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Wednesday, 11 May 1994
Page: 624

Senator LOOSLEY —My question is addressed to the Minister representing the Treasurer. I refer to the 1994-95 budget delivered in the parliament last night. Is the minister in a position to advise on the implications of the budget for the medium-term outlook for deficit reduction strategy? Is that strategy reinforced by the Treasurer's statement to the parliament? Is it integrally related to continuing economic growth?

Senator COOK —I am delighted to outline that. Of course, the answers to the last two parts of Senator Loosley's question are `Yes' and `Yes'. The deficit in this budget will be further reduced, and will bring the budget close to balance in 1997-98. It will do it by encouraging maximum economic growth in the economy, by reducing unemployment, by promoting social justice and, more importantly than all those things perhaps for those on the other side of the parliament who are transfixed by these issues, it will do it without levying any new taxes.

  First, I should say that the deficit reduction strategy has been accelerated. In this budget the deficit is estimated to be $11.7 billion, or 2.5 per cent of GDP. That is $2.4 billion less than estimated in the last budget and a reduction of $1.9 billion on the estimate for the 1993-94 deficit.

  Secondly, in this budget we have several new expenditure items. They address serious issues in the Australian community. They ensure that all Australians will be able to participate in the economic recovery. I have a list of them here. They range from $1.5 billion expenditure for the national land fund for Aboriginal land acquisition over 10 years and half a billion dollars over five years for Aboriginal health, right through to extra expenditure on mental health, extra expenditure on a national breast cancer program, further expenditure on medical research, $63 million over four years to assist homeless people in Australia, $48 million to fund an Asian languages program and, of course, some funds—$135 million in fact—over six years to help athletes prepare for the Sydney Olympic Games in the year 2000.

  All the expenditures have to be considered against the background that it was only last week that we brought down the white paper and committed expenditure for jobs and training and for industry policy and regional development initiatives. So taken altogether there is a large area of socially necessary outlays, but nonetheless the deficit comes down. As I say, it comes down without increasing the tax burden on Australians, so we keep our promise on that subject. The opposition has been running around Australia over the past several months saying, `There will be new taxes.' Well, there will not be new taxes, as the budget makes clear. The tax burden is not to be increased.

  Outlays as a percentage of GDP will continue to fall. Outlays as a percentage of GDP will reduce from 26.9 per cent in 1992-93 and go through, on this budget's projections to 1997-98, to 24.2 per cent. The increases in the revenue side will be occasioned by a stronger growth in the economy, by higher business profitability, and not by what the opposition has been running around Australia saying on TV and radio over the last day, and that is by bracket creep. There is no high level of inflation in the economy. Wage earners will not be pushed into higher wage brackets in anything like the same way that would happen if there were a higher level of inflation.

  The extra income is due to economic growth in the economy. Those opposite do not like to mouth the words `economic growth' because it does not suit them. They want to talk down the Australian economy, to undermine the confidence in the business community in the reachable goals of growth figures that we have projected, and to pretend, by relying on shonky estimates themselves, that that investment figure will not be realised. If those opposite look at the reasonable case that has just been made by the Leader of the Government in the Senate, they would find that they have absolutely no support for their contentions.

Senator Campbell —Mr President, on a point of order: the minister's time has expired.

The PRESIDENT —I thank Senator Campbell for drawing my attention to that.