Coalition blackhole concerns Independent MP Tony Windsor

Mr Abbott's budget credibility was under fire last night with Treasury saying there was an error of up to $10.6 billion in his election promises.

Tony Windsor, one of the three independents who asked for the costings, last night described it as "a black hole''.

Speaking this morning, Mr Abbott said the Coalition would deliver substantially larger surpluses than Labor despite the Treasury analysis.

"That is the bottom line of that discussion,'' he said.

The Opposition Leader said there were two competing economic records to think about and Labor's was one of waste and mismanagement exemplified by the home insulation program, debt and deficit, "versus our record of responsible economic management and paying off debt".

Mr Abbott called for bipartisan support to set up a Parliamentary Budget Office to ensure that "these type of arguments don't happen in the future''.

Shadow treasurer Joe Hockey said there were about $5 billion worth of savings that Treasury had not taken into account.

But he said even Treasury conceded the savings would be made should the opposition come to office and have the power to make certain decisions.

Mr Abbott said the Charter of Budget Honesty, which allows oppositions to have their policies costed during an election campaign, was never designed as a weapon for governments to use against the opposition.

"Which is what in fact this government has tried to do with it,'' he said.

Opposition finance spokesman Andrew Robb said the backwards and forwards discussions with Treasury and Finance had given them confidence in their figures.

"We stand 100 per cent behind our costings,'' he said. "What it established was there was not an error of costing - there was a difference of opinion on, in one or two cases, government being able to make the decision.

"They conceded that but they still ran their proposition.''

Mr Abbott said discussions with independents Bob Katter, Tony Windsor and Rob Oakeshott were continuing in good faith.

He said he was confident wall-to-wall meetings with the trio and the shadow ministry later today would reassure Mr Windsor the Coalition had nothing to hide when it came to its costings.

It seems unlikely the Coalition will grant Mr Katter his wish of reintroducing tariffs to boost the agricultural industry.

"Bob quite rightly wants to do the right thing by the rural industries in rural Queensland," Mr Abbott said.

"Now I want to do the right thing by the rural industries of north Queensland too.

"I don't think we can turn back the clock but supporting and helping rural industries is part of the coalition's DNA and that will never change.''

The Opposition Leader refused to reveal his offer to Tasmanian independent Andrew Wilkie, who wants a new hospital for Hobart and poker machine reform.

But the discussions were good and constructive, and he understood Mr Wilkie's concerns about problem gambling and pokies, he said.

Mr Abbott said he was open to copping another grilling when he meets with the three independents.

"If Tony or Rob or Bob want to kick off the discussions by talking about costings, I'm very, very happy to do that,'' Mr Abbott said.

"We want them to know what they are doing.''

The Treasury documents released at 10pm yesterday by the independents found the Coalition would improve the Budget bottom line by $863 million over the next four years - well below the $11.5 billion improvement predicted by the Liberals.

The Liberals would deliver a Budget bottom line that was eight times better than Labor, but only a fraction of what they had promised.

Treasury's five-page report on the Coalition's costings suggested the bottom-line could rise from $863 million to $4.5 billion if other assumptions were made. Mr Abbott said those other assumptions could be "responsibly achieved through prudent economic management''.

Treasury said Labor would improve the bottom-line by $106 million - double its prediction of $44 million.

The Coalition had refused to submit its costings to the Treasury during the election campaign and Mr Windsor last night said "I think we understand now why he wasn't interested in releasing the numbers''.

"(It's) what I call a black hole anyway of probably somewhere between seven and 11 billion in terms of difference between what the Coalition said their costings were and what the Treasurer would suggest in terms of an incoming government s to their bottom line,'' Mr Windsor told the ABC's Lateline program.

He said the issue would be "in the mix'' in deciding whether to support Mr Abbott or Julia Gillard for Prime Minister.

He said the independents were trying to decide who to trust and would demand answers from shadow ministers during meetings scheduled for today.

Mr Windsor said Treasury discovered the Coalition planned to cut $3.3 billion worth of spending but did not tell anyone during the campaign.

He said Treasury, as the "independent umpire'', had assessed the promises of both applicants for the job of PM.

Mr Abbott said last night that Treasury and the Department of Finance had confirmed that 95 to 96 per cent of Coalition policy costings were correct, covering 304 decisions worth $90 billion.

"The Coalition maintains that our election policies will deliver a Budget bottom line that is improved by more than $11 billion over the forward estimates,'' he said.

He said under Treasury's "worst case scenario'' the Coalition's bottom line would be $7 billion better than Labor.

The release of the documents caught both Labor and the Liberals by surprise and came after Mr Windsor, Bob Katter and Rob Oakeshott met with Treasury officials in the Cabinet room.

The briefing was part of their demand to be better informed about whether to choose Mr Abbott or Julia Gillard as PM.

A spokesman for Treasurer Wayne Swan said: "This huge costings blackhole finally proves why Mr Abbott and Joe Hockey abandoned Peter Costello's charter of budget honesty.

This costings shambles is damning evidence of the risk the Liberals pose to the budget and to the economy.''

Earlier,  Mr Swan had boasted that other world leaders "would kill'' to have the economic report card delivered yesterday for the Australian economy.

The Gillard Government's economic credentials were boosted by the Bureau of Statistics saying the economy posted its best quarterly growth for three years of 1.2 per cent to be humming at an annual rate of 3.3 per cent.

CommSec economist Savanth Sebastian said the economy had "hit the sweet spot'' and was one of the strongest economies in the advanced world.

"While other countries are still attempting to artificially stimulate their economy, Australia has clearly moved into third gear,'' Mr Sebastian said.

But he said without the mining boom in WA, national growth would be about 2.5 per cent.

Mr Swan said the figures were outstanding and the mining boom was supported by household spending, building investment, strong exports and more jobs.

"It's a strong outcome when you consider the shaky conditions that exist in countries like the United States and Europe,'' Mr Swan said.

"Prime Ministers elsewhere would kill for a set of outcomes such as these.''

Economists said with inflation under control, the Reserve Bank was unlikely to consider increasing interest rates before its November meeting on Melbourne Cup Day.

Mr Swan said business plans to inject $123 billion into investment in the year ahead would be a "massive'' boost.

He said the figures were "an endorsement of what the Government has done over recent years to support our economy'' and why Labor should stay in power.

Mr Abbott said the Howard Government had set up the good result.

"I think that the strength of the Australian economy is fundamentally due to the reforms of previous governments, not to the spending spree of the current government,'' Mr Abbott said