The Hon Josh Frydenberg MP
Federal Member for Kooyong
NATIONAL PRESS CLUB ADDRESS
THE DIVIDEND OF A STRONG ECONOMY
PARLIAMENT HOUSE, CANBERRA
3 APRIL 2019
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Well, thank you very much, Sabra. Firstly, can I acknowledge the Deputy Prime Minister, Michael McCormack and the Finance Minister Mathias Cormann. Thank you for the incredible work that you have done. To my ministerial colleagues who are here, to the secretaries of the Department of PM&C, Treasury and Finance, thank you to the professionalism, the professionalism of your staff and the hard work of everyone within the public service who has made this Budget possible.
Now, ladies and gentleman, when I was preparing for this budget, I spent over a week locked down in Treasury. As I usually do when I’m on the road, I FaceTimed my family with my wife and my daughter, Gemma, who is four, and my son who is two. My wife has been teaching my daughter about what I do. I’m not a footballer, I’m not a tennis player, I’m actually a politician. And, as we were on FaceTime, my wife turned to my daughter and said ‘Gemma, do you know what a Budget is?’ And, she turned around and said ‘yes, you’re not supposed lose other people’s money.’ And, so with that very sound advice, I have helped prepare this Budget with the help of a lot of other people.
This Budget outlines our economic plan and it’s a plan that sets Australia up for the next decade. I firmly believe this Budget sets Australia up for a brighter future. One with lower taxes, more infrastructure, better skills and record spending on schools and hospitals. And as you probably picked up last night, all of this without increasing taxes. You would have seen the headlines this morning about some of the big numbers. Tax cuts for more than ten million Australians and three million small businesses. 80,000 new apprenticeships. A $100 billion new Infrastructure Plan. But what you might not have noticed is some of the smaller, but deeply significant measures. I thought, today, I would outline some of these. There are hundreds of measures in the Budget. But it is some of these smaller measures that will make a real difference to people’s lives.
Because a strong economy is not just a piece of paper with numbers on a page.
It matters to people.
It allows you to do things you might not have otherwise done.
It’s not an end in itself. It’s merely a means to an end.
Addressing youth mental health and suicide prevention
So last night, we announced that the Government is boosting mental health funding by $730 million. With a real focus on mental health in our young people and suicide prevention. This is the most significant investment of its kind.
And to illustrate how it could change people’s lives for the better I want to share with you some thoughts of someone very close to me and who works daily with me who suffers from severe depression and has lived a life of quiet desperation.
I never knew until last night of his struggles, when he approached me to share his story.
He is a father and an active member of his local community who was first diagnosed with severe depression twenty years ago. It started out as the tell-tale signs of loss of appetite and insomnia. He would average three hours of sleep a night and then try and hold down a full time job. He felt, in his words, like a zombie – no feeling of happiness or sadness – just personal pain. Being a male in his 20s, he thought that he could beat it all by himself. For 3 months, he tried to fight it and he suffered in silence. Too ashamed to talk to someone about it or go see a doctor, he finally admitted that he had a weakness; he had a mental illness. He thought about taking his own life and had planned on how to do it. But he worked up the courage to go see a doctor. He started medication, which he has taken daily ever since, and he manages his illness effectively and he lives a normal life.
But he is one of the fortunate ones in our community who did get help in time. Every year over 65,000 Australians make a suicide attempt. Suicide is the leading cause of death for Australians between the age of 15 to 44 and the second leading cause of death among of those of the age of 45 to 54. Eight Australians today will take their own lives – six of those will be men. Around 3,000 a year and a nine per cent increase between 2017 and 2018. Younger Australians are more likely to take their own life than to die in motor vehicle accident. And the suicide rate for Aboriginal and Torres Strait Islander people is approximately twice that of non-indigenous Australians.
And to anybody who is watching or listening today who is in crisis and feeling suicidal please reach out for help and call LIFELINE and call 13 11 14 and someone will be there to help.
