I begin by acknowledging the traditional owners of the land on which we meet, I pay my respects to elders past, present and emerging.
I’m proud to lead a government committed to the Uluru Statement from the Heart, in full, including a constitutionally-enshrined Voice to Parliament.
It’s great to be back in Melbourne for the conference that stops the nation and to have the chance to reflect on the generational Labor mission I referred to in my speech on election night:
Opening the doors of opportunity – and widening them.
That ambition is at the heart of our vision for Australia and it’s the foundation of our first Budget.
We’d always said that if we were successful at the election, our government would deliver our own Budget this year.
First, because we wanted to move quickly to deliver on the commitments we took to the Australian people.
To put the plan Australians voted for into action.
Getting our investments in cheaper child care, cheaper medicine, fee-free TAFE, local manufacturing and affordable housing on the books and underway, as soon as possible.
And second, because we knew that the best time to strip-away the waste and rorts of your predecessors is early on.
But it became very clear, very quickly there was a third compelling reason for our government to deliver a new Budget in October, following the Liberal one in March.
That is the significant and rapid change we’ve seen in the global economic environment in recent months:
The IMF has downgraded its global growth projections – and is warning of ‘stormy waters’ ahead.
The consequences of Russia’s illegal invasion of Ukraine are driving up fuel costs and energy bills around the world.
And the impact of that here in Australia is magnified by a decade of ideological opposition to renewables and the neglect of key energy infrastructure – leaving us more vulnerable to global shocks.
Rising inflation is biting here and overseas - and central banks are responding with the sharpest and most synchronised tightening of monetary policy for decades.
And while the long tail of COVID continues to impact supply chains and construction costs, the new economic downturn we are facing is very different to the recession brought on by the pandemic.
We can’t close our borders and wait it out, we have to reform our way through.
Our Budget was framed in recognition of this global uncertainty – as well as the intensifying fiscal challenges here at home.
Alongside the terrible and tragic human cost of the floods that are battering our nation, there will be severe economic consequences for our farmers and producers.
And then there are the obvious, standout structural spends:
- Growing pressure on health care.
- A crisis in aged care
- New investments in our defence and national security, critical in this time of regional instability.
- And cost pressures on the NDIS.
At Budget time, we can all occasionally fall into the trap of talking about these four things simply as a set of figures.
But that’s not right.
National Security. Medicare. Aged Care. The NDIS.
These programs are essential to the safety of our people, fundamental to the health and strength and fairness of our society.
Our national security is a national asset.
Investing in our capability helps keep Australians safe. It is also part of our contribution as an ally and a partner and a neighbour and a leader.
And – at their best – reliable, affordable services are economic assets too.
One of the crystal-clear lessons of the pandemic is that a healthy economy depends on healthy people.
Making sure people can see a doctor when they’re feeling sick and afford the medicine to make them better means less time off work and less risk of adding pressure to the hospital system.
When people with disability are at the centre of decision-making – not only is the care more efficient and better targeted, the opportunities for economic participation are greater too.
It’s why Labor created the NDIS, it’s the same reason we created Medicare - because we know affordable, universal services give people greater confidence.
They reward aspiration, they make sure the doors of opportunity are open to all.
So, yes, of course we always want to see value for every dollar.
And we must ensure these programs are sustainable, for the long term.
But we also have a clear understanding of the value of these investments, as well as their cost.
Recognising also there is a clear difference between those four major areas of spending growth – and the fifth, which is the cost of repayments on a trillion dollars of debt, when interest rates are rising.
Our government has inherited the highest level of debt as a share of GDP in over 70 years.
And we face higher borrowing costs to service this debt.
At $12 billion, the increase in the interest bill over the next four years is not just the largest payment variation in the Budget, it is also the fastest growing cost.
And this interest bill is forecast to rise at more than 14 per cent a year over the next decade.
This is why Jim Chalmers and Katy Gallagher went through every program, line by line, to identify $22 billion in savings.
And it’s why we purposefully returned the revenue upgrades to the bottom line.
99 cents in every dollar for the first two years.
92 cents in the dollar over the forward estimates.
For perspective, the previous government averaged 40 cents in the dollar.
Howard and Costello went at 30 cents.
We are serious about the work of Budget repair, because we know how important it is to build a fiscal buffer against international uncertainty.
To plan and prepare for the unknown, for the global shocks that expose a domestic weakness.
Just as the pandemic revealed the grievous risk of goading manufacturers offshore and stranding Australia at the end of the global supply chain.
Just as the impact of Russia’s illegal invasion of Ukraine on global energy prices has put a spotlight on the catastrophic consequences of ten years of denial and delay and neglect here at home.
