I would like to acknowledge the Traditional Owners of the Land and pay my respects to their elders past and present.
I would also like to acknowledge my colleagues in the room, Deputy Prime Minister Barnaby Joyce, Finance Minister Simon Birmingham and my Treasury colleagues Assistant Treasurer Michael Sukkar and Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume.
Also here today is my great friend Minister for Health, Greg Hunt, who has done an outstanding job over the last two and he has with him a very special guest Julie Cini who is the founder and CEO of Spinal Muscular Atrophy Australia.
Julie tragically lost both her children to Spinal Muscular Atrophy (Type 1) and has led the charge to list Zolgensma on the PBS, a lifesaving and life changing gene therapy to treat infants under nine months.
Last night we listed this drug on the PBS. At a record $2.5 million for a one‑off treatment, the most expensive drug ever listed on the PBS. It will save 30 children a year. Listing drugs such as Zolgensma and last night Trodelvy to treat breast cancer patients is only possible because of our strong economy.
Ladies and gentlemen, we live in extraordinary times.
A global pandemic that has taken more than 6 million lives.
All too frequent natural disasters that are devastating local communities.
And war in Ukraine that has shattered peace in Europe and seen global inflation spike.
But despite all the challenges we face, Australia remains resilient.
Australians remain strong.
In just a few weeks’ time, our nation will go to the polls.
Voters will face a clear choice.
A Liberal/National Coalition, led by Scott Morrison, that has delivered a world‑leading economic recovery and has the long‑term plan to create more jobs.
And a Labor Party, led by Anthony Albanese, that has hidden from view for the last three years, trying to sneak into government with little more than a false and fanciful promise that he will govern like Bob Hawke and John Howard.
The opposite would be true.
The most left‑wing Labor leader since Gough Whitlam has spent his entire political life championing higher taxes and higher spending.
A history the Leader of the Opposition wants you to conveniently forget.
Ladies and gentlemen, over the last two years, Australians have been tested.
There have been setbacks along the way.
But we have got the big calls right. Closing our borders early in 2020, which saw Australia avoid the makeshift morgues of Central Park.
Implementing JobKeeper, saving more than 700,000 jobs and putting a security blanket across the economy.
Responsibly tapering and ending emergency economic support so that crisis level spending was not baked in, nor continue any longer than necessary.
The verdict is in: Australia has seen an economic recovery that is faster and stronger than the United States, United Kingdom, Canada, Germany, France, Italy and Japan.
A double dose vaccination rate of more than 95 per cent, putting Australia among the top ten countries in the OECD.
A mortality rate, which per head of population, is third lowest in the OECD.
This was not luck.
More than one thousand individual decisions across all areas of government have put our economy in the strong position it is today.
It is our record.
Last night, I set out our plan for an even stronger future.
A future where:
- Aspiration and enterprise are encouraged and rewarded.
- Families have greater flexibility and choice.
- Those in need get a helping hand.
- Greater self‑reliance leaves our nation less vulnerable.
Today, I would like to make four key points outlining:
First, how far our economy has come in the last two years, avoiding the economic abyss.
Second, how last night’s Budget is banking the dividend of a stronger economy, with a material improvement to the bottom line.
Third, how our plan delivers cost of living relief now and long‑term investments in skills, small business, manufacturing, infrastructure, the regions and the digital economy, to create even more jobs in the future.
Fourth, how we are investing more in national security and defence as global threats increase.
Australia’s remarkable recovery
As we gather here today, we are reminded of just how far we have come.
In early 2020, Australia faced its biggest economic shock since the Great Depression.
Around 1.4 million people, or a little over 10 per cent of the workforce, lost their jobs or were stood down on zero hours in April 2020.
Our economy shrank by an unprecedented 6.8 per cent in the June quarter.
To put this in context, prior to this the largest ever quarterly fall in GDP was 2 per cent in the June quarter 1974. GDP fell just 0.5 per cent during the GFC.
People were confined to their homes, the economy was put into hibernation and our lives were put on hold.
Treasury feared the unemployment rate could reach 15 per cent.
And Labor said the biggest test for our Government would be what happens to jobs and unemployment.
Today, Australia’s unemployment rate today is 4 per cent, its equal lowest level in 48 years.
Two million more Australians are in work than when we come to government.
More women participating in work than ever before.
Our economic plan is working.
Banking the dividend of a stronger economy
Last night’s Budget demonstrates that our economy has real momentum.
Growth is higher, unemployment is lower and wages are strengthening.
Real GDP is expected to grow by 4¼ percent in 2021‑22 and 3½ per cent in 2022‑23.
Unemployment is forecast to hit 3¾ per cent by the September quarter and be sustained at that level. A 50 year low.
Wages have been upgraded in every year of the forecasts and the Wage Price Index is expected to reach 3¼ per cent next year – the strongest in almost a decade.
