Labor's $1.2 billion bomb rips a hole in the budget Detainees at the fence of the Manus Island Detention Centre / Picture: Nathan Edwards Source: News Limited THE Abbott government will take a further $1.2 billion hit to its budget with the discovery Labor left its offshore processing policy for asylum seekers grossly underfunded. The revelations will be in next week's nightmare mid-year economic and fiscal outlook, to be released by Treasurer Joe Hockey. Sources have confirmed that, with the latest discovery by the Immigration Department that it was left $370 million short by the previous government, for this year alone, the revised budget deficit will balloon out to end up close to $50 billion. The Daily Telegraph understands the border protection budget outlined in Labor's election eve economic statement released in August had not fully accounted for the full cost of its controversial asylum seeker policy of processing all boat arrivals in PNG and Nauru. Instead it accounted for only one in six arrivals being processed offshore, despite promising to refuse entry into Australia for any new boat arrival after July 19. But even on the reduced number of one in six arrivals processed offshore, the funding package was left underfunded by $370 million for this financial year, eventually leading to a shortfall of $1.2 billion over the four-year forward estimates. The discovery was made by the Department of Immigration and Citizenship and verified by the Department of Finance and will be revealed in the Mid Year Economic and Fiscal Outlook next Tuesday. The government said it will have to wear the blowout, which will go straight to the budget bottom line. The number is on top of the total costs blowout since 2008 for the previous government's failed border protection policies, which the Coalition has claimed had already reached $11.6 billion. The border protection funding black hole would have been even greater had the number of boats not been reduced by 70-80 per cent since the Coalition was elected to government. Government sources confirmed the $1.2 billion blowout included savings the government realised on the lower number of boat arrivals. The figure is for offshore processing operations, housing and accommodation and excludes managing the mainland processing program for the 50,000 asylum seekers currently in Australia. Immigration Minister Scott Morrison told The Telegraph the discovery revealed Labor had not funded the operational requirements for Nauru or Manus Island. A plane load of family groups arrive on Nauru / Picture: Nathan Edwards Source: News Limited THE Coalition's NBN policy has been hit with an $11.5 billion blowout and a broken promise after a damning review of the Labor-run project found it would suffer major delays and a whopping $29 billion budget blowout. The review found the National Broadband Network would have been delivered three years later than the Rudd and Gillard governments claimed, saying Labor had relied on "blind faith" while spending tens of billions of taxpayer dollars. It found Labor's NBN would really cost $73 billion, not $44 billion as claimed, would have been completed in 2024, not 2021 as claimed, and consumer costs would have been 80 per cent more. The review also had problems with the size of the organisation with 3000 staff, prompting the Abbott government to flag job cuts. Some of the costs recently discovered included $34 million on travel, $111 million on legal bills and $152 million on consultants since 2010. But the state of the books has caused problems for the Coalition after it promised before the election to deliver a cheaper $29.5 billion policy. Communications Minister Malcolm Turnbull yesterday said the review was the project's "unvarnished truth."