David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

It gives me great pride to be able to speak in support of the measures contained within the appropriation bills. The 2012-13 budget delivers on the government's commitment to return the budget to surplus. The surplus is growing over the forward estimates. As well as returning to surplus, the budget spreads the benefits of the resources boom to help families and low- and middle-income earners with increases in the cost of living. The return to surplus is the right decision for the Australian economy because it will sustain confidence in the strength of Australia's public finances, it will strengthen the government's balance sheet, to support Australia's capacity to respond to future adverse economic shocks, and it is appropriate for an economy expected to grow around trend and allows monetary policy to respond to economic conditions.

Australia's budget will return to surplus ahead of any other advanced major economy. Many other advanced economies are still grappling with the task of rebuilding their economies as well as setting their public finances on a sustainable footing. The current European sovereign debt crisis makes maintaining strong fiscal discipline and credibility more important than ever. Australia's strong public finances, very low public debt, solid economic growth, low unemployment and contained inflation make it one of the strongest economies in the world.

The government will return to surplus despite tax receipts being revised down by $28 billion over four years from 2011-12, relative to the 2011-12 MYEFO, due to parameter and other variations. Relative to the forecast made in the 2008-09 budget, total tax receipts have been written down by around $150 billion over the five years to 2012-13. The government has taken a disciplined approach to both return the budget to surplus and create room for new investments. This has required the government to identify $33.6 billion over five years in savings, with those savings split roughly equally between expenditure and receipt measures. These savings have been designed to be targeted and responsible, ensuring that the most vulnerable Australians and front-line services are protected. In addition to delivering the surplus and spreading the benefits of the boom, the 2012-13 budget contains a number of important initiatives, including establishing the first stage of a national disability insurance scheme; reforming Australia's aged-care system to make the system fairer, more transparent and responsive; delivering additional dental health services; and investing in a number of high-quality infrastructure projects, including funding for duplicating the Pacific Highway, additional funding for Roads to Recovery and Black Spot programs, committing to develop the Moorebank Intermodal Terminal and the Torrens and Goodwood rail project.

Average real growth in payments over the forward estimates is 1.8 per cent. This is within the commitment to maintain a two per cent annual cap on real spending growth on average, until surpluses are at least one per cent of GDP and while the economy is at or above trend. The budget also sees a fall in nominal payments in 2012-13 compared to 2011-12—the first fall in 42 years for which data is available. This highlights the key role disciplined spending is playing in the fiscal consolidation. The discipline imposed on real spending growth has reduced payments as a proportion of GDP to 23.5 per cent in 2012-13—that is a fall of 1.6 percentage points from 2011-12. In 2012-13 and each subsequent year in the forward estimates, payments as a percentage of GDP are expected to be at their lowest level since the onset of the global financial crisis. Across the forward estimates from 2012-13, payments are expected to be below 24 per cent of GDP. This is the longest sustained period below 24 per cent since the 1980s.

The budget includes measures to support the integrity, fairness and sustainability of the tax system, such as the removal of tax concessions for golden handshakes and living-away-from-home allowances. Nonetheless, over the forward estimates the tax to GDP ratio is projected to remain below what it was in 2007-08. In 2012-13, the tax to GDP ratio is expected to be 1.6 percentage points lower than the 2007-08 level, which equates to around $24.1 billion worth of tax in 2012-13. Tax receipts are projected to reach 22.9 per cent of GDP in 2015-16, around one percentage point below the levels reached in the mid-2000s. Tax receipts as a proportion of GDP in 2011-12 and the previous two years were the lowest since 1993-94. (Time expired)

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