I really appreciate the introduction – thanks Laura.
The invitation – thanks Maurice.
The support of the sponsors – thanks Steven.
The hospitality – thanks to the Press Club and Parliament staff.
And I’m grateful to all of you who’ve turned‑up and backed‑up after another busy Budget night.
To gather again on Ngunnawal land.
To acknowledge elders, customs and culture.
To put our third Budget in its proper context.
And take your questions.
I think this is my 10th time speaking at the Press Club.
And last night was my 18th lockup.
Almost half as many as Laura Tingle.
About twice as many as Laura Chalmers – who is here today, and with our kids last night.
Seeing them there just fills my heart and I can’t thank you and them enough, for everything. And Nan and John as well, for looking after little Jack, and for all they do for our family.
After all these budgets 2 things are really clear to me.
The first is that the credit is never adequately shared.
Which is why I’m always grateful for this opportunity to shout‑out my office, and the Treasury.
Steven, Jenny, and Glyn and all the officials and all the staff who worked around the clock to put the Budget together.
And to thank the Prime Minister for the inclusive way he leads our Cabinet. I’m very fortunate and grateful for that as well.
And for the opportunity to work in, and with, his team.
With an outstanding Expenditure Review Committee that includes Richard, Penny, Catherine, Stephen, Michelle, and both Marks.
And especially my absolutely invaluable and unfailingly selfless friend – Katy Gallagher.
I could not ask for, and I could not hope for, a better colleague.
So much of the workload is carried by the Finance Minister in any government, but especially in our government.
So please put your hands together for Katy.
The second thing I’ve learned over all these years is that budgets get notoriously over simplified.
Our first Budget in 2022 was about funding our commitments in key areas like early childhood education – but it was also about cleaning up the waste and rorts.
Last year’s Budget was about a first surplus and fighting inflation – but it was also about strengthening Medicare.
Last night’s was primarily about easing the cost of living, a second surplus, and a Future Made in Australia – but it was also about more homes for Australians, the care economy, and broadening opportunity.
This Budget was more ambitious without being less responsible.
We had more to do, and less to do it with.
Which probably made it the hardest of the 3 to land.
Because along with the elements that would have had a familiar ring: the focus on responsible economic management, cost of living, renewable energy, the care economy, housing and Medicare –
There was also a greater emphasis on security.
On investment, as well.
And more nuance in the fiscal strategy.
This Budget was all about relief and restraint and renewal.
Relief was the cost‑of‑living package for people doing it tough, which is substantial and responsible at the same time.
Restraint, allowed us to forecast a second surplus, pay down lots of debt, and keep the pressure off inflation.
All at the same time as we took important steps to renew our industrial base, and our energy base.
That showed this Budget and this government is also about reform.
Microeconomic reform to make our economy more efficient and effective, more productive, dynamic and competitive.
Universities reform, in skills, and the labour market.
Transforming our energy base.
Tax reform and work incentives, and incentives to invest.
Retirement incomes and parental leave.
Open‑source geoscience.
Reforms to modernise government services.
Changing commonwealth‑state relations.
Getting value for money in the care economy.
Mergers reform.
Big changes to the foreign investment framework.
Abolishing almost 500 nuisance tariffs to get costs down.
Ambitious reform by any objective measure.
Even just housing on its own had:
- Targeted interventions for states to address bottlenecks, slash red tape and release more supply.
- New transport networks and better connected communities, so people can live where they can work.
- Additional fee‑free TAFE places to train construction workers so we’re not as constrained by skills shortages.
- And reducing the pressure that our education sector is putting on housing, by requiring universities to build more accommodation.
All this is a reminder that the front pages can never adequately capture all of the work and all of the reform in any one budget.
Which is why I’m so grateful for this chance to give you a sense of what we grappled with, and how we imposed some coherence on all the complexity – and amidst all the commentary.
This Budget was about pressures now, and priorities for the future.
Let me put it this way.
Every budget asks us to strike a series of fine balances.
But this one was really defined by them –
By a sense of balance.
I’ll give you a few examples.
First, we had to keep our balance in the face of complex cross currents in the global and domestic economy.
The lingering impact of 3 crises in 15 years, the pace of social and economic change that’s reverberating through the global economy in often unpredictable ways.
There’s some welcome resilience, but warning signs as well.
Challenges in the Chinese economy, deepening conflict in the Middle East, the persistence of inflation in some advanced economies.
