James McGrath (Queensland, Liberal National Party) Share this | Hansard source

As I was saying in the whip's office before I came into the chamber, this is a budget that will let you sleep at night, whereas Labor's budget will keep you awake at night in pure terror in terms of what they will do to Australia's economy. This is a budget that should relax Australians in knowing that there are adults in charge of the Australian economy, that there are adults in charge of the Australian government and that we are going to get the economy back on track.

As night follows day, Labor get into power and they go a little bit crazy, like drunken teenagers with their parents' credit card, and destroy the economy.

Senator Polley interjecting—

Goodbye, Senator—a devastating analysis in your contribution. Labor get in and destroy the Australian economy at a state or federal level, and then what happens? We get the coalition in, we get the Liberal and National parties in, to clean up Labor' mess. This is what Tony Abbott, Joe Hockey and the cabinet have been doing since they were elected, with a strong and fantastic mandate, in September 2013. This budget is the next step in the coalition's responsible, long-term economic plan to build a strong, safe and prosperous future for all Australians.

We all know there are economic challenges. We know that China's economy has slowed and that the iron ore price has almost halved since the last budget. But it is important to stabilise the nation's finances and reduce debt. Debt is a word that Labor are uncomfortable with. They are probably too comfortable with debt because they love debt. There is debt in Labor's DNA. On this side of the chambers, in the Senate and in the other place, we do not like debt. We think that debt in Australia at the moment is too high and we have a plan to reduce that debt. One of the ways we can reduce debt is by building a stronger economy and a better future for all Australians. This country is seeing real progress. Our plan is working because growth is up and jobs are up. Labor's projected debt and deficit have already been cut in half.

This year's budget delivers a credible path back to surplus. The coalition government remain committed to returning the budget to surplus as soon as possible. The budget will show that our plan is working, because this budget is going to deliver jobs, growth and opportunity in a way that is responsible, measured and fair. We want to help Australians get ahead and provide them with greater capacity to make their own decisions about their future. That is why this year's budget has been focused on families and small businesses. Later on in my contribution I will talk about what the budget is doing specifically for families and small businesses. This is a jobs and small business package that includes the biggest small business tax cut in Australian history which is going to boost investment and boost jobs. And the budget delivers a better childcare system that is simpler, more affordable, more flexible and more accessible. It will provide parents with greater choice when it comes to balancing work and family.

Addressing Labor's debt and deficit will make Australia stronger and will allow the government to invest more in the services Australian's need. So we are taking decisions in the long-term interest of this country, not in long-term sectional interest and not in the interest of the next election. We are making decisions on what is best for Australia in five, 10, 15 or 20 years' time. So, let's talk about the deficit. We inherited a deficit of $48 billion. The deficit for the budget year is now estimated to be $35 billion and is forecast to reduce each and every year to below $7 billion over the next four years. Over four years this means we will have reduced the $123 billion worth of deficit inherited from Labor by over $40 billion, and we have a credible path back to surplus. Because of our efforts the deficit reduces each and every year, on average, by around half a percentage point of GDP per year. This is despite over $90 billion of tax receipts having been written off since we came into government.

Iron ore prices have halved since the last budget from US$90 a tonne to US$48 a tonne in this budget. This has contributed to the largest fall in the terms of trade in over 50 years. The government have decided not to proceed with our fully funded PPL package as provisioned. The funding was put aside in the budget and the scheme has being redirected to fund other important budget priorities. As we promised, the size of government will reduce over the next four years. We have kept real payments growth in check at 1.5 per cent, on average, over the five years to 2018-19. While Labor promised real spending growth at two per cent per annum, they delivered 3.6 per cent per annum. Gross debt in a decade will be more than $110 billion lower than what we inherited from Labor where it was provisioned to go towards $667 billion. Net debt is projected to peak at 18 per cent of GDP in 2016-17 before falling considerably, because of the decisions we made in last year's budget and the decisions made in this year's budget, to 7.1 per cent of GDP in 2025-26.

Our action on the budget has allowed us, each year, to lower taxes. In 2014 we removed the carbon and mining taxes, which was a key pledge of the coalition that we took to the 2013 election. We said that we would get rid of the mining tax; we abolished it. We said that we would get rid of the carbon tax; we abolished it. In 2015 we are reducing taxes for 96 per cent of all Australian businesses. I will repeat that—we are reducing taxes for 96 per cent of all Australian businesses. Taken together all of our decisions since coming to government have reduced the overall burden of tax by $5.4 billion. The government's economic stewardship has seen nearly a quarter of a million new jobs created since we came to office. In the lead-up to the budget Labor were standing in the way of fixing the budget by blocking $30 billion worth of savings including $5 billion of their own savings that they had promised.