Jim Chalmers (Rankin, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

And I acknowledge the Ngunnawal people here, and the Yagara and Yugambeh back home.

This budget builds on the progress that we have made, together.

It's a plan to help with the cost of living.

With two new tax cuts, and higher wages.

More bulk-billing, and more help with electricity bills.

Cheaper medicine, and less student debt.

And it's a plan to build Australia's future.

With more homes.

New investments in skills and education.

Competition reforms, and a Future Made in Australia.

Our economy is turning the corner.

Inflation is down, incomes are rising, unemployment is low, interest rates are coming down, debt is down, and growth is picking up momentum.

On all these fronts, our economy and our budget are in better shape than they were three years ago.

This progress has been exceptional, but not accidental.

The credit belongs to Australians in every corner of our country.

We've come a long way, but there is more work to do.

This budget is our plan for a new generation of prosperity in a new world of uncertainty.

It's a plan to help finish the fight against inflation.

Rebuild living standards.

And maximise our national advantages into the future.

This is a responsible budget with five main priorities:

Economic o utlook

The global economy is volatile and unpredictable.

The 2020s have already seen a global pandemic, global inflation and now the threat of a global trade war.

The whole world has changed as a consequence.

Tariffs and tensions abroad have been accompanied by storms here at home.

Ex-Tropical Cyclone Alfred could wipe a quarter of a percentage point off quarterly growth.

North and Far North Queensland have flooded too.

Storm clouds are gathering in the global economy as well.

Trade disruptions are rising, China's growth is slowing, war is still raging in Europe, and a ceasefire in the Middle East is breaking down.

Treasury expects the global economy to grow 3¼ per cent for the next three years—its slowest since the 1990s.

It's already forecasting the two biggest economies in the world will slow next year—with risks weighing more heavily on both.

Australia is neither uniquely impacted nor immune from these pressures, but we are among the best placed to navigate them.

We're emerging from this spike in global inflation in better shape than almost any other advanced economy.

Growth is forecast to pick up from 1½ per cent this year to 2½ per cent in 2026-27.

The private sector is resuming its rightful place as the main driver of this growth, with Treasury upgrading forecasts for growth in private demand to more than double next year, compared to this one.

Unemployment is now projected to peak lower, at 4¼ per cent.

Employment and real wage growth this year will be stronger, and participation will stay near its record high for longer.

Inflation is coming down faster as well.

Treasury now expects inflation to be sustainably back in the band six months earlier than anticipated.

Now, all of this means that the soft landing we have been planning for and preparing for is now looking more and more likely.

Because of our collective efforts, the worst is behind us and the economy is now heading in the right direction.

Delivering r esponsible c ost- o f- l iving r elief

But there's more work to do because we know that people are still under pressure.

The cost of living is front of mind for most Australians and it is front and centre in this budget.

We know the welcome improvements in the aggregate numbers don't always immediately translate to how people are feeling and faring.

We've made a lot of progress together but we know many people are still doing it tough.

Our plan to rebuild living standards starts with cost-of-living help and wages growth.

It includes more hip-pocket help for households:

New tax cuts for every Australian taxpayer

Tonight, the government is proud to be delivering more tax relief.

Every Australian taxpayer will get a tax cut next year and the year after, to top-up the tax cuts which began in July.

This will take the first tax rate down to its lowest level in more than half a century.

These additional tax cuts are modest but they will make a difference.

The average earner will have an extra $536 in their pocket each year when they're fully implemented.

Combined with our first round of tax cuts, this is $2,190.

And the average total tax cut will be $2,548, or about $50 a week.

We'll also increase the Medicare levy low-income thresholds, which is extra tax relief for more than a million Australians.

Now, our $17 billion in tax cuts are the biggest part of the responsible cost-of-living package in this budget.

But they're not the only part.

New energy rebates

Electricity prices, in the official data, went down 25 per cent last year but they're still putting pressure on households around the world.

Two rounds of energy rebates have helped take some of the sting out of energy costs.

Tonight, we're providing $1.8 billion in energy bill relief.

Every household and around one million small businesses will receive energy rebates until the end of 2025.

This means cutting another $150 off bills this year.

The government will also be using the powers and penalties of the energy regulators and the ACCC to help ensure:

Earning more and keeping more

At the core of our economic plan—and at the very heart of this Labor government—is a simple objective:

To ensure more Australians earn more and keep more of what they earn.

