Budget Lunch hosted by the Devonport Chamber of Commerce and Industry

Speech
16 May 2018
Devonport, Tasmania
Prime Minister
E&OE
Economy and Finance

PRIME MINISTER:

Well, thank you very much Stacey, it is great to be back in Tasmania, great to be back in Devonport. I want to say, we’ve had a fantastic day, or morning up at Cradle Mountain. It was cold, there is no doubt about that but…

[Laughter]

… the Premier, you know, he’s incredibly tough. He really was wearing nothing more than a business shirt and a pullover, everyone else was dressed up for an arctic expedition, but not the Premier. It’s good to see, he’s young and fit.

[Laughter]

But we survived, didn’t we Premier? So look, Stacey, thank you very much for your warm welcome. Will, it’s great to be here with you again and congratulations on winning another term in government at the last election. It’s good to be here with Senator Richard Colbeck and Senator Steve Martin, where is Steve? I’ve just been hearing all about you from Stacey and boy, you have got a fan there. She’s a great salesman, fantastic.

And of course, a special welcome to Brett Whiteley who is back on the hustings to convince you all, and everyone, that he needs to be the Federal MP for Braddon once again. Let’s give him a round of applause.

[Applause]

We were up at Cradle Mountain announcing the Federal Government’s commitment to a further $30 million for the Cableway Project. That’s alongside the State Government’s contribution of more than $56 million overall to the Cradle Mountain Master Plan. It’s a game-changer. It’s going to deliver 60,000 more visitors, 150 jobs in construction, 50 more jobs ongoing. But as we’ve just been discussing already here today, this is absolutely critical, this is the ultimate tourism destination. It’s “experience tourism” as you were saying Steve, when you talked about it up on top of Cradle Mountain. Richard Colbeck, former Tourism Minister talked about it also and Tasmania can offer that in a way that very few other places can do so.

But you’ve got to build on the great momentum that is driving stronger economic growth and more jobs in Tasmania. You’ve got a great government, led by Will and his Liberal team. You’ve got strong advocates in Canberra, Senators Colbeck, Jono Duniam, David Bushby and Eric Abetz and of course we’re hoping to add Brett once again to that legion of passionate Tasmanians in the federal Parliament.

We know that the objective for the Budget was to deliver on the promises we made in 2016 at the election, with stronger economic growth and more jobs.

And we have delivered on that. You know, ever since the election, our National Economic Plan has been working and we saw last year, 415,000 new jobs created in Australia. That is the largest jobs growth in any calendar year in our nation’s history.

We’re also delivering a clear path to repair of the Budget. We can’t afford to throw a growing mountain of debt onto the shoulders of our children and grandchildren - even if you’ve got four grandchildren like me. But still, we don’t want to do that. We want to bring that debt down.

And you know something? Net debt this year is going to peak. It will peak this year and after this year, it’ll come down every year as a share of GDP. It’s about 18.6 per cent this financial year that’s 2017/18. In ten years’ time, it will be 3.8 per cent of GDP. You don’t have to take my word for it, it’s all in the budget papers. That is the result of bringing the Budget back into balance a year early, a year earlier than we forecast. So it will come back into balance in 2019/20 and then go into surplus after that.

Now critically, what we need to do is to ensure that everything is encouraging stronger economic growth. I know you hear me talk about this a lot but it is the enabler, the great enabler for everything you want to do. Whether it is to provide record funding for infrastructure in Tasmania, whether it is to spend $30 million to support the Cableway Project on Cradle Mountain, whether it is to enable tax relief for businesses – absolutely vital, if you lower business taxes, you get more investment, you get more productivity, you get more jobs, plainly. That’s why we’re so committed to them. Or indeed, to provide tax relief for hardworking Australians on lower and middle incomes. I’ll come back to what we’ve done there in a moment.

All of that requires a stronger economy.

You know, not only do we have record jobs growth in Australia and record levels of employment overall, we have the lowest percentage of Australians of working age on welfare in 25 years.

Now since 2013, we’ve seen 17,000 new jobs here in Tasmania and many of them have come through our big export trade deals. Again, we haven’t swallowed that protectionist claptrap that Bill Shorten has become so keen on in recent times. We pressed ahead with the Trans-Pacific Partnership. We got the free trade deals with China, Korea, Japan, most recently Peru, we’re working on one with Indonesia. We’ve got a new one with Singapore, but the Trans-Pacific Partnership is an 11 country deal. When Donald Trump pulled out of it, a lot of people said – notably Bill Shorten – that we should abandon it. It was “dead”. He said ‘the TTP is dead and the Government is being deluded by pursuing it’.

You know, that is going to offer our exporters huge advantages and opportunities in ten other markets right around the Pacific, that is including of course Japan, the largest country in the TPP.

If you give up on Australian jobs, then you will get the type of economic growth Labor governments are famous for which is; either no, or slow, or negative economic growth.

You need to have a government with a relentless focus on enabling business, because it is business that creates the jobs. Exports are a big part of that.

