Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

Mr Deputy Speaker, thank you for the opportunity to speak on the appropriation bills in this budget debate. In getting around my electorate during the past week, I found that the budget was very well received—especially the very significant tax cuts and the changes to superannuation, whereby tax is no longer taken from the end benefits for someone aged over 60, where these are paid from a taxed superannuation fund. I would like to focus on some of the local benefits of the budget.

The first thing I was very pleased to see was that the budget allocated $15 million for a new state aquatic centre in the electorate of Boothby. It has been a disgrace that, since the late 1980s, South Australia has not had an international standard aquatic centre. South Australians have been unable to see our Olympic heroes—like Ian Thorpe, Grant Hackett, Kieran Perkins, Petria Thomas, Susie O’Neill and Jodie Henry—compete in South Australia, because we have not had an international standard swimming facility.

This facility has a very long history. About eight years ago, the Marion council were looking at having a south-west indoor aquatic centre. They involved the then Olsen state government, which initiated a public-private partnership plan and allocated $28 million to it—$1 million for the survey to determine interest in a public-private partnership. I got involved in this about two years ago, when it became obvious that the whole process had stalled under the state government. Marion were able to prepare a submission, which was unsuccessful last year but, fortunately, was successful this year. It means that $15 million will be received by the South Australian state government and by 2009 South Australia should have an international standard aquatic centre swimming facility and be able to host events of a FINA standard.

The second thing I was pleased to see was the very welcome announcement of a doubling of the Roads to Recovery allocation. It was $307.5 million, and councils within Boothby will receive almost $3 million. Like the previous speaker, the member for Cunningham, I also conducted a survey prior to Christmas and received over 2,000 responses. The No. 1 local issue was the state of local footpaths, but the No. 2 issue was the state of local roads. I have written to all of the councillors, the mayors and the city managers advising them how much money they will be receiving, and for electorates that are wholly or partly within Boothby there is over $3 million. The City of Holdfast Bay receives $241,322; the City of Marion, $602,541; the City of Mitcham, $486,871; the City of Onkaparinga, $1.464 million; and the City of Unley, $247,000. This has been welcomed by local councils and constituents to help with the very important work in upgrading local roads.

The third announcement which specifically relates to South Australia and which has been greatly welcomed in my electorate is the additional $500 million going towards the Murray Darling Basin Commission. This will fund additional projects under the Living Murray Environmental Works and Measures Program, and it will provide additional resources to return 500 gigalitres per annum by 2009 for the Living Murray’s environmental flows. Some of the capital works that may occur under this increased allocation include things like advancing the construction of salt interception structures and systems to reduce salinity and maintain water quality for Adelaide irrigators and regional communities. Also, there is the maintenance and renewal of River Murray water delivery infrastructure, which is currently run down.

What we need to see is a response from the state governments—Queensland, New South Wales, Victoria and South Australia—to also invest generously in the health of the River Murray. Since 1996, the Australian government has spent $2 billion on the River Murray. For my state, South Australia, the state of the River Murray is an issue that everyone cares about passionately. It does affect the water quality in Adelaide, and it is also a very important part of our state. This measure certainly was welcomed.

When we look at the overall state of the Australian economy and where we have come from over the last 10 years, it is worth reflecting that back in 1995 we ranked 13th in the OECD in GDP per capita. Over the last 11 years, we have grown to the point where we rank eighth in GDP per capita. We sit above Denmark, Canada, the UK, Sweden and the Netherlands—countries that we compare ourselves with and benchmark ourselves against. GDP per person has increased by 23 per cent since 1996.

In this budget, we have a $10.8 billion surplus. We have gone from $10 billion deficit budgets, which were Labor’s last budgets, to now having a $10 billion surplus. Debt, which was $96 billion in 1996, is now zero; there is no government debt. Our interest bill, which was $8.4 billion 10 years ago, is now zero; we are not paying any interest. That has freed up more money to be spent on child care, families, schools and hospitals. One of the themes of the 2004 federal election—in fact, it was the central theme—was that it takes a lot of discipline and experience to manage an $800 billion economy. Next financial year, 2006-07, Australia will become a trillion-dollar economy for the first time, so it could be said that it requires even more discipline and experience to manage a trillion-dollar economy.

Unemployment in Australia is now around five per cent. That is the lowest it has been since November 1976. Unemployment has not been this low for 30 years. In my electorate of Boothby, the unemployment rate in March 1976 was 7.3 per cent. It is now 4.2 per cent, below the national average and the state average. In March 1996 interest rates on home loans were 10½ per cent. They are now 7½ per cent. Those much lower interest rates have meant significant savings per month for families with mortgages.

Australia is a country of 20 million people. In terms of our population, we are the 53rd largest country in the world. We are just ahead of countries like Sri Lanka, Mozambique, Syria and Madagascar. But when we are look at our economy, we see it is by some measures the 12th and by other measures the 14th largest economy in the world. As the Minister for Foreign Affairs says, Australia is a significant country. While as a country of only 20 million people we are not part of the G7 or the G8, we are just outside them given the size of our economy, a trillion-dollar economy for only 20 million people. The OECD estimates that over the last 12 years only six countries in the world have grown faster than Australia: China, Ireland, India, South Korea, Poland and the Slovak Republic. We have grown faster than the United States and the United Kingdom. Our economy has grown an average 3½ per cent over the last 10 years, which is above our average long-run growth rate.

