by Alan Thornhill
Tests for the Age Pension will be tightened, as the result of a deal between the Federal government and the Greens.
That deal saw the new tests – which the government announced in its May budget – become law when the Senate passed the necessary legislation late last night.
This means that at least 170,000 pensioners with low and modest levels of assets will have their pension increased by around $30 a fortnight.
However the changes will also mean cuts in part pensions for another 235,000 people.
And 90,000 others – with large amounts of assets- will lose their part pensions entirely.
The changes will save the government $2.4 billion.
Labor had opposed them.
The Greens leader Richard Di Natale said that – in striking the deal with the Coalition – he had managed to convince the Government to put superannuation back on the agenda.
But the Prime Minister, Tony Abbott, told parliament – after the deal was struck – that his government is not planning any changes to superannuation.
The government described last night’s vote as a major victory.
Social Services Minister Scott Morrison said it was both a win for pension fairness and for the budget bottom line.
“This is a fairly emphatic endorsement of the Government’s policy, but also of the Government’s budget,” he said.
“The have-a-go budget is gaining real traction in the Senate.
“Some $3.5 billion worth of savings passed the Senate, not just the pension assets test change but also the seniors supplement passed.”
However, Labor’s Jenny Macklin said the Greens had been “completely dubbed” as the Government had made it clear they would not change tax concessions on superannuation.
by Alan Thornhill
Scott Morrison told parliament today that pensioners were not treated badly in the May budget.
In fact, the Social Security Minister said, “the most vulnerable” would be receiving a rise of $30 a fortnight.
He said the new rates, to apply from January 1 2017, had been set after discussions with interested parties, including the Australian Council of Social Service.
Mr Morrison’s defence of the government’s position followed an attack earlier in the day, by the Shadow Minister for Families and Payments, Jenny Macklin.
Ms Macklin said new research had shown that Tony Abbott’s second budget is “just as unfair as his first.”
Her observation was based on research by Ben Phillips, of the Institute of Governance and Policy Analysis.
Mr Phillips, in turn, used modelling by the National Centre for Social and Economic Modelling.
Mr Phillips said the May budget papers, combined with old measures yet to pass the Senate, show that the government expects to get a total of $18 billion, over the forward estimates period, through savings and tax increases.
But he said that while the poorest 20 per cent of households would account for 33 per cent of this extra money, the top 20 per cent would account for only 7 per cent.
Ms Macklin said this research also shows that more than 1.4 million families will be worse off.
“Tony Abbott’s second budget is just as unfair as his first, and will hit low and middle income families the hardest,” Ms Macklin said.
“80 per cent of families with children earning below $75,000 will lose out overall,” she added.
Ms Macklin also said six out of seven families who receive Family Tax Benefits will be worse off because of the Government’s child care changes and Family Tax Benefit cuts.
“One in ten families receiving Family Tax Benefit will be over $4,000 a year worse off,” Ms Macklin added.
“The Government’s child care changes will push some families out of the child care system altogether, while others will have their access cut in half,” she said.
“By linking child care changes to Family Tax Benefit cuts, Tony Abbott and Scott Morrison are holding families to ransom.
“Tony Abbott promised not to fix his budget at the expense of the family budget – but that was a lie,” Ms Macklin said.
“Low and middle income families, and children who need access to early education and care, will be hurt the most by Tony Abbott’s Budget,” she added.
by Alan Thornhill
Tony Abbott says Labor has “used and abused” economic research in its campaign to show that the Federal budget is unfair.
Speaking at question time in Parliament today, the Prime Minister said the research, by the National Centre for Social and Economic modelling did not – in fact – model this year’s Federal budget.
He did so after the Opposition Leader, Bill Shorten, sought to press Labor’s campaign, at question time in Parliament today.
The Treasurer, Joe Hockey, suggested yesterday that NATSEM’S report might – in fact – be nothing more than a two page document – signed by a Labor staffer.
Mr Abbott said today that NATSEM had put its report up on its website, to give the public access to it.
It concluded that The poorest 20 per cent of Australian families will pay $1.1 billion more into government coffers than the richest households as a result of the budget, highlighting the huge inequity in the government’s four-year blueprint for fiscal repair.
Its analysis also found that the weight budget consolidation is falling disproportionately on low income families, especially those who have school-age children.
NATSEM divided the community into five segments or quintiles, each with a little over 2.5 million families.
