Speeches & Transcripts

Budget breakfast 2014, National Press Club, Canberra

14 May 2014


Check against delivery

The first Budget of the Commonwealth of Australia was presented by Sir George Turner on 8th Oct, 1901. Under Turner’s stewardship the new national government was able to be budgeted to the pound an annual expenditure of £3,933,746.

Interestingly, Turner—who had been seared by the Depression of the 1890’s as the Premier of Victoria—stressed in his first Budget speech the need to avoid extravagant expenditure despite the ardent revenues the new national government was reaping from the new customs duty.

By 2007 when the Rudd Government came to power, the Budget outlays of the Commonwealth of Australia had grown to $253 billion.

Last night we heard the projected Budget outlays were $412.5 billion in 2014-15.

What is very important to understand is that the Australian Government’s Securities Outstanding, basically our overdraft (you can look for this for yourself on your phone, just Google AOFM).

This was drawn back in that time where Rudd came to power to about $58 billion, but now it is drawn to $320 billion.

So you see that trajectory from $58 to $320 billion that we have to turn things around.

We can’t just continue on like that. And, from a little old bush accountant, quite simply, you’re going broke. And when you arrive there is up to you but that’s where you’re off to.

So we have to, as a nation, turn this show around, and that is really the crux and purpose of the Budget.

You might remember in the period of 2009 for a short period I was the shadow finance minister and when I first began warning about Australia’s debt. But it would be foolishness if we don’t take remedial action and we are doing that.

And you don’t have to be Warren Buffet to work out what you need to do. It’s quite simple. You have to reduce your costs, and you have to grow your business to increase revenue streams. Any business person in this room can understand that completely.

Now for our part we had to go in to batt to make sure some of those crucial revenue streams for you don’t become revenue streams for us.

One of the big battles we went into for your part was the diesel fuel rebate, and we kept the diesel fuel rebate

And I think it’s really important that people understand this because sometimes they say, “Oh well what were you doing for the last couple of months?”, “Where were you?” Like the day in the work that is also done by the NFF and Brett Findlay, and how people work together for a common purpose to put forward a concise argument as to why diesel fuel rebate was not just some sort advantage to farmers.  It is a charge for road usage. And last time I saw a diesel engine it was not walking down the highway. So we have to make sure that we kept that, also for fisherman and also for miners. We also made sure ethanol remained competitive, that the Australian ethanol production stays in place and that is another great outcome for agricultural Australia.

We also have, and with my department, some rather interesting battles. Sometimes more elevated—I remember one where I went in to ERC and I was so worked up I went for a swim before hand to try and burn off some energy, and I was still burning off some energy by the time the PM and Treasurer started speaking to me. If we have to get from this current position in to a better position there are some pain. There is a general increase in fuel excise and a temporary debt levy. But—if you balance out against the fact that we are getting rid of the carbon tax and getting rid of the mining tax—the actual tax position of the nation is not increasing from its standard position because we are removing some major taxes as well.

We also have to be aware that one of the great driving forces in this current period is going to be brought on by the deputy Prime Minister and that’s in infrastructure. This is going to be vitally important.

  • We have $6.7 billion dollars to fix the Bruce Highway
  • $5.6 billion dollars to complete the duplication of the Pacific Highway
  • $1.3 billion dollars towards Toowoomba Second Range Crossing

And a very important project to all our hearts in agriculture, $300 million as a start of the inland rail.  So that we can take this dream to reality. Of a line of commerce direct between Melbourne to Brisbane—and on the way we have the Morees, we have the Dubbos, we have the Parkes—and we can create that intermodal port access to give us a real competitive advantage to start driving that agenda, of real infrastructure, that turns real dollars and takes our nation ahead. 

Agriculture has a vital role to play in also earning money. And my role in my department has been to work as a team in trying to make sure that we start turning a dollar for our nation.

When agriculture sits at the Cabinet table I am very proud of the fact that I can look round and see where every Minister is responsible for taking money off the table for moral and good purposes—for health, for education, for defence—but what agriculture does is we put money back on the table. We are actually the reason the money goes on the table. 