Of course, as a Labor Government, my colleagues and I understand there are many people feeling the pain of rising prices, especially off the back of a decade of stagnant wages.
And the easy option would have been for us to funnel these savings straight into a cash-splash, a one-off giveaway to buy a headline.
Cheap politics and hugely expensive economics.
Not just because of the dollar cost.
Not just because that’s exactly the sort of short-term approach that got Australia into this situation.
But because the untargeted spending would make the problem worse.
Instead of helping households, it would only add to the inflationary pressures that are eating-away at family budgets and devaluing wages.
What’s more it would put the independent Reserve Bank in a position where it would likely raise interest rates higher than it otherwise would.
Fiscal policy needs to work with monetary policy, not contradict it.
The moment demands a different mindset and a different model.
And a critical part of that is getting wages moving again:
- Delivering a real increase in the minimum wage
- Supporting a meaningful, long overdue pay rise for aged care workers
- Closing labour hire loopholes that drive down pay and undermine security
- Fixing the broken bargaining system – helping more workers in low-paid sectors like disability care and early childhood education negotiate with their employers for a better deal.
- And fee-free TAFE courses, more uni places, more apprenticeships – skilling people up for higher-paying jobs
It’s also about creating new jobs and investing in the resilience of our economy:
- Backing local manufacturing, so we make things here again
- Upgrading the NBN, so businesses and workers can have greater flexibility.
And our plans for Powering Australia and Rewiring the Nation – bringing tens of thousands of new jobs to regional Australia.
Our National Reconstruction Fund is central to transforming existing businesses but also supporting the creation of new industries for the future.
We’re also focused on providing cost-of-living relief that delivers an economic benefit - taking pressure off family budgets without putting pressure on inflation.
Making child care more affordable is the perfect example of this.
It’s cost-of-living relief that can save families thousands of dollars a year in fees.
And it’s economic reform that makes available over a million more hours of paid work for parents every week.
Raising incomes and boosting retirement savings, helping to address the terrible disparity in the wages and retirement incomes of men and women.
Investing in cheaper child care also delivers on the three Ps: participation, productivity and population.
So not only will it remove a structural barrier to economic equality for women.
It will also add the equivalent of 37,000 full-time workers a year to our economy.
These are not entry-level jobs either: we’re talking about women who are already on a career path, able to return to work and fulfil their aspirations for a promotion.
And all the economic principles behind our investment in child care hold true for our expansion of Paid Parental Leave to 6 months.
Providing more support and greater flexibility helps Mums and Dads with a new baby share those precious early days together – and it empowers parents to share the caring responsibilities more equally, in a way that works best for them.
I am proud to say our Budget’s commitment to Cheaper Child Care and the expansion of Paid Parental Leave represent Australia’s biggest-ever investment in women’s economic equality.
Because we understand economic equality for women is Australia’s biggest-ever untapped resource.
And talking of the doors of opportunity - the hard truth is too many times, the women of Australia have had to kick those doors down in pursuit of the respect, safety, support and opportunity they deserve.
These two measures speak for our commitment to help with the cost of living.
To champion equality for women.
To boost productivity and participation.
And they also reflect our commitment to economic reform driven by co-operation.
Because investing in Cheaper Child Care and expanding Paid Parental Leave were two of the clearest points of consensus from the Jobs and Skills Summit we brought together in September.
Economists, industry, unions, small business, State Governments, early childhood experts are all on the same page when it comes to these policies.
And that’s how we’re going to bed change down - and lock reform in, for the long term.
We’re taking the same approach with our new National Housing Accord and its aspiration of building one million new homes.
Bringing together:
- State and territory and local governments
- Institutional investors like superannuation
- And the construction sector
To build more affordable housing, where it’s needed most.
Not crowding-out private investment, or competing with it - but bringing everyone together.
Incentivising some of the national savings pool, to help with a great national challenge.
Our National Housing Accord will work alongside:
- Our Housing Australia Future Fund
- Our Help to Buy program
- Our Regional First Home Buyer Guarantee
So more Australians can grow up knowing the security of a roof over their head, so more families aspire to a home of their own.
I know this will change lives. It changed mine.
And that’s the final thing I would say about the doors of opportunity.
When a door is opened for you, you have a responsibility not just to hold it open for those who come after you, but to widen it.
To make sure it is easier for future generations to fulfil their potential, to achieve their aspirations, to enjoy a higher standard of living and greater economic security.
That’s not the work of one Budget, or one term of government - it is the responsibility one generation owes to the next.
It is the better future we campaigned on.
It is the better future people voted for.
It is the better future we are determined to deliver, for all Australians.