It found that the poorest 20 per cent – those with $35,000 or less in disposable annual income – will forgo $2.9 billion over four years thanks to changes to family benefits, pensions and other payments.
But it said the wealthiest 20 per cent – earning $88,000 or more after tax and benefits – will suffer a $1.78 billion hit, some 40 per cent less than the lowest income families.
NATSEM also said that – overall – those in the lowest quintile will see incomes their incomes fall by an average of almost 2.2 per cent while it is a decline of only 0.2 per cent for those in the highest quintile.
by Alan Thornhill
The haggling over cuts in this year’s Federal budget has only just begun.
The Opposition Leader, Bill Shorten, and his Shadow Health Minister, Catherine King, made that clear in a joint statement they issued on the eve of this week’s resumption of Parliament.
They said:”This week Labor will hold the Abbott Government to account for its sneaky Budget cuts through the Australian Parliament.”
Its campaign will have support.
The Australian Council of Social Service issued a report at the weekend concluding that low income families would lose heavily, from the combined impact of the Abbott government’s first two budgets.
And the Australian Greens have declared that they, too, will oppose proposed budget cuts they believe will hurt some of the nation’s most vulnerable people.
The government’s main problem, in all of this, is that it still does not have the Senate majority it would need to steer its proposals through parliament.
Mr Shorten led he attack, saying:” Australians know this Budget was…repackaged for an opinion poll.”
But he said the public had been kept largely in the dark on the new cuts and unfairness in this Budget.
“Labor will forensically interrogate the extent and the impact of Government’s latest Budget cuts through all of the accountability mechanisms of the Parliament,” Mr Shorten said.
“The Government has done its best to hide the latest round of cuts to health, education, families, veterans, aged care and security from the Australian people,” he added.
“While the Government claimed this Budget would be good for families these cuts, on top of cuts to family payments from the last Budget, will leave Australian families worse off,” he added.
The Labor leader, too, referred directly to the ACOSS analysis, saying:”… ACOSS has estimated that the combined cost of cuts to families in this Budget and the last, to be around $15 billion in total.
“There is no doubt that these secret cuts will once again be felt by the most vulnerable in our community,” Mr Shorten said.
“The Government has cut $2 billion from health and aged care but exactly where those cuts will be felt remains unclear.”
But he said that includes:-
– $125.6 million cut to Child Dental Benefits (Schedule Budget Paper No.2 page 100).
– $144.6 million cut to the MBS for child health assessments (Budget Paper No.2 page 103).
– $69.6 million cut to dental and allied health for Veterans (Budget Paper No.2 page 180).
– $20.1 million cut from the Dementia and Aged Care Service Fund (Budget Paper No.2 page 151).
Mr Shorten added that the cuts also include almost $1 billion cut to an undisclosed number of health programs Budget Paper No.2 page 110.
“The Government must explain exactly which health programs have been targeted and who will be affected,” he said.
“Labor is extremely concerned that the Government has dishonestly hidden cuts to small programs for Australians suffering severe health conditions in this $1 billion cut, Mr Shorten said.
He declared that Labor “will continue to stand up against this government’s short-sighted, unfair cuts that hurt the most vulnerable in our community.”
by Alan Thornhill
How’s Tony going?
With Federal parliament about to begin its winter sittings that is, undoubtedly, the central question in Australian politics now.
But let’s take a broader look.
The bounce that the government has received in the polls after its second – and more user friendly – budget was predictable.
What we don’t know yet is whether Tony Abbott can hold – and build on his new found support – or whether things will slip back to where they have been over recent months.
There are several complications.
Neither of the major parties, for example, has its natural leader at its helm.
In retrospect, the independents Tony Windsor and Rob Oakeshott had a point – when they decided after the 2010 election that Tony Abbott didn’t have the stability needed to be a Prime Minister – and supported Labor instead.
And many Liberals would still feel more comfortable under their former leader, Malcolm Turnbull, than Mr Abbott as they move towards the next elections.
Mr Turnbull, certainly, has his faults.
But he also has an eloquence – and related gifts – that Tony Abbott simply cannot match.
A look over the fence, though, shows that Labor isn’t led by its best man, either.
With names like Gough Whitlam, Bob Hawke and Paul Keating, still ringing in Australian politics, Labor has produced some real political pizzazz in recent years.
Bill Shorten is not – yet – being compared with any of those Labor heroes.
The most common complaint, in Labor circles, about the current Opposition Leader is that he is simply “not cutting through.”
