Media Room

Budget-in-Reply

On Thursday 16 May 2013, the Leader of the Opposition, The Hon. Tony Abbott MHR, delivered his Budget-in-Reply address in the House of Representatives. See Mr Abbott’s speech below:

Tonight, I want to directly address you, the Australian people.

While it’s easy, and understandable, that you should be pessimistic about this government, everyone should be optimistic about our country.

Our health researchers have saved hundreds of millions of lives through breakthroughs in everything from infectious diseases to cancer vaccines to ulcer treatments.

Our military personnel stand ready to protect people in some of the world’s worst trouble spots.

Our universities are educating the future leaders of our region.

Our musicians, artists, actors and film-makers are making their mark all over the world.

Our resource exports have helped hundreds of millions to move from the third world to the middle class.

And, with the right product, our manufacturing, too, is capable of competing with the best in the world, even with the high dollar – as demonstrated by Cochlear, Blackmores, Murray Goulburn and RM Williams, whose boots I’m wearing tonight.

We are a great country and a great people let down by a bad government.

Bad governments always pass.

What should never dim is our faith that Australia’s best years are ahead of us.

So my purpose tonight is to assure you that a Coalition government will do what’s needed to restore the hope, reward and opportunity that should be your birth right.

Our Real Solutions Plan will build a strong and prosperous economy for a safe and secure Australia.

Margie and I know the pressure that every Australian – that each one of you – is under.

We’re not crying poor but we run a household with power bills, rates, health and education costs to be paid all the time.

Margie runs a community-based occasional care centre which has to live within its means just like every small business and every family.

Governments’ first job is not to make your life harder.

But this government has – with its carbon tax, broken promises, and skyrocketing debt.

Australian families are paying for this government’s mistakes yet all you ever hear from the Prime Minister and the Treasurer are excuses and promises to do better next time.

Should the Coalition win the election, there will be no nasty surprises and there’ll be no lame excuses.

No surprises and no excuses.

The Coalition’s Plan has two objectives: first, to take the budget pressure off Australian households; and second, to strengthen our economy so that, over time, there’s more to go round for everyone.

Only by delivering a strong economy can government deliver a sustainable National Disability Insurance Scheme and better schools.

You need certainty to plan your future and you need cost of living relief.

So tonight I announce a major initiative to ease the financial pressure on Australian families.

A Coalition government will keep the current income tax thresholds and the current pension and benefit fortnightly rates while scrapping the carbon tax.

The carbon tax will go but no one’s personal tax will go up and no one’s fortnightly pension or benefit will go down.

So with a change of government, your weekly and fortnightly budgets will be under less pressure as electricity prices fall and gas prices fall and the carbon tax no longer cascades through our economy.

This will strengthen our economy – because there’ll less tax hitting Australian businesses but not their overseas competitors.

And it will help families – because you’ll have tax cuts funded by smaller government, not by taking money out of one pocket to put it in the other.

Our plan starts with recognition of economic reality.

Government doesn’t create wealth; people do.

Government doesn’t spend its own money; it spends your money.

This year’s spending is either this year’s taxes or it’s this year’s borrowing – that’s next year’s taxes.

Government spending is not a free gift but something that everyone is paying for, now or in the future.

That’s why good governments are at least as careful spending the money they hold on trust from the people as you are when making decisions that affect your family’s budget.

Parents don’t mortgage their children’s future and neither should government.

Last year, the Treasurer began his budget speech declaring, and I quote: “the four years of surpluses I announce tonight are a powerful endorsement of the…success of our policies”.

Well, surpluses would have been a vindication.

But there are no surpluses.

Not this year.

Not next year.

Not the year after that.

The Treasurer now says that there will be a surplus in four years’ time.

That’s four years after the Treasurer and the Prime Minister said that it had already actually been delivered and spent tens of thousands of your dollars boasting about it in letters to their constituents.

If a public company made these sorts of claims its directors would most likely face serious charges rather than asking to be re-elected.

