May eNews - Budget Edition

May 21, 2014

Rather than inflict yet another torrent of numbers on you about the Budget last week, I thought I would let the dust settle a little and write to you in what I hope is a more reflective voice.

The 2014-15 Budget is a tough one (although not the toughest we have seen), but with a combination of spending cuts and tax increases it does improve the Budget outcomes by $43.8 billion through to 2017-18. Looking further ahead it will reduce gross government debt in 2023-24 from the $667 billion it would have been had Labor's strategy continued to a still formidable $389 billion.

While some economists have argued that the budget is not tough enough and that it should cut spending by more, they have been more than drowned out by people unhappy with the numerous cuts in spending programmes not to speak of the Medicare $7 copayment, the 2 per cent increase on the top tax bracket and the re-indexation of the fuel excise.

But the starting point for this debate surely must be the budgetary situation which we inherited from Labor.

Labor left our nation's finances in an unsustainable state in that too much spending was locked in without the revenues to cover it. It is commonplace to say that Australia's national debt to GDP is not as high as many other countries, but that is only because when Labor took over in 2007 we had no net debt at all, in fact there was $45 billion of cash at the bank.

The melancholy truth of the matter is that Labor ran up larger and larger deficits and thus higher and higher debt in the midst of the biggest mining boom in our nation's history. According to the IMF, the rate of increase of Australian Government spending between 2012 and 2018 was forecast to be the highest in the developed world and the rate of increase in net debt over that period was the third highest in the world. So while most countries were cutting debt and restraining spending once the worst of the GFC was over, if Labor's plans had been left in place we would have been charging ahead spending and borrowing more and more.

So clearly something had to be done. And our Budget has proposed a set of measures to repair the budget and return, over time, to a surplus. Now I can well understand, and respect, different views about each of the measures we have proposed.

It is reasonable to question whether this or that should be cut, or indeed whether less spending should be cut and instead more raised by increasing taxes. All of that is the legitimate grist of political debate. Or you could argue that we can take a more leisurely path to return to surplus and seek to justify imposing a heavier burden on our children and grandchildren to pay for our expenditures.

But what we have seen from Labor does not engage on any of those points. Mr Shorten simply complains - he doesn't like any of the cuts in expenditure or any of the increases in tax or charges either. Is he in denial? Refusing to accept what is obvious to everyone else, namely that something has to be done. What sort of la-la land is he inhabiting? Are we just to keep on spending more than we receive, borrowing more and more billions, kicking the fiscal can further down the road in the expectation that somebody else will deal with it?

A responsible Opposition Leader would set out an alternative plan, one which adds up, which includes different measures, perhaps cuts less or different expenditure and raises more or different additional revenues. In contrast,  I recall very well in 2009 I proposed unpopular measures (increase the tobacco excise in fact) as an alternative to Labor's proposal to cut back on the tax rebate for private health insurance. 

Treasury analysis after last year’s change of government (in the 2013-14 Mid-Year Economic and Fiscal Outlook, or MYEFO) showed that Labor’s legacy was debt of more than $34,000 per household.

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Budgets are about setting the nation's priorities and investing in the people and industries that will create jobs for generations to come.

As Treasurer Joe Hockey said in his budget night speech, prosperity is earned not inherited.

The first Coalition Budget since 2007 re-directs spending to more productive areas.  Investments in our future include:
  • An infrastructure growth package of $11.6 billion – which in our city includes including spending on WestConnex, NorthConnex and new roads in Western Sydney.
  • A $20 billion Medical Research Future Fund, which will grow to be the largest endowment for medical research of its kind in the world.
  • $820 million to expand access to higher education by providing direct financial support to students studying diplomas, advanced diplomas and associate degrees.
  • A loan scheme providing loans of up to $20,000 to trades apprentices over the four years of their apprenticeship.
In my own portfolio, there will be continuing and indeed accelerated investment by the Government in the National Broadband Network, bringing total Government equity investment to $29.5 billion by 2017-18. As you know we are committed to completing the NBN sooner, at less cost to the taxpayer and consequently more affordably for consumers. And at the risk of repeating myself, we are NOT completing the NBN with "old technology"; the multi-technology design we are using is consistent with the current approach taken by leading telcos around the world including AT&T, BT in the UK, Deutsche Telekom in Germany, Swisscom in Switzerland and many, many others.

The Budget also includes $100 million of Government money which will be augmented by co-investment from carriers, States, councils and others to increase mobile coverage in remote Australia - it is worth noting here that in six years of Government and $6.5  billion of investment in the NBN Co, Labor spent not one cent on eliminating mobile black spots in regional Australia.

There are cuts to the budgets of the ABC and SBS, but they should not result in any curtailment of services or programming. We have undertaken a very thorough analysis  of both the public broadcasters and are satisfied that there is plenty of potential for substantial savings from eliminating administrative and other back office waste without impacting on the quality of the programming services to the public.

I should note that in the lead up to the Election and the Budget I made it clear on many occasions that we would endeavour to improve operational efficiencies at both broadcasters - to deliver the maximum broadcasting bang for the least taxpayer buck - and that if there were to be savings across the board, ABC and SBS could not expect to be exempt. 

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May eNews:

Anzac Day in Wentworth
Wayside Chapel's 50th Anniversary

Sports Code Sign Onto Anti-Homophobia Framework
Broadband for Seniors at Diamond Bay Bowling Club
Our Newest Citizens Welcomed at Jewish Care
Final Exhibition at Eva Breuer Gallery
Speeches, Opinion Pieces and Blogs
Videos and Podcasts

Anzac Day in Wentworth

Thousands attended Anzac Day commemorative events at North Bondi, Bondi Junction, Waverley and Bronte this year. 

