Labor’s assertions that the Government would have to make spending cuts in the future to pay for our income tax relief for hard working Australians are false.
What Labor’s latest statements show again is that they do not know how to read Budget papers. They do not know how to manage money.
All of our policy decisions are reflected in our 2019-20 Budget bottom line which shows a consistent surplus both over the forward estimates and over the medium term to 2029-30.
The published expenditure as a share of GDP for 2029-30 is a projection and not a target.
It is not based on assumed future cuts, but is a reflection of the projected fiscal impact of our current policy settings and the best available information about economic and other parameters over the medium term.
Importantly, what our Budget shows is that we are able to boost funding for all the essential services Australians rely on, including for hospitals and schools, without the need to increase taxes.
Hospital funding has already increased by 59 per cent and our new five-year agreements deliver $31 billion more funding for hospitals, while schools funding is increasing 62 per cent per student over the next decade.
As a result of our good management of the economy and the Budget, we are able to fund all the services Australians rely on and provide substantial income tax relief, while also returning the Budget to surplus – building to surpluses of 1 per cent as a share of GDP over the medium term.
When Labor lost Government back in 2013, spending as a share of GDP was projected to reach 26.5 per cent by 2023-24 and to continue to rise.
We have brought spending under control, with expenditure as a share of GDP down to 24.9 per cent this year.
Through disciplined Budget management, this share is projected to be reduced further to 24.5 per cent by 2021-22 and 23.6 per cent by 2029-30.
This is based on decisions that have already been taken and already publicly announced.
Overall expenditure as a share of the economy, projected to be 23.6 per cent by 2029-30, is a function of a stronger economy under the Coalition and the ongoing effect of past decisions to get spending growth under control.
Indeed, as a result of decisions to better control spending growth, annual real growth in payments is averaging 1.9% over the period since the Government was elected in 2013 to the end of the current forward estimates period.
That is the lowest spending growth of any Commonwealth government in more than 50 years.
A previous Coalition Government was able to reduce spending as a share of the economy even further. Indeed, at 23.1 per cent in 2007-08 spending as a share of GDP was in fact 0.5 percentage points lower at the end of the Howard Government period in office.
Better control of our expenditure has been a central foundation on which we built our budget repair strategy.
Labor’s $387 billion in higher taxes would weaken growth, with less investment and fewer jobs into the future.
A weaker economy combined with Labor’s proposals to increase spending would again dramatically increase payments as a proportion of GDP and expose Australia again to higher debt into the future.
The more Labor spend the more they tax. The more they tax the more they slow the economy down, which hurts every single Australian.