Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Hansard source

This budget sets the framework for a sustainable future for our country, and it is absolutely the budget we need at this time. The previous six budgets delivered in this place simply drove us ever further and further away from that fundamental requirement: sustainability. Labor's entire approach to public finances was fundamentally unsustainable. Their expenditure was out of control, and Labor did not care. They remain completely unrepentant for the legacy of intergenerational debt that they have left behind. They show no signs of regret for the legacy of debt that they are leaving to future generations. They show no signs of being prepared to adopt a different path, were they ever to be entrusted with government again.

Each and every budget from those opposite raised hopes and raised expectations, but in reality it was all based on unfunded spending that could not sustain those hopes and expectations. Labor was turning Australia into la-la land, where the cornerstone idea was that everybody could have everything they wanted when they wanted it and they would never have to pay for it. It was the most socially, culturally and economically irresponsible government in the history of this country.

The result was debt and deficit on a massive scale, stretching off way beyond the forward estimates. It put the stupidities of the Whitlam era—and some of those were extraordinary—deep in the shade, and we could consign the Whitlam era even deeper in the shade if the member for Lilley had ever been able to find himself someone like Mr Khemlani! Australia simply cannot sustain the kind of government spending that the member for Lilley directed without a Khemlani. That took the federal government from having $70 billion in the bank in 2007 to having a rapidly looming gross debt, without any remedial action, of $667 billion.

When we came to office, the most fundamental task confronting us was to restructure the public economy, shifting the balance away from recurrent expenditure to investment in infrastructure and skills and the things that drive productivity growth. That is the best safety net there is: an economy in which there is a job for everyone who is capable of holding one and where the need for a safety net for those who cannot gain employment is at a level that those who have a job are able to sustain indefinitely. That is not where we are today. It is where we have to be as soon as we can reasonably manage it. As an inevitable result of that necessity, there are hard decisions in this budget, and there had to be plenty of them, given the way this country had been governed for the past six years. Now, some of the measures will not impact immediately. Several are designed to trim expenditure growth by freezing indexation or tightening eligibility in the welfare sector.

Australia has been drifting too far, too fast towards more leaning and less lifting, under the mistaken impression that we could always afford it. But we cannot, and the proof of that is that this drift was occurring on borrowed money. According to Labor—still in denial—debt in this form of unproductive, unsustainable government does not really matter. But of course debt does matter. Everybody managing a personal budget knows that. The debt projection in this country is a crisis. Labor's debt bill is costing us $1 billion a month just in interest. The first billion dollars raised in revenue each month goes to paying Labor's debt, and that would have kept going until the $1 billion became $2 billion and then $3 billion if Labor were still entrusted with the treasury bench. But, if you do not think that is a crisis, Labor wanted to add to the amount they borrowed to pay interest on the debt while lifting spending even further. The Gonski reforms meant billions more; the NDIS, billions more; foreign aid, billions; defence, billions; health, billions—and none of this expenditure had been provided for. Spending was just going up ever and ever higher, way out beyond the forward estimates.

To make it even sillier, the sources of revenue for this spendathon were works of fiction or worse. King amongst them of course was the mining tax, the magic pudding that never was. It was sliced and sliced and sliced again, all to deliver absolutely nothing. The pudding simply never existed. The carbon tax was even worse, putting a burden on all Australians but not delivering anything that was going to improve our national economy.

The International Monetary Fund recently confirmed that, for the six years from 2012 to 2018, Australia was forecast to have the largest percentage increase in spending of the 17 IMF advanced economies profiled. Labor promised to limit real spending growth to two per cent a year. Instead, during their time in office, they delivered real spending growth of 3½ per cent. Now 2017-18 is coming into the forward estimates for the first time, the medium-term projections from MYEFO show real spending growth between 2016-17 and 2017-18 would have been nearly six per cent—nearly three times what Labor promised they were going to deliver.

So we made some tough decisions in this budget, but they are the right decisions. We will reduce the budget deficit from almost $50 billion in 2014 to $29 billion by next year and to just $2.8 billion in 2017-18. And we are doing it the hard way by reducing expenditure, not the Labor way of raising taxes. Peak government debt will be reduced from $667 billion to $389 billion in 2023-24. That number is still too high, but it does represent a substantial improvement on where Labor would have taken us.

