KEY POINTSThe Morrison Government will deliver a budget surplus this coming year and every year over the forward estimates and the medium term. Any additional spending on Morrison Government's election commitments during this campaign, beyond what has already been factored into the 2019-20 Budget, has been more than offset by additional savings. Indeed, the net effect of all our policy commitments announced since the Budget during the election campaign is a slight improvement to the budget surplus in each year of the current forward estimates period. This leads to a slight overall increase in the cumulative surplus, now expected to be $45.1 billion over the next four years. This is the result of the Liberal and Nationals Government’s economic plan, which has secured a record number of Australians in jobs, and responsible budget management. The Liberal and Nationals Government has made a lot of progress in rebuilding our economy and repairing the Budget. There is more to do. This is not the time to turn back to Labor’s fiscal mismanagement. The Coalition has the right plan to build our economy and secure Australia’s future. Now is not the time for the reckless high-tax, high-spend experiment offered by Labor. Their fiscal plan is built on $387 billion in higher taxes, which would make Labor the highest taxing government in Australia’s history. Labor’s high taxing agenda would weaken our economy, cost jobs and leave Australians worse off. Over time it would also weaken the Budget again and reduce the ability to fund the essential services Australians rely on. There is a reason why federal Labor has not delivered a Budget surplus since 1989. They do not know how to manage money. Only the Morrison Government has a credible, fully costed economic plan to build a stronger economy and secure a better future for all Australians: Returning the budget to surplus and paying off Labor’s debt Delivering more jobs Lowering taxes Guaranteeing essential services like Medicare, schools, hospitals and roads Keeping Australians safe and our borders secure A budget surplus matters for all Australians because it means the government can guarantee better essential services. It also allows us to pay down Labor’s debt and be more resilient and better prepared for any economic headwinds. By fixing the budget and keeping the economy strong the Liberal and Nationals Government is delivering: Tax relief for over 10 million workers, starting this year. Tax relief for 3.4 million small businesses employing 7.7 million Australians. Annual hospital funding has increased by 60 per cent compared to Labor in 2013. School funding has increased by 62 per cent per student. More than 2,000 new life-changing medicines worth $10.6 billion listed on the Pharmaceutical Benefits Scheme. Record investment in infrastructure, Defence and border security. Support for those affected by drought, flood and fire, particularly in regional areas. OUR PLANA strong economy that delivers jobsA stronger economy is central to everything. It is the key to creating more and better paying jobs. It is the necessary foundation to ensure the Government is able to pay for the essential services Australians rely on over the long term. Australia’s economy is growing at a stronger rate than the OECD average and all of the G7 economies, except the United States. The Liberal and Nationals Government has delivered on our 2013 promise for one million new jobs to be created. In fact, over 1.3 million more Australians have found a job since the Coalition was elected. The majority of these new jobs are full-time. More than 100,000 young Australians between the ages of 15 and 24 found jobs last financial year – the largest number in Australia’s history. The percentage of working age Australians on welfare is at its lowest level for a generation. Australians are participating in the jobs market at record levels, including record levels of female participation. Not only are there more women in work than ever before, the gender pay gap is at its lowest level on record at 14.2 per cent and well below the 17.2 per cent gap when Labor left office. We know that work offers opportunity and we are committed to job creation. That is why a re-elected Morrison Government will create another 1.25 million jobs over the next five years. One in five of our new jobs will be for young Australians, getting 250,000 young people into work over the next five years. We will do this by building a stronger economy, investing in the skills Australians need and supporting businesses to start and to grow. More jobs and better jobs are good for the economy, good for the budget and – most importantly – good for Australians. Returning the budget to surplusAfter more than a decade of deficits, the budget returns to surplus in 2019-20. It has been a long road of budget repair since the Coalition was elected in 2013. Over the last six years, the turnaround in the budget balance has been $55.5 billion, or 3.4 per cent of GDP. When Labor left government, they had racked up 6 consecutive deficits that were the highest in Australia’s history. This mismanagement of the budget meant that Labor was not able to properly fund the most essential of government services. When Bill Shorten was Assistant Treasurer, Labor stopped listing new medicines on the Pharmaceutical Benefits Scheme because they ran out of money. Because Labor couldn’t manage the budget, they put Australians’ health care on hold. They also raided the Defence budget, reducing it to the lowest level since 1938. At the same time, Labor baked in tens of billions of unfunded spending. Since coming to government, the Liberal and Nationals has made steady progress to repair the budget and chart a responsible path back to surplus. Unlike Labor, this means we have been able to list the life-changing medicines and we have been able to fully fund record investments in schools, hospitals, roads and the NDIS. We have also been able to support communities affected