Thank you very much Carol. It's with real enthusiasm and gratitude that I again address the annual meeting of the State Council of the Tasmanian Division of the Liberal Party. By any measure the last 12 months have been a great year for the Liberal Party here in Tasmania. We saw at the federal election of the 9th of October last year stunning victories in the two northern electorates of Bass and of Braddon and I express my admiration and my thanks to Michael Ferguson and to Mark Baker for the remarkable efforts they both chalked up in winning those two seats.
Those victories were possible because we chose the right candidates in the right places. And that is a lesson for the Liberal Party all over Australia, whether at a national level or at a state level. And can I say Rene that I am very impressed with the team that you are assembling for the state election. I met many of them for the first time last night. They represent a cross section of the Australian community. They are people who have had some of life's experiences; they have not spent their entire existence counting numbers in some sub-faction of a narrow cave of a political party. They have in fact acquainted themselves with the concerns and the needs of the people of Australia and of the people of this state. Can I take this opportunity of congratulating Ben Quin on his endorsement as the Liberal Party candidate for the federal seat of Lyons.
We're not content with just Bass and Braddon; we would like to further extend our horizon. And Ben you secured a significant swing last time and we look forward to helping you to secure the necessary further swing when the election is held in 2007. Might I take this opportunity of recording my great thanks to Carol Humphries for the remarkable work she has done as President of the Tasmanian Division over these years. Thank you Carol for a wonderful job. It's a pretty thankless job being the well-paid president of a division of the Liberal Party of Australia and there's a large competition for the job. So I thank you Carol, you've brought energy and enthusiasm and very importantly of all you've brought very great commitment to the task. Can I thank my other federal colleagues, especially the senior Tasmanian Liberal Eric Abetz, the Special Minister of State, for his contribution to the Government, to Paul Calvert, the President of the Senate, and all of my other senatorial colleagues. You have all formed a remarkably cohesive, effective and dedicated Tasmanian Liberal team.
As we look back on the last year and we ask ourselves why was it that the Government for a second election in a row was not only returned to office but also increased its majority? I said on election night on the 9th of October last year that one had to reach back to the 1960s, to the elections of 1963 and 1966, to find the previous instance where an incumbent government had on two successive occasions increased its majority. Not only did we increase our majority in the House of Representatives, but we also, I have to confess, miraculously and beyond my expectations, won a narrow majority in the Senate. Not control of the Senate - a narrow majority in the Senate. A majority of one on a good day as the saying goes. And we should keep that in mind, but we should not lose sight of the importance of that majority that the Australian people gave to us. They didn't do it carelessly; they did it because for a combination of reasons in the right places at the right time they wanted to say to the Government you're doing a good job and provided you continue as you have in the past we continue to have confidence in you. And we must always see that victory as being a decision by the Australian people to trust us for another three years. And provided we see it as a privilege, provided we see it as a responsibility of discharging the trust of the Australian people, provided we have a proper sense of humility and modesty about the nature of the challenge and the nature of our capacity then I believe that we will continue to be successful.
This Government has brought economic security and national security and family security to the people of Australia. And that is why overwhelmingly we have won four elections in a row. The Australian economy now is stronger than it's been at any time since World War II. Of that there is little doubt. In a difficult international environment permeated by the contemporary and, I'm afraid it's been with us for a long time, the threat of terrorism, this Government is seen as strong and reliable; as having formed the necessary alliances with our friends and allies and also understanding the importance of embracing every section of the Australian community that wants to enhance the national unity of this country.
I want today to say something about the security that we have brought to Australian families. And in talking about the security that we've brought to Australian families I look back to some of the commitments we made in 1996. And one of the major commitments I made in 1996, before I became Prime Minister, was to alter the tax system to provide greater help to middle Australian families raising young children. I made no apology for the fact that if I became Prime Minister I was going to alter the tax system to help Australian families, because I believe that strong functioning united Australian families are not only this country's greatest asset but they also represent the most efficient social welfare system that mankind has ever devised. So I set out in 1996 and the Government set out in 1996 to introduce changes to the tax system that would benefit Australian families. And over the nine and a half years that have gone by we have steadily changed the system to provide greater assistance, most particularly to low and middle income families who have dependant children. We've done it openly, deliberately and we've done it in a targeted fashion so that those who need the assistance most get the most. I don't apologise for that, it's a very sound principle. If you believe in something and you've got the opportunity in government to achieve it, you set out to achieve it. And over the past several weeks independent, irrefutable evidence has emerged of the extent of our success in changing the system to help the people we set out to help almost ten years ago.
