Anthony Byrne (Holt, Australian Labor Party, Parliamentary Secretary to the Prime Minister) Share this | Hansard source

I want to give a quick overview of the appropriation we are considering in some form of detail today. The 2009-10 budget has been framed against the worst recession since the Great Depression. The world economy is expected to contract by 1.5 per cent in 2009 and global economic growth is expected to remain below average until the end of 2011. Real gross domestic product in Australia is expected to contract by about 0.5 per cent in 2009-10, recovering in 2010-11. As a result of the global financial crisis, estimated taxation receipts have been revised down since the 2008-09 budget by about $210 billion over the period 2008-09 to 2012-13.

In the face of the global recession, with virtually every advanced economy expected to be in recession in 2009, the Australian government has allowed the budget to fall into temporary deficit and engaged in temporary additional borrowing to cushion the impact on jobs and preserve government spending in vital areas such as health and education. An underlying cash deficit of $57.6 billion, or 4.9 per cent of GDP, is expected in the financial year 2009-10. This is less than half that of comparable advanced economies, at 10.4 per cent.

I will now turn to the key elements of the budget. This budget, as has been stated in the other place, supports jobs now. It invests in the future to ensure the economy is well placed to make the most of the global recovery. Measures in the 2009-10 budget raise the level of GDP by three-quarters of a per cent in 2009-10 and half a per cent in 2010-11, when the economy is expected to be hit hardest by the global recession.

The centrepiece of the 2009-10 budget, the $22 billion Nation Building for the Future package, comprises $3.4 billion for roads, $4.6 billion for rail and $389 million for ports and freight infrastructure. There is $4.5 billion for the Clean Energy Initiative, which includes $1 billion of existing funding. There is $2.6 billion for universities and research in the Education Investment Fund and $3.2 billion for hospitals and health infrastructure in the Health and Hospitals Fund, and we are partnering with the private sector to build the $43 billion National Broadband Network.

This Nation Building for the Future package builds on earlier stimulus measures taken by the government to support activities and jobs, such as the Economic Security Strategy, COAG decisions, nation-building infrastructure of $4.7 billion and the $42 billion Nation Building and Jobs Plan. This early and decisive stimulus has helped cushion the economy from the worst impacts of global recession. These stimulus packages are expected to raise the level of GDP by 2¾ per cent 2009-10 and 1.5 per cent in 2010-11, supporting a total of up to 210,000 jobs. The government’s $1.5 billion Jobs and Training Compact will also provide support to those affected by the downturn, including $299 million for retrenched workers and $155 million in support of apprentices and their employers.

The government’s two-stage fiscal strategy is expected to return the budget to surplus in 2015-16. The first stage comprises government support for the economy by allowing variations in revenue and expenditure to drive a temporary underlying cash budget deficit and using additional spending to deliver a timely, targeted and temporary stimulus with reprioritising of existing expenditure to meet budget priorities and new policy proposals. The second stage comprises sticking to a deficit exit strategy, with the government allowing the level of tax receipts to recover naturally, as the economy improves, and holding real growth in spending to two per cent a year until the budget returns to surplus. I am running very short of time here already.

The Department of Prime Minister and Cabinet has 11 new measures announced in the 2009-10 budget, with a total fiscal impact of $50.3 million over four years, including $3.6 million in capital. The additional funding delivers on the government’s key reform initiatives. The government will provide $20.6 million over four years to establish the statutory Office of the Information Commissioner, which is a key component of the government’s FOI and information reform agenda. An additional $10.2 million over four years has been provided for the COAG Reform Council to undertake an expanded role in monitoring, assessing and reporting under the new performance reporting framework. The COAG Reform Council is jointly funded by the Commonwealth and the states and territories. I have run out of time, and I am sure the opposition have got some questions.

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