Introduction
Thank you very much Melinda.
Thank you CEDA for the opportunity to speak with you all today.
And I do want to thank your team and everything that you do at CEDA. It’s important work, it shapes what I know needs to be right now a very important national conversation on the economy and indeed the budget.
Can I acknowledge my colleagues, our Deputy Leader and Shadow Treasurer, Ted O’Brien, whose economic leadership is vital to the task ahead.
Our Shadow Finance Minister, James Paterson, who brings sharp focus and discipline to the nation’s finances from opposition.
To my other parliamentary colleagues here today, both federal and state, thank you for your presence and your support.
As the new Leader of the Opposition, I want to outline the principles that will guide the Coalition as we develop policies for the 2028 election.
In particular, I want to discuss how we manage the budget responsibly in the years ahead.
It’s about the kind of Australia we want to build: an Australia that is prosperous, fair, and self-reliant, where government lives within its means and empowers its citizens.
Today, I will make the case that we must move from a time of dependency to empowerment.
By “dependency,” I mean the growing expectation that government will provide for every need and solve every problem by spending more.
My message is that we must put guard rails around government spending, not as an end in itself, but so that we can strengthen our economy, preserve our capacity to help those truly in need, and ensure that the next generation inherits opportunity, not debt.
Because debt is an issue of intergenerational fairness.
From Dependency to Empowerment
Many governments have become reluctant to wind back programs because it’s not popular to take something away from voters.
But ultimately the fiscal reality of paying for it must be confronted.
Moving to empowerment is about restoring the right balance between what citizens provide for themselves and what taxpayers provide as a safety net.
It’s about reaffirming that government can do a lot of good but it cannot and should not do everything.
We are a compassionate nation, and we will always support those who fall on hard times, and those who are vulnerable and those who cannot support themselves.
But if we want to keep the safety net strong, we have to ensure it is financially sustainable and targeted to genuine need.
Unfortunately, in the past few years, the pendulum has swung too far towards dependency.
It has become almost taboo in politics to suggest that not everyone is entitled to a government benefit.
But I ask: is it fair to pile up debts that our children will have to pay off?
Research from the Centre for Independent Studies states more than half of adults rely on the government for most of their income, while just 10 per cent of taxpayers pay two-thirds of all income tax.
This is further evidenced in the fact that in the last two years, 80 per cent of new employment has been in the non-market sector, which accounts for just 30 per cent of employment.
So if we stay on this path, it will mean fewer opportunities for young Australians to buy a home, a weaker safety net, and a diminished capacity to respond when the next crisis hits.
Now, none of this is about blaming individuals for taking up government programs that are offered.
But the time of reflexively looking to Canberra to solve every problem with a blank cheque, must give way to a time of empowerment, personal responsibility, and fiscal commonsense.
The Post-COVID Reality: Temporary Crisis Measures vs Permanent Dependency
Now, we cannot discuss government spending today without acknowledging the pandemic.
We acted decisively to protect livelihoods with targeted, temporary measures despite our political opponents wanting to spend $81 billion more as well as having the government buy Virgin Australia.
By the time we left office in 2022, the budget, while strained, was on a path to repair as the economy rebounded.
In fact, thanks to a strong post-lockdown recovery and surging commodity prices, the budget even returned to a modest surplus in 2022-23 – earlier than many expected.
This should have been the moment to firmly shift from crisis mode back to normalcy, to bank those windfall gains and begin restoring the nation’s finances.
Instead, what we have seen is a Labor government that has normalised and extended the era of big government.
So rather than using the recovery to pare back spending, the government has layered on even more permanent programs and higher baseline spending.
The mindset of “government will take care of everything” has been actively encouraged.
Take Labor’s electrical vehicle policy.
Tax breaks on leases which mean that taxpayers are now covering up to half the cost of a vehicle for high-income earners.
With policies like this, the electorate, having lived through COVID, is now being conditioned to expect ongoing government assistance as a matter of course.
But if we keep spending at pandemic-emergency levels during ordinary years, we will inevitably lose our AAA credit rating.
Losing that rating, of course, would mean higher borrowing costs for government, which flow through to higher interest rates for households and businesses, and less money available for hospitals, schools, and tax relief.
This year, government spending will reach 27% of GDP, the highest level outside of a recession since 1986 and up from 24% since the government came to office.
We are essentially running a peacetime economy on emergency fiscal settings.
It’s obviously not sustainable.
Yet the current government appears in no hurry to adjust.
In fact, they proudly tout any new spending as more evidence of their generosity.
The problem is they are being generous with borrowed money.
This government came to office in 2022 and inherited not only a surge in revenue from record commodity prices, but also the strongest jobs market in half a century — a legacy delivered by the Coalition.
To their credit, they allowed some of those unexpected revenues to flow through to the bottom line, resulting in a short-lived surplus.
However, this year’s budget papers show a decade of deficits ahead.
Our gross federal debt is already around $959 billion and climbing.
By the government’s own projections, it will hit $1.2 trillion by 2028-29.
It means we are setting new records for indebtedness, yet the government’s answer is to keep spending more, despite having to spend $50,000 every minute on interest.
