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Budget surplus is $17.3 billion; Treasurer announces establishment of a health and medical infrastructure fund.



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This transcript has been prepared by a source external to the Parliamentary Library.

 

It may not have been checked against the broadcast or in an y other way. Freedom from error, omissions or misunderstandings cannot be guaranteed.

 

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PM

 

Tues day 21 August 2007

Budget surplus is $17.3 billion; Treasurer announces establishment of a health and medical infrastructure fund

 

MARK COLVIN: The Federal Government revealed that the b umper surplus it revealed at the May Budget is even bigger than expected. 

 

The forecast three months ago was for $14-billion, the actual figure's turned out to be $17-billion. 

 

It's given the Treasurer Peter Costello to unveil plans for a new fund. 

 

After the Future Fund and the Higher Education Endowment Fund comes one to be invested for health and medical facilities. 

 

The Opposition argues that the Government is still awash with money from the mining boom, and the problem is it's not spending that money in the right places. 

 

From Canberra, Peta Donald reports. 

 

PETA DONALD: With today's Newspoll showing the Government still well behind Labor, and even losing credibility on economic management, it must have pleased the Treasurer to call a press conference this afternoon. 

 

PETER COSTELLO: Ladies and gentleman, preliminary estimates indicate that the Australian Government recorded an underlying cash surplus of around 1.7 per cent of GDP or $17.3-billion for the year-ended 30 June, 2007. 

 

PETA DONALD: So, because of lower than expected spending and higher than expected company tax receipts, the Budget surplus has turned out to be $3.7-billion more than the Government was expecting. 

 

It was a proud Peter Costello who outlined where the money will go.  

 

Seven billon dollars will be channelled into the Future Fund, to meet the superannuation liabilities of Commonwealth public servants by 2020.  

 

PETER COSTELLO: And after we make this payment into the Future Fund, as long as its locked down, as long as Mr Rudd doesn't get his grubby paws into it, we will be in a position to fund all superannuation liabilities by 2020. 

 

This is a very, very strong financial position. Now, we're going to need it because the world is very volatile at the moment. There are big economies in the world that are facing great pressures. The United States is one of them. That's why we want a strong Australia. That's what this is all about. 

 

PETA DONALD: The Government will make good on it's promise for a Higher Education Endowment Fund - $6-billion will now be invested. And, in a similar style, the Treasurer has announced a new fund.  

 

PETER COSTELLO: Today, I announce the establishment of a new Commonwealth fund, the health and medical infrastructure fund. The capital will be preserved in perpetuity. And the earnings from the health and medical infrastructure fund will be available for new capital medical facilities, such as surgical theatres and high technology medical equipment. 

 

The capital will be preserved in perpetuity, and as the fund grows, and I hope it does, over the years, this will enable Australia to get access to the kind of treatment which is only now being invented and built, which will be an investment into tomorrow's health system for all Australians. 

 

PETA DONALD: But, the Opposition's finance spokesman Lindsay Tanner is less than impressed. 

 

LINDSAY TANNER: The mining boom is raining money on the Howard Government and it's still got no long-term plan for Australia's future. It's still wasting huge amounts of money on the introduction of its extreme industrial relations legislation, huge amounts of money on political advertising and politicians' perks, while our universities and TAFEs are starved of funding and Australians have to put up with a third rate national broadband network. 

 

PETA DONALD: And he's sceptical about whether the Higher Education Endowment Fund and the new Health and Medical Investment Fund will deliver the extra funding that's needed. 

 

LINDSAY TANNER: I would expect we will support these, but obviously we we'll be looking in some detail at the health proposal. We support the Higher Education Endowment Fund, but it's important to keep in mind that the amount of money put in that fund will deliver an annual payment to each Australian university of less than $2-million. That's very small compared with 11 years of neglect, 11 years of being starved of funding. 

 

We'll look at the new health fund they're proposing, but that also is pretty small compared with the overall health spending of the Federal Government of $43-billion a year. That… obviously any additional spending is welcomed, but it's a very tiny amount relative to the total cost of our health system, and there's no guarantee that they won't simply reduce their funding to the states for hospitals by the same amount when they're introducing this fund. 

 

MARK COLVIN: Labor's finance spokesman Lindsay Tanner ending Peta Donald's report.