JOSH FRYDENBERG:
Today Australia has seen an incredible set of job numbers, far exceeding market expectations. The unemployment rate has fallen to 4.6 per cent. It was 5.7 per cent under Labor when we came to government. More than 366,000 jobs have been created, a monthly record. Almost 60 per cent of these jobs went to women and about a third of the jobs to young people. Employment is now at a record high, with 180,000 more people in work today than at the start of the pandemic. And I repeat that: employment is at a record high, with 180,000 more people in work today than at the start of the pandemic. This result belongs to all Australians who have sacrificed so much over the last two years. It shows that the Morrison Government’s economic plan is working. Today’s budget update further confirms that the Australian economy is rebounding strongly having outperformed every major advanced economy throughout the COVID pandemic. Despite the impact of Delta, which saw 13 million of our fellow Australians subject to an extended lockdown. Today’s updated numbers show a stronger outlook than what was forecast in May.
Real GDP is expected to grow by four and a half percent in 2021 and by four and a quarter percent in 2022, reflecting strong and broad‑based momentum across the economy. Tax cuts for families are boosting household incomes, with household consumption set to increase at its fastest pace in more than two decades. Temporary tax incentives are driving the strongest increase in business investment since the mining boom, with non‑mining investment forecast to reach record levels. And on the back of the strong economic recovery, the unemployment rate is forecast to fall to four and a half percent by mid next year. With the unemployment rate falling to four and a half percent, this would be the first time since before the global financial crisis that Australia has sustained an unemployment rate at below five percent and only the second time since the 1970s. The rapid recovery from the Delta lockdowns is expected to see the creation of around one million new jobs by the end of the forecast period, which is around 150,000 more jobs than was forecast at budget. The employment to population ratio is expected to reach a record high next year.
But these gains are not yet locked in. The pandemic is still with us and we must continue to live with the virus as demonstrated by the recent emergence of the Omicron variant. We must also continue to stick to the plan that has seen Australia enjoy world‑leading health and economic outcomes during this crisis. No country is better placed to face the challenges presented by the pandemic, and Australians can look to next year with hope, optimism, and confidence. Our vaccination rates are amongst the highest in the world. The nation is lockdown‑free. Consumers are spending. Businesses are investing and the jobs are coming back.
As a result of the improvements in the economic outlook, the fiscal outlook has also improved across the four years of our forward estimates. The underlying cash balance in ’21‑22 is expected to be a deficit of $99.2 billion, or four and a half percent of GDP, a $7.4 billion improvement since the ‘21‑22 budget. And across the forwards, the budget is $2.3 billion better off than forecast in this year’s budget. The improved budget position is being driven by the stronger‑than‑expected recovery in our labour market. The combination of higher incomes, more people in work, less people on welfare has contributed $50 billion to the budget bottom line since May. Company tax is also contributing an additional $36.8 billion over the four years to ’24‑25 off the back of record terms of trade with prices for Australia’s key commodity exports having reached record highs in recent months. Notwithstanding this upgrade to revenue driven by a stronger economy, the government continues to reduce taxes, and this is reflected in the tax to GDP ratio, which is expected to decline by almost one percentage point across the forward estimates to support a private sector‑led recovery.
On the payment side, the government has continued to support households and businesses through these lockdowns and the COVID health restrictions while continuing to guarantee the essential services Australians rely on. In response to the Delta outbreak, the government provided a further $25 billion in direct economic and health support, bringing our total pandemic support to around $337 billion or 16.3 percent of GDP. This included more than $7.3 billion in business support payments and $12.6 billion in payments to more than two million Australians through the COVID disaster payment and further investments totaling $2.9 billion in our health system to ensure Australia continues to have the world’s best health outcomes. A stronger economy has also enabled the government to guarantee the essential services that Australians rely on with a further $26.4 billion being provided in MYEFO to the NDIS to ensure that those with a permanent and significant disability continue to receive the necessary support.
