As I was saying in the whip's office before I came into the chamber, this is a budget that will let you sleep at night, whereas Labor's budget will keep you awake at night in pure terror in terms of what they will do to Australia's economy. This is a budget that should relax Australians in knowing that there are adults in charge of the Australian economy, that there are adults in charge of the Australian government and that we are going to get the economy back on track.
As night follows day, Labor get into power and they go a little bit crazy, like drunken teenagers with their parents' credit card, and destroy the economy.
Senator Polley interjecting—
Senator McGRATH: Goodbye, Senator—a devastating analysis in your contribution. Labor get in and destroy the Australian economy at a state or federal level, and then what happens? We get the coalition in, we get the Liberal and National parties in, to clean up Labor' mess. This is what Tony Abbott, Joe Hockey and the cabinet have been doing since they were elected, with a strong and fantastic mandate, in September 2013. This budget is the next step in the coalition's responsible, long-term economic plan to build a strong, safe and prosperous future for all Australians.
We all know there are economic challenges. We know that China's economy has slowed and that the iron ore price has almost halved since the last budget. But it is important to stabilise the nation's finances and reduce debt. Debt is a word that Labor are uncomfortable with. They are probably too comfortable with debt because they love debt. There is debt in Labor's DNA. On this side of the chambers, in the Senate and in the other place, we do not like debt. We think that debt in Australia at the moment is too high and we have a plan to reduce that debt. One of the ways we can reduce debt is by building a stronger economy and a better future for all Australians. This country is seeing real progress. Our plan is working because growth is up and jobs are up. Labor's projected debt and deficit have already been cut in half.
This year's budget delivers a credible path back to surplus. The coalition government remain committed to returning the budget to surplus as soon as possible. The budget will show that our plan is working, because this budget is going to deliver jobs, growth and opportunity in a way that is responsible, measured and fair. We want to help Australians get ahead and provide them with greater capacity to make their own decisions about their future. That is why this year's budget has been focused on families and small businesses. Later on in my contribution I will talk about what the budget is doing specifically for families and small businesses. This is a jobs and small business package that includes the biggest small business tax cut in Australian history which is going to boost investment and boost jobs. And the budget delivers a better childcare system that is simpler, more affordable, more flexible and more accessible. It will provide parents with greater choice when it comes to balancing work and family.
Addressing Labor's debt and deficit will make Australia stronger and will allow the government to invest more in the services Australian's need. So we are taking decisions in the long-term interest of this country, not in long-term sectional interest and not in the interest of the next election. We are making decisions on what is best for Australia in five, 10, 15 or 20 years' time. So, let's talk about the deficit. We inherited a deficit of $48 billion. The deficit for the budget year is now estimated to be $35 billion and is forecast to reduce each and every year to below $7 billion over the next four years. Over four years this means we will have reduced the $123 billion worth of deficit inherited from Labor by over $40 billion, and we have a credible path back to surplus. Because of our efforts the deficit reduces each and every year, on average, by around half a percentage point of GDP per year. This is despite over $90 billion of tax receipts having been written off since we came into government.
Iron ore prices have halved since the last budget from US$90 a tonne to US$48 a tonne in this budget. This has contributed to the largest fall in the terms of trade in over 50 years. The government have decided not to proceed with our fully funded PPL package as provisioned. The funding was put aside in the budget and the scheme has being redirected to fund other important budget priorities. As we promised, the size of government will reduce over the next four years. We have kept real payments growth in check at 1.5 per cent, on average, over the five years to 2018-19. While Labor promised real spending growth at two per cent per annum, they delivered 3.6 per cent per annum. Gross debt in a decade will be more than $110 billion lower than what we inherited from Labor where it was provisioned to go towards $667 billion. Net debt is projected to peak at 18 per cent of GDP in 2016-17 before falling considerably, because of the decisions we made in last year's budget and the decisions made in this year's budget, to 7.1 per cent of GDP in 2025-26.
Our action on the budget has allowed us, each year, to lower taxes. In 2014 we removed the carbon and mining taxes, which was a key pledge of the coalition that we took to the 2013 election. We said that we would get rid of the mining tax; we abolished it. We said that we would get rid of the carbon tax; we abolished it. In 2015 we are reducing taxes for 96 per cent of all Australian businesses. I will repeat that—we are reducing taxes for 96 per cent of all Australian businesses. Taken together all of our decisions since coming to government have reduced the overall burden of tax by $5.4 billion. The government's economic stewardship has seen nearly a quarter of a million new jobs created since we came to office. In the lead-up to the budget Labor were standing in the way of fixing the budget by blocking $30 billion worth of savings including $5 billion of their own savings that they had promised.
