Well thank you very much Peter, Santo Santoro, Lord Mayor, Bob Quinn, the leader of the Queensland Parliamentary Liberal Party, my other ministerial colleagues and Michael Caltabiano, the State President of the Division, ladies and gentleman. Can I first of all thank Santo and Peter for their very warm words and can I say how impressed I have been and I know all of my colleagues have been with the tremendous fist that Peter has made of a very tricky portfolio in seven very short months. He's a younger member of the Ministry, we have a range of ages in the Ministry and he is one of the younger ones and I think he'll go a long way in politics and I thank him for his very important contribution.
He of course is emblematic of the contribution that the Queenslanders have made to the strength and the success of the Government I have had the privilege of leading over the last nine and a half years. But when I looked at the Federal results in Queensland in 2001 and I looked at them again in 2004, I thought, inevitably of that immortal slogan, "Beautiful one day and perfect the next," because it so effectively described my sense of, how should I put it, unexpected additional pleasure at the result that we managed to reap in Queensland. I never dreamt that we would win control of the Senate, I have to say that, I must confess that at four o'clock on the afternoon of the election when I was talking to my two sons who'd been out trying to persuade the electors of Bennelong to vote for me, I said to them, I thought in my most best moments, we'd probably win the House of Representatives, we might lose a seat or two and I thought the best we could do in the Senate was to win 37 seats. How wrong I was and how little faith I turned out to have in the great people of the great state of Queensland but can I say thank you ...
I do want to thank all of you for the support you gave to the Liberal and to the National Party because it was a team effort. I am a Coalitionist, the great success of the Federal Government has been the cooperation between the Liberal Party and the National Party. When those two parties work together, they succeed, and they win, and they stay in Government and it's been a view that I have held all of my political life.
Last Tuesday night Peter Costello delivered what many people have regarded as his best Budget. Some might say the first Budget he delivered for the Government in 1996 was his best because in 1996 we faced huge problems, we inherited a deficit of some $10.5 billion, the Federal Government owed the world, owed its creditors $96 billion, we had an unemployment rate of 8.5%, we had housing interest rates well over 10%, we had low levels of business confidence and we had an unreformed taxation system and we had a largely unreformed industrial relations system. Although, to its credit, the former Government had implemented a number of other valuable reforms such as tariff reform and financial deregulation which the then Opposition had been willing to support. So it was a different environment in 1996 and we had to take a lot of very unpopular decisions. One of those unpopular decisions was of course to introduce something that I know was never very popular at gatherings such as this and that was the superannuation surcharge and it was something that I received many comments about. Let me put it in a neutral way - over the years as time went by, and I will come to the fate of that in a moment. But it was in many respects, last Tuesday, it was a Budget that brought together and put on display what the Government has with, as always, the support and the effort of the Australian people and of the Australian workforce, put on display, what has been achieved with the Australian economy over almost ten years.
Now I would never pretend for a moment that Governments are the beginning and the end of economic success. The greatest reason why the Australian economy is performing well at the present moment is that the workforce and the business men and women of this country, have taken advantage far more, than most other groups of people, have taken advantage of the opportunities that the world has given this country over the last ten to twenty years.
This country and its country men and women, have many virtues, none in my opinion is greater and more important than our capacity to change and adapt. And the way in which the workforce of this country, the way in which the entrepreneurs, the business men and women of this country, have changed and adapted to the new circumstances. It's turned ourselves from an inward looking economic culture where we automatically expected protection and a leg up before we started to compete, the way in which we have moved away from that over the last decade or more, has been quite remarkable.
But of course Governments are responsible for setting the climate. Governments can influence, they can create, and they can alter expectations and what we have essentially tried to do over the last decade is to provide a climate which gives the maximum encouragement to people, decision makers in business and importantly, their employees to adapt and to exploit the new opportunities of a globalised economy. We are lucky, there's no doubt about that. Providence gave us vast resources of minerals, vast energy resources. We've also been given the fortune of occupying an island continent and we are very lucky that our history has not been marked by internal conflict and discourse. We are very fortunate but there are many fortunate nations that have squandered the fortune that providence has given them and I don't believe Australia has done that and what we have endeavoured to do as a Government is to allow the Australian people to take advantage of the good fortune that we have had.