As a Government, we have to do better, and as a nation, we have to do better. I know this is something the Prime Minister feels very strongly about and is personally very committed to, having led this particular initiative through the Budget process.
Funding that we announced last night will help provide for 30 new headspace services, a perinatal mental health program, four specialist residential facilities for eating disorders and more support for indigenous youth through mentoring and peer support.
The high rate of suicide, particularly among our young people, is a national tragedy which we
have to take urgent action to address.
We will expand the Headspace Network and reduce wait times at centres around the country to enable more young people to access support. Headspace has already provided support on more than 2.5 million occasions. Like a young person from Echuca with depression and anxiety, who can get the support they need. A young student in Western Sydney experiencing stress from exams who needs clinical support to remain engaged in their studies. Or a young person getting bullied in Townsville who will not experience unreasonable wait times in order to receive support.
These are policies and initiatives that will address a missing gap in our health system. These are policies and initiatives that will save people’s lives.
We are also committed in this Budget to ensuring every Australian has access to affordable medicines. We continue to list more medicines on the PBS so that patients only pay $6.50 if they’re on a concession or $40.30 if they’re a general patient.
In addition to Besponsa, which I announced last night, other drugs to treat:
• inoperable advanced metastatic breast cancer. Without subsidy, they would pay $55,000 per year.
• a rare and highly aggressive type of skin cancer.
• lung cancer, which would otherwise cost patients $88,000 per course of treatment.
• advanced renal cell carcinoma, which would otherwise cost patients $254,200 per course of treatment.
• adult patients with chronic lymphocytic leukaemia, which would otherwise cost patients around $165,000 per course of treatment.
We have listed over 2,000 new drugs as a Government on the PBS at a cost of more than $10 billion and this is one of our proudest achievements.
We also continue to guarantee Medicare.
Around nine out of every ten GP services are now bulk billed.
In this Budget, we are increasing the Medicare rebate for important diagnostic services, including ultrasound and X-ray imaging to reduce the costs to patients.
We are also investing $150 million to expand the number of Medicare-eligible MRI machines to more than 50 newly funded units in the last 12 months.
This will give patients from around Australia better access to lifesaving scans, including at Mount Druitt Hospital in New South Wales, Ipswich Hospital in Queensland and Kalgoorlie Health Campus in Western Australia.
New Medicare services for MRI that will help diagnosis for around 14,000 breast cancer patients each year.
We are delivering a $1.1 billion package to support Australia’s doctors and specialists to deliver improved access and outcomes for patients.
$450 million extra to support GPs and this will allow Australians over the age of 70 to sign up for more personalised and coordinated care in partnership with their local GP.
Supporting senior Australians
In this Budget, there are a number of initiatives to support aged care. An additional $7 billion we are providing over the forward estimates and supporting older Australians to receive aged care in their own homes and live independently for longer.
We have increased the number of home care packages from 60,000 in 2013 to 124,000 in 2019. The Government is providing almost $6 billion to extend the Commonwealth Home Support Programme.
Access to essential home support services, like Meals on Wheels, to help almost one million older Australians still living in their own home.
In residential aged care, the Government has invested $320 million in this Budget to the general subsidy and will support the increase in residential places.
These are the real stories of the Budget.
Programs that make an enormous difference to people’s lives, people who need our help. It is only through a strong economy and sound budget management that you can sustainably provide these services.
This is why budget discipline and maintaining a strong economy are so important.
We’ve been able to make record investments in health, education, aged care and disability support.
Education spending is increasing by 63 per cent, with record funding for government, independent and Catholic schools.
Disability funding is increasing by 10 per cent a year.
Hospital spending has increased by more than 60 per cent, with more beds, more doctors and more nurses.
Medicare funding is at record levels with more Australians today visiting the doctor without having to pay.
We have bolstered Medicare, with an additional $1.1 billion in Primary care support for our doctors and our patients.
These are the investments that we can afford to make.
Last night, I outlined our plan for Australia’s economy.
A plan to restore the nation’s finances.
A plan for lower taxes.
A plan for more infrastructure across Australia.