Not yet, at least.
And the time – before the next election – whether early or not – is running out very quickly.
But Chris* Bowen who is – probably – Labor’s best bet – if Bill was to go – has simply shown no interest so far in trying out for the nation’s top job.
Tony Abbott bases much of his political appeal on something very deep – and not particularly respectable – in the Australian political psyche.
He does that as he boasts,constantly, about stopping the boats.
And, none too modestly reminds us of the much feared “refugee flood.”
However a growing number of voters is recognising the contribution that Vietnamese refugees are making to the sophistication of Australian life.
And many are starting to back the Greens.
This moving batch includes a substantial clutch of voters who have, traditionally, supported Labor.
That is causing senior people, in the Labor movement, to ask whether their party’s policy of falling into line with the Libs, on border protection, isn’t producing an unintended consequence.
That is setting up the Greens, as a third force, in Australian politics.
Couldn’t Australia do better by looking for something better in the – admittedly complex – field of refugee management?.
As some of our closest neighbours are already doing.
Then, of course, there’s the economy.
With growth slow – and the Reserve Bank assuring us that it is likely to remain so – over the politically critical period ahead – this is an area in which Labor should be able – at least – to make a real fight of it.
While it is true, at least, that the Abbott government’s second budget isn’t as bad as the first, in the public mind, that is not – necessarily – saying all that much.
The most detailed analysis of the latest budget, so far, is undoubtedly that produced by the Australian Council of Social Service.
It has not added to the euphoria, that has greeted Joe Hockey’s second budget, so far.
Quite the opposite.
As the Australians Greens Senator Rachel Siewert, says:”analysis by ACOSS shows that Mr Hockey’s two budgets rip an estimated $15 billion from low and middle income households over four years.
“This entrenches the Abbott Government’s vicious agenda to pursue our most vulnerable rather than the big end of town.
“Mr Hockey should be ashamed of this figure, especially considering his by-line urging all Australians to ‘have a go’.
“Each day this Government pursues these measures they further disadvantage those in need.
“The Abbott Government’s pursuit of vulnerable Australians is intensified by his failure in the budget to address the inadequacy of income support payments such as Newstart.
“People will continue to slip further behind and vital services that would have provided support have been cut.
“We know that the Government is harsh and paternalistic when attempting to balance the nation’s purse, but they will find it difficult to push harsh measures that pick on our most vulnerable through the Senate.
“I urge the Government to move away from severe measures that hurt our most vulnerable.
“This includes keeping people under 25 off income support for a month, offering a ‘families package’ at the expense of cuts to Family Tax Benefit Part B, and no increase to the Newstart Allowance.
“We are a caring society and can do better,” Senator Siewert said.
ACOSS is not a natural friend of the government.
But analysis, like this, carries weight.
That is still not clear.
*An earlier version of this story had the name as Lionel, not Chris Bowen. My mistake
by Alan Thornhill
There are big gaps between the rich and the poor in Australia, according to the OECD.
It reports that the top 20 per cent of Australians earn more than five times as much as those in the bottom 20 per cent.
However the OECD also reports that Australia performs very well in many measures of well-being relative to most other countries in the Better Life Index.
“Australia ranks at the top in civic engagement and above the average in environmental quality, health status, housing, personal security, jobs and earnings, education and skills, subjective well-being, social connections,” it says.
But it adds that we are below average in work-life balance.
It says in Australia, 14 per cent of employees work very long hours, higher than the OECD average of 13 per cent.
That’s mostly due to men.
The OECD said, with 21 per cent of Australian men work very long hours compared with just 6 per cent of women.
by Alan Thornhill
Heavy staff cuts, in Australia’s public service, are leaving many vulnerable people out in the cold, as winter approaches.
One result of those cuts is that many phone calls to Centrelink simply go unanswered.
Greens Senator Rachel Siewert said the number of unanswered calls last year exceeded the entire number of people living in Australia.
“26 million unanswered calls last year is a staggering number,” the Senator said.
But she said this “echoes complaints I have consistently received from people trying to seek services and advice.” she said.
Senator Siewert is the Greens spokesperson on Community Services.
She bases her charge on evidence to a Senate Estimates Committee.
“During estimates in February the Department of Human Services played down my questions about unanswered calls and busy signal.
“I hope the Department does not continue to downplay the issue following these overwhelming statistics.
“Nearly half of 57 million phone calls unanswered is simply not good enough.
