Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

These appropriation bills make provision for moneys required to be appropriated from the consolidated revenue fund, as part of the 2015-16 federal budget, to fund the day-to-day operations of the Commonwealth. The budget forms part of the government's plan to build a strong and prosperous economy while funding the traditional functions of governments, such as health, education, social services and national security. As the Treasurer stated on budget night, this government inherited $123 billion in cumulative deficits. However, as a result of responsible budget measures, the projected cumulative deficit is expected to be reduced to $82 billion over the next four years. On a daily basis Treasury borrows $96 million just to pay the bills, down from the $133 million a day that this government inherited.

This budget is not framed in isolation but rather in the context of an increasingly competitive economic environment impacted by international factors. In my home state of Western Australia the mining industry is experiencing volatility in commodity prices. Iron ore is Australia's biggest export, accounting for some 22 per cent of total exports. Western Australia is the major producer of iron ore, so the dual effects of a 40 per cent slump in the iron ore price and a marked drop in mining construction activity have slowed that state's economy. On current prices, the iron ore price slump is forecast to lead to a projected $2 billion shortfall in state government revenue from mineral royalties, prompting cost-cutting measures in the state budget. At a federal level, since the 2013-14 budget, the fall in iron ore prices has resulted in a $90 billion write-down in the forecast value of iron ore exports, contributing to a $52 billion reduction in forecast taxation receipts from the budget bottom line. It is in this context that the budget was framed.

The national economic recovery must start locally. In each and every electorate across the nation there are local economic development projects which, when combined, will have a significant national impact. Opportunities for downstream processing and value-adding to our products must be explored. The construction of processing plants, refineries and smelters in our economy is preferable to exporting low-value raw commodities.

To safeguard our economy against future cyclical shocks, there must be a renewed focus on diversification into other industries within the economy in order that we become less reliant on the mining industry. In the next five years, Australia is on track to become the world's largest exporter of liquefied natural gas. If we could lift the value of our service exports—such as higher education, tourism, health care and financial services—to just half the level of our commodity exports, it would add $50 billion to our gross domestic product each year.

Trade and investment with emerging economies in our region is the key to promoting economic development. Over the past year, there has been a 23 per cent increase in approved foreign investment applications in Australia. In order to maximise economic benefit, investment into research and development must by necessity be closely matched with commercialisation of Australian innovation, invention and technology. Greater competitiveness and productivity are required in order to succeed in the global marketplace.

Commonwealth regulation is estimated to cost the Australian economy approximately $65 billion annually, equivalent to 4.2 per cent of GDP. Whilst a degree of regulation is necessary to ensure the orderly functioning of society, there are many cases in which overregulation is stifling the economy with bureaucracy and red tape. The business community has been making the case for years that the streamlining of our regulatory system is essential for greater productivity and to make the Australian economy more competitive internationally. The total deregulatory saving in reduced compliance costs since the election of the Abbott government in September 2013 is estimated at $2.45 billion.

The budget contains $5.5 billion worth of initiatives designed to promote small business investment, growth and employment. More than 95 per cent of Australian businesses are eligible for the accelerated depreciation scheme on productive assets of up to $20,000 in value. This will encourage businesses to invest in plant and equipment and to raise output. The 1.5 per cent reduction in the company tax rate from 30 per cent to 28.5 per cent brings the tax rate down to its lowest level in almost 50 years. Some 90 per cent of incorporated businesses, 780,000 small companies, will be eligible for this tax cut. In addition, a five per cent tax discount will apply for small unincorporated businesses, providing a tax cut of up to $1,000 for sole traders. The reasoning behind supporting small business is to take advantage of export market opportunities opened up by free trade agreements. There were 280,000 small business start-ups in 2013-14.

Other measures to assist small business include an exemption from the fringe benefits tax for work related portable electronic devices. From 1 July 2015, expanded tax concessions for employee share schemes will enable employees to share in and benefit from the future growth and success of their business. In addition, removing obstacles to crowdsourced equity funding will help promote small business access to finance by increasing the availability of innovative sources of funding and lower compliance costs.

