Speech: A Stronger New Economy to Secure Our Future

June 10, 2016

Well thank you so much Scott. Thank you Julian and Nick. It is great to be speaking at the Menzies Research Centre. A great institution and I recall the time when I was Chairman and we did a lot of great work. Great work which has produced stronger public policy in many areas.

Now ladies and gentleman we are living in a time of economic change unprecedented in human history in both its scale and its pace.

Hardworking Australians are seeing this reality on the nightly news – how trade, globalization, and, above all, technological change is producing both new opportunities and also uncertainty in their world.

All Australians, not just economists, know we need to innovate and build new industries and strengthen existing ones because the mining construction boom has ended and the economy must transition to create new sources of growth and jobs.

Our resilience our resourcefulness is being tested in an intensely competitive and volatile global economy.

But if we as Australians make the right calls to ensure a strong economy and embrace enterprise and innovation to drive jobs and growth, we can secure our future as a high-wage first world economy with a generous social safety net.

That’s why Australians face a critical choice on July 2.

This election is about two very different versions of what Australia should look like in the future. Two very different visions.

My Coalition team’s national economic plan sets Australia up for a secure and successful future in the 21st century. We are the only team at this election with an economic plan and every element of our Plan is directed at generating stronger economic growth, and more jobs.

Our opponents take a different and very complacent view: they seem to assume economic growth is a given, and that no matter how much you tax, how much you spend, the good times will just keep rolling.

Our Plan will encourage more businesses to grow, to invest and to employ. And we will live within our means with record spending on education, health and infrastructure and at the same time bring the Budget back into balance.

The Budget that Scott brought down is our plan. It is all set out. Not a lot of pictures. A lot of numbers and a lot of analysis.

Labor on the other hand wants to deny tax cuts to all but the smallest businesses, run larger deficits, incur more debt, increase taxes on business and investment - in other words discourage investment and employment.

Now do we need more investment; do we need more enterprise and more jobs? Of course we do.

Australians can see in our policy measures that encourage that - you lower the tax on investment, you get more investment.

What is Labor doing? It is increasing taxes on investment, reducing the return on investment. That will result inevitably in less investment and that means less jobs.

Now Australia has survived the greatest terms of trade shock in its history. With the wind back, inevitable wind back I might add, of the mining construction boom.

In fact, we are doing much better than surviving.

How has this happened? It is not by chance.

We are recording strong growth in many sectors, information and telecommunications, tourism, financial services, retail trade and health care. Agricultural incomes have grown strongly on the back of our export trade deals.

All of this indicates our plan is working - a stronger and more diverse economy, with industries old and new contributing to the heavy lifting.   

In times like these - here citizens of the lucky country, more than ever we have to make your own luck.

If we were to falter in our strong and disciplined approach to transitioning our economy, there is a real risk of us falling off the back of the pack of the world’s leading economies.

Today I’m going to take you through my Coalition team’s Plan for a Stronger, New Economy.

I want to explain exactly what we mean when we talk about “Jobs and Growth”.

I’m going to explain how the elements of our plan are designed to make Australia more innovative, more productive, and more competitive, and how our plan is working already to deliver strong growth and more jobs.

I want to stress to you why it is critical to our economic security that we stick to this plan.

If we see our plan through over the next three years, Australians will have every reason to approach the future with great confidence and optimism.

Half of the world’s middle class will soon reside in Asia. This gives Australian business massive opportunities to grow new global markets that will deliver jobs at home.

To seize these opportunities, we have to help ensure our businesses are nimble and competitive. We have to promote a vibrant culture of enterprise and innovation - in every industry from agriculture to advanced manufacturing. Innovation is not just for twenty-something programmers; it is the key for every firm to be successful in the 21st century.

Our GDP grew 3.1 per cent in the year to March, faster than any of the G7 economies and well above the OECD average.

That doesn’t happen by accident. You need strong economic leadership. You need a pro-growth pro-business agenda that delivers investment and jobs.

My Government is providing that leadership and driving that plan for jobs and growth.

In the last calendar year, 300,000 new jobs were created; almost two thirds of these were women.

The unemployment rate at 5.7 per cent is well below where it had been anticipated to be when we came into government.

And the Budget is now on an achievable path back to surplus.

Our economy and our Budget are now heading in the right direction.

But to ensure our longer-term economic security, we can and must do more to stay ahead of the curve.

Let me turn to exports, a key element, a key driver of success for us in the future.

Critical to our economic plan are our export trade deals, ensuring our businesses have premium access to the world’s largest and most dynamic economies, including our major trading partners in Asia - where within a few years will be found half of the world’s middle class consumers.

