Treasurer’s National Press Club Address 11 May 2005 Underlying cash balance Per cent of GDP 3 3 Per cent of GDP 1 0 0 -1 -1 -2 -2 -3 Projections 1 Estimates 2 Outcomes 2 -3 -4 -4 -5 -5 1992-93 1996-97 2000-01 2004-05 2008-09 Budget balances in OECD and Australia 3 Per cent of GDP Per cent of GDP 3 2 2 1 1 0 0 -1 -1 -2 -2 -3 -3 -4 -4 1995-96 1997-98 1999-00 OECD 2001-02 Australia 2003-04 2005-06 Net debt and net interest payments 15 Estimates Per cent of GDP Per cent of GDP Outcomes 20 2.0 1.5 10 1.0 5 0.5 0 1980-81 0.0 1984-85 1988-89 Net debt (LHS) 1992-93 1996-97 2000-01 Net interest payments (RHS) 2004-05 $5.7 billion of interest savings $billion $billion 30 Assistance to families with children 25 25 Hospitals & schools 20 Assistance to families with children 15 10 30 Public debt interest 15 Hospitals & schools 10 Public debt interest 5 20 5 0 0 1996-97 2005-06 Future Fund 160 $billion $billion 160 120 120 80 80 40 40 0 0 2005-06 2007-08 2009-10 2011-12 Target for Future Fund Assets 2013-14 2015-16 2017-18 Unfunded Liability 2019-20 Unemployment rate Per cent Per cent Forecasts 12 11 12 11 10 10 9 9 8 8 7 7 6 6 5 5 4 1976 1981 1986 1991 1996 2001 4 2006 Inflation Per cent Per cent 20 Forecasts 20 15 15 10 10 Target band 5 5 0 0 -5 1974 1978 1982 1986 1990 1994 1998 2002 -5 2006 Personal income tax scales 2005-06 Tax scale 2004-05 Tax scale 2006-07 Tax scale Income range ($) Tax rate % Income range ($) Tax rate % Income range ($) Tax rate % 0 – 6,000 0 0 – 6,000 0 0 – 6,000 0 6,001 – 21,600 17 6,001 – 21,600 15 6,001 – 21,600 15 21,601 – 58,000 30 21,601 – 63,000 30 21,601 – 70,000 30 58,001 – 70,000 42 63,001 – 95,000 42 70,001 – 125,000 42 70,000 + 47 95,001 + 47 125,001 + 47 Tax savings by income level 20 Tax cut per year ($) Tax cut per year (% of tax paid) 15 10 5 0 10,000 30,000 50,000 70,000 90,000 110,000 130,000 Taxpayer's annual income ($) Tax savings - $ per year (RHS) Tax savings - percentage reduction (LHS) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 150,000 Increasing Australia’s international competitiveness 12 Top threshold, multiple of the average production wage (bars) Top rate, per cent (dots) 80 70 10 Top rate 60 8 50 6 40 Australia (1 July 2006) Australia (now) 30 4 20 2 Top threshold USA Turkey 0 Korea Japan Portugal Italy France Poland Switzerland Austria Norway Spain Canada Finland Australia Greece Sweden Mexico Czech Rep Netherlands Germany UK NZ Iceland Luxembourg Australia Ireland Belgium Slovak Rep Denmark 0 Hungary 10 Personal tax cuts over time Per cent reduction Per cent reduction 50 50 40 40 30 30 20 20 10 10 0 10 20 30 TNTS tax cuts 40 50 2003-04 tax cuts 60 70 Income ($'000) 2004-05 tax cuts 80 90 2005-06 tax cuts 100 110 0 120 2006-07 tax cuts Income support recipients 1,200 Payment recipients ('000s) 1,000 1,200 1,200 1,000 1,000 Payment recipients ('000s) 1,200 1,000 800 800 800 800 600 600 600 600 400 400 400 400 200 200 200 200 0 1970 1975 1980 1985 1990 1995 2000 Newstart Allowance 0 0 1970 1975 1980 1985 1990 1995 2000 Parenting Payment (Single) Disability Support Pension 0 Elements of Welfare to Work reform Obligations Employer Demand Compliance Services Payments Spending to help people into work $million $million 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 2005-06 2006-07 2007-08 2008-09 Child care places 500,000 Places Places 500,000 400,000 400,000 300,000 300,000 200,000 200,000 100,000 100,000 0 0 1996 Family day care 2006 2008 Outside school hours care