Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance, representing the Treasurer, Senator Cormann. Can the minister provide an update on the government's plan to repair the budget and strengthen our economy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Hume for her persistent interest in good economic and fiscal policy for Australia. I am pleased to inform the Senate that the government has reached agreement with the opposition in relation to just over $6 billion worth of savings measures captured in the Budget Savings (Omnibus) Bill. This outcome has been achieved as a result of a very positive and constructive process with the opposition, and I would like to thank in particular the shadow Treasurer, Chris Bowen, and indeed the whole Labor leadership for their engagement with the government in relation to this piece of legislation. We hope that this is only the beginning and that there will be opportunity for the government and the opposition to work together in the national interest to bring the budget back into balance as soon as possible on further measures.

In any such discussion, in any such negotiation to reach an outcome, obviously there is necessarily a level of give and take on both sides of the discussion, and that has been the case on this occasion. The government, as part of our compromise, has agreed to progress the government's reforms to dental services through separate legislation. We have agreed to restore $800 million worth of ARENA funding over five years as grants funding instead of making it available by way of concessional loans or equity funding. The energy supplement through this omnibus savings bill will be removed only for new recipients of family tax benefit payments and the Commonwealth Seniors Health Card. We are also—and this was a concession made by the opposition—adding a new schedule to this bill which limits access to the family tax benefit part A end-of-year supplements only to families earning less than $80,000 per annum. The government has also decided not to proceed with the so-called baby bonus. (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Hume, a supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

Can the minister please explain why the timely implementation of the government's plan for budget repair is so important?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Right now the Australian budget continues to be in deficit. We do have an improving trajectory over the forward estimates, and we are expected to get back into balance within five years. It is very important that we deliver on the return to balance as outlined in the budget, to ensure we protect our AAA credit rating. Our AAA credit rating helps to keep interest rates low for business and for consumers. It also helps us deal with any future economic shocks that we may face from time to time as a result of developments around the world beyond our control. And, furthermore, it is of course very important that spending on funding of important social services and other services provided by government is affordable and sustainable over the medium to long term and that we do not continue to fund our expenditure today based on borrowings from our children and grandchildren, based on borrowings from future generations. That is why today's significant step is an important step—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Say, 'Thank you'!

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

but it can only be one step. (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Hume, a final supplementary question.

Jane Hume (Victoria, Liberal Party) Share this | Link to this | Hansard source

Can the minister outline any other measures the government is pursuing to encourage stronger economic growth?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

For the benefit of Senator Conroy, yes, the government is very grateful for the cooperative approach that Labor has taken in relation to the omnibus savings bill, and we hope, as I said, that this is only the beginning. There is more work to be done to implement our reforms, to make our superannuation system, and the tax concessions in super, fairer and more sustainable. There is still a lot of work to do to ensure that we have a genuinely internationally competitive business tax framework, that we continue to attract more investment, that we continue to be able to boost productivity, boost growth and indeed achieve increases in real wages over time. There is of course still significant work to be done to ensure that the spending growth trajectory that is currently reflected in our forward trajectory is reduced and brought down to a more sustainable and affordable level. We hope that this example today of an agreement reached between the government and the opposition is only the beginning of more to come. (Time expired)