Address to the LNP Budget Lunch

17 May 2017
Brisbane, Queensland
Prime Minister


It is wonderful to be back here with you in Queensland and in Brisbane.

Later this week I will be visiting Rockhampton and Emerald, and I can say, as you know, that we in the LNP understand that magnificent though Brisbane is, there is a lot more to Queensland than the capital and the south east.

This is a state of great regions and great cities and only the LNP speaks for the whole state and its diversity.

And with Origin two weeks away, a reminder there is one thing that unites Queenslanders as much as the Maroons, and that is the state’s ability to deal with everything that Mother Nature throws at you; the resilience with which you absorb hardship and the tenacity that enables you to recover. Tropical Cyclone Debbie and the devastating floods that followed were the latest in a long line of natural disasters that have tested your mettle. Thousands of people were affected. Tragically, lives were lost and many are still grieving. Homes were destroyed, treasured belongings are gone forever.

And all Australia stand with you.

The Australian Defence Force’s deployment was the largest ever in anticipation of a natural disaster and they worked tirelessly with Queensland’s own emergency services as I saw firsthand in Bowen and Proserpine with George and in Logan and Eaglesby with Bert.

The National Disaster Relief and Recovery programme costs will run to hundreds of millions of which the Commonwealth will pay 75%, and I should note that over the last decade $10.5 billion has been spent by the Commonwealth on natural disaster recovery relief and 85% of that has been spent in Queensland. You are in Queensland at the front line in terms of natural disasters. We are a land of droughts and flooding rains and storms, and fires.

We are steadfast in our commitment to growing Queensland: creating more opportunities, more jobs with higher wages, and providing a helping hand to those who need our support.

The budget is the latest step in our plan to create more jobs, secure the vital services that Australians rely on and ease the cost of living - all the while living within our means.

That is the beating heart of this budget; a commitment to fairness, opportunity and security for all Australians.

Our goal is to ensure there is no better place in the world to start and grow a business. I was out this morning with some great small businesses, small and medium businesses with Ross Vasta, in the electorate of Bonner. Innovative, enterprising, hard-working, training young Queenslanders.

We’re backing them. We’re extending the instant asset write-off for another year, which means more than half a million Queensland small businesses can invest in the capital equipment they need to grow, that many of your businesses want to sell them.

We’ve already reduced taxes for more than three million small and medium businesses. And we will go back to the Senate to seek support for the rest of our tax plan.

I recently met US President Donald Trump. He’s planning to bring down company tax to 15 per cent. Britain’s heading to 17 per cent. France’s new President Macron, who I spoke to last night, plans to cut his country’s corporate tax rate from 33 to 25 per cent. France historically has been a country that had higher taxes, so you can see that there is a global move on to reduce business taxes.

Now we are competing for investment. We are competing for jobs. We cannot succeed if our company tax rate remains at 30 per cent. Bill Shorten knows this - he once advocated for this change – but as usual he’s done a backflip. He’s now putting his political self-interest ahead of Australian businesses and the millions of workers they employ. We know that lower company taxes will result in more investment, and more investment results in more jobs. That’s what we need.

We believe in lower taxes, but paying them is not optional. Because of our tough new anti-avoidance laws - which I might say, the Labor Party voted against - multinationals are now paying their fair share of tax in Australia.

Since the election we have managed to deliver more than $25 billion of budget repair.  However, it is clear many of the other savings we have pursued simply cannot pass the Senate.

We have to work with the Parliament the Australian people elected.

So we have to have a budget that is credible. A budget that enables us to retain our AAA rating. So we have to deal with the Senate the people elected. That meant we needed to raise more revenue.

Our banks are the most profitable in the world and they’re the beneficiaries of a stable and well-managed financial system.

The new big major bank levy will raise $1.5 billion a year and represents a fair and affordable additional contribution from our major banks to budget repair. It has many counterparts in other comparable economies including of course, most notably, the United Kingdom.

There is no need for such immensely profitable businesses to pass on the levy to their customers.

We are also enshrining fairness in the financial sector.

We’re creating a one-stop shop, the Australian Financial Complaints Authority, where consumers and small businesses can resolve their disputes with banks and other financial institutions.

And we’re introducing a new Banking Executive Accountability regime to make sure that senior bank executives’ remuneration reinforces their obligations to act in the interests of their customers.

So that’s what we’re doing, as Jane foreshadowed earlier, we’re not talking about measures, we’re delivering. We’re getting on with it, making the changes and reforms that we need, addressing the budgetary challenges that we have, ensuring that we don’t throw a mountain of debt onto the shoulders of our children and grandchildren. Because there’s nothing fair about that. We have to deal with the Parliament the people elected, the Senate the people elected and we have to live within our means.

Now I want to talk about infrastructure. We are taking a very different approach to infrastructure than our predecessors.

Historically, the Commonwealth has been a fairly passive provider of grants to State Governments – effectively an ATM.

We need to make our infrastructure spending go further. We need to leverage private sector contributions and we need to operate more as an active and intelligent investor, than a dispenser of cash.

