To Phil Baressi, thank you for that wonderful introduction and thank you for the warmth and the love that is in this room tonight. I want to say to you that I understand how important the eastern suburbs of Melbourne are. I understand it because I grew up in what was then considered the outer eastern suburbs in the suburb of Blackburn in the late 50s early 60s. Our family came out post-war, built a house on a block which had previously been an orchard. And as a young child I was directed by my parents out the back to pick the fruit off the old plum trees that still stood in our backyard. And my parents use to tell me to pull out the thistles and walk across the road and feed them to the horses that were on the vacant blocks opposite.
And I knew the freedom of growing up in the suburbs in a home of your own on a block in a country where the suburbs were giving young kids opportunities. I went to the local government school and I got a good education. I learnt to value work by picking fruit from those plum trees and it wasnt until I was 16 that I got an axe and I cut them all down. That meant I didnt have to pick those plums anymore!
And I know how important it is out here in the outer east to have good transport. I know how important fuel prices are. I know how important it was for the outer east, when the State Government promised that they would build a freeway called the Scoresby Freeway and what that meant to people out here who travel long distances. And I know how let down you felt when that promise of a freeway after the last State election was broken and instead you got a toll road, which will be charging you and your children and their children for generations to come.
And I just want to say to you that I believe Victoria can do better. And I want each and every one of the candidates that is here in this Hall tonight to stand up now, stand up, we are going to have a good look at you, right on your feet, everybody who is a candidate in this State election. I want you to look at the people who can form the next Government of Victoria after the November State election.
This is the team that the Liberal Party, led by Ted Baillieu, is taking into the State election and I want to say every Liberal we must give them our full support to make sure that after the State election we have a Liberal Government, that Ted Baillieu is the new Premier and that Victoria gets the kind of good Government that it deserves.
Can I thank our State colleagues for being here but can I also acknowledge the federal Members that have put tonight together Chris Pearce the Member for Aston, Phil Baressi the Member for Deakin, Jason Wood the Member for La Trobe and Tony Smith the Member for Casey. It is my privilege to serve with these people in the Federal Parliament. They are making a difference. They are wonderful representatives and I count them all as friends.
I count our Senators as friends too tonight. They are out here to show their support for our State candidates. And our President Russell Hannan, to our State Director Julian Scheezel and all of their staff: you are the engine room of this State election campaign. And I want to thank you for the effort that you are putting in and the professionalism that you are bringing to the campaign, for the fundraising that you are putting together and for the support that you are giving to all of our State candidates out here.
You know, as Phil said, our country has made some great strides over the last decade. We had a report from the OECD which came out recently that was written up in the Financial Times of London. The Financial Times of London has no reason to guild the lily when it is carrying a report on the Australian economy.
The Financial Times of London began its editorial two weeks ago by saying: What do you say to a country that has got straight As in its economic report? Do you say, it is time to rest or do you say, good student, continue the effort? That is the verdict of the OECD in its recent report on Australia.
You will very rarely hear things like reported in the Australian media. Sometimes you have to go outside of your own country to actually find an independent report.
The OECD report said that over the last ten years Australias living standards had risen and they now surpass the living standards of every G-7 country except the United States.
You know we are in a world competition and we were falling. We were the Carlton Football Club of the world economic table. And we have turned ourselves around, we are coming back-like Essendon will next year. And we started rising again in terms of living standards. There is nothing God-given about Australias economic performance. It is not as if we had been given something that other countries dont have. Sure, we have resources but there are countries that have better resources than us. Papua New Guinea has better natural resources than Australia in terms of gold and copper and oil and gas. And we dont have the largest population in the world, we have 20 million people, China has over one thousand. They have 1.2 billion, 12 hundred million people.
And yet our economy has proven strong and resilient over the last ten years, and that is because we have had the decency to do the reform that is necessary. I guess this came home to me in June when I was invited to go to the G-8 Summit in St Petersburg. An Australian Minister had never been invited to a G-8 Summit before. This was the first time. And I was invited to give the opening address on how to manage budget policy in a modern economy to the G-8 in St Petersburg.
And that is because we have got some runs on the board. But my message is this, here is my message: it is not an accident, it is not a fluke. It doesnt just happen. The Australian economy this year will be a $1 trillion economy. That will be our output in Australian dollars this year, $1 trillion. The Federal Budget is $200 billion. That is 200 with nine noughts on the end.
You dont have much of a margin for error. It takes a little bit of management. Let me let you into a secret. If economic management were easy, Kim Beazley could do it!
You dont have margin for error and it takes management. And now we are starting to see some of the results. It was balancing the Budget, repaying $96 billion of debt, abolishing wholesales sales tax and introducing GST, cutting capital gains tax, cutting company tax, cutting income tax in 2000, 2003, 2004, 2005, 2006, establishing a Future Fund to meet our future liabilities, making changes in relation to energy to encourage alternative fuels and investing in our nation. We are starting to get some of the pay off and it doesnt happen easily.
At the Federal level we have cut income tax in 2000, 2003, 2004, 2005, 2006. When was the last cut in stamp duty in the State of Victoria? There has been no change in thresholds and no cut in stamp duty since 1998. It hasnt been indexed to inflation, it hasnt been indexed to the property market, it hasnt been cut. We have been through the greatest property boom in Australias history over the last eight years. And yet those rates and those thresholds are still set for those pre-boom prices. And as a result the stamp duties in Victoria are higher than any other State.
When young people are buying houses they have got to write out huge cheques. The Commonwealth Government which introduced the First Home Owners Scheme, a grant of $7,000 is seeing most of that grant now being captured back by State Government in the stamp duty on the conveyance. Here is a grant, let it help you pay your stamp duty to the State Government.