This budget also includes further investments to grow our economy and create jobs, investments to make it easier for vulnerable Australians to participate in the workforce, to support a stronger labour market recovery, and to build the skill sets that Australia’s economy needs. MYEFO includes an additional $2.3 billion in commitments to new and existing infrastructure projects which will help support jobs and the economic recovery. There’s further investments in the digital economy as well as to help the agricultural sector reach its goal of increasing output to $100 billion by 2030. Higher revenues from a stronger economy have been largely offset, though, by the cost of the Delta outbreak and the growth in the NDIS. This still sees the underlying cash balance improving, as I said, this year by $7.4 billion compared to budget, which builds on the $80 billion improvement we saw in last year’s final budget outcome.
Consistent with what we forecast in May as a share of the economy, the budget deficits halve over the next four years. The stronger economy and improved fiscal outlook has reduced debt levels across every year of the forward estimates. In ’21‑22 our loan gross debt is expected to be $44 billion lower than expected in the May budget. And even at its peak, Australia’s gross debt levels less than half the average seen across G20 economies.
In conclusion, Australians have good reason to be optimistic about their future. Our plan is working, and in the face of the largest economic shock since the Great Depression, working together we have been doing what has needed to be done. Australians should be incredibly proud of what they have achieved. They’ve come forward in record numbers to be vaccinated, the Australian economy is rebounding strongly, the jobs are coming back in record numbers, we’ve avoided the labour market scarring evident in prior recessions, confidence is up, businesses are investing, and the next phase of our economic recovery plan will be set out in next year’s budget. It will be guided by our fiscal strategy, a strategy that will see unemployment sustained at levels not seen in this country since the Howard and Costello era. Our plan will lock in the recovery and set Australia up for many years to come. Simon.
SIMON BIRMINGHAM:
Well, thanks, Josh. As the Treasurer has outlined, our economic recovery plan centered on lower taxes is driving stronger investment, greater confidence and fuelling a jobs boom for Australians. Since handing down the budget in May, though, we have faced significant impacts, and Australians have faced real disruptions from COVID‑19 and Delta‑driven lockdowns. These have seen more than $24 billion in additional health and economic support provided to Australian businesses, households, families, and health systems. But this support has been proven to not only be necessary but to be highly effective given the positive results it continues to demonstrate for our economy, for the jobs and security of all Australians. We have also taken since the budget necessary steps to support the Pharmaceutical Benefits Scheme, to deliver on commitments towards Closing The Gap, and to deliver on our road map towards net‑zero emissions. However, the majority of payment variations that we’ve seen reflected in this budget update relate to estimates variations, not policy decisions. With 56 per cent of the growth in those estimates variations attributable to the $26.4 billion in additional NDIS costs as estimated in the NDIS actuary’s baseline forecasts. Other important estimates variations reflect increased investments in Australian schools and are also reflective of the stronger economy driving stronger GST returns and, therefore, stronger GST payments passing through to the states and territories. Notwithstanding major budget pressures like COVID or the NDIS growth, our economic strength, though, means that our debt outlook continues to improve. At the time of the 2020 budget net debt as a share of GDP was forecast to peak at 43.8 percent. In the 2021 budget, this peak in net debt was revised down to 40.9 per cent. And pleasingly today as a result of the continued success of our economic recovery plan, net debt is forecast to peak at a further revised down figure of 37.4 per cent of GDP. As this budget update demonstrates, as we get more Australians into jobs from a stronger economy, we face lower debt.
