I begin by acknowledging the traditional owners of the land on which we meet and I pay my respects to their elders past, present and emerging.
I want to acknowledge all the members of my team who are here today.
Our Labor Government is driven by the determination to make a positive difference.
To change this great country, for the better.
And to build an economy that works for people, not the other way around.
So that when you work hard and make sacrifices, you get fair reward for your effort.
You earn the economic security to plan for your future, to pursue your aspirations, to make a good life for yourself and your family.
That’s at the heart of everything our Government seeks to deliver for the people of Australia.
This is why helping with the cost of living remains our number one priority.
Because if the cost of essentials is rising too fast, people hardly have time to think about the future, let alone plan or save for it.
I understand people are under financial pressure.
After inflation jumped to 2.1 per cent in the March quarter of 2022, interest rates started to rise.
Australians have been living through the economic aftershock of the pandemic, the first recession in three decades, and the ongoing, far-reaching consequences of Russia’s invasion of Ukraine.
An unprecedented combination of global inflation and damaged supply chains has pushed up interest rates, putting pressure on family budgets.
Everything we have done as a Government has been about managing those competing forces.
Making the responsible decisions to fix the Budget – delivering the first surplus in 15 years and a second one a possibility - so we have a buffer against future uncertainty.
So fiscal policy is working with monetary policy, not against it.
And so we have room in the budget to provide more support to Australians.
Rebuilding our supply chains, fixing workforce shortages and investing in manufacturing, skills and energy for the future.
And delivering a range of targeted measures – from energy bill relief to increased rent assistance - that provide meaningful help with the cost of living, without adding to inflation.
That’s the core of our approach.
Tackling the immediate challenges people are facing – while always looking to both anticipate and shape the future.
Helping Australians here and now – in a way that also builds for the long term.
And one of the great privileges of serving as Prime Minister is meeting people for whom our policies are making a real and practical difference.
Australians with chronic heart conditions, or osteoporosis, saving hundreds of dollars through cheaper medicines.
Families in Frankston and Hobart and Rockingham who’ve been able to get fast and free treatment at one of the 58 Urgent Care Clinics we’ve opened all over Australia.
Young people in regional Queensland and the northern suburbs of Perth, undertaking apprenticeships because of fee-free TAFE.
Factories in Ingleburn, Bundaberg and Marrickville that are hiring new workers and investing in new technology, because they are backed by a government that believes in a future made in Australia.
Australian universities and researchers partnering with local firms to lead the world in everything from cloud computing to critical minerals.
Farmers and producers, who’ve been able to diversify and find new markets in India and South East Asia and are now exporting to China again as well.
Pensioners and small business owners being assisted by our energy bill relief – and our new support for rooftop solar in social housing.
More than 1 million families have saved money through cheaper child care.
Help for their family budget here and now – and an economic reform that delivers for two generations.
Boosting productivity and participation by making it easier for parents to return to work - and giving more children access to the benefits of early education.
And of course, it’s not just the people you meet, the national economic data tells the same story.
Around 650,000 jobs created, since we came to government.
Last year is the first year since monthly records began where unemployment stayed below 4 per cent for every single month.
The first time ever.
Since 1978 there have been 22 months when unemployment has had a 3 in front of it – 19 of these 22 have been under our Government.
Importantly, the latest monthly inflation rate for the 12 months to November fell to 4.3 per cent.
The smallest annual increase since January 2022.
And – just as we promised Australians - wages are moving again.
We’ve supported back to back increases in the minimum wage and we’ve delivered an historic 15 per cent pay rise for aged care workers.
We’ve taken the gender pay gap to a record low.
And wages are growing at their fastest rate in almost 15 years – including two consecutive quarters of real wages growth.
All of these signs are encouraging, all of them reinforce my optimism about Australia’s future, all of them underline my admiration for our people, their perseverance and positivity in tough times.
But I understand that the progress we’ve made together is not enough.
I recognise – as Treasury analysis confirms:
“Working households have experienced the fastest rise in their cost of living.”
