Category: Banking

Source: Australian Parliamentary Secretary to the Minister for Industry

Here we are, back again on Ngunnawal land, gathering at the kind invitation of Maurice and the Board, sponsors and members of the National Press Club.

But since last time, not just one new President but 2: Trump; and Connell.

Congratulations Tom on your election, and thanks for your introduction –

And to everyone here, including the pundits and, on recent form, maybe a couple of protesters again too.

Last night marked the first time since Ben Chifley was PM and Treasurer, more than 3 quarters of a century ago, that there’ve been 4 budgets in a single term.

And of the 11 times I’ve spoken here, I think it’s the 4 post‑Budget opportunities I’ve cherished the most.

Partly because Laura Chalmers comes along, and is here again, she brought Leo last night, and that means a lot to me.

And also, because they offer us the chance to go behind the Budget a bit, to provide some more of the colour and context.

Today I want to talk about how our economy is turning a corner, even as global conditions take a turn for the worse.

Explain how seismic changes in the world validate and vindicate our strategy, rather than undermine it.

And lay out our government’s economic case for re‑election –

Based on our progress to here, our plans from here, and the risks posed by our opponents.

The fourth shock

First let me sketch the backdrop.

Twenty years ago, I fronted up for my first of 19 Budget lockups.

Costello was Treasurer, and the global economy was a very different place.

In the 2 decades since, half a dozen subsequent Treasurers presided over 3 big economic shocks.

The first, a financial crisis that became a demand shock.

The second, a pandemic that became a supply shock.

The third, an inflationary shock that lingers around the world longer than anyone hoped.

Escalating trade tensions now risk, if not represent, the fourth big economic shock in just 17 years.

Now, if you think about the big post‑war global economic story.

From Bretton Woods in 1945, to the high inflation of the 70s.

The Washington Consensus that held from the end of the Cold War until the start of the GFC.

There’s a tendency to talk about economic shocks as punctuation. A break in the flow.

But the last 20 years prove that global shocks – in one form or another – are chapters in their own right.

They no longer interrupt the story – they are the story.

Acknowledgements

Governing a country like ours in uncertain times like these is a responsibility we accept and an opportunity we cherish.

Led by the Prime Minister – who is here today.

His collaborative style of leadership is appreciated by all of us in his team.

Katy and I told the Cabinet yesterday that we consider ourselves very fortunate to have been so well‑supported by so many ministers, a number of them here today and I thank and acknowledge them again.

And no Treasurer has ever been more fortunate than me when it comes to the Finance Minister.

The best colleague I’ve ever had.

Nothing we’ve done over the course of 4 Budgets would be possible without her calm and composure, her empathy and judgement.

Katy came to the Treasury thank you dinner on Thursday night.

I’m told that’s unprecedented – but for us it’s not unusual.

I’m sure Katy would agree it’s not the most glamorous ritual.

The pile of pide boxes and a sea of tired eyes sums up the week, and weeks, before.

But it gives us a chance to say thanks to Steven, Jenny, Glyn and all the officials involved in putting this Budget together.

That evening, I was reflecting with officials on the time I spent as a public servant, working for Glyn in Queensland.

He was the first to tell me what it looked like inside the Cabinet Room here in Parliament House.

Right down to the framed paintings of Australian lorikeets on the walls.

Those birds have seen and heard a lot!

I’m told I’ve spent 664 hours in that room this term – which is about 27 days.

Whenever I’m in there, I try to remember that’s it’s not the birds in the frame or the galahs in the pet shop that really matter.

We try to ensure those conversations around the cabinet table are shaped by the conversations Australians are having around the kitchen table.

We know cost of living is front of mind for most Australians and that’s why it’s been front and centre in all 4 budgets.

No matter how difficult or long the deliberations might be in that room I’m always aware how lucky we are to be in there.

Treasurers stand there on Budget night on behalf of all who do so much to put our plans into Budgets, and into action.

ERC ministers who undertake the essential deliberations – 233 of those 664 cabinet room hours were with them.

Every member of our caucus who all do so much to advocate for the people they represent.

The staff from our offices and all the public servants.

Please join me in thanking them.

Turning a corner

This Budget makes it clear that the Australian economy is emerging from a global cost‑of‑living crisis in better shape than anywhere else.

Inflation is down, living standards are rising, real incomes are growing, unemployment is low, interest rates are coming down, debt is down and now growth is gathering pace.

That combination is exceptional – and not accidental.

It is the product of the choices we have made.