At the North Bondi event, Afghanistan veteran Damien Thomlinson spoke movingly about the emergence of a new generation of injured veterans like himself. The veterans of 2014 should not be forgotten as we remember the heroes of 1914.. This year also saw the unveiling of the 'Fallen Surf Lifesaver' memorial in Coogee, to honour the contribution and service of those involved in the surf  lifesaving movement to the nation's wars. 

This year's Anzac Day Dawn Service at North Bondi saw more than 4,000 people in attendance

Wayside Chapel's 50th Anniversary

It was a pleasure to join Pastor Graham Long and all of Wayside’s friends for their 50th anniversary celebration. The team at the Wayside Chapel in a very practical way show unconditional love to some of the most disadvantaged in our community. On any given day the Wayside will provide counselling for 15 people, multiple referrals to health and alcohol abuse services and low cost meals to more than 200 people. 

It seems such a short time ago that the Wayside was under threat of closure for lack of funds. Through the generosity of our community and the Chapel's supporters, the Wayside remains an important institution - and has indeed expanded its services. Without it, Kings Cross would be a much tougher place than it is today. Congratulations and here’s to another 50 years!

With my old friend, 'Animal', at the Wayside Chapel's 50th anniversary celebration

Sports Code Sign Onto Anti-Homophobia Framework

The chief executives of Australia's major sports codes - including the ARU, NRL, Cricket Australia, the AFL and the FFA - recently signed onto an Anti-Homophobia and Inclusion Framework, to help stamp out discrimination.

The framework is the result of the hard work by the organisers of the Bingham Cup, the world cup of gay rugby, which will be hosted at Woollahra in August.  In particular, the advocacy of event organiser Andrew Purchas has meant that our sports codes have signed onto one of the most ambitious frameworks in the world for stamping out homophobia.  A great initiative and congratulations to the Bingham Cup organisers for such an historic achievement.

At the signing of the Anti-Homophobia and Inclusion Framework

Broadband for Seniors at Diamond Bay Bowling Club

The Federal Government has funded a computer kiosk at Diamond Bay Bowling Club, under the 'Broadband for Seniors' program, to help anyone above the age of 50 to learn basic computer and Internet skills. The club is looking for tutors with appropriate skills in email, word-processing and Internet surfing to help out on a volunteer basis at the kiosk.  

If you are interested in helping out - or know someone who may be interested - or if you would like to learn some computer skills, please contact the Bowling Club on 9337 4060 or email  [email protected].

Our Newest Citizens Welcomed at Jewish Care

It is always a pleasure to preside over citizenship ceremonies in  Wentworth and this week Jewish Care in Bondi Junction welcomed 20 new citizens to our country.  Our new citizens honour us by choosing to be part of the Australian family and help secure Australia as the most successful multicultural society in the world.

Thanks  to Allan Vidor, Claire Vernon, Warren Hurst and the entire team at Jewish Care.

Our newest citizens after the ceremony.

Final Exhibition at Eva Breuer Gallery
After more than two decades, the Eva Breuer gallery in Moncur Street in Woollahra will be closing its doors, with a final exhibition featuring the work of artist Victor Rubin, one of Eva's favourite artists.  Lucy and I will launch this final exhibition at Eva Breuer Gallery this Saturday from 3pm so I would encourage you to come along if you are in the area. The gallery was founded by one of our great collectors and dealers, Eva Breuer, who sadly died in 2010. Her daughter, our dear friend, Nicky has run the Gallery since then with all of her mother's passion for Australian art.

Speeches, Opinion Pieces and Blogs

In April I visited London and delivered an address to Chatham House on the future of Internet governance, arguing that the Internet should remain beyond the control of national governments.

Following the release of a study into the productivity impacts of mobile broadband on the Australian economy, I blogged on what the Government can do to drive further gains for the industry.

The Australian Information Industry Association held a conference on 'big data' and I delivered a speech on how it can help make Government services more efficient.

On the NBN front, I also blogged on the Government's commitment to a cost-benefit analysis and on how our approach is in keeping with the most advanced telcos around the world, such as AT&T.

Videos and Podcasts

On Triple J, I spoke about the Government's achievements to date in slowly getting the NBN project back on track.  More generally, I debated Tanya Plibersek on the federal budget and went on ABC's QandA to debate taxes, the budget and media ownership laws.

On my 'Tech Talk' YouTube channel, I spoke to economist Phil Manners on his study which found that mobile technology has contributed $30 billion to the Australian economy in the five years to 2013.  I also spoke to Toby Feakin from the Australian Strategic Policy Institute on his report, which measured 'cyber readiness' in the Asia Pacific region and opportunities for governments and businesses to adopt more sophisticated cyber engagement strategies.  I spoke to Survey Monkey CEO Dave Goldberg about the company's expansion into Australia and opportunities for companies to use cloud based services to engage with consumers and clients.

We have made an investment to improve the NBN's interim satellite service and I  spoke to Thorpdale resident Kim Styles on its effect on her access to high speed broadband.

In Parliament, I spoke in the condolence debate on the death of my good friend and former NSW Premier, Neville Wran, remembering that he was the best of men, a politician of action and achievement.

Yours sincerely,

Malcolm Turnbull  


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