We have seen ourselves first and foremost as having the responsibility to manage the Australian economy in a predictable fashion. People do not like unexpected shocks, they like to believe that they live in a country that provides a degree of certainty and predictability. We have sought to be good economic housekeepers, we believe in the value of paying off debts. We don't believe that the country should be over-geared. We do believe that if we practice prudent housekeeping with a national economy, it instils confidence in the rest of the community and that is why we are very proud of the fact. As Peter Costello could report last Tuesday night, we are very proud of the fact that we started with $96 billion of Federal Government debt and that has now come down to a mere $6 billion. We have a net debt to GDP ratio, if you can forgive the jaw breaking economic jargon, of 0.7% of GDP and that is undreamt of amongst most industrialised countries. We have a fiscal position that is the envy of any of our comparable nations. The Chancellor of the Exchequer in the United Kingdom doesn't have a budget surplus. The Secretary of the Treasury in the United States certainly doesn't have a budget surplus and the Finance Minister of the Japan doesn't have a budget surplus. Now it's not the only thing but it's an extremely good start and it's one of the things that has helped instil a sense of confidence. We have over the last ten years endeavoured to bring about a large number of additional reforms. We've been substantially but not totally successful. The changes in the taxation system overall, although in some respects they fell short of the mandate we received at the 1998 election and fell short of some of the things we wanted to do, merely because we couldn't get them through the Senate in their original form.
Taxation reform has nonetheless overwhelmingly been a great step forward. Most importantly it has done something that I have wanted to do for a long time. Going back to the time when I was Treasurer in an earlier government and that is to give to the states of Australia, a guaranteed revenue base that grew with the economy. I can remember the earliest encounters I had with Premiers from both political sides and from all around Australia when they complained that Premiers merely got the pickings at the end of day. You know it was never true but that was their complaint and they used to say you know we want access to a growth tax. You've got the growth tax and you just decide each year you know you are going to give a few scraps out of the growth tax and that's not good enough because we have to fund public hospitals, government schools, police services and build state roads and that over time came to me to represent a fair argument and that is why we decided in 1998 when we announced the GST that we were going to give all of the GST to the states and it may come as a surprise even to some people in this room that every last dollar of the GST goes to the states of Australia because we believe they are entitled to have access to a growth tax and out that growth tax, they can fund their responsibilities for public schools and public hospitals and all of the other services that states are meant to provide.
Now there is of course a concomitant of that and that is if you have access to a growth tax, you can't then double up, you can't when you've got a shortfall in the Queensland hospital system or the New South Wales hospital system, turn around and say, well we could do even more if only Canberra would give us more money. The reality is that Canberra has given you more money and there is no State in Australia that has done better out of the GST than the great State of Queensland and can I say, I can tell from his body language every time I have a discussion with him, the Premier of Queensland knows that damn well and Queensland has done extremely well, it's done extremely well out of the GST. I don't object that, I support it, it's the end result of our policy but it carries with it a responsibility to discharge the obligations that under the power sharing arrangement of the Australian federation rest with the States.
The Budget was able to report that we have the lowest level of unemployment in Australia in 30 years. In the space of something like 10 or 15 years, we have gone from a country that had a shortage of jobs to a country that has a shortage of workers-particularly skilled workers. And that was another feature of the Budget, its emphasis in fulfilment of the election campaign commitments I made for the Coalition, its commitment to invest hundreds of millions of dollars in boosting the skills capacity of this country, and in particular, the funding of the 24 Australian technical colleges -which are designed to restore the prestige of a technical qualification in this country.
I frequently said that there was no remark I made in the last election campaign that drew more spontaneous support than when I said at the launch, just a few yards from here, few hundred yards from here in the City Hall in Brisbane, I said that I wanted an Australia in which a high quality technical qualification was as prized as a university degree. And I think we have made an error in this country of downgrading trade qualifications. For a generation or more we embrace the foolish notion that the only path to a successful career was for a person to go to year 12 and then go on to university - ignoring the fact that many people have neither the interest in or the adaptability to university, but if they're forced to go down that path, they ignore the prospects and the possibilities that lie through technical education.