Broader measures of wages are picking up even more quickly. The National Accounts measure of wages growth is expected to increase by 5 per cent over the year to June 2022.
Inflation in Australia is forecast to increase to 4¼ per cent next year, before declining over the forward estimates period.
This is well below that of the United States where it is at a 40‑year high of 7.9 per cent and the United Kingdom, Canada and New Zealand where inflation is at around 6 per cent.
We are now banking the dividends of a stronger economy.
By the end of the forward estimates, the bottom line will have improved by more than $100 billion since MYEFO.
The Budget shows the fastest improvement to the bottom line in over 70 years with the deficit more than halving as a share of GDP over the forward estimates.
More people in work, fewer on welfare, repairing the Budget without increasing taxes.
At the same time we are guaranteeing the essential services Australians rely on, with record funding for schools, hospitals, Medicare, mental health, aged care, disability support and last night a further $2 billion of new measures to improve the safety, health and economic security of women.
In this Budget, almost three quarters of the Revenue improvement is due to a stronger economy and stronger labour market.
Not the product of baking in high‑commodity price assumptions, a weakness of previous Labor budgets.
We have maintained the discipline of a tax‑to‑GDP cap of 23.9 per cent.
Constraining revenue imposes a discipline on the expenditure side of the Budget and is consistent with our values of cutting taxes, not increasing them.
It is then no surprise that Labor has no such discipline and no such tax cap, having promised $387 billion in higher taxes at the last election, which would have seen the tax‑to‑GDP ratio reach a record high of 25.9 per cent.
On the expenditure side, our approach has also been different to Labor.
When we ended JobKeeper, the Opposition Leader claimed “the economic roof would come crashing down.”
Three months later nearly 120,000 more people were in work.
When we ended the COVID disaster payments, the Shadow Finance Minister said that “support should not be pulled”.
A month later we had the strongest monthly increase in employment on record.
They could not have been more wrong.
Keeping the spending taps on would have been irresponsible.
Labor has made more than $80 billion of additional spending commitments during COVID.
This is in stark contrast to the approach to spending in last night’s Budget.
Spending as a share of GDP is lower than projected at MYEFO by the end of the forward estimates and across the medium term.
A prudent approach that avoids putting upward pressure on interest rates.
By sticking to our fiscal strategy, gross debt peaks 4 years earlier and 5.4 percentage points lower than previously forecast.
Our debt to GDP ratio is less than that of all G7 economies and around half that in the United States and a third of that in Japan.
And we remain one of only nine countries in the world to have retained our AAA credit rating from the three major agencies.
This was affirmed again last night with S&P confirming our AAA stable rating and acknowledging “Australia's economic recovery is improving the government's fiscal trajectory faster than it previously anticipated”.
Dealing with cost of living pressures
The number one topic around the kitchen tables of Australia right now is cost of living.
COVID and events in Ukraine have disrupted global commodity markets and supply chains, driving up the price of food and fuel.
This is a global phenomenon impacting us here at home.
The price of oil is up 50 per cent since the start of the year, wheat prices up by 40 per cent since the start of the year and shipping costs today are more than five‑times what they were pre‑COVID.
The Budget I handed down last night responds directly to these pressures in a temporary, targeted and practical way.
Halving fuel excise for six months — which could save a family with two cars, who fill up once a week, around $700.
A temporary $420 cost of living tax offset for over 10 million low‑and‑middle‑income earners.
A new, one‑off $250 cost of living payment to 6 million Australians, including pensioners, carers, veterans, Jobseekers and concession card holders.
Greater access to cheaper medicines for 2.4 million Australians, who will now require fewer scripts before their medicines are either free or at a concessional rate.
These measures will provide real relief for Australian families, just when they need it.
And they come on top of more than $40 billion in personal income tax relief since the start of the pandemic.
Lower energy costs ‑ having fallen by almost 10 per cent in the last two years.
And reduced child care costs for around 250,000 families as a result of measures I announced in last year‘s Budget which have now been implemented.
Long term plan to create more jobs
Last night’s Budget not only responds to the pressures of the here and now, it also outlines a long‑term plan for an even stronger and more resilient economy.
Critical reforms to upskill a new generation of young Australians.
Bold new investments in regions of national significance.
Expanding Australia’s sovereign manufacturing capability.
Boosting the competitiveness of our small and large businesses with new investments in infrastructure, energy and the digital economy.
It is also these investments that will help secure our pathway to Net Zero emissions by 2050 and respond to the critical global challenge of climate change.
Skills
During the pandemic, the Government invested $13 billion into skills and training, helping to deliver a record 220,000 Australians now in a trade apprenticeship.
In last night’s Budget we committed a further $2.8 billion to support even more apprentices.
