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Thursday, 27 May 2004
Page: 29366


Mr BARTLETT (1:15 PM) —Any budget involves finding the right balance between meeting the expenditure needs in a range of essential services, supporting those in need, minimising the pressure on taxpayers and exercising responsible fiscal management. Clearly this budget does all those things and continues this government's proven record of achieving that balance. In the limited time available I would like to briefly expand on each of those areas. The budget addresses a number of priority areas of need, allocating increased or new funding to a number of areas. Time prevents an exhaustive or detailed discussion, but a summary of the main areas might be helpful.

Firstly, this budget allocates $41 billion to health over the next year, including $2.85 billion for the government's program to strengthen and protect Medicare, and introduces a new safety net—an extra level of protection that was never there under Labor. Funding of $41 billion for health next year doubles the amount provided under Labor in 1996. The fact is that this government is delivering record spending on medical services, medical research and immunisation. Record levels of immunisation were reached. There is funding for a whole range of new programs. The federal government is providing record assistance to the state governments to help them with their public hospitals, which, I have to say, they cannot seem to manage in New South Wales anyway. Overall there has been a doubling of health spending. We hear the rhetoric from the other side, but this government is delivering double the spending on health that the last Labor government managed to spend.

Secondly, the budget provides $17 billion on education for next year—up by 5.4 per cent from this year. For schools there is $7.6 billion, supporting both government and non-government schools, as we need to. The point worth making is that we hear a lot about the controversy of funding for state schools. This budget brings the increase in direct funding by this government for state public schools up to 68.7 per cent over the last eight years. That is, this government has directly increased funding for state public schools by almost 69 per cent since it has been in office—far faster than the commitment of state governments, which have prime responsibility for state schools.

Another feature of this budget in the area of education is the commitment of $18 million for a medical school for the University of Western Sydney—an announcement greeted very positively by my community and which will bring strong education benefits and strong health benefits to the people of Western Sydney, the Hawkesbury and the Blue Mountains. I am delighted that the government has responded to this need in our part of Sydney.

Thirdly, there is strongly increased spending by this government in the area of aged care. In fact, there is an extra $2.2 billion in funding over the next four years, including extra capital funding. Some of that is an immediate injection: $513 million extra before the end of this financial year. That is an immediate injection which, for nursing homes and hostels in my electorate, in the Blue Mountains and the Hawkesbury, will mean an extra $3.8 million within the next six weeks. In addition to that there will be another $438.6 million in capital funding over the next five years, extra recurrent funding, and an extra 27,900 residential and community aged care places over the next three years.

It is worth pointing out that since the coalition has been in government we have increased the number of aged care places by 55,600, substantially making up the terrible shortfall left by Labor's neglect when they left office. Another 27,900 places will be provided over the next three years. In all, by next year spending on aged care will have doubled from $3 billion in 1996—it is already $6 billion this year—to $6.7 billion next year. So we are already spending double the amount that Labor was spending on aged care when they were in office. As well as that, we have put in extra effort to improve accreditation and standards for aged care facilities right across this country.

There is increased funding for veterans. The provision of an extra $604 million over the next four years was announced in this budget, bringing total expenditure for veterans to $10.6 billion by next year—up from $6.5 billion under Labor. Specifically, we have more than doubled spending on veterans health care, from $1.8 billion in 1996 to $4.4 billion under this budget. There is a raft of other new initiatives, programs and services for our veteran community that Labor never even thought of spending and could not deliver.

There has been further spending in other areas, including enhancement of Australia's defence and security. There is an extra $755 million for security and intelligence capability, which is so necessary in this very fragile, volatile and insecure world. There is an extra $1.5 billion for defence over the next five years, bringing the total increase in defence spending under this government to $39.7 billion. The prime responsibility of any government is to do whatever it can to ensure the security of its people. That is a responsibility that this coalition government has taken very seriously and it has committed the funding to deliver on that.

I could talk about many other areas in this budget. There is a commitment of $5.3 billion for science and innovation and an extra $1.1 billion for Australian land transport under AusLink, in addition to the $2 billion announced earlier this year. There will be an extra $461 million over the next four years for carers of people with disabilities, including an immediate bonus of $1,000 for carer payment recipients and $600 for carer allowance recipients.