In the five quarters before our first budget, real wages fell in annual terms.

They have now grown for the last five.

Real incomes per capita are now growing too.

This is the dividend of our economic plan to get inflation down, wages up, and tax cuts flowing.

Tonight, we're providing an additional $2.6 billion to fund pay rises for aged-care nurses from March this year—

So that the workers that we trust to care for our parents and grandparents get paid properly for the work that they do.

We're reforming non-compete clauses, to lift wages by up to $2,500 a year for workers covered by them.

We've supported a historic wage increase for the early childhood educators and care workforce.

And we've backed pay rises which ensure the national minimum wage has risen by almost $7,500 a year.

A fair go for families and farmers

We know that Australians, despite all of this, are still under pressure, and a lot of that pressure is felt at the checkout.

That's why we're cracking down on the supermarkets.

By empowering the competition watchdog, making the Food and Grocery Code mandatory, increasing penalties and boosting competition.

At the same time, we're targeting excessive surcharging and scams and unfair trading practices that harm consumers.

Cutting student debt

A university education is a life-changing opportunity.

But it shouldn't leave Australians with a lifetime of debt.

This year, we will cut 20 per cent off all student loan debts, raise the minimum repayment threshold and reduce repayment rates.

Combined with our existing student debt relief, we will slash $19 billion in debt for more than three million Australians.

Cheaper medicines

In every budget, including this one, we have made medicines cheaper.

Tonight, we reduce the maximum price for a PBS script from $31.60 to $25.

Pensioners and concession cardholders will still pay $7.70 a script, because we froze their costs as well.

We're also investing $1.8 billion to list more life-changing and life-saving medicines on the PBS.

For example, cutting the cost of a lymphoma treatment will save some Australians more than $600,000.

Strengthening Medicare

The Pharmaceutical Benefits Scheme is a great Labor creation—and it's a great Australian institution.

We are strengthening it because Australians need us to, not weakening it because American multinationals want us to.

A Labor government created Medicare as well—and only Labor governments strengthen it.

Tonight, we are proud to make the single biggest commitment to Medicare since its creation.

A record $8½ billion to lift bulk-billing rates and build our health workforce.

Because of this investment, nine out of 10 GP visits should be fully bulk-billed by the end of the decade.

More bulk-billing will mean less pressure on families.

These incentives mean there'll be around 4,800 fully bulk-billing practices around the country—

Making it easier to see a doctor and get the care you need.

And saving patients around $860 million a year.

This budget also delivers new incentives for doctors to train as GPs—

New scholarships for nurses and midwives—

Better access to urgent care clinics

And another 50 Medicare urgent care clinics.

This is a $644 million investment in this budget to build on the 87 urgent care clinics that we've already opened.

Four in every five Australians will live within a 20-minute drive of an urgent care clinic as a consequence.

Opening early, closing late—available on weekends.

Taking pressure off hospitals and emergency departments.

And all you need is your Medicare card.

More funding for public hospitals

Every single state and territory will also get more money for hospitals in this budget.

Funding that will reduce waiting times.

Tonight, we're locking in an extra $1.8 billion, taking our total contribution to public hospitals to $33.9 billion next year.

Investing in women's health

We're proud to be investing $793 million in this budget in women's health.

To create more choices, lower costs and deliver better health care for women.

This funding will help Australian women save on contraception, access more endometriosis and pelvic pain clinics, and receive better support throughout menopause.

Because, for our government, women's health is not a boutique issue or a question of special interest—it is a national priority.

Building more homes for Australians

New plans for cost of living and health are accompanied by new investments in housing.

We are tackling the housing shortage from every responsible angle.

Making homeownership more affordable for young Australians and for young families in particular.

Our $33 billion plan will help build 1.2 million new homes before the decade is out.

More homes, more quickly

This includes $54 million to accelerate the uptake of modern methods of housing construction.

Which is all about building more homes, more quickly.

It supports our work to cut red tape and reduce financial barriers to more efficient construction methods.

The first two rounds of the $10 billion Housing Australia Future Fund are helping to build about 18,000 social and affordable homes for those who need them most.

And lifting the cap on Housing Australia's financial liabilities to $26 billion also helps in this regard.

We're making sure new properties are well located and connected to the infrastructure that they require.

Our Housing Support Program is funding the crucial roads, water and power that these new homes need.

Our national leadership is incentivising states and territories to reform their planning systems to accelerate new housing supply.

