Mr ZAMMIT(10.02 p.m.) —I listened very attentively to what the Deputy Leader of the Opposition (Mr Gareth Evans) had to say. According to him, everything in the budget is wrong—the direction is wrong, the vision is wrong. Here we saw a former senior minister of the former government with not a single hint of contriteness in his address. We were left with a huge foreign debt and a $10.3 billion budget deficit. On top of that, the credit rating of Australia was downgraded not just once but twice in the final six years of the former Labor government.

It is now about nine months since the new Howard-Fischer government brought down the first coalition government budget in 13 years, generally seen as a tough but fair budget. The plan of action was then detailed to redress the years of Hawke-Keating Labor government budgets that pursued a policy of deficit and debt, a policy that saw little inclination to take tough decisions in the long-term interests of our nation and a policy that resulted in Australia's overseas debt blowing out to unheard of proportions.

That policy also resulted in a Commonwealth general net debt in excess of $93 billion, a budget deficit of more than $10 billion and Australia having to suffer the ignominy and shame, for the first time in our nation's history, of being downgraded by the world's major credit rating agencies from our AAA credit rating not just once but twice in the last six years of that government. Deficit and debt are the hallmarks of the legacy of Labor.

It is interesting to note that in its last five years the former Labor government ran up $70 billion in deficits, averaging $17 billion a year. Treasurer Costello has turned a $10.3 billion deficit around to a surplus in 1998-99 of $1.6 billion. The Treasurer has set the scene in this plan for a steady, decades-long growth—no more of the boom and bust of Labor with the recession we `had to have'.

This budget provides the framework for steady growth, low inflation, low interest rates, Commonwealth outlays at pre-Whitlam levels and a budget in surplus, with a growing economy at 3¾ per cent and perhaps even higher. Just as importantly, this will obviate the need to borrow this year or next year on the long road to repaying our debt. In other words, we are at last beginning to pay our way through a reduction in spending instead of a lifting of revenue.

Not only will the Commonwealth not be borrowing, but in fact the process of repaying our debt has begun—a debt left to us through the former Labor administration's mismanagement of the Australian economy. The repay ment of the debt will be at the impressive rate of $5 billion in the coming financial year, with a further $5 billion the following year.

Also, for the first time in more than a decade the Commonwealth is going to tax savings less, and the tax system is going to be biased in favour of savings. National savings have fallen steadily for the past 13 or so years. As a result, investments which create jobs and improve the socioeconomic standards of our society have exponentially dried up. The cornerstone of the Howard-Costello financial strategy is the increasing of national savings through an increase of public savings. It remains an undeniable fact that, even though we form part of the global economy—in particular I refer to the capital markets—those nations whose people save money have higher levels of business investment than nations whose people do not. Domestic savings that are clearly identifiable are exactly what Australia needs to advance economic growth and reverse unemployment trends.

If there is a highlight to the budget, a point of emphasis, then it must be in reference to savings. In the recession, the one we `had to have', the rate of national savings as a percentage of GDP was at a very low 16 per cent. That has steadily improved since the Howard government came to power on 2 March 1996 to about 18 per cent currently. However, even that improvement leaves us well short of the 25 per cent of GDP experienced in the 1950s and 1960s, which is the level we have to aim for.

The savings rebate contained in the budget goes some of the way to redressing the injustice felt especially by self-funded retirees. The bulk of self-funded retirees are people who have sacrificed all their lives to not become a burden on governments when they retire. Many, if not most, retire on fixed incomes and have to rely on their investment and/or superannuation just to survive.

There will be a rebate on interest on bank account savings, superannuation contributions, share dividends, and also on rents from properties. That rebate will be at the rate of 15 per cent on savings worth up to $450 a year on taxable income from savings of up to a maximum of $3,000. These measures will be brought in over two stages, with a 7½ per cent redebate from 1 July 1998 and the full rebate from 1 July 1999. The major incentive to savings in this budget is the fact that the government is strenuously setting about the task of repairing years of mismanagement by returning the underlying budget balance to a sufficient surplus to meet the accruing costs of government initiatives.