“People on payments such as the Disability Support Pension, Newstart and Youth Allowance need access to advice and support; people are already struggling, they deserve a decent service.
“I will continue to chase this in upcoming estimates, it is clear this needs to be resolved as soon as possible,” Senator Siewert said.
by Alan Thornhill
Madam Speaker, I move that the Bill for the 2015 Budget now be read a second time.
Tonight I am speaking directly to you the people of Australia.
I want to inform you of the next steps in the Government’s plan to strengthen our nation’s economy.
As we all know over the past twelve months, Australia has had to deal with its fair share of challenges.
We have stared down terrorist events in Sydney and Melbourne.
We have had to deal with a terrible drought in Queensland and New South Wales.
On the economic front, iron ore prices have fallen dramatically and the recovery in the global economy has been weaker than expected.
But I say to you, the economic plan laid down by this Government more than a year ago, is in place and it is helping us to deal with these challenges.
Through careful planning we are successfully navigating the difficult transition from a mining investment boom, to one of broader?based growth across our economy.
In the past 12 months we have coped well with weaker than expected global demand, lower commodity prices and falling revenue.
Even in the face of the largest fall in our terms of trade in half a century, which has contributed to a significant fall in tax receipts, our economic plan has helped Australia to have one of the fastest growing economies in the developed world.
I can report tonight that despite the headwinds, our timetable back to a Budget surplus is unchanged from last year.
We inherited $123 billion of deficits when we came to office. We have now brought that down to $82 billion over the next 4 years.
This is despite the fact that we have lost $90 billion in expected tax revenue over the same period.
A $40 billion improvement in the bottom line is good, but we need to do more.
On a daily basis we borrow $96 million just to pay our bills, which is down from the $133 million a day that we inherited when we came to Government.
So today we have taken steps to continue repairing the Budget with sensible savings and a prudent approach to spending. We are redirecting funding to areas, such as small business, child care and infrastructure, which will boost growth and create jobs.
At the same time we have been repairing the Budget, we have overseen a strengthening of growth in employment, housing construction, retail trade and exports.
This is not an accident.
Since we came to Government, we have abolished job?destroying taxes like the carbon tax and the mining tax.
We have helped create a quarter of a million new jobs and there are more to come … a lot more.
We have abolished 50,000 pages of regulation and red tape which was costing our economy nearly two and a half billion dollars a year.
We are rolling out the biggest infrastructure programme in Australia’s history, with new road and freight corridors being built right across the country.
We have helped to bring down the cost of living — Australians today are paying less for their electricity and less on their mortgages.
I say again, our economic plan is working, and things are getting better.
A lower Australian dollar is now providing a boost to sectors like manufacturing in South Australia and Victoria, and tourism and education in Queensland.
On election night, the Prime Minister declared that Australia was back open for business. His words have been proven true. Since then we have seen a significant increase in approved foreign investment applications in Australia, up 23 per cent in the past year alone.
The world has expressed its growing confidence in Australia’s economic future. I too share that optimism.
This Budget is the next step in our economic plan.
This Budget empowers small business to invest, grow and create jobs.
This Budget gives Australians the opportunity and freedom to participate in the workforce — no matter what their circumstances.
This Budget continues to implement our plan to build new roads, new rail and new infrastructure that will generate new growth opportunities across all parts of Australia, from our cities to regional areas, from Tasmania to our northern frontier.
A great economic opportunity
Madam Speaker, the global economy is turning for the better.
The United States is back to near full employment, Europe is looking a little stronger, and Japan is finally starting to grow.
And our biggest trading partner, China, continues to grow at nearly 7 per cent, despite a recent slowdown.
With more than 1.3 billion consumers living in China, the demand for our exports will continue to grow.
For every dollar we spend buying Chinese goods and services, the Chinese spend two dollars buying our goods and services.
We are the big winners out of this relationship.
Each year we send enough iron ore to China to build the Sydney Harbour Bridge, from Sydney to Perth, and then back to Sydney again.
And in the next five years we will become the world’s largest exporter of Liquefied Natural Gas. Together with our annual exports of coal, this is enough energy to power Tokyo, Singapore and Mumbai for an entire year.
And while prices are lower, and we wish they were higher, the opportunities from Asia for our resources are enormous.
People ask me where are the future jobs going to come from. Well consider this, if we could lift our service exports like higher education, tourism, health care and financial services, to just half the level of our commodity exports, it would add $50 billion to our economy each and every year.
