I value my engagement with the Chamber of Commerce and Industry WA.
In the big debates – particularly on the GST, but others as well – the Chamber always comes to the table with well researched views and a case worth hearing.
On election night I said the result was a victory not for the Liberal Party, but for the quiet Australians. Australians who quietly go about their lives, working hard each day, running their businesses, caring for their families, volunteering in their local communities.
There is a champion in every Australian. It is our job to support them to realise that champion within.
The election was a message that Australians wanted their Government to respect their aspirations and back them in as they did everything they could to get ahead and make a better life.
Australians rightly see themselves as being in charge of their own lives and their own destinies.
That is why I have now exhorted my team to respect the outcome of the election by governing humbly, understanding that the election result was not about us, but it was about those quiet Australians and their honest and decent aspirations.
Our job is to ensure that our decisions can simply make the lives of Australians that little bit easier.
Australians also said they were are no longer prepared to accept any claim that Governments can solve all your problems just by giving them more of your money or saddling future generations with a mountain of debt.
Australians live within their means and simply expect Governments to do the same and get the job done. The election also confirmed our view that Australians appreciate that the services they rely on depend fundamentally on ensuring we have a strong economy, not higher taxes.
Without a strong economy, all else is in vain. Jobs, funding for schools and hospitals, combatting youth suicide and the NDIS.
And so today, at the start of this new term, I want to speak to you about getting on with the job of building our economy to secure your future.
The Australian economy has shown remarkable resilience over a long period of time.
We are on track to achieve 28 years of uninterrupted economic growth and Australia’s real GDP has grown faster than any G7 economy over that period.
The median age of Australians is around 38 years. These Australians have not known a recession over their entire adult lives.
At 2.9 per cent, jobs growth has been stronger than any of the G7 countries over the past year. The vast majority of the nearly 1,000 jobs a day created over that time have been full-time positions.
Almost three quarters of Australians aged 15 to 64 have a job – a record high. Female workforce participation is also at a record high. So is the workforce participation of those aged 65 and over.
So the great Australian jobs machine continues to whir away. A great strength. But there’s more to do, which is why our pledge to create 1.25 million new jobs over the next five years is central to our economic plan.
The 2019-20 Budget, only days away, will be in surplus. It’s been a long road back, 12 long years, but we’re almost there. Another great foundational strength for our economy. And our AAA credit rating remains in place, one of only ten nations in the world to achieve this outcome from all key agencies.
That said, we do face some challenges and headwinds.
That’s not news. Treasurer Josh Frydenberg and I have been talking about this for some time.
The Treasurer’s reports from his recent trip to the G20 Finance Ministers’ meeting in Japan as well as to London, Berlin and Washington, confirm that international risks have increased over the first half of the year.
Protectionist sentiment and trade conflict, especially between China and the US, is weighing heavily on global confidence and here in Australia as well. The uncertainty regarding Brexit is also not helping, although the impact of this on Australia is quite muted.
The unfolding of all of these events are own goals for the global economy given the broader consensus points that the fundamentals of the global economy are relatively sound.
As a trading nation, this week’s G20 Summit will be an important opportunity for the world’s leading economies to map out the way forward from here.
We are also close to the peak of the global cycle on interest rates ‑ with pressure on European Central Bank and the United States Federal Reserve to lower rates to support their economies.
In the domestic economy, there are challenges too.
We’ve seen the effects of prolonged drought and floods on regional communities – with farm GDP declining by 6.8 per cent over the past year.
A necessary moderation in the housing market has also contributed to softer consumer spending.
Removing Labor’s threat of massive changes to the housing taxation system has erased some of the gloominess from the sector, which combined with interest rate cuts, prudential changes and our forthcoming First Home Loan Deposit Scheme are providing some support to the market.
Credit tightening, post the Banking Royal Commission, has also dimmed economic activity, especially for small business and housing development.
The latest national accounts showed quarterly growth of 0.4 per cent and, while this was a modest increase in growth compared with the previous quarter, it also indicates subdued activity in some parts of the economy – the housing sector, business investment and household consumption.
It’s fair to say that politics has also played a role, with the election weighing on confidence. The bounce back in the business confidence as measured by the NAB Monthly Business Survey following the election, showed the largest monthly increase since the change of government at the 2013 election.
Our job post-election is now very clear – to get Australians off the economic sidelines and on the field again.
The Reserve Bank’s recent cut in the cash rate will put more money in the hands of Australians.
But as Governor Philip Lowe has stated, we must also drive economic growth in the longer term.
The key goal of these policies is job creation. For our Government, it’s always been about jobs.
