This year’s budget delivers the first surplus in more than a decade. At $7.1 billion and 0.4 per cent of GDP in 2019-20, it marks a turning point in our nation’s finances.
When we came to government, we inherited a $48 billion deficit and an economy in which unemployment was high, growth was lower and business investment was in freefall.
Since then we have created more than 1.2 million new jobs, reduced spending growth and are on track to deliver $45 billion of surpluses over the next four years.
All of this is being achieved without increasing taxes. What is driving this improvement in the bottom line is a growing economy with more people in work and fewer on welfare.
There is, however, a clear message in this budget about emerging risks at home and abroad.
The Chinese economy has slowed and there has been a loss of momentum in Japan, Europe and other advanced economies.
The drought has reduced farm output by 6 per cent, with the full impact of the floods still to play out.
A softer housing market is having an impact on dwelling investment and household consumption.
In light of these challenges, it is more important than ever to continue the growth of the economy.
This budget is the next stage in that plan with a focus on lower taxes, more infrastructure and a new skills package.
In 13 weeks, after they lodge their tax return, more than 10 million people earning between $21,000 and $126,000 will receive a tax cut of up to $1080 a year.
For a dual-income family this tax could be worth $2160 a year and go towards paying the mortgage, energy bill or car insurance premium.
In 2024-25, the 32.5 per cent tax bracket for those earning between $45,000 and $200,000 a year will be reduced to 30 per cent, meaning 94 per cent of taxpayers will pay no more than 30 cents in the dollar.
The nation’s 3.4 million small and medium-sized businesses will also benefit. The instant asset write-off will be increased to $30,000 and expanded to apply to all businesses with a turnover less than $50 million.
Infrastructure is also critical to Australia’s future economic prospects, helping to alleviate congestion, unlocking the potential of our regions and getting products faster and more efficiently to market.
In this budget, we boost infrastructure spending to $100 billion over the next decade.
A $4 billion Urban Congestion Fund; a fast rail plan to connect major cities with regional centres; and a Safer Roads Package funding upgrades, black spots and maintenance by local councils.
This budget also includes a new skills package of $525 million to create 80,000 apprenticeships, 10 new training hubs, and a literacy, numeracy and digital skills program.
By lowering taxes, increasing infrastructure spending and enhancing skills, the productive capacity of the economy will increase.
Growing the economy is not an end in itself; it’s what you do with it that counts.
This budget delivers a significant social dividend to the community.
We have already increased hospital funding by 50 per cent since coming to government and in this budget we are funding a new children’s cancer centre in Sydney, a new brain and spinal ward in Adelaide and supporting a tropical medicine centre in Cairns.
We’re adding six new drugs to the PBS. We’re investing in a $461 million youth suicide and mental health strategy.
We’re strengthening Medicare with more new MRI machines.
There is a new respite program for carers and 10,000 new home care packages to allow older Australians to stay in their homes.
We’ve increased school funding by more than 60 per cent. There is more than $450 million for early childhood learning.
This budget, and the first surplus in more than a decade, is the product of an economic plan that is working. The dividend for people is more spending on the things that matter to them, schools, hospitals and roads, as well as keeping more of their hard-earned money with tax cuts.
This is the course we have set for a better and brighter Australia.
Originally published in The Age