That’s why, in order to open that door, we are investing $6 billion in new trade agreements with China, Korea and Japan. And we are expanding that to India, which is the fastest growing economy in the world, but still a very small trading partner of Australia.
Australian based businesses, exporting our own home grown skills, in everything from advanced manufacturing to services, will be the big new drivers of wealth creation and job creation over the next decade.
This is the growth opportunity that Australia has been patiently waiting for, and it is here and it is available now.
So as part of our economic plan we need to do more to help business, particularly small business, take advantage of these opportunities.
Energising small business
Madam Speaker, I like so many of my colleagues, grew up in a small business family.
That small business put a roof over our heads. It paid the bills. It gave all of the family a chance at a better life.
Small business is often a family business. A business of brothers and sisters, uncles and aunts, cousins, parents and children. And for those who work in a small business, who are not related, well they often become family.
Our future growth will come from growing small business into big business.
Every big company in the world started small.
Every big idea in the world came from just one person, or a handful of people working together.
That is why tonight, I am announcing a package of measures that will make a genuine and permanent difference to small business in Australia.
To start, every small business will get a tax cut. We are giving you back more of your own money.
From 1 July this year, small companies with annual turnover of less than $2 million will have their tax rate lowered, from 30 per cent to 28 and a half per cent.
This is the lowest small business company tax rate in almost 50 years.
Most small businesses are not run as companies. So we will also give an annual 5 per cent tax discount of up to $1,000 a year for unincorporated businesses.
We are the only Government that will deliver tax cuts for small business because we want small business to grow and employ more Australians.
But we recognise that small business, in order to succeed, needs better cash flow and better tools for innovation as well.
So I announce, that from 7:30pm tonight, small business can claim an immediate tax deduction for each and every item they purchase up to $20,000.
From tonight, it can be instantly written off to reduce your tax liability.
And this will benefit the 96 per cent of Australian businesses — more than 2 million of them — that have a turnover of less than $2 million a year.
This will be of enormous benefit to their bottom line and help businesses with their cash flow.
It means innovation.
It means jobs.
It means more money to invest and grow your business.
If you run a café, it might be new kitchen equipment, or new tables and chairs.
If you’re a tradie, it might be new tools or a computer for the home office.
Cars and vans, kitchens or machinery … anything under $20,000 is immediately 100 per cent tax deductible from tonight.
We also want Australians to start a new business, and we want them to grow.
Because new businesses create new jobs.
That is why we will ease the financial strain by allowing business owners to immediately deduct the costs incurred when starting up a new business, or receive tax relief when restructuring their existing business.
In addition, we are expanding the tax concessions for Employee Share Schemes, to make it easier for small start?up companies to attract the skills and talent they need to grow.
Unlike the old system, under the old government, employees won’t have to pay tax on their shares until they actually receive a financial benefit from those shares.
This is great for workers and it is great for innovative start?ups.
And to help small business grow, we are facilitating new opportunities for crowd?source funding, making it easier for small investors to marry up with growing small businesses.
And in a further new policy initiative which is just common sense in the digital age, we are abolishing Fringe Benefits Tax on all portable electronic devices used for work, like mobile phones, laptops and tablets.
We need to keep up with developments in the new digital economy. Accordingly the Government is investing $255 million to make your dealings with the Tax Office, Centrelink, Medicare, and other government agencies easier, simpler and faster.
Farmers and regional communities
Madam Speaker, in many ways farmers are the most resilient of all Australians and they are also our best environmentalists.
They have to deal with the varied conditions of a big land, fierce global trade and ever increasing competition.
At the moment, we have parts of our country that remain in drought. As such, we are committing over $300 million to help them get through these tough times.
Equally important, as part of our economic plan, we need to start preparing for the droughts beyond today.
So all farmers will get an immediate tax deduction for new investment in water facilities, and a three?year depreciation allowance for all capital expenditure on fodder storage assets.
In addition, all farmers will be able to fully deduct the cost of new fencing from their tax bill. This initiative will help to improve productivity and environmental management of the land.
Over the next few weeks, after further discussion with farmers, we will be releasing more details about our plans to strengthen agricultural production across Australia.
Investing in the future
Madam Speaker, this is a Budget that unleashes our nation’s potential.
An extraordinary area of untapped promise is Australia’s North. This is an exciting frontier for economic development that is filled with abundant resources and talented people.
Its tropical climate is shared with two thirds of the world’s population, and of course it’s closer to our key trading markets than any other part of our country.
