Petro Georgiou (Kooyong, Liberal Party) Share this | Hansard source

Are we reflecting back on 17 per cent? The second is building on a range of sensible policy initiatives, which sequentially target areas of current need and future investment. On the first count, there can be no question that this budget does deliver. The budget will remain in surplus to the tune of $10.8 billion. Economic growth will continue at around 3¼ per cent. The Australian economy will break the $1 trillion mark for the first time, which I think is a noteworthy event. We have been trying to work out how much the Australian economy is worth, and now we have a very simple figure of $1 trillion. Unemployment will remain at around the current 30-year lows. Inflation should remain contained at below three per cent. With government debt now repaid, the government will invest heavily in the Future Fund to support its long-term financial sustainability. Unlike the Labor budgets of old, these are not pie in the sky projections. They are real, achievable and possibly even a bit conservative.

The budget also delivers on the second count, outlining a range of initiatives which will benefit all Australians and strengthen our nation for the future. Some years ago the Treasurer outlined the government’s fundamental view on tax. Once the budget was balanced, outstanding debt repaid and important services funded, consideration should be given to cutting taxes. Over the last few years this doctrine has delivered substantial tax relief for all Australians, beginning with low- and middle-income earners and progressively, gradually, going to the upper end of the income tax scale.

There has also been significant streamlining with the reduction or abolition of several of the more inequitable or illogical taxes. This year the government has continued in that vein. In framing its reform agenda, it has also looked internationally, benchmarking the Australian taxation system against those of other developed countries in the OECD group. The result is a package of income tax cuts worth $36.7 billion over four years. The threshold for the 30 per cent tax rate will rise to $25,001; the 42 per cent tax rate will be cut to 40 per cent, with a new threshold of $75,001; and the 47 per cent tax rate will be cut to 45 per cent, with a new threshold of $150,001. These changes will increase disposable incomes, enhance incentives to participation and improve Australia’s international competitiveness. The changes will continue to ensure that 80 per cent of taxpayers face a marginal tax rate of no more than 30 per cent. The changes will reduce the proportion of Australians in the top marginal rate to just two per cent. It is worth while recalling that 10 years ago workers earning slightly more than average weekly earnings were paying the top marginal tax rate, which at that stage was 48 per cent.

The other major change to taxation in this budget is the simplification of superannuation arrangements. From 1 July 2007, the superannuation benefits paid to most retirees at 60 or above will be tax free, while members of untaxed funds—mainly public servants—will continue to pay tax on their benefits. This will be at a reduced rate. Reasonable benefit limits will also be abolished and the current age based contribution limits will be streamlined. It has to be said that superannuation has not always been the easiest issue to deal with. National policies sometimes do not fit well with individual plans, ambitions and timings. However, I do believe that these latest changes will be widely accepted and warmly welcomed.

The budget also provides a number of targeted initiatives focusing on areas of clear and immediate need. To assist senior Australians in meeting the cost of living, by 30 June the government will provide a one-off payment of $102.80 to each household eligible for the utilities allowance and to each self-funded retiree eligible for the seniors concession allowance. Eligibility for the utilities allowance will also be extended to recipients of mature age allowance, partner allowance and widow allowance.

To make child-care places more accessible the government is removing the cap on the number of outside hours care and family day care places, and this is expected to increase the number of places by 25,000. In recognition of the special contribution of carers to Australian society, the government will provide a $1,000 bonus to recipients of the carer payment and a $600 bonus to recipients of the carer allowance. As with previous bonuses, these will be paid before 30 June this year, they will be tax free and they will not affect social security entitlements.

We are speaking with comparatively limited time, so I want to just touch on a few issues. There has been a significant degree of media and political focus on the difficulties being faced by the Wadeye community, and this has underscored the intolerable poverty and disadvantage faced by many Indigenous Australians. There is no question that this is a deep, complex and intractable problem which will need a multifaceted approach—to use that hackneyed phrase—to address it.

Money alone cannot fix the problem, but it will take money. It is worth noting that the government is committing an additional $488 million, including $115 million in capital over five years, to improve Indigenous outcomes. These include $61 million on health initiatives such as improving access to mainstream health services; $55 million towards combating petrol sniffing with measures that include the prevention, diversion and rehabilitation strategies that are fundamentally important; and a whole range of initiatives designed to address specific problems that can make an important contribution to improving the lives of Indigenous Australians. They cannot be viewed as a panacea—they must be backed up by action across all areas of government if their potential is to be realised and, from my perspective, if more money is required it should be provided.

In the time available to me, I cannot cover the infrastructure commitments, the medical commitments and the commitments to research. I will conclude by saying that the budget is based on the fundamental principles of sound financial management, repaying debt, funding long-term priorities and tax relief. In my view, it does set an ambitious agenda, which has been met admirably. Certainly there is always room for improvement in the future. To do anything else would be a sign of complacency and—to use a favourite word—hubris. But neither the Treasurer nor the government has shown any signs of complacency: the reformist zeal continues strong, the attention to detail sharp and the work ethic relentless. I am proud to be a part of a government with economic credentials the equal of any in Australia’s history. I congratulate the Treasurer on his achievement and I commend the bill to the House.

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