Now let me go through the contents of the Budget, very briefly.

So from 2018-19, next financial year, more than 10 million low and middle earners will get up to $530 in tax relief each year. In Braddon alone, there are more than 39,200 taxpayers who stand to benefit from that tax relief next year, with around half of them receiving the full $530.

Now that’s a modest measure, I’m not suggesting it’s a huge tax refund, because Australians have made it very clear that budget repair is a priority.

But it’s also affordable, because we’re living within our means. The Government is living within its means and we’re bringing the Budget back into balance.

Now, Stage Two locks in this tax relief for low and middle income earners and it protects middle income Australians from bracket creep, where as we all know, increases in wages are eaten up by moving into higher tax brackets, where the greater taxes, the marginal rate of taxes is higher.

In Stage Three – this is in 2024/25 - we abolish the entire tax bracket, the 37 cent tax bracket, ensuring that 94 per cent of Australians will never face a marginal tax rate higher than 32.5 per cent.

So think about that; what we’re talking about here is that you’ll go into the 32.5 per cent bracket at $41,000 which is obviously higher than it is now. Then, all the way up to $200,000 of income – and by that stage only 6 per cent of taxpayers will be earning more than $200,000 – you’ll pay no more than 32.5 cents in any additional dollar you earn.

What that means, is you’re giving every incentive to people to get ahead, to do some overtime, to seek a promotion, to start a business, to invest in their business. You’re saying that we’re not going to get caught into that sort of spiral of “earn some more, and the government reaches into your pocket even deeper.

What this will do is ensure you get all of those incentives and support for enterprise right.

I just want to say to those people like Bill Shorten, who says it’s unfair, I’ll tell you what’s unfair; robbing grandmothers of their savings. That’s really unfair. Reducing people’s savings, retiree’s savings – I imagine there might be a few here that have done that – and then you suddenly say companies, superannuation funds, people with big portfolios, can access franking credits and use it to reduce their tax on their other sources of income. But you – you who have chosen to put your savings, your modest savings, into a portfolio consisting of Australian blue chip shares, you won’t be able to get those franking credits.

We see in the Australian today, that is how Shorten is trying to fund his alternative tax plan; by robbing people’s grandparents. It’s outrageous. I was sitting next to a woman in her 80s in Queanbeyan last week and I know her husband – he’s well into his 80s so they’re not in a position to go out and start a new business or getting into a new job or anything like that. They are very much retired. It’s a 28 per cent reduction in their income as advised by their accountant. Now how is that fair?

It’s exactly the approach that Shorten has taken on citizenship. He thinks he can get away with it.

He thought he could get away with asserting that Justine Keay and three other members of his were eligible to sit in the Parliament, even though the High Court last October, said they weren’t. He thought he could get away with it until finally it became too much and they had to resign. Now, belatedly, we have these by-elections.

But I want you to understand that the choice here at this coming election and indeed at these by-elections, is a very stark one.

Everything we’re doing, everything we’re doing, is supporting investment and economic growth. We’re supporting investment and jobs and It’s working. The Labor Party has over $200 billion of additional taxes. Whether it is on businesses, companies and trusts, whether it’s on individuals, particularly on higher incomes, whether it is on property, banning negative gearing, they call it a tax loophole, it’s not a tax loophole, it’s been part of the tax system since 1911, it’s a business deduction.

And then of course, this extraordinary attack on retirees and self-funded retirees and their savings. Incredible. So that’s a really stark choice. We’re not in one of those situations where the Labor Party is trying to tack to the centre and pretend that they’re progressive economic managers. They’re not, this is Jeremy Corbyn - Australia style is what Shorten is going for. He is left-wing, anti-business and anti-jobs and it’s a huge risk.

Now because we’ve got a stronger economy, we’re able to provide a guarantee of our essential services. I’ll just run through a couple of the measures here.

We’re providing more help for older Australians to stay in their home, with $1.6 billion funding an extra 14,000 high-level home care places and that’s in addition to the 6,000 high level places we funded last year.

What we’re doing is bringing the funding for residential aged care and home care into essentially the one bucket so that it can meet demand. The truth is there’s less demand for residential aged care and more demand for people to get support while they’re in their own home. That’s a good thing, so we should again meet the requirements and meet the – provide older Australians with the respect they deserve.

We’re increasing the Pension Work Bonus to allow pensioners, aged pensioners to earn an extra $50 a fortnight without reducing their pension. Again, with older people who are on the pension, they want to stay connected to the workforce and that’s good. It’s good for everybody. Good for the economy, good for them, good for their state of mind. So we want to provide that encouragement.

We’re making superannuation more secure — we’re giving the Australian Tax Office the power to reunite 3 million people with – wait for it - $6 billion in lost super, that’s a lot of money. So the ATO will proactively reunite you with your lost super, it will track you down in effect. So that’s going to be restoring billions of dollars to its real owners. We’re going to ban exit fees for members who switch funds, and we’re going to cap fees for low-balance accounts at three per cent. Some of you may have had this experience, you’ve moved on from a job, you’ve got a small amount of money in a superannuation fund, you check in a few years later and there’s nothing left because of all of the fees, so we’re capping that.