This has all happened in a few decades. This is what I mean about the extraordinary times in which we live. The pace and the scale of change has no precedent in human history.

Our export trade deals with China, Korea and Japan are giving our farmers a competitive edge and higher prices, our tourism sector more visitors, our colleges and universities more students and they are opening the doors for all our exporters, especially services, into these giant markets.

The Trans-Pacific Partnership free-trade agreement our Government negotiated with the United States and 10 other leading world economies awaits ratification by the US Congress and we are negotiating new trade deals with the rising economic giants, India and Indonesia.

The results are already strong. In the last quarter, we recorded a 4.4 per cent lift in exports, and 6 per cent for the year. Services exports grew by 14 per cent over the year - the fastest growth since 2000.

Now it is worth remembering that Labor, under pressure from a ferocious ACTU campaign to block ChAFTA, only agreed a minute before midnight to pass the legislation ratifying that historic trade deal.

The Greens and Nick Xenophon are also vocal opponents of this element of our plan to generate jobs and growth.

Only this week, the ACTU was again piling pressure on Labor, if elected, to reopen elements of these agreements.

It is another pointer to the chaos and economic uncertainty likely to arise if a Labor-Greens-Independents alliance is revived at this election.

Our export trade deals are creating jobs right across Australia and in every sector;

  • The fisherman Karl Krause who is getting record prices for the world’s best lobsters caught on his boat the Carmen in the waters of Northern Tasmania
  • The Mornington Peninsula Brewery in Victoria, which has become the first Australian craft brewery to export to mainland China
  • Grove Juice in southern Queensland which has sold almost 100,000 bottles of orange and apple juices into the Japanese and Korean markets
  • Philmac the 85 year old plumbing components maker in Adelaide, now exporting to 30 countries with its innovative fittings to connect Imperial and metric gauge pipe networks
  • A.H. Beard the 117 year old mattress maker, now sending a container of Australian made mattresses to China every three days
  • Wine makers like Warren Randall of Seppeltsfield who described the ChAFTA “as the single most important development in wine marketing” for the 39 years he has been in the business
  • And so many other innovators in technology and advanced manufacturing like Carbon Revolution in Geelong producing the lightest wheel rims in the world.

Let’s be very clear about this.

Globalisation means we are now in a much larger global market. More opportunities but also more competition.

If we want to pull the doona over our head, like Labor and the Greens and pretend it’s not happening, then we will be left behind.

We have to embrace these opportunities, seize them and win.

And we can only do that with a plan.

We have that plan, and we can see that it is working. We can see that Australians can compete and win on global markets.

Our national economic plan creates these incentives and opportunities to grow - the risk of an alliance of Labor, the Greens, independents and the unions is that they will make it harder for enterprising Australians to take their products and ideas to the world.   

Another key driver is directly supporting Australian enterprise.

Small and medium businesses, many of them family owned businesses, are at the heart of our economy. Their energy and commitment is vital to jobs and growth.

Our Plan for a Strong, New Economy backs small and medium business.

Under our plan from July 1 businesses with a turnover of less than $10 million will receive a tax cut and access to instant asset write-offs.

Labor has said it will only support tax cuts to businesses which turn over less than $2 million.

That means if we are not re-elected, 100,000 small and medium businesses with turnovers between $2 and $10 million and employing 2.2 million Australians will get no support to invest, to employ, to grow.

The tax cuts we will keep, we will deliver will help every one of those employers, encouraging more investment in businesses, more jobs, higher retained earnings, higher real wages.

Until very recently, Mr Shorten was happy to say that tax cuts for business were good for jobs, growth, productivity and higher wages.

Let me quote to you from his interview from March, 2012:

“Any student of Australian business and economic history since the mid-eighties knows that part of Australia's success was derived through the reduction in the company tax rate. We need to be able to make life easier for Australian business, which employs two in three Australians.”

Well said, you might say. A penetrating glimpse of the obvious, from presumably, a student of Australian business and economic history. Sadly the student, Mr Shorten has either lost his memory, or lost his way.

The proven experience of business tax cuts is as he said in 2012, that they generate growth and jobs. 

Basic common sense and economic principles confirm it.  Economic modelling confirms it.  Statistical research confirms it.  Chris Bowen has confirmed it. He went so far as to write a book about it.  

Peter Costello cut company tax, as did Paul Keating. So persuaded was he that he cut it twice!

When Peter Costello reduced our company tax to 30 per cent, we were the 9th lowest in the OECD. Now we are at the uncompetitive bottom of the pack with 27 OECD nations having a lower company tax rate than us.