And I always try to remind people of the GDP ad, where people say, “well the GDP is predominantly is in urban areas”. But if you get ten people at a table and you take a ten dollar note and you pass that ten dollar note around the table then you have a GDP of 10x10, a hundred dollars. And you can say that 90 per cent of it, being nine per cent of the reserve of Australia, but you remind them that the only reason that ten dollars got on to the table was put there by regional Australia, by mining and agriculture. So if you take them from the table then the GDP of what’s left is zero. And we’re the people who put money on the table and we must remind people of that because this how we drive our nation forward and get those dollars turning.

Since I’ve been Minister for Agriculture I’ve gone about a concerted campaign with my department to get the live cattle trade and live sheep trade up and running again. 

I am happy that we’ve moved close to 540,000 head of cattle and I see record numbers now going from the port of Townsville and I think we’ll see record numbers going from the port of Darwin. We are really starting to get that industry moving again.

It gives me a great sense of pride also to see that we have moved over 1.2 million sheep. And to go to Fremantle and actually see boats lined up, come in to pick up our product—it’s not just mining boats now but actual agricultural boats coming to pick up our product—and  making sure that we’re working with the West Australians to drive this agenda forward.

We’ve taken on those who would want to shut us down completely and we’ve taken them on head on. And have said to them “We will stand by our industry”  and if you don’t like it—you want to become a vegan, that’s alright for you—but we are not going to diminish the income capacity of the people on the farm.

We are going to give them a future, we’re going make sure they can make a buck, we’re going to drive forward that agenda that gives a better return back to the farmgate, real dignity back to the lives of the people who have lost it in the past.

We have reopened markets to Egypt, to Bahrain. We are currently negotiating access to Cambodia, to Iran, to Iraq, to Thailand and these are worth real money to us.

In Saudi Arabia we see that our product lines up with other products at supermarkets—called lulus—and it’s a real Olympic race of food.  And we have to make sure that our product stands next to alternate product and wins, and it does.

I looked at our mutton, and our lamb next to mutton, and lamb from another country, and to the best of my observations it looked like a sheep next to a rat. This is because we produce a good product.

Just in the last week 4000 litres of milk was loaded on to a plane for the first time by Norco and I congratulate them for this. It has been sent to China where it’s going to get $7-9 a litre.

As we pursue this agenda we start loading the planes and creating the markets we create a great mechanism, a great future so that I can help people of Port Curtis so that they can get their dairy industry rolling again.

In the last day we’ve had discussions with Coles about trying to get clearly identifiable brand names on to milk for central Queensland, to try and get product identification, so we can drive those markets again as well. 

And I can see a great sense of excitement in our own capacity to drive some of these agendas to get more money back into other areas where probably in the past we thought that those were ‘sunset’ industries. 

We have completed a free trade agreement with Korea—which was exceptional—and we have also completed one with Japan and this going to help us move more horticulture, more dairy, more sugar, more grains.

I understand that some of the areas the Japanese said we had concerns with but we are massively ahead from where we were, and we have started the process of getting people through the real dilemma of how we find the product to actually sell, because the demand for agricultural product is racing ahead.

We have in front of us a free trade deal to China coming up. And this goes on the back of an exponential growth in the sale of agricultural product to China.

I want to give you a classic example of how we are turning the show around in agriculture. In January, our nation thought we would have $1 million dollar loss. We ended up with a $1.4 billion surplus, a $1.5 billion dollar turn around.  If I was back in my accountancy days my boss would be rather happy about that. That is a good turn around. So where did this come from?

Well it came from all those horrid people who put live cattle on ships and getting paid for it, and all those terrible ma and pa families over in Western Australia who took on 19.2 million tonnes of wheat and got 6 million tonnes on to a ship. This was real money.

The main reason for the change, the main inclusion of funds that turned our nation around was agriculture and we can continue to build on this. This is why in this department we have a great future and in this government we have a great future.