All these pressures reveal an uncertain near‑term future –
And all while we deal with longer term shifts like the net zero transformation, the changing shape of our population, digitisation, and geopolitical fragmentation, that go to the heart of our future security and prosperity.
Amidst all this, Australia has performed really well.
Inflation is moderating, real wages are growing, the labour market has been resilient and business investment is strong.
But at the same time, the combination of higher rates and higher inflation has weighed on our near‑term growth prospects, and it’s put our people under pressure.
Responding to these cross currents required:
Steady hands – when it came to inflation.
Hard heads – making sure we are robust and rigorous and getting value for money and putting the Budget on a more sustainable footing.
And warm hearts – recognising people are doing it tough and that we had an opportunity and a responsibility to help out.
And it required a series of balanced judgements.
Balancing our primary objective, to help people now –
And investing in the future.
We know that inflation is easing but Australians are still hurting.
Which is why the Budget was built on a tax cut for every taxpayer – an average tax cut of $36 a week.
Bigger tax cuts for more people to help with the cost of living.
And on top of that, responsible relief that directly reduces inflation.
Recognising that cost‑of‑living pressures aren’t confined to one section of the community –
That middle Australia is impacted too.
And because we are a government for all Australians, we feel the responsibility to help all of our people –
At the same time as we offer more targeted support for those on lower and fixed incomes.
Power bill relief for every household –
Another increase to rent assistance for almost a million renters –
And freezing the maximum cost of PBS prescriptions –
Are forecast to directly reduce headline inflation by half a percentage point in 2024–25.
To use the jargon, this will also help keep inflation expectations ‘anchored’.
Which means we’re supporting monetary policy.
While the outlook is uncertain, Treasury’s forecasts make it clear that our policies could see inflation return to target earlier, perhaps even by the end of the year.
Helping to turn the tide for more Australians who are under the pump, and who remain the number one focus of this government.
Even as we continued to deal meaningfully and responsibly with the pressures of today, namely inflation –
We are also investing substantially in the future.
Because our idea of balance doesn’t mean standing still.
We don’t confuse familiarity, with security.
The primary purpose of the Budget was helping people now, and fighting inflation in the process – but the longer sweep and context is important too.
Because we need to build a new generation of prosperity for our people and communities – and the Budget’s about that too.
You’ve heard it said and written before that Australia’s had 3 economies.
The first was colonial and agricultural.
The second, industrial, behind a tariff wall.
And the third, when Paul and Bob opened us up to the global economy without selling‑out.
What we are now creating together is Australia’s fourth economy.
By grasping the vast industrial and economic opportunities of the global net zero transformation.
Making ourselves an indispensable part of it.
Combining technology and human capital –
Heavy industries, new industries, and the care economy.
Leveraging our traditional strengths but powered by cleaner and cheaper energy.
That’s what a Future Made in Australia is all about.
Modernising our economy and maximising our opportunities in a world of churn and change, and on a path to net zero.
Securing Australia’s resilience and prosperity in a changing geostrategic and global economic environment.
Anything this ambitious will invite a range of responses – not always right.
An exchange of views – often robust.
And that’s almost always a good thing.
But this is not about repudiating anyone or anything from the past – we’re building on it.
The great reformers of the 1980s and 1990s weren’t successful because they looked back and reached for the solutions that were right for the problems of 40 years prior.
They were successful because they looked forward.
They were successful because they recognised times had changed and the world was changing.
They were successful because they were strategic, rather than nostalgic.
And because they recognised that our guiding light should always be to make our people the big beneficiaries of change.
That’s what we’re doing.
By investing and engaging, not retreating or protecting –
So that out of fragmented supply chains, and new emerging markets we can become that indispensable part of that new net zero economy – and help power the future.
The balance here is between targeted public investment, and the much bigger pool of private investment we hope to attract and unleash, not replace.
Not a free‑for‑all of public spending, crowding out private capital, but careful, considered incentives to crowd it in.
That’s what the Future Made in Australia Act is about.
Imposing the rigour and robustness and the framework.
Attracting and enabling private investment –
Making Australia a renewable energy superpower –
Value‑adding to our resources and strengthening our economic security –
Backing Australian ideas and innovation, in science and technology –
And investing in people and place – in skills, education and our regions.
The Act will help us to make targeted, impactful public investments to get value for money.
ARENA will help us commercialise the research and innovation.
Our financing facilities can help de‑risk and reduce upfront capital costs for worthy projects.
Production tax incentives for green hydrogen and processed critical minerals, which make tax breaks the biggest part of the package, will reward success and scale.