Australia is one of only nine nations to retain an AAA credit rating from all three international credit rating agencies with two of these agencies having removed Australia from their negative watchlist since the last budget. The improved economic growth and employment outcomes that we’re seeing demonstrate that our economic recovery plan is working while lower debt projections show that our fiscal strategy is also on track. But there is no room for complacency. The spending pressures from COVID, the NDIS, delivering aged‑care reform, or delivering necessary national security investments are obvious. We must maintain real focus on achieving the economic growth to implement the fiscal strategy that meets those pressures. And yet our political opponents the Labor Party entertain further huge additional structural spends with promises of free childcare or free TAFE. Now, Australians know that nothing comes for free. With our economic strategies working, the risks of a higher spending or profligate Labor government will become ever clearer. Our government will stick to the plan that has kept Australians safe in their lives and secure in their jobs. And we’ll urge Australians to stick to that plan, too, the benefits of which are clear not just in this update but, crucially, in the unemployment figures detailed today.
JOURNALIST:
Treasurer, you’ve got sixteen billion here in decisions taken but not yet announced. It's clear in the budget, on the spending side. What is that about? Is that a secret spend‑a‑thon that you've got ready to win the next election?
JOSH FRYDENBERG:
Well, as you know, David, you’ve been at many budgets and you know about contingency reserves and you know about conservative bias and that allowances and you know also about the great deal of uncertainty that is out there. So we may have to make provisions for that. I do point out to you that…
JOURNALIST:
Are they election spending measures to fight the campaign?
JOSH FRYDENBERG:
They are measures that we expect to eventuate, but at this point, we can’t allocate and confirm to specific programs. What we do know is that since we handed down the budget in May we had the Delta variant. That required an additional $25 billion in spending in both economic and health terms. We have had to make allocations for that in the budget. And, you’re right, there is a contingency reserve; there are decisions taken but not yet announced. And that has been consistent with previous budgets by both sides of the political divide.
JOURNALIST:
Will you be upfront with the Australian people then and tell us what part of that is for your spending between now and the next election?
JOSH FRYDENBERG:
Simon might want to add to this, but what goes into a contingency reserve can be a number of specific initiatives, including those that are commercial in confidence and, therefore, can’t be revealed. Issues that may relate to the purchase of vaccines or other necessary health support ‑ it can be national security‑related. It is a provision in the budget that is just there in the event that those specific areas need to be confirmed, and which they would be at a budget, which is scheduled for the end of March. Simon.
JOURNALIST:
But can you separate it out in broad terms?
SIMON BIRMINGHAM:
Over the longer term what we have is the conservative bias allowance that is built into every budget bottom line. However, what we can see in relation to the pressures we face from uncertain events like COVID‑19 is that especially in the course of this budget year we’ve had to put further spending in beyond what had been provisioned for in relation to the contingency reserves. Showing a prudency and a cautiousness there, is important. Then there are the not‑for‑publication items that are included in the bottom line. They include things such as the domestic aviation network support or the tourism aviation network support. These are demands – or these are driven programs that are structured in commercial contracts with the airlines. The full figures of those are flushed out and demonstrated very clearly to the Australian people and, of course, all of these matters…
JOURNALIST:
Sorry, the $16 billion is decisions taken but not yet announced. You’ve actually made the decisions, haven’t you? You’ve made the decisions to spend this $16 billion. It’s on page 202. So you know exactly what they are. It is just that you’re keeping them secret until the election campaign, is that right?
SIMON BIRMINGHAM:
No. David, as Josh has said very clearly, the fact is we have to both be prudent in terms of allowing head room but also be prudent in terms of assessing where certain risks may be, take decisions that mean we are reflecting in as conservative a way as possible in the budget the potential for spending, but making sure then that as we work through those in the lead‑up to the next budget some will be realised, some may not be realised. They’re decisions the government will take as we work through that. This has been a prudent approach.
JOURNALIST:
Just picking up on the not‑for‑publication element of that line item we’re talking about, is one of those elements the cost of the cancellation of the Naval Group contract because there’s no further information available in MYEFO about what that will cost taxpayers? And one more, if I may. Can I just read you one of the assumptions: “The Omicron variant is not assumed to significantly alter currently reopening plans or require a reimposition of widespread health and activity restrictions.” How on earth can that be said at this point in time?