by drought, flood and fire. We have guaranteed the essential services that Australians rely on, while ensuring that total spending is kept to sustainable levels. After accounting for the Morrison Government policies, this coming year will see a budget surplus of $7.1 billion. Budget surpluses will build in size and exceed 1 per cent of GDP over the years ahead. Paying our own way The Liberal and Nationals has restored our nation’s finances by building a strong economy and through good budget management. Government spending has been focused on delivering high quality essential services while careful targeting has seen payments as a share of GDP returning to long-run average levels. In achieving this, the Coalition’s average real spending growth is the lowest of any Commonwealth government in over 50 years. Through good fiscal management we are ensuring Australia is better equipped to deal with future challenges and reducing the fiscal burden on future generations. Our responsible approach to spending means there is more for the essential services that matter to Australians, including hospitals, schools and roads. We will continue to invest more each year in these essentials. Because we can manage money we can guarantee this funding will be delivered. Keeping taxes lowThe Morrison Government is also keeping taxes as a share of GDP within the 23.9 per cent cap, limiting the tax burden on Australians. In contrast, a potential Labor Government would be the highest taxing Australian government on record. This would be a dangerous experiment on a scale that has never been conducted before. Their $387 billion of higher taxes over the next decade would weaken the economy and put at risk the capacity of government to fund essential services like health, education, infrastructure and national security. Paying down Labor’s debtWith the budget moving into surplus, the Morrison Government will be paying down Labor’s debt. The Morrison Government is reducing debt, not through higher taxes, but by good budget management and growing the economy. Reducing debt will ensure that the nation’s finances remain sustainable and that we are prepared for future challenges. It will also ensure that future generations are not burdened as a result of today’s spending. The Morrison Government’s ongoing commitment to strong fiscal management will see the government’s financial position substantially improve over the next decade. We are reducing debt as a share of the economy and are on track to eliminate net debt by 2029-30. This matters because over the last year the interest bill on the national debt was $18 billion. This is money that could have built 500 schools or a world-class teaching hospital in each state and territory. Continuing to drive efficiency in government administrationA Morrison Government will continue to ensure that our government’s administration is as efficient, productive, effective and responsive to community needs as possible. A re-elected Liberal and Nationals Government will reduce departmental funding to government agencies by $600 million less than proposed by Labor under their previously announced policy costings. Labor has revealed during this election campaign that they will reduce departmental funding to Government agencies by more than $2.1 billion, which in the 2019-20 financial year is equivalent to an Efficiency Dividend of 2.5 per cent. During Labor’s last full year in office, they imposed an Efficiency Dividend of 4 per cent, double the current level of the Efficiency Dividend. Labor has sought to politically frame their 2.5 per cent Efficiency Dividend imposed on Departments as something else. But Labor’s measure is clearly a $2.1 billion net reduction in overall departmental funding to Government agencies. A re-elected Liberal and Nationals Government will maintain the Efficiency Dividend at its current level of 2 per cent for a further two years, before stepping it down to 1.5 per cent in 2021-22 and returning to the base rate of 1 per cent from 2022-23. Through this policy, the Morrison Government will reduce total departmental expenses over the 2019-20 forward estimates period from $288.6 billion to $287.1 billion, whereas Labor would reduce departmental expenses further to $286.5 billion. This will ensure Commonwealth Government agencies continue to focus their efforts on achieving value for money for taxpayers by making sure that our government administration is as efficient, productive, effective and responsive to community needs as possible. By unlocking those further cost efficiencies in government administration, we are able to re-direct those savings into funding for services and infrastructure. All existing exemptions that currently apply to the Efficiency Dividend will continue to apply, including for agencies such as the ABC, SBS and Safe Work Australia. The current temporary exemption granted to the Australian Signals Directorate and Office of National Intelligence would be made ongoing and further exemptions will apply in relation to this Efficiency Dividend extension, including for: the National Disability Insurance Agency; the Australian Securities and Investments Commission; the Australian Prudential Regulation Authority; National Collecting Institutions, including the Australian War Memorial, National Archives of Australia, National Gallery of Australia, National Library of Australia and National Museum of Australia; and all agencies with an Average Staffing Level of below 200. In contrast to Labor’s approach, the Liberal and Nationals Government believes that Departmental Secretaries are best placed to identify the most appropriate and sensible areas to secure further efficiencies in their departmental expenses and hence will not be prescriptive in where or how they are to be achieved. If Departmental Secretaries assess that these efficiencies can most appropriately be secured through reductions in expenditure on contractors, consultants and travel, because that