But the North needs new infrastructure to get things moving. We need to build in order to grow.
I announce tonight a new $5 billion Northern Australia Infrastructure Facility which is the first major step in our plan for our great North.
We will partner with the private sector and governments of Western Australia, the Northern Territory and Queensland, to provide large concessional loans for the construction of ports, pipelines, electricity and water infrastructure that will open our Northern frontier for business.
This commitment to nation building adds to the record $50 billion in transport infrastructure we announced in last year’s Budget. Infrastructure that is now, as I speak, under construction.
Through this new investment we are laying down strong foundations to get Australia ready for its economic future.
Families and child care
Madam Speaker, a nation that lives as a family must help to strengthen and support all of its families.
Next year we will spend $38 billion to support families, which includes more than $7 billion on child care.
Australian parents work hard to juggle the demands of modern life.
It is a difficult balancing act.
Just weeks after coming to Government in 2013, I initiated a Productivity Commission inquiry into child care. Since that time, we have consulted widely and as a result we are allocating an additional $3.5 billion to reform the child care system.
We want to give parents a choice about work, and by investing this money we are responding to the demands of 165,000 parents who want to work more, but are prevented from doing so by the current costly and complex scheme.
Our reforms will make the system simpler, and ensure child care is more affordable, accessible and flexible.
Madam Speaker, this Government knows there are many Australians who want a job and can’t get one. As part of our economic plan, we are doing more to help.
The level of youth unemployment in Australia is too high.
So tonight I announce this Government will invest more than $330 million to help young and disadvantaged Australians get their start.
This will include a new $212 million Youth Transition to Work programme that will fund community workers, on the ground, in high youth unemployment areas.
Furthermore, there will be an additional $106 million of intensive support trials for job seekers of all ages, who are facing the most significant barriers to employment.
We are also improving the national work experience programme so that 6,000 people can get genuine work experience in a real workplace.
Whether you are young or old and no matter where you live, we want all Australians to have the opportunity to get a job and stay in a job.
This Budget will have a $1.2 billion National Wage Subsidy pool to target long?term unemployment. Following consultations across the community, we are reshaping the pool, including the Restart programme for older workers, to ensure that the subsidies are available when and where they are most needed.
A better retirement
Madam Speaker, I want to reassure all Australian workers they can have confidence in their retirement plans.
There will be no new taxes on superannuation under this Government.
And the Age Pension will continue to increase, twice a year, this year, and every year — at the highest available indexation rate.
The Age Pension is our Budget’s biggest item of expenditure, $44 billion a year. This is more than 10 per cent of all government spending.
The Age Pension is a critically important safety net for many Australians.
That is why as our population ages, we need to ensure the pension is sustainable and affordable.
So from 1 January 2017, we will make changes that benefit pensioners with fewer assets beyond the family home. But we will also tighten eligibility for those pensioners with higher levels of assets.
Importantly anyone who currently has a Pensioner Concession Card will continue to receive a concession card that provides the same benefits, such as subsidised utilities and transport, bulk billing and cheaper PBS prescription medicines.
These measures are all intended to provide security and certainty for older Australians in the years ahead.
A stronger health system
Madam Speaker, we are building a stronger and more sustainable health system.
The Pharmaceutical Benefits Scheme has, for over 60 years, given Australians affordable and reliable access to a wide range of drugs.
In this Budget, the Government continues its commitment to new listings on the Pharmaceutical Benefits Scheme, at a total cost of $1.6 billion.
To give you one example, around 1,000 people will now benefit each year from subsidised access to better treatments for certain types of melanoma. Some of these treatments have until now, cost up to $131,000 per course of therapy. Now they are accessible for all Australians.
It is however not enough to subsidise existing drugs.
We need to find the next generation of treatments and cures.
Last year I announced the creation of the Medical Research Future Fund, which will become the biggest medical research endowment fund in the world. Starting this year, and over the next four years, the Government will distribute $400 million from the Fund, to help our best and brightest medical researchers develop the drugs and cures for the future.
Keeping Australians safe
Madam Speaker, the highest responsibility of any government is the safety and security of its citizens.
When it comes to national security, there can be no shortcuts.
This year we will commit a further $1.2 billion to make Australia safe and secure. This builds on the $1 billion of extra funding we committed last year.
This is an essential investment for our nation and it is working.