And our reforms will improve the regulatory settings and approval processes –
Create new standards and new markets –
And a new front door to make it easier for investors.
All these initiatives will change the way we attract and deploy and improve the flow of capital in our economy –
And help create a new generation of prosperity for our people.
These are 3 of the main balances that we had to strike when forming up this Budget.
Between global and domestic economic crosscurrents –
Between cost‑of‑living relief now and maximising the opportunities of the future –
And between public and private investment.
But the balance on which all of these others depended –
Was the one that we struck with our fiscal strategy.
We have delivered a remarkable positive turnaround in the Budget since we came to office.
We have done it in a methodical and considered way.
Because responsible economic management is a defining feature of this government and this Budget.
We were determined not to slash and burn while growth is slowing, and people are hurting.
We were determined to fight inflation without smashing the economy, or dismantling essential services.
Yes, we’ve had to grapple with fiscal pressures and unavoidable spending that impacts the bottom line.
But that shouldn’t diminish all the progress we’ve made.
The fact is our balanced approach has been achieved alongside a stunning improvement in our nation’s finances –
Including the fastest and largest improvement of the budget position as a percentage of the economy – on record –
One of the fastest fiscal consolidations in the G20 –
And a significantly better budget position and much lower debt compared to our predecessors.
To give you a sense of this, since coming to government:
We’ve achieved the first surplus in 15 years and are on track for another – something not achieved in nearly 2 decades.
Our budget position and debt position has improved every year and over the medium term compared to what we inherited.
We’re turning 2 Liberal deficits totalling $135 billion into 2 Labor surpluses, together expected to be more than $30 billion – an improvement of $165 billion in just 2 years.
And we’ve cumulatively improved the budget position by over $215 billion since we came to office.
Next year alone we’ve shaved nearly $19 billion off the deficit we inherited, even as we accommodate spending that any reasonable person would consider unavoidable.
And we’re stabilising and reducing our debt burden sooner than what’s occurred after previous economic downturns –
With gross debt due to peak at 9.7 percentage points lower than projected at the time we came to government.
None of this would have been possible without taking a much more responsible, restrained and disciplined approach to the Budget than the Coalition.
Returning 96 per cent of revenue upgrades in this Budget for 2023–24, and 82 per cent in this term of government –
Compared to an average of around 40 per cent under them.
Finding $77 billion worth of savings and reprioritisations, including $27.9 billion in this Budget – compared to zero savings in their last budget.
Restricting real spending growth to an average of 1.4 per cent, compared to 4.1 per cent under our opponents.
With net policy decisions in this Budget substantially lower than what they managed in March of 2022, when inflation was on the rise.
So, we’re outperforming opponents, the historical norm and other countries when it comes to rebuilding fiscal buffers –
And none of this has come at the expense of helping people or making important investments in the future.
And that’s linked to another point I want to make here.
Although there is an understandable focus on the quantity of spending when it comes to talking about budgets – it is the quality that matters too, as well as its timing, sequencing and shape.
Some of our spending is automatic, some of it unavoidable, much of it is desirable –
And all of it is warranted.
In fact, around two‑thirds of the net impact our decisions will have on the Budget is due to those unavoidable pressures –
So we can secure the extension of key health programs like palliative care and cancer support.
Provide veterans with the support that they need and deserve.
Sustain the aged care system.
Improve water security.
And boost funding for Home Affairs to address chronic underfunding by the previous government.
The remaining one‑third is providing cost‑of‑living relief for people doing it tough – helping our people through so we can set them up down the track.
By making critical investments to create a better, more sustainable care economy –
By building the industries of the future –
By dedicating more resources towards fixing the housing crisis, including accommodation for women and children fleeing domestic violence –
And by expanding opportunity.
So, this is not an under‑investing budget –
It’s not an over‑spending budget –
It’s not a smash and grab budget –
It’s a budget that takes a responsible middle course.
Balancing the Budget this year and last –
Building on the stunning turnaround we’ve engineered in the Budget already –
And balancing our realism about the pressures people are under now, with our optimism about the future.
The complex challenges and changes of the defining decade will require us to work together.
And, in an ideal world, that would also involve a serious and credible opposition that presents a serious and credible alternative of the future.
Unfortunately, all that we’ve gotten so far from the Coalition is negativity and complacency, in a moment that demands urgency and optimism.
We’ve seen that reveal itself in the characteristically shambolic way they’ve responded to the Budget.
Categorising the indexation of pensions as overspending.
Looking for excuses to oppose energy bill relief for middle Australia.
