The opposition is talking about economic planning. There is nothing like leading with your chin. They have an absolutely shambolic record on economic management and economic planning. The words 'sound economic management' and 'the Labor Party' are not words usually uttered in the same breath, and the Australian people know it. They're onto you; they've got it worked out.
Let's take a trip through recent history, shall we? On 21 April 2006, the then Treasurer Peter Costello declared 'debt-free day'. Australia had paid off its mortgage. It had paid off the credit cards after a huge debt left over from the Labor years in office. It was the coalition cleaning up the Labor mess; that was what was going on. Having paid off the nation's mortgage, along came the Rudd experience and Gillard and Rudd and more shambolic economic management. The Rudd money—who could forget that? It was money being thrown up against the wall. I say 'thrown up against the wall', but I could use language that is a little more unparliamentary. It was an absolute shocker. It was commodity prices that got Australia out of the global financial crisis; the low Australian dollar and commodity prices drove us and enabled us to avoid going into recession.
Who could forget the Building the Education Revolution and the overpriced school halls? Out in my neck of the woods, they wouldn't let local builders build them. It was a noble theory, and it would have been worthwhile, but they botched the management of it. You had horrifically overpriced buildings that weren't suitable for the needs of schools. In my neck of the woods, Nashdale Public School basically told the government to get stuffed. They managed the project themselves and actually got value for money. But they squandered taxpayers' money—Rudd money—with the BER. And who could forget the pink batt debacle, a debacle that cost lives? That was more poor management from the opposition. I was talking to morning radio host Kerry Peck on 2BS in Bathurst today and he was reminding everyone how bad the pink batt experience was for this nation—more taxpayers' money absolutely squandered.
So after Rudd-Gillard-Rudd it fell to us again to clean up their economic mess. This is exactly what we're doing. The Australian people can rest easy because it's on our watch at the moment and we're in safe hands. In the 2017-18 budget, the deficit will be $18.2 billion, less than half of what it was just two years ago. This will be the best budget outcome for a decade. It's about living within our means. If we don't live within our means, there is a cost. And the cost is borne not by politicians today but by our children and our grandchildren. A balance of $2.2 billion in 2019-20 is forecast, increasing to projected surpluses of $11 billion in 2020-21 and $16.6 billion in 2021-22.
We have stayed on track for a surplus in 2021 for six successive budget updates. The budget is projected to remain in surplus for the whole period of the medium term, with surpluses growing to more than one per cent of GDP from 2026-27 without breaching our tax cap and consistent with our sound fiscal plan and strategy. Average real expenditure growth has been reduced further—down to 1.6 per cent—the most restrained expenditure of any government in the last 50 years. Government spending is falling to 24.7 per cent of GDP, below the 30-year average of 24.8 per cent, over the forward estimates. We are also keeping taxes under our limit of 23.9 per cent of GDP. Net debt, something the opposition has had great problems with, is going to peak at 18.6 per cent of GDP in 2017-18 and will fall to 3.8 per cent of GDP by 2028-29. Gross debt will peak during 2019-20 at less than 30 per cent of GDP. Over the medium term, gross debt will be $126 billion lower in 2027-28 than was estimated in the midyear update in December.
The trend is clear: those opposite create the mess; they've always done so. They're creating it again with their big new taxes, especially the one on retirees that will cost about $60 billion over the long term. But it is the Liberals and Nationals who always have to clean it up—and that's exactly what we are doing with this budget.