Senator Cameron: Boring!
Senator McGRATH: This is very interesting. Senator Cameron said it is boring, because Senator Cameron and the Labor Party do not care about the debt and deficit position of Australia. They do not care about making sure that we get Australia back on track. To them it is boring, because on that side of the chamber we have a culture of union and Labor barons who do not understand the business world. They do not understand that you have to have money coming in in order to have money coming out. Every day for Labor is Tattslotto or Gold Lotto Saturday. It is a jackpot for them, because the money is coming in and they do not care where it comes from, but eventually, as Mrs Thatcher said, the trouble with socialism is that you eventually run out of other people's money.
Let's go back to talking about the $4.4 billion Jobs for Families package that is going to deliver a childcare system that is simpler, more affordable, more flexible and more accessible. Our objective is to help parents who want to work and parents who want to work more. This package will provide parents with greater choice when it comes to balancing work and the family. Families using child care in 2017 on family incomes of between $65,000 and $170,000 will be around $30 a week better off. Those on higher incomes will on average continue to receive the same level of support. We know families face costs when parents want to return to the workforce. Having two parents in paid employment has become a necessity for most families because of changes taking place in our society and the economy over many years. All mothers work hard and many are also in paid employment. Changing the way we make child care more accessible and more affordable is necessary to help families adjust to these changes and set them up for the future.
These new measures will encourage more than 240,000 families to increase their involvement in paid employment, including almost 38,000 jobless families. We are putting downward pressure on childcare costs. The inflationary system in place under Labor saw childcare fees increase by more than 50 per cent between 2007 and 2013. Through the nanny trial, the government is also providing more flexibility for Australian families. The two-year in-home care nanny pilot will support 10,000 children in families who find it difficult to access mainstream childcare services, such as shift workers, nurses, police, and families in remote and rural areas. This is a cost of over $246 million. The government has also established a new childcare safety net to support families who are vulnerable and disadvantaged with $327 million in additional funding for three new programs, supporting up to 95,000 children and up to 18,000 individual services and centres. The government in this budget has also announced $843 million over two years for preschool programs across Australia by extending funding to the states and territories under the National Partnership Agreement on Universal Access to Early Childhood Education. This will ensure Australian families can continue to access 15 hours a week of preschool education a year in 2016-17.
What should really excite Australians is what this government is doing for small business in terms of helping small businesses and helping people get jobs. In 18 months since this government came to power, over a quarter of a million new jobs have been created, but we know there is more work to do. We have a lot more work to do. As our economy changes, the role of small businesses will be even more important. With the economy in transition, we are freeing up small businesses to create new jobs for you and for your children—to those people who might be listening or are reading this later. That is why the $5.5 billion Growing Jobs and Small Business package will provide major incentives for businesses to invest, hire and grow. In addition, the package includes $375 million aimed particularly at improving opportunities for Australians to get a job and reaching out to disengaged youth. It is a package that is good news for big business, which is already enjoying direct benefit. Every big business started out as a small business—except under Labor, because under Labor every small business starts as a big business.
Senator Cameron interjecting—
Senator McGRATH: Senator Cameron—through you, Mr Acting Deputy President Williams—I welcome your interjections any time. I would love Labor to stand up and say they are supporting what we want to do for small businesses in Australia. What we will hear now is Labor saying that. No, I cannot hear Senator Cameron saying he supports small businesses in Australia. So, from 1 July 2015, a mere few weeks away, all small businesses, whether they are incorporated or not, will receive a tax cut. From 1 July 2015, the government will cut the company tax rate for incorporated businesses with an annual turnover of up to $2 million by 1½ percentage points, and that is reducing it down to 28½ per cent. From 1 July 2015, the government will also provide a five per cent tax discount to unincorporated businesses with an annual turnover of up to $2 million. Here we have a budget that delivers a tax cut to small businesses across Australia—a coalition government that is delivering on reducing the tax burden on businesses across Australia. From 7.30pm on budget night—a couple of days ago—until 30 June 2015, small businesses will be able to immediately deduct every asset they acquire that is valued up to $20,000 for tax purposes. Currently, the threshold sits at $1,000. This is a massive boon for small businesses in terms of what they can do with their tax liability, but it is also a massive boon for the small businesses where people are going to spend money and buy the goods and products that they need to run their businesses.