If this had been the only dodgie promise, they might have got away with it but this government never gets it right.

It got the mining tax numbers wrong.

It got the carbon tax numbers wrong.

And last year’s budget commitments to boost family payments and to cut taxes didn’t even make it to this year’s budget.

This year’s supposed revenue shortfall went from $7 billion, to $12 billion to $17 billion in just two weeks – so how can ministers possibly predict a decade ahead?

The Prime Minister guaranteed there would be no carbon tax – but there is.

She guaranteed there would be a surplus – 165 times she guaranteed there would be a surplus – but there isn’t and there never will be under the government.

After seven deficits totalling $220 billion, the Treasurer can hardly congratulate himself over an almost invisible surplus, if nothing goes awry, if he’s still there, in four years’ time, in his ninth budget.

The government originally said that the deficit was “temporary”.

With seven in a row, the Second World War was more temporary than this government’s deficits.

The government promised a surplus over the cycle but this isn’t a cycle – it’s a spiral, deeper and deeper into debt which is now surging towards $400 billion even on the government’s own figures.

The last time a Labor Treasurer stood in this parliament to deliver a surplus was way back in 1989 so it’s hardly surprising that this year’s Labor surplus promises are no more believable than last year’s.

In the second line of this week’s budget speech the Treasurer said that it was a budget for jobs and growth.

In fact, unemployment increases and growth decreases.

The Treasurer spent much of his speech complaining that he was the victim of a sudden collapse in government revenue.

In fact, revenue is up 6 per cent this year and will be up 7 per cent next year.

Next year, revenue will be up $80 billion on six years ago.

That’s right, the Treasurer has $80 billion more to balance his budget than Peter Costello ever had – yet Costello delivered surplus after surplus.

We have a $20 billion deficit now rather than the $20 billion surplus then not because revenue is down but because spending is up: by $120 billion.

Madam Speaker, in 121 days, there will be an election.

It will be a tipping point in the life of our country.

The choice could hardly be more stark: three more years of broken promises, nasty surprises and weak excuses.

Or change for the better with an experienced team that will not just rebuild the economy but also the bonds of trust that should exist between you and your parliament.

The last Coalition government grew GDP per person by well over two per cent a year – under this government it’s limped along at well under 1 per cent.

The former government grew jobs by two and a quarter per cent a year – or enough to create over 2 million new jobs within a decade.

Since then, they’ve grown by just 1.6 per cent a year.

With the Coalition, you could trust government to save.

With Labor you can be sure government will spend which is why worried households are saving at the highest rate in a generation.

During the Howard years, real wealth per person more than doubled – since then, it’s actually declined thanks to weaker growth, subdued house prices and lower share prices.

Change won’t come overnight but a Coalition government will do what’s needed to strengthen economic growth and prosperity.

All the Coalition’s main policies are designed to make it easier for you to get ahead and for businesses to be more productive.

We will abolish the carbon tax – because that’s the quickest way to reduce power prices and take the pressure off cost of living and job security.

Let me repeat: We will abolish the carbon tax – because it’s a kind of reverse tariff that hurts local businesses but not our overseas competitors.

There is no mystery to how this will happen.

What one parliament legislates, another parliament can repeal and the carbon tax repeal bill, should we be elected, will be the first legislation that a new parliament considers.

We will reduce emissions with targeted incentives, not clobbering business with the world’s biggest carbon tax.

We will abolish the mining tax – because that’s the quickest way to support investment and jobs.

We will cut red tape costs by at least $1 billion a year – to give small business a much-needed break – and we’ll have parliamentary days dedicated to repealing laws, not passing them.

By cutting tax and regulation, we will boost productivity.

That will give Australian manufacturers the more level playing field they need to remain at the heart of a five pillar economy along with services, education, agriculture and resources.

We will have a once-in-a-generation commission of audit so that government is only as big as it needs to be to do what people can’t do for themselves.

