The Coalition's Policy for A Stronger Economy and Balanced Budget

Key Commitments

The Coalition’s policies are fully costed and we will deliver an improvement to the Budget bottom line.

Our responsible and transparent approach to fiscally sound policy means that, compared to the Budget bottom-line in the Pre-Election Fiscal and Economic Outlook (PEFO), we will deliver a net improvement of $1.1 billion over the next four years.

By contrast, Labor worsens the PEFO results by $16.5 billion over the four years, despite increasing taxes.

Only the Coalition has a credible, fully-costed economic plan that will deliver jobs, promote economic growth, and deliver a secure future for Australian families.

Our economic plan is seeing results. Since the start of the election campaign several updates to economic indicators have been released by the Australian Bureau of Statistics:

  • latest growth figures show Australia’s economy grew at more than 3 per cent over the last year
  • our economy is growing faster than the US, UK, Canada and well above the OECD average
  • export volumes and trade balance improved in April
  • the current account balance strengthened in March
  • household consumption remained solid, growing at 0.7 per cent through the March quarter and 3 per cent over the year
  • the number of employed Australians has increased by 225,000 over the year to May 2016 and more than 460,000 jobs have been created since the Coalition came to government
  • the unemployment rate is 5.7 per cent, down from its peak of 6.3 per cent in July 2015
  • consumer confidence as measured by the Westpac Index remains elevated at a level of 102.2 in June – above the 10 year average and nearly 7 points above the confidence level a year ago
  • business conditions and business confidence as indicated in the respected NAB survey remain positive and the AIG Performance of Services Index is stabilising
  • our credit rating remains stable at the top level of Triple-A

The Coalition’s fiscally responsible and transparent approach to policy will mean lower taxes for families and businesses, greater certainty and stability, and more opportunities for job and real wage growth.

Our approach guarantees the protection of Medicare and funding for health, education and infrastructure.

Our Plan for a Stronger Economy and Balanced Budget

The Coalition’s policies are fully costed and deliver an improved Budget bottom line.

Our responsible and transparent approach to fiscally sound policy means we will deliver a net improvement of $1.1 billion to the Budget over the next four years.

By contrast, Labor worsens the Budget position by $16.5 billion despite increasing taxes.

Only the Coalition has a credible, fully-costed economic plan that will deliver jobs, promote economic growth, and deliver a secure future for Australian families.

While Australia’s economic and budget positions are strong compared to other developed global economies, the Coalition recognises that challenges remain.

That’s why the Coalition is directing every lever of policy to secure our nation’s prosperity and economic security for the 21st century.

At a sensitive time of transition in a global economy that remains uncertain, the Coalition is focusing on those matters that we can control.

That is why the Coalition is controlling Budget spending and improving the Budget positon through sounds and responsible policy measures over the next four years.

Labor, by contrast, has confirmed that it will adopt a policy approach of increasing spending – resulting in higher deficits over the next four years despite also promising to increase the tax burden.

A core element of our plan for a stronger new economy is to have a sustainable Budget with crackdowns on tax avoidance and loopholes.

While we believe in lower taxes, paying them is not optional. That is why we have introduced measures to ensure a fair share of taxation is paid by multi-national corporations.

1. Impact of Coalition Policies on the Budget

Our responsible and transparent approach to fiscally sound policy means we will deliver a net improvement against PEFO of $1.1 billion to the Budget over the next four years.

Over the election campaign period, the Coalition has announced policies that address local needs as well as national issues. We have, for example, made significant announcements to:

  • ensure jobs and growth, particularly in regional areas
  • guarantee increased funding for hospitals, schools and roads
  • increase funding for mental health, medical research and finding cures for cancer
  • boost infrastructure investment
  • revitalise cities and urban areas
  • invest in our environment, including the Great Barrier Reef
  • promote business investment and innovation
  • ensure safer communities

Our approach guarantees the protection of Medicare and funding for health, education and infrastructure.

In aggregate, the Coalition’s election promises have a $1.1 billion positive impact on the underlying cash balance budget aggregates as set out in PEFO, and shown in the following table:

A more detailed summary of the policy announcements is included here.

2. The Coalition’s commitment to repairing the Budget

The 2016-17 Budget, with assumptions and numbers confirmed in PEFO, shows a falling deficit each and every year over the forward estimates. The PEFO reflects the best professional judgement of the officers of the Treasury and the Department of Finance and is released independently from the Government.

In coming to Government, the Coalition inherited a situation where our economy was weakening, the unemployment rate was rising, and the Budget position was rapidly deteriorating with spending growing at a faster pace than any major advanced economy.

We have a clear strategy to repair the Budget.

We set a rule for ourselves that new spending measures will be more than offset by reductions in spending elsewhere within the Budget.

This means that the Budget does not deteriorate because of the Government’s policy decisions.

3. Progress to date

Today our economy is growing more strongly, at more than 3 percent annually according to the most recently released National Accounts.

Employment growth is running at about three times the rate over the past 12 months compared to the last 12 months of Labor.

Our unemployment rate of 5.7 per cent is well below what had been anticipated when we came into Government and our Budget is now on a credible path to balance.

The number of employed Australians has increased by 225,000 over the year to May 2016 to reach 11.9 million.

More than 460,000 jobs have been created since the Coalition came to government

We continue to implement our fiscal strategy and we will continue to do everything we can to ensure that Australia is on the strongest possible economic and fiscal foundation for the future. That includes making sure that Australia maintains its AAA credit rating.

The Choice

The Coalition has a strong economic record and a plan to continue to grow our economy in order to provide jobs into the future.

The Coalition inherited a Budget in chaos from the Rudd-Gillard-Rudd years.

Living within our means is a key part of our National Economic Plan.

Unlike Labor, all our policies are fully funded.

This means we guarantee the protection of Medicare and funding for health, education and infrastructure.

Labor have rejected this commitment. They are instead raising taxes and at the same time make the Budget deficit worse over the next four years.

Under Labor, the deficit will be $16.5 billion higher than under the Coalition.

This means Labor will be borrowing an average of $11 million more than the Coalition each and every day over the next four years.

Three eminent economists have confirmed Labor will put Australia’s AAA credit rating at greater risk.

This is simply not fair to Australia’s youth.

High levels of debt shift the burden of paying for services Australian’s enjoy today on to our children and our grandchildren.

It’s the same old Labor – higher spending, higher deficits, despite increased taxes and higher debt.

Costs

The Coalition’s election policies are fully costed.

Our responsible and transparent approach to fiscally sound policy means we will deliver a net improvement of $1.1 billion compared to the PEFO bottom-line result over the next four years.

By contrast, Labor worsens the budget bottom line by $16.5 billion compared to the PEFO result.

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