Since 2008 New Zealand has cut its company tax rate from 33 to 28 percent.

And over the same period the UK has gradually reduced its company tax rate from 30 to 20 percent, and  will further reduce it to 18 percent by 2020.

More investment means more jobs and higher wages.  As businesses put more money into their enterprise, they grow. As they grow they need to have more people. As they grow they are more profitable, they can then pay their employees more.

Labor and the Greens see a conflict between business and workers. Well let’s try this quiz? Who would you rather work for - a business that is doing well, investing and growing? Or one that is struggling, burdened by too much tax?

Struggling to succeed in markets because there isn’t the encouragement to enter them. Who would you rather work for? A business that is achieving well, investing more and growing, or one that is struggling? Its obvious isn’t it? And yet everything Labor and the Greens are doing will discourage business and discourage investment. And when they do that they discourage employment.

Now Independent Economics’ Chris Murphy, who led the tax modelling work for Labor’s Henry Tax Review when Bill Shorten was last in government, shows that the benefit to Australian consumers from our enterprise tax plan is $2.39 of benefit for every single dollar of tax cut.

Now that is exactly the kind of economic dividend for workers that was once championed very persuasively and effectively in government by Paul Keating - but which is now repudiated by the modern Labor party.

These are economy-wide gains - the benefit of jobs and growth - that Bill Shorten is opposing, just so he can play cheap politics with his toxic attacks on “the big end of town”.

In the next term of Parliament, the only firms which will get enterprise tax cuts under our plan, are small-to-medium businesses that collectively employ more than 4.4 million hard-working Australians.

They are not big banks. Overwhelmingly they are Australian-owned, hard-working family enterprises.

Now we are backing also young Australians who need a job, young Australians who have struggled to get into the work force. Scott Morrison set out an innovative PaTH Program in the budget, which will ensure that 120,000 young unemployed Australians have the opportunity to get into a job and get the experience of work.

The industry response to this initiative has been very encouraging, with the Motor Trades Association of Australia, representing more than 60,000 automotive businesses nationwide, signalling they will partner in this initiative. They’re looking to provide internships to 4000 of those job-seekers. This has been a very well received initiative and it tackles that challenge, that problem of long-term youth unemployment.

Innovation and advanced manufacturing are also key drivers of our Plan.

Our innovation and science plan will bring more great Australian ideas to market. Under our $1.1 billion National Innovation and Science Agenda, we are offering real incentives for start-up companies in the industries on the frontier of technology.

And its worth reflecting what we’re doing there. We’re providing tax offsets and we’re providing relief from capital gains tax. Why are we doing that? Why does everyone agree that is a good approach? Because we know that if you want more of something, you reduce the tax on it. If you want less of something, you increase the tax on it. So what we’re doing is we’re reducing tax in order to promote more investment. And that will deliver more investment.

What Labor is doing, they are increasing taxes on investment and that can have only one consequence, of less investment and less jobs, less opportunities for Australians.

Now to succeed in the 21st century, we need to ensure that Australia and Australians are more innovative, more technologically sophisticated. That is clear.

Our plan will prepare our children for the jobs of the future with a greater focus on science, technology, engineering and maths and skills in digital literacy like coding. Likewise, the investment by my Government in Australia’s defence industries, is central to our plan to ensure national security and economic security for generations to come. Under our defence industry plan, 12 offshore patrol vessels will be under construction in two years’ time. Australian workers building those vessels with Australian steel.

A year later, the building of nine Future Frigates will commence. Then in 2022, we will start construction of the first of 12 regionally superior submarines, the single biggest investment in our military history.

These projects will drive jobs, growth and innovation for 50 years.

Using the most sophisticated technology in the world, the submarine build alone creates nearly 3000 direct and indirect jobs in Australia. And it is vital to understand that our naval shipbuilding program goes well beyond these projects, well beyond the submarine project. For our advanced manufacturing sector, the benefits will be decades-long, across the entire national supply chain.

This is a commitment that puts our opponents to shame.

The Labor-Greens-Independent government cut more than $18 billion from Defence funding and delayed more than 100 projects.

Our plan – our naval shipbuilding program - will transform our defence industries and sustain them for decades.

And the benefits of these elements of our Plan, like all of the Plan, begin right now.

Now let me turn now to Labor’s fiscal fantasy.

Our Labor opponents as you know, are inclined to push their performance measures out to a 10-year time frame, because they have no way of paying for the promises they make.

Kevin Rudd gave us a 2020 vision. I might say, it’s been often observed, that a vision without resources is a hallucination.