A plan for better skills for more Australian workers.
A plan to grow the economy and continue to underwrite the essential services Australians need and rely on.
Restoring the nation’s finances
To deliver on the things that matter, it is fundamentally important to have the books in order. For the first time in more than a decade, we are delivering a surplus.
In 2019-20, the surplus is $7.1 billion.
Over the forward estimates, surpluses will be $45 billion.
And surpluses will continue to rise over the decade to reach more than one per cent of GDP, eliminating Commonwealth net debt by 2030.
All of this is being achieved without increasing taxes.
We have reduced the rate of spending growth by more than half.
It is the lowest of any government in 50 years.
The proportion of working age Australians on welfare is the lowest in 30 years.
And this has contributed to government payments falling to 24.6 per cent of GDP in 2019-20.
This is below both the 30 year average and the 25.4 per cent we inherited when we came to Government.
While commodity prices have been strong, our forecasts have remained conservative.
In the Budget, we expect the iron ore price to decline from $80 today to $55 by June next year and metallurgical coal to decline from $200 today to $150 over the same period.
These forecasts are consistent with the Coalition’s prudent approach and Treasury’s comprehensive industry-wide consultation.
It also reinforces the point that future surpluses are based on broad-based growth across the economy and not based on inflated commodity assumptions.
Surpluses do not occur about by accident.
Turning around the Budget has taken six years through disciplined decisions and those decisions have affected both sides of the ledger.
Our strong budget management has been recognised with Australia retaining our triple AAA credit rating, one of only ten countries in the world to do so.
As Standard and Poor’s said last night in response to the Budget:
“The central government will achieve stronger fiscal outcomes than we anticipated …”
And as they go on to say:
“Better labour market conditions have lowered expenditure outflows compared with previous budgets. These stronger outcomes have helped to fund new policy announcements in today’s budget.”
Ladies and gentleman, if we were to lose our AAA credit rating, all Australians would suffer.
It would mean higher interest rates, higher mortgages and higher costs to business loans.
This is why sticking to our economic plan is so important.
Our plan is Australia’s insurance for a better and more secure future.
A Government that gets the books back in order sends a strong signal that we can, as a nation, be more confident in our ability to deal with the challenges that lie ahead.
The policies we announced last night in relation to tax will ensure over 10 million Australians will receive a tax cut of up to $1,080 a year or a couple up to $2,160 in just thirteen weeks-time when they put in their next tax return.
This is money that can go toward paying the monthly mortgage, the quarterly energy bill or yearly car insurance.
These are structural reforms aimed at incentivising effort and innovation to boost our nation’s productivity when we combine the changes to the lower middle income tax offset with our policy to reduce the 32.5 cents in the tax bracket to 30 cents in the dollar.
That is a change that will ensure more than 94 per cent of taxpayers pay no more than 30 cents in the dollar. It will boost or nation’s productivity and will help ease the cost of living pressures.
In the Budget last night, there were also significant measures for small business.
The nation’s 3.4 million small and medium-sized businesses will also get access not to an instant asset
write off that has been increased to $30,000 and expanded to apply to all businesses with a turnover of up to $50 million.
This will help a tradie buy a new ute or a cafe owner replace their coffee machine.
There are stories from all across the country.
From the more than 350,000 small businesses who have taken advantage of the instant asset write off.
Lower, not higher taxes, will bring about a stronger economy and prepare it for the challenges ahead.
For those who advocate higher taxes on income and business, I simply ask the question:
How can removing incentives to work more, save more and invest more be good for the economy?
It’s not just fairness they forsake with higher taxes. It’s also economic growth.
New taxes, higher taxes will suffocate enterprise and aspiration which will weaken the economy.
You cannot tax your way to bigger surpluses.
And you cannot tax your way to prosperity.
Investing in infrastructure
Our plan also includes a significant boost in infrastructure development.
A boost to the Budget that underwrites a 10 year nation building plan.
A plan to bust congestion, unlock the potential of our regions and get products faster to market.
