Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

I thank the honourable member for the question. When the government assumed office, and in framing this budget, we were faced with three big economic challenges: one, inflation in Australia running at a 16-year high, delivered to us as a courtesy, a parting gift, of the preceding government; two, a world financial crisis which the International Monetary Fund says is one of the most serious crises we have seen since the Great Depression; and, three, historic shifts in commodity prices, including a doubling of oil prices in the last 12 months. That is why it has been critical for the government to deliver a responsible budget. We are a government of responsible economic management. We believe in ensuring that we are budgeting for Australia’s long-term economic needs rather than for short-term political opportunism, which seems to have been the hallmark of those opposite.

What have we therefore delivered? One, a $22 billion budget surplus. That surplus is critical to put downward pressure on inflation and interest rates. That is the hallmark of what we have done. Beyond that, government expenditure as a proportion of GDP is now at its lowest level since 1989-90. Tax as a proportion of GDP has also gone down. This is a fundamentally responsible and conservative economic document designed to meet the economic challenges of our time.

Beyond that, the budget has sought to invest in Australia’s future. Investing in the future is a core requirement to ensure that the proceeds which have come into Australia per medium of the resources boom are not frittered away on consumption, as has been done by those opposite, but invested in long-term productive capacity. We have done that through, firstly, the Building Australia Fund to invest in infrastructure. Secondly, we have done that through establishing an Education Investment Fund of $11 billion to invest in the critical needs of our TAFE and university sectors, which have been crumbling in recent times. Thirdly, there is a $10 billion Health and Hospitals Fund for the future to make sure that through reforms in that sector we deliver the best possible health system that Australia can support.

On top of that we have made sure that apart from investing in the future, apart from producing a responsible budget and putting downward pressure on inflation and interest rates, we have also delivered on our commitments to working Australians, working families and those doing it tough. I referred in my earlier answer to a $55 billion support package for working families, including for the first time a $4.4 billion education tax refund to help mums and dads out there struggling with their school expenses. There is $750 a year for primary school kids and $1,500 a year for secondary school kids, and for identified education items there is an opportunity to come back and claim 50 per cent of those amounts. Of course, there are our additional payments for the childcare tax rebate, raising it from 30 per cent to 50 per cent. Then there is our assistance in the housing affordability challenge facing so many Australians. Not only do we have for the first time a housing minister—there was not one under those opposite; we have housing policy because there was not one before, either. There is $2.2 billion of investment in housing affordability initiatives for working Australians.

Beyond that is the Making Ends Meet package. The budget delivered senior Australians an additional $900 compared with last year’s budget. Carers allowance and carers payment recipients will get up to $2,100 in addition to what they were provided in the last budget. Disability pensioners will receive an additional $500 towards the cost of living, in addition to the last budget.

The question asked whether there are threats to this. There are. That threat is summed up in three words: ‘the Liberal Party’. The challenge to Australia’s future economic policy lies in the Liberal Party—or, as it could now be described, ‘the many liberal parties’. As I look across the front bench I see many liberal parties represented there. It is difficult to choose which one we are responding to on any given day. Of course, their promise so far is to block the budget, to block budget revenues to the tune of some $22 billion. At a time when we are fighting inflation and fighting to put downward pressure on interest rates the response from the party of so-called responsible economic management is to say, ‘We’ll raid the surplus to the tune of $22 billion.’ This was a remarkable first step.

But there are three things that stand out about this overall budget position on the part of our opponents. These are of direct relevance to the country because the opposition controls the fate of the budget in the Senate. When we look at the raid on the surplus, nothing can be said of it other than what Saul Eslake said. He described it as a piece of economics which is ‘dopey, dopey, dopey’.

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