Rudd makes $650m in campaign pledges

PM Kevin Rudd is expected to announce a package to help the battling car industry ahead of election. Source: AAP

LABOR has notched up $650 million in new spending on the first full day of the election campaign, targeting cash strapped parents and the ailing vehicle manufacturing sector.

Prime Minister Kevin Rudd's first big promise, which came just hours before the government went into caretaker mode, was an extra 68,000 places in before- and after-hours school-based care for children at a cost of $450 million.

The extra places will be available from 2014 and increase job opportunities, particularly for women.

"The government will give parents a further helping hand," Mr Rudd said Canberra on Monday.

Earlier, Labor earmarked $200 million for the car industry and pledged to ensure commonwealth agencies only use Australia-made passenger vehicles.

During a trip to the Labor-held southeast Queensland seat of Blair, Opposition Leader Tony Abbott used his first campaign foray ahead of the September 7 poll to revisit a pledge to abolish the carbon tax.

Mr Abbott has written to the Department of Prime Minister and Cabinet to warn legislation to repeal the carbon tax will be his first order of business if elected to government.

The opposition leader was critical of the Labor plan to inject $200 million into the car industry, saying there were no details about how it would be spent.

"They throw taxpayer money around like confetti," Mr Abbott said.

"I have more respect for your money than to make blank cheques to industries which, let's face it, have been very good at using taxpayers' money but haven't always been that good at maintaining production and jobs."

With the economy firmly at the centre of the campaign, shadow treasurer Joe Hockey sparked debate over a possible central bank interest rate cut on Tuesday being a sign of a weak growth.

"We should not be in a position where interest rates are being cut, because the economy should be growing faster," Mr Hockey said.

Mr Rudd said the comment showed Mr Hockey believed it was "okay to have very high interest rates".

The prime minister evaded a question on whether he, like Mr Abbott, would pledge not to go into minority government if the election ended in a tie like the 2010 poll.

He said if the Liberal-National coalition was adamant about not doing deals with independents or minor parties it should instead direct preferences to Labor at the election.

Meanwhile, the Australian Greens accused Mr Abbott of "arrogance" over his letter to the prime minister's department about the carbon tax.

"We haven't had the election yet and he is already assuming that he is the prime minister," Leader Christine Milne said.

Former senator and Nationals lower house candidate Barnaby Joyce, who's wants to win the NSW seat of New England, was very upbeat about the coalition's chances in the upcoming poll.

"I honestly think the coalition will win," he said.

"You're not supposed to say that, but I try to be straight with people."

The latest Newspoll puts the coalition on 52 per cent of the two-party vote, to Labor's 48 per cent.

The first allocation from Labor's car industry plan was $28.6 million to Toyota Australia, which makes the Camry in Victoria.

Mr Abbott said the best thing Labor could do for the industry was scrap its $1.8 billion in fringe benefits tax changes on employer-provided cars.

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