May 14, 2002
The Federal Treasurer, Peter Costello

Mr Speaker, I that the Bill now be a second time.
Mr Speaker, past year has again reminded all that world events can dangerously and unpredictably.
Last year I delivered the Budget we not know that four months our world would change in a devastating way.
The terrorist of 11 September shocked us and showed that terrorism can even the most powerful of . We cannot take our security granted. Tonight I will announce to upgrade Australia's security. Tonight will announce measures to secure 's borders.
But developments in other of the world do not affect our physical security. They affect our economic security as . Through last year country after fell into recession. The events 11 September made things worse. trading partners:- Japan, the United and Europe all turned down. found itself in a very economic environment.
We were not by the global slowdown. But I can report to the that Australia is strong. Last , other countries went into recession our economy grew.
The hard of the last six years to shield our country and people in work. It gave the capacity to respond swiftly measures to stimulate the economy the additional First Home Owners . It allowed us to respond with a major contribution to War Against Terrorism.
But we continue strong economic policy if want to be able to to unpredictable events in the . Strong economic policy has been hallmark of this Government. By end of this coming financial we will have paid off billion of the Labour Government's . Our Budget for the year in surplus, a surplus of $2.1 .
And the Budget will out a programme, not always , but fair, to sustain important and welfare services into the .
This year we will fund to upgrade security, to secure borders, to strengthen our defence and deliver the Government's election in full, on time, and budget.
Mr Speaker, last year announced the largest and most upgrade of our defence capabilities any Australian government in over years. Under that plan set in a White Paper an $1 billion is included in 2002-3 defence Budget. But, the has decided to add to programme to fund the deployment Australian troops in the War Terrorism.
The deployments are being out as part of our to the American-led operation against terrorism and the Gulf blockade support of UN sanctions against . They involve around 1,100 Australian personnel and comprise land, sea air operations. The initial deployment an Australian special forces task participating in operations in Afghanistan the Taliban and Al Qaida . It includes a naval task of an amphibious landing ship mid 2002 and a frigate, the continued presence of a missile frigate in the Persian to support the Multinational Maritime Force. And it includes an Force B707 tanker aircraft to air-to-air refuelling operations and F/A-18 deployed to Diego Garcia to air defence of coalition forces.
composition of the deployment is to strategic requirements and is under review.
The additional funding the base funding and over White Paper for this deployment 2001-2 and 2002-3 is around million.
But as we have , terror and crime can also at home. Our Government's first is to defend our citizens our national security assets. We do it in a careful hoping for the best, but against the worst. In this we are allocating an $1.3 billion over five years to security within Australia.
Australia's airport will be upgraded. Armed, plain , Protective Service officers now travel selected flights. Additional Protective Service provide heightened security at Australia's with enhanced capacity for detecting .
The Budget provides an additional million to the Australian Federal , the Australian Protective Service and intelligence agencies to assist in potential security threats. There will increased screening of imported goods, cooperation with overseas law enforcement , and improvements in screening arriving departing international passengers.
The Government also investing in the development leading edge technology that has potential to significantly improve passport . If successfully developed, a biometric could record individual features on magnetic strip on passports and distinctive matching at airports and points of entry. This will funded by an increase in Passport Fee.
The Government will improving the secure communications system the Department of Defence and measures to protect our critical infrastructure from attack.
The Government double the Australian Federal Police team capability, allowing for the deployment of more than 200 agents around Australia dealing with such as terrorism and politically violence.
We will establish a Australian Defence Force Tactical Assault on the east coast of , in addition to the existing on the west coast. The Assault Group is a special unit with specialist counter-terrorist training, hostage recovery.
And we will within the Australian Defence Force permanent Incident Response Regiment. This be a highly trained group to respond to chemical, biological, , nuclear and explosive incidents. To our capacity to respond to an incident - one we will never occur - the has authorised a national stockpile chemical antidotes and vaccines.
Mr , Australia operates a substantial immigration which in the coming year offer permanent migration places at base level of 105,000 people. addition we offer around 12,000 under the humanitarian category for . This is one of the offshore humanitarian programmes of any in the world.
But to the integrity of that programme places should be reserved for assessed as genuine refugees and who have complied with Australia's processing arrangements. The Government does intend to allow people smugglers determine the intake under this .