A few weeks ago the Treasury released, I'm sorry the Bureau of Statistics released, the latest figures on disposable incomes in Australia and what those figures showed very interestingly was that low and middle income people in Australia had enjoyed faster increases and greater increases in disposable income than had the very well off in Australia. Both groups had gone up but the low and middle income people had gone up at a greater rate over the last nine or ten years than had the very well off in the Australian community. Evidence number one, or exhibit number one in the case for establishing that we have kept faith with the commitment we made to Australian families.
But a few days ago the Federal Treasury released in its regular economic round-up an analysis of the impact of the family tax benefits payment system on Australian families. And what that demonstrated is that so great has been the assistance to Australian families that an estimated 38 percent of families received more in family tax benefits than they initially pay in income tax. And the story is even better for larger families. 59 per cent of families with three or more children aged under 16 pay, when you net out the family tax benefits and the tax initially paid, no tax in net terms.
So the Australia of which I am proud to be Prime Minister is not an Australia that says to the wealthy you can pay no tax. It's an Australia that says to young struggling families if you qualify according to the income tax you are the group that pays no tax and that is something that in net terms that I am very proud of. Because you all know from your experience, we all know that the most difficult time is when your children are young, the costs are there. I mean it doesn't seem to get any cheaper as they get older I appreciate that but the cost is there, the school fees are there, the excursions are there, everything is there and unless you have a tax system that gives you help then you've got a tax system that really doesn't have a soul. So I'm very proud of the family tax benefit system and when I hear the Labor Party darkly muttering about the churning effect of the family tax benefits system, I hear the Labor Party darkly muttering about middle class welfare, I hear the Labor Party not darkly muttering but in fact saying that, as Wayne Swan said in the last election campaign, that the $600 a year supplement to people with children was not real, didn't exist. I mean you could tell that to the millions of mums of Australia who've received it last year and they're receiving it right now, they can tell Mr Swan they're getting it right now, right at the beginning of September, hundreds of thousands of them are receiving it now. They will tell Mr Swan it's very real indeed. And they will tell Mr Swan that it's extremely valuable.
What the Treasury analysis showed was that Australia's system of tax payment benefits is tightly targeted and it aims to provide assistance to those most in need while keeping the cost affordable. Our approach stands in very stark contrast to the Labor Party's attitude towards the family tax benefit system. You don't really know whether they favour of it or they don't. Mr Emerson wants to significantly tighten the means test of family benefits. Let me to say to Dr Emerson, and he's meant to know something about economics, if you really want to save a lot of money so-called, from tightening family tax payments, you have to bring the income test right down so that it affects hundreds of thousands of what we would call ordinary middle Australian families. The idea that you can fix a loophole here or there and save hundreds of millions of dollars is phoney, you can't do anything of the kind. I've gone through these sort of exercises wearing my various disguises over the years and I can say to Dr Emerson, forget it. If you really want to slash hundreds and hundreds of millions of dollars off the cost of family tax benefits and redistribute the money somewhere else you're going to have to introduce an income test that severely affects middle Australian families.
I've already talked about the disappearing $600 that strangely enough is turning up right now in the pockets of Australian families, and under Labor's election policy last year parents were punished by up to $2,000 a year if they chose to stay at home and look after their children. And one of the features of the new family tax system that we have brought in over the last 10 years is that we have restored to a very significant extent the reality of choice for parents to decide when their children are very young whether they themselves will provide the full time care for their children as an alternative from them going into paid childcare. I believe that this is something that should be a matter of parental choice; it's not the role of the Government to tell people how they should care for their young children, it's the role of the Government to provide Australian families with choice and we have been prepared to underwrite that choice by increasing the opportunities for families to remain single income families while their children are very young. Equally we have provided very generous additional support for the cost of childcare, including the introduction of the 30 per cent tax rebate on net childcare expenses announced in the last Budget.
My friends, I mention these things because in the past couple of weeks we've heard these rumblings from the Labor Party about the family tax benefit system. We've seen the odd smoke signal going out. There've been quite a lot of them. They don't seem very coordinated, but smoke signals they are. And they seem to be saying what a Labor government would do is cut out all of this middle class welfare and we'd sort of use some of that money to cut tax. Well, that's a phoney proposition on a number of fronts. The first front is that the family tax benefit system is what it is - it's a family tax benefit. People can take the family tax benefit either as a fortnightly payment to the principle carer, usually the mother, or they can take it at the end of the year as a tax rebate. They can take either choice; the net effect is the same.
