Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is also to the Minister for Finance, Senator Cormann. Can the minister update the Senate on the government's plan for the economy, for jobs and for budget repair?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Hume for that question. She clearly has a great interest in the strength of the Australian economy. When our government was elected in 2013, we inherited a weakening economy, rising unemployment and a budget position that was rapidly deteriorating. Let me repeat that: when Mr Shorten and Mr Bowen were defeated at the 2013 election, they left behind a weakening economy at a time when commodity prices for our key commodity exports were way above what they are in our budget now, they left behind rising unemployment and they left behind a budget position that was deteriorating by a staggering $3 billion a week. In the 11 weeks between Labor's last budget and the Pre-Election Economic and Fiscal Outlook, the budget position deteriorated by $3 billion a week, at a time when the price of iron ore was still above $120 a tonne. We're now forecasting our budget on the basis of $55 a tonne, just to use one example.

As a result of our plan for a stronger economy and more jobs, and our plan to get the budget back into surplus, we are in a much better position now. Our economic growth outlook is better, employment growth is much stronger—in 2017, 415,000 new jobs were created—and, of course, our budget is back on track to a surplus one year early: a $2.2 billion surplus in 2019-20, followed by an $11 billion surplus in 2020-21, a $16.6 billion surplus in 2021-22, rising to over one per cent of GDP by 2026-27, and in surplus all the way through the medium term. As of this year, the government no longer has to borrow to fund our day-to-day expenses. That's been the result of fiscal restraint. It's been the result of stronger growth on the back of our plan for a stronger economy and more jobs. We inherited four per cent spending growth from Labor locked into legislation. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Hume, a supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

Can the minister outline for the Senate how this budget will encourage and reward hardworking Australians?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Unlike the Labor Party, we want to back, to support, to encourage and to reward hardworking Australians because we are committed to ensuring that Australians today and Australians into the future have the best possible opportunity to get ahead. That is why we want to ensure that we can provide income tax relief to Australian families—prioritising low- and middle-income earners (1) because we want to support them to deal with cost-of-living pressures, (2) because we want to address bracket creep, because bracket creep is a drag on economic growth, and (3) because we want to simplify the tax system. While we will prioritise low- and middle-income earners, we do believe it is important that the tax policy settings for personal income tax overall are lowered, and that is why, over a seven-year plan which is fully costed, which is affordable and which is reflected in our budget bottom line, we are putting forward a seven-year plan which provides— (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Hume, a final supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

Minister, how is the government guaranteeing funding for the essential services Australians rely on while making sure that the government lives within its means?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

A stronger economy is central to everything. The way we can afford to pay for the quality health care that Australians expect, the way we can afford to pay for the social welfare safety net that Australians expect and the way we can pay for our defence, for our border security, for our education and for all of the many essential services that Australians expect their Australian government to provide is on the back of a stronger economy. A stronger economy is central to everything, and what we've been able to achieve as a result of our plan is stronger revenue flows to government on the back of stronger growth—and do you know where it came from? Predominantly, from increases in personal income tax revenue as a result of 415,000 additional Australians in work. We have been able to help, since we came into government, 140,000 Australians off welfare and into a job. That means less expenditure on welfare. It means more revenue on personal income tax. And that is, of course, just one example. (Time expired)