Last Budget we proposed $1.6 billion over five years on security. The measures we have since, together with the measures am announcing tonight, will increase expenditure to $2.8 billion.
This include $219 million to construct maintain a purpose built Reception Processing Centre on Christmas Island will allow downsizing of other at Curtin and Woomera. The has allocated $455 million over next four years for receiving processing asylum seekers at the facility on Christmas Island and, necessary Cocos Island.
Mr Speaker, Government has decided to double Marine Unit surveillance, it has Coast Watch surveillance, and it allocated additional funding to the Defence Force to patrol Australia's waters to deter unauthorised boat .
Mr Speaker, it is also to take steps to reduce flow of unauthorised immigrants to Australian waters. To this end, Government has committed $75 million fighting people smuggling through the of unauthorised migrants in transit .
The Government is increasing the of authorities and international organisations transit countries to detect and illegal people movement.
The Government also increasing support to international , such as the UN High for Refugees and the International for Migration, to help in , processing and subsequent removal of in transit countries.
There is that these comprehensive measures are results. In August last year numbers surged, with some 1,212 boat arrivals arriving in the three weeks of August alone.
the introduction of the Government's to secure our borders, there been a dramatic slowdown in arrivals. There have been no boat arrivals to Australia since of last year.
Mr Speaker, , as part of the Budget, am releasing the landmark Intergenerational . This is the first report its kind and the first any attempt has been made the Budget to look across generations and identify the challenges lie ahead for our children, society and our governments. What will our children and their have to confront in forty time? And what will the of Australia's finances be in ? And what should we do to prepare for the generations ?
One of the big changes our society will be that number of older people will , and with falling birthrates, the of younger ones will not . The ratio of old to in our society will increase.
in medical science will make and more treatments available and our capacity to live longer.
strong Budget position means we better placed than most other societies to cope with these . But we must start now put in place measures which sustain a decent health system a decent aged care system the future. If we ignore changes now the challenges will get greater, the decisions will get harder, and the solutions slip outside our grasp.
The of the Pharmaceutical Benefits Scheme growing rapidly as medical science and we have a greater to treat more conditions. Since the cost of this scheme nearly quadrupled from $1.2 billion $4.2 billion. The Intergenerational Report that the Pharmaceutical Benefits Scheme be the most significant area pressure in the health budget in forty years time grow around $60 billion in today's .
So the Government is taking small steps to help put Pharmaceutical Benefits Scheme on a sustainable basis so it can access to medicines at affordable over the longer term. These will ensure that consumers, industry, and pharmacists all contribute to the rate of increase in Pharmaceutical Benefits Scheme.
From 1 this year, co-payments for concession such as pensioners and Seniors cardholders will rise by $1 $4.60 and co-payments for others rise by $6.20 to $28.60 prescription. While a concession cardholder only pay $4.60 for a , this is only a small of the cost of many Benefits Scheme medicines.
Humulin, widely in the treatment of insulin diabetes costs $229.13 per prescription. , a drug used for the of multiple sclerosis costs $1,090.81 prescription. Zyban, used for the of nicotine addiction, costs $238.85 prescription.
New drugs with high are coming on to the Benefits Scheme all the time. notwithstanding the cost of the the co-payment will only $4.60 for concession cardholders.
Safety net will continue to protect people need a large number of . Consistent with the current arrangements, concession cardholders have paid for prescriptions in the year, they receive further medicines free for rest of the year. Non cardholders who pay $874.90 in year for their Pharmaceutical Benefits medicines will be eligible for medicines at the concessional rate the rest of the year.
Government is also introducing changes ensure medicines are used appropriately.
making the Pharmaceutical Benefits Scheme sustainable, the Government can continue fund the listing of new, effective, but expensive medicines.
Mr , the Government has a policy equipping our young people in best possible way for the . That is why we invested improving literacy and numeracy in education system. That is why revived the apprenticeship system. And this Budget we will focus further with an extra incentive $750 to employers willing to on a new apprentice while or she is still at , and a bonus of $750 keep the apprentice after they completed Year 12.
We will an incentive of $1,100 to to take on a new in information technology. And for age people we will offer assistance of up to $500 attain basic skills in computers information technology. One of the barriers for mature age workers back into the workforce is of computer skills. This training be available to 11,500 people year.
