Michael Keenan (Stirling, Liberal Party) Share this | Hansard source

It is a great pleasure to rise to speak on the Appropriation Bill (No. 1) 2007-2008 and cognate bills, because, in a very real sense, this budget has locked in the economic gains that Australia has made over the past 11 years. We are in our 16th year of sustained economic growth—a record unparalleled in the history of this country.

This is a budget that only a coalition government could bring down, because a budget like this could not have been brought down unless you had had 11 years of sound economic management. You could not have brought down this budget if Australia were still paying out $8 billion in interest on a $96 billion government debt. That extraordinary figure—$96 billion—is the debt that we inherited from previous Labor governments, and we have subsequently paid it off.

You could not have brought down a budget like this if you had consistently run budget deficits, as Labor governments federally have historically done and as they are now doing in the states. You could not have brought down a budget like this if you had failed to provide for the enormous unfunded liability of Commonwealth superannuation through the Future Fund. You could not have brought down a budget like this if you had failed to reform an antiquated tax system. You could not have brought down a budget like this if you had failed to unleash personal productivity through reforms in our workplace. Indeed, you could not have produced a budget like this unless you had behaved like a fiscal conservative when in government. When I say ‘behaved like a fiscal conservative’, I mean more than taking out television advertising time to say that you are a fiscal conservative. In fact, being a fiscal conservative is far more than your spin doctors telling you to say that you are. What is it about? It is about a record of achievement. It is not about looking at what you say; it is about looking at what you do.

We know very well how the Labor Party operates in government. We can see it with the eight separate governments that they now control around Australia. Which one of those governments would anyone here characterise as a fiscally conservative government? It would be an interesting exercise for us to sit around as federal MPs and work out which of these governments is the worst government in Australia, because there would be some hot competition for that title.

In contrast, the Howard government has an economic record that would be the envy of any government internationally. It is an economic record, as I said, that has seen Australia move into its 16th consecutive year of expansion. Our annual GDP growth rate has averaged over 3.5 per cent for this period. That is extraordinary for an advanced economy. As I said, this is the longest history of expansion in Australian history. At the end of the day, everything hangs off economic growth. You cannot be green unless you are in the black. You certainly cannot provide social programs unless you have a strong fiscal position.

As a result of this growth, over two million jobs have been created since March 1996. That is really quite an extraordinary figure. Two million people have entered the workforce since the Howard government came to office. The unemployment rate has fallen from 8.2 per cent to 4.5 per cent and it is now at a 30-year low. In my electorate of Stirling, unemployment was in double digits before the Howard government came to office; it is now down to about five per cent. That is a lot of families who now have a future who did not have one under the Labor government. The proportion of the working-age population in jobs is now at the highest level on record. So not only have all these jobs been created, not only is unemployment at record lows, but the participation rate is at a record high. This is all very good news.

In addition to this, real wages have increased by 20 per cent over the same period. We have heard some Labor talk this week about the cost of living, but of course the increase in real wages is an indication that the cost of living has actually decreased under the Howard government. Once you take out the increases for CPI, people are now earning substantially more.

A broader measure of living standards is real net national disposable income per capita, and it has grown by a staggering 36 per cent since March 1996. Historically, periods of growth at that level have been accompanied by inflation. But CPI inflation has averaged only 2.5 per cent during the current expansion, which, as members would know, is right smack bang in the middle of the Reserve Bank’s target, which aims to keep inflation between two and three per cent. Low inflation has, of course, allowed the Howard government to keep interest rates low. Business investment has grown strongly during these years and it is now at historically high levels as a share of GDP.

All of these amazing financial statistics and all of this impressive achievement have come despite a number of substantial global shocks that in past times would have knocked the Australian economy around. There was the Asian financial crisis of 1997; the global downturn at the beginning of this decade; the enormous shocks of the September 11 terrorist attacks; threats of global diseases, like SARS; and, of course, historic high global oil prices. On the structure reform side, key initiatives have included substantial overhauls of taxation and workplace relations. Unless the government had had the courage to take these tough decisions, there is no way that we would be seeing these incredible economic results.

