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

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

7 September 2010

NO.061

Responsible Economic Management

The Gillard Labor Government reaffirms its commitment to the strong, stable and responsible economic management that has seen Australia fight off the global recession, create more than half a million jobs, and that will return the national budget to surplus in 2012-13, comfortably ahead of every major advanced economy.

Central to this Government's vision for the nation is the economic plan that will strengthen, broaden and modernise our economy so that more Australians can contribute to and benefit from our prosperity, no matter where they live.

While many of the big industrial economies are struggling to maintain growth momentum in the face of near double-digit unemployment rates and challenging fiscal consolidation tasks, Australia's economy is continuing to strengthen. Our unemployment rate is amongst the lowest in the developed world and our public finances are amongst the strongest.

With the right plans and policies, Australia's strong fundamentals and close ties with the fast growing Asian economies means we are uniquely positioned to maximise the opportunities that will come from our region and meet the challenges of the future.

The Gillard Government reaffirms its commitment to:

  • Returning the budget to surplus in three years, following the global recession;
  • Promoting strong and stable economic growth with low inflation;
  • Implementing productivity-enhancing reforms that further strengthen and broaden our economy; and
  • Ensuring all Australians benefit from a stronger economy.

Returning the budget to surplus

The Gillard Government reaffirms its commitment to the fiscal strategy that will see the budget return to surplus three years ahead of schedule in 2012-13, through:

  • Holding real growth in spending to 2 per cent a year on average until the budget returns to surplus; and
  • Allowing the level of tax receipts to recover naturally as the economy improves, while keeping taxation as a share of GDP below the 2007-08 levels we inherited on average.

The Government will continue to reprioritise existing expenditure consistent with 2 per cent real expenditure growth.

The focus of the fiscal strategy in future years will remain on building stronger government finances. Once the budget is back in surplus, and while the economy is growing above trend, the Government will maintain the 2 per cent annual cap on real spending growth, on average, until the budget surplus is at least 1 per cent of GDP.

Strong and stable growth

Strong, stable and sustainable economic growth is critical to job creation and increased prosperity, and is the central plank of the Government's economic strategy.

When the global recession threatened Australian businesses and families, the Government acted responsibly to keep the economy growing and protect jobs. That action meant Australia avoided recession and provided a strong foundation for future growth.

The Government remains committed to strong, stable and responsible economic management that will underpin confidence, create jobs, and provide certainty to businesses.

In addition to its fiscal strategy, the Government also reaffirms its commitment to the independence of the Reserve Bank and its inflation-targeting framework.

Strengthening and broadening the economy

The Gillard Government will further strengthen and broaden our economy so we continue to remain one of the strongest advanced economies in the world.

We will continue to advance our productivity agenda and build on the investments we have already made in skills and infrastructure. This will further expand our economic capacity, which is so critical to driving strong growth with low inflation into the future. We will continue our investments in transport, health and education infrastructure, teach and train the skilled workers we need for the future, and invest in infrastructure in our mining regions and across Australia.

We recognise the contribution that regional Australia makes, and we are committed to a long‑term plan to support balanced economic growth across Australia. We will roll-out the National Broadband Network that will drive productivity and help overcome the disadvantage of distance, we will improve health and education services in regional areas, and we will continue to promote employment in regional areas.

We will work with the new Parliament to progress our ambitious agenda to make the tax system fairer, simpler and more competitive. This includes implementing the new resource tax arrangements to ensure our resource wealth contributes to the nation's long-term prosperity; cutting company tax for all companies; delivering new tax breaks for all small businesses; and introducing an optional standard deduction for all Australian workers.

Our national savings plan will also mean Australians have higher incomes and greater security in retirement through increases to the superannuation guarantee, fairer concessions for low income earners making superannuation contributions, and larger contribution limits for over 50s.

We remain committed to transforming our economy to deliver continued strong growth while reducing carbon pollution over time. We will build on our existing investments in clean energy technologies, which will play such an important role in our economic future. We will establish a Climate Change Committee which encompasses experts and Parliamentarians who are committed to tackling climate change and who acknowledge that reducing carbon pollution by 2020 will require a carbon price.

These reforms will broaden and strengthen our economy and build a more secure future for all Australians, and that's why we remain committed to their implementation.

Ensuring all Australians benefit from a stronger economy

The Gillard Government understands that despite the success of our national economy, not every part of the country or every sector of the economy is benefiting from the recovery. That's why our policies will ensure we have the broader, stronger economy that rewards the hard work of Australians whether they live in our cities, suburbs, towns or rural Australia.

The resolution of the political situation now gives the Australian Parliament and the Australian people the opportunity to unite behind an economic plan that will further strengthen our world‑beating economy, return the budget to surplus in three years, and keep more people in work.

CANBERRA
7 September 2010