Our policy is to people to get job ready that as the growing economy more jobs, they have the to get those jobs and into the mainstream of the workforce.
The Government's Work for Dole Scheme has been a successful programme to develop work . At a cost of $81.5 over three years we will 8,500 additional Work for the places.
Mr Speaker, in last 's Budget I announced a programme reform our welfare system called Working Together.
We want to the next steps in this . There are many people who out of work and on Disability Support Pension who have support or encouragement to get into employment. Since 1990, the on Disability Support Pensions has .
We want to take measures encourage those who are capable work, including part time work more than 15 hours a , to get back into the . This will improve their esteem self-reliance. At present eligibility for Support Pension is assessed as incapacity to work 30 hours week. This will be reduced 15 hours. Disability Support Pension and the means test are .
To provide people with greater to improve their work 73,000 new training and work programme will be created for those are currently on Disability Support . This will cost additional money, in giving people access to services it is expected more will re-enter the workforce and the longer term it will the taxpayer.
This new measure apply to all new Disability Pension applicants from 1 July . Those currently on Disability Support (except those severely disabled with work capacity or those who within five years of Age age) will be assessed under new criteria within five years implementation.
The Government will continue commitment to the most vulnerable disadvantaged citizens in our society. new five year Commonwealth State Agreement is proposed with the providing the States an extra $547.5 million over five years for need. This Agreement funds the and Territories to deliver Specialist services such as accommodation, community and respite. This means the will allocate $2.7 billion to new Agreement - $743 million than the previous Agreement.
For part, the States and Territories at least match the Commonwealth's . They must also provide better , quality, efficiency and effectiveness in delivery of their services. Over same period the Commonwealth intends spend another $2 billion in of its responsibilities for employment for people with disabilities.
Mr , when Labour left office the mortgage interest rate was 10½ cent. Today it is 4¼ points lower. Low interest rates supported Australian families giving them on their mortgage repayments and them to make ends meet.
First Home Owners Scheme has many young Australians to buy first home. This grant which at $7,000 from 1 July help thousands of young Australians a home for the first . The grants are expected to $784 million in the budget .
And the Government is going introduce new measures to help starting a family. This is addition to higher payments of Tax Benefits which were introduced in July 2000.
One of financial pressures facing those who starting a family is that generally lose their second income the mother goes out of workforce to have the child. baby bonus is going to mothers who are out of workforce with their first child claim back tax they paid they were in the workforce. amount they can claim is to $2,500 per year for years depending on the amount tax they paid before leaving workforce. There is a minimum of $500 per year for years for low income parents.
is expected that around 245,000 will benefit from the baby in the first year and ,000 Australian families will eventually benefit.
Speaker, we know that access health services is a major for families - particularly the in the outer suburbs of major cities.
That is why Government has a plan to an additional 150 doctors to in the outer-metropolitan areas of six State capital cities. Under plan, doctors who agree to in a designated outer-metropolitan area register on an alternative pathway achieve vocational registration will be for higher Medicare rebates. Specialist will be able to access provider numbers if they work outer-metropolitan areas. And doctors in 'general stream' of the GP training programme will undertake a placement in an outer-metropolitan area. is an $80 million plan more doctors for the families the outer suburbs of our cities.
And we want to our public places safe for children. So the Government will a strategy for the introduction retractable needle and syringe technology Australia. This means that exposed cannot be left lying around public places or anywhere else children’s lives could be at from needle stick injuries.
Mr , in the Budget two years I announced a Regional Health designed to make a practical in improving health services to regions and the bush. This we want to add some practical, on the ground, services regional Australia.
We want to six new facilities, outside the cities, to improve patient access radiation oncology services. A programme 72 million over four years do this and include training to international best practice to these local services.
Another of services that needs improvement in areas is the provision for care. Older Australians do not to move away from their communities in their twilight years. Budget has a programme to or replace high care homes rural, remote and urban fringe and also includes funding to more people to take up care nursing with 250 aged nursing scholarships at rural and university campuses.
Mr Speaker, our Report shows that aged care require increasing attention as the of older people in the increases. Again this year there new measures to provide better for older Australians.
Subsidies for aged care will be increased allow better pay rates to offered to aged care nurses providers can attract and retain aged care nurses.