The Budget was conspicuous for tackling some of the longer term problems that this country has. We are an ageing population, the ageing challenge is not as great in Australia as it is in Japan and some of the countries of southern Europe, but it is nonetheless there. And we've sought to challenge it in several ways. We've sought to encourage people to remain in the workforce longer, that will require a cultural change but it's a beginning. I noticed that many firms around Australia are now embarking upon positive programmes to recruit or retain older workers. The Government is doing the same thing and I think it's important that that cultural change continue because it's very relevant to our capacity to fully exploit the strengths of the Australian economy.
We've also embraced and this of course brings us very much to Peter Dutton's area of responsibility, a policy to encourage many people now on welfare to enter the workforce. Not as a means of punishing them, not as a means of saving money because it won't. Indeed for the first four years the training programmes, an additional investment in making people more ready for the workforce, will cost something in order of $2 billion over the next four years-so it hardly represents an exercise in cost cutting. But it's a recognition that welfare dependency is from a long term point of view, as a distinguished Aboriginal leader Noel Pearson has said, is poisonous to the development of communities and of the human personality. And people need and deserve the satisfaction and the value in self-esteem of being part of the employed workforce and that is the attitude that we will bring to these reforms.
We're not bringing the attitude of trying to punish people or deprive them but rather through a combination of incentives and changes in the rules - both in relation to the disability support pension and also those people who have sole parent or other payments of that kind to encourage them to enter the workforce. It's a very important initiative. It will be implemented in a consistent way and it will be implemented in a very sympathetic and a very understanding way.
And finally ladies and gentleman the Budget was able to deliver very significant taxation relief. This county over the last 8 or 9 years has seen the introduction and the steady expansion of a system of Family Tax Benefits - which has resulted in a marked improvement in the financial position of low and middle income families in this county. One of the frequent mantras of the Labor Party, when they attack us, is to say that under Howard the rich have got richer, at the expense of the poor getting poorer. That statement is fundamentally wrong and it's been disproved by some recent research. It is true that over the last 10 years more people who might loosely be called as well off, as wealthy, however you want to describe it - more of those exist now then existed 10 years ago and there are... they're not only better off but there are more of them. There's no argument about that and that's no bad thing, because any fair capitalist society will always have a certain cohort of very high income and very successful people and we should never make the mistake of regarding that as a bad thing. But that has not occurred at the expense of people at the lower end of the income range or in the middle because it's been demonstrated by some recent research, by the organisation carrying the acronym NATSEM, a respected Canberra based economic modelling organisation. But largely because of the introduction of the Family Tax Benefit system, the position of low and middle income families has not only been maintained but has been significantly improved over the last 8 or 9 years.
And so far from us building a society which has seen growing in equities, built on the suppression of the incomes of people at the lower end of the range, to benefit those at the end of the higher end of the range, that has manifestly not been the case. I mention that to, I suppose underline my astonishment at the petty populism which has been practiced by the Leader of the Opposition in relation to taxation relief in the Budget.
I believe that our top rates of marginal tax in this country cut in at too low a level of income. We have a progressive taxation system in Australia and I believe that there is still very strong support for maintaining a taxation system that has an element of progressivity in it, but it depends very much of course on where the levels are struck and at what points in the income scale you move from one level to another.
Let me give you some comparative figures. In the United States the top rate of income tax - and this allows for the imposition of state and city taxes and other imposts - totals about 43 cents in the dollar, and it applies at A$425,000 of income. In Japan it comes in at something in the order of A$275,000 of income, and the level is at about 46. In the United Kingdom it comes in at $87,000 and it's 41 percent, and in New Zealand it comes in it $55,000, and it's 39 percent. Ours of course is 47 percent, and it currently is legislated to come in at $80,000. Now if you put those figures and then you superimpose on that the changes that Peter announced last Tuesday that will end with the top rate of 47 coming in at $125,000. It represents two things. It represents a significant improvement over what the situation was only a year ago, and that is that it cut in at $60,000, and that was courtesy of the Labor Party and the Democrats in the Senate when they mutilated that part of our GST. You superimpose that. But it also demonstrates that it is hardly in international terms an unreasonable bonanza to the rich in this community. It is a recognition that successful people, whether they start with accumulated resources or not, and whatever field of endeavour they're working in in this country, will inevitably, unless you keep adjusting the thresholds for those rates, will inevitably keep pushing against those top rates. And when these changes have been implemented there will only be 3 percent of the Australian population, taxpayers, who will in fact be on the top marginal rate of 47 cents in the dollar.
