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Transcripts from the Prime Ministers of Australia

Transcript - 23519

We save the economy now or the nation will pay later

Photo of Abbott, Tony

Abbott, Tony

Period of Service: 18/09/2013 to 15/09/2015

More information about Abbott, Tony on The National Archive website.

Release Date: 23/05/2014

Release Type:

Transcript ID: 23519

The tough but responsible measures outlined in last week’s Budget are absolutely necessary to secure Australia’s economic future.

The Budget outlines a clear plan – in fact, the only plan – that will address Labor’s debt and deficit disaster.

Firstly, let’s remember the problem we are trying to fix.

When John Howard and Peter Costello left office, Australia had a $20 billion surplus and $50 billion in the bank.

Over six years, Labor squandered this and ran up five record deficits, a further $123 billion in projected deficits and gross debt headed towards $667 billion.

You pay for that debt. For example, every single month Australia is spending one billion dollars – or one thousand million dollars – just to cover the interest bill on Labor’s debt. And at the moment we are borrowing to pay that interest, which is like a household paying a mortgage on a credit card.

In my view, that is simply unsustainable.

So through the Budget the Government delivered an Economic Action Strategy that will put Australia’s finances back on a sustainable footing, strengthen the economy and reduce Labor’s debt by almost $300 billion over the next decade.

If we don’t take action now, we will effectively be asking our kids to bear an even greater cost in the future.

Over the last week you’ve probably read or heard a lot of things about the Budget that are simply untrue.

The Labor Party desperately want to scare you and that’s why they don’t care about telling you so many blatant untruths.

So let’s get the facts on the table and dispel some of Labor’s myths.

Firstly, on health. The Budget does not cut funding for health.  Annual federal assistance to the states for public hospitals will increase by more than 9 per cent every year for the next 3 years and by more than 6 per cent in the 4th year – that’s a 40 per cent increase over the next four years or more than a $5 billion a year increase in spending on hospitals.

Overall annual health spending (not just hospitals) will increase by more than $10 billion over the next four years. Every dollar of estimated savings in health expenditure in the Budget will be re-invested back into the Medical Research Future Fund

The Government is also putting the growth in health spending on a more sustainable trajectory from 2017-18, but every year it will continue to grow.

Secondly, on education. Again, funding for our schools will continue to increase each and every year.

Students and schools will benefit from the Government’s record funding investment of $64.5 billion over the next four years. And we are putting in place other reforms to improve the quality of teaching – because money isn’t the only answer to better schools.

From 2013-14 to 2017-18 total Commonwealth funding to all schools in Australia will have increased by 34 per cent, a $4.6 billion increase.

This is over $1.2 billion more than Labor would have spent over the next four years.

From 2018 there will be a stable and sustainable system for schools funding based on the Consumer Price Index (CPI) plus growth in school enrolments. But every year, schools funding will continue to go up and up and up.

Pensions. As I promised prior to the election, the pension will not change during this term of parliament. In fact, the amount of the pension will continue to increase twice a year as it always has.

In March this year, the base rate of the pension increased $14.30 a fortnight for single pensioners, and $10.80 a fortnight for each member of a couple.

The amount of the pension will increase again in September and age pensioners will also benefit significantly from the carbon tax being scrapped.

Australians are living longer and healthier lives, so I am determined to ensure that our pension system is sustainable over the long term.

That’s why from 2017 (after the next election) pensions will be indexed to CPI rather than wages.  But the pension will still continue to increase each and every year.

This reform is necessary because without change, the cost of the age pension is projected to almost double over the next decade, from almost $40 billion a year now to well over $70 billion a year.            

While there may be many things in this Budget that you don’t like, by working together we can fix Labor’s mess and strengthen our economy for the long term. Together, we can build a stronger and more prosperous economy that will deliver more jobs and a better future for our children.

Transcript - 23519