitment would have a negligible cost (such as simple legislative changes or pass through of grants to specific entities), implementation costs are assumed to be absorbed within existing departmental resources.

Departmental expenses in the budget baseline tend to decrease over the forward estimates as a share of GDP primarily due to the cessation of funding for terminating programs (see Box 3) and indexation arrangements.[15] In some cases, further resource reductions are also included in party platforms. When considering the combined impact of these reductions, the PBO notes that there is a downside fiscal risk that the public service may not be able to absorb all of the expected departmental costs and deliver on commitments.

Box 3: Changing the costs of the public service

The 2025 general election featured commitments from all major parties to change the costs of the public service, usually referred to as 'departmental expenses'. Once appropriated, agency heads have discretion on how to spend these funds.

Two major categories of departmental expenses are:

  • employee expenses, which is the remuneration of staff hired by agencies, including wages and salaries, fringe benefits, accrued leave and superannuation. These expenses depend on the number of staff and their average remuneration
  • supply of goods and services expenses, which include the costs of external labour (consultants, contractors and labour hire), stationary, IT equipment, electricity and other office running costs.

In the 2025 ECR, there are 4 commitments specifically targeted towards departmental expenses, one each for Labor and the Coalition and 2 for the Greens. These affect:

  • supply of goods and services expenses: Labor's Further reducing spending on consultants, contractors and labour hire, and non-wage expenses (ECR-2025-1596) and one of the 2 Greens' commitments, Reduce agency spending on consultants – reduce federal government contracts with big consulting firms (ECR-2025-3101), both of which improve the budget balances (positive bars on the left panel of Figure 2-9)
  • employee expenses: the Coalition's Reducing the APS to a sustainable level over time through natural attrition (ECR-2025-2147), which improves the budget balances (positive bar on the left panel of Figure 2-9), and the Greens' Invest in the public service (ECR-2025-3685), which decreases the budget balances (negative bar).

These commitments are in addition to reductions in departmental expenses that are already factored into the 2025 PEFO baseline. Budgets incorporate only the impact of government decisions already taken. This means that programs which have been announced to receive funding for a limited time are assumed to end on schedule, which includes staffing costs. For costings in the ECR, the PBO has assumed that over the forward estimates:

  • public service staffing levels fall by around 22,500[16]
  • supplies of goods and services fall by around 12% in real terms (equivalent to $7 billion).

The last 15 Budgets have included similar assumptions, such that departmental expenses are forecast to fall steeply, but these forecasts increase in subsequent budgets as programs are extended or new programs are announced (see right panel of Figure 2‑9). More information on the typical fall in departmental expenses over budget forward estimates can be found in the PBO's Beyond the budget 2024-25.

Figure 2-9: Departmental expenses

Source: 2025 PEFO and PBO analysis.
Note: A positive impact indicates a reduction in expenses. 
A negative impact indicates an increase in expenses.

Commitments with capped funding or savings

Across all major parties, a considerable number of election commitments involved the commitment of specified (or capped) amounts of funding to achieve particular policy outcomes. These capped amounts as specified by parties are included in the estimates of the budget impact.

Where capped funds are allocated, the PBO assumes that the full amount will be spent. The PBO has not assessed whether the full specified amount would be required, nor if it would be sufficient to achieve the announced policy outcomes. Risks are included within individual costings if the funding cap is potentially insufficient to deliver a commitment as specified.

Where a party announces that a specified amount of money will be saved from reducing funding on an existing program, the PBO confirms that there is available (that is, uncommitted) funding equal to or greater than the specified saving.

 

[12] See Labor’s costed plan to Build Australia’s Future and the Coalition’s Our Plan for a Sustainable Budget.

[13] Balance sheet financing arrangements can be an appropriate method for financing government commitments, however, the budget reporting of these arrangements is not as comprehensive as the budget reporting of direct expenditure and taxation measures. See the PBO report Alternative financing of government policies.

[14] Regulatory changes would be expected to have impacts across the economy, often having offsetting impacts on different sectors. The flow-on effects of these impacts on the budget are referred to as ‘indirect effects’ or ‘broader economic effects’, however the net budget impact of these effects is often highly uncertain in terms of magnitude and timing. For further discussion of these issues, see Appendix E.

[15] See PBO Budget Explainer: Indexation & the budget – an introduction

[16] The total public service wage bill, excluding defence, is forecast to fall by around 3% over the next 4 years while average wages are assumed to grow by around 10% (see Budget Paper 3, page 130). The implied fall in the staffing level of around 13% corresponds to around 22,500, assuming the composition of staff classifications remains broadly unchanged.