This record of achievement is the difference between the real thing and the pretenders. The coalition government has 11 years of achievement under its belt. That is 11 years of actually behaving like fiscal conservatives as opposed to just saying that we are fiscal conservatives. It is true, as members on the opposite side are very fond of saying, that we are living in very good economic times, but the fact that we are living in good economic times is a result of government policy. The idea that somehow the Australian economy operates in isolation to the settings that the government creates is really quite farcical. The ALP would have us believe that this has somehow all just happened—that the Australian economic miracle is somehow chance or the result of the mining boom. That just is not true.

I will turn to some of the specifics in the budget. I think the centrepiece of this year’s budget, as it has been in previous years’ budgets, was a tax cut for all Australians. This is building on a record of providing tax relief since the year 2000. Tax relief in this year’s budget is worth $31.5 billion over four years. It rewards effort, it improves incentives and it enhances Australia’s global competitiveness. I want to look at the coalition’s record on tax reform, because I think this is extraordinarily important. From 1 July next year, the 30 per cent threshold will be raised to $30,000. The low-income tax offset will be increased from $600 to $750 per year, and it will be phased out from $30,000—up from $25,000. From 1 July 2008, the 40 per cent threshold will be raised to $80,000, and the 45 per cent threshold will be raised to $180,000.

There are bills on measures that the coalition government has taken previously. Since 2004-05 the first marginal tax rate has been reduced from 17 per cent to 15 per cent; the 30 per cent threshold has increased from $21,600 to $30,000; and the low-income tax offset has been increased from $235 to $750. This means that Australians are paying far less tax as a result of the good economic times that the government has played a substantial role in creating.

The other most notable feature of this budget is the genuine education revolution that was announced. This was a genuine revolution, as opposed to just saying that you are going to have a revolution. This was backed up by $5 billion for the creation of the Higher Education Endowment Fund. This will go a long way to help Australian universities realise their potential. The Higher Education Endowment Fund will provide a guaranteed source of income for Australian universities in perpetuity. It will provide money for capital investment and for Australian universities to create enhanced research facilities. The income earned will be distributed yearly to universities across the nation. The initial investment is $5 billion but further capital injections may be made by the government into the HEEF. Of course, you can only do this when you have a surplus.

The fund will enhance Australia’s reputation as a provider of world-class education services and it will improve productivity around Australia. The ALP loves to talk about productivity, but this is something that will go a long way towards enhancing Australia’s productivity. The government will invest another $1.7 billion over four years to give universities added flexibility to underpin future productivity growth. That is another enormous investment. On budget night I ran into several vice-chancellors I know, and quite frankly, they were terribly impressed with what this budget holds for them.

Universities are not the only part of the education sector to benefit. The coalition does not believe that university education is the only worthwhile form of education. As I move around the community, the skills shortage is constantly raised with me, as it is with many members of this place. I personally would be more inclined to characterise it as a labour shortage. We do have shortages in various skill sets, but because of the economic boom we really have a shortage of labour. When you have record low unemployment, it is hard for employers to find people to work for them. The government recognises this and is putting in another $549 million over four years to train apprentices in the skills shortage trades. This is on top of the other things that the government has done, such as create the Australian technical colleges. Over a quarter of a million apprentices will benefit from this measure over four years.

Schools are not forgotten in this budget. The government will supply an extra $843 million over four years to improve the quality of teaching and education outcomes. We all recognise how vitally important education is. Of course, the state governments are largely failing in their responsibilities to fund state government schools. As I move around my community of Stirling, I am sometimes astonished by the state of the infrastructure in local state schools. In true style, the Carpenter government never does anything about it, apart from bleat that it is somebody else’s responsibility. This extra funding in schools builds on the Investing in Our Schools Program that has already injected $1.2 billion into schools around the country. In my electorate of Stirling that has meant that local schools have been able to have new play equipment, introduce new information technology into the classrooms and build on lots of things that benefit their students.

