Investing in Australia's Future
This Government has a strong record in meeting economic challenges. We have managed the structural economic transitions of recent years and we have navigated the challenges of the Global Financial Crisis (GFC) and the ongoing bouts of economic and financial volatility.
Our action during the GFC saved Australia from the recessions seen across the world in other OECD nations. While these countries are either just recovering, or still struggling to recover from the effects of the GFC, we have some of the strongest economic fundamentals in the developed world — economic growth close to trend; moderate unemployment; a prudent fiscal position and contained inflation.
As Australia embarks on a new era of economic transition marked by a shift from the largest investment boom in our history to more of our economic growth being sourced from the non‑resource sectors of the economy, we start from a position of economic strength and resilience.
Managing this transition will be fundamental to Australia's economic prosperity. In order to ensure continued growth, productivity has to be front and centre of Australia's economic agenda. Australians deserve a Government with a proven record of successful economic management and a clear plan to ensure the current economic transition is managed smoothly.
That is why the Government is working closely with business and unions to develop and implement a new national competitiveness agenda. Only through collaboration between business, unions and government can we effectively implement the wide‑ranging reforms needed to boost productivity and ensure more broad‑based economic growth. This plan will build on our existing productivity enhancing policies.
Under our policies, the Australian economy has grown by around 14 per cent since we came to power; and we have laid the foundations for higher productivity and labour force participation growth in the future. This growth has occurred during the worst global recession since the Great Depression of the 1930s, continued international economic instability and rapid economic change both at home and abroad. These policies include:
- investing in traditional economic infrastructure like roads, rail and ports to increase the economy's productive capacity;
- investing in new infrastructure like the National Broadband Network (NBN) so Australia can thrive in a globalised digital economy;
- ensuring our workforce has the skills needed for the jobs of today and tomorrow by increasing funding for higher education, vocational education and training and schools, and providing additional student access and places;
- supporting all parts of the innovation chain from basic research to commercialisation through initiatives like Industry Innovation Precincts and Venture Australia;
- recognising the importance of small business to the economy by assisting people to invest in their businesses and improve their competitiveness through expanded tax arrangements and support services;
- working with Australian industry to ensure that Australia has world class businesses and high skill, high wage jobs for the future;
- empowering regional Australia to reach its potential by improving infrastructure and employment services through initiatives like the Regional Australia Development Fund; and
- commissioning and undertaking fundamental tax reform to enhance Australia's investment and productivity.
Maintaining macroeconomic stability through a prudent and sensible path to surplus over the forward estimates will provide an environment conducive to sustained economic growth. This Economic Statement reflects maintained fiscal restraint, while still funding economic and social reforms and investing in the infrastructure of the future. A gradual return to surplus will support jobs and economic growth, especially in the near term, and deliver sustainable public finances.
Our financial position is the envy of other advanced economies. Australia has one of the lowest levels of government debt as a percentage of GDP among the advanced economies. The budget deficit as a proportion of GDP is also one of the lowest among the advanced economies. We are also one of only 8 countries in the world to enjoy both a stable outlook and a AAA credit rating from all three major international rating agencies.
All Australians should share in the opportunities and benefits that come with a strong economy. This Government's policies will ensure all Australians experience the benefits of rising living standards, both directly and through more efficient and accessible government services.
Significant reforms in health, education and disability services have been achieved and will be continued. The Government has introduced Australia's first national Paid Parental Leave scheme and increased assistance to families to meet the costs of child care, primary and secondary education. Record increases to age pension payments and the Superannuation Guarantee will result in higher standards of living for Australians in retirement.
Economic prosperity depends also on protecting our environment. The potential impacts on our economy of unmitigated climate change and water scarcity are severe. Our commitment to an internationally linked market‑based emissions trading scheme and the finalisation of the Murray‑Darling Plan are essential components of ensuring Australia continues its economic growth in an environmentally sustainable way.
Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.
