David Gillespie (Lyne, National Party) Share this | Hansard source

This is a tough budget; it had to be. To make an analogy of the mortgage on an Australian house: the house had been paid for, the mortgage had been paid off. We had savings in the bank but, in the space of six years, slowly, we as a nation had all our savings spent for us. The house had been remortgaged, then mortgaged again for another five years so that the mortgage was greater than the value of the house. The then government mortgaged it a bit more and started paying off the bill with a credit card. That is such a good analogy. That is the situation we are in. That is why this budget had to be tough.

The coalition promised to stop the boats and to end the waste. We promised to build the roads of the 21st century and, most importantly, we promised to get the budget back under control. We have introduced and implemented policies necessary to stop the boats. We have not had any arrivals for over five months. We have begun investing in Australia's biggest infrastructure program, with $50 billion to be spent up to 2019. We are cutting red tape and getting rid of the waste. Earlier in this parliament we introduced measures to cut over $700 million in federal red tape costs. We are getting the budget back under control.

The reality is, if we had continued on that spending binge, wasting money on things like school hall rip-offs, broken-down laptops and with billions of dollars in deficit, our gross debt at the end of 2024, just 10 years in the future, would have reached $667 billion. The interest rate on our current debt equates to $12 billion a year, and that is rising. That is an amazing amount of money.

In the last three governments of Rudd, Gillard and Rudd, the millions, which were often quoted as huge amounts of money, slowly rolled into billions. People have got blase about debt. But what could we have done with $12 billion? We could have been building a four-lane divided highway from Sydney to Brisbane every year. We could have built 40 state-of-the-art regional base hospitals. Better still, over the last six years we could have established two or three of the Medical Research Future Fund that we are creating.

There are short-term measures which have changed the situation for the nation, but they had to be made so that there can be long-term repair. We want to be back on track to being a competitive nation, capable of tackling the challenges that the world throws up. We are dependent, to a large degree, on China's economy. What would happen to our economy if there was turmoil in China? There was the Arab Spring. What would happen to our economy if there was a 'Chinese Spring'? Who knows what could happen? We are building infrastructure that will deliver long-term productivity gains. It will create employment, with a run-off in associated industries. We will be in a much better situation to cope with any international economic shocks.

Contrary to Labor's misinformation campaign, pensions will continue to rise. They will go up twice a year for the term of this parliament according to the current indexation. Then they will go up according to CPI. Education spending will increase over the term of this parliament. To put things in perspective, annual assistance to the states for public hospitals will increase by more than nine per cent each year over the next three years and then four per cent in the fourth year. That is a massive increase of state expenditure. The funding for public hospitals will increase by more than $5 billion, from $13.8 billion this year to $18.9 billion in 2017-18. Overall health spending will increase by $10 billion or 16 per cent from $64.5 billion to $74.8 billion in 2017-18. Plus, we will have created the Medical Research Future Fund, which will itself deliver great efficiencies in the way we deliver health care. Medical research is where all the medical advances that we take for granted come from.

Also, contrary to the misinformation campaign that has hit the airwaves since the budget was released, there will be a record recurrent funding investment of $64.5 billion in schools over the next four years from the federal government. As I mentioned, the pension is not being reduced. It will increase again this September. Age pensioners will be better off as well because, by cutting the carbon tax, that annual cost of $550 for every household will be reduced. The energy supplement will continue. The pension supplement will continue.

The demographics of the nation are changing. By 2035, one in three of us will live to be 100. By that time, there will be a 400 per cent increase in those over 85 years of age. We have to make things sustainable. The pension age was already changed to 67 by the previous government for future years, from 2023. But we are giving a whole generation of people the chance to plan for their pension eligibility age by 2035. The reason for that is that there will be twice as many of us who are in the state of requiring government support. At the moment 80 per cent of people over 65 end up relying on a pension. If that doubles with the increases over time it would simply not be sustainable. The previous government recognised this and governments overseas have realised this. We have to take the hard decisions now.