Unemployment, which is forecast to go down to about eight per cent, continues to be Australia's major economic and social problem. However, that level, if attained—and I am confident that it will be—will be the lowest level for the past eight years. The Howard coalition government in the past year has created 130,000 new jobs, and the forecast in this year's budget is for 200,000 additional jobs. The coalition government's plan of action with a budget surplus in 1998-99, the underlying inflation rate at only two per cent—one of the lowest in the world—and interest rates at their lowest for more than a quarter of a century puts the Howard government well on target for a reduction of unemployment to under eight per cent by the middle of next year.

The other good news I want to refer to is the Commonwealth general government net debt which is set to fall from over 19 per cent of GDP in 1995-96 to under 10.5 per cent in the years 2000-2001—a huge turnaround, almost halving our public debt levels as a percentage of our GDP that has restricted our economic growth prospects. That, if it were left unaddressed, would have resulted in many future generations of Australians having to shoulder the debt.

I turn now to the issue of the family and what is being done to assist them primarily through the $1 billion family tax initiative, which is beginning to provide substantial assistance for low and middle income families. Additionally, on 1 July this year, the $450 rebate on the cost of private health insurance will come into effect. The new initiatives announced in this budget by the Treasurer will further assist families in need, especially some of the most disadvantaged—and I refer specifically to those who look after elderly relatives and/or children with disabilities.

The domiciliary nursing care benefit will be aligned from 1 July 1998 with the child disability allowance to assist carers who provide home based care as against nursing home care, with an extra $16.60 per fortnight. Also effective from 1 July 1998, those caring for children under the age of 16 with severe disabilities will become eligible for carer payment. This means that a full-time carer will be eligible to receive up to $347.80 per fortnight. Further, additional funding of $54 million spread over four years will be provided under the Commonwealth-state disability agreement for additional support for accommodation for people with severe disabilities.

I want to turn now specifically to two coalition plans, which are visionary: the first, through the Natural Heritage Trust, has the potential to largely repair the destruction successive generations have inflicted on our environment; and the second, through the Federation Fund, looks to the future for the celebration of our centenary of federation. The Natural Heritage Trust is provided with $1¼ billion to fund the largest ever rescue operation, with the greatest possible urgency, for our greatest national inheritance—and that is the environment—to save our rivers, vegetation and land. The Federation Fund will consist of $1 billion to fund projects of special national importance in commemoration of the forthcoming centenary celebrations of our federation, which occurred on 1 January 1901.

Mr Leo McLeay —Pork-barrelling.

Mr ZAMMIT —I cannot let that interjection from the honourable member for Watson go unanswered. He called it pork-barrelling. Repairing the environment that successive generations have not taken responsibility for, and providing a Federation Fund—something that we should all be very proud of—he refers to as pork-barrelling; all the jobs that will be provided to help young Australians especially, he calls pork-barrelling. I believe that comment will come back to haunt the honourable member for Watson.

These projects will be especially selected to create jobs in the construction phase, and will also be chosen to honour our achievements as a nation since federation. I am particularly glad to see that one of the projects will include a National Museum of Australia. I would hope to see a significant portion of that museum dedicated to the collation of the history and other related memorabilia surrounding migration to Australia, which I think is much needed before all this memorabilia and these parts of Australia's history are perhaps lost forever.

As I move around the electorate, I am heartened by ordinary average Australians who say to me that they are aware that in just two budgets we cannot—and neither are we expected to—repair 13 years of boom and bust cycles and the deficit and debt mind-set of the former Labor government. They also tell me that they want a plan of action for a better and fairer Australia.

I pay tribute tonight to the Treasurer for providing in this budget the plan of action for his and the Prime Minister's perceptive view of the aspirations of our fellow Australians, with an emphasis on small business, families, reduction of debt, budget outcomes and jobs, jobs, jobs. I can think of no better note to finish on in expressing my strong support for the appropriation bill 1997-98.