Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Hansard source

How do we ensure that, at a time when we see the slowdown of the mining and construction boom, we maintain strong economic growth, strong growth in employment? How do we ensure that our children and our grandchildren have the great opportunities that await them if their government leads them with wisdom and with an economic plan that is designed to ensure that they achieve the greatness that awaits this nation in the 21st century? Every element of our economic plan is pulling in that direction of growth and jobs. We began with our Innovation and Science Agenda. We recognise at a time of rapid technological change that Australians need to be more innovative, more productive, more competitive. So, we have set out in our innovation agenda real incentives for Australians to invest in start-up companies, for our best scientists and researchers to collaborate with business and industry to ensure that we are at the cutting edge of technology.

We need to ensure that our defence forces have the 21st century capabilities they need to protect us in the years ahead. But we also need to ensure that every dollar that we can spend in Australia on Australian technology, on Australian advanced manufacturing, is spent here. So, we have set out a defence industry investment plan that will drive thousands of jobs in Australia directly and thousands more in the industries and the businesses that will spin off that high-tech advanced manufacturing base that we are creating.

Growth in our region is, as I said, unprecedented, in scale, in its size and in its pace. Forty years ago, China was barely part of the global economy; now it is, by many measures, the world's largest single economy. We have opened up the doors to those huge markets with free trade agreements with Korea, with Japan and, of course, with China. We are seeing across Australia, therefore, the response to that with more jobs, particularly in the services industries, in education, in tourism and, of course, in soft commodities, particularly from agriculture. Enormous opportunities have been generated, and that is why we had 300,000 new jobs created last year and three per cent real growth. That is why we had 26,000 jobs created last month. We have to continue with this agenda for economic growth. We cannot afford to risk it by changing tack in the way the Labor Party would propose.

In the budget on Tuesday night, the Treasurer set out the other elements of this national economic plan, including an enterprise tax cut plan over 10 years which will see our company tax rates become far more competitive with other countries around the world and in our region. In particular, it will benefit small companies—smaller businesses with turnovers up to $10 million, rising to $25 million, $50 million and $100 million in the earlier years. We know that those smaller companies that turn over up to $10 million employ 3.4 million Australians, and we know that reducing company tax to make it more competitive will result in more investment, more employment and more jobs. It drives economic growth and will add, over the long term, one per cent to GDP. Of course, it adds GDP to our economy every year, but it adds real growth over that period—as, indeed, the shadow minister who spoke so heatedly a moment ago has acknowledged in his own remarks and his own books in the past. We know that this will drive growth.

We also need to ensure that our tax system is sustainable over the long term, so we have made the tough decisions with respect to superannuation by scaling back very generous tax concessions to Australians on very high incomes and Australians with high levels of wealth, so that the superannuation system is more sustainable, fairer and, above all, more flexible. As I said earlier, in question time, it will be more flexible for women in particular who find themselves out of the workforce with family. When they come back, they will have the flexibility to catch up with concessional contributions if they are able to do so. Of course, people who are self-employed will be able to contribute to super in the way that they should be able to. Indeed, it will be more flexible for people over 65.

We have also set out to ensure that young Australians who are unemployed have a pathway to get into the workforce. The best way to ensure a young person is employable is for them to be employed. We need to give them the preparation—to give them the internship that gets them into the habit of getting up, turning up to work punctually, working with other people and getting the confidence to become more employable in the years ahead. These are enormous changes—life-changing policies that will transform the future of up to 120,000 young Australians in the years ahead. This is our commitment to ensuring that this works for every Australian right across the board.

What we are also doing here in the budget is ensuring that we live within our means. This is vitally important—bringing the budget back to balance. We have to ensure that we are able to slow the deficit, bring the deficit down, bring debt down and relieve that massive burden of debt and deficit that was left on future generations by the six misguided years of Labor government. We cannot forget that the Labor Party inherited a government which had cash at the bank and left Australia with a government mired in debt and with a huge structural deficit. All of our policies are determined, calculated and designed to drive growth and jobs. That is what they will deliver. What the Labor Party are proposing, on the other hand, is one measure after another that will stand in the way of enterprise. We all agree we need more investment in Australia. Who could argue with that? Well, apparently the Labor Party do, because they want to increase the tax on investment by 50 per cent—they want to increase capital gains tax by 50 per cent. That can have only one consequence: there will be less investment. And if there is less investment, there will be fewer jobs.

The Labor Party claims to be concerned about housing affordability. What they propose is a ban on negative gearing which will have the consequence that no Australian who lives by the sweat of his or her brow will be able to offset an investment loss against their personal income—it might be a salary, a wage or a professional income. What that will mean is that someone on average earnings or less—as is the case with 70 per cent of the people who lodge returns with negative gearing—in the future will not be able to purchase an investment property and offset a net rental loss against their income. This will take thousands of people out of the investment market. It will ensure that rents will go up. They have to go up because investors will have to seek a higher after-tax return. The availability of rental properties will decline, because the pool of investors will be gone and when investors sell they will have to sell to owner occupiers.

When you pull so many people out of the market the price of housing will crash. Not so long ago in the House I made the point that, all other things being equal, if you reduce the demand and the pool of buyers by a third, values and prices will fall. I recall the member for Isaacs cried out, 'You are making that up.' This is just the law of supply and demand. Every measure we have set out will drive growth and jobs—every single one: trade, innovation, investment and backing enterprise. Everything Labor has proposed stands in the way of jobs, stands in the way of enterprise, stands in the way of growth.

See this speech in context