And, to build more, we know that we also need to train more builders.

That's why we're attracting more apprentices into the housing industry.

By doubling incentive payments so that eligible apprentices get up to $10,000 if they train up in the housing construction sector.

More support for first home buyers

Tonight, we're expanding our Help to Buy scheme as well.

This is part of our efforts to help ensure more Australians can buy a place of their own.

We will update the property price and income caps so more first home buyers are eligible for the scheme, and this will help 40,000 Australians buy their first home in the next four years.

And the changes mean that they can access a bigger range of homes and buy one that suits them.

And we're easing pressure on the housing market by banning foreign investors from buying established homes, and cracking down on foreign land banking as well.

Investing in every stage of education

A crucial part of this Labor government's economic plan relies on the transformational power of education.

Its power to turn aspiration and ambition into reality.

This is why we're investing in every stage of education.

To lay the foundation for a better and fairer system and teach and train Australians for the jobs of the future.

Reforming early education and care

This all starts with early childhood education and care.

We believe every child has the right to an early education, to ensure that they don't start school behind.

Cheaper child care is also cost-of-living relief with an economic dividend.

A key part of our plan to rebuild living standards is to help people work more and earn more if they want to.

That means breaking down the barriers to workforce participation.

So, from January 2026, we are replacing the childcare subsidy activity test with a new three-day guarantee.

This will make sure families are entitled to at least three days a week of subsidised early childhood education and care.

We're also building more childcare centres in areas of need.

Investing $5 billion to expand access across the country and lift the wages of early educators.

And charting a path to universal early education and care, regardless of a child's background, no matter where they live.

Investing in public schools

We're also putting billions into public schools in this budget, to open the doors of opportunity for more Australian children.

We're fully and fairly funding public schools to help students catch up, keep up and finish school.

This means public schools will finally be on track to reach the funding standard recommended in the Gonski review almost 15 years ago.

Making f ree TAFE permanent

On top of this, our fee-free TAFE program will help equip Australians for the jobs of the future.

Over the next decade, nine out of 10 new jobs will require postsecondary qualifications.

Almost half of these will be from vocational training.

We have introduced legislation to lock in 100,000 free TAFE places annually from 2027.

And we've committed $1.6 billion to fund these places until 2035, to make it easier for Australians to train, retrain and upskill.

B uilding a stronger economy

We see this as an important way, or one way, to ensure Australians can be primary beneficiaries of all of this churn and change that we're seeing around the world.

Another is by investing in our comparative advantages.

Or by looking for opportunities to join with our partners in new, more resilient global supply chains.

By becoming an indispensable part of the global net zero economy.

By preparing our people to adjust to and succeed in the new world being created right in front of us.

By building a future made in Australia.

A more productive, more dynamic economy

A big part of this depends on boosting productivity the right way, to lift living standards over the long term.   

Our plan for productivity growth doesn't mean making Australians work longer for less.

It's about investing in our people and doing more to unlock our potential by boosting dynamism and competition in our economy.

We've created a $900 million fund to reward state governments for implementing reforms that promote competition.

Tonight, we are advancing this substantial economic reform agenda.

We will abolish non-compete clauses for most Australian workers.

Non-competes are holding too many Australians back from switching to better, higher paying jobs.

More than three million Australians are captured by these clauses, including childcare workers, construction workers and hairdressers.

People shouldn't need to hire a lawyer to take the next step in their career.

Or permission from their old boss if they want to be their own boss and turn an idea into a small business.

The Productivity Commission estimates that this reform could lift productivity, reduce inflation and improve GDP by $5 billion.

And it could boost wages by up to four per cent.

We're also introducing a national licensing scheme to allow electricians to work seamlessly across borders.

This will be a template for expanding national licensing to other occupations, when and where we can.

The PC suggests these broader licensing reforms could boost GDP by up to $10.3 billion.

A Future Made in Australia

Australia is well placed to respond to the five seismic challenges shaping this new world of uncertainty.

The shift from globalisation to fragmentation.

From hydrocarbons to renewables.

From information technology to AI.

From a younger population to an older one.

And all of the changes in our industrial base.

All of this puts a premium on resilience.

That's what a future made in Australia is all about.

In this budget, we're investing more than $3 billion to support the production of Australian-made green metals, like aluminium and iron.

Building on the tax incentives for critical minerals and green hydrogen that we legislated last year.

We're also backing clean technologies through our Future Made in Australia Innovation Fund and by recapitalising the Clean Energy Finance Corporation.