You have not heard very much from our critics over recent weeks on this, but the budget will actually reduce taxes by $5.7 billion in the coming financial year—$5.7 billion less in taxes. The company tax rate has been cut by 1.5 per cent and we intend to honour our election mandate to get rid of the carbon tax and the mining tax. By comparison, Labor lumped an extra $107.3 billion in taxes on Australian families and businesses while they were in government, introducing 944 new revenue measures over that time, more than 90 of which they never even legislated. Around 80 per cent of those measures were increased taxes or increased compliance costs on enterprises, while 77 per cent of our budget improvements come from reduced expenditure and only 23 per cent from higher receipts. So we are moving to make substantial changes. We are moving to make sure that our budget can be secure in the future. We have to make the safety net in our welfare system secure and capable of catching people who need it in the future. We were elected to fix Labor's mess, to deliver better management and to start turning the budget around. We did not hide the fact that it would be tough, and this budget gets on with the task.

We have made some significant reforms to the age pension to make it sustainable. Young people with the capacity to work will be required to be earning, learning or participating in work for the dole. Businesses will receive $10,000 for employing workers older than 50 who have been on income support for six months or more, meaning there will be stronger incentives to hire older workers. The budget takes steps to ensure the government is living within its means and to rein in the age of entitlement. More than 830,000 Australians now receive the disability support pension and that number is growing at 1,000 per week. Some recipients under 35 will have their entitlement reviewed as we want to help everyone who can make a contribution to our society to do so. There will be a temporary budget repair levy. From July, individuals with a taxable income of over $180,000 will pay an extra two per cent. That levy will raise an extra $3.1 billion over the forward estimates period and will help ensure higher income Australians contribute to the budget repair.

But what I think is the most exciting part of this budget is the government's commitment to infrastructure. The government has announced a program of more than $50 billion to build the infrastructure of the 21st century. Our record budget investment will support more than $125 billion of construction activity as part of the government's infrastructure investment program. The key message of this budget is that Australia must contribute and build. This budget calls on everyone and every business to contribute, to join together, to grow the workforce, to boost productivity and help build a stronger economy with more investment.

The road building program covers every state and every territory. It includes a major boost in expenditure, spending real money for real productivity improving roads and rail projects. It will make our transport system much more efficient. There is $6.7 billion to fix the Bruce Highway which is the main artery of Queensland commerce. There will be funding for 45 new projects in this budget and continuing funding for 16 already underway. There is $5.6 billion to complete the duplication of the main eastern states artery, the Pacific Highway. Importantly for right across regional Australia, there is a $2.5 billion extension to the Roads to Recovery program, one of the most important ongoing inputs to regional Australia. This was set in place originally by the coalition government and we remain totally committed to it.

Augmenting that program there is the new $300 million Bridges Renewal Program. There is $450 million for more four-laning of the Princes Highway West in Victoria, $480 million for the North-West and Great Northern Highways in Western Australia, $400 million for the Midland Highway in Tasmania, $90 million for the Northern Territory's Regional Roads Productivity Package, up to $1.3 billion towards the Toowoomba Second Range Crossing, $509 million for the Warrego Highway and $229 million for a new national highways upgrading initiative. This is a massive start to the Prime Minister's promise that we will build the roads of the 21st century.

And those roads are on top of the big capital city project like Gateway North in Brisbane, the WestConnex in Sydney and the $2.7 billion commitment to Western Sydney roads. There is the East-West project to which the Commonwealth will contribute $3 billion in Victoria. There is the South Road in Adelaide and of course the Roe Highway and Swan Valley Bypass in Perth. This is a major roads program.

I have heard some criticism from members opposite that there was no investment in rail in this budget and that in fact as a result of our investment we would be distorting state expenditure away from rail projects and urban public transport onto roads. The facts are that the evidence denies that allegation. There is $3.6 billion in this budget for rail, significantly, for example, for freight rail projects including the beginning of the Melbourne to Brisbane railway line which will make such a difference to east coast freight movements. On top of that, the states have committed or recommitted to $25 billion of urban public transport projects since this government came to office. So our big investment in roads is not taking money away from urban public transport; it has indeed supported substantial investment in urban rail.

The other nonsense we have heard is that this is only a tiny increase, that there are only one or two additional projects. There are dozens of additional projects that Labor had not even thought of including billions of dollars in areas like Western Sydney and the like. Labor has been asleep at the wheel when it comes to infrastructure. There has been plenty of talk but over the last two or three years in particular their actual expenditure on roads was in decline. We will reverse that. There is a substantial 55 per cent increase in road and rail funding in this budget and that will make a difference to our nation's infrastructure.

There are also significant commitments to local regional projects. This is a good budget. It is a rebuilding budget. It is the budget that will ensure that we will be able to get our economy back on track with real money and our national priorities being achieved. This is a change of direction for Australia which will make a big difference to the future of our nation and our capacity to walk proudly with balanced budgets in the future.

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