SIMON BIRMINGHAM:
I’ll take part one and you can take part two. So the Prime Minister in terms of the cancellation of the Naval Group contract made clear at the time that we saw costs in the order of $2.4 billion at that stage. The details around finalising the exit of that contract and the one with Lockheed Martin associated with the Attack Class are being finalised through negotiations. Provisions are made for all of those elements in the Defence budget in terms of making sure that funds are available to meet any and all of the likely consequences of that. At page 101 of MYEFO you’ll find in the statement of risks it details looking to the longer term the questions around making sure we fund the nuclear powered submarines adequately and other defence needs into the future. That’s why I identified in my remarks the fact that national security funding pressures are one of the real things of the long term we have to prioritise.
JOSH FRYDENBERG:
Yes, and it’s there in the statement of risks. In terms of the assumptions, Katharine, at one level you’re absolutely right about the uncertainty that is out there because we’re still in the middle of the pandemic. When we delivered the budget as a government in May of this year we didn’t forecast the Delta variant, and you’ve heard and seen today a $25 billion hit to the budget bottom line from just the economic – specific economic support measures for businesses and households as well as the health support measures. What we do know, though, is based on the health advice to us today – and you’ve heard that from the Chief Medical Officer – that the Omicron variant is highly transmissible but the early signs are that it’s more mild than other variants and that the vaccines, which have been rolled out across the country are an effective defence against serious illness with the virus and that the various treatments that we’re rolling out have also been effective against this virus. The expectation in the papers today, in MYEFO, is that we’re not going to see Omicron derail the recovery. And you’ve heard similar words from others. Now, Sharon Lewin, as you know the Director of Doherty and someone who helped put together the reopening plan based on the vaccination rates reaching those key marks of 70 and 80 percent, has said publicly we should not panic about Omicron. This is what they expected, and it should not be a reason why borders should be closed. You’ve heard, as I said, from the Chief Medical Officer as well, reassuring words about how Australia can cope with this new variant. I have a very clear message to the Premiers – their actions in response to Omicron must be proportionate to the risk. They must show compassion. They must show common sense. That initial response where everyone on a plane heading into Queensland was subject to quarantine for two weeks, including Christmas Day, that was clearly an overreaction of which they had to walk back from. We need the Premiers to stick to the national plan. The momentum in the economic recovery depends on it. Premiers should not be spooked by the Omicron variant. We have a plan. It’s working. Today’s job numbers are the clearest indication of what happens when you ease restrictions, when you take 13 million people out of lockdown, they go out and spend the money that they’ve either saved or that the government has provided in assistance. To know that there are 180,000 more people in work today than at the start of the pandemic is the biggest tick you can imagine for our economic recovery plan. It shows that it’s working.
JOURNALIST:
Treasurer, there is a scenario in the papers today, the MYEFO papers, that says that there would need to be physical distancing and targeted lockdowns through to the first half of 2022. In that scenario, economic activity would be $20 billion lower. Are you suggesting that there won’t be a need for targeted lockdowns at all over that first half of 2022?
JOSH FRYDENBERG:
As you know, there’s another scenario as well that points to the fact that the savings ratio goes down faster than what was provisioned for in the budget, and that sees a big jump in terms of economic activity, so it goes both ways, Lanai. What we’re doing in terms of these scenarios in the budget is showing how there can be a negative and there can also be a positive impact depending on how we manage the Omicron variant. We did that previously. We’ve done it again. I think it just provides extra information for people like yourself.
JOURNALIST:
Treasurer, your figures in the budget are positive, your forecasts are positive. But we still hear for business that they’re under huge pressure on issues like labour shortages and particularly supply chains. How do you reconcile that? How can you be so sure that those problems businesses experience – are experiencing now won’t be denting those figures? And you talked, secondly, about your temporary concessions to business. Would you consider making some of them permanent, like instant asset write‑off? And if not, why not?
