Education Revolution

Mr Speaker, tonight we begin to honour the Government's commitment to an Education Revolution, with an additional $5.9 billion in funding over the next five years.

Just one year ago, from the other side of this House, we promised $2.5 billion for Trade Training Centres in our schools.

Tonight it gives us immense pleasure to announce we are funding that promise.

We will provide $1.2 billion over five years to provide up to $1 million per school to deliver computers and communications technologies to all students in Years 9 to 12, as part of the Government's Digital Education Revolution.

We will honour our commitment to providing all four year olds with access to 15 hours a week, 40 weeks a year, of early childhood education by 2013.

Our Skilling Australia program will increase and deepen the skills capacity of the Australian workforce. A key initiative is the provision of $1.9 billion over five years to deliver up to 630,000 additional training places to fill skills shortages.

And to boost the research capacity that underpins innovation, we will invest $326 million on Future Fellowships for top mid-career researchers, and $209 million to double the number of Australian Postgraduate Awards for PhD or Masters students.

Better hospitals and health services

Mr Speaker, we have put up our hand and accepted responsibility for improving the health system. No more buck passing. No more blame shifting.

The Government's National Health and Hospitals Reform Plan will revitalise the public health system. In this Budget we are committing to an extra $3.2 billion over five years to public health.

The Government is determined to bring a greater focus on preventative health. Our National Binge Drinking Strategy brings the tax treatment of 'ready-to-drink' alcoholic beverages in line with full-strength spirits to help address binge drinking among young Australians, particularly young women. We will work with the States and draw from the revenue raised to fund preventative health measures.

Tackling climate change

Mr Speaker, the Government is addressing the fundamental environmental and economic challenge of climate change. We have ratified the Kyoto Protocol, and begun work on an emissions trading scheme and a national renewable energy target.

This Budget includes measures totalling $2.3 billion over five years to help reduce Australia's greenhouse emissions, adapt to climate change, and ensure we show global leadership in the transition to a low emissions economy Funding includes $500 million over eight years for clean coal, $500 million over six years for renewable energy, and $150 million over four years for energy innovation.

The Government will assist working families to reduce household emissions with a range of initiatives, including the Green Loans program costing $300 million over five years.

Supporting business

Mr Speaker, the Government supports the aspirations of Australian business, including small business, for a simpler tax system and less regulation.

Our nation has the potential to be a financial services hub in the Asia Pacific Region - the fastest growing region in the world.

To support this ambition, the Budget begins the process of significantly reducing the withholding tax, by reducing the current interim rate of 30 per cent to a final rate of 7.5 per cent for most non-resident investors.

This Budget confirms our commitment to a comprehensive agenda of regulation reform - cutting red tape and making it easier for business, particularly small business, to deal with government. To improve innovation and productivity, the Government will invest $251 million over five years to establish Enterprise Connect Innovation Centres.

Regional and Rural Australia

Mr Speaker, at the election we promised to be a Government for all Australians. For rural and regional Australia, and for Indigenous Australia.

Rural Australia has been going through the worst drought in a hundred years. The Government's $12.9 billion ten-year national water policy framework Water for the Future brings a comprehensive and coordinated approach to water supplies.

We will invest $2.2 billion over five years for the Caring for our Country program, to bring an integrated approach to our natural resource management.

To assist regional communities in achieving their economic potential, we will invest $176 million as part of our Better Regions initiatives.

And we will provide $271 million over four years to fund the Australian Broadband Guarantee, ensuring all Australians, particularly those in regional and rural areas, have equitable access to 'metro-comparable' broadband services.

Indigenous Australia

Mr Speaker, the Government is working closely with the States to close the gap in Indigenous disadvantage. This is a long-term challenge for our nation.

As an initial step, the Government will invest an additional: $90 million over five years for child and maternal health services; $99 million over five years for additional teachers in the Northern Territory; and $56 million over four years for an expansion of literacy and numeracy programs.

National security

Mr Speaker, a major priority in this Budget is strengthening Australia's national security. It delivers on the Government' commitment to provide 3 per cent real growth per year on average in Defence's underlying funding base to 2015-16, and extends this commitment to 2017-18.

As the Defence White Paper is implemented, real growth in total Defence spending is expected to average 4 per cent per year over the next four years. On current projections, Defence spending is expected to be around $6 billion more in 2011-12 than in 2007-08.

We will continue to support our military in Afghanistan, Solomon Islands, East Timor and Iraq, until our combat forces in that country are withdrawn.

And we will increase overseas development assistance to around $3.7 billion in 2008-09, from about $3.2 billion. This is critical for alleviating poverty, and building security in our region. It is the first step in delivering our long-standing commitment to increase Official Development Assistance to 0.5 per cent of Gross National Income by 2015-16.

Investing in the future

Mr Speaker, for too long our national budgets have been short-sighted.