This will help develop new industries in clean energy manufacturing, green metals and low-carbon liquid fuels, and unlock more private investment.

This agenda is about recognising that our future growth prospects lie at the intersection of our industrial, resources, skills and energy bases and our attractiveness as an investment destination.

So that we can grasp the jobs and opportunities of the net zero transformation.

Support for local businesses

In difficult conditions, around 25,000 new businesses have been created each month on average since we came to office.

We respect and admire the hard work, aspiration and sacrifice behind those record numbers.

Which is why we're going in to bat for small and local businesses in this budget:

Thriving cities, suburbs and regions

Building Australia's future also means building on the strength of our regions.

That's why we're securing banking services in country towns and flights in the bush.

It's also why we're investing up to $3 billion in additional equity to complete the rollout of the National Broadband Network.

Infrastructure like the NBN is essential for communities, students and businesses, and to the productivity of our nation.

So are the roads and railways connecting our regions to our cities and supporting economic growth.

This budget provides $17.1 billion over 10 years for these projects.

Including:

In total we're investing more than $120 billion in infrastructure in every state and territory over the decade.

Improving the productivity, resilience, liveability and sustainability of our cities, regions and communities.

Accompanied by $262 million to preserve and conserve our natural land and ocean assets.

Securing Australia's place in the world

In these uncertain times, economic security and national security are increasingly intertwined.

We're supporting stability and prosperity in our region, by helping to shore up banking services in the Pacific.

We have invested an extra $50.3 billion in defence by the mid-2030s, to help keep Australians safe.

It means defence funding will grow beyond 2.3 per cent of GDP by the early 2030s.

And we're investing $45 million in our initial response to the 2024 Independent Intelligence Review.

Responsible e conomic m anagement

In a tight budget, we've made room to boost our defences, strengthen Medicare, help people doing it tough, build more homes and invest in the future.

We've done all this at the same time as we've overseen the biggest ever fiscal improvement in a single term of government.

Tonight's budget is $207 billion better than we inherited.

It's in better shape in every year over the forward estimates than it was three years ago.

In our first two years, we posted the first back-to-back surpluses in nearly two decades.

Our deficit this year has almost halved since we came to office.

Next year's deficit is $42 billion, lower than what was forecast at the last election, and lower than at the mid-year update.

Gross debt will hit $940 billion this financial year, $177 billion less than what we inherited.

This means we will avoid around $60 billion in interest costs over the decade.

These are some of the dividends of our responsible economic management.

Achieved through a combination of spending restraint, finding savings and banking revenue upgrades.

Real payments growth is forecast to average 1.7 per cent to 2028-29, less than half of the average under our predecessors.

We have found around $94 billion of savings since coming to government, including another $2 billion in this budget.

In this term, we've banked around 70 per cent of tax receipt upgrades.

And we've made structural improvements to the budget across the NDIS, aged care and interest costs.

Broadening o pportunity

We're repairing the budget without ignoring our responsibility to build a stronger, fairer and more inclusive society.

Where more Australians have the chance to contribute to and share in our economic success.

We're providing $1.3 billion for Closing the Gap and economic self-determination for First Nations Australians.

With investments in remote community services, opportunities for business, and support for homeownership.

Tonight's budget also includes $424 million for Australians with a disability, and more funding for aged-care reform.

There's more money to support veterans and build on the progress that we have made eliminating the backlog of claims.

Cyclone Alfred

And we're providing help to Australians and communities affected by natural disasters.

Provisioning another $1.2 billion to properly fund recovery from ex-Tropical Cyclone Alfred.

As part of $13.5 billion in natural disaster funding for further north and around the country.

Seizing t he o pportunities a head

It's even more important and even more remarkable that Australia's economy is turning the corner.

When we know that the global economy is taking a turn for the worse.

Our progress and our prospects validate and vindicate the decisions and sacrifices that we've made together as Australians.

To bring inflation and debt down.

To get wages and growth up.

And to keep unemployment low.

What really matters is that we build on this platform.

How we help finish the fight against inflation.

How we keep rebuilding living standards.

And how we maximise our national advantages to benefit Middle Australia.

The plan at the core of this budget is about more than putting the worst behind us.

It's about seizing the best of what's ahead of us.

To build a stronger economy together.

And to build a future that we can all be proud of.

That's why I commend this bill and this budget to the House.

Debate adjourned.