Now you may know quite a few of them, and you may think everybody is, but I think it's always important that we preserve a sense of balance and perspective with these things, and the truth is that more than 80 per cent of individual taxpayers in Australia will be on a marginal tax rate of 30 per cent or less. Now that was one of the objectives of tax reform, and I'm delighted that it remains one of the achievements of taxation reforms.
We were, of course, also able to announce the total abolition of the superannuation surcharge, and I know that will be widely applauded. It always was raised with me when I came to Queensland, and other parts of Australia I might hasten to add as well. And of course many of the other reforms that are contained in the Budget, particularly the removal of the 3 per cent impost on certain imports will be widely welcomed by the business community. It was a good Budget for business; it was a good Budget for consumer confidence; it was a good Budget for putting incentive back into the taxation system; and it was a good Budget for long-term reform. But I want to conclude on this note: I wouldn't want anybody in this room to think that because I've spoken enthusiastically not only about the Budget, but also about the Government's economic programmes of the last ten years, I wouldn't want anybody to think that we regarded the reform process as completed. My opponent may believe, Mr Beazley may believe, that the lemon has been squeezed dry when it comes to industrial relations reform. He may believe that all of the changes that were needed in that area have now been completed. I do not.
One of the opportunities that the unexpected numbers in the Senate presents us with is a capacity to go somewhat further in the area of industrial relation reform, not in a way that needlessly creates antagonism in the community, not in a way that denies people the right to belong to a trade union if they wish, or denies them the right to have their interests represented industrially by a trade union. That is their right, and it will never be the policy of this Government to deny people a choice. But we do need still more flexibility, and I think we need a more nationally consistent industrial relations system. Not because I have any interest in taking roles away from the states where they are being discharged efficiently and in the national interest, but because I believe that overwhelmingly we are living not only in a globalised economic environment, but we're also living in Australia in an increasingly nationalised economic environment, and it's important therefore that those areas of our economy where unnecessary barriers and duplication exist between the different states of the Commonwealth that they be removed.
We will, of course, be implementing the commitments we made about reforming the unfair dismissal laws. We will of course be making other changes that make it easier for people to enter into workplace agreements. We will not see industrial relations reform as a vehicle for reducing wages, and I want to finish on this note. No charge from our critics has been more absurd than the charge that it's part of the philosophy of the Government I lead to cut people's wages. I keep hearing it time and time again. The truth of course is that, in the 9 years or more that we have been in government, real wages in this country have risen by 14 percent. They rose by 1.2 percent in the 13 years that the previous government was in office. I mention those figures to make the stark comparison that at the end of the day the purpose of good economic policy is to produce higher living standards, more secure employment, and greater opportunities for the families, the children, of Australian working men and women. Good economic policy can have no other objective; it's not an end in itself. It's not a beautiful set of numbers that you can purr about at night. What really matters about good economic policy is the impact it has on the lives and the hopes of the great bulk of the Australian workforce, and I don't think any of us should ever lose sight of that fact. I don't. I think about it every day because they are the people who are most in need of our consideration, and when I opened the Liberal Party's campaign for seats we held in the western suburbs of Sydney last September I said that the proudest boast I could make was that we had been a better friend of the workers of Australia than the Labor Party had ever aspired to be in the time that it was in government.
Now that will remain our objective, and I know that many of you as employers will know that it's your objective as well because the best employees you can ever have are the well paid, successful ones - the ones that contribute to their future and contribute also to your future. My friends, thank you for the support that I know so many of you have given to the Liberal Party here in Queensland over the years. I appreciate it very much. Queensland has been a wonderful source of support to the Federal Government over the last nine-and-a-half years, and I'm sure it will continue to be that way for years into the future.
Thank you.