The Government's care policy is, wherever possible, improve and expand community care which enable older Australians to to stay at home and independently, as independently as possible the community.
The Government will an additional 6,000 Community Aged Packages over four years. These are tailored to meet the of frail older Australians who to remain in their own , and can do so if receive home help, laundry, meals bathing.
The Government will also funding to support the carers older Australians, carers of people dementia, and ageing carers of with disabilities.
This Budget will aim to improve the standard palliative care offered in the . Funding of $55 million over years will be provided for coordination between hospital and community ; improved education and further support general practitioners and further assistance families of people who choose spend their final years in home setting.
Mr Speaker, over years this Government has taken decisions to recognise the contribution by our veterans. Tonight, we to go further. The Government extending eligibility for the war ' Gold Card (which provides comprehensive health care) to Australian veterans 70 years and over who qualifying service from post World II conflicts. This will allow veterans the Gold Card comprehensive health card.
In this Budget are also introducing twice-yearly indexation the ceiling rate of the Support Supplement for War Widows. ceiling rate will be increased the same percentage as the or service pension. This increase income support for our war is expected to cost $85 over four years.
Mr Speaker, Intergenerational Report projects that over next 40 years the number people of Age Pension age grow from 2.7 million to 6.3 million. This is expected to a significant Budget pressure from pension outlays.
This Budget provides number of incentives to encourage to improve their retirement incomes making greater contributions to superannuation.
1 July 2002, the Government make a matching superannuation co-contribution up to $1,000 per year qualifying low income earners who personal undeducted superannuation contributions. Individuals assessable incomes and reportable fringe up to $20,000 per annum be eligible for the maximum $1,000 co-contribution and those individuals with between $20,000 and $32,500 will eligible for a reduced co-contribution. initiative will replace the existing $100 rebate for personal superannuation made by low income earners.
each of the next three , the Government will reduce the and termination payments surcharge rates one-tenth of their current levels. will reduce the maximum surcharge from 15 per cent to 10.5 per cent in 2004-05.
From July 2002, self-employed and other people will be able to a full tax deduction for to $5,000 of superannuation contributions, to $3,000 currently. Contributions above new higher threshold will continue be 75 per cent tax , with a maximum deduction equal the taxpayer's age based limit.
Superannuation Guarantee system will also improved by requiring employers to at least quarterly Superannuation Guarantee on behalf of employees. This reduce the potential loss of benefits in the event of or insolvency.
The Government is introducing measures to make superannuation arrangements more family friendly. From July 2003, members of accumulation will be allowed to split superannuation contributions with their spouse. Government will also allow parents, and friends to make superannuation on behalf of children and increasing from 70 to 75 age up to which working of superannuation funds can make superannuation contributions.
Sustainable revenues
Mr , the Budget surplus announced tonight not required any major new initiatives nor any increase in overall tax burden. The Government's reforms have secured the tax , proving one of the keys the strengthening of Australia's economic .
The Government remains committed to tax reform strategies and will ahead with the business tax agenda, including a review of tax arrangements.
Mr Speaker, the economy is expected to continue strong performance in the year , with robust economic growth forecast around 3¾ per cent for -3. This is higher than forecast for any of the major economies of the world and Australia's sound economic fundamentals.
Business is expected to grow very in the next budget year be a key driver of economic growth. Household consumption is expected to remain strong.
In with the outlook for robust growth, the unemployment rate is to decline gradually to 6 cent by June next year. unemployment rate below 6 per would be achievable over the couple of years, provided economic remains strong and progress is on labour market and welfare . Since the Government came to over 900,000 jobs have been in Australia. We expect over million jobs by Christmas.
With moderate increases in wage costs continued strong productivity growth, inflation expected to be around 2¾ cent in 2002-3 within the -term inflation target band. Largely reflecting strength of the domestic economy, current account deficit is expected increase slightly to around 4 cent of GDP, which is the average over the 1990s.
Speaker, the last year has difficult in an uncertain world, a global economic downturn. But has emerged much stronger than countries.
This Budget is designed meet the continuing challenges of , and to project forward so can set ourselves a path will address the challenges of future.
This is a Budget keep Australia safe, to keep borders secure, and to keep economy strong.
I commend this to the House.