That’s why, over summer, I asked Treasury and Finance to present us with options to help people with their cost of living, while continuing the fight against inflation.
Australians are looking for more help.
Australians deserve more help.
And today I can confirm that more help is on the way.
Today, I announce that from the 1st of July this year, our Government will deliver a tax cut for every Australian taxpayer.
All 13.6 million taxpayers, not just some.
Everyone who works and pays tax will benefit.
This is a plan for middle Australia that delivers for every Australian taxpayer, right up and down the income ladder.
Helping with the cost of living, nourishing aspiration – and boosting participation.
Strengthening the connection between hard work – and fair reward.
Because we want people to earn more – and we want them to keep more of what they earn.
The first element of our plan reduces the lowest rate of income tax from 19 cents in the dollar, down to 16 cents.
This change means that taxpayers earning less than $45,000 will now receive a tax cut.
And every working Australian will pay less tax on the first $45,000 that they earn.
This is a significant boost for the take home pay of Australians on modest incomes and people working part-time.
An early educator, or an aged care worker or a cleaner earning $50,000, will receive a tax cut worth over $900 a year.
These tax cuts will provide meaningful help for parents returning to work, particularly women with young children.
Because we know that when women with children are making decisions about how many hours they will work, an increase in their take home pay is a powerful incentive.
This is where our broad and fair tax cuts that benefit workers also deliver for business, by increasing workforce participation.
Today, I also announce we will be increasing the low income threshold at which the Medicare levy applies.
This means 1.2 million low-income earners will either remain exempt from paying the levy, or pay less in tax.
But it doesn’t stop there.
Our Government understands that middle income Australians need help with cost of living now, more than ever.
This is why Labor’s tax cuts are fairly and squarely focused on middle Australia.
The second tax rate will be cut from 32.5 percent down to 30 per cent - and that will apply all the way to $135,000.
We will be retaining the 37 per cent rate, which will now apply from $135,000 - up from $120,000.
The threshold for the top tax rate of 45 per cent will also be increased. It will now kick-in at $190,000, up from $180,000.
This is the first increase in the threshold for the top marginal rate since 2008.
I want to take you through what these changes will deliver for people.
The average wage in Australia is $73,000.
A person earning that will now get a tax cut of more than $1,500 a year.
More than double what they would have got, under the plan put forward by Scott Morrison.
Consider a full-time worker earning $100,000 a year.
They will get a tax cut of over $2,100.
Over $800 more for these middle income earners, because of our changes.
For a family on the average household income – around $130,000.
With one partner earning $80,000 and the other $50,000, their combined tax cut will be over $2600.
$1600 more than they would get under the old plan.
And someone earning over $190,000 will get a substantial tax cut, over $4,500.
Our plan will more than double the benefit for Australians on the average income.
And it will look after low income earners and part-time workers as well.
So, someone working at Australia’s largest employer Woolworths earning $40,000, will now get a tax cut of over $650.
Under Scott Morrison’s plan, they would have got nothing.
Not a dollar.
And – crucially - just like our other measures assisting people with the cost of living, our tax cuts do not add to inflation.
We have publicly released the advice from Treasury.
It makes it clear, and I quote:
“This option is broadly revenue neutral, will not add to inflationary pressures and will support labour supply.”
The Treasury Secretary – and the Treasurer – have both consulted the Governor of the Reserve Bank on our changes, who expects that there are no implications for their inflation forecasts.
Since I had the honour of becoming Labor Leader, this is the 9th time I’ve addressed the National Press Club.
As Leader and as Prime Minister - I’ve always said I’d be upfront with people and take responsibility for the decisions my government makes.
I’m doing that today.
When economic circumstances change, the right thing to do is change your economic policy.
That’s what we are doing.
This is a change in our policy.
Some would say that we should stay the course, even if it means going to the wrong destination.
To them I say, we are choosing a better way forward, given the changed circumstances.
We are doing the right thing, for the right reasons.
With a plan that delivers a tax cut for every taxpayer.
More help for middle Australia.