We also lay the foundations for national skills reform with a $3.7 billion investment. Supporting an additional 800,000 training places.
We understand that no one knows better than a small business owner what skills they need in their employees.
Last night’s Budget incentivises and rewards small business for helping their employees to upskill.
For every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction, effectively lowering the cost of training for small business.
Ladies and gentlemen, 270,000 new jobs were advertised across the country in February.
By investing more in new and expanded programs to help disadvantaged youth, Indigenous Australians, the mature aged and Australians with a disability find employment, we will help more Australians make the most of these opportunities.
Equipping our workforce with better skills, making our economy stronger, more innovative and more productive.
That’s our plan for a stronger future.
Regions
Nowhere are these opportunities more abundant than in our strong and growing regions.
Accounting for two‑thirds of our exports, Regional Australia is already a powerhouse of our economy.
No government understands this more.
We have committed a record $100 billion to our regions since coming to office.
This Budget outlines an even more ambitious vision for our regions.
Leveraging their strengths and proximity to new and growing markets, we will invest in nation‑building infrastructure to transform four regions primed for growth.
Through targeted investments in land and water infrastructure, low emissions technology and energy generation, resources extraction and processing, we will open up new frontiers of production and growth.
These landmark investments will help create the next chapter of Australia’s economic success story.
Manufacturing
Growing Australia’s manufacturing sector will also be key to creating more jobs and making our economy more resilient.
In last night’s Budget we are providing almost $330 million for manufacturing businesses that eliminate vulnerabilities across our key supply chains.
We have secured the manufacturing of mRNA vaccines in Victoria, one of a handful of countries anywhere in the world to have this capability.
And we continue to invest in our Modern Manufacturing Strategy, setting out a ten‑year blueprint to expand Australia’s sovereign manufacturing capability.
Medical products, recycling and clean energy, critical minerals, defence, space and food.
Last night I also announced the expansion of our patent box regime — which taxes income from home‑grown patents developed by medical and biotech firms at around half the normal rate.
Agriculture and low‑emissions technology businesses will now also benefit.
Further supporting the commercialisation of Australian technologies is part of our plan to see Australia become a leading digital economy by 2030.
Australia has already seen the emergence of exciting new tech companies.
Afterpay, Atlassian, Canva, Seek and many more.
Indeed, every Australian company is now a digital company.
That is why we have invested more than $3.5 billion in digital initiatives since 2020.
And why in this Budget, we are delivering a new Technology Investment Boost.
This will provide a $120 tax deduction for every $100 small businesses spend on computer hardware, software and other digital technologies, up to $100,000 of expenditure per year.
Our plan will help businesses to grow, lift their productivity and become more competitive and at the same time make us less reliant on global supply chains.
Investing more in national security and defence
There is no more important time to strengthen our national security and defence.
This Budget does just that.
Australia faces a less‑stable region and a more uncertain world.
Autocracies are challenging the liberal rules‑based order that has for more than 70 years underpinned global prosperity and the rapid acceleration of globalisation itself.
The stakes are high.
Strategic competition is on the rise.
Economic coercion more pronounced.
Critical supply chains under pressure.
National security and economic security are now intrinsically linked.
Since coming to Government we have lifted defence funding from 1.6 per cent of GDP to more than 2 per cent in 2022‑23.
We have put in place $270 billion defence capability plan supporting more than 100,000 Australian jobs across supply chains.
And in the past fortnight, announced our plans to expand the size of our defence workforce to more than 100,000 at a cost of $38 billion.
To build a new submarine base on the east coast of Australia as part of a more than $10 billion investment in future submarine infrastructure.
And last night, we announced a record $9.9 billion, ten‑year investment in Australia’s offensive and defensive cyber capabilities.
More data analysts, computer programmers, and software engineers to boost our capacity to prevent and respond to cyber threats.
We are also building stronger strategic partnerships.
We have been doing this through AUKUS, the Quad, ASEAN and the Five‑Eyes network.
Australia must always be in a position to stand up for our values.
This Budget will ensure we remain in a position to do so.
Conclusion
After nearly 30 years of uninterrupted growth, COVID stopped our economy in its tracks.
It was the biggest economic shock since the Great Depression and while our economy has recovered strongly, we should not lose sight of how far we have come.
Just on two years ago, we were literally staring into the economic abyss.
Now, our economy leads the world.
Growth is higher, unemployment is lower and wages are strengthening.
We are on track for an unemployment rate at 3.75 per cent.
We are seeing a material improvement to our Budget bottom line.
Our economic plan is working.
Now is not the time to change course.
To put all our gains at risk.
The Budget last night, delivers cost of living relief now.
A long‑term economic plan to create more jobs.
Guarantees the essential services Australians rely on.
And invests more in national security and defence.
A Budget for our times.
A Budget that delivers a strong economy and a stronger future.