9 May 2018
Speech - #2018010, 2018

Address to the National Press Club, Parliament House, Canberra

THE BENEFITS OF A STRONG ECONOMY

Check against delivery

The faces you have just seen, the stories you have heard, are why the Turnbull Government is focused on building a strong economy.

At the end of the day, everything rises and falls on a stronger economy.

The security of your job, your business, your wage, your income.

The essential services you rely on. Hospitals, schools, Medicare, disability services, affordable medicines, aged care - all funded, delivered and guaranteed out of a strong economy.

Bringing the Budget back into balance. Paying down debt – all depend on continuing to build a strong economy.

*****

When framing this Budget, there was one key question in my mind.

What will be the economy that Australians live in over the next decade?

Maybe your kids are in high school or studying at university in their early 20s. Maybe they are only just starting out on the education journey.

What kind of economy do we want our kids to walk into when they finish school; their trading or apprenticeship, or University?

If you are a small business owner, what type of economy do you need over the next decade and beyond, to back in the risks and investments you have made to make your business a goer.

Maybe you are approaching retirement age and gearing up for life outside the workforce.

What type of economy will you live in?

The economy is not a theory, it not some staged reality television show. It’s real life. It has real consequences.

You live in it. It defines your choices and your opportunities, perhaps more so than anything else bar your health.

****

When I left university in 1989, I walked into the last decade when we had a recession.

I was one of the lucky ones that managed to get a job, but for many others it was a brutal slap; straight from an idealistic realm within the university campus to a brave new world: a battered economy, sliding backwards.

In the ensuing two years, under a Labor Government, more than 400,000 Australians joined the dole queue, with 200,000 fewer Australians in work.

While the unemployment rate rose five percentage points to 10.5 per cent, it was young Australians that paid the heavy price. Youth unemployment rose eight percentage points to a staggering 19 per cent, with 200,000 more young Australians out of work.

This put a significant strain on the Budget, with one in five working-age Australians surviving on welfare.

Economic growth was reminisced about. There was no growth in the economy for two years, in fact it was going backwards for much of that time. And a story most baby boomers like to remind their kids about: how interest rates hit 17 per cent.

This was my reality when I went to work.

I don’t want that reality for my kids, or yours.

I want our kids to enjoy the benefits of a stronger economy over the next 10 years so they can achieve all that they want to achieve and not be held back by circumstances beyond their control and the mistakes of a previous generation.

I want our small business owners, young couples planning families, or older Australians preparing for retirement to plan for that next 10 years with a great deal of confidence about where their economy is heading, knowing they will benefit from a stronger economy.

****

Mark and Nicole Roberts perhaps embody what it means to be Middle Australia.

A house in suburban Sydney. A mortgage. A couple of kids finding their way in high school.

They work hard, but still find time to volunteer in their community. A happy and honest life, but not one of indulgences.

Just like many Australian families.

This budget is for Mark and Nicole and their family.

It will mean they will keep around $1000 more of what they have earned. It’s their money. They earned it. They deserve to keep it.

For this family, it can be a new washing machine. It’s kids school uniforms and books. It covers several months of catching the train to work. It pays for half the power bill and more. It fills up the petrol tank around 10 times.

So anyone that thinks that this tax relief is meaningless, they are clearly out of touch, caught in an almond latte fog.

Our tax relief will not only provide help for those bills to be paid, in Nicole’s own words as you heard them: “it will allow a bit more freedom in budgeting and also allow us to give the kids just some extra things that they would like to do.”

More freedom.

Our seven-year tax plan also runs the sword through bracket creep, ensuring those who get more hours, do overtime, get a pay rise, get to keep more of it, rather than pay more to the Government.

When the second highest tax bracket is eventually abolished, most Australians earning above $41,000 will never face a higher marginal tax rate through their entire working lives.

So couples like Mark and Nicole, and their kids, are genuinely rewarded for their effort, not punished.

This is in addition to the welcome news we have already given the Roberts’ family on electricity prices, with the National Energy Security Board estimating annual power bills will fall by $400 on average for every Australian household from 2020, following the introduction of our National Energy Guarantee.

This Budget also provides certainty for their kids’ education. Our legislated needs-based funding for schools ensures they are now getting $24.5 billion more over the next 10 years.

And not just funding that is pumped into the schools without any accountability.

They don’t have to be scientists, Nicole says of her kids, but they need to be well educated.

All of this is reliant upon a stronger economy over the next ten years.

****

Steven Davey loves to call himself lucky. Luke Howarth knows him well.