Our economy has displayed an enormous capacity to absorb record levels of employment growth. The more jobs that are created, the more Australians keep entering the workforce, increasing participation rates also to record levels, forcing economists to now postulate that full employment is now an unemployment rate closer to 4.5% than 5%.
This means that to see larger increases in incomes from wages growth we need to see even more jobs created to reduce unemployment to these levels.
The only way to create more jobs is to increase the levels of investment in our economy. Job creating investments that unlock productivity gains and enable Australians to earn more.
This relies on businesses having the confidence, capability and incentives to back themselves.
Today I want to focus on three elements of our plan to achieve this.
First, how we will get things moving by lowering taxes, sharpening the incentives to work and invest and get infrastructure projects underway.
Secondly, provoking the ‘animal spirits’ in our economy by removing regulatory and bureaucratic barriers to businesses investing and creating more jobs.
And thirdly, boosting the economy’s long-term growth potential by unlocking greater economic dynamism and productivity by lifting our skills capabilities and driving uptake of new digital technologies to promote innovation and competition in our financial system.
Firstly, tax relief.
Australians must keep more of what they earn. In fact at the last election, they demanded it. Next week in parliament we will submit our tax plan to the parliament, just as we presented it to the people.
Labor’s high taxing agenda has now been rejected at two successive elections. Labor’s primary vote at the election last month was their lowest in a hundred years, even lower than when they lost Government in 2013, 1996 and 1975.
Labor’s internal conniptions about supporting the Government’s plan to simply let Australians keep more of what they earn exposes Labor’s deep mistrust of Australians to do what’s best for them with their own money. Labor always think they know best. Australians disagree.
The fact Labor are having to be dragged kicking and screaming, putting up one excuse and ruse after another, shows they simply don’t understand that when you find yourself in a hole, you should stop digging
Our proposed tax relief doesn’t just have a strong political mandate. It has a compelling policy rationale. The first stage of our tax changes will support economic growth by putting money in people’s pockets that they can use to boost consumption. Worth at least two 25 basis point rate cuts.
This will include immediate tax relief to low- and middle-income earners after they lodge their 2018‑19 tax returns.
For middle-income earners, this works out to be over $1,000 dollars for singles, and it’s double that for dual income families.
More than 10 million taxpayers will benefit. Right here in WA, around 1.25 million taxpayers will benefit from our plan.
This first stage is part of our longer-term plan to simplify our tax system and sharpen the incentives to work and invest for the future.
While stage 1 of our tax plan will fast-track and boost tax relief for low and middle income families and support the economy, stages 2 and 3 are more fundamental long term changes to our personal tax system.
We are simplifying the system, more closely aligning the middle tax bracket with corporate tax rates and improving work incentives by tackling the ‘silent thief’ of bracket creep.
As the PEFO statement confirmed prior to the election, the measures are fully incorporated into the medium term projections, which also maintain all spending projections on current profiles.
It still baffles me why Labor can readily sign up to spending schemes that run for decades but cannot do the same to let Australians keep more of their own money.
Under our changes, from 2024-25, 94 per cent of Australians will pay a maximum marginal tax rate of no more than 30 cents in the dollar, compared to only 16 per cent if stages 2 and 3 are not delivered.
Or to put it another way, almost 80 per cent of hard working Australians will keep more of what they earn following stages 2 and 3 of our tax plan.
They will receive greater reward for their efforts, providing an incentive to put in the effort to get a raise or secure a promotion.
Getting these incentives right in the workplace is vital to raising our productivity.
We are also backing small business by reducing their taxes so that they have more money to invest back into their business to support their growth aspirations.
In our April Budget, we increased the instant-asset write-off threshold to $30,000 until 30 June 2020 and expanded access to medium-sized businesses so that around 22,000 additional businesses employing around 1.7 million workers will now be eligible.
This is in addition to fast-tracking the company tax cut for small and medium-sized companies with an annual turnover of less than $50 million.
While lower tax is a centre-piece of our plan for a stronger economy, contrary to most commentary, it is by no means the whole story.
To get things moving, the Deputy PM, Michael McCormack will be ensuring the Government leads by example with a single minded focus on implementing our $100 billion infrastructure investment programme.
This programme increases Commonwealth support for transport infrastructure by about a third by funding nationally significant transport projects across all states and territories, unlocking productivity by decongesting our cities, creating jobs and supporting future population growth to make our cities more liveable.
The immediate focus is for Minister Tudge to work with the St. e congestion busting urban infrastructure projects that can be readily actioned to spur growth, support local jobs and get things moving.