Tasmania’s going to receive an additional $373.6 million for public hospitals over 5 years from 2020-21 – and that’s a total of $2.4 billion over that period. So that’s more money for more doctors, more nurses and more services and support for patients, including in the North West and West Coast of Tasmania.

And compare that to Labor’s last full year in office: in 2012-13 the Commonwealth funding for Tasmania's public hospitals was $294 million. This year (2017-18) it is $418.6 million – so that’s up 42 per cent. So just remember the next time the Labor Party says we’re cutting hospital funding. Completely and utterly untrue. It’s increasing every year and here as well in Tasmania.

We have backed our Medicare guarantee with an additional investment of $4.8 billion for Medicare which includes lifting the Medicare indexation freeze, which we inherited from the Labor Party.

We’re prioritising bulk billing: in 2016-17 there were 158,000 more bulk billed GP attendances in Tasmania compared to the last full year of the Labor Party in office. So again, when you hear that we’re undermining Medicare, we’ve guaranteed it. We’ve restored indexation. We’re spending more on it every year, and more people are using it, particularly bulk billing.

So everything you hear from the Labor Party about Medicare is a lie. It is an absolute lie. Guaranteed it, increased it and it’s being used more. You can’t do better than that.

In terms of our Budget for Tasmania, we’ve included $921 million for new investments in Tasmanian infrastructure over the next decade: the Bridgewater Bridge of course, very popular in Hobart, long-term upgrades to the Bass Highway corridor, and the second tranche of the Tasmanian Rail Revitalisation Package.

We’ve committed in total, $2.2 billion to infrastructure around the state, ensuring that everyone can get home sooner and safer.

And of course, I can make a commitment because of our responsible economic management that Labor cannot. Tasmania will not receive one cent less, one cent less as a result of the GST, any changes to the GST that flow from the Productivity Commission Report, and I gave that commitment when I was standing with Will gibbering in the cold up there at Cradle Mountain. In fact I embraced him at the same time.

[Laughter]

I’m not sure whether I was trying to save myself or him, but either way.

[Laughter]

Let’s just talk about schools. We hear the Labor Party says we’re cutting schools. Again I’ll just give you the numbers, you work out whether you think they’re telling the truth.

The Budget shows funding for education rises from $33.7 billion this year to $39.3 billion in 2021-22. Funding for schools alone rises from $18.3 billion to $23.5 billion - every year a record.

With the Gonski reforms that we have actually introduced, Labor used to talk about them, we actually introduced them. We have for the first time in the history of the Commonwealth national, consistent, needs-based, federal funding for schools. So doesn’t matter the school, if the school has got the same needs, it doesn’t matter if it’s in Tasmania or Western Australia, it doesn’t matter whether it’s a Catholic or a Protestant or a Jewish School, it will get the same funding. That’s what everyone has said should be aspired to, we’ve actually delivered it.

So the gap between us and Labor has never been greater. We will, as you know, as Liberals, always look for ways to reduce the burden of tax on families and businesses. And we’re doing that.

And I want to thank Steve, and I want to thank all the Senators, particularly on the crossbench who’ve supported our efforts to do that. Because we know that Australians should be able to retain more of the money that they earn. We shouldn’t take any more of the money they earn than we need to. We’re particularly focused on ensuring that business has every incentive to invest and employ.

Those are our values, and they are values that are delivering for Tasmania. They’re delivering for the nation.

Our opponents on the other hand are diametrically opposed to that. It hasn’t always been the case, just like you can’t trust Shorten’s rolled gold guarantees on citizenship. He’s got twin T problems as Christopher Pyne was saying today. He’s got a problem with one T word, which is trust. You can’t trust him, because everything I just said to you about the importance of lower business taxes Bill Shorten has said. He’s actually said it very eloquently, he said: “lower business taxes result in more investment, higher productivity, more jobs and better paid jobs”. That’s what he said. He was right. Economic orthodoxy, complete reverse today. We’ve heard what he’s said on citizenship, indefensible position he had there. Trying to get away with it for as long as he could. You cannot trust him, the only thing he knows, is that he is coming after you with much higher taxes.

Now if you think that our economy can bear another $200 billion of taxes, well I’d have to beg to differ with you. We know that the energy and enterprise of our economy comes from business. And you’ve got to be prepared to support business. 

Now we believe everyone should pay their tax, we’ve got the toughest multinational tax avoidance legislation we’ve ever had in Australia. And as Scott said on Budget night, over $6 billion has come back in revenue, into the tax net as a result.

So we’re cracking down on tax evasion, whether it’s in a cash economy, or whether it’s from the multinationals. We believe in lower taxes but we believe in everyone paying their taxes. But above all, we believe in you.

So Stacey, thank you very much for your warm introduction, thank you very much for all of you, the energy and the optimism in Devonport is contagious, and I’m delighted to be here with you.

[ENDS]