The interest bill on that debt is becoming one of the fastest-growing items in the budget.
Every dollar spent on interest is a dollar that can’t be used for hospitals, schools or tax relief.
It means every two minutes that is one less nurse or every four minutes that’s one less doctor.
Long-Term Budget Pressures – A Glimpse into the Future
If the immediate budget outlook is concerning, the long-term outlook is alarming.
And it is not just demographic forces or external shocks driving the problem.
It is also the decisions the government makes today.
In 2025–26, the deficit is forecast at $42 billion.
But since coming to office, Labor’s policy decisions alone have added a staggering $37 billion to that number.
That is 1.3% of GDP in extra spending in a single year.
Put another way, the deficit could have been just $5 billion if new spending had been responsibly offset.
That is the difference between a manageable budget challenge and a structural blowout.
Fiscal rules exist precisely to prevent this sort of discretion, yet the government has walked away from them.
The latest Intergenerational Report makes it clear that if we stay on our current trajectory, Australia faces decades of rising spending, slower growth, and entrenched deficits.
By 2063, health, aged care, pensions and the NDIS will consume half the budget, funded by a smaller workforce.
And without reform deficits will persist and then worsen.
It means our children and grandchildren will inherit a permanent fiscal gap that compounds year after year.
That is why discipline now is essential to ensure that the economic legacy we hand to the next generation is stronger, not weaker, than the one we inherited.
Responsible Budget Management: Returning to Our Principles
So how do we begin to move to empowerment and restore responsible budget management?
The first step is based on principle.
We must re-establish some fundamental principles around our public discourse.
Principles that used to be broadly accepted across politics, but which have been allowed to erode.
Let me outline a few core beliefs that the Coalition will be standing by as we formulate policies for 2028:
Government should live within its means.
Just as any household or business cannot forever spend more than it earns, neither can a nation.
Running deficits in a crisis or downturn is acceptable – even wise – to cushion the blow, but persistent deficits in good times are not.
Our default should be budgets that are balanced over the economic cycle, and surpluses in prosperous times to pay down debt.
Restraining spending growth is key to this, as is avoiding over-reliance on volatile revenue booms that may not last.
As they say the time to fix the roof is when the sun is shining.
Encourage personal responsibility and reward for effort.
A fundamental Liberal value is that people’s hard work and enterprise should be rewarded, not penalised.
We need policies that incentivise Australians.
This means winding back disincentives to work and save.
It means targeting welfare to those who truly need it, while encouraging those who are able to work or study to do so.
Our goal should be to help people off welfare and into self-reliance, not to add more people onto government support unnecessarily.
Ultimately, the best form of welfare is a job and a thriving private economy.
We must never lose sight of that.
Target assistance to the vulnerable; stop subsidising the comfortably well-off.
If this period has taught us anything, it is that trying to give everyone a slice of the government pie, regardless of need, is a recipe for fiscal failure.
Universal free everything might sound nice, but in reality it drains resources from those who need help most.
We believe government support should be a safety net, not a hammock.
That means, for example, we should not be paying benefits to high-income households.
It means carefully designing programs so that as people’s income rises, the government steps back.
We need to ask tough questions because every dollar spent on those who can manage without it is a dollar denied to someone who genuinely can’t.
Ensure value and efficiency in all government spending.
We owe it to taxpayers to squeeze maximum value from each dollar the government spends.
Waste and mismanagement are the enemies of sustainability and they all add up.
Under the current government we have seen $40 million spent on advertising automatic tax changes, $1 million on a secret new Greens Party Room and $620,000 on a speech writer.
We will be unrelenting in pursuing efficiencies, eliminating duplicative or low-value programs, and demanding accountability for outcomes.
A dollar saved through smarter management is a dollar that can go to deficit reduction or vital services elsewhere.
Responsible budgeting isn’t just about cutting or capping.
It’s also about innovating to deliver services more effectively.
That might mean embracing technology, public-private partnerships, or empowering local communities rather than top-down Canberra bureaucracy.
Plan for the long term, tackle structural challenges now.
One lesson from the Intergenerational Report is that problems only get harder and more painful the longer you postpone action.
We are determined to tackle some of the structural drivers of unsustainable spending.
This could, through proper consultation, include sensible reforms around eligibility, indexing programs more smartly, or capping demand driven programs where recipients would receive a reduced amount of the pie.
It means having honest conversations about the growth trajectory of programs like the NDIS and how to keep them on a sustainable footing, in partnership with the disability community.
It means focusing on preventative care and efficient hospital funding so that we get better health outcomes per dollar as the population ages.
Our approach will be guided by a simple principle: do it once, do it right, do it for the future.
These principles reflect our Liberal values of economic responsibility, individual empowerment, and fairness between generations.
There is nothing radical about living within your means and preparing for tomorrow – it is what any prudent household does.
Governments should be no different.
For much of our modern history, Australia did adhere to these principles.
We ran regular surpluses in the late 20th century and built a strong fiscal position that saw the Coalition eliminate federal debt and bequeath a Future Fund which now has more than $300 billion in funds under management.