We will set up a root and branch review of competition policy to ensure that small business gets a fair go and small business will be a cabinet portfolio within the Treasury department.

There’ll be an affordable and responsible Paid Parental Leave scheme because women should get their full wage while on maternity leave just as men should get theirs while on annual leave.

We will revitalise work for the dole because people who can work, should work, preferably for a wage but, if not, for the dole.

Within three years, the Coalition’s NBN will deliver broadband speeds at least five times faster than the current average for $60 billion less than Labor’s version.

We will start work within 12 months on Melbourne’s East-West Link, Sydney’s WestConnex, Brisbane’s Gateway Motorway upgrade, Adelaide’s South Road, and Tasmania’s Midland Highway, as well as key roads in Perth and parts of the Bruce Highway, because when you’re stuck in traffic jams, you aren’t at work or at home with your family.

We will duplicate the Pacific Highway, finally, well within this decade.

We will establish a one-stop-shop for faster environmental approvals so that new projects can get up and going more quickly.

We will re-establish a tough cop on the beat, the Australian Building and Construction Commission, to deliver (as it previously did) $6 billion a year of productivity improvements in a troubled industry.

We will return the workplace relations pendulum to the sensible centre, under the existing Fair Work Act, with fairer rules for right of entry and for new projects.

And we will establish a new, two-way street version of the Colombo Plan taking our best and brightest to the region as well as bringing their best and brightest here.

It will be part of a foreign policy that’s focussed on Jakarta, not Geneva.

All these commitments are affordable and deliverable.

We will deliver them in our first term of government, if we win, and will provide all the funding details after the pre-election fiscal statement is released.

But tonight, I set out specific savings to cover keeping tax thresholds and pension rates without a carbon tax to fund them.

The Coalition has already announced that we will rescind the increase to the humanitarian migration intake because – until the boats are stopped, and we will stop them – it’s the people smugglers who are choosing who comes to Australia.

We’ve announced that we’ll reduce by at least 12,000, through natural attrition, the size of the Commonwealth public sector that’s now 20,000 bureaucrats bigger than in 2007.

We’ve also announced that we’d scrap Labor’s green loans scheme for projects that the banks won’t touch.

Tonight, I confirm that we won’t continue the twice a year supplementary allowance to people on benefits because it’s supposed to be funded from the mining tax and the mining tax isn’t raising any revenue.

As well, we won’t continue the low income superannuation contribution because that’s also funded from the tax that isn’t raising any revenue.

I announce that we will delay by two years the ramp up in compulsory superannuation because this money comes largely from business – not from government – and our economy needs encouragement as mining investment starts to wane and new sources of growth are needed.

These measures alone will produce nearly $5 billion a year in savings which is more than enough for tax cuts without a carbon tax.

The Coalition won’t shirk the hard decisions needed to get the budget back into surplus.

Living within your means is not mindless austerity – it’s simple prudence.

It’s recognition of the reality that you can’t spend what you don’t have.

Households know this and it’s time governments did too.

At least for a first term, until we’re on an honest path not just to surplus but to re-paying debt, an incoming Coalition government will resist new spending commitments that aren’t fully funded, nearly always by offsetting expenditure reductions.

As far as the Coalition is concerned, the next election won’t be an auction.

Talking to people all around the country, the last thing you want is more “historic” announcements or so-called “revolutions” that never justify the hype.

Let me be clear.

Many of the measures in this budget are objectionable, the attacks on Medicare; the abolition of the baby bonus which the government had promised never to touch; robbing Peter to pay Paul on education; and forcing more businesses to do the tax paperwork monthly, not just quarterly.

But thanks to Labor’s poor management over five years, there is now a budget emergency.

Hence the Coalition may decide not to oppose any of them; doesn’t commit to reverse any of them; and reserves the option to implement all of them, in government, as short-term emergency measures to deal with the budget crisis Labor has created.