We can only supply as a major global player if we are at the forefront of our industry. It’s extremely important to focus on research and development.

During this budget we managed to secure $100 million dollars for further research and development, direct research and development that’s an important delivery back to agriculture.

We have made sure we have continued to work, to push for, further investment in the cutting edges of agricultural development—whether it’s in genetics, or whether it’s in rice production, long paddy rice— in the development in the capacity around Rockhampton for a form of rice that deals with the change in temperature so that we can produce rice without the need for water, the need for a rice paddy.

In this budget we managed to keep our eyes on those who are doing it tough, we manage to secure a drought package. And in the drought package we have available to us—in the two tranches of 420 million and 280 million—the potential of over $700 million dollars of concessional rate money.

We have got 420 million at 4.5 per cent rolled out, we have these agreements signed off. We have banks saying to us they’re desperately upset because they’re having to match our rates at times, which makes me desperately happy.

We are finalising now the $280 million to get that money rolling out as well. And people say, “Why is there the process of finalisation?” because I wanted to make sure that the terms that the money goes out are terms that make it accessible to people to get. And to make sure that people have the capacity to say, “Well I can apply for the money then I can get it.”Rather than being ruled out by problems we’ve had in the past of lines on the map. Making sure that we create this program and we go back to this program and making sure that people have access to this money so as to alleviate their position.

We’ve also got $10 million dollars in there for pest management. I’ve heard all the time the problems with wild dogs.  And I sometimes get the sneers and the sniggers from people who say “oh wild dogs you know...” Because wild dogs are not a problem when you’re on National Circuit or Pitt Street but you don’t have to go very far out of town and it’s not a joke anymore. You don’t even need to go too far out of Brisbane and it’s not a joke anymore.

And where we have areas that have completely removed capacity to have sheep we now have a major problem. Especially when we have major growing markets and when we have rural rates that have gone down to 40%, 30% in areas in cattle, we know we have a major problem. So we’ve put money on the table for that and we’ve taken the Prime Minister out to so he can understand that.

We’ve got $20 million for stronger biosecurity and quarantine.

We’ve got $8 million for improved access to minor chemicals.

We’ve got $15 million for financial assistance for small exporters

We’ve got $9 million for fishing including a review of invasive marine pests.

We’ve kept our rural financial councillors and these are all extremely important which goes to show that we are going into batt for our people and a recognition that what we are delivering in agriculture that real money is coming in for our nation.

The $8 million in the Budget Agvet chemicals for minor use is critical for making our small agricultural industries more competitive. We are committed to repeal Labor’s re-registration charges that cost the industry $1.3 million a year.

We still have more to do and we have an official regulator to deliver new safe chemicals to the market and we will be looking to industry for ways to make our system work better. We would have made sure that APVMA stays with agriculture. These are things that are extremely important to us.

We’ve made sure that agriculture has a definitive role at our borders, protecting our nation’s biosecurity. To make sure when you come through Customs—while there are people looking for terrorists—we have to make sure that we have the capacity that our people are looking for foot and mouth disease and protecting our nation, this is vitally important.

Without a clean, green, protected industry—especially in cattle and sheep—we’re history. It’s always interesting to note that when foot and mouth comes to this country it’s just not the cattle industry that goes, it’s the sheep industry. It’s the pig industry. It’s wool. They all go, so the affects would be absolutely and immediately devastating so we must be ever vigilant and always keep our shoulders to the wheel that this is something that is different to other countries that are not, for want of a better word, vigilant as us. This is one of our greatest attributes that must be protected at all costs and the PM clearly understands that.

We may be criticised to some form for changes to the Landcare budget, and acknowledge that in every area you have something that needs to be cut and Landcare will be cut. 

But we have already entered into negotiations with Greg Hunt with Richard Colbeck as how we massage this process and get the Green Army buzz and incorporate them in such as way and utilise that in that Landcare space.

This is us seeing the problem and dealing with it and working for our national purpose. We are going to work in such a way as to try and keep up confidence and keep the programme working.