JOSH FRYDENBERG:
The expanded instant asset write‑off has been a great success, and, again, you can see that investment has been rising even though we’re in the middle of a pandemic. That’s sort of counterintuitive – you’d normally think businesses would put their hands in their pockets and not make those investments. And so in these numbers you see business investment up 16 percent over this year and next, which is very positive and a significant upgrade to what we were expecting at budget. We’ll make decisions about various tax measures and spending measures at the appropriate time as we lead into the budget at the end of March. What you said about workforce shortages is a real issue. And we have seen job ads now at a 13‑year high. There are more than 200,000 job ads right now with jobs available for people. The hospitality sector is crying out for more workers. We’ve seen in the agriculture sector a great need, construction, mining, professional services and IT. Today, as you know, we’ve lifted the pause, the two‑week pause on international students and skilled workers coming in. We expect some 200,000 people will come through our doors now that we have lifted that pause. Over time that’s going to provide additional workers to meet some of these skilled workforce shortages.
JOURNALIST:
It won’t be instantaneous will it? And you’ve got supply chain issues as well?
JOSH FRYDENBERG:
It won’t be instantaneous, you’re absolutely right Karen. The other point, though, is we’re investing heavily in skills. There’s some additional measures in today’s MYEFO around what we’re doing for apprentices, continuing the wage subsidy at a tapered lower level. That’s been a great success. There are 217,000 trade apprentices in work today. That’s the highest since those records began back in 1963. We’ve got 450,000‑plus places in the JobTrainer program, of which there are 250,000‑plus who have already enrolled. There is, as I think Simon alluded to, extra programs in here for older workers to be skilled up, for people who are entering the workforce for the first time there are programs. We’re tackling this at both sides, Karen. We’re going for skilling the workforce here in Australia so that they’re equipped, ready to meet those job shortages, as well as opening up borders when it’s safe to do so, which will bring in more people. I also do point out there is, in terms of the population numbers in MYEFO, 120,000 extra people come in in net overseas migration as a result of us being able to open the borders earlier than what we said at Budget. At Budget, we said we would gradually reopen from the middle of next year, and clearly, these borders are staying open.
JOURNALIST:
Treasurer, on real wages, they actually sink by half a percentage point in this financial year and increase only half of that by the following financial year, which means that people won’t get a real wage increase for two years. Why should that be the case given unemployment is so low, there are so many demands for people to work? Isn’t this reason for you to temper net overseas migration, not increase it dramatically?
JOSH FRYDENBERG:
Firstly, I don’t see it as a binary choice between having a sensible, measured immigration program that is helping to bring in skilled workers, family reunion, humanitarian needs as well as, of course, getting a tighter labour market, putting the policies in place that drive real wages up…
JOURNALIST:
But that’s not the case.
JOSH FRYDENBERG:
Let me put it in context for you, Andrew. When we came to government, real wages were falling under the Labor Party, falling, and unemployment was rising. What you see in these numbers is over the next three years you see wages going up 2¾, 3, 3¼ and you see inflation for those three years at 2½, 2½ and 2½ . So actually you’ve got real wages rising in those three years. Last year, last year, we saw a record fall in inflation and we saw real wages the highest that they were for 10 years. Now Labor doesn’t like to talk about that, but that was last year. You’re right that inflation now at 3 per cent has risen and it’s been more persistent. But what these numbers show is over the three years coming, you will see real wages growth, and what these numbers also show today, which is the absolute focus for the Morrison government, is creating more jobs. 366,000 new jobs today, a record number of Australians in work, 180,000 more than at the start of the pandemic. Unemployment at 4.6 percent coming down to 4.5 per cent. A tighter labour market drives more competition for labour, as (inaudible) was saying, those employers out there chasing for workers, and when they’re chasing workers they’re paying higher wages. That’s good news for the economy. Phil.
JOURNALIST:
Treasurer, the unemployment forecast dropping down to the low 4s. That’s your self‑stated trigger for budget repair by the start of this financial (inaudible). Given that’s the sort of trajectory we’re on, is there still a capacity or even a reason to give more tax cuts, like to roll LMITO over for another year, beyond this year? I mean, isn’t that just a waste of $8 billion, given we’ve already got so much pent‑up spending demand in the economy?