Delivering cost‑of‑living relief for every Australian.

Strengthening Medicare and the services people count on.

And building a Future Made in Australia.

The 2 weeks leading into the Budget made clear just how important and urgent this work has been.

The human and economic costs of Tropical Cyclone Alfred.

Coming so soon after widespread flooding in north and far north Queensland – with more damaging heavy rains there just last week.

And now, fresh turmoil in the world – part of this fourth shock.

All of this vindicates the course we chose 3 years ago.

And validates the choices we made together.

Economic case for re‑election

This is where I want to pay tribute to the Prime Minister.

The leader Australians see standing with emergency services in disasters brings the same decency to every challenge confronting our nation.

Anthony’s leadership is defined by his compassion, his optimism – and his determination.

And he will make our case for re‑election to the Australian people with those same qualities and commitment.

This election will be about the strong foundations we have laid, the better future we are building – and the risk of our opponents wrecking it all.

It will be a referendum on Medicare.

A simple choice between Labor cutting taxes and helping with the cost of living –

And Peter Dutton’s secret cuts which will make Australians worse off.

Because he wants to cut everything except income taxes for workers.

Above all else it will be an election about the economy.

Labor’s economic case for a second term has 3 parts:

The progress we have made together in the economy and repairing the budget.

The work we are doing and the economic plan we are implementing – to boost wages, rebuild living standards, and make our economy more resilient, more competitive and more productive.

And the deliberate threat and significant danger that the Coalition pose if they form the next government.

Reason one: progress

The economic progress documented in the Budget last night belongs to every Australian.

It’s all the more remarkable against a backdrop of extreme global uncertainty.

To give you a sense of that, take inflation.

In the most recent quarterly data, inflation sits at 2.4 per cent – and just now, today’s monthly reading came in the same.

On election night, in May of 2022, inflation was more than double that and rising.

So when I stood here after our first Budget in October that year, inflation was nearly triple what it is today.

In that first Budget, we were talking about how far we had to go together.

Today, we can point to how far we’ve come.

We have brought inflation down while encouraging a broader recovery in our economy, now well underway.

Our fiscal policy helped break the back of inflation when it was at its peak.

It adjusted to support growth and preserve employment, as inflation came down.

And we’ve delivered responsible cost‑of‑living relief that has directly taken the pressure off prices.

Because of this a soft landing is coming into view –

With growth rebounding, living standards recovering, and the private sector playing a larger role.

The last financial year saw the highest level of business investment in over a decade.

Four in every 5 of the million jobs created have been in the private sector.

25,000 new businesses created each month this term – the highest average on record.

Real wages and living standards rising again.

While the gender pay gap is at near record lows and unemployment is at around 4 per cent.

Treasury expects employment growth this year will be stronger, inflation will come down faster, and participation will stay near its record high for longer compared with the mid‑year update.

So, our economy isn’t just growing faster, it’s growing in a way which will be stronger, more sustainable and more inclusive too.

All this, while successfully steering towards a stunning improvement in our fiscal position.

We inherited a mess and we’re cleaning it up.

The budget bottom line is $207 billion better off on our watch.

This is the biggest ever nominal improvement in a single term.

Turning $135 billion of Liberal deficits into surpluses worth $38 billion – the first back‑to‑back surpluses in 2 decades.

Almost halving the deficit we inherited for this financial year.

And improving the budget position every year of the forward estimates, compared to PEFO.

All this is a deliberate result of our responsibility and restraint.

Banking the vast majority of revenue upgrades – around 7 of every 10 dollars.

Restraining spending growth to 1.7 per cent – less than half the average under our predecessors.

Finding almost $95 billion of savings – more this term than they managed over their last 2 combined, with precisely zero in their last Budget.

Making real structural reform to secure the future of aged care and the National Disability Insurance Scheme.

Guaranteeing the choice, dignity and security they bring to millions of Australians.

And tackling high and rising interest costs.

Just after coming to government, they were forecast to grow by 14.4 per cent per year.

After 3 years of responsibility and restraint we’ve managed to cut that to 9.5 per cent.

A big part of this story is our decision to return the vast majority of revenue upgrades to the bottom line.

Not only has this improved the budget position by around $250 billion dollars to 2028–29.

It means we will save about $112 billion in interest payments over the medium term.

Reason 2: plans

We don’t see the substantial progress we’ve made on the budget as an end in itself.

Repairing the budget and rebuilding living standards go hand in hand.

Our responsible approach has made room for the 5 main priorities of this Budget.