The budget will also help everyday Australians to access new jobs, particularly young jobseekers and the long-term unemployed. New measures will focus on making jobseekers more employable, reducing the costs of taking on new staff and bringing jobseekers and job providers together. A $1.2 billion national wage subsidy pool will target long-term unemployment. Employers will receive the subsidy from the time they start in a job, when hiring and training costs are the greatest, rather than waiting for six months or more. This will ensure wage subsidies are more effective. This includes reforms to Restart that will make it easier for small businesses to receive government support sooner when they employ older workers. And we are delivering a private sector work-for-the dole program—$18 million over four years for around 6,000 jobseekers annually to undertake valuable work experience. This will allow, in particular, young job seekers the chance to develop practical skills and gain workplace experience, and will better connect them with real jobs. There will also be a $311 million youth employment strategy, including a new $212 million transition to work program, to support disengaged young people to develop the basic skills that employers want and need; $106 million of intensive support to young people who are vulnerable, migrants or parents, or those who have experienced mental illness; and $14 million to assist job seekers who have not completed high school.
I would also like to talk this evening in terms of what this budget does for Queensland. Over the next four years, total annual Commonwealth funding to Queensland is increasing by around $6.7 billion. Despite the tight budget conditions, the Commonwealth is increasing annual funding for Queensland hospitals by 27 per cent over the next four years on top of growth of nine per cent in 2014-15. We are also increasing funding to Queensland schools by 29 per cent over the next four years on top of growth of around 10 per cent in 2014-15. Perhaps the Queensland Treasurer and the Queensland Premier, before they go out and make outrageous statements about the Commonwealth government cutting funding to Queensland, should read the budget papers to see the increased expenditure that we are providing to benefit education in my home state in Queensland.
In addition to these large funding increases, the government is investing $13.4 billion to build the infrastructure of the 21st century for Queensland. The Prime Minister has said he wants to be the infrastructure Prime Minister of this country. For Queensland, he is certainly delivering in terms of the infrastructure that we need to make sure that Queensland can proudly march into the 21st century. This infrastructure package, this $13.4 billion, includes $6.7 billion towards fixing the Bruce Highway. I spend a lot of my time on the Bruce Highway. My office is in Nambour on the Sunshine Coast, just off the Bruce Highway. The Bruce Highway is the coastal spine of Queensland. As someone who spends a lot of time bouncing along that road, I can tell you that it needs a lot of work done on it.
The promises and commitments this government has made to making the Bruce Highway four lanes in places and fixing up some of the black spots are welcome indeed. Lots of people in Queensland are very happy with the money that is going towards the Bruce Highway. Construction is already underway. This will upgrade safety, improve congestion, especially for the Sunshine Coast-Brisbane route that many people take, commuting between the coast and Brisbane, and it will also make sure that the Bruce Highway is not impacted by floods. One of the things that people, especially people from overseas, find a little bit strange is that every time its rains in Australia, and especially up in Far North Queensland, the national highway floods. It is a national disgrace that every time it does rain the highway, especially around Ingham, comes to a complete standstill. This government is a government that is certainly going to make sure that over the coming years we flood-proof the Bruce Highway.
We are also committing $1.3 billion to the Toowoomba Second Range Crossing. This is a commitment that the member for Groom and the member for Maranoa have taken to the last few elections since, I think, 2007. This is another coalition promise that we are delivering on. Anyone who has ever driven from Brisbane to Toowoomba and knows what the current range crossing is like will be aware that, if a truck rolls over or if there is a car accident, the highway between western Queensland and Brisbane comes to a complete standstill. So the Second Range Crossing is welcome indeed for Toowoomba and for the Darling Downs in western Queensland. It will ensure a safer road and, also, it will ensure that we get those trucks onto a road on which they can deliver their goods.
We have also committed $1 billion towards the upgrade of the Gateway Motorway North. This is underway already. It is being widened from four lanes to six lanes, improving access and providing better connection between the Bruce Highway, North Brisbane and the port of Brisbane. This means there will be less time spent in peak hour traffic. As someone who drives from the Sunshine Coast down to the airport and goes through this particular part of the Gateway, this is worthwhile indeed. Sometimes, if I need to get an 8 am flight I need to ensure that I leave home at four o'clock in the morning to make sure I do not miss that flight just in case of congestion on the Gateway. The Queensland government is also benefiting from the abolition of the carbon tax.
In closing, this is a budget that will allow people to sleep at night rather than the raw terror of Labor's proposals which will keep people awake at night. (Time expired)