Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Hansard source

The important thing about this budget is that we have not only produced a document of responsible economic management but, unapologetically, decided to tip the scales in the direction of working families. This is absolutely critical for those people who are suffering cost of living pressures right across Australia—working families, working Australians, retired Australians—those who are doing it tough at present. The first challenge however is to produce a responsible budget, not one galloping ahead with out-of-control expenditure growth but one which actually puts itself within respectable fiscal parameters.

This $21.7 billion surplus is a significant investment in the future but it is being delivered on the basis of hard work—as the finance minister indicated yesterday—$7.3 billion in savings involving $5.3 billion of spending cuts. Where were the spending cuts and savings measures in previous budgets brought forward by those opposite? I do not recall. We see those measures detailed in page after page of the budget papers brought down by the Treasurer the other night and an overall expenditure growth. The fact that we can deliver an outcome for the budget which produces an increase in real expenditure by barely one per cent, against the 4.5 per cent real expenditure increases delivered by the smiling member for Higgins in recent budgets, frankly, I think, stands in stark contrast to the fiscal record that we inherited.

On the expenditure side, it is worth emphasising this point: we have produced an outcome on expenditure in this budget whereby expenditure as a percentage of gross domestic product now ranks as the lowest that has been produced by any government since 1989-90. That is a significant measure. On the other measure which is relevant to the overall size, effectiveness and efficiency of government—that is, tax as a proportion of GDP—we have reduced tax as a proportion of GDP from 24.7 per cent, which was in the budget we inherited, down to 23.8 per cent. That is a significant advance. The investment funds for the future indicate the way in which we want to build the nation into the 21st century. The money involved in those investment funds is not our money, it is not the Liberal Party’s money and it was not Peter Costello’s money; it is the Australian people’s money.

The Australian people want that money invested long term in fixing urban congestion; in dealing with the infrastructure crisis and bottlenecks which are confronting many of our citizens today; in improving the state of our public hospitals; in our universities so the kids studying there do not have to crowd into lecture or tutorial halls; and in the TAFE schools and colleges of this country to ensure they are of a 21st century standard and not that of a different age or era. Most importantly in the measures contained in this budget, we have been about the business of tipping the balance in the direction of working families—$47 billion of tax relief over the next four years is directed to low- and middle-income earners. We have also of course increased the childcare tax rebate from 30 to 50 per cent.

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