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.
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.
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