Address to IPAA Budget breakfast, Canberra
- Minister for Employment and Workplace Relations, Financial Services and Superannuation
15 May 2013
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Good morning Ladies and Gentlemen.
Welcome to Parliament’s Great Hall.
Welcome to that special time of year in Canberra.
The leaves have turned; many of you are devoting your weekends to raking them up.
And the nights are getting cooler.
It’s a sign, its Budget season.
And that’s what brings us here this morning.
Last night Treasurer Wayne Swan delivered the 2013-14 Budget. The Government’s 6th Budget.
This morning I’d like to talk to you about some of the key themes. The major decisions.
For some, that comes down to one number.
But I believe that the picture is much broader.
Over the past 5 years, our economy has emerged as one of the strongest in the developing world.
The Australian economy is now 13 per cent larger that it was when the Labor Government came to power – and we’ve grown 5 times faster than countries like the US and Germany.
We’ve seen around 950,000 jobs created in the same time – while around the rest of the world 28 million joined unemployment queues. This is to the credit of businesses like those represented in this room.
For the first time in the history of our Federation we have a AAA credit rating from the three major ratings agencies – on this we are in an elite group of eight other nations.
Government debt – which will peak at 11.4 per cent of GDP – is very small compared to the rest of the developed world. It is a small fraction of other western countries.
Unemployment is low.
Inflation is low.
Our economy is expected to outperform most advanced economies over the next two years.
As former Prime Minister Howard said on Friday:
"When the Prime Minister and the Treasurer and others tell you that the Australian economy is doing better than most – they are right,"
So I’m optimistic about Australia’s future.
But we are seeing some unprecedented circumstances in the global economy, combined with a large degree of structural change at home.
The unusual combination of a persistently high Australian dollar and lower terms of trade defies economic orthodoxies.
The insulating effect a falling currency would normally have on falling terms of trade has frayed.
Company profits and prices growth are both being put under pressure by this phenomenon – and this has obviously flowed through to lower tax revenues and subdued nominal GDP growth.
To put it simply – the country is working harder but earning less, commodity prices have fallen and the world has given us a pay cut, and the high dollar is making us feel the full force of this in our hip pockets.
Since last years’ budget, revenue has been revised down by $17 billion this year, bringing to total revenue write downs since 2008-09 to around $170 billion.
Since MYEFO last year, revenue looking out over the forwards has been revised down by $60 billion.
Despite this, yesterday’s Budget charts a course to surplus through $43 billion of responsible savings and natural increase in tax receipts.
Our savings deliver on our priorities – and mean that cumulatively the bottom line will be over $300 billion better off by 2020-21.
To govern is to choose, and the Budget handed down last night contains some big choices about our priorities as a Labor Government.
We have made the choice that after a number of years of major global turbulence we have had to take the short term as it comes and focus on the future.
This Budget is a watershed moment in our federation of states, our national story.
It delivers a decade long blueprint for the most profound piece of social justice policy since Medicare.
This is our chance to turn to the millions of Australians with disabilities and their carers that face daily struggles and say to them `your country will not leave you to fight each day alone`.
We see you. You have worth. And with a bit of help from your people, your society, your tribe, there is a chance things can change.
It is in this Budget that Australia undertakes to give every child – from Dandenong to Double Bay, be they first or fifteenth generation Australian – a greater commitment from their country towards their education.
We all know our kids are going to do remarkable things. They’re the generation which is going to put a person on Mars, and 20 per cent of the jobs they’re going to do haven’t been invented yet.
We owe it to them all to give them the opportunities they deserve to become all that they want to be.
They need our love – which they’ll always have and always hold for us, despite the grunts you might get from your teenagers.
But they also need an education system which sets them up for our bright, exciting and uncertain future.
This Budget maps the next decade of this system.
To capture the opportunity presented to our nation by the Asian century we have to invest in our people and our economy.
That’s why the Budget is focussed on building a stronger economy, a smarter nation, and a fairer society.
Embracing change, equipping Australians to manage change, whilst always supporting those who fall off the pace.
We know that you have to invest in the enablers of growth, in the productive capacity of the economy, in order to generate wealth.
After more than a decade of neglect, we’ve made significant inroads into the nation’s infrastructure backlog.
Labor has doubled annual Federal infrastructure spending from $141 to $269 per Australian.
The Budget makes a further significant commitment to putting right the decade of underinvestment prior to coming to office and begins building for our future.
Making the big investments in the economic drivers – not based on the margin of the electorate but in the benefit to the nation.
We‘re building on our massive $36 billion investment in road, rail and ports with a further $24 billion of investment in the next wave of nation building infrastructure.
We’re funding the missing links, and starting the investments in the transformational infrastructure needed in our biggest cities to ensure they will be able to meet the challenges of the future.
These investments matter to all of us.
There is a major cost to our economy of lost opportunities if we don’t get the capacity in place.
If we wait to invest, till the time is better, we put at risk the needs of our economy now and into the future.
The costs of congestion are estimated to reach $20 billion per annum by the end of this decade if we don’t invest, and invest now.
We know for business, this is opportunity lost.
You can’t sell when you’re stuck in traffic, you can’t grow if you can’t meet clients’ needs.
Businesses also lose on another front.
You need people to grow.
For families time commuting is time lost investing in your children.
Time lost connecting with them and with the community.
Investments that yield fruits for businesses, families, communities, the nation.
Businesses know that their greatest resource is their people.
Without skilled workers Australia can’t compete.
Now, and especially in the future.
You need a smart nation in order to have a truly strong economy.
We should be making our own luck, not digging it up.
We already earn far more as a nation mining what’s inside our heads than what’s under our feet.
That’s why I’ve been saying the future of Australia is a good job.
Every challenge and opportunity we face as a nation – the re-emergence of Asia, the easing of the mining boom, the digital economy – will come down to our people.
And the three big things I’ve discussed today are all about unlocking and improving the productive capacity of our people.
Getting our kids ready for the future.
Giving Australians with disability and their carers the right to an ordinary life – by helping them participate more fully in the economy and society.
And undertaking the nation building, job creating infrastructure projects.
We could face the current circumstances on the revenue side and shy away from our obligations, to shrink our ambitions.
That is not the Government’s choice, that’s not the Australian way.
To build a strong economy you need to invest in its capacity.
You don’t cut your way to prosperity.
You need to summon the courage to make the choice to grow our economy, to advance our nation.
So we’ve taken the hit to revenues, and to strengthen our economy in the future we are investing in making our economy stronger.
Investments in the foundations to create prosperity, investments in ensuring that opportunity can be accessed by as many people, as many ideas, as possible.
That’s what we’ve done in this Budget.
That’s what we do as a Government.
That’s what we’ve done for 125 years as a Labor Party.
These are our choices – and we’re extremely proud of them.
I thank you.