But their lack of credibility and policy doesn’t conceal the difference or soften the contrast.
It makes the choice all the clearer.
In this Budget we are offering the Australian people cost‑of‑living relief which is both substantial and responsible –
And a longer term vision shaped by a profound sense of optimism in what we can achieve as a country –
In a budget that is profoundly better because of our efforts to clean up the mess they left behind.
Now, it’s long past time for the Coalition to present their plan.
They’ve said there should be deep spending cuts.
Well, it’s time to say what they will cut.
They promised to resurrect the old, skewed stage 3 tax cuts.
It’s time to say what that will cost and how they’ll pay for it.
They said they’d spend more on defence.
It’s time to say how much, and where the money is coming from.
And they’ve promised a nuclear policy.
It’s time to tell Australia what that looks like, where the nuclear reactors will go and how all of these promises will add up.
So that Australians can decide for themselves which version of the future they prefer.
The Coalition clown show of nasty negativity and dead‑end complacency –
Or a new generation of growth and prosperity which makes our people the primary beneficiaries of the way our society and economy is changing.
We have all the natural advantages we could possibly need to build that future.
But the one resource we don’t have at our disposal is time to waste.
The Budget reflects a sense of urgency.
We’ve undertaken more significant reform in 2 years, than our predecessors managed in close to a decade.
And Tuesday’s second anniversary of Anthony’s government is a rare opportunity to consider how far we’ve come together.
During that time, we’ve made huge strides in strengthening Medicare, building our care economy, advancing our housing plan, and investing in our clean energy future.
It’s been 2 years of managing and reforming our economy in the interests of the people.
As I’ve said, we’ve overseen a more significant and most rapid budget improvement than at any other point in Australia’s history:
- Budgeting for back‑to‑back surpluses.
- Reducing cumulative deficits by around two‑thirds.
- Taking $152 billion off our national debt this year.
- Saving $80 billion in interest costs.
- And improving the structural position of the Budget by reducing interest costs and managing the growth of the NDIS.
We’ve set our economy on a steadier footing:
- With inflation less than half its peak.
- The creation of 780,000 jobs, more than any other first term government, ever.
- Wages, growing at rates not seen in over a decade.
- And strong business investment.
We’re making our markets more dynamic, our economy more competitive, our tax system fairer and our policy foundations stronger.
- Modernising our financial system, across payments, financial market infrastructure and crypto.
- Introducing a new sustainable finance strategy.
- Strengthening and streamlining our foreign investment framework.
- Delivering a tax cut for every Australian taxpayer, returning bracket creep and delivering an economic dividend.
- Making sure that multinationals pay their fair share, that we get a fairer return from our LNG resources, and that super tax concessions are more sustainable.
- Working to enshrine the objective of super into law and make the system more effective for Australians in retirement.
- Abolishing nuisance tariffs.
- Renewing our institutions like the RBA and the Productivity Commission.
- And undertaking the most significant merger reform in half a century.
Reform to go with the relief and restraint.
I’m keen to get into your questions but first some concluding thoughts.
Those of you who’ve heard me speak in this hall before, know that I love this tapestry to my right.
I’m sure the hundreds of people who visit here every day say the same thing.
Where I’m tipping we differ, is that one of the reasons I love it, is because I see something of a parallel in budgets.
A team of people doing painstaking work.
Where every thread matters on its own.
But it still has to come together, as a coherent whole.
It has to be a close‑up and a panorama all at once.
And it has to last.
In the 2 years it took 14 craftspeople to weave this magnificent work of art, Halley’s Comet passed through the sky.
They put it in, up there in the canopy.
Capturing a pretty amazing moment in time.
That was 38 years ago.
Two years before that, in the first Budget speech to be televised.
Paul Keating stood in the old Parliament and said:
‘Australia now has before it an historic opportunity to embark upon a new growth path’.
Think of all the change that Australia has known since then.
It was not the easy road we took, it was not the familiar course.
But the courage of Australians to make a new way forward, set our nation up for the longest run of economic growth in our history.
Today, we can choose a new path to prosperity.
Not by doubling back, but by going forward together.
Making the most of the geographical, geological, meteorological, geopolitical and industrial cards we’ve been dealt –
Making our people the biggest beneficiaries of all the churn and the change in the world around us.
And taking the golden opportunity which is presenting itself in this defining decade.
So we are more secure and more prosperous –
More confident with more cause for optimism –
In the Australian future we all make together.
The Budget last night was central to that effort.
And I’m looking forward to your questions about it now.