Most families, because for understandable reasons they need the money, take it as a fortnightly payment. And one of the things that I don't think the Labor Party has thought about is that if they turn that system on its head it would have massive re-distributional effects between men and women, between mothers and fathers, overwhelmingly to the detriment of the women of Australia because in most cases the women are the principle carers of very young children, and that is a factor that perhaps the Labor Party has not kept in mind.
I just want to say to you that one of the proudest achievements of this Government has been the family tax benefits system. And whilst in its finer details you can always be making sure that it's operating as efficiently as possible, overwhelmingly it's been hugely beneficial, overwhelmingly has lifted the living standards of middle Australian families, and overwhelmingly it has delivered on the commitment that I made 10 years ago that I would change the tax system to provide greater help to Australian families and I'm very proud that we have done exactly that.
I just want to say my friends just two other things. I had the opportunity last night of talking about the importance of ongoing economic reforms. I know there's the tendency in some quarters, including in sections of the Liberal Party, for people to think that, look we've had all of this reform over the last 20 years, we've done very well, you've got unemployment down, inflation is down, interest rates are down, people have got jobs, business is confident, exports are booming, particularly in the resource sector, why don't we just go away for a holiday and let's have no more reform? Why don't you just rest of your laurels? If you have a good thing stick to it, just let it alone, don't touch it, it's going perfectly well. Now that's very attractive and it's very complimentary but it's a recipe for this country's slowing slipping behind as the years ago by.
Economic reform is a never ceasing challenge and the way to stay on top is to find the next opportunity to further reform the Australian economy, the way to stay on top is to make certain that the gains that have brought us where we are now are met by gains in the future, that will give us a new ascendancy in the future because in my now well-known metaphor it is like participating in a footrace towards an ever receding finishing line. Frustrating, you never quite get there but if you stop running hard the other blokes in the race are going to go past you. And I don't want the other blokes in the race to go past Australia. I want Australia to keep out in front. I want the strength that we are seen to present now to be retained.
If we want unemployment at five per cent or lower in five years time we've got to embrace workplace relations reform and other reforms. If we want business investment to remain strong we've got to provide them with the incentive of continually modernising the industrial relations system. So all of those things point towards further reform and further change; the task is never completed. And the reward; we're strong now because of the benefits of reforms of the last 20 years, some of those reforms I acknowledge were carried out by the former government, I've never denied that. The difference was that when they tried something sensible when they were in government we didn't block it in the Senate. Every reform we've tried since we have been in government, every single serious reform without exception the Labor Party has tried to block in the Senate. And that is why the importance of that tiny majority of one should be very, very much in their minds.
And finally can I say to all of you in expressing my gratitude for the support and loyalty that you've given to me over the last nine and a half years, and to all of my colleagues, how very important it is that that energy and that enthusiasm drives through to supporting Rene Hidding and supporting the State Liberal team. I don't like the fact that we have eight Labor Premiers and Chief Ministers. I would like to see us win state governments. I want to see State Government restored to the Liberal Party around Australia. It's challenging, I understand that, and a couple of weeks ago a seemingly invincible Peter Beattie suffered two very severe by-election defeats in Queensland. Politics is volatile and if you focus on presenting a strong alternative, all oppositions have got to be negative to a large extent, but they must also, of course, present positive alternatives. And if you can provide to Rene the sort of loyalty and support I know you will, I can assure him that we at a federal level will do all we can to help, do all we can to give the Liberal Party a real good shot at winning government when the next Tasmanian state election is held.
My friends, my thanks, my deep gratitude are due to all of you for not only the loyalty of the last nine and a half years, but the tremendous support you gave in the election campaign just under a year ago. I shall never forget no matter what comes my way in my political future, I shall never forget the first news coming through just after six o'clock, because you're an hour ahead of us, I know that, you're a long way in-front of us up there in Sydney and Canberra, coming an hour ahead of the results in the rest of Eastern Australia, to hear those wonderful swings that had been achieved in Bass and Braddon. It gave to me and my group at Kirribilli House, anxiously peering over the computers, it gave us a sense of great exhilaration and great excitement and of course it was the harbinger of a wonderful, exhilarating and enjoyable evening.
Thank you Tasmanian Liberals for your tremendous contribution to our cause.
[ends]