Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I am pleased to bring the second reading debate on Appropriation Bill (No. 1) 2009-2010 and cognate bills to a close. The global recession has resulted in a rapid deterioration in Australia’s economic outlook since the 2008-09 budget. The changed economic circumstances have adversely impacted on government revenues and led to successive downward revisions to estimated tax receipts since the 2008-09 budget, amounting to about $210 billion over the forward estimates to 2012-13. As a result of the global recession and the associated drop in government revenue, the underlying cash deficit is expected to be $57.6 billion, or 4.9 per cent of GDP in 2009-10. This compares strongly with other advanced economies.

In response to the global economic crisis the government considers that the only responsible course is to support the economy and jobs now. This means we will allow temporary deficits to unfold and cover those deficits with temporary borrowings. The government’s budget has been crafted to protect and promote the interests of all Australians now and into the future. To support the economy through the global recession the government’s fiscal stimulus program started with supporting household consumption and then moved to small-scale investments that could be implemented within a relatively short time frame. This budget marks the start of the next phase—a move into larger and longer term nation-building infrastructure projects. I will have more to say about this shortly.

The government’s fiscal stimulus packages have helped to cushion the economy from the worst impacts of the global recession. This action is expected to support up to 210,000 jobs. Supporting jobs is a priority for the government. We understand the dignity that work provides and value the contribution that these 210,000 Australians can make to our country. The government is providing $1.5 billion over five years through its Jobs and Training Compact. This program is aimed at providing relief and assistance to those directly affected by the economic downturn. It will also better position Australia in global growth returns by increasing the skills of our workforce.

This budget contains a significant infrastructure package. The government will invest $22 billion over six years to improve the quality, adequacy and efficiency of transport, communications, energy, education and health infrastructure across Australia. The National Broadband Network, which is supported by an initial investment of $4.7 billion, $1 billion of which will be spent in 2009-10, is the biggest single nation-building infrastructure project in Australia’s history. The government’s investment coupled with changes to the existing telecommunications regulatory regime will fundamentally transform the competitive dynamics of the telecommunications sector for the benefit of all Australians.

The government is providing $1.1 billion in this budget to invest in critical road, rail and port infrastructure to encourage more sustainable urban development and renewal and to lower transportation costs to ensure Australian businesses continue to be globally competitive. To complement investment in infrastructure and improve long-term productive capacity the government is supporting world-class higher education and hospital systems and investing in innovation. The government will invest $1.39 billion in this budget from the Education Investment Fund for priority research and higher education infrastructure projects. In addition, the government will provide $36.4 million in 2009-10 and $491 million over four years to uncap the number of public university places from 2012, allowing an extra 50,000 students to commence studies over the next four years. The government will also provide $29.4 million in 2009-10 and $436.9 million over four years to universities to give students from disadvantaged backgrounds the opportunity of a university education.

In this budget the government is providing funding of $465.7 million from the Health and Hospital Fund to support the development of health infrastructure projects of national significance. The government will invest an additional $3.5 billion over nine years including $400 million in 2009-10 for the establishment of the Clean Energy Initiative. The initiative will encourage further innovation in and large-scale commercialisation of clean energy generation and low-emissions technologies which will contribute to Australia’s transition to a low-carbon economy. The new measures will focus on carbon capture and storage and solar and non-solar renewable technologies.

In the 2008-09 budget the government committed to reform the pension system. Since that time the scale of the global recession has highlighted the importance of the pension as a safety net for those most vulnerable in our society. The government has found room under difficult circumstances to deliver on its commitment with increases in pension payments, reform of the payment structure for pensioners and more assistance for carers at a cost of $16 billion over five years. As a result of some tough decisions and despite the ageing of the population, our secure and sustainable pension reform will be fully offset by 2020-21. To boost workforce participation in the long term and as part of its rebalancing of the family payment system, the government is spending $731 million over five years to deliver a paid parental leave scheme. The scheme is due to commence operation from 1 January 2011.

Finally, it is necessary to inject some balance and perspective into the debate concerning the government’s budget position. Australia’s balance sheet is strong and will continue to be one of the strongest in the world. After peaking at 13.8 per cent of GDP in 2013-14, net debt is expected to fall to 3.7 per cent of GDP by 2019-20. In comparison, average net debt in advanced economies will continue to rise to a substantial 80.6 per cent of GDP in 2014.

The government’s firm commitment to return the budget to surplus will ensure that fiscal sustainability is maintained. Meeting this commitment will involve further tough choices, but it is important because fiscal sustainability remains one of the key ingredients for sustainable economic growth. The government’s approach seeks to support the economy and to protect jobs. It does so in large part by making substantial investments in worthwhile infrastructure that will yield benefits for the future. It is a budget, therefore, for all Australians and for future generations of Australians. I commend the Appropriation Bill (No. 1) 2009-2010 and the cognate bills to the House.

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