And it is not as if these State Governments dont have good revenue bases. We put in place the GST, every last dollar of GST goes to the State Governments - $7.9 billion to the State of Victoria. The State Governments didnt have to implement the system, they dont have to administer the system, all they have to do is bank the cheque every month for a great revenue that requires no administration. The biggest question they have every month is where they are going to bank it.
And I just think Victoria could do better. I look around Australia at the moment and I think Victoria could do better. I think it could do better in reducing the burden of stamp duty. I think it could do better in its spending priorities with those GST revenues. I think it could have done much better in relation to the Scoresby Freeway. There is no reason why the Government couldnt fund a freeway. I think that Victoria can do better in relation to economic growth. I think it would do better if we had a reforming government. I think Victoria, rather than being middle to low lower-middle of the pack, could be one of the great powerhouses of the national economy.
But I know these things dont come easy. They require work and discipline and leadership and as a proud Victorian I want to see that again. I dont want to see commercial enterprises gradually slipping out of the State. It is our future. It is our childrens future. It is your business opportunities. It is very, very hard to run a business if the public and your potential consumers are contracting rather than growing to the extent that they are in some of the northern states rather than here.
But it would make life easier for Victorian businesses if we had a faster growing consumer base. If we had better transport hubs, if we had less of a burden in relation to stamp duty. If we had more targeted investment, if we had business-friendly regulation. That would make things easier for people here in Victoria and that is why I want to say Victoria can do better. Victoria could do better with a new Government. I believe that this Government has run its course and I believe that Victorians want a new Government under Ted Baillieu and under the Liberal Party.
Earlier this year, I asked an independent committee led by Dick Warburton and Peter Hendy to benchmark Australias taxation system. They found that Australias taxation system was not competitive in some areas. In one area the top marginal tax rate, our rate was too high, it was above the OECD average. It was 47 cents so we cut it at 45 to bring us back in line with the OECD average. It showed that our thresholds were too low so we increased our thresholds. We had a report and we acted on it.
One of the other things that it showed is that Australia is the most out of whack with comparable developed countries in relation to property transaction taxes. The OECD average for property transaction taxes is 0.7 per cent through the developed economies of the world. For Australia it is 1.6 per cent. The proportion of the economy that is taken in property taxes, chiefly transaction taxes in this country is more than double the average for the developed nations of the world.
Now we do these international benchmarks so we can meet them. We as a country have to meet them if we are going to maintain our competitive edge. We are not just maintaining our position but we have to improve against improving competition if we want to go up that league ladder of living standards.
Australia has a lot to be proud about. By population we are the 58th largest country in the world. We have a population of 20 million people. We are about the same size as Sri Lanka, Romania, Mozambique 20 million people. The Americans have got about 300 million. The Chinese have got about 1200, India has got about a thousand. We are the 58th largest country by population in the world, but do you know, we are the 14th largest economy in the world? We are 58th by population, 14th by economy. Because our per capita GDP is so high we dont compare our economy with Sri Lanka or Romania or Mozambique. We compare our economy with the G-7. That is our yardstick after 10 years of hard work and that is where we want to keep it.
And I would like to see Australia continue to grow its economy, not just because I want to see improved living standards for our population, but our economy is the base for our health systems, it is the base for our social security systems, it is the base for our defence. We wont be able to defend ourselves and lend a hand as we are doing in East Timor, in the Solomon Islands, in Afghanistan, in Iraq unless we can defend our country and that comes ladies and gentlemen, from economic strength. That comes from good government, setting the policy parameters and it comes from strong businesses. I pay tribute to those businesses that are in the room tonight, where people invest and risk their capital where they create jobs, where they generate a profit, where that profit generates revenues, where those revenues pay for the hospital care and the social security care and defence and the security that we all want.
I want to see every Victorian grow up proud, proud of their State, proud of their State Government and proud of their country.
I was out at a local primary school today presenting an Australian flag and I saw those kids bright faces, a bit like the kids we saw up here singing the national anthem. They lined up as we ran the flag up on the flag pole, they were proud to be Aussies. And they are bright and they are confident.
I tell you, these kids are going to race us. These kids are going to challenge us. But I want to see them grow up proud and confident because we at governmental level have done the hard things to make it possible. We havent coasted. The trick for Australia is now to take our prosperity and develop it, to take our prosperity and bequeath it to future generations.
You have heard me banging on about the ageing of the population and the importance of getting our country into shape for what we know is the inevitable challenge of the ageing of the population. You have heard me banging on about fertility rates and getting the fertility rate up in this country. You have heard me banging on about making sure we can afford financial costs that are coming through the pharmaceutical system. The task now is to take that prosperity and to lock it down for future generations.
And many of my colleagues say, oh why are you worrying about forty years time about 2040, that is a long way off, you wont be in Government, who knows, Kim Beazley might win an election and be in government then? And I say, I am going to be sitting in the aged care home in 2040. I am going to need somebody who has got a plan to fund it and pay for the pharmaceuticals and the healthcare, that is what I am going to need, that is what we are going to need and there arent going to be that many young people around to do it and that is why we have got to the take steps to set it up today.
Now ladies and gentlemen, we have an historic opportunity. We have got no debt, we are funding the future, we have got a balanced budget, we have got the lowest unemployment in 30 years, we have an historic opportunity. And my great hope is that we can, in hand with good State Government, realise our aims and our ambitions for our State, for our country, for our people.
That is what politics is about, that is why our candidates are running and I thank you all for supporting them here tonight. Thank you very much.