makes sense from a value-for-money point of view, then of course that is what the Morrison Government would expect them to do. The efficiency outcomes will be better and more sensible by letting Departmental Secretaries make those judgements based on value-for-money considerations. In contrast to Labor’s command and control approach, we consider that leaving Departmental Secretaries with the flexibility to make the best possible decisions on how to realise efficiencies in their department’s administration will result in the best value-for-money outcome for taxpayers. The Efficiency Dividend extension will return a saving in departmental expenses of around $1.5 billion over the forward estimates. OUR COMMITMENTSOur spending commitments have been fully costed and overall our policy commitments will increase the cumulative surpluses outlined in the 2019 PEFO by $102 million over the forward estimates period. This includes $1.4 billion in new spending commitments over the forward estimates, building to $3.8 billion over the medium term. This is more than offset by new savings of $1.5 billion over the forward estimates, building to $5 billion over the medium term. Over the election campaign period, the Morrison Government has made significant announcements, including our plans for: More jobs in a stronger economy Strengthening Australia's World-Class Health System Youth Mental Health and Suicide Prevention Delivering high quality skills and vocational education Supporting first home buyers Backing small business with lower taxes and lower energy costs Supporting Retirees Infrastructure to bust congestion and keep Australians safe on our roads Backing the economic prosperity of our regions Stronger Defence and supporting our veterans In aggregate, the Morrison Government's election commitments have a $102 million positive impact on the underlying cash balance as set out in the 2019 PEFO as shown in the following table. THE CHOICEThere is a lot at stake at this election. And there is a clear choice. A choice between the Morrison Government that is delivering a strong economy or a Labor Party that would weaken our economy. A choice between the Morrison Government that is making life easier for families by lowering taxes or a Labor Party that will put more strain on households by imposing $387 billion in new taxes on workers, retirees, families and small business. A choice between the Morrison Government that is fixing the budget and can guarantee better services and infrastructure or a Labor Party that cannot manage money. Labor cannot manage moneyLabor has not delivered a budget surplus since 1989. Like the Rudd-Gillard-Rudd Governments, a Shorten Labor Government will never deliver a surplus budget. Labor has proven to be incapable of managing money. They have repeatedly left debt and deficits for incoming Coalition Governments to fix. In 1996, the incoming Howard Government inherited a budget deficit (in today’s dollars) of $26 billion or 1.5 per cent of GDP. The Howard Government returned the Budget to surplus. After inheriting that surplus in 2007, Labor racked up $240 billion in deficits over six years. In 2013, Labor left the Coalition a budget deficit of $48 billion or 3 per cent of GDP. Like the Howard Government a decade earlier, Liberal and National's Government has again repaired Labor’s budget mess. This coming year we are returning the Budget to surplus. If given the chance, Labor will squander the surplus again, even while slugging Australians with hundreds of billions in new taxes. We cannot repeat this cycle again. Labor’s hidden Bill Labor is not being up front with the Australian people about the cost of its commitments. Throughout the election campaign, Bill Shorten and his team have dodged questions about the cost of their policies on the economy and on the budget. Labor’s claims that they will deliver higher budget surpluses simply cannot be believed. Their plans for $387 billion in higher taxes – which would make a Labor government the highest taxing in Australia’s history – would hurt the economy and cost jobs. This would weaken the budget and undermine the ability to fund essential government services. Labor has abandoned any pretence of budget responsibility. Labor have revealed the costs of $35 billion of its spending commitments over the forward estimates, and $112 billion over the medium term. However, its spending goes well beyond these sums. Indeed, just the day after Labor released its costings, Bill Shorten promised a further $10 billion in spending. In addition, Labor have made commitments that do not show up in their costings. Overall, the costings Labor have released do not account for unfunded promises and under-funded commitments with a negative financial impact of more than $40 billion over the forward estimates, building to more than $240 billion over the next ten years. Estimates of just some of these impacts are detailed below. Our policy commitments will increase the cumulative surpluses outlined in the 2019 PEFO by $102 million over the forward estimates period. Notes: 1. The Coalition has committed unallocated funds within the following programs: Community Development Grants Program, Community Sport Change Rooms and Swimming Facilities Fund, Environmental Restoration Fund, Indigenous Advancement Strategy, Infrastructure Investment Program – Urban Congestion Fund, Infrastructure Investment Program – Urban Congestion Fund - Commuter Car Park Fund and Infrastructure Investment Program – Roads of Strategic Importance. 2. The Coalition remains committed to the construction of East West Link despite the decision of the Victorian Government not to proceed with the project. To this end, a re-elected Morrison Government will provide $4 billion to the first Victorian Government willing to build the East West Link and is therefore recording this commitment as a contingent liability. This contingent liability has increased from $3 billion as outlined in the 2019-20 Budget.