(Bloomberg) — Australia’s ruling Liberal-National coalition said it will narrow the budget deficit by about A$1 billion ($700 million) via cuts to the bureaucracy as it announced costings for its election policies.

Josh Frydenberg, Treasurer of the Treasury, stated Tuesday that the government would increase the efficiency dividend for the public service agencies from 1.5% to 2.5% in the next three-years if it is reelected on May 21. The measure will cover the costs of all the coalition’s election announcements while leaving the budget better off.

“It’s a responsible approach,” Frydenberg told reporters in Melbourne. “It ensures our budget bottom line actually improves over time.”

The opposition Labor party is due to release its policy commitment costings on Thursday ahead of Saturday’s ballot.

Australia’s books will remain deep in the red over the four-year horizon set out in this year’s budget, reflecting the hit to growth and vast fiscal spending deployed to support the economy through the pandemic. In opinion polls the centre-right government trails in that Labor plans to increase taxes to cover higher spending. 

©2022 Bloomberg L.P.