ELECTION 2010: Tony Abbott defends $7 billion costs gaps, claims surpluses will still be bigger than Labor

Opposition Tony Abbott has defended his ability to manage the economy, saying a Coalition government will deliver “substantially larger surpluses than Labor” despite an apparent $7 billion black hole in its costings.

Late last night the three independents who will decide who forms minority government – Rob Oakeshott, Tony Windor and Bob Katter – released Treasury costings of the Coalition’s election promises.

The official costings by Treasury showed the Coalition’s promises would result in savings of $4.5 billion over four years, compared to the Coalition’s promise that it would produce savings of $11.5 billion, thereby getting the budget back into surplus faster than Labor had promised.

The discrepancy led Windsor to claim the Coalition has a “$7 billion black hole” in its policies.

But this morning, Abbott has defended the costings, saying Treasury had used different assumptions in its costing mode, although Abbott also claimed that Treasury had conceded that the Coalition’s costings assumptions were reasonable.

“From our perspective, there are decisions that we have a difference of opinion with Treasury about,” he said.

“We can and will deliver substantially larger surpluses than Labor. That is the bottom line.”

Mr Robb said one such issue related to interest on the multibillion dollar borrowings for the national broadband network, with the opposition calculating a saving of $2.4 billion over the next four years through cancelling the scheme.

One example of the differences of opinion between Treasury and the Government provided this morning by Opposition finance spokesman Andrew Robb involved an apparent $900 million hole around savings from borrowings on the National Broadband Network, which the Coalition put at $2.4 billion and Treasury calculated that at $1.5 billion.

Robb says the Coalition used an interest rate of 5.5% based on the 10-year bond rate, while Treasury used a rate of 4.9%.

“In the end we agreed to disagree,” Robb said.

Abbot also said discussions with the independents are continuing in “good faith”.

Commentators expect the independents will decide whether they will back Labor or the Coalition by Tuesday of next week.