Speech - The Fair Go Budget




"The Fair Go Budget"


MONDAY, 14 MAY 2012


Ladies and gentlemen, thanks so much for having me here and for coming along to hear me speak about this year's Budget. And thank you, Cass, for that warm introduction.

Every year after the Budget is delivered in May, I tour the country to talk with Australians about what we're doing with their money, and why. I'm particularly happy to be here with ACOSS today. For more than a decade I've admired ACOSS as an important contributor to the national debate.

Your organisation is an important counter-weight to the powerful vested interests that often try to stand in the way of important reforms. And there's an enormous amount in this Budget for the people that ACOSS represent. In many ways, this Budget delivers on the values that I've been fighting for my entire working life.

With this budget, we have shown that you can balance the books, invest to keep economy strong, and build big social reforms all at the same time. We understand that a strong economy and disciplined fiscal policy is vital if you are going to build a fair community and support the most vulnerable. But we also know that the flip side is true - that a fair and inclusive society is critical for a strong economy. Because without social mobility you don't allow people to achieve their potential and you sell the economy short.

As I wrote in my article in The Monthly, Australia's future in the Asian Century will rely on retaining a strong, united, middle-class society. We will need a nation which calls on everyone's skills to seize the opportunities ahead; which is tolerant not resentful; which recognises the need for public investment in skills, infrastructure and education. A country which draws on the strengths of the market so Australia's flair for entrepreneurship, innovation and free trade can continue to create more wealth for all of us. And a nation that grows together, building a fairer community that gives more Australians the sense that they have a stake in our exciting future.

In my view, we simply cannot claim to be a prosperous nation until all Australians can access the opportunities ahead of us – that's what this budget was really about. Now, of course the usual suspects will call this class warfare – whether that is a misunderstanding or simply a distortion is another issue – that's fine, I'm delighted that we're having this debate. Because it's a debate about what kind of country we want to be. A country that capitulates to the demands of the vested interests, and allowing the benefits to amass disproportionately to very few. Or a country where we stand up for the fair go and for the egalitarian spirit that has made Australia such a great place to live and work and bring up a family.

Our political opponents will misrepresent this choice as a choice between fairness and growth. I don't accept that characterisation for a second. Indeed, this budget shows that that is a false choice and that a fairer community goes hand in hand with a strong economy. This is a point that Tony Abbott just does not get – it's almost as if he didn't actually read the budget papers showing growth at 3.25 per cent before he delivered his risible non-budget reply.

When he accuses us of class warfare for providing people with an opportunity to participate in the boom and for helping our most vulnerable, he is really saying that his only vision for growth is increased inequality. Indeed, he has proven by his actions in the Parliament just last week that he will actively oppose efforts to Spread the Benefits of the Boom to low- and middle-income families, and small businesses.

Tony Abbott's choice will always be to look after his vested interests by making people frightened of change, and to equate the status quo with economic responsibility. In contrast, our choice will always be to tackle the big social and economic reforms that will build a better future for all Australians.

Now, we can all talk about choices and goals and aspirations but these are all only just words until we back them up with action. And that's what we've done this Budget. We're Spreading the Benefits of the Boom to low- and middle-income households who are doing it tough with cost of living pressures. We are investing in the first stage of a National Disability Insurance Scheme, to help the most vulnerable in our society. We are helping people languishing on dental waiting lists And we are delivering fundamental reform to improve aged care services for older Australians who have done so much to build our nation. And now I'd like to talk about these in a bit more detail.


For us to make the most of the opportunities just over the horizon, we need to make sure all Australians have a foothold in our success. Because for many this feels like somebody else's boom. That's why, at the heart of this Budget, there's a plan to spread the benefits of the mining boom to low and middle-income Australians.

We're delivering a $1.8 billion boost to family payments to help people with the cost of living. More than 380,000 Victorian families will benefit from this, with over 160,000 of these receiving an extra $600 a year.

We're investing $1.1 billion in a new supplementary allowance for jobseekers, students and parents on income support.

From next year, over 340,000 vulnerable Victorians will start receiving the new allowance of $210 for singles and $350 for couples. By providing a little more for our most needy, we can give that extra bit of help that can make a real difference to people going through tough times.

This package is on top of the $2.1 billion investment to transform the Education Tax Refund into a new Schoolkids Bonus. This will provide simple and guaranteed support for families, when they need it most, as the kids head back to school. And by taking this support into the transfer system, we're making sure that nobody misses out on support. You shouldn't need a good accountant to get support with the costs of schooling. Over half a million Victorian children will benefit from these payments in a matter of weeks.

