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Economy

Strong economy the driver of social resilience: Morrison

If we want to build a socially resilient Australia we need to build and maintain a strong economy, Treasurer Scott Morrison told CEDA’s State of the Nation conference in Canberra today.

Delivering the conference’s opening keynote address, Mr Morrison said the nation can’t have social resilience without economic resilience.
 
“The essential services that Australians rely on. The quality of our schools and hospitals. Medicare, the PBS and our disability services. Infrastructure that is critical to bust congestion, boost the liveability of our cities and better connect our regions. All reliant upon, all paid for, all guaranteed by a stronger economy,” Mr Morrison said.
 
“This principle was central to the Budget I delivered in May; an acknowledgement of the undeniable link between the strength of our economy and the ability to deliver high-quality and reliable services.
 
“And it is the theme of this year’s (CEDA) event, Building Australia’s economic and social resilience.
 
“Without putting in place the right economic fundamentals, the task of building social resilience means you’re playing uphill and into the wind.”
 
Mr Morrison said half of the Commonwealth Budget is dedicated to building social resilience through record funding for schools, hospitals, health services and a social safety net.

And without a strong economy social services such as jobs programs, funding treatments through the PBS and flexible aged care services cannot be afforded.

The Treasurer warned Australians not to take a strong economy for granted. 
 
“If you take economic growth for granted, if you seek to undermine economic growth through reckless policy, or tax it within an inch of its life, you undermine your capacity to deliver the social safety net and supports that social resilience depends upon,” Mr Morrison said.
 
Mr Morrison said a strong economy is exactly what the Turnbull Government is delivering, noting the nation’s economy is growing at a rate that puts it ahead of most major advanced economies in the world and above average in the OECD.

Citing a range of the Turnbull Government’s economic initiatives, Mr Morrison said the economy and finances are more resilient now than they have been at any time since the Global Financial Crisis, despite $80 billion of mining investment being stripped from the economy since the mining boom peaked in 2012.
 
Mr Morrison said the Government’s plan for a stronger economy – involving fostering growth through positive economic policies and removing inhibitors that hold the economy back –  is working.
 
“One of the greatest of these impediments to growth is uncompetitive taxes – our taxes are too high and tax revenues are increasing once again as a share of our economy,” he said.
 
“There must be a limit, a control, on just how much tax you are prepared to impose on the economy.
 
“That is why we have applied the tax speed limit, expressed as a 23.9 per cent share of GDP. This protects the economy and the budget from fiscal recklessness.
 
“If you are not prepared to control your taxes, you are not prepared to control your spending. That is why Labor have abandoned the notion of a tax speed limit.”
 
The Treasurer said the Government’s attention would now shift to legislating implementation of the Enterprise Tax Plan that will extend tax cuts to businesses up to a $50 million turnover to all businesses.
 
“What we are seeking to do is extend those tax cuts to a further 6000 businesses – those companies that have a turnover in excess of $50 million. While that may not sound like a significant number of businesses, the headcount is considerable. Around four million employees working in businesses that are still stuck paying a 30 per cent tax rate,” Mr Morrison said.
 
He said there are clear risks involved in keeping our businesses anchored to what is now one of the highest tax rates in the OECD. Once France’s company tax cut kicks in, Portugal will be the only OECD country with a higher company tax rate than Australia.
 
Mr Morrison also took aim at the Opposition, chiding the Labor Party for a “stubborn, anti-business, anti-economy stance” for refusing to back the company tax cuts. 
 
That stance is galling, he said, given former Labor leaders and current Shadow Ministers had previously supported business tax cuts.
 
Mr Morrison said while the Government believes tax in this country should be lower and more competitive across the board, it also should be paid.
 
He outlined measures the Government is taking to crack down on multinational tax avoidance.
 
“As a Government we are achieving the goals of economic and social resilience by ensuring that we deliver on our plan for a stronger economy that I announced in this year’s Budget,” Mr Morrison said.
 
“That’s our plan. The plan is working.”