The 2020 vision of Kevin Rudd crumbled in the chaos of the Labor-Greens minority government debacle. The result was a Budget in structural deficit and the loss of confidence and certainty in our economic future.

Much like Kevin Rudd, now Bill Shorten wants to take us on a flight of fantasy to 2026.

Same old Labor.  Australians will not be taken for fools.

Mr Shorten could have spared us the gloss and hype of the launch of his brochure and simply told Australians the unvarnished truth.

After taxing the life out of the economy, Labor still ends up with much bigger deficits over the next four years - the forward estimates. That is the plain truth from which they cannot hide.

They cannot or will not tell us how much bigger these deficits will be. Nor have they, nor can they, offer a credible pathway back to a responsible budget position.

Bill Shorten jokes about piling more and more funding promises onto his spend-o-meter.

This is nothing to laugh about. Labor’s reckless approach to our nation’s public finances would have very serious consequences for the economic security of all Australians. As we have heard in the warnings this week from prominent commentators and economists about the risk Labor’s trajectory of increasing deficits would pose to our credit rating.

Labor’s promise for the next three years is to spend more money we don’t have, slow economic growth and employment by increasing taxes on business and investment and as a consequence run higher deficits and run up more debt for our children and grandchildren to pay off. So much for fairness. Piling more and more debt on our children and grandchildren to pay off.

Let me paint you a clear picture, by way of contrast, of what Our National Economic Plan can deliver in the life of the next Parliament. This is not some over-the-horizon promise. It is our assessment of the positive, practical gains from a fully costed and funded Plan for jobs and growth to be delivered over the next three years.

By 2019, over 99.5 per cent of businesses - employing nearly 40 per cent of working Australians -  will be benefiting from our enterprise tax plan. There will not a big bank, or large multinational among them. For the most part, these will be locally owned, family run businesses including your local newsagent or builder.

By 2019, international tourists to Australia will be spending an extra $5 billion a year in real dollars, in our economy, nearly half of this increase accounted for by tourists from China and India.

By 2019, there will be nearly 100,000 young Australians helped into work by our PaTH youth employment program.

By 2019, Australia will be shipping 1.1 million tonnes of beef worldwide – including 170,000 tonnes to China, 294,000 tonnes to Japan, 190,000 tonnes to Korea and 300,000 tonnes to the United States. This is enough, Barnaby Joyce assures me, to make 21 billion hamburgers.


By 2019, our tax cuts for middle income earners will put $2.8 billion back into the pockets of around two and a half million Australians.

By 2019, the Budget will be well on the way to a responsible surplus, with the deficit being reduced to $5.9 billion in 2019-20, and returning to surplus the following year.

And by 2019, because we are living within our means we can ensure the funding we provide to schools will have grown by a further 26 per cent to $19.8 billion each year. 

That is the fundamental distinction between our approach and that of Labor.

Our Plan is set out in the Budget, fully costed and funded.

Our commitments are bankable; our fiscal projections are prudent; and it is all part of a coherent, carefully-constructed plan that is already delivering tangible results.

Labor’s alternative program is a leap into the unknown - or perhaps the all too well known and bitterly remembered. It is the same old Labor, built around promises they can’t pay for and will never be able to deliver. 

The flaw in the Labor Party's thinking is that they assume economic growth and just take it as a given. They can increase taxes, rack up more debt, spend more. And none of this, they assume, is going to have any effect on the economy.


Let’s not kid ourselves.


There are plenty of economic risks on the horizon, particularly in the global economy. There are risks in the things that we can't control, like the price of iron ore, or growth projections in China, or the stability of the Eurozone.


But what I know for sure, is that we are best able to deal with these challenges, if we have a strong and resilient economy, if we have a Government with strong economic leadership which understands what drives business.


A government with an economic plan that will encourage investment and employment. That's the Government I lead. That's the clear plan we have laid out. That's the plan that will deliver us the jobs and growth in the years ahead: a strong economy, a resilient economy, backing the enterprise and commitment of Australians.


Only a sustainable budget, built on strong economic growth, can deliver Australians the services they want and expect, like guaranteed funding for health, education and infrastructure.


Neither Labor nor their friends the Greens or Independents, have a credible plan to deal with the economic challenges of this the 21st century. Our Labor opponents have nothing to say about generating investment and enterprise. They have nothing to say about securing prosperity today, or forging the growth of the industries and jobs of the future.


Labor’s only plan is to impose $100 billion in additional taxes over the next 10 years.


