Petro Georgiou (Kooyong, Liberal Party) Share this | Hansard source

I rise to speak in support of Appropriation Bill (No. 1) 2007-2008 and related bills. This is the government’s 12th budget and, as with each of the preceding 11, it is a well-measured document based on fundamental and successful economic principles. It is underpinned by a strong surplus and there is considerable new expenditure directed towards key policy priorities. If anyone had predicted back in 1996 that a budget could be described in these terms, they would not have been believed. But today Australia is a more prosperous and stable place than it was a decade ago. Unemployment is at generational lows. The government is free of net debt. Economic growth consistently exceeds three per cent a year. Inflation is tightly controlled. Interest rates move incrementally within a narrow band. All this has become the norm over the last decade; it has become a custom. The reality is that we should become accustomed to these things but it is also important to reflect on the fact that the state of the Australian economy is the product of over a decade of hard decisions and progressive reforms. It is a product of the coalition government.

The Australian government has made fundamental progress over the last decade. That progress has not been matched by the Labor Party when you look at the decisions it has made and the reforms it has fought against. Labor has long opposed moving the budget into surplus. It has opposed the payment of $96 billion in debt, yet the removal of this debt has saved Australia $8 billion in interest payments per year. Labor has opposed taxation reform, the most obvious being the introduction of the GST. This reform has delivered significant levels of additional revenue to strengthen and improve services to our communities. The introduction of the GST has also led to the abolition of other taxes and duties, which has benefited many people but not as many as the federal government would have liked.

Labor has opposed industrial reforms that have created more flexible workplaces and have generated economic growth. This is evidenced by the 320,000 full-time jobs created in just the last 13 months. In addition to Labor’s continual opposition to policies of economic reform, the inadequacy of Labor’s economic performance cannot be overstated. We should reflect on the legacy of a $10 billion deficit, the desperation of Labor’s asset sales, the 17 per cent interest rate and the 11 per cent unemployment rate. We should reflect on Labor’s negative economic growth, spiralling inflation and the general cynicism felt by people about their own positions.

The Leader of the Opposition thinks he can skirt around these facts by playing his cleanskin card and presenting a small target for the government to attack. I have to say that it is not a bad strategy and, indeed, I might have advocated it myself once or twice over the past few years. However, there is small, there is tiny and there is minute. The vision and creativity of the Leader of the Opposition’s budget reply were positively minute. Faster Commonwealth government bill paying, a standard disclosure form for financial services products, a superannuation clearing house, small capital grants for schools to build metal workshops, graphic design labs and the like are not big ideas, and they certainly do not count as nation building. They are incremental public policy measures of which there are literally hundreds in the government’s budget.

Let me give you just a sample of these government measures. The government will provide up to $103.5 million over four years as its contribution to a cost-shared initiative with state and territory governments to address the growth in type 2 diabetes by focusing on people aged 40 to 49. This initiative will encourage people to take a tick test when they attend a general practice surgery. Support of $3 million is being provided over two years to manage the orderly entry and stay of the 135,000 international pilgrims expected to visit Australia for World Youth Day 2008. Funding of $56.6 million is being provided over four years to support the design, development and building of the Australian Square Kilometre Array Pathfinder telescope. This will be a world-class radio telescope that will add to Australia’s role in exploring scientific and technological square kilometre array designs. It will also support possible participation in the generation of an international SKA radio telescope facility.

Additional funding of $10.3 million will be directed towards the cost of eradicating the imported red fire ants in Queensland. A further $4 million over four years will help expand control efforts for the yellow crazy ant infestation on Christmas Island. From July 2007 the government will relax the beneficial ownership provisions of the premium 175 per cent R&D tax concession. This measure will allow Australian subsidiaries of multinational enterprises to claim deductions under the concession for their incremental R&D expenditure where the resulting intellectual property is held overseas. The National Portrait Gallery will receive funding of $21.2 million to ensure that the new gallery building will be fully operational when it is due to open. The government will provide $55.6 million over four years to develop two new counselling services to assist separated parents and their children. This is just a sample of the hundreds of important policy initiatives contained in the budget, but even this sample makes the Leader of the Opposition’s offering look very small indeed.

As with every budget in recent times, all attention is turned towards who gains from the budget and how this will impact on opinion polls in the coming election. The Financial Review, behind its wallpaper front page, produced 28 pages of budget analysis and commentary—and that was just the Financial Review. The government’s own website is a veritable goldmine of budget information. Every industry association and interest group worth its salt has produced its own analysis for its membership. In one sense, this attention is a very good thing, but at times, however, I believe that the focus on the detail can distract from the main game.

I believe that the great majority of the Australian people know, deep down, that they will benefit more from steady economic and employment growth, from increased real wages and from continued low inflation than they will ever do from an individual budget measure. So, as I have argued several times before, the first and most important test should be: will the budget deliver these key outcomes? Again, the answer is yes.

Next year we are expecting economic growth of 3¾ per cent, inflation of 2½ per cent and unemployment of around five per cent. The government’s financial position will remain strong, with a surplus of $10.6 billion forecast for the next year. All of the $96 billion of debt the government inherited when it came to office has been repaid. We no longer need to fork out $8 billion in interest payments every year. Indeed, we are now actively saving for the future and, by the end of the financial year, more than $50 billion will have been invested in the Future Fund to support long-term, sustainable government finances.