More help for families under pressure with their cost of living.
And a better deal for 5.8 million working women.
Every woman taxpayer will get a tax cut.
And 90 per cent will receive a bigger tax cut, under our plan.
When Scott Morrison brought his tax plan to the Parliament back in 2019 I said, on many occasions, that pretending you knew exactly what the economy would look like in 5 years’ time was:
“a triumph of hope over experience - and economic reality”.
As the Treasury advice makes clear:
“The Australian economy was expected to be supported by a positive global outlook, with strong, broad-based global growth.
Inflation, and therefore interest rates, were expected to remain low.
However, unanticipated global events meant that these projections have not come to pass.”
Instead, we know, we’ve had to deal with a global pandemic, a recession, damaged supply chains, conflict in Europe and the Middle East, rapid increases in the price of food and energy and ongoing worldwide economic uncertainty.
And if we were to simply proceed with the old plan – promoted before any of these challenges even existed it would mean middle Australia missing out on the help they need and they deserve.
And it would mean leaving out millions of women, part-time workers, young people and renters, who more than ever, deserve a government that’s on their side.
For me, our responsibility is clear.
This is the right decision, not the easy decision.
Just as the health crisis of the pandemic meant that governments had a responsibility to change economic policy, through measures such as JobKeeper, the cost of living pressures facing Australians on low and middle incomes, demand a better tax policy.
A plan that responds to the real challenges people are facing today.
Because when I see the pressure Australians are under right now, it’s crystal clear to me that every taxpayer needs and deserves a meaningful tax cut.
And that is precisely what Australians will get from our Government.
We’ve seen, already, that our opponents will revert to their predictable shouting and confected outrage.
That’s all they do, that’s all they’ve got – negativity, conflict and division.
Nothing positive to offer the Australian people.
One quote from yesterday sums up why I say the Coalition has become the Noalition.
The Deputy Leader of the Liberal Party actually said:
“We will fight this legislation in the Parliament.
We don’t even know what it will look like.”
They don’t know what it looks like.
They don’t care who it will help.
The only thing they are in interested in, is having a fight.
They are so addicted to saying no, that they have already promised to reverse these tax cuts - and increase taxes on 11.5 million hard working Australians if they win the next election.
That’s how far down the rabbit hole they’ve gone.
They would rather stage a political brawl, than help low and middle income earners.
That’s why they voted against cheaper medicine and energy bill relief.
Voted against secure jobs and better pay.
Voted against Australian manufacturing and voted against more affordable housing.
Attacked cheaper child care and talked-down fee-free TAFE.
But good Government isn’t about looking for fights – it’s about finding solutions.
And that is the focus of my government
Putting people ahead of politics.
That’s what our Government is doing by broadening these tax cuts so they include everyone.
A decision inspired by unity and serving the national interest, delivering for everyone.
I want Australians to know that we did not choose this course lightly.
This is the right decision, for the right reasons – and we’ve made it the right way, through our proper processes.
It is the best way forward.
Because it’s the best way to help Australians struggling with their cost of living without putting pressure on inflation.
This plan will boost the family budgets of middle Australia and boost workforce participation in our economy.
These broader and better tax cuts are not the beginning of our actions on cost of living – and they will not be the end.
They fit together with everything we are doing to build a stronger economy across the board.
Balancing the Budget.
Bringing inflation under control.
And driving fairer prices for Australian consumers.
We want people earning more, keeping more of what they earn – and getting better value for what they spend.
I’m pleased Dr Craig Emerson is leading our review of the Food and Grocery Code of Conduct.
And today I announce that the Treasurer will be directing the ACCC to conduct a 12 month price inquiry into the supermarket industry.
The ACCC has significant powers – and it is the best and most effective body to investigate supermarket prices.
To look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry.
And to examine the difference between the price paid at the farm gate – and the prices people pay at the check-out.
For me, it’s this simple.
When farmers are selling their product for less, supermarkets should charge Australians less.
Today, I also announced that the Government will fund consumer organisation CHOICE to provide shoppers with a clear understanding of how supermarkets are performing on this score.