They are proposing taxes which will actively slow economic growth. Labor’s policies would kill incentive, damage jobs and stop the successful transition of the our economy dead in its tracks.

Let's be quite clear about this. You want more investment; you lower the tax on investment.

As I said a moment ago, that is why we recently all voted to provide capital gains tax relief and offsets to encourage people to invest in start-up companies. That’s why we provide tax incentives for research and development. It’s obvious, that’s why taxes have been increased and imposed  over many years on tobacco- to discourage people from smoking. If you want less of something you increase the tax on it. Labor plainly wants less investment. And that means less growth, less jobs.

They’re planning to ban negative gearing - the ability of working Australians to invest and offset losses against their personal wage or salary income.

They're banning negative gearing on every single asset class - shares, business, property, commercial property, residential property - except for new dwellings.

So what’s that going to do? That also restricts and reduces investment.

You reduce investment, you reduce growth and jobs.

What about capital gains tax? That is a classic tax on investment and they are going to increase it by 50 per cent. Has only one result- again, less investment.

       Now this is what awaits Australians, should we return to the chaos of a Labor-Greens alliance. Less investment, less jobs, less confidence, less economic growth and more uncertainty. A less secure future for all of us, but especially for those for whom we should be acting with the greatest fiduciary trust- the greatest and deepest responsibility. Our children and our grandchildren. Labor renders their future insecure, and uncertain.

        We are ensuring with every element of our plan, that their future is secured. That there will be greater opportunities for them to start a business, to find a new job, to find a better job. For them to seize the opportunities of the hour. We are creating that environment with an economic plan- every element of which will deliver stronger economic growth and jobs. And our opponents seem determined to go in precisely the opposite direction.

       This is a very clear choice. And so as pre-poll voting opens in the next few days, I urge all Australians to think very carefully, about the choice they are to make.

Just a few thousand votes across a handful of seats will decide if the Greens and Independents will be once again calling the shots in a Shorten-Greens minority government.

A vote for any candidate other than a Coalition candidate is a vote for this chaos.

We have seen the effect of this dysfunction in the Senate, with vital economic reforms being blocked by Labor, Greens and the independents.

That is why I called this double dissolution election.

Restoring the rule of law in our construction industry through the restoration of the Australian Building and Construction Commission, is an essential reform if Australians are to have the infrastructure they need at a price they can afford – from hospitals and schools, to office towers or apartment blocks.

Labor, the Greens and cross-benchers blocked this reform twice in the Senate, despite evidence to the Heydon Royal Commission showing widespread malfeasance by union officials on construction sites across the country.

At the latest count, there are more than 100 officials of the CFMEU before courts and tribunals on more than a thousand charges over breaches of industrial law.

Bill Shorten in Government set up the RSRT with the express objective of putting owner drivers out of business to benefit large trucking companies whose employees were members of the TWU.

And it worked. 50,000 owner drivers were off the road, they were out of business, their families had no income.

Thankfully we were, just, able to abolish that Tribunal and keep those families in business. But make no mistake if Labor wins this election, as it did before, the RSRT will be back - the Transport Workers Union will demand and will get its reward and family businesses once again will be the losers.

And, now, in Victoria, unfolding we see an outrageous attempt by the Andrews Labor Government and the United Firefighters Union to impose an effective takeover by the union of the Country Fire Authority volunteers.

Like the SES, like the Surf Lifesavers Associations, the CFA volunteers are vital to the fabric of our community.

We have been reminded of the selfless service of our volunteers this very week.

And that is why we are committed to standing shoulder to shoulder with the volunteers and amending the Fair Work Act to protect volunteer organisations, like the CFA, from union takeovers.

That is why it is so important Australians consider their vote very carefully at this election, for both the Senate and the House of Representatives.

Every single vote for the Nick Xenophon Team, the Independents or Labor or the Greens brings us closer to Bill Shorten and The Greens running Australia.

That would mean Labor’s tax hikes on investment, the Greens tax hikes on superannuation, and Nick Xenophon’s tax hikes on traded goods.

So now is not the time for a protest vote or a wasted vote; it is the time to use your vote in support of a strong economic plan – and to prevent a hung parliament that would bring government and our economic transition to a grinding halt, costing jobs and imperilling our future.

If you want a better future for yourself and your family, don’t risk yet another change of government, yet another Labor Prime Minister and the chaos of yet another minority government.

The only way to ensure that there is continued, strong, stable government with a clear national economic plan is to vote for the Coalition in both houses.

With your vote we can complete the job we’ve started, stick to our economic plan for jobs and growth – and together we can make Australia stronger and our future more secure.

Thank you very much.


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