Angus Taylor (Hume, Liberal Party) Share this | Hansard source

It is a great joy to speak on the appropriation bills because I know this budget is the right budget for the constituents of my electorate of Hume, and for all Australians—for small businesses, for farmers, for young families, for pensioners and for those looking to study and contribute. For all those Australians who want to have a go, we should never forget that Australians are aspirational. The only metric the Labor Party can apply to a budget is the metric of redistribution. Yet Australians are aspirational, they want to have a go and they want budgets that support them having a go. That is exactly what we see here. When I get around my electorate I see an outpouring of happiness about this budget—people are delighted that finally, after years of Labor, we have a government that understands aspiration and that understands ambition. Ambition is a good thing—we want to encourage it; we want to encourage Australians to get on, have a go, create jobs, invest and make Australia a better place.

This is the right budget for Hume; it is the right budget for Australia. Most importantly, it is about solving real problems. Government is about solving problems. What I am going to do is a little different from what many others have done—I am going to go through the budget and talk about the problems we are solving.

A division having been called in the House of Representatives—

Sitting suspended from 10:47 to 11:02

I was just saying that this is a budget that is seeking to solve real problems, and I thought I would describe the problems we are solving in this budget. I hasten to add that the previous speaker, the member for Hotham, identified a number of problems Australia is facing. She failed to identify that these were problems that emerged under the previous, Labor, government, and of course the first of those problems is out-of-control spending growth. This is not well understood. The fundamental problem Labor bequeathed this government is spending growth well above GDP growth. You do not have to be a rocket scientist to work out that if you have spending growth at close to four per cent a year and income growth at below three per cent then you have a growing deficit problem, a growing debt problem, and that is exactly the situation we were left with.

In fact, the budget deficit we were left with when we arrived into government was about $48½ billion. But we also know that if it was left untouched—if this spending growth of about 3½ to four per cent a year was allowed to continue—we would within a relatively short period of time be faced with debt levels of well over 100 per cent of GDP. That beats the Greeks, it beats the UK, it beats the US. That is where we were heading. And of course in this budget we see that budget deficits fall each year, despite the rhetoric from those opposite—from the $48½ billion I have described to $41.1 billion, $35.1 billion, $25.8 billion, $14.4 billion and in the final year $6.9 billion. So, this is a reduction in deficit each and every year, addressing the problem of rampant spending growth. What is really underlying those figures is that our spending growth level has been reduced from the 3½ to four per cent that we saw under Labor down to one per cent.

So, it is the containing—not cuts—of spending growth that is absolutely fundamental to making this budget work. It is true that we would like less of that to be dependent on bracket creep and more of it to be dependent on other things. But the fact of the matter is that whilst those opposite are reluctant, hesitant—in fact, are avoiding any real discussion about tax reform and spending reform in this country—it is going to be very, very difficult for us to bring the budget down any other way, and that is exactly what we are doing.

But the most important point here is that we have contained spending growth to about one per cent a year, which is an extremely credible outcome relative to what those opposite offered.

That is problem No. 1 that we are addressing. Problem No. 2 is that we are faced with an economy that is relatively soft, where we have not, under Labor, seen the investment and job creation that we would like to see. We recognise that there is a major change happening in the Australian economy, the first of which is something that I saw in my previous career before coming into politics—the increase in the investment spending in mining, going from something like $20 billion a year back in the 2000s up to about $120 billion at the peak, and it is on its way back down again. That extra $100 billion of investment is a gift from the mining industry we should be very thankful for. It was mostly squandered in the Labor years, but the truth of the matter is that is a big kick to take in the economy. We desperately need to stimulate growth, investment and job creation.

At the same time, we are seeing some major transformation in individual sectors across the economy, and nowhere is that clearer—and I see this in my electorate—than in retail, where we are seeing a shift. Retail was only ever a local business. It is now an international business. It is now possible for someone to sell bike parts or clothes or shoes—whatever you like—from the UK, the US or Asia into small country towns. That restructuring of retail is a very major change in the economy that we need to address and that Labor really never got its head around.

Our solution to this problem is very clear, in contrast to the Labor solution, which was to run big, cumbersome, expensive government programs. We have taken the view that every small business in Australia can help stimulate the economy. There are no better shovel-ready projects in Australia than the shovel-ready projects contained in every Australian small business. So what we have said is, 'Get your shovels out, small businesses. Have a go. We want you to stimulate the economy. You know more about job creation, you know more about investment, than any government ever will, and we want you to get out there and create those jobs.'

I am absolutely delighted that in my electorate of Hume that is exactly what is happening. I am watching business after business investing and creating jobs. This has been happening since we got into government, but it has only increased with free trade agreements, the reduction of red tape and a recognition from this government that it is not school halls and pink batts that are going to stimulate this economy, but the small entrepreneurs, the business people of Australia who will do the work for us.

