The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

2 September 2012

Treasurer's economic note

Government is all about priorities. There will always be competing demands and resources will always be limited. As a Labor Government, our priorities are focused on building a stronger economy to deliver a fairer society. This is why we want to ensure that all kids get a good education  and decent start in life, that the sick can access quality health care, that those with disabilities receive the support they deserve, that the workplace delivers fair outcomes for all, that hard work and entrepreneurship is fairly rewarded, and that the contributions of older Australians are valued and respected. We've shown our commitment to deliver on these priorities despite some of the toughest conditions in the global economy in generations, which have ripped around $150 billion from budget revenues. And we will continue to make room to deliver on the big investments our nation needs for the future.

Delivering on priorities

Here's a few of the reforms to build a stronger, fairer society introduced over the past five years:

  • The biggest boost to the pension in our history, increasing the maximum rate by about $154 per fortnight for singles and $156 per fortnight for couples combined;
  • The uncapping of university places enabling an extra 130,000 Australians to go to university;
  • The first national Paid Parental Leave  scheme that helps families look after their newborn babies at a time when costs go up and family income goes down;
  • A price on carbon pollution with over half the revenue going to help households with flow-on costs, leaving over 4 million household budgets better off;
  • A tripling of the tax-free threshold, providing greater incentives to work and freeing about one million more Australians from having to lodge tax returns;
  • Abolishing WorkChoices and introducing the Fair Work Act;
  • Introducing plain packaging for cigarettes;
  • A Minerals Resource Rent Tax to spread the benefits of the mining boom to provide tax relief for businesses outside the fast lane, increased national savings, better infrastructure and higher family payments;
  • An agreement to roll out of the first stage of a National Disability Insurance Scheme  to give people with a disability access to the services they need when they need them;
  • A series of reforms to create a more stable, secure and competitive banking system, including a ban on mortgage exit fees on new home loans;
  • The Schoolkids Bonus providing help to 1.3 million families with the cost of uniforms, books, excursions and all the other myriad of expenses that come with getting the kids through school;
  • The roll out of a National Broadband Network  to provide super-fast internet speed to all Australian households and businesses no matter where they are;
  • An increase in the Child Care Rebate from 30 per cent to 50 per cent for out-of-pocket child care expenses that provides families with up to $7,500 per child per year towards child care costs;
  • A greater focus on prevention and early intervention in mental health;
  • The biggest overhaul of the health and hospital system since Medicare to provide more doctors and nurses, more beds, reduced waiting times, better accountability and more community control; and
  • Aged care reform to provide more choice, easier access and better levels of care.

The Government has a proven track record of finding savings to deliver on priorities like these. The last budget alone had $33 billion of savings and there were over $100 billion in savings in the budgets before that. Many of the changes have improved the structural position of the budget so the savings will grow over time. A good example is our decision to means test the private health insurance rebate, which will save $2.4 billion over the next three years alone. It simply made no sense to continue to subsidise the health insurance of households earning more than a quarter of a million dollars a year. We've made substantial savings to pay for substantial reforms, and we're ready, willing and able to do it again.

Investments in the future

It was pleasing to be able to build on our substantial reform record during the week with Health Minister Tanya Plibersek announcing a $4 billion dental care package . I think most Australians would agree that the state of your teeth shouldn't be determined by how much money you earn. Labor is the party of Medicare, and with this package we'll be able to help millions of people who go without adequate dental care, including more than three million children and over a million adults on low incomes, including pensioners. Poor oral health can affect general health and wellbeing, increasing the strain on our hospital system in the long term.

Like health care, we know that better resourcing of education is a great investment in the future. That's why we've almost doubled funding for schools to more than $65 billion over four years. We've also introduced the national curriculum, modernised facilities in schools across the country through the Building the Education Revolution program's investments, invested more in teacher training, given more power to principals, and provided more information to parents than ever before through the My School site . National reform of funding and concrete steps to improve schools is the next step, and that's something the Prime Minister will be talking more about at the National Press Club in Canberra tomorrow. We want to make sure all kids have access to a world-class education no matter where they live or what school they attend.

A standout performer

Through responsible budget management and keeping our economy strong, we've been able to put in place long-lasting sustainable reforms to build a fairer society . On Wednesday, we'll get the official snapshot of how our economy travelled last quarter. This National Accounts will be a particularly special one as it is likely to confirm a remarkable feat – that Australia's economy has been growing for 21 straight years. No major developed economy can come within cooee of that. The hard work and resourcefulness of every Australian has contributed to this astonishing record. We all have a right to be proud of the national prosperity we have created together.

While our economy continues to be the standout performer of the developed world, we know that conditions remain uneven. There are a variety of pressures, such as the sustained high dollar, lower commodity prices, cautious consumer behaviour and other structural changes that are making conditions harder for some industries. We also saw heightened global volatility return in the June quarter after a period of relative calm at the beginning of the year. This has added to the patchwork pressures in our economy in recent months.

Whatever the GDP result for the second quarter, the big picture is that the fundamentals of our economy remain strong. Australia continues to be a magnet for investment. Figures out during the week showed planned capital expenditure  is expected to reach a new record high of $182 billion this financial year – a simply staggering figure. While overall investment figures can be lumpy quarter on quarter, it was very encouraging to see that actual capital expenditure in mining reached a new record high in the June quarter. We also know there's more to come, with a record half a trillion dollars worth of resource projects either underway or on the drawing boards with over half of this at an advanced stage, indicating a very bright future for our economy. A record $260 billion of resources projects are largely locked in already, up by nearly $90 billion in the past year alone, and this will drive investment and lift our export volumes in coming years. Figures like this really are a reality check for those who try to talk down the future of this great industry.

Recognising experience

Tomorrow I'll be delivering a speech in Sydney about one of this Government's other areas of priority: recognising the wealth of life experience , knowledge and skills of older Australians. With an ageing population, it's essential we don't overlook the contributions that so many seniors are making to society and to the economy. I'll be talking about the progress of some of the Government's new initiatives like the Corporate Champions program and the Jobs Bonus that are designed to ensure mature-aged Australians have the opportunity to stay in the workforce if they choose.

The policies and priorities of this Government aren't just about better services or increased help with making ends meet. The ultimate aim is providing more opportunities to more people. This Government believes in a society where everyone has a fair chance to succeed, and a society where everyone gets a decent shot at a decent life.

Wayne Swan
Deputy Prime Minister and Treasurer of Australia