There will be an extra 44,000 child-care places, particularly for the much-needed out-of-school-hours service for school-age children. There will be an extra $400 million for the environment, bringing the amount to a record $2.4 billion next year—well above, far above, what we ever saw under Labor. We get the empty rhetoric from the other side again about the environment, but this government has been delivering, and continues to deliver, record levels of funding for the environment. I could go on and on about the increased spending measures in the budget.

The second area that I want to mention is the measures aimed at reducing the financial pressure on taxpayers and families. The budget delivers these in two ways: firstly, through reduced income taxes and, secondly, through increased family payments. With income tax cuts, we see a third stage in the reduction of income tax levels delivered by this government. You will remember, Mr Deputy Speaker Hawker, that in the year 2000, as part of the new tax system, we delivered massive income tax cuts. We cut income taxes by $12 billion. Then, in last year's budget, we reduced income taxes again by another $2.4 billion. And in this budget, over the next four years there will be a further reduction in income taxes of $14.7 billion. We hear the criticism from the other side, we see the crocodile tears, but we have delivered far better income tax cuts than the opposition has ever been able to.

These income tax cuts significantly and importantly will reduce the disincentives faced by middle-income earners—those who are just about to go into the 42 per cent tax bracket. For instance, someone who is currently on average weekly earnings and who does a bit of extra overtime or gets a pay rise would be pushed into the 42 per cent tax bracket. These tax cuts are aimed at reducing those disincentives at that middle-income level, so it will involve raising the threshold at which the 42 per cent cuts in: from the current level to $58,000 from 1 July and then to $63,000 next year. For the higher tax level of 47 per cent, the threshold will be raised from the current level to $70,000 from 1 July and then to $80,000 next year.

These changes in the thresholds will ensure that, even with predicted income and pay rises next year, 80 per cent of taxpayers will remain in the 30 per cent tax bracket or less. It is worth pointing out again that these are part of this government's ongoing tax reform, part of this government's ongoing efforts to reduce income taxes. If you look back over the last four years and include this package, low-income earners—those on $20,000 or less—will have had a 23 per cent reduction in income tax. Income earners on $50,000 will have had a 21 per cent reduction in their income tax levels and higher income earners a reduction of 18 per cent.

These tax cuts are under threat under Labor. Remember that, in the year 2000, Labor opposed measures to bring tax relief to middle-income earners. Labor has already ignored the challenge of guaranteeing that the second tranche of these income tax cuts will be delivered. In fact, they have refused to guarantee that those income tax cuts will be delivered. The point is that Labor's record and Labor's refusal to give an unequivocal guarantee make it quite clear that the second tranche of these tax cuts will be seriously under threat, and will probably be jeopardised the same way that the promised l-a-w tax cuts were, should we have a Labor government.

The other area of relief for families is the massive increase in family tax benefits announced in this budget—benefits totalling $19.2 billion over the next five years. It is worth noting that these family tax benefit improvements come on top of increases in previous years by the coalition aimed at improving the financial position for our families. They are measures that have helped families to juggle the joint responsibilities of work and parenting. They are measures that have significantly improved living standards for families around Australia. The two parts to this package—family tax benefit part A and family tax benefit part B—will deliver in total an extra $600 each year for many families. The more relaxed withdrawal rates will mean that the effective marginal tax rates for those parents working part-time and re-entering the workforce will be reduced to take the pressure off these families. So the combined effect of the tax cuts and increased family tax benefit means that almost all families will be substantially better off.

I will give you two simple examples. A single income family earning $45,000 with two young children—one under five—will be $48.55 a week better off just through the tax cuts and family benefit. If they take up the option of the superannuation co-contribution they will be better off by even more than that—by $61.05 a week. Another example is a dual-income family with a total income of $65,000, split 67 per cent to 33 per cent—a two to one split. With three children—one under five—that family would be $39.84 a week better off. If they took the offer of the government's superannuation co-contribution they would be $53.73 a week better off.