Those entrepreneurs and innovators are the backbone of our economy, they are the backbone of our country, and they will stimulate this economy and get it going. They are not in the public service; they are in the private sector. Ninety-six per cent of all Australian businesses are small businesses. Combined, they produce about $350 billion of economic output and they employ over 4½ million Australians. Nowhere are they more important than in regional Australia and, of course, nowhere is that more important than in an electorate like mine in Hume. Under Labor, we saw the number of small businesses in Australia and the number of people employed actually decline. This was a shocking situation where we saw an erosion of the strength of small business. That is not something we will stand for.

We have heard a lot about the tax deductions and the accelerated depreciation that will have huge impacts on the investments that are being made in regional Australia. There will be a very positive impact on the activity of the businesses themselves. But one thing that is easily forgotten is how much they will stimulate the businesses around them. That second-order effect—the Keynesian multiplier, as economists put it—of a small business buying things from another business and in turn that business buying from someone else will have a very significant impact in regional Australia and across Australia more generally.

One sector that we know has phenomenal opportunity in the coming years is agriculture.

To shore up the strength of our agricultural sector and its robustness to drought and volatility, we are offering immediate tax deductions for new investments in water facilities and a three-year depreciation allowance for all capital expenditure on fodder storage assets. Absolutely fantastic news came yesterday—the government has again listened to rural and regional Australia and has again prioritised rural producers' needs. They told us that they wanted to get on with building fences, dams and fodder storage, and therefore they would like to see this accelerated depreciation come into place immediately. And that is exactly what we have done. In fact, from 7.30 pm on 12 May, that accelerated depreciation for those agricultural investments went into place.

We want every farmer in Australia to be out there investing. Now is the time. With the lower dollar and higher margins, what an extraordinary opportunity we face to get these investments in place and to get all the flow-on effects to the rest of the Australian economy that we will undoubtedly see. And that accelerated depreciation applies regardless of the size of the farm.

For small business more generally, as I said, whether you are farmers or tradespeople or accountants, lawyers or entrepreneurs, from 7.30 pm on budget night there was an immediate tax deduction for each and every item purchased up to $20,000 if the business has turnover of less than $2 million. This is something that we want to see Australian small businesses making the absolute most of. On budget night I sat there with a bunch of small businesspeople who were immediately on their phones, talking to their accountants and their business partners about how they can get moving. They are out there having a go right now. This is not a gift; this is not a handout. They get the tax deduction if they spend the money, and when they spend the money they create jobs, they create income, they create prosperity and they create exactly what we need in this country to stimulate growth at a time of great transition for our economy.

The other part of stimulating the economy is infrastructure investment, and I am absolutely delighted with the infrastructure investment in this budget. We have a $16 million investment under the National Stronger Regions Fund in my electorate, a water treatment plant in Goulburn and a pipeline from Yass to Murrumbateman, which will support the growth of an absolutely extraordinary region. Our time has come in the Hume Corridor from Sydney down to Canberra. This is an amazing part of the world that needs infrastructure investment, because we are seeing thousands of people move out of our capital cities into one of the most wonderful parts of Australia—indeed, one of the most wonderful parts of the world. We need the infrastructure investment to support that, and that is exactly what this government is doing and what the last government consistently failed to do.

The third real problem that we are solving in this budget is the relatively low participation rates of women in our workforce. As someone who has four children and a wife who has worked throughout the time that we have had those children, I understand what a battle it is juggling work with kids every day of the week. More and more Australians battle with this every day. My parents did not, but we do; we need to support partners, two-income families, where they want to work. Not everyone is going to choose to—and nor should they have to—but for those who do choose to, it is absolutely critical that we support them.

We know that in Australia we have lower participation rates for women than in countries like Canada; we are at about 75 per cent, while Canada is over 80 per cent. The Grattan Institute tells us that if we could match the Canadian record, the GDP of Australia would be about $25 billion higher in a decade, so that is exactly what we are proposing to do with the $3.5 billion Jobs for Families childcare package in the budget. Families using child care who are on family incomes of between $65,000 and $170,000 will be about $30 a week better off, and that is a wonderful thing.

On top of that there are a number of initiatives in there to support the more vulnerable families and also to support families that cannot access traditional child care. For those in rural areas where there is not easy access to child care—and I have been in this situation, my family has been in this situation—sometimes the only option is a nanny. The reality is that the support being provided in this budget to those families is absolutely wonderful, and I am looking forward to seeing that pilot working in my electorate. I have no doubt it will be a great success.

The fourth real problem we are solving is: finding jobs for unemployed Australians, particularly young Australians, and I commend the jobs package in this budget to everybody. Youth unemployment rose under the previous Labor government from about nine per cent to 13 per cent in its time in government. That is significant underemployment, particularly of younger Australians. What we see in this budget is a $1.2 billion wage-subsidy pool, work experience for up to four weeks and $330 million to focus on new job initiatives aimed at young job seekers. This is a great budget for Australia. This is a great budget for young Australians, for working Australians, for small businesses and I absolutely commend this budget the House.

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