23 October 2012

Opinion piece: We Run a Strict Budget So That You Can Balance Yours

Note

Published on The Punch

My entire public life has been governed by a simple principle that we have a responsibility to keep our economy strong in the interests of working Australians.

Everything we do as a Labor Government is about ensuring people on low and middle incomes benefit from our strong economy.

During these times of ongoing global economic uncertainty, one of the most important things the government can do to support families is to run a strict budget of our own.

By the government doing its bit by running a tight ship, we play our part in helping families who are also facing cost of living pressures.

This is because by bringing our budget back into the black we give the RBA the flexibility to cut interest rates for home owners as they have done repeatedly over the past year or so.

These rate cuts mean a family with a $300,000 mortgage is now paying $4500 less on their mortgage than when we were elected - that's very real help for families under cost of living pressures. That's based on the standard variable rates that families are actually paying now.

Unfortunately, home owners copped the pain of ten interest rate rises under the previous government, despite the Liberals promising to keep rates at record lows.

That happened because - as Mr Hockey and Mr Turnbull now openly admit - the Liberals spent too much, and that meant inflation was not contained, like it is now.

Interest rates are now rates now lower now than at any time the Liberals were in office.

So what our mid-year economic review has confirmed is that we remain on track to return our budget surplus in record time, ahead of every single major advanced economy after the global recession.

It shows yet again that we have an economy with fundamental strengths that are the envy of the world.

We can continue to expect solid growth, low unemployment and huge investment.

Since coming to government we have always made responsible budget savings to pay for classic Labor reforms, like the biggest increase to the aged pension in a century, and bringing in a landmark paid parental leave scheme.

This is how we ensure that the dividends of our responsible and successful management of the economy flow to more Australians and not just a fortunate few.

These are some of the reasons why we are absolutely committed to getting the budget back into the black this year, even though that task has got considerably tougher in recent times.

In this update, our government revenues have taken another $22 billion hit, primarily due to what's happening overseas.

This means we've now had about $160 billion wiped from government revenues due to the worst turmoil in the global economy since the Great Depression.

We'll always make our decisions in a balanced and responsible way in contrast to the savage cuts to jobs and front-line services that Liberal premiers are making, and which Mr Abbott will have to make to fill his $70 billion budget crater.

And because we're a Labor Government, we'll do everything we can to protect low and middle income families and the community's most vulnerable along the way.

Our economic fundamentals combined with our budget position send a clear message of confidence to the world about the strength of our world-beating finances.

The ongoing tough times abroad reinforce that there isn't a country in the world you'd rather be in than Australia - something we can all be proud of.