Coalition to keep $10b of ALP tax rises, cuts

The Opposition will go ahead with more than $10 billion in Government tax increases and spending cuts including its bank levy and a hike in cigarette tax.

Unveiling its own $31.6 billion worth of savings, shadow treasurer Joe Hockey admitted the Opposition also needed the Government's proposals if it was to deliver a "slightly better" Budget bottom line.

This month Tony Abbott railed against the levy, which will raise $700 million, and the tobacco excise increase which will boost the Budget by $5.8 billion.

"All of these, whether it is a bank deposit tax, whether it is an increase in cigarette tax, it's all a hit on you the people," he said at the time.

But in announcing many of the planned cuts, Mr Hockey conceded all changes proposed by the Government except the $1.8 billion change to fringe benefits tax on cars would be accepted. "We do accept the savings," Mr Hockey said. "We don't like a number of them but we have to do it."

Apart from the tobacco increase, which is the single biggest saving or revenue measure accepted by the Opposition, it commits an Abbott government to a $500 million lift in visa charges, an extra $800 million in unpaid superannuation taxes and a $1.8 billion extra efficiency dividend on the public service.

The coalition will save $5.2 billion by shrinking the public service by 12,000 - half will be made redundant in the nine months from October 1.

This means an incoming coalition government would have to act swiftly to lock in this saving by announcing a hiring freeze.

Defence, Customs and Border Protection, the Department of Human Services and quarantine and security sections in Immigration and Agriculture are likely to be exempt.

Public sector unions say the efficiency dividend and the Opposition's cuts will slash the public service by about 17,000 people within the next three years.

Significantly, Mr Hockey softened his language on when a coalition government would return the Budget to surplus, saying this would be achieved when it was "reasonable and responsible to do so".

Earlier this year the Opposition promised to deliver surpluses in every year of its first term.