New era of responsible economic management
Mr Speaker, this Budget begins a new era of responsible economic management.
The Government believes there is an economic case for cutting government spending.
It is this discipline that will place downward pressure on inflation, give us a buffer in a time of difficult economic conditions, and begin overdue investment in our future.
We have honoured our commitment to deliver a budget surplus of at least 1.5 per cent of GDP, and gone further to budget for a surplus of 1.8 per cent. The previous Government forecast a surplus of only 1.2 per cent for 2008‑09.
The Government is reducing spending on programs that do not meet our objectives in the most cost‑effective manner.
We are applying an additional two per cent efficiency dividend to most Australian Government agencies, producing savings of $1.8 billion over five years.
Every single dollar of new spending is more than offset by savings. We have delivered our commitments by redirecting spending to more pressing priorities.
Fairness and integrity in the tax and transfer systems
We have decided to redirect welfare payments to where they are needed most.
The Government does not believe hard earned tax dollars are best spent on cash payments to the wealthiest Australians. It is simply not defensible.
So from 1 July 2008, an income test will be introduced so that Family Tax Benefit Part B will only be available to families in which the principal earner does not have an annual income exceeding $150,000.
From 1 July 2008 we will increase the Baby Bonus to $5,000. From 1 January 2009, an income test will be introduced so that it will only be available where family income is not more than $150,000 a year.
From 1 July 2008 the tax rate for luxury vehicles will be increased from 25 per cent to 33 per cent.
Tax rules for employee share schemes will be amended to prevent unfair tax minimisation.
We are removing the crude oil excise exemption for condensate, increasing the financial return to the community from the extraction of this non‑renewable resource.
To those Australians we have asked tonight to play a role in the fight against inflation, I say this Government did not take these decisions to cut spending lightly.
Mr Speaker, some Australians have been asked to bear a greater burden than others, that's true. But in the end, if we're to beat inflation and build prosperity, we have no choice. We simply cannot go on as before, spending irresponsibly, and allowing inflation to build.
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