The same will be done by the Deputy PM for regional communities through our building better regions and water infrastructure schemes..
Here in WA we’ve committed more than $13.6 billion since we came to office and we’re getting on with new projects – including further upgrades to the Tonkin Highway, and improvements for the Oats Street, Welshpool Road and Mint Street Level Crossing Removals as part of METRONET.
Since our re-election, I have already met with Premiers in NSW and Victoria to take stock, get a common view on project timetables, priorities and to do lists. While here in WA, I will be meeting with Premier McGowan to do the same.
The last thing we want is project delays leading to more congestion and greater costs.
That’s why infrastructure delivery will be an important item on the COAG agenda for August.
The same process is being followed for our historical investments in defence capability. With more than $200 billion being invested, with generational job creating projects here in WA, as well as South Australia and Queensland.
Ensuring these investments remain on schedule and that we realise the uplift in skills and technological capabilities for our defence industries, will be the strong focus of our new WA Defence Industry Minister, Melissa Price.
To provoke the much needed ‘animal spirits’ in our economy we must also remove regulatory and bureaucratic barriers to businesses investing and creating more jobs.
Congestion is not just on our roads and in our cities.
We also need to bust regulatory congestion, removing obstacles to business investment.
When we came to power in 2013, our Government launched its ‘Cutting Red Tape’ Initiative.
Working across every government department in Canberra, we set ourselves the goal of reducing the burden of regulation on the economy by $1 billion each and every year.
And we succeeded. Between September 2013 and December 2016, this initiative yielded red tape savings of $5.8 billion.
Removing what governments identify as excessive or outdated regulation is one thing. Whether we are really focusing on the barriers that matter to business in getting investments and projects off the ground is another.
Take the WA mining industry for example. In 1966, the late Sir Arvi Parbo took the Kambalda nickel mine near Kalgoorlie from discovery to operation in 18 months.
By contrast, the Roy Hill iron ore mine took around 10 years to complete around 4,000 approvals. Delays to the project meant delays to over 5,000 construction jobs and 2,000 ongoing jobs.
This in a region where iron ore mining has been taking place for decades and is relatively low risk.
There is a clear need to improve approvals timeframes and reduce regulatory costs, but in many cases regulators are making things worse.
Look at the WA Environment Protection Authority and the uncertainty it has created over new emissions requirements for the resources sector. Business will also make valid criticisms of many Commonwealth agencies and departments.
That’s why I’ve asked my colleague Ben Morton – as Assistant Minister to the Prime Minister – to work with me, the Treasurer and other Ministers, to tackle the full suite of barriers to investment in key industries and activities.
This will be a renewed focus on regulatory reform but from a different angle.
Rather than setting targets for departments or government agencies, we’ll be asking the wider question from the perspective of a business looking, say, to open a mine, commercialise a new biomedical innovation, or even start a home-based, family business.
By focusing on regulation from the viewpoint of business, we will identify the regulations and bureaucratic processes that impose the largest costs on key sectors of the economy and the biggest hurdles to letting those investments flow.
What are the barriers, blockages and bottlenecks? How do we get things moving?
I urge the business people in this room and around Australia to engage with this process.
Step one is to get a picture of the regulatory anatomies that apply to key sectoral investments. Step two is to identify the blockages. Step three is to remove them, like cholesterol in the arteries.
While reducing taxes has had a major impact in the United States, it was actually the Trump Administration’s commitment to cutting red tape and transforming the regulatory mind set of the bureaucracy that delivered their first wave of improvement in their economy. You can be assured I have begun this term by making it clear to our public service chiefs that I am expecting a new mindset when it comes to getting investments off the drawing board.
One particular area where it’s essential to get regulation right is to protect investment from the impact of militant unions, that would have been given free reign under a Labor Government if elected six weeks ago.
Events since then with the CFMMEU in full R18 rated technicolour have only underlined the wisdom of the Australian people in rejecting going down that path.
Labor does not run the unions in Australia, the unions – through their money from member’s indentured fees and union super funds, their numbers in their factions and their armies on the ground at elections, run modern Labor.
It is a very far cry from the balanced relationship of the Hawke-Crean-Kelty alliance of the past.
Our Government is committed to enforcing the rule of law on Australian work sites. All Australian businesses have the right to expect that they can go about their work without being subject to bullying and disruption.
When we’re back in Parliament next week, another of our priorities is to introduce laws to give greater powers to deal with registered organisations and officials who regularly break the law, prohibit officials who are not fit and proper persons from holding office, and stop the rorting of worker entitlement funds. All measures Labor resisted during our last parliamentary term.
