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Parliament given first budget repair task

AAP logoAAP 30/08/2016

The federal government has launched into its "moral challenge" to repair the budget, introducing a $6.1 billion savings bill as parliament finally got down to business after a near four-month absence.

Prime Minister Malcolm Turnbull chose the new parliament's first question time on Wednesday to remind every MP and senator of their responsibility to support the task of budget repair.

"Failing to do so betrays our children and grandchildren," he said.

It would also put at risk Australia's AAA credit rating, which underpinned the cost of borrowing right across the economy.

Treasurer Scott Morrison introduced a so-called omnibus that contains 24 savings measures Labor agreed to during the eight-week election campaign but opposed in the previous parliament.

"This bill is the first test of the parliament's resolve on acting to support our triple-A rating and getting expenditure under control," he told parliament.

"This is just the first step. There is more work to be done than what is contained in this bill."

All the government was asking Labor to support were the measures included in its own costings, Mr Morrison insisted.

Shadow treasurer Chris Bowen and Labor's finance spokesman Jim Chalmers are examining the bill line-by-line before formally responding when the parliament meets in a fortnight's time.

But Mr Bowen told parliament there appeared to be a $100 million "black hole" in the bill.

Mr Morrison was adamant the bill has more than $6 billion worth of expenditure savings.

"That is what it says," he responded.

But, just after 5pm, Mr Morrison tabled in parliament an updated explanatory memorandum with a corrected figure

His office described it as a "Treasury error".

Tony Makin from the Griffith Business School said the bill was but a "drop in the bucket".

It may be a foray on the part of the government to test the waters, but "much more drastic action is needed".

"$6.1 billion over four years is not going nearly far enough when there is an annual $40 billion gap," the economics professor said in a statement.

"The rhetoric is there, as we can see with the prime minister's 'moral challenge' statement, but the question is what further concrete action is he going to take to bring about budget repair?"

Mr Morrison was due to introduce legislation for his controversial 10-year economic plan to cut the company tax rate but was forced to put it on hold because of what he called Labor's "royal commission stunt".

Nearly two hours of parliament time was eaten up as Labor tried to force a royal commission into banks and condemned the government for not reining in negative gearing.

Legislation to incrementally cut the corporate tax rate to 25 per cent from 30 per cent over the next decade is now due on Thursday along with a bill to increase from $80,000 to $87,000 the upper limit for the middle-income tax bracket.

In a later statement, Treasury admitted it made a mistake in calculations in the budget savings omnibus bill.

Treasury acting secretary Michael Brennan said the financial impact table incorrectly stated that the measure relating to student start-up scholarships would save $405.6 million over the next four years.

The total across the forward estimates should be $298.1 million because of a changed start date, Mr Brennan said.

That makes total savings of $5,996.6 million.

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