All up – this Budget delivers over $5 billion in assistance to households who need it most. And $5 billion that will boost confidence and spending in struggling Australian businesses, including small businesses, which in turn supports jobs across the community.


Of course, we're not just providing direct financial support in this Budget. We're also building better services for a fairer Australia. We want people be able to take control of their lives by giving them the right access to care and support in the right place and at the right time.


I am enormously proud of this Government's commitment to a National Disability Insurance Scheme. It will be one of its defining achievements. It will right the wrongs of the past by providing people with a significant and permanent disability the support, independence and choice that they deserve.

Australia's current disability support system is underfunded, unfair, fragmented, and inefficient. When the Productivity Commission published those words last year, it wasn't telling any of us something we didn't already know. The Government commissioned that report because we understand that the system was not delivering the kind of care and support Australians expect for people with disability. The report sent a clear message to all Governments, State and Federal, that we must do better.

Right now, people with a disability face a number of roadblocks to participating in work and in community life. Many of which stem from underfunding current services, leading to rationing of care and support services. Problems like a lack of respite for carers, which can leave parents in crisis, or worrying about what will happen to their children when they become too old to care for them. Like long waiting times that reduce people's ability to participate in the community. Like an inefficient focus on short-term support, which may not give people with a disability the independence they desire.

But it's not just an underfunded system. It lacks choice. Only one State, Western Australia, links support funding to the individual. Which highlights another big problem faced by many of you here today: the sheer complexity within, across and between jurisdictions, making it needlessly difficult for people to access services.

Over 400,000 Australians live with a significant and permanent disability. Some of whom I met this morning at morning tea organised by Jenny Macklin and Bruce Bonyhady. You can't help but be moved when you meet these special Australians. Despite the limitations that have been imposed on them, they can put many of us to shame with their positive outlook and determination to live a full life.

One of those people I met this morning was a young fellow named George Gibb. This young man was born with a rare muscle condition which means he must be ventilated 24 hours a day, 7 days a week. He relies utterly on selfless family, friends and other carers for his general wellbeing. But, just like other boys his age, he likes the Wiggles, Thomas the Tank engine, music and books.

George's mother, Michelle, spoke about George today as any proud mother would. She spoke of a bright, intelligent, fun loving young man, with plenty of nous. But Michelle also told us about a 'maze' of disability services, the lack of control she felt over her life and that of her son, and the sacrifices she and her family make each and every day providing care for George.

Michelle and George are among the most deserving of better support. Under this Government, they will start to receive it.

We've committed $1 billion over four years to roll out the first stage of an NDIS, expecting to cover 10,000 people from 2013-14, and 20,000 people from 2014-15.

The launch includes more than $555 million to provide individualised care and support for people with a disability; and $123 million to increase the capacity of the disability services sector. This new funding means that the NDIS will start to roll out a year ahead of the timetable set out by the Productivity Commission. Implementing this first stage will inform our discussions with the States and Territories on how and when we roll out the full scheme.

As I said earlier, the evidence tells us that all governments need to lift their investment in disability support services. We've shown with our investment that we are prepared to do the heavy lifting to get the NDIS started, but we'll also be looking to the States to lift their game as well.

We look forward to working with the States and Territories to deliver this reform, and I note that Premier Baillieu has signalled his willingness to continue working with us on it, as have other Premiers.

Now, we know that fixing the problems in the system will take time. This is a big reform, at least as big as Medicare. But we have made a good start.


We are also making a start in improving the dental health of lower and middle-income Australians. Because the state of someone's teeth should not be determined by their level of income. That's why this Government is investing $515 million in better dental health, including $346 million to benefit around 400,000 people currently on waiting lists.

There will also be much needed investment in the dental workforce for the public system, and more help for those in regional, rural and remote Australia, where access to dental care can sometimes be patchy with long travel times for a check-up.


There's one more big social policy challenge that I want to touch on today: the ageing of Australia's population. This is much more than just a problem to be solved. Harnessing the potential of senior Australians is a core part of our participation and productivity agenda.

Despite lower rates of absenteeism, high retention rates and the benefits of life experience, employers can still be reluctant to hire older workers. Our economy needs to recognise, respect and harness the experience and energy of our growing population of seniors. That's why we are providing $61 million in the Budget for new initiatives to improve training and employment services for older Australians. We'll continue to tackle these issues through a new Advisory Panel to be led by Everald Compton.