A Coalition Government understands that infrastructure is critical to Australia’s economic prosperity.
For every infrastructure dollar invested, there is a four dollar pay-off to the economy.
In this Budget, we boost infrastructure spending to $100 billion over the next decade, with major investments in every state and territory.
A fast-rail plan to connect our major cities with regional centres, starting with a $2 billion down payment on the Melbourne to Geelong route.
It is not a fanciful vision to better connect Sydney and Melbourne which would double down on the population pressures in our two biggest cities.
It is a plan to grow our regions and take the strain off our most congested areas.
We are also increasing the Urban Congestion Fund to remove bottlenecks and increase access to public transport.
There are plenty of stories where the congestion is hurting people in their daily lives. And this Budget, this increase to the Congestion Fund will help make a difference.
Enhancing our skills
This Budget also includes a new skills package to better prepare Australians for the jobs of today and tomorrow.
A $525 million skills package which will create 80,000 new apprenticeships.
10 new training hubs that will connect schools and local industries in areas of high youth unemployment.
And a new literacy, numeracy and digital skills program.
This builds on other initiatives we have underway, including our support for 55,000 young women under our Future Female Entrepreneurs Program.
And the PaTH program which provides internships for young people as a stepping stone into employment has been a great success with 70 per cent of people getting a permanent job.
This new skills package, existing policies like the PaTh program, our making a difference in creating the highest number of young people who are getting a job in many, many years.
Ladies and gentleman, when it comes to the economic outlook, we need to boost the productive capacity of the economy.
We know that the path to more jobs, higher wages and a better way of life is a strong economy.
Over the last two years, businesses have been hiring more people than ever.
The investment outlook is the strongest since the mining boom.
Mining investment is expected to make its first positive contribution to growth after falling by around 60 per cent since 2012-13.
Outside of the mining sector, the picture for investment looks even stronger.
Non-mining business investment grew by 9.7 per cent in 2017-18, its fastest pace in over a decade and well above the 10 year average of 1.5 per cent.
This is important as investment supports the uptake of technology across the economy and makes labour more productive so workers can command a higher wage.
Exports also remain solid as output in our resources sector continues to ramp up.
Particularly LNG, which at over $50 billion in export revenue this year, has become our second largest resources export, overtaking metallurgical coal in 2018-19 and second only to iron ore.
Our strong and competitive education and tourism sectors also continue to benefit from their proximity to a strong and growing Asian region.
In 2018, there were nearly 1.5 million tourists from China which is twice as many as five years ago from China.
Our existing pipeline of public infrastructure investment is strong and will support activity and job creation.
Indeed the unemployment rate, now at 4.9 per cent, has fallen to its lowest level in more than seven year and Treasury has upgraded its outlook to reflect that fact.
We know that there are challenges ahead and that we face choices in how we respond to meet those challenges.
We have an economic plan that is working.
A plan that has delivered a $55 billion turnaround, and a return the Budget to surplus, the first in more than a decade.
A plan that has reduced the proportion of working age Australians on welfare to its lowest level in 30 years.
A plan that has delivered one million new jobs ahead of schedule.
And now we recommit to creating another 1.25 million new jobs over the next five years.
Being in government is about plans, their execution and their delivery.
The fundamentals of the Australian economy are sound.
Australia is in its 28th consecutive year of economic growth, with the economy reaching $2 trillion next year.
This Budget is the product of responsible economic management and decisions taken over six years, a plan that is firmly based on lower taxes.
In light of these challenges, it is more important than ever that we continue to grow the economy by sticking to our plan.
The dividend for the Australian people is more spending on the things that matter to them– local schools, hospitals and roads and mental health services like the ones I talked earlier about – and importantly, we need to allow people to keep more of their own hard-earned money. We believe that people should earn more and they should keep more of what they earned.
It is not worth the risk of another path of higher taxes when we are reaping the rewards of years of disciplined fiscal management and difficult but necessary choices.
This is the course we, as the Coalition Government, the Morrison Government has set for a better and brighter Australia.
Thank you very much.