Like you, our Government believes in cooperative workplaces.
In his new capacity as Minister for Industrial Relations, I am asking Christian Porter to take a fresh look at how the system is operating and where there may be impediments to shared gains for employers and employees.
Any changes in this area must be evidence-based, protect the rights and entitlements of workers and have clear gains for the economy and for working Australians.
We would expect business organisations such as yours to build the evidence for change and help bring the community along with you too.
Just as our economy is growing and changing, our skills system needs to grow and change with it.
Demand for skills is shifting from manufacturing to the services sector and emerging industries like advanced manufacturing, ICT and cyber-security.
Our vocational education system needs an upgrade to ensure it remains world-class, modern and flexible.
That’s what business has told us – you’re not getting enough people walking through your doors with the skills you need.
The Joyce Review we commissioned prior to the election confirms this and will now guide the changes we will seek to make during this term of parliament as a key component of our economic plan.
The Review acknowledges the good work undertaken in the sector so far, but says VET needs to adapt so it can support important and emerging industries and become a first choice for students who want to pursue technical careers.
We believe that learning through a vocational education is just as valuable as a university degree, so we want to transform the way we deliver skills, support employers and fund training
We’re addressing the findings of the Joyce Review by setting up a National Skills Commission and a new National Careers Institute to give people the information they need to decide their future careers and the best pathways to get them into a job.
We’re simplifying and targeting increases in apprenticeship incentives.
And we’re creating up to 80,000 additional apprentices over five years in priority skill shortage areas through a new apprenticeship incentive.
The Review’s recommendations are wide ranging and responsibilities for the sector are shared.
Vocational education sector is one of my key priorities and I intend to make it a primary focus of discussion with states and territories at COAG.
This work will also be led two Western Australians, Michaelia Cash in Cabinet and Steve Irons as Assistant Minister, a trade qualified electrician and small businessman.
Digital disruption, especially in financial services is changing the way people, businesses and governments interact.
Consultancy firm McKinsey argues that “digitisation could contribute between $140 billion and $250 billion to Australia’s GDP by 2025, based on currently available technology alone.”
I have appointed Senator Jane Hume as Assistant Minister to support the Treasurer to drive the changes we are making in this area.
Our upcoming legislation to introduce Open Banking, through a new Consumer Data Right, will give customers more control over their own data and empower them to compare and switch between products and services, and encourage competition between service providers.
The Consumer Data Right will enable customers to get assistance and tailored support by empowering them to own and share their information as they choose, driving further innovation and competition.
While we are starting with banks, we intend to expand this choice to multiple sectors, for things like phone and internet providers or your energy bill. It will lead to better prices and more innovative products and services.
The New Payments Platform (NPP) makes payments faster and simpler for consumers and businesses and will pave the way for further innovation in the payments system. The challenge is now to encourage economy wide uptake.
The potential gains that are available to businesses, particularly small and family businesses, through the NPP and its ability to reduce payment times are immense.
We will also continue with the establishment of a mandatory comprehensive credit reporting system that will increase competition.
With greater information, new entrants and small lenders, including innovative FinTech firms, will be encouraged to compete for small business and retail customers. The mutuals sector, including customer owned banks and cooperatives, will also be able to compete better with our legislation lifting restrictions on their ability to raise capital being passed just before parliament rose.
More broadly, our Government will continue to advocate strongly for a rules-based and open global trading environment that supports digital trade, builds trust and confidence in the online environment, and reduces barriers. Right now we are seeking to conclude a new benchmark agreement on digital trade with Singapore by the end of the year that I discussed with Prime Minister Lee just a few weeks ago.
We also kick-started negotiations on e-commerce rules in the WTO.
At the upcoming G20 Summit, I’ll continue to advocate for initiatives like these which clear the way for us to do business with the world, while ensuring trust in the online environment, including consumer privacy.
There are of course many other components to our plan to build our economy into the future that we don’t have time to delve into this morning.
Expanding our export markets and lifting the share of our two way trade covered by trade agreements to more than 90% by 2022.
Keeping Government spending and taxes under control, keeping the budget in surplus and eliminating net debt within the decade
Keep supporting greater investment in innovation and new technology.
Reducing energy costs through market reforms and in continuing to foster increased investment in both renewable and reliable energy infrastructure.
Supporting our drought and flood impacted agricultural sectors and deliver on the national water grid.
We will return to these on other occasions. For now, we will just keep getting on with the job that millions of Australians have entrusted us with to support them to realise their goals and aspirations.