As we know from events as recent as last weekend, the more work we do, the more likely we can prevent tragic incidents from happening in our community.
The threat of terrorism is rising and ever evolving and our response must be swift and uncompromising.
We must have the best counter?terrorism capabilities possible.
Tonight the Government is committing an extra $450 million for our intelligence capabilities, to ensure that we have the very best equipment and skills necessary to keep our communities safe.
Overseas, our military personnel are leading the fight against terrorism.
The Government is providing $750 million for military operations this year, including our efforts to disrupt, degrade and ultimately destroy D’aesh in Iraq.
To help pay for this, our tough stand on border protection is delivering a dividend.
Our border protection policies have stopped the boats and they have saved lives. As a result, we are saving more than $500 million from closing unnecessary detention centres and we are saving on the costs of processing new boat arrivals.
Levelling the playing field
Madam Speaker, fairness is essential to the integrity of our taxation system.
So I say to all Australians, rather than introducing new taxes on you, we simply want people or companies who are avoiding their tax to pay their fair share.
As a result of Tax Office investigations we have identified 30 large multinational companies that may have diverted profits away from Australia to avoid paying their fair share of tax in Australia.
Everyday Australians rightly believe that if a dollar of profit is earned here, then you should pay tax here.
Unfortunately this is not always the case for some multinationals. Many have the capacity to aggressively minimise their tax.
What that means, is that families and small businesses are forced to carry more than their fair share of the tax burden.
Tonight I am releasing the details of a new Multinational Anti?Avoidance Law, that will stop multinationals using complex schemes to escape paying tax.
Under this new law, when we catch companies cheating, they will have to pay back double what they owe, plus interest.
In addition, it is unfair that overseas based businesses selling services into Australia may not charge GST when local businesses have to charge GST.
A local business that employs Australians, pays rent in Australia, pays tax in Australia, and helps build our economy is disadvantaged by the current system.
We will level the playing field for Australian businesses by mandating that foreign businesses supplying digital products and services are subject to the GST.
Madam Speaker, tonight I am also tabling for Parliament’s consideration a second Bill that directly addresses this issue.
Everything we spend in this Budget is being paid for by prudent savings in other areas.
We don’t want to increase taxes on Australians, but we do want everyone to pay their fair share along the way.
In this Budget, we are amending the Zone Tax Offset so that it is only available to those who have genuinely moved to specified remote areas, saving $325 million.
We are limiting Fringe Benefits Tax entitlements on overly generous meal and entertainment expenses, capping them at $5,000 a year per person, saving $295 million.
And anyone on a working holiday in Australia will have to pay tax from their first dollar earned, rather than enjoying a tax?free threshold of nearly $20,000. This will save the Budget $540 million.
And the need for fairness and a level playing field applies in other areas.
We are making changes to strengthen Australia’s foreign investment framework by introducing a new fee regime, better enforcement and stricter penalties. This will deliver $735 million of revenue to the Budget.
These integrity measures protect those who are doing the right thing.
They promote trust.
And they’re all part of responsible budgeting.
Madam Speaker, as I said last year, the debt and deficit mess that we inherited was not of our making, but we have taken positive action that is delivering results.
Australia’s budget position is getting stronger each and every year.
From a $48 billion deficit we inherited, to $35 billion next year, down to a $7 billion deficit in another three years’ time.
And over the same period, we are reducing the size of government as a share of the economy.
Of course there is more work to be done on Budget repair. Every nation must live within its means, and Australia is no different.
But we cannot tax our way to prosperity. And we must continue to look for sensible savings.
When we invest taxpayer money, we must do so with great care.
Despite the iron ore price having halved, we are still on a clear and credible path back to surplus and gross debt in a decade will be over $110 billion lower than what we inherited.
Madam Speaker, this Budget is responsible, measured and fair.
We are creating opportunities for job seekers, young and old.
We are caring for our most vulnerable.
And we are keeping the country safe and secure.
This is a Budget for small business people who want to innovate and grow.
This is a Budget for young people wanting to get a foot in the door.
This is a Budget for parents juggling the complexities of modern life.
This is a Budget as much for the miners of the Pilbara, as it is for the farmers in the Mallee. It is as much for a family in Brisbane, as it is for a start?up business in Adelaide.
This is a Budget that helps build a stronger, safer and more prosperous Australia.
Madam Speaker, I believe our nation’s best days are ahead of us. So now is the time for all Australians to get out there and have a go.
I commend the Budget Bill to the House.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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