JOSH FRYDENBERG:
Well, Phil, I know you’d like me to give a final, you’d like me to give a definitive position on tax relief right now. But what I can say to you is we will make decisions in accordance with our budget timetable, and we’ll have more to say about measures that are in or out of the budget, whether they’re on the tax or the spending side, when we get to budget at the end of March. But what I can say to you is that at every opportunity we have looked to cut taxes for the Australian people. Now, we took to the Australian people at the last election a significant package of tax reform. We legislated it. Abolishing the 37 cents in the dollar tax bracket, seeing 95 per cent of taxpayers pay a marginal rate of no more than 30 cents in the dollar, ensuring that over the September quarter we saw more than $10 billion go to more than 11 million people with the most tax relief in more than two decades. These are low and middle‑income earners that we’ve focused on with our tax relief. At the same time we’ve cut small business taxes down to 25 percent, which is the lowest in 50 years. We’ve put in place the business investment incentives which are driving investment. We’ve put the loss carry back measure. We’ve announced a patent box which brings the company tax rate down to a concessional rate of 17 cents for those medical and biotech sectors to encourage innovation and create jobs that way. So at every turn the Morrison Government has been focused on cutting taxes. Now it won’t surprise you that this will be a key battle line at the next election because it was at the last election when the Labor Party said they were proud and they were pleased to put $387 billion in higher taxes on your housing, on your retirees, on your superannuation, on your income earners, on family businesses. Now, they have rolled themselves up into a ball now and saying, “Don’t look here, look there. We’re not for higher taxes.” But, hang on, this leopard doesn’t change their spots. And Labor always stands for higher taxes to chase their higher spending. We’re for lower tax, and with respect to new measures, obviously, we would announce those at budget.
JOURNALIST:
Treasurer, you’ve got debt heading past a trillion dollars. Is it prudent use of taxpayer money to be spending $16,500 on TVs so rugby union fans in Sydney’s eastern suburbs can watch the Wallabies play overseas, $14,500 for new carpet in a sports club so it can apparently encourage more women to play sport? Is that prudent use of taxpayer money?
JOSH FRYDENBERG:
Well, if you’re referring to the various grants programs, they’ve always been around and there are proper processes, and the ANAO has scrutiny over those programs. I note that...
JOURNALIST:
Would you give the ANAO more money?
JOSH FRYDENBERG:
Well, we have been giving the ANAO more money in recent budgets. And as you know, they have scrutinised the programs. And the analysis that was done was 1 per cent of programs, 1,700 programs (inaudible). But the point is it didn’t focus on social services programs where 60 per cent of funding in social services programs are going to disability support, going to aged care, going to health, going to Indigenous. That wasn’t subject to it. And I note that, for example, the member for Grayndler was showing he wasn’t receiving grants. Well, he got an $87 million grant under the NDIS community support grant. So I note the commentary, but I do point out to you that that was quite selective analysis. We have an ANAO and it does the scrutiny on the grants.
JOURNALIST:
Treasurer, how can you give Australians any sort of assurance following on from Katina’s question, you can’t say to Australians how much you’re going to be spending on election commitments this time around. You’re trying to predict the unpredictable of the virus by saying in one instance borders could close and in one instance they’ll stay open. How can Australians look at you and know that the numbers in this are going to be in date, that they can trust what you’re going to say and that they know what’s coming at the next election?