For too long, our national budgets have focussed on the next election, not the big challenges facing our country in the next decade and beyond.

For too long, our national budgets have squandered the proceeds of the mining boom and failed to invest properly in our country's future.

Tonight, we begin a new era of investing in Australia's long-term future needs.

Tonight I announce three new funds that will provide more than $40 billion for capital investment in infrastructure, education and health to strengthen the economy.

In infrastructure - in roads, rail, ports and broadband. In education. In skills, TAFE colleges and universities. In health and hospitals. And to build national productivity.

Mr Speaker, tonight I announce that the Government will invest $20 billion in a new Building Australia Fund to finance roads, rail, ports and broadband across the nation.

Tonight I announce that the Government will invest $11 billion in a new Education Investment Fund to finance skills, TAFE colleges and universities.

And tonight I announce the Government will invest $10 billion in a new Health and Hospitals Fund to finance improvements to hospitals and the health care system.

Mr Speaker, this is a Government of nation builders.

We have no intention of hoarding the strong surplus for its own sake. This money is not ours, it belongs to the Australian people.

We will make initial contributions to these funds from the 2007-08 and 2008-09 Budget surpluses, and will add to them from future surpluses as appropriate.

Both the capital and earnings of these funds will be available for investment once projects have been identified and rigorously evaluated, from next year onwards. This will ensure significant investment in Australia's future for many years.

The funds will be managed by the Future Fund Board of Guardians. There will be rigorous assessment of projects by independent bodies before they are approved for funding. For the Building Australia Fund, this will be Infrastructure Australia.

Building Australia Fund

The Building Australia Fund will finance critical national transport and communications infrastructure, including roads, rail, ports and broadband, that is not being provided by the private sector or the States.

The Building Australia Fund will receive an initial allocation of around $20 billion.

So that investment can begin immediately, tonight I announce that the Government will allocate $75 million in 2007-08 for immediate feasibility studies on high-priority transport projects across Australia. This will begin the necessary planning work for key projects in advance of further deliberations by Infrastructure Australia.

Health and Hospitals Fund

Mr Speaker, the Health and Hospitals Fund will finance health infrastructure. Key priorities include spending on hospitals, medical technology equipment, and medical research facilities and projects. The Fund will receive an initial allocation of $10 billion.

We need to reverse the cutback in public hospital funding by the Commonwealth now. That's why the Government will provide an extra $500 million to the States through the Australian Health Care Agreement by 30 June 2008.

Education Investment Fund

Mr Speaker, the Education Investment Fund will finance capital investment in higher education and vocational education and training.

It will receive an initial allocation of around $11 billion, including $6 billion from the Higher Education Endowment Fund.

Our education infrastructure is in urgent need of attention, right now. So tonight I announce that the Government will provide additional capital funding of $500 million before the end of this financial year, to help universities upgrade and maintain teaching and research facilities.

COAG Reform Fund

Where funds are used to finance capital projects with the States, they will be distributed to the States from the three new funds I have just announced through a new Council of Australian Governments (COAG) Reform Fund.
The COAG Reform Fund will also distribute funding provided in future budgets to the States for recurrent expenditure in areas of COAG national reforms, through new National Partnership payments.

In 2008-09, the States will receive $78.6 billion in total payments, an increase of 4.8 per cent. And new financial
arrangements will allow all levels of government to work together to improve outcomes and reduce costs.

Future Fund

The Government will meet its commitments to the Future Fund to pay the superannuation liabilities of Commonwealth Public Servants.

The Government will invest $3.9 billion into the Future Fund to help it reach its target by 2020.

Australia's Future Tax System

Mr Speaker, a modern economy demands a more modern tax system, which helps build the nation.

We need a tax system that is fairer, that is simpler, that better rewards people for their hard work, that responds to our environmental and demographic challenges, that makes us internationally competitive, and that creates the incentives to invest in our productive capacity. One that supports national prosperity beyond the mining boom.

Tonight, I confirm the most comprehensive review of Australia's tax system since World War 2. The Australia's Future Tax System (AFTS) review will be reporting progressively from this July through to the end of 2009.

Conclusion

Mr Speaker, the longer our nation's economic challenges are neglected, the harder it will be to deal with them. In implementing our new vision for the nation's economic future, we don't have a moment to waste.

I'm confident Australians will see this as the Budget our nation now needs, to beat inflation, and lay the foundation for future growth.

It is the beginning of a long term plan to build a stronger economy that delivers for working families.

A coherent package of reforms based on four principles: honouring our commitments; delivering for working families; investing in the future; and beginning the new era of economic responsibility we need, to sustain growth in challenging times.

Mr Speaker, the Rudd Government's first Budget lays the foundation for a modern and competitive economy that can meet the challenges of the 21st century with optimism, and with confidence.

It is a Labor Budget for the nation. For Australia's future. For all Australians.I commend the Bill to the House.