So we will invest more in infrastructure, taking direct equity stakes in projects, and none more important to this region than the $8.4 billion to build the Inland Rail from Melbourne to Brisbane.

Barnaby Joyce has quite rightly referred to this as a ‘corridor of commerce’, that’s going to take bulk produce off the road and away from mums, dads and kids on the road in their cars.

But it also provides an investment in infrastructure, truly nation-building infrastructure that, I was reminded the other day, Australians have been talking about since the time of Federation. So it’s less an idea whose time has come, than an idea that needs to be brought into reality. We’re going to build it. Just as we’re going to build the expansion of the capacity of the Snowy Hydro Scheme - as we were discussing at our table - making renewables reliable. Just as we will build the Western Sydney airport. Governments need to lead, we need to invest. We need to take your money, your taxes, and when we invest them, do so intelligently and with a commitment to ensure that you and the people we serve get good value for them 

As you know, we’ve committed $844 million for Bruce Highway priority projects, as part of a ten year, $6.7 billion upgrade. That’s already having a real impact, some of the work making sections more flood resistant, particularly across the Yeppen Floodplain south of Rockhampton. Essential supplies and services were able to be delivered during the recent floods, a terrific demonstration of why this work is so important. This budget locks in over $13 billion for Queensland infrastructure and continues to roll out funding for other key projects like the Gateway Motorway North and the Toowoomba second range crossing, which Ian MacFarlane championed, I might say, for such a long time.

We are investing $10 billion for passenger rail under the National Rail Program, not just for capital cities like Brisbane but to fund regional rail links, potentially the Sunshine Coast and Gold Coast. And as we count down to the 2018 Gold Coast Commonwealth Games, we’re investing more than $500 million to support our athletes and for critical infrastructure to service the Games, including $95 million for the Gold Coast Light Rail Stage Two that I announced shortly after becoming Prime Minister and of course $215 million for upgrades to the M1.

Queensland is going to put on a great show. I look forward to cheering our athletes on to gold and welcoming visitors, competitors and tourists from around the world.

You may have noticed that Bill Shorten didn’t mention regional Australia once in his budget reply speech.

I’m proud to say that unlike the Labor Party who would struggle to find regional Australia on a map, or anywhere else, we have a comprehensive plan for our regions, especially regional Queensland.

Our $472 million Regional Growth Fund will back in the plans that regional communities are making to take control of their economic future, including  $200 million for another round of the successful Building Better Regions program.

This is on top of the $70 million we’re investing in Queensland’s regional communities as part of our Jobs and Investment packages.

We’ve extended the Stronger Communities Programme and of course as you know, one of our first City Deals is the Townsville City Deal. We’re investing in the stadium, we are investing in the rail bypass there – we are working, committed to working with the city government and the state government, and we are looking forward, Tim, to working with your government to ensure that the three levels of government collaborate. That is our vision. The federal government being an active partner in the development of our communities, the development of our cities and our regions. Working intelligently, constructively to ensure that we deliver the best outcomes.

Regional Australia and regional Queensland in particular are benefitting from those big export deals we have negotiated with China, Japan and Korea. Fresh beef from the Darling Downs, flying from the Wellcamp airport, constructed by the Wagner family – what a fantastic achievement that was. It was the first airport I think built in Australia since the early 70s. Really extraordinary achievement. That fine produce is now being served in the restaurants of Guangzhou and Shenzhen. It is taking the best we can produce to the world and we are able to do that because of those big trade deals and we’ll do more of them. Of course, the great Queenslander Steve Ciobo has stepped into Andrew Robb’s shoes as the Trade Minister.

Now, there should be no doubt that this is the budget that secures the future of Medicare. It should quarantine it from politics, once and for all. Medicare has been the subject of political games for too long. All of us remember the Labor Party’s notorious scare campaign last year.

After the election I told Australians they could trust the Coalition to secure our world class health system. And that's exactly what we are doing.

This budget includes record funding for Medicare and the PBS, the backbones of our health system. We will establish the Medicare Guarantee Fund, ensuring transparency and funding into the future.

The Medicare Guarantee Fund will safeguard Medicare and the PBS for the benefit of all Australians now and forever.

And we will lift progressively the Medicare rebate freeze first imposed - I must remind you - by the Labor Party.

That will increase the rebate for patients and it will safeguard bulk-billing. Here in Queensland bulk-billing is at record levels, about four percentage points higher than it was when Labor left office.

So we’re demonstrating our commitment to Medicare and the security of Australians’ health.

At the same time, we are spending $1.2 billion in the budget making life-saving medicines cheaper by putting them on the Pharmaceutical Benefits Scheme, including drugs that target conditions like heart disease, severe asthma and cystic fibrosis.

We have listed 1400 new drugs on the PBS. Labor only listed 331. 

They rationed the listing of drugs because they had lost control of the budget.