Helping with the cost of living.

Strengthening Medicare.

Building more homes.

Investing in every stage of education.

And making our economy stronger, more productive, and more resilient.

These are essential components of our economic plan.

To strengthen our resilience in uncertain times.

To create a more dynamic, competitive economy.

And to rebuild incomes and living standards.

Rebuilding living standards

In this Budget we’re delivering more cost‑of‑living relief for Australians when it’s needed.

Extending energy bill relief.

Funding wage increases for care workers.

Making medicines cheaper.

Relieving student debt.

And lowering taxes for every taxpayer.

The combined benefit for an average household will be more than $15,000 from our 3 rounds of tax cuts and energy bill relief alone.

Substantial relief while also building the earning capacity of Australians for the future too.

By improving access to education – so that every Australian gets the chance to work in the jobs of the future.

By investing in Medicare and expanding bulk billing – minimising out of pocket health costs and time out of work.

And by moving towards universal early childhood education – so that parents can work more, if they want to.

These parts of our plan to rebuild living standards are distinct but interlinked.

Take our tax cut top‑up – a modest but meaningful addition to the tax cuts we’re rolling out already.

The average annual tax cut, after this year’s and next year’s, is $2,548 or about $50 a week.

Our tax cuts will:

Boost incomes by 1.9 per cent within 2 years.

Support the private sector recovery.

Increase participation by more than 1.3 million hours –

With Treasury estimating that 900,000 of these hours will be taken up by women.

And give people a better start in their careers with the average young worker receiving a tax cut more than twice the size they would have under the Coalition.

So, our tax cuts provide immediate relief while also boosting participation, aspiration, and Australians’ long‑term earning potential too.

Resilience

This focus on improving living standards is a big part of this Budget because it’s the fundamental mission of our government.

Creating opportunities, and helping people seize them in a world full of churn and change.

We cannot undo or ignore the shift from globalisation to fragmentation.

We can determine how we respond.

That’s what a Future Made in Australia is about.

It’s a pro‑trade agenda, that puts a premium on private sector investment.

It rejects self‑sabotaging tariffs and trade barriers, protectionism and isolationism.

It focuses on how we shore up critical supply chains and become indispensable to new ones.

This is critical to the jobs of the future.

And it’s vital to managing uncertainty now.

$30 billion of projects in sectors like green hydrogen, critical minerals and clean energy manufacturing have been proposed or are in development.

Our plan is to build on this progress – improving our resilience by unlocking our competitiveness.

In this Budget we’re facilitating more private investment in renewable energy – our fundamental comparative advantage in the new net zero economy.

We’re funding research in clean energy technology manufacturing and low carbon liquid fuels – so we can commercialise Australian innovations.

And we’re making big investments in green metals – leveraging our traditional strength in resources to build new opportunities.

Reform

A Future Made in Australia, powered by cleaner and cheaper energy, positions us as an essential part of the global net zero economy.

This will be critical to our growth prospects.

But it’s not the only part of our growth agenda.

We know the foundations of future success start with more competitiveness, and a more productive economy.

That’s why we’re reforming the payments system, our financial market infrastructure, approvals processes, our foreign investment framework and more.

It might be unusual to keep the wheels of economic reform turning in a pre‑election Budget, but that’s what we’re doing.

First, by banning non‑compete clauses for most workers.

And second, by creating a national licensing scheme for electrical occupations.

We’re proud of these changes because they show that the way to increase competition and productivity in our economy isn’t with scorched‑earth industrial relations –

Or making Australians work longer for less.

It’s with policy that boosts competition, while boosting wages and our workforce at the same time.

This is a Budget that’s pro‑worker, pro‑growth and pro‑competition.

Our reform to non‑competes will remove a handbrake on competition and a speedbump to aspiration.

Most workers will no longer need a lawyer to get a better paying job.

They won’t need permission from their old boss to become their own boss.

Instead, we’re empowering them to move jobs and earn more and start businesses if they want to.

This could add an estimated $5 billion annually to our economy.

At the same time as average wages for those freed from these restrictions could increase by up to $2,500 a year.

We’re also boosting competition and backing workers with a new occupational licensing regime for electricians.

Requiring electricians to get a new license every time they want to work inter‑state is unnecessary, costly red tape.

We’re making sure a sparky on the Tweed doesn’t need a different licence for a job in Coolangatta.

Broader licensing reform could lift GDP by up to $10 billion a year.

Which is why this change will be a template for future reform.