Because across thousands of products it can be hard for people to find the best deal.
We are backing CHOICE – renowned for their commitment to consumer fairness - to provide clear and regular information on prices across a basket of goods.
This will promote transparency, enhance competition and drive value.
These actions send a very clear message – our Government is prepared to take action to make sure that Australians are not paying one dollar more than they should for the things they need.
When I stood at this podium on the Wednesday before the 2022 election.
I said I wanted to lead:
“A government that honours the values of the Australian people: that repays hard work, nourishes aspiration, and creates opportunity.
A government driven by strong and simple principles – no-one held back, no-one left behind.”
No-one held back, no-one left behind.
No-one left behind speaks to our responsibility to look after the most vulnerable in our society.
That has always been fundamental to the Labor mission – and indeed central to the Australian character.
That’s why our tax cuts deliver for every taxpayer.
No-one held back is about aspiration - because that is a fundamental Labor value too.
Making sure every Australian is encouraged to aim high, to pursue their dreams and reach their potential – and to get fair reward for the hard work they put in along the way.
That’s why the tax cuts we are delivering on 1 July, go all the way up the income scale.
That’s why we are addressing the issue of bracket creep with our changes.
Middle Australia is the big focus of this plan - and people on low incomes and the highest income earners are included too.
Because we want all Australians to be able to strive for a promotion or take up an extra shift or a new opportunity, without feeling like the system is working against them.
And because whether you’re earning $50,000, or $90,000 or $190,000 or more – I know you work hard for it.
I recognise that what you do is essential to the strength of our economy and the health of our society.
And I want to make sure your efforts are rewarded.
Put simply, our Government’s definition of aspiration is bigger and broader than just the highest income level.
Our aspiration is inclusive, not exclusive.
Because when no-one is held back and no-one is left behind – everyone is lifted up.
That’s so much a part of what we celebrate tomorrow, around our country, as we welcome our newest Australian citizens.
People who have come here seeking to make a better life for themselves and their children and in doing so have made this a better nation for us all.
Our Government’s aspiration is for all Australians to have the security and opportunity and the confidence to plan for their future.
The security of a good job, with fair pay in a safe workplace.
The opportunity for parents to balance caring and career, without being penalised or put-off by the cost of child care.
The security of Medicare, knowing that if you get sick, you can see a doctor and afford the medicine you need.
The life-changing power of education – from the early years to school to TAFE to university.
Something I spoke about on election night, opening the doors of opportunity.
That’s what education does – giving people the skills and knowledge and self-belief to adapt and succeed in a world being shaped by new technology.
The security we gain from investing in our capabilities and investing in our relationships.
Because when Australia is engaged in our region and stronger in the world, we are safer at home.
The opportunity that acting on climate change represents for our economy in new jobs and clean energy and the security that we must deliver for the next generation, by protecting our environment.
The security of a roof over your head - the opportunity to buy your first home.
The opportunities we can create, working with people with disability, to reform the NDIS and secure its future.
The security – and dignity – that superannuation and the pension offers working people in retirement.
The security and dignity and peace of mind that decent aged care provides older Australians and their families.
And the transformative opportunity of equality for women – in our economy and our society.
Closing the gender pay gap, addressing family violence and promoting gender equality in every aspect of Australian life, from the sporting field, to the boardroom, to our parliaments.
It all matters. It all fits together.
It all drives our Government’s determination to make a positive difference.
On the eve of Australia Day, I am more optimistic about Australia than ever before.
If we respond to the challenges before us with hope, with vision, with ambition and determination - we can make this, the greatest country on earth, even greater in the future.
Located, as we are, in the fastest growing region of the world in human history.
Home to extraordinary resources and natural assets.
And strengthened by the remarkable diversity and talent, creativity and courage of our greatest asset, the people of Australia.
Together, we can build, shape and secure a better future, where no-one is held back and no-one is left behind.
Learn what you'll save: Tax cuts to help with the cost of living | Treasury.gov.au