Let us look specifically at the changes in the budget. The superannuation changes were really welcomed by the people in the electorate of Boothby. These changes will lead to very significant increases in people’s retirement incomes. One of the issues that Australia faces over the next 40 years is that, as the proportion of the population over 65 doubles, it is absolutely imperative that we have a very strong retirement income system. Our retirement income system has been based on the three pillars of having compulsory superannuation, a means-tested age pension and additional private savings on top of that. One concern that was raised sometimes by various groups, including the Association of Superannuation Funds of Australia, was whether retirement incomes would be adequate. Taking the superannuation tax off at the benefit stage ensures an automatic increase in people’s retirement incomes. The benefits are further magnified if people make an additional contribution themselves on top of their nine per cent superannuation guarantee. Of course, for untaxed schemes there will be an equivalent benefit in the form of a 10 per cent tax rebate on the benefits that are paid.

Turning to the area of tax cuts, personal tax relief is equivalent to $36.7 billion over four years. That means people will now have to be on an income of $150,000 before they hit the top marginal rate. The top marginal rate has been reduced. When we came into government in 1996, the top marginal rate cut in at an income of $50,000, only 1½ times male total average weekly earnings. Now the top marginal rate will not cut in until someone is on triple the average weekly earnings. The budget also contains measures which will increase assistance to families by $1.5 billion, specifically increasing, firstly, to $40,000 the income threshold at which maximum family assistance can be paid and, secondly, changing the definition of large families from those with four children to those with three children. As for the area of child care, since 1996 we have seen a doubling of the number of child-care places, from 300,000 to over 600,000. By uncapping child-care places for out of school hours care and family day care, we will see more child-care places and much more choice becoming available to families with children. Within that doubling of child-care places, there has actually been a quadrupling of the amount of out of school hours care places and those positions will now be uncapped. Instead of allocating a certain number of places, as we all do, to our schools, we will now uncap them. That is a much better way of meeting that demand.

The budget contains a $3.7 billion measure to enhance tax depreciation for companies. There is $435 million for tax simplification and reduction measures for small business. There is $2.3 billion to be spent on road and rail. In particular, there is $100 million to upgrade the Sturt Highway between Gawler and Nuriootpa, which is the major route between Adelaide and Sydney and is very important for agriculture and so on. As I mentioned before, there is $500 million for water management in the Murray-Darling system. There is $1.9 billion over five years for mental health services, and I pay tribute to the Parliamentary Secretary to the Minister for Health and Ageing for putting together this package. Another initiative that will be welcomed in my electorate is the spending of $905 million on increasing health and medical research. The capital funding for medical research institutes and the additional funding for the National Health and Medical Research Council will be very much welcomed.

When we look at the different cameos as to the impact of the tax cuts, we see how generous these tax cuts are. Firstly, over 10 years the real disposable income of a couple with a single income of average full-time wages and with two children, aged three and eight, has increased by 36.3 per cent, and their real net tax threshold, which is the point at which they start paying more tax than the benefits they are receiving, has increased by 41.3 per cent. Someone in those circumstances has to get to an income of $48,065 before they are effectively paying tax. If you look at a dual-income couple, one on average weekly earnings and one working part time on only one-third of average weekly earnings, you will see that their real disposable income has increased by 31.1 per cent over 10 years, to $64,624. Their net tax threshold, the point at which the taxes they pay exceed the benefits they receive, has increased by 49.6 per cent. The changes that the Howard government has made over the last 10 years have been very much for families on lower and middle incomes. Families with a couple of kids who are receiving benefits through expansions of family tax benefit part A and part B have really been able to improve their position. That has really helped in giving families support in raising children.

Lastly, one point I want to make is that a recent survey showed that, amongst OECD countries, Australia is the second lowest country in taxation and the eighth lowest in spending. One of the important reforms that we undertook in 2000 was moving to A New Tax System and the GST. Every single state and territory government is receiving far more revenue under the GST than they would have ever received before. The revenue to South Australia has increased by 7.7 per cent per year over six years. This year South Australia will be receiving $193 million more than they would have been receiving had tax reform not taken place. The state governments, which are principally responsible for the funding of schools, hospitals and so on, now really do have an obligation to deliver for their constituencies and provide the increased services which people demand and also the increased capital works on things like schools and hospitals.

In closing, I would like to say how much I welcome this budget. The tax cuts have not been opposed this year, which is very welcome. The superannuation changes will be very significant in increasing the retirement income for everyone over 60. There will be 100,000 people each year reaching the point where they are over 60 and they will be able to get an immediate benefit after 1 July 2007, along with existing self-funded retirees and people who are on partial pensions as well. I think budget 11 is a great budget. There is a fantastic $10.8 billion surplus, there is no debt and it has been welcomed right across the board in my electorate.

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