To support our agricultural sector, the budget provides $300 million in drought assistance for struggling farmers. In addition to the small business tax cuts, accelerated depreciation is provided for investment in water facilities, fodder storage assets and new fencing. The budget provides for a $5 billion Northern Australia Infrastructure Facility, which will seek to establish partnerships with the private sector and state governments of Western Australia, the Northern Territory and Queensland in providing concessional loans for the construction of ports, pipelines and electricity and water infrastructure. This latest initiative complements the $50 billion in infrastructure investment announced in last year's budget and is designed to open up northern Australia for business.

In 2015-16, the government will spend $154 billion on welfare, which is around 35 per cent of total government expenditure. The current welfare payment system manages 40 different payments and 38 supplements. The Department of Human Services is responsible for delivering welfare payments through Centrelink to 7.3 million people annually. We have a generous welfare system to support those in our community who genuinely need support. However, we must encourage workforce participation and individual independence, in the spirit of enterprise and endeavour. As a nation, we can do much better than having one-third of the population dependent on welfare.

The budget allocates $331 million to increase employment participation and provide the skilled workforce needed to build the economy, including $212 million earmarked for the youth transition to work program. To assist job seekers in the transition into the workplace, 6,000 places have been provided in the national work experience program, as has $106 million to provide intensive support trials for job seekers of all ages from disadvantaged backgrounds. Furthermore, $1.2 billion has been included in the national wage subsidy pool to counteract long-term unemployment. A family support package of $4.4 billion has been provided in the budget. It is estimated that up to 165,000 Australian parents have a willingness to return to work but find the cost of child care prohibitive. By providing families with childcare assistance, parents can return to the workforce, bringing skills, expertise and productivity back to the economy.

The budget provides $44 billion for the age pension, which accounts for 10 per cent of all government spending. The age pension will continue to increase twice a year using the highest available indexation rate. Seniors who currently have a pensioner concession card will continue to be eligible for a concession card that provides the same benefits such as subsidised utilities, transport, bulk-billing and cheaper PBS prescription medicines. For self-funded retirees, there will be no new taxes on superannuation under the Abbott government. In addition, $17 billion has been allocated for the disability support pension.

The inclusion of new medicines and treatments on the Pharmaceutical Benefits Scheme is at a cost of $1.6 billion to the budget. In addition, to develop new cures and treatments, the budget allocates $400 million per year to the Medical Research Future Fund over the next four years to fund medical research into the latest medical treatments for the future.

Border protection and national security are top priorities for the government. The budget allocates an extra $1.2 billion for national security and $450 million to boost intelligence capabilities. In addition, the budget includes funding of $35 billion in the combined areas of defence, national security and law enforcement. The $31 billion allocated in the budget for defence spending puts it on a growth path to two per cent of GDP by 2023-24, which is consistent with our election commitment.

A key tenet in the budget is the introduction of multinational anti-avoidance legislation, aimed at preventing multinational corporations using complex schemes to avoid paying tax. In particular, the 30 largest multinational companies are being targeted and compliance with the goods and services tax is being tightened to ensure it is paid on goods and services entering Australia from overseas suppliers.

In my electorate of Moore there is a sense of optimism and opportunity about the budget. We have leading tertiary and vocational education and training facilities, including but not limited to the Edith Cowan University; the West Coast Institute; the Motor Trade Association training centre; Trades North; and the National Electrical and Communications Association training centre. Young and mature age residents alike can access the training necessary to equip them for employment. We have the developing Joondalup CBD, a business park, three marinas, several district commercial centres and a 1,000-hectare industrial area. There is capacity for local economic development to occur over the next few decades, with billions of dollars of investment and thousands of local jobs to be created. What is needed to succeed is a positive mindset, a willingness to acquire skills and participate in the workforce, and an enterprising attitude of making a go of opportunities.

In summary, the budget should be viewed in the context of the prevailing economic and fiscal conditions facing our nation. It is a budget designed for those who are prepared to take advantage of the opportunities presented to them and to make a go of things. A number of reforms are contained in the budget, which will boost the national economy and restore business confidence, particularly in the small business sector. It is a fair budget that meets our social responsibility obligations, by providing assistance and support to those in our community who genuinely need it most, whilst encouraging those who are able to contribute to society into greater workforce participation.

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