In addition to my agricultural role I have been given the job of building dams and have been made Chairman of the Dams Committee, which has made me extremely happy. 

This with my colleagues will be vital in making sure that we build new dams in this nation. This is not a dream there are ones that are clearly on the books and are about to start right now—Chaffy Dam, made from 40,000 mega litres up to 100,000 mega litres.

The funds are there, we’ve added to the bucket of funds to get things started. The plans are there, they’re approved.  I have had an arduous fight with the Booroolong frog and won, so Civilisation – 1, Booroolong frog - 0.  And we will start to drive this agenda.

We have been around and have done our work in opposition so that we know where these dams will go.

We’ve been over to Lake Argyle, we’ve been to the Fitzroy, we’ve been through the Gulf. We have talked to the people using private money in the Gulf for further development—one site with $1.7 billion of private money for further irrigation and development. These are the stories we must tell and these are the ways we drive our nation forward.

I’ve been in discussions with the State Ministers so that we work hand-in-glove with them to in the process of building and delivering dams, of increasing Australia’s water infrastructure capacity so we can take our agricultural nation forward.  And as the PM has appointed me Chairman of the Dams Committee, I think he has the expectation that we actually build dams. 

So this is in essence starts to sell a clear picture that agriculture is really a fifth pillar for our economy. It is not merely rhetoric. We are actually doing it. And we’ve started and we are progressing at a rate of knots.

Also there is a very important process that got underway and that’s the white paper for agriculture. I have been overwhelmed by the returns and correspondence that we have been getting on the white paper- over 670 submissions, one of the greatest responses of any white paper that has happened in agriculture.

We have been driving this agenda making sure people reply. We have been making sure that people are part of the process.  We have been saying to people, giving them the sense that if you were the boss in Canberra ‘What would you do for agriculture for our nation?’And by gosh they’ve been telling us. And this is good.

We’ve had 30 regional communities visited under the white paper. We’ve spoken to more than 900 stakeholders. We’ve been doing everything in our power to make sure that when we get to the end of this year that we deliver a white paper back that is a real plan, that is almost comes synonymous, in the same thing, the same schematic as the Feds.

Our policy which we were never so proud to say it was our policy it’s something we can hand on. Hand on to the next group who comes after us.

So they can look at it and say this is a fairly good understanding of where you need to go for this nation, to try and make sure that we make agriculture going ahead on a constant theme so we don’t have erratic oscillations backwards and forwards.

When George Turner did his first Budget he had the quantum of full public service. That’s put the fear of God into some people in Treasury.

Ladies and gentleman you know full well that if we don’t turn this nation around, if we had taken the easy path...We didn’t create a tough budget to make people feel uncomfortable, we did it because we have to do it. A responsible person sees a problem coming and fixes it. So often people say “Is this a broken promise?” “Is that a broken promise?”

One of the greatest deceits to the Australian people would be to say, “Well we will avoid making the hard decisions because that is popular now”. And in five years time there will be another discussion and that discussion will be about what hospitals we close, and what schools we close, how we defend ourselves as a nation, what drugs come off the Pharmaceutical Benefits Scheme because we can no longer afford them.

And at that time our nation will say to us, “When you knew better, why didn’t you do something about it?” And we can’t say at that time we didn’t have the ticker. We didn’t have the courage to start turning our nation around.

We are going turn our nation around.

We are going to take our nation to a better place.

We are going to do the fundamental things any household would do and make sure that we live within our means.

We are not going to continue along a position where we live off the legacy of those who came before us. We live off their sweat and their toil as well as borrow from the future and leave a debt for our children.

Because that isn’t prudent and is also, I believe, immoral.

You would deserve a fair share of your endeavours and no more than that. Because that’s what every other generation in this great nation has lived with, a fair share of their endeavours and then you leave some for those that come after you.

You don’t borrow for those that come after you. Agriculture will have a crucial role to play in this because it will be agriculture that’s putting money on the table right now, for our nation, to make our nation a better place.

All the best and god bless.

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