The other thing is that just in this four-year term our debt—and I have mentioned the 10-year debt projections—if we sat back and did nothing, which some members on the other side of the House have recommended we do, we would be left with another $123 billion on top of the $200 billion we already owe. By means of this budget and the tough decisions, that $123 billion projected debt will be halved to $60 billion, and the 10-year debt will be down to $389 billion.

These are massive amounts of debt, and if we do not address these changes we will be in the situation of Greece, Ireland, Spain and all those nations that for the last 20 or 30 years have been living off the credit card. Most of these nations have got to the stage with a debt is so great that it is beyond the means of any nation to get rid of. So they are committed to paying massive amounts of interest on the international borrowings, virtually forever. Nevertheless, all those nations that I have mentioned have redressed this and are trying to get their debt under control.

It is the same in the UK; they were in a situation where they realised that things had to change. People should not be afraid of change if they realise it is for their long-term sustainability. We, as a generation, cannot saddle our children and our children's children with paying perpetual amounts of the annual budget of the nation in interest payments.

The infrastructure spend that I have mentioned is a massive bill. Just in my electorate of Lyne, we will have $1.129 billion spent on the Pacific Highway dual lane expansion. That will deliver at least 1,000 direct jobs and probably the same number again in indirect jobs. It will bring our part of the mid-North Coast closer to the Brisbane market. Transport costs will shrink because all the produce that we bring into the region, all the product that we get out and our tourism products all rely on the Pacific Highway, so it will be a massive benefit.

The Bucketts Way, the artery of commerce in the south-west of the electorate, has been so long ignored by the last government. They made all sorts of pronouncements about improving it, but we are actually delivering $17.8 million, including GST, to the Gloucester council and the Greater Taree City Council in the term of this government.

We have announced increases to black spots and Roads to Recovery funding, which are essential. When you see the state of some of the roads in the regions, they no longer have a bitumen surface; they are collection—a mosaic—of patches for stretches of hundreds and hundreds of metres, with only a clean sheet every now and then, rather than the other way round, where there should be the odd patch every now and again. And that leads to road safety improvement. Financial assistance grants are quarantined to councils, so they will continue.

The deregulation of the higher education centre will mean that there is an expansion of the demand-driven system and, with the budget estimates and education assessments, hopefully that will lead to another 80,000 students being enrolled in education beyond school. The deregulation and the changes the budget bring in mean that it will be delivered through alternative pathways into universities.

Colleges with diplomas, associate diplomas and associate degrees, of which there are several in my region, will have students who can access Commonwealth supported places because we have expanded the number of institutions that attract Commonwealth funding. As well, the existing institutions that have the ability to raise fees will be putting into their own funds for Commonwealth scholarships. One dollar in five of the money they raise from the deregulation will go into that. So people with low socioeconomic capability and standing will have another fund to enhance their entry into higher education.

Contributions from the savings from the co-payment will be delivered into the medical research future fund. What a great initiative. Medical research is something that Australian scientists are really good at. If that can be used in some of the existing programs, the research can be sped up. New avenues of research can be developed. There is so much intellectual capital in the scientific, particularly in the biomedical and the medical space. This will be an area of growth. If you look at all the medical scientists in Sydney, Melbourne, Brisbane, Adelaide and Perth, the major centres, the spin-off to the economy is staggering. Talk about growing. The best business to grow in your own region are those that are already there. People look for these magic new industries, and they do come along all the time, but the quickest way to expand things is to do what you do now and expand it. That is what that medical research future fund will do.

There are many challenges that the nation faces, but this budget is addressing them. All the social good and every program that Australians rely on will come into question. Can you imagine if we do not make the tough decisions now? Can you imagine if we did, as one of the previous members mentioned, kick the problem down the road, which countries overseas have done for decades? Their chickens have come home to roost. We have to make the tough decisions, and that is what this budget does. But they have been responsible, they have been measured and they are necessary. I commend these bills to the House.

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