Far from cutting to the bone, we reserve the right to implement all of Labor’s cuts, if needed, because it will take time to un-do all the damage this government has done

By keeping, if needed, all Labor’s budget cuts – and – by not implementing any of their budget spending measures unless specified, we will achieve the first duty of every government: namely, to preserve the nation’s finances.

We will keep the announced spending on the National Disability Insurance Scheme and we’ll ensure that the scheme reflects the Productivity Commission’s recommendations rather than becoming just another big government bureaucracy.

I would not have ridden 1000 kilometres, the week before last, to raise money for Carers Australia if I was half-hearted about the NDIS and would never claim for just one side of politics this reform that should be an achievement for our whole nation.

On the other hand, the key to better schools, at least as much as more money, is better teachers, better teaching, higher academic standards, more community engagement, and more principal autonomy.

So that’s what we’ll work with the states to deliver.

We won’t back a so-called national education system that some states don’t support especially as this government has a history of spending more while schools’ performance actually goes backwards.

Regardless of normal political allegiance, Australians are sick of leaders who play politics ahead of governing the country and who blame everyone but themselves when things go wrong and the numbers don’t add up.

You want a grown up government like the ones that John Howard and – yes – Bob Hawke too used to run.

As soon as people know there’s a government with an economic strategy to build the country rather than just a political strategy to save its own skin, confidence will start to return to our economy.

Tax reform starts with immediately repealing the carbon tax and the mining tax and giving a modest company tax cut as soon as it’s affordable – but it doesn’t end there.

Within two years, an incoming Coalition government will consult with the community to produce a comprehensive white paper on tax reform.

We’ll finish the job that the Henry review started and this government squibbed.

We want taxes that are lower, simpler and fairer and will take proposals for further tax reform to the following election.

Right now, the blame game between the Commonwealth and the states that Kevin Rudd promised to end has become worse than ever.

Typically, over the past three years, the Prime Minister has announced massive new programmes in areas that are the states’ responsibility so she can claim the credit but the states have to pay.

It’s no way to run the country and it’s no way for adult leaders to behave.

Within two years of a change of government, working with the states, the Coalition will produce a white paper on COAG reform, and the responsibilities of different governments, to ensure that, as far as possible, the states are sovereign in their own sphere.

The objective will be to reduce and end, as far as possible, the waste, duplication and second guessing between different levels of government that has resulted, for instance, in the Commonwealth employing 6000 health bureaucrats even though it doesn’t run a single hospital.

Again, a Coalition government will seek a mandate at the subsequent election for any proposed changes.

One of the best ways to ensure that governments don’t make mistakes is to have a proper cabinet process.

That’s how Bob Hawke and John Howard ran their governments but that’s not how government is run now, as the four former ministers now sitting on the backbench have testified.

My ministers won’t need to learn how to be a good government because they’ve been one before.

Sixteen members of the Coalition shadow cabinet were ministers in the last government that actually delivered surpluses, as opposed to just promising them.

Those surpluses weren’t just John Howard’s and Peter Costello’s.

They were my surpluses and Joe Hockey’s surpluses and Julie Bishop’s and Warren Truss’s and Malcolm Turnbull’s because we were all part of the last government that Australians knew was competent and trustworthy.

Unlike the current government which never makes an announcement that isn’t supposed to be the most important thing ever, what I’m proposing is not unprecedented and shouldn’t even be remarkable.

I’m offering what should be normal: careful, collegial, consultative, straightforward government that says what it means and does what it says.

That would be change for the better.

The next election, to which this budget is a mere prelude, should not be about who becomes prime minister.

It should be about who can do more for our country – because our country is more important than any of us in this parliament.

My colleagues and I have a Plan to build a strong and prosperous economy for a safe and secure Australia.

It’s not about us.

It’s about you, the Australian people.

We pledge ourselves to your service.

More Information

For more detail and analysis of the Budget, please contact CapitalHill Advisory on (02) 6198 3210 or via email enquiries@capitalhilladvisory.com.au

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