Senator the Hon. Mathias Cormann
Minister for Finance and the Public Service
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 26 September 2018
In September 2013, when we were first elected to government, the Australian economy was weakening, unemployment was rising and the Federal Budget position was rapidly deteriorating.
We came into government with a plan to deliver stronger growth, more jobs and to repair the Budget.
Five years on the evidence is that our plan is working.
Our economy is stronger, employment growth is much stronger, the unemployment rate is well below where it was anticipated it would be and the Budget is demonstrably on a stronger, more sustainable foundation and trajectory for the future.
Stronger growth and more jobs provide better opportunities for Australian families to get ahead. A stronger, more sustainable Budget, keeping expenditure growth under control, ensures we can secure the necessary funding for all the important social, health and other public services Australians expect over the longer term without having to increase taxes, which would hurt the economy and put jobs at risk.
For example, our stronger Budget is why we have been able to invest billions of dollars providing affordable access to important new medicines through the Pharmaceutical Benefits Scheme and why we can guarantee that we will continue to list all those medicines the medical experts on the Pharmaceutical Benefits Advisory Council recommend.
Contrast that with Labor's loss of control of the Federal Budget. In 2011 they were forced to defer listing important new medicines on the PBS "until fiscal circumstances permit".
That was after spending billions on pink batts and overpriced school halls.
Our stronger Budget position is also why we can afford to fix the GST, delivering a better, fairer deal to WA in a way that is also fair for all other States.
When Treasurer Josh Frydenberg and I delivered the Final Budget Outcome for 2017-18 yesterday, it showed a $19.3 billion improvement in our Budget bottom line compared with the 2017-18 Budget forecast.
The $10.1 billion deficit for 2017-18 is the smallest deficit in ten years.
It was driven by stronger revenue on the back of both stronger economic and employment growth, as well as lower payments than anticipated at Budget time.
Having cut company tax for businesses with a turnover of up to $50 million a year in early 2017, company tax receipts in 2017-18 were up by $6.8 billion as a result of stronger growth in corporate profits and increased ATO compliance activity.
Personal income tax revenue was up and welfare payments were down on the back of more Australians than ever in paid work.
This is the second year in a row that our actual Budget bottom line is better than that forecast at Budget time.
It shows that our Budget assumptions are credible and appropriately prudent and that, having inherited a deteriorating position, we have been able to turn that situation around and now continue to make progress heading in the right direction.
This is not the time to put what has been achieved and what can be secured into the future at risk.
During its last six-year period in government, Federal Labor delivered significantly worse final Budget outcomes in all but one of their Budget years.
For 2012-13, the final Budget bottom line was $20.3 billion worse than forecast.
Labor's last Budget in government was delivered in May 2013 and by the time of the independent Pre-Election Economic and Fiscal Outlook just three short months later the Budget bottom line for that one year had already deteriorated by $12 billion.
Importantly, after five years of Liberal-National Government we were able to report on actual employment growth in our economy in 2017-18 of 2.7 per cent (translating into about 350,000 new jobs). That is nearly four times stronger than the 0.7 per cent employment growth recorded in 2013-14, a level that was too low to prevent the unemployment rate from rising. In his first National Press Club Speech as shadow treasurer in December 2013, Chris Bowen argued, among other things, that we should be judged based on whether or not we would keep the unemployment rate below 6.25 per cent. Well, it is down to 5.3 per cent.
Why is all this relevant today? Because Bill Shorten and Chris Bowen were senior members of the Labor government that delivered a weakening economy, rising unemployment and a deteriorating Budget position.
And they haven't learnt the lessons of the past.
Between 2007 and 2013 it was Labor's anti-business, anti-jobs agenda with tax grabs like the mining tax, the carbon tax and others, chasing reckless, unaffordable spending increases, which made us less competitive and over time weakened our economy and our Budget position.
We have been able to turn that around with a pro-business, pro-growth, pro-jobs agenda designed to deliver better opportunity for all Australians to get ahead, combined with prudent fiscal management putting our Federal expenditure on to a sustainable trajectory for the future.
Mr Shorten and Mr Bowen have already announced more than $200 billion in higher taxes if they are elected to government next year which would harm the economy, cost jobs and leave Australian families worse off.
Anyone committed to a strong economy, more jobs and a Budget which can fund the essential services Australians rely on without the need for higher taxes should support us in our efforts to keep building on the progress we have made so far.
Labor's alternative would take us back on to a path which demonstrably made us weaker and less resilient as a country in the past.
This is an opinion piece published in The West Australian on 26 September 2018.
Karen Wu - 0428 350 139