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Malcolm Turnbull
May 15, 2009
The enterprise and energy of Australians and the richness of our resources mean with the right leadership our greatest, most prosperous days should be in front of us.

But opportunities can be seized or squandered. The budget should have laid a foundation for recovery, growth and hope for a better future. Instead, we were offered a counsel of despair setting out no credible plan for economic recovery, a budget so unbelievable the Prime Minister is already running away from it – racing to an early election so that he can get to the polls before the full consequences of his mismanagement are felt.

Last year, the Treasurer was filled with pride as he proclaimed a surplus built by others. This year, he was so ashamed he could not bring himself to even mention the $58 billion deficit he created. He could not utter the words “$188 billion of net debt – the highest in our history – double the record under Paul Keating”. That’s $9000 for every man, woman and child in Australia.

The Prime Minister’s reckless borrowing and spending today is guaranteed to deliver higher interest rates and higher taxes in the future. Debt has to be repaid with interest – whether it is a family’s credit card, or the credit card of the nation. How many years will it take us to pay off hundreds of billions of dollars of Rudd Labor debt?

It didn’t have to be this way. Australian didn’t have to embark on this irresponsible, dangerous course of high deficits, high debt, and high unemployment. There was a better way forward, involving less debt and less risk.

Our plan for recovery will be based on four key principles: protecting and creating jobs; no more government debt than necessary; targeted spending at jobs and building infrastructure; and supporting private enterprise and small business as drivers of growth.

Labor has no strategy to return the budget to surplus other than hoping that “something will turn up” – in this case, an incredible six successive years of above-trend growth. Nobody believes this scenario is credible.

Australians deserve an honest appraisal of the nation’s circumstances. We will appoint an independent commission to determine what levels of expenditure are sustainable and consistent with the need to address intergenerational equity. We would create an Australian version of America’s Congressional Budget Office, which has for many years provided the Congress with objective advice and analysis on fiscal policy.

Governments never welcome greater scrutiny, and I’m under no illusion this proposal will be greeted with any great enthusiasm by the Prime Minister and the Treasurer. But it would contribute greatly to a better-informed debate about fiscal policy alternatives and the consequences of different choices and trade-offs.

This deficit is already too big – we do not want to make it bigger, but there is one savings measure in this budget which we will oppose. The changes to the private health insurance rebate are the latest phase in Labor’s unrelenting war against private health insurance.

Every Australian knows the cost of public health is growing, and as our population ages the need for more self-reliance becomes greater. This broken promise will directly hit the family budget of at least 1.7 million Australians and indirectly will result in higher premiums for all Australians. And as private health insurance costs go up, more pressure is put on public hospitals.

This broken promise contributes $1.9 billion of savings over four years – when total revenues will exceed $1200 billion. But the Government could comfortably afford to retain the rebate by increasing the amount of excise collected on tobacco by 12.5 per cent. Tobacco is the single most preventible cause of ill health and death in Australia.

There’s a tough choice for a weak Prime Minister: raise $1.9 billion by making health more expensive and putting pressure on the public system or do it by adding about 3 cents more to the price of a cigarette and taking pressure off the public system.

Australians took on trust this Prime Minister and Treasurer, that they were economic conservatives, and they genuinely wanted this Prime Minister to succeed. Yet today, Australians see our national balance sheet drowning in red ink.

Our job as political leaders is to build hope for the future. For at least 60 years our proudest boast as a nation is that no generation of Australians has been left worse off than their parents. Yet, tonight, we cannot avoid the question: will we be the first generation of Australians to bequeath to our children a lower standard of living?

To what extent are our actions today consigning the next generation of working Australians to higher taxes, higher interest rates and higher debt – and a lesser opportunity to give their families what we ourselves enjoy in life?

When the time comes to answer for these failings, who will be judged the guilty party? That day of reckoning is approaching for the Rudd Labor Government.

This is an edited extract of the Opposition Leader, Malcolm Turnbull’s, budget address in reply last night.


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