I turn to childcare assistance. It is very important to note that the Howard government now spends two and a half times more on child care than was ever spent by the previous government. That is an extraordinary level of growth. Of course, you cannot do that unless you have managed the economy well. The Howard government has introduced the childcare benefit and the childcare tax rebate, which covers 30 per cent of the out-of-pocket expenses associated with child care. From 1 July next year, the childcare benefit will be increased by 10 per cent.

Other great examples of why economic management is so important are the reforms that have been made to superannuation and retirement savings. In last year’s budget I think that probably did not get as much fanfare as it deserved in the sense that it really was something that changed people’s lives. I know, from my own experience of talking to people, it has allowed many people to be able to retire earlier. This year’s budget built on those wonderful efforts—that wonderful superannuation reform that saw people being able to withdraw funds from their superannuation fund. Instead of paying a complex array of taxes as existed previously, they can now withdraw money from superannuation and pay no tax—not one cent of tax. That is a life-changing thing for people who have saved hard for their own retirement.

In this budget we have particularly focused on superannuation for the low paid. This budget boosts the retirement savings of low-income earners to the tune of $1.1 billion by doubling the co-contribution payment paid for eligible contributions in the financial year 2005-06.

We owe older Australians a debt of gratitude for building this country in times that were substantially harsher than those we enjoy now. It is important for the government to recognise that and this budget has done so. This budget will provide $1.3 billion so that older Australians can receive a bonus of $500 for their utilities. This allowance has been paid in previous years and it will be paid again on 30 June 2007, although it will be substantially increased this year to $500.

Carers, who do a wonderful job in our community, will receive a $1,000 bonus payment. This is the fourth year in a row that this bonus payment has been made. Veterans are another group I think which collectively we owe a large debt to. Veterans will receive an extra $160 million, as their per-fortnight payment of special rate disability pension will be increased by $50.

One-off payments—this is not the most expensive measure in the budget, but I think it is a very important one—will be made to Australians who were prisoners of war in Europe. If they are no longer alive, then that payment can be made to their surviving partner. I think that everyone in this chamber would agree that there are very few people who are more deserving of the thanks of a grateful nation than those who suffered tremendously as prisoners of war.

My time to speak is running out, unfortunately. There is substantially more in this budget in the way of transport and water infrastructure. But I want, in the few minutes that I have remaining, to talk about something that impacts heavily on my electorate and is the result of a measure that was announced in this year’s budget. This year’s budget added an extra $250 million to the AusLink strategic program. That means a tremendous amount to electors in Stirling because $10 million of that money has been offered to the City of Stirling to address a serious black spot that has exercised the minds of people in my electorate for many years.

When the Reid Highway extension went through to the coast, it intersected with a number of main roads in my electorate and, unfortunately, the decision was taken not to build overpasses where they intersected, which was a mistake in hindsight. I am the first to admit that that was a mistake that was made by a Liberal government. Unfortunately, subsequent governments have not committed to build these overpasses. Initially they would have cost about $2 million—if they had been built when the road went through. The cost of those overpasses is now up to about $24 million. Astonishingly, that reflects the growth of construction costs in WA. Indeed, when I came to office in 2004 as the member for Stirling, the cost of building these overpasses would have been only about $12 million. In 2½ years, the cost of building them has doubled.

But I think, importantly, the Labor Party, both at a state level and at the federal level, have consistently promised to build this overpass and have consistently failed to deliver. They have talked about it for six years, yet not once have they allocated one brass razoo to build this overpass. This road is 100 per cent a state government responsibility. They completely fail to live up to their responsibilities and they have consistently said that they will build the overpass but never once has one cent been allocated towards it. My predecessor, Jann McFarlane, actually committed both federal and state Labor governments to build it, yet somehow this promise again has remained unfulfilled.

I think with this $10 million that has been offered to the City of Stirling through the AusLink strategic program, the state Labor government have a historic opportunity to fix this black spot where on a weekly basis people are being injured and killed. Sadly, Alannah MacTiernan, the minister for transport in the state Labor government, has refused to fulfil her responsibilities. She has refused to do what they have promised to do consistently. But I would like to let the chamber know that I will be campaigning vigorously for this overpass to be built. The federal government have come to the party, even though it is not our responsibility, and I urge the state government to do the same. (Time expired)

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