Trials and tribulations have been steady companions of the affable 62-year-old Brisbane grandfather. But not that you would know it, according to Luke.

You wouldn’t meet a bloke with a more positive disposition.

He’s lucky, as he’ll remind you.

He’s lucky, despite the fact his sheet metal manufacturing businesses went belly up in the GFC. He went broke, the bank took his factory, and he kissed goodbye to all his superannuation.

He’s lucky, despite the fact he had to give up his subsequent career as a landscaper when he had two car accidents. Neither were his fault.

He’s lucky, despite the fact he’s had to put his latest career as a security guard on hold to undergo a double knee replacement.

Lucky. That’s Steven’s view, and he’s sticking to it.

The beauty of people like Steven, is that they are not defined by their circumstances nor the long, bumpy road they have travelled to get here and the scars they bear. They are defined by their outlook, they are defined by who they believe they are.

Out of work as a 60 year old, and with barely a few coins in his super account, Steven went back to school to get his security license.

It was strange being back in the classroom, he says, but ever the optimist, he used the opportunity to not only learn, but share his experiences with the young people sitting next to him. That would’ve been an education in itself.

This Budget is for Steven Davey.

Australians are living longer, and that’s a good thing. What we are doing in this Budget is giving older Australians more choice, more flexibility and more opportunity in how they live their lives. More choice for a longer life.

Through this Budget, Steven will be able to contribute to his superannuation for longer; a huge benefit given his predicament.

Currently, he would have to work 40 hours a month to satisfy the activity test and be able to keep making contributions after he turns 65.

Our changes will give him a full year from when he stops working, to continue putting money into his superannuation account. Every little bit helps.

Our help continues when Steven likely moves onto the pension.

We have expanded the Pension Work Bonus that will allow Steven to earn an extra $1300 a year without reducing his pension payments.

We have also extended the pension loans scheme to full-rate pensioners and self-funded retirees, giving him the opportunity to increase his income in retirement by using the equity he’s built up in his home.

With the extra financial pressures that come with a longer life, we are backing older Australians like Steven if they choose to stay in work, with a range of initiatives to help them transition their skills, provide wage subsidies for employees who take them on, and combat age discrimination in the workforce.

We will also provide free online skills and health checks at ages 45 and 65 to help Australians to prepare for a healthy and longer life.

And those who wish to stay independent for longer and remain in their family home, we are funding 20,000 more home care places, ensuring the care you need comes knocking on your door.

More choices for a long life.

All of this is reliant upon a stronger economy.

****

You probably haven’t heard of a bloke named Nick Holden, even though his work is proudly on display at the Sydney Opera House.

But then again, his work is also on display at your local McDonalds, so he’s no Picasso.

Nick lives in the Shire – up up Cronulla – and he builds walls.

Clearly not your average wall, but an innovative modular wall that you can build and shape yourself, and one that doesn’t look like a stack of bricks.

Like most Australians who for some ungodly reason decide to renovate their home themselves, Nick inadvertently stumbled across an immovable little thing called council regulations when he was attempting to build a wall at the front of his house.

There were restrictions based on underground council services.

So he found another way. He liked his creation so much, and its functionality, he started his own business.

In those early days around 15 years ago, he was a one-man-band: buying the raw material, constructing the walls, answering the phones, writing the invoices.

He now has 50 employees, a state-of-the-art manufacturing plant in Kurnell, export orders from all over the world, and a handy $20 million in annual turnover.

We all love to hear success stories like this, when somebody steps out on their own, rolls the dice and risks it all. And comes up trumps, all because of a bright idea and damn hard work.

But they don’t just happen.

They are stories that are enabled out of a strong economy; where businesses are championed and given the opportunities and the right environment to invest, grow, employ skilled Australians and thrive.

In this Budget, we are backing businesses like Modular Walls. We are backing entrepreneurs who are giving flight to their bright ideas. We are backing businesses to create more jobs, and continue the incredible jobs growth we have seen in the last 12 months – more than 1000 new jobs created every single day.

We have already legislated tax cuts for businesses under $50 million; tax relief that is already filtering through Nick’s business and having an impact on his workers and his community.

How do we know that? Because as he told you in the video, Nick has always reinvested his profits back into the businesses and his staff, which has enable him to grow his operations, create more jobs and lift wages.

Lower taxes have also allowed him to compete on fairer terms with his global competitors when selling his products both here and abroad; remembering at 30 per cent, Modular Walls would be paying the third highest tax rate in the OECD.