Reason 3: risk

Our progress to here, and our plan for what’s ahead, make up 2 parts of our economic case for re‑election.

The third is the risk that all this could be undone by a Coalition government.

Usually at this point in Budget week or the electoral cycle, you would set some basic tests for your opponent.

On this occasion they’ve already failed them.

The Coalition has put forward the ‘weakest policy offering from an opposition in living memory’, according to industry sources.

They either don’t have a clue or they won’t come clean.

But what looks like slapstick comedy masks more sinister intent.

We know this because Angus Taylor has told us, and the Coalition’s position on key issues has shown us.

Now, Angus and I don’t agree on much.

But to give credit where it’s due, he made one insightful point recently when he said ‘the best predictor of future performance is past performance’.

And – in a dramatic break from usual Coalition internals – Peter Dutton backed him in.

On this, they are absolutely right.

Their past performance is no surpluses, more waste and rorts, and more debt.

Their past performance is middle Australia missing out – with real wages in reverse and living standards falling fast.

Their past performance is much higher and rising inflation.

Their past performance is Peter Dutton’s attacks on Medicare.

But it is not just their record in government that reveals their priorities and what they would do if elected.

Their recent record in Opposition makes it very clear:

Australians would be worse off under Peter Dutton.

When he cuts, Australians will pay.

Cutting cost‑of‑living help is the only motivation that binds this Coalition clown show together.

They’ve opposed cuts to student debt and energy bill relief.

Opposed cheaper childcare and cheaper medicines.

Opposed more homes and more Urgent Care Clinics.

Today they voted for higher taxes on Australian workers.

Australians would be much worse off if Peter Dutton had his way and they’ll be worse off still if he wins.

This brain snap from Angus Taylor on tax makes that crystal clear.

It means this parliamentary term finishes like it started:

Labor helping Australians with the cost of living and Peter Dutton and the Coalition trying to prevent it.

The Liberals and Nationals have now opposed 3 tax cuts, 3 times in 3 years.

Instead of working with us to help Australians, they’ve got secret plans to harm them.

It beggars belief that Peter Dutton says he will make hundreds of billions in cuts, but won’t tell Australians where or how.

There’s only one reason for that – and people should know about it.

The Coalition can’t find the $600 billion they need for nuclear, or the billions in cuts they’ve promised, without coming after Medicare again.

The point I’m making is this.

When the Australian economy is turning a corner.

And the global economy is taking a turn for the worse.

We can’t afford to turn back.

Not when so little is known about the alternative.

Conclusion

I know this tradition is as much about your questions as it is about the Treasurer’s address.

So let me just share some final thoughts.

There are familiar rituals and rhythms to Budget week.

Even after 20 years, you can still get caught up in them.

But a budget is never about one week, or 5.

It’s overwhelmingly a program for the years ahead.

Ours also makes the economic case for re‑election.

More than that, it spells out our plan for action to build on the progress we’ve made together.

Now, it’s probably fair to say that over the years and out in the suburbs there’s been a flattening of expectations of what we can achieve through economic policymaking.

And a narrowing of our collective sense that political leadership can make a real and tangible difference in people’s lives.

Every one of us has reason to reflect on our role, but also, on whether we can turn it around.

Because Australians should be proud of all that we have achieved together.

We are on the cusp of something extraordinary in our economy.

But something prevents us from saying so.

Maybe that’s because of Australians’ natural streak of humility.

Maybe after years of crisis, we’ve trained ourselves to brace for the next one.

Maybe it’s the erosion of trust in institutions that we see around the world.

Something that Australia has so far managed to avoid the most extreme fallout from.

But a big part of it is undoubtedly due to the pressure people are under.

We get that.

Because, while we have every reason to be optimistic about the future, we understand that this can often run ahead of
how people are faring and feeling.

For many Australians, the pressures of the past few years have been substantial.

So let me say we don’t just acknowledge that – we’re doing something about it.

You saw that again in the Budget last night.

Yes, inflation is coming down, real wages are up, unemployment is low, interest rates have started coming down, the economy is bouncing back.

But for many people, the gap between working hard and getting ahead still needs eliminating.

That’s why there’s more work to do.

It’s why our focus isn’t confined to the national numbers – as important as they are.

This Budget is about more than turning the corner, it’s a plan for where we go next.

Not just putting the worst behind us –

But seizing what’s in front of us.

In this new world of uncertainty –

Creating a new generation of prosperity –

That is stronger, because it is more inclusive –

In the better future that we’re building together.

Thanks very much.

MIL OSI News –