Many families around this country will be $30, $40 or $50 a week better off because of this budget. And what do we have the opposition doing? They are scratching around trying to find some sort of negative—trying to put a negative spin on it—instead of supporting and praising these measures that will improve life for our families. Families across Australia—families in my electorate of Macquarie, the Blue Mountains and the Hawkesbury—are delighted with these improvements. But, again, these improvements cannot be guaranteed under Labor. The shadow finance spokesman refused to guarantee the family tax benefits and the tax cuts beyond 2004-05. These benefits—these tax cuts and increased family payments—are under serious threat under Labor.

This budget has provided massive increases in funding for essential services and infrastructure. It has increased funding and reduced taxes dramatically to take the financial pressure off families. The third thing it has done is continue this government's record of sound and responsible fiscal management. It is to this that I want to turn in the remaining five minutes of my speech.

This budget delivers another surplus, the seventh in a row under this government—a surplus of $2.4 billion, which will again go to reducing the legacy of debt left under Labor. That debt, which in 1996 when Labor left office was $96 billion—or 19 per cent of GDP—has been reduced, by this government's careful responsible approach, to $25 billion, which is only three per cent of GDP. We have repaid over $70 billion of Labor's debt. Compare the fact that we have delivered surpluses for seven years in a row with the deficit after deficit that Labor delivered in their last five years. And these were not small deficits; they were deficits which, in five years, totalled $68 billion. These deficits averaged almost $14 billion a year for their last five years.

And that is on top of all the asset sales that we had. Just remember that, in those last five years of Labor, they not only ran up those massive deficits but sold almost everything that was not nailed down: Qantas, the Commonwealth Bank, the Commonwealth Serum Laboratories—a long list. Yet, in spite of selling all those assets, they still ran up deficits averaging almost $14 billion a year. This matters because it means that, as we have repaid roughly three-quarters of that, we have reduced substantially the annual interest servicing costs—that is, instead of $8 billion a year of taxpayers' money merely going down the drain to service Labor's debt, as it was in 1996, now less than $3 billion is required to service government debt. This means over $5 billion extra a year going into health, education, essential services, infrastructure and reducing tax pressures. Responsible, sound economic management delivers benefits to all Australians.

There are many other dividends—many other benefits—from this sound, responsible approach to management. The strong economic growth that we have had, despite trouble all around the world, has enabled the country to generate some 1.3 million jobs and reduce unemployment from the average of 8.5 per cent that we saw during Labor's 13 years to 5.6 per cent. Inflation, which averaged 5.2 per cent under Labor, is now down to two per cent. Home loan interest rates averaged 12.75 per cent for 13 years of Labor. It was not just one year of high interest rates; they averaged 12.75 per cent for 13 long, miserable years. Yet interest rates now, because of this government's responsible management, are down to just over seven per cent.

Home owners in my electorate are delighted by the reduction in their interest payments. They are terribly afraid of what will happen to interest rates if Labor is returned to office. In my electorate, someone paying off a mortgage on a loan of $200,000 is saving $575 a month, tax free, on what they would have been paying when Labor left office in 1996, when interest rates were 10.5 per cent. The important point is that these results are not an accident; they are not just a fluke. They happened because of careful, sound, responsible economic management.

These things are under jeopardy if Labor are returned. Look at their record. Basically every Labor government in memory has been an economic vandal. Look at the legendary financial incompetence of the Whitlam government. Look at the $97 billion debt left by the last Labor government. Look at the recession they said we had to have. Look at the massive 17½ per cent interest rates they gave us. Look at the sheer incompetence of the New South Wales state Labor government that cannot deliver adequate services in hospitals, schools, infrastructure or law and order.

Look at the unfunded promises we are already hearing from the Labor Party. Look at their refusal to rule out tax rises. Look at their commitment already to a new national payroll tax across the country. Look at their commitment to slug mining companies an extra $500 million a year. There is a real threat if Labor are elected. The economic security of this country and the wellbeing of Australians have been enhanced through the sound fiscal management of this government and would be seriously jeopardised under the economic vandalism of Labor. This budget has delivered, and continues to deliver, on extra services, tax cuts, support for families and responsible fiscal management in each of these areas. It stands in clear contrast to Labor's record.