That discipline served us incredibly well and it gave us the flexibility to respond to the Global Financial Crisis and to COVID when they hit.
But since then, we have veered off course.
It’s time to course-correct.
We need to once again look to providing for our future, not putting burdens on it.
The Way Forward – Guard Rails for the Future
As we look to the 2028 election, the Coalition will present Australians with a positive plan to restore sound finances without losing sight of our compassion or our dynamism.
These goals go together.
A strong budget underpins a strong economy, and a strong economy is what delivers better lives for every Australian.
I want to outline the broad direction of our fiscal strategy and our initial thinking around guard rails that will guide us.
We’ve heard commitments that claim to be fiscal strategies but fall short of being real ones.
A proper quantifiable strategy requires clear targets, timelines, and discipline, not just aspirations.
That’s the difference between a fiscal fantasy and fiscal responsibility.
As we have been clear, our policies are under review and we are undergoing a process of listening to the Australian people, meeting them where they are.
Over the past four months I have heard a growing concern around debt and it being passed on to future generations.
That means we need to develop a set of quantifiable fiscal rules to guide our policy making.
Without that rigorous foundation, nothing else works.
While we’ll work on this foundation through the term, I can say if we were in government today, our economic and fiscal strategy would be clear.
We would focus on private sector-led growth, on driving investment and job creation, and on ensuring that Australia is resilient enough to withstand future shocks.
That is because strong finances are the foundation for strong services in health, education, and security.
That means discipline.
We would have a clear handbrake on the amount of tax collected, because Australians deserve certainty that the government won’t take a bigger and bigger slice of their income.
The government must live within its means, just as households do.
Spending should only grow where it delivers real value, not just because the economy got bigger.
Every new dollar of spending would require a saving, a reprioritisation, or a reform that makes government leaner, with only the most fundamental safeguards for our nation standing apart from that.
We should not and cannot leave the next generation with a credit card bill for today’s politics.
Our commitment is to turn the tide on debt.
That is how we safeguard the future.
We would also undertake an audit of government programs.
Every dollar would be tested.
Is it delivering results?
Does it reflect the core responsibilities of government?
Can it be done more efficiently, or not at all?
This is not about mindless cuts.
It is about smart choices and hard priorities.
That doesn’t mean attacking the welfare safety net or health or school funding as Labor will of course scare Australians with.
It is about reducing waste and low-value programs allowing us to strengthen essential services like Medicare and deliver tax relief for families who are under pressure.
But above all, our focus will be on a stronger economy because the economy grows, more Australians are in work, wages rise, and the budget strengthens without higher taxes.
That is the virtuous cycle we must restore.
Productivity growth is the key.
It has gone into reverse under this government dropping 5 per cent, and unless it is revived, living standards will continue to decline.
Our agenda will be built on reforms in tax, regulation, skills, and infrastructure to lift productivity and competitiveness.
This will require leadership and honesty.
There will be tough calls ahead.
Programs cannot keep growing at 10 per cent a year.
Australians deserve to hear this truth before the crunch arrives.
Past governments, both Labor and Coalition, have made difficult reforms work by levelling with the public and designing those reforms fairly.
Australians will accept change if it is explained clearly, applied fairly, and done with future generations in mind.
That is because the Government should do for Australians what only government can do: provide a safety net, deliver quality services, invest in infrastructure and keep the nation secure.
Beyond that, it should step back and trust Australians to make their own choices and build their own futures.
To the business community and economic leaders here at CEDA, I say this: we will need your partnership.
A stronger economy is a national project.
Business must invest and employ.
Government must set the right guard rails, then get out of the way.
The easy path is to keep spending, to keep borrowing, to keep expanding the role of government.
But that path leads to decline.
The better path is one of responsibility, empowerment, and shared effort.
That is the path we will take.
And today, I invite you to be part of it.
Conclusion
In closing, let’s remind ourselves why all of this matters.
This is not about numbers on a spreadsheet.
It’s about the kind of country Australia will be in 5, in 10, in 20 years.
I want Australia to remain a land of opportunity, where each generation can climb the ladder of prosperity.
I want us to hand off to our children a nation in better shape, not worse.
That means handing them public finances that are robust, not ruined.
We are at a crossroads.
Down one path is a continuation of the status quo.
Bigger government, higher spending, higher debts and eventually higher taxes to pay for it, and a people increasingly reliant on Canberra’s largesse.
Down the other path is a course correction restoring sustainability and unleashing the power of our people and businesses to drive progress.
The first path may feel comfortable for a time, until it hits the wall of economic reality.
The second path may require some hard work and adjustment now, but it will lead to far greater rewards in the future.
To me, the choice is clear.
The time of dependency can and must give way to a new age of empowerment.
We will be principled, we will be courageous, and we will be honest about the challenges.
And if we earn the privilege of government in 2028, we will deliver a program of fiscal repair and economic renewal that sets Australia up for decades of success.
This is about ensuring we can continue to care for the vulnerable, invest in our future, and weather any storm.
I invite all Australians to join us on this mission.
Thank you.