Another $5 billion will have been invested in the newly established Higher Education Endowment Fund to help finance future capital works and research facilities in our universities. These achievements are the result of the sensible management of government finances and the strong sustainable economic growth this has encouraged and assisted. With continued good management, there is no reason why these favourable conditions should not continue.

With the government in a strong financial position and the economic outlook favourable, there is considerable scope for new initiatives which address important areas of community need. First and foremost amongst these is a comprehensive package of reforms across the university, vocational education and training and schools sector. The centrepiece of this package is the $5 billion investment in higher education. But there are many other important elements of the plan, including measures to address the shortage of skilled tradespeople, the establishment of a further three Australian technical colleges, $700 tutorial vouchers for parents of children who do not meet the national literacy and numeracy benchmarks and a $5,000 bonus for teachers who undertake professional development through a new summer school program.

The government is also making a strong commitment to addressing climate change while maintaining a strong and competitive economy. Since 1996, we have invested $2 billion to develop practical responses to climate change. For example, the $500 million Low Emissions Technology Demonstration Fund is assisting the development of solar and clean coal technologies, and we are active participants in the Asia-Pacific Partnership on Clean Development and Climate.

But there is a universal recognition that still more needs to be done. The budget provides for important new initiatives, including the cost of establishing qualifying carbon sink forests being made tax deductible. The rebate to encourage homeowners to install solar panels will be doubled to $8,000. A $126 million Australian Centre for Climate Change Adaptation will be established. The CSIRO will be allocated $103 million for climate change and energy research. Over five years, $197 million will be provided for the Global Initiative on Forests and Climate to assist developing countries to maintain and manage their precious tropical forests. These measures are in addition to the recently announced $10 billion, 10-year national plan to safeguard the sustainable use of Australia’s scarce water resources, and they are a prelude to the government’s response to the report of the task force on emissions trading.

In the area of transport, a second phase of the hugely successful AusLink program will be commenced, at a cost of $19.1 billion, from 2009-10. The government will also increase funding for current AusLink initiatives by $695 million to assist in bringing those projects to completion. This program reflects true nation building. It encompasses important projects like the Pacific Highway, the Deer Park bypass and the Caboolture Motorway, and it will greatly improve the efficiency, adequacy and safety of the national land transport system.

I will now turn to defence. The government is spending $6.6 billion over 13 years to purchase and operate 24 FA18F Super Hornet aircraft in order to secure air combat capability, to maintain air superiority in our region and to ensure a smooth transition of service of the F35 Joint Strike Fighter. A further investment of $1.4 billion over 10 years is also being provided to operate and maintain four new C17 heavy lift aircraft.

Budgets are about big projects and visionary ideas. They are also about people, particularly those who have worked hard and sacrificed so much to make Australia the place it is today. In recognition of the role which senior Australians have played in creating our economic growth and to ensure they share in the benefits of this growth, the government is again providing a bonus of $500. This will go to those who are eligible for either the utilities allowance or the seniors concession allowance.

In recognition of the special contribution of carers to Australian society, the government will once again provide a $1,000 bonus to recipients of the carer payment and a $600 bonus for recipients of the carer allowance. As with previous bonuses, these will be paid before 30 June. They will be tax-free and will not affect social security entitlements.

To provide Australia’s most disabled veterans with greater financial support, from July 2007 the fortnightly payment of the special rate disability pension will increase by $50 and the intermediate rate pension will increase by $25. In what I think is a long overdue recognition of the tremendous sacrifices made by Australians who were prisoners of war in Europe, the government will provide a one-off payment of $25,000 to either the former prisoner of war or their surviving widow.

Some years ago the Treasurer outlined a very sensible and measured budget doctrine: once the budget was balanced, outstanding debt repaid or allocation provided for future financial obligations and important new services funded, consideration should be given to cutting taxes. Over the last few years this doctrine has delivered substantial tax relief for all Australians. Again this year, there will be personal income tax cuts for most Australian income earners. From 1 July this year, the 30 per cent threshold will rise to $30,000. The low-income tax offset will also rise from $600 to $750 and begin to phase out later. From 1 July 2008, the 40 per cent tax threshold will increase to $80,000 and the 45 per cent threshold to $180,000. These changes build on the tax cuts announced in previous years and will ensure that more than 80 per cent of taxpayers face a top marginal tax rate of 30 per cent or less. They will improve Australia’s international competitiveness and enhance incentives for participation.

I have spoken some length today about the new programs and initiatives outlined in this year’s budget. These incremental changes should not be allowed to overwhelm the total picture painted by the budget. The simple fact is that next year the Commonwealth will spend $96.5 billion on social security and welfare, $43 billion on health, almost $18 billion on education and nearly $20 billion on defence. These are key priority areas and the programs funded within them are all vital to Australian society. But funding these programs on an ongoing basis requires maintaining an environment conducive to growth and prosperity. This is what the government has done and, given its re-election, what it will continue to do in the future. There will be no wild tax incentives and spending. There will be commitment to stable economic management and sensible funding of key programs addressing both current needs and long-term goals. I commend the bills to the chamber.

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