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Thursday, 10 May 2018
Page: 2905

Budget

Senator PATERSON (Victoria) (14:11): My question is to the Minister representing the Treasurer, Senator Cormann. Can the minister please update the Senate on the government's plan for a stronger economy to create more jobs and to guarantee essential services?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (14:12): I thank Senator Paterson for that question. I'm pleased to advise the chamber that this year's budget shows that we, as a nation, are turning the corner on Labor's legacy of deficit and debt. Our economy is strengthening, more jobs are being created, our budget is getting back into surplus and we can now start to pay down the debt that was accumulated on the back of unsustainable spending growth locked in by the previous Labor government—in particular by the previous Labor finance minister, Senator Wong.

Funding for essential services is guaranteed within the budget through increased revenue on the back of stronger growth—rather than through higher taxes—and more jobs, and by ensuring that the government lives within its means. The budget is the sixth consecutive update that charts a course to surplus by 2020-21. As a country, we are no longer borrowing to fund recurrent expenditure. Real expenditure growth has been limited to 1.6 per cent over the forward estimates per year, the lowest of any government in the last 50 years. Under Senator Wong, it cost four per cent per year on average above inflation.

We are projected to pay down more than $232 billion of government net debt over the next decade, taking government net debt down to 3.8 per cent as a share of GDP over the medium term. The budget is projected to return to balance in 2019-20, one year earlier than previously expected, and with surpluses growing to more than one per cent of GDP from 2026-27.

Don't take my word for it—Innes Willox, the CEO of the Australian Industry Group, has said that our budget:

… will give business and the community confidence for the future and is cause for optimism.

Mr Willox went on to say:

The Government has moved to take advantage of the economic improvement now underway by proposing tax relief to business and households, as well as a significant boost to infrastructure spending. This strategy is anticipated to drive further growth in activity, real incomes and job creation.

(Time expired)

The PRESIDENT: Senator Paterson, a supplementary question.

Senator PATERSON (Victoria) (14:14): How will the budget provide tax relief to working Australians and small businesses?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (14:14): As a result of our sound economic and fiscal management, we are now able to provide tax relief to reward and encourage working Australians: to help them deal with cost-of-living pressures; to address bracket creep, which is a drag on economic growth; and to simplify the tax system. Our seven-year personal income tax plan prioritises low- and middle-income earners, who will be provided with tax relief of up to $530 per year. Our plan also delivers a tax system that encourages aspirational Australians to get ahead, to take on additional work and to seek advancement knowing they can keep more of their extra income. We're extending for a further year the $20,000 instant asset write-off for small businesses with a turnover of up to $10 million, and, of course, we have legislated tax cuts for small and medium-sized businesses. Denita Wawn, CEO of Master Builders Australia, said:

Reducing the tax burden on households and small business is good for the economy and good for builders. People may decide to renovate their kitchen sooner or buy their first home faster.

(Time expired)

The PRESIDENT: Senator Paterson, a final supplementary question.

Senator PATERSON (Victoria) (14:15): What are the key risks to job creation, economic growth and returning the budget to surplus?

Senator CORMANN (Western Australia—Leader of the Government in the Senate, Minister for Finance, Special Minister of State and Vice-President of the Executive Council) (14:15): The biggest risk to our economy, to jobs and to getting the budget in a stronger position into the future is Mr Bill Shorten. We have to remember that when Mr Bill Shorten and Mr Chris Bowen lost government in 2013 they left behind a weakening economy, rising unemployment and a rapidly deteriorating budget position that was deteriorating by $3 billion a week. They haven't learnt from their past mistakes. Bill Shorten's anti-growth, anti-jobs agenda would take Australia back to where we were in 2013: a weakening economy, rising unemployment and a rapidly deteriorating budget position, because lower growth means less revenue for government and higher expenditure on people on unemployment benefits, and that is precisely what Labor caused when they last were in government. That is not where Australia needs to go.