Obviously though, the ageing of our population also requires governments to respond to the growing need for quality aged care. Ask most older Australians about aged care, and they'll say: 'I don't want to go into a home.' They want to be as independent and active as possible, and a big part of that is staying in their own home. Under our aged care reform package, more people will be able to do just that.

We'll deliver 40,000 more home care packages over the next five years. This will be part of a broader rebalancing of the system towards home‑based care, reflecting people's preferences.

We also recognise that part of the reason people don't want to go into an aged care home is that they're worried about quality. And we know that hard-working, dedicated aged care workers and nurses are the cornerstone of delivering high quality aged care. So we're making a $1.2 billion investment in a Workforce Compact that will deliver wage increases; better training and education; and better career development opportunities for the roughly 300,000 aged care workers around the country.

The financing model for residential aged care facilities is broken, so we're providing $660 million to improve incentives for providers to invest in quality aged care facilities, including in regional, rural and remote areas.

Of course, it's not possible to reform aged care without addressing the inequities of the financing arrangements. We are acting to make the contributions people make to their care fairer. But nobody in the system at 30 June 2014 will pay a cent more for the care they already receive. And we aren't changing the treatment of the family home.

Now, we're doing all of this: spreading the benefits of the boom, investing in the first stage of an NDIS, and taking on other big reforms in the context of a strong economy, but a tight Budget.

But the simple fact is that you can't spend money that you don't have. And with the economic imperative to return the Budget to surplus, and a $150 billion write down in our revenues, we have had to conduct another rigorous savings exercise in this Budget. And while there have certainly been some pretty robust debates around the ERC table, we've ensured that our savings are targeted and responsible. They have been specifically tailored to do the right thing by low and middle-income earners and the frontline services they rely on.

We asked the public service to tighten its belt, we've reformed the Pharmaceutical Benefits Scheme to get better value for money, we've re-prioritised our spending in defence and overseas aid.

We've taken important steps to make the tax system fairer, reforming tax concessions that ordinary Australians just can't access. Like reducing super concessions for very high-income individuals, stopping the rorting of the living away from home allowance and stopping the use of golden handshakes to minimise tax.


As well as bringing the budget back into the black, we are always deeply committed to ensuring as many people as possible enjoy the opportunities, benefits and dignity of work.

As a Labor Government we absolutely understand that a job is critical to a family's wellbeing, and not simply because it helps make ends meet. That's why we've done so much to help Australians – especially those marginalised in our community – into the workforce.

We're tripling the tax-free threshold, which from July 1 will mean around 1 million more Australians have no tax taken out of their pay packets. This will provide more reward for low-income workers – especially part-time workers – and will encourage participation in the workforce.

We're also substantially boosting resources in areas like childcare - with $226 million to provide capacity for an additional 130,000 people over four years to access affordable childcare while they undertake training, study or job search activities.

The PM has recently announced an historic skills package to make sure Australians have the training that will lead to a job. A package that will guarantee every Australian a training place, and access to income contingent loans to help meet the up front costs of study.

I know some of you have paid very close attention to parenting payment measures in this Budget. I'd like to make a couple of points here. First, this measure is addressing a situation where two families living next door face very different and quite inequitable arrangements.

It is simply not fair that one family can receive parenting payments until their youngest child has turned 16, when the family next door receives those payments only until their youngest child turns 8 – under arrangements put in place by the previous Government.

Second, we should remember that we have put in place a more generous taper rate for Newstart for single parents, providing up to $4100 more in assistance which will flow to those coming off parenting payment. And single parents making their way back into the workforce will also benefit from the boost to family payments, the supplementary allowance and the new Schoolkids Bonus announced in this Budget, as well as the childcare and skills initiatives I've just mentioned.

But more broadly, these measures all reflect the Government's strong view that income support should ideally be a temporary measure. They also reflect our view that when a child is settled in primary school, it is reasonable to be taking steps to support and encourage parents into the workforce. For those we encourage to find more and better work, we'll be opening up opportunities that many of us take for granted.


As I mentioned at the outset, this Budget demonstrates that we can maintain fiscal discipline, invest in our economy and deliver on the big social reforms that support the most vulnerable in our society. Because you can't have a strong community without a strong economy, just like you can't have a strong economy without a strong community.

We will always manage our priorities so that the more vulnerable in our community are not left behind. We want everyone to have a stake in this nation, especially as we stand on the cusp of the Asian century. We will always do it with an eye on spreading the opportunities to every corner of this country.

It's all part of investing in the future of a stronger, fairer, more inclusive Australia.