The Rudd Government is proud to deliver the 2008-09 Budget, which honours its commitments to the Australian people.
This Budget marks the end of reckless, short-term spending, and the start of responsible investment to prepare our economy to meet future economic challenges.
The Budget provides for the establishment of three new nation building funds - the Education Investment Fund, the Building Australia Fund and the Health and Hospitals Fund.
Education and skills
The Rudd Government believes that investing in the Australian people is the best way to secure prosperity, spread opportunity and increase living standards into the future.
The 2008-09 Budget invests $5.9 billion over five years in the Rudd Government's Education Revolution, from early childhood education and care, through schools, vocational training and to our universities. In particular, the Government will deliver on its commitments to invest:
- $2.5 billion over ten years for Trade Training Centres in schools;
- $1.9 billion over five years to deliver up to 630,000 additional training places to boost the skill level of the workforce; and
- $1.2 billion over five years to provide up to $1 million per school to deliver computers and communication technologies to all students in Years 9 to 12.
To ensure our long-term goals for education reform are delivered, the Government will establish the Education Investment Fund to finance capital investment in higher education and vocational training. The Fund will receive an initial allocation of $11 billion (including around $6 billion from the Higher Education Endowment Fund, which it will absorb). Both the capital and earnings of the Education Investment Fund will be available over time to finance appropriate projects, which means that the funds available in coming years will be substantially greater than under the previous arrangements.
An additional $500 million will be provided in 2007-08 to help universities upgrade and maintain teaching and research facilities. This is a much needed down-payment of overdue funding, in advance of the funding decisions that will be taken once the Education Investment Fund is in place.
Climate change, water and the environment
Climate change - and its impacts on water and our natural environment - presents one of the greatest challenges to our prosperity and living standards, now and into the future. For that reason, ratifying the Kyoto protocol was the first official act of the Rudd Government.
After a decade of neglect and inaction, the 2008-09 Budget will deliver in full on the Government's commitment to tackle the long-term challenge of climate change, with measures totalling $2.3 billion over five years. The Rudd Government's commitments include:
- $500 million over eight years for projects that accelerate the development and deployment of clean coal and low emissions technologies;
- $500 million over six years to support the new Renewable Energy Target and accelerate the development and commercialisation of renewable technologies in Australia; and
- $150 million over four years to support the development of clean energy technologies in Australia.
Adapting to climate change will affect all parts of our community. For families, the Government will allocate $300 million over five years through the Green Loans program to help with the costs of installing energy efficient technologies. The Government will provide $240 million over four years to the Clean Business Australia program to help businesses adapt to a low-carbon economy. To further reduce pollution, and promote the sustainability of Australian car manufacturers, the Government will provide $500 million over five years from 2011-12 to encourage the development of low-emissions vehicles.
The Government is committed to tackling Australia's water crisis. The new $12.9 billion ten-year national water policy framework, Water for the Future, will bring a strategic and coordinated approach to Australia's urban and rural water challenges.
In addition, the Government is refocusing natural resource management on national priorities and improved environmental outcomes. We will provide $2.2 billion over five years for the Caring for our Country program - an integrated approach to natural resource management that will rehabilitate, conserve and support our ecosystems.
Investing in infrastructure
Neglect of critical infrastructure over the past decade has pushed up the costs of doing business and contributed to inflation and interest rates pressures in the economy.
The Rudd Government is committed to tackling infrastructure bottlenecks that are constraining our economy. In particular, the newly formed Infrastructure Australiawill develop a strategic blueprint to unlock infrastructure bottlenecks and modernise the nation's key infrastructure assets.
In this Budget, the Government will make a major long-term investment in our nation's productive capacity by establishing the Building Australia Fund. This Fund will help finance the current shortfall in critical economic infrastructure in transport and communications, such as road, rail, ports and broadband. The Building Australia Fund will receive an initial allocation of around $20 billion, and will absorb the Communications Fund.
To ensure that investment in the nation's future can begin early, the Government is planning to fast-track infrastructure feasibility studies on high-priority projects at a cost of $75 million in 2007-08.
In addition, the Government will roll-out a National Broadband Network that will offer high speed broadband to 98 per cent of Australian households and businesses. The Budget also includes substantial commitments to land transport infrastructure investment under Auslink 2.
Health and hospitals
A strong public health system is vital to ensuring that Australians have access to high quality and affordable health care.
The Government will invest $3.2 billion over five years through the National Health and Hospitals Reform Plan to revitalise the public health system. Funding includes:
- up to $600 million over four years to slash elective surgery waiting lists;
- $390 million over five years to upgrade hospital and community health infrastructure;
- $290 million over three years to reduce public dental waiting lists; and
- $275 million over five years for GP Super Clinics.
In another major investment to meet future challenges, the Rudd Government will establish the Health and Hospitals Fund to secure long-term funding for key health priorities. The Government will make an initial allocation of $10 billion to the Health and Hospitals Fund. Investments will be focused on health infrastructure, with key priorities including the refurbishment of hospitals, medical technology equipment, and medical research facilities and projects.
Subject to final budget outcomes, the Government will make initial contributions to the three new funds - the Building Australia Fund, the Education Investment Fund and the Health and Hospitals Fund - from the 2007-08 and 2008-09 Budget surpluses. In total, an initial amount of around $40 billion will be allocated for capital investment through these funds to modernise the Australian economy and prepare it for future challenges. Further contributions to the funds will be made from future surpluses as appropriate.
Both the capital and earnings of the Funds will be available over time to finance appropriate projects, marking a significant increase in the investment funding that will be available in coming years. All projects financed from the Funds will need to satisfy rigorous evaluation criteria assessed by independent bodies. Provision for financing such projects has been incorporated in the budget aggregates from 2009-10 onwards. The Funds will be managed by the Future Fund Board of Guardians.
The Rudd Government's first Budget lays the foundation for a modern and competitive economy that can meet the challenges of the 21st century with confidence.