That’s the big difference; because we have the budget under control, because we are managing our finances, we can afford to put those life-saving medicines, those new developments onto the PBS so that they’re affordable for Australians.

The budget also contains an extra $173 million to treat mental illness, with $58 million identified to support veterans’ mental health. What this means is that anyone who has served full time in the ADF  can access free mental health treatment.

We believe and it is our commitment, that in these centenary years of the Great War, the First World War, we best honour the diggers of a century ago by supporting the men and women of the Australian Defence Force today, the veterans and their families of today.

That is our commitment. That’s again demonstrated in what we have done in this budget.

Importantly, the budget delivers certainty on two other vital national responsibilities where Labor has completely failed the people of our nation.

First is the Disability Insurance Scheme. It was established under the Labor government and it had bipartisan support. But it was never properly funded. The National Disability Insurance Scheme, as Jane knows well, faces a $55.7 billion shortfall in future years. If nothing is done, the system will fail the people who need it the most.

Now rather than saying to parents with a disabled child, in a couple of years’ time: “I’m sorry, the cupboard is bare. We don’t have the funds to support the NDIS anymore,” we’re looking all Australians in the eye and saying: “We all benefit from this National Disability Insurance Scheme. We’re all covered, so we should all pay for it.”

We have announced an increase in the Medicare levy of 0.5 per cent from 2019 so that the most vulnerable Australians - many of them children - can live with dignity, live with the support that we’re able to afford and deliver to them. But again, as responsible economic managers. we must be able to pay for it, and assure it.

Labor also failed to deliver on David Gonski’s vision for education. I don’t know anyone whose name has been more taken in vain or more misrepresented that David Gonski’s.

Now, at the heart of our schools policy is fairness, fairness and equity. The extra $18 billion over the next decade we’re going to invest in schools will enable us to deliver a world class education and put Australian children back at the top of the class.

For the first time, we will deliver a true needs-based funding model that Gonski recommended six years ago.

Labor had, as you’ll recall 27 complex, contradictory, secret deals. It was a corruption of the Gonski proposal, of David’s very clear then vision. It was a corruption of that as his co-author of the report, Ken Boston has often said.

This system is fair, distributing funding according to need. It increases funding for more than 99 per cent of schools and it will ensure that by 2027, we will be, the federal government will fund 20 per cent of the schooling resource standard for government schools and 80 per cent of the schooling resource standard adjusted by reference to the SES or the community’s capacity to make a contribution, for non-government schools.

It will be consistent. It will be national. It will be needs-based.

Across this state, 1700 primary and secondary Queensland schools will see their funding grow by an estimated $2.7 billion over the next ten years.

As a father, as a grandfather, and the father of a school teacher, education is very close to my heart. My life was changed - as I know many of yours were too - by great teachers.

We want all Australian children to have great teachers.

So our Quality Schools program is about consistent needs-based, transparent funding. But it is also about ensuring that the money is spent where it is going to deliver better outcomes and better results.

We want Australian students at the top of the class.

Yes, we understand that we need more resources, financial resources into education. But we need to get better outcomes for it. That is what Gonski is going to assist us with, with the second review into the work that wasn’t done six years ago. Gonski 2.0 will ensure that we are able, working with the states and territories and independent systems, non-government systems, that we spend the extra funding so it achieves better results.

These reforms are designed to ensure we give our children the best shot at life.

We are listening and we are acting. Unlike the Labor government you endure in this state - whose inaction has cost Queenslanders dearly - we are getting on with the job. Getting on with the tough decisions; financial, infrastructure and reform.

Now this next State election is critical.

We need a strong Liberal National Party government here in Queensland as our partner, led by Tim Nicholls and Deb Frecklington. We want them to win it and take this great State with our support, our partnership to the much brighter future that it deserves.

We are doing everything we can to help by delivering a budget that tackles the big issues you face.

It is a fair budget. It is responsible. It is a budget for every Australian. And when presented with the choice between a budget that defends the AAA rating for Australia and one that puts budget repair into the too-hard basket, we made the responsible choice.

The Coalition above all else, is committed to responsible economic management. So it has been carefully crafted to both grow the economy and balance the books.

Continuing intransigence from the Senate has meant that revenue is doing more of the heavy lifting than we would have liked. 

But we have to deal with the world as it is – not how we would like it to be, or how we fondly imagine it should be.

We are bringing the budget back into surplus, it’s projected at $7.4 billion in 2020/21.

This is a building budget. It is building a better Australia, with record investments in roads and rail, improved schools funding, guaranteed Medicare and a fully funded disability insurance scheme.

Under our Government the economy will grow as businesses invest and Australians get the infrastructure that they need.

There’ll be more jobs, and they’ll be better paid.

This is a fair budget. Fair to all Australians and fair to our children and grandchildren, securing the education, the health and disability insurance they need. Creating opportunities for business to invest with tax incentives and with the infrastructure that will be the sinews of our 21st century economy.

These are the right choices. They’re the fair choices, to secure the better times, with greater security and more opportunity, for all Australians.

Thank you very much.