SUBJECTS: Budget 2012
Good morning, everyone. As you'd appreciate it's a busy day so I've got a fair bit to do but I'm certainly happy to take a few questions. I want to say a few things about the Budget tonight because first and foremost this is a Labor Budget. It's a budget which goes into bat for the living standards of millions of Australians on low and middle incomes who aren't in the fast lane of the mining boom. That's pretty important. Bringing the Budget back to surplus, making sure our prosperity is fairly shared, and looking after the most vulnerable, are what this budget is really about.
I'm proud of the budget. In uncertain times we live in one of the strongest economies in the developed world but also in one of the fairest communities. What we do in this Budget is to help people with their cost of living pressures and make sure that our economic prosperity in the future is also assured. When you look around the world, when you look at what's happening in Europe, you can see that Australia's economic fundamentals are strong. What tonight is about is making sure they stay that way and that's why coming back to surplus is so important.
In many ways this is a battler's Budget. It makes sure we support jobs, it provides cost of living support for those under financial pressure and it puts in place new initiatives for some of the most vulnerable in our community. And importantly by coming back to surplus we give the Reserve Bank maximum flexibility to cut interest rates, should they decide to do so independently of the Government.
So coming back to surplus is about making sure we help those people sitting around the kitchen table when they're figuring out how they will make ends meet. Additional support in this Budget for those on low and middle incomes, but also making sure through our surplus we give maximum flexibility to the Reserve Bank through monetary policy.
It will be interesting to see tonight whether Mr Abbott wants to put his wrecking ball right through that surplus because if he puts his wrecking ball right through that surplus that doesn't help the cost of living pressures that families are under and it doesn't give the Reserve Bank the flexibility it needs when it comes to monetary policy.
So all in all, this budget is one that I'm extremely proud of. It's the fifth budget I've delivered but in some ways it's been delivered in times of great uncertainty and it's bought great challenges. We've lost $150 billion over five years of government revenue. The Liberals pretend that that hasn't happened. The Liberals pretend the global financial crisis hasn't happened. The Liberals pretend that the floods last year hasn't happened. The Liberals pretend that uncertainty and recession in Europe is not impacting on our economy. All of those things are happening and that is why I'm so proud of the outcome of this budget. A surplus, a Budget which deals with cost of living pressures for those on low and middle incomes, but also looks after the most vulnerable, in those conditions that we see internationally. All of that is a very big achievement for the Australian people.
Treasurer, Mr Abbott says that it's a budget that's based on cooked books and fiddled figures and it's been completely overshadowed by Craig Thomson.
Well, let's just unpack that. I mean, here is the Liberal Party with a $70 billion crater in their budget bottom line before they look at this budget and if they decide to refuse or knock back savings in the budget that crater gets even bigger. This is the party whose election costings at the last election were audited by a group of accountants that were found to be in breach of their duties by their professional association. So the Liberal Party has no credibility when it comes to talking about costings of budgets, none whatsoever.
So I guess he would say that, with a $70 billion crater in his Budget bottom line and the complete debacle of their election costings at the last election, where they had an $11 billion hole in their costings process. But look, they will say anything and do anything to avoid an economic debate about our fundamentals and what we must do to preserve our prosperity.
All the front pages of the newspapers today though were about Craig Thomson. So do you feel like this budget has been overshadowed by the events surrounding Mr Thomson?
First of all, can I say these are serious matters but they are being dealt with appropriately. I would prefer that we were having a fuller discussion right now about the long-term economic prospects of this country and the policy settings that are appropriate for it. I would prefer all of our public debate to be focused solely on that. But that's not the case and that's what I've found in politics. These things come along but it won't deter me for one second from staying completely on the case of putting in place this Budget, getting it through the Parliament, and making sure we make a difference for Australians out there, particularly those who are under cost of living pressure.
Is the Budget going to slug the wealthy?
Well, I'll get a lot of questions this morning so I'll pre-empt them all and say let's just wait until tonight until we see all of the detail of what's in the Budget. I don't intend to go into the ins and outs of what's in and what isn't this morning.
Treasurer, can you confirm whether the surplus will be $1.5 billion and if it's so wafer thin are you confident that you will achieve that surplus in 2012-13?
I'm very confident that we will achieve a surplus and build our surpluses over time. You see, there's a lot of criticism out there. Some people are saying we can't get there, it can't be done, others are saying it's too thin, and others are saying that we should cut even harder, we should have a scorched earth approach to savings.
Look, what the Government has got is a budget which brings us back to surplus, builds those surpluses over time and we have done it in the most extraordinary of circumstances. The loss of $150 billion worth of revenue over time and another bout of global uncertainty fed by Europe in the latter part of last year, the floods and natural disasters last year, all of these things have been very substantial head winds for the Australian economy. What I'm proudest of, is that in the face of all of those head winds the resilience of the Australian people and the Australian economy has shone through globally and that's something we could all be very proud of.
Can you confirm the figure of $1.5 billion?
What I can confirm is that we're coming back to a modest surplus in 2012-13, building those surpluses over time because we have low unemployment, we have solid growth, we have a very big investment pipeline, we have contained inflation, all of those things are the sort of economic basic settings that many elsewhere in the developed world would kill to have. Thanks.