JOSH FRYDENBERG:
Because today’s numbers are actually an upgrade on what we saw at budget. So actually we have been conservative in our estimates, whether it’s around iron ore prices or whether it’s about employment forecasts. We have actually been conservative in the way Treasury have forecast these numbers. And what we’ve announced… sorry, you asked a question, I’m trying to give you an answer. The question is how can we be certain. There is a great deal of uncertainty right now. We’re living in the middle of a pandemic. The biggest economic shock since the Great Depression. The first pandemic in a century. Treasury came to me last year and said the unemployment rate could reach as high as 15 percent. That’s more than 2 million Australians unemployed. Today we have an unemployment rate at 4.6 percent, even after the COVID recession, the first in nearly three decades, we have an unemployment rate that is lower than when we came to government. Now this result belongs to 26 million Australians. People who have sacrificed so much but through the resilience of our economy and then through their resilience are now seeing that reward for their effort. Today is a day is a day where we should be acknowledging the incredible strength of the economy. I can’t give you, right, I can’t give you a crystal ball that says what every particular outcome will be next year because we’re still in the pandemic. But what I can give you is Treasury’s best analysis. And their best analysis is that we’re going to see 1 million new jobs created. Their best analysis is that the unemployment rate comes down further to 4½ percent, that growth next year will be 4¼, that consumption will be 5½ , that exports are increasing, that investment is increasing, that Australia has maintained its AAA credit rating. That’s a very strong economic track record.
JOURNALIST:
Treasurer, on the structural spend, you’re saying that over the forward estimates a $55 billion increase in the NDIS. Can you look voters in the eye…
JOSH FRYDENBERG:
Over the forward estimates, we said an extra $26 billion compared to what we forecast at budget
JOURNALIST:
Correct. But can you look voters in the eye ahead of the election and say under your government there will be no cuts to the NDIS, or does that growth in spending need to be paired back?
JOSH FRYDENBERG:
Look, I’m really pleased you asked me that question because Sabra Lane also asked me today on AM about, with the NDIS why are we talking, you know, about only the costs rising. Can I just tell you, I think the NDIS has been a brilliant program for Australia. And what has given Australians reassurance is that it has had bipartisan support. So the Morrison government is absolutely committed to fully funding the NDIS. But I just want to point out a couple of key numbers for you. Prior to the NDIS, commonwealth and state governments combined were spending just under $8 billion on disability support. Today that number is around $30 billion. So we’re spending in three months what we were spending in a year. Now, the commonwealth is going to be responsible shortly for around 70 percent of the funding of that program and rising.
JOURNALIST:
Is that unsustainable then, Treasurer?
JOSH FRYDENBERG:
Well, we’re absolutely committed to fully funding that program. And growth has been at more than 10 percent per year. So, it’s absolutely incumbent upon me and Simon as the Treasurer and the Finance Minister to explain to the Australian people how the cost of that program is rising because we’ve seen a greater number of people come on the program than expected and we’ve seen the average costs of each individual package go up more than expected. But we’re absolutely committed to fully funding this program, but it is increasing quite dramatically, and that is having an impact on the budget. Simon.
SIMON BIRMINGHAM:
Let me just add to that briefly. We at the last few elections, each and every one, have been asked the question about whether we would fully fund the NDIS. The proof is in the delivery. We have fully funded the NDIS at every step of the way. And in this budget update, we are honestly reflecting for the future what the actuary who operates over the NDIS has predicted those future costs will be. Now they are projections. Just like Josh was talking about other projections, those projections may vary depending upon demand or other factors. We’re committed to ensuring the sustainability and the integrity of the NDIS. If you look at the measures in page 295, you’ll see there’s some compliance measures we’re funding in relation to the NDIS. That’s about making sure that we don’t let fraud get out of control in a program like this, we don’t let overcharging get out of control in a program like this because we’ve seen in these sorts of spaces before, whether it was in relation to child care or vocational education, that those fraud and non‑compliance activities have ended up costing taxpayers billions of dollars. We want to make sure we get ahead of it in the NDIS to ensure it is as sustainable as it possibly can be, and that every possible dollar we invest in support of Australians living with disability goes to supporting Australians living with disability, not to anybody seeking to rort or rip off that valuable system.
JOSH FRYDENBERG:
Thank you very much.