In this Budget, we are also extending the popular instant asset write off for all businesses with a turnover up to $10 million for purchases of up to $20,000. Nick won’t be able to use this measure this time around, but in the past it has enabled him to buy a ute, some forklifts and office furniture.

To support our businesses further, and create an environment where science and technology is propelling our economy forward, we are investing more than $2.4 billion in Australia’s public technology infrastructure.

We are talking supercomputers, world-class satellite imagery, more accurate GPS, a national space agency and leading research in artificial intelligence.

This is about giving businesses the technology and infrastructure they need to not only drive innovation and compete on fairer terms with global peers, but actually lead the world in their field.

Giving our businesses an edge in a new smart global economy.

All of this is reliant upon a stronger economy.

****

When Jo Liete becomes overwhelmed by the tough times; when she finds herself doubting and questioning the fairness of life, she thinks back on that dream.

The dream that so vividly remains in the back of her mind, recalled freely in those dark moments.

There, sprinting across the soccer field, his arms and legs pumping wildly, was her boy Cruz.

She thought nothing of the dream at the time, given little Cruz was merely a bundle in her arms.

But now it’s a beacon of light for this Sydney hairdresser.

At 18 months old, Cruz was diagnosed with spinal muscular atrophy, a rare condition that would eventually strip away his newfound ability to stand, let alone walk. The condition causes a severe deterioration in the muscles till they simply stop functioning anymore, placing a great strain on vital organs.

He now whizzes around in his blue wheelchair, his name embroidered on its back, and a smile on his face. Nothing has managed to rock this five-year-old’s world, or his upbeat mum, despite his dire predicament.

That dream keeps her thoughts on track and her optimism full.

One day, instead of his mum having to carry him upstairs to bed, he will be running down that soccer pitch kicking goals in more ways than one. She knows it in her heart.

Most babies born with stage 1 spinal muscular atrophy die before they reach two. Those with stage 2, can reach their teenage years if they are lucky.

Cruz is stage 2.

There is hope, genuine hope, in the form of a breakthrough drug called Spinraza which is seeing incredible results in the US.

But the treatment for one patient can cost up to $400,000 a year – about $100,000 for every needle; clearly a burden too enormous for the vast majority of Australians families to bear.

This Budget is for Cruz and Jo.

In this Budget, we are spending $241 million to include Spinraza on the Pharmaceutical Benefits Scheme, taking a $100,000 needle treatment down to less than $40 a script.

This is what Budgets can do on a stronger economy.

Yes, they build nationally-significant infrastructure projects, fund our schools and hospitals, create programs to get people into work, and help older Australians in retirement.

But they can also save lives.

Young Cruz, and the 168 other kids around Australia suffering from spinal muscular atrophy, will now have every chance of not only surviving their formidable start to life, but thriving.

Too many have left us too early and we grieve with those parents, but they more than any, would not want to see other families go through the same unimaginable journey they have.

In addition to listing Spinraza on the PBS, the Government’s first project as part of our Genomics Health Futures Mission will be ‘Mackenzie’s Mission’ – a new $20 million trial in preconception screening for rare and debilitating genetic birth disorders, including Spinal Muscular Atrophy. This trial will provide vital information and hope for hundreds of parents who face difficult choices in starting a family.

This has been named in honour of Mackenzie Casella, who sadly passed away from spinal muscular atrophy in 2017. As her parents Rachael and Jonathon Casella have said:

“We can't change our story, we can't bring her back, but our story can change what happens to someone else. We cannot begin to express what Mackenzie's Mission means to us, it is our daughter’s legacy. With it, a part of Mackenzie lives on. She will save lives and prevent pain. We could not be more proud of her.”
All up, we are spending $1.4 billion adding new and amended listings to the PBS, including medicines to treat breast cancer, relapsing-remitting multiple sclerosis and a new medicine to prevent HIV.

On the MBS, we’ve added cystic fibrosis testing, 3D breast screening and MRI tests for prostate cancer.

All of this, of course, in addition to the record $30 billion in additional funding for hospitals between 2020-21 and 2024-25, courtesy of our new five-year public hospital agreement.

Guaranteeing the essential services that Australians rely on? All reliant upon a stronger economy.

****

This Budget is a plan for a stronger economy.

Tax relief for working Australians like Mark, Nicole and lucky Steve.

Backing businesses like Nicks to create more jobs

Guaranteeing the essential services that Jo and Cruz are relying on.

Keeping all Australians safe.

Making sure the Government lives with its means - keeping spending and taxes under control.

Under our plan, there will be a stronger economy for Australians to live in over the next decade.