Bill's Speeches

ADDRESS TO CEDA STATE OF THE NATION 2012

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What I wanted to do today was talk to you - just really make three points and perhaps a little one at the end. One point is about having a look at the silent achievers, the quiet achievers of the Australian economy, then talking about industrial relations and productivity, then perhaps talking about leadership and some observations at the end about ideas for the future.

 First of all, in terms of the Australian economy, there is a real battle for the heart and soul of the Australian economy underway I think across the Australian political landscape. And that battle is about confidence. And I'd like to submit to you this morning there's some arguments for us to be more confident than perhaps the current public headline debate would indicate the circumstances for.

 And what I want to do to support that proposition that we should be more confident about the performance of the Australian economy than the current political debate would have you believe are the silent achievers of the Australian economy. And of course I refer to our services sector. And many of you work in the services sector.

 I'm proud to be Australian and I think we have a modern, sophisticated, diverse economy. I'm terribly proud of the accomplishments of our mining industry. I recognise they contribute. Their job growth's been remarkable, 130,000 jobs in mining, new jobs since the end of 2007 when Labor was elected. So they're sitting at about 240,000 employees.

 But I'm also proud in that circumstance of the contribution of our services sector. And let me put to you that, in our modern diverse economy, the services sector requires perhaps a little more of the praise than it otherwise receives. I mean we have a view of ourselves as being an agricultural economy. That's about two per cent of our GDP. If anything, that's undercooked with opportunities for growth in my opinion. We have a manufacturing economy which, whilst it is doing it tough with the high dollar, certainly still employs nearly a million Australians. It contributes a significant proportion of our GDP.

 Construction continues to grow and construction services I submit are part of that quiet revolution, if you can call cranes and building sites quiet. We're seeing that the construction services, everything from hydrocarbons to mining, right through the Australian economy, is contributing in jobs growth. So we're an economy who builds things. We're an economy who digs things up. We're an economy who makes things. But we are also fundamentally an economy who provides services. And that's the sophistication of the modern Australian economy.

 Now of course our population is higher than it's ever been before in the history of Australia. But the number of Australians going to work every day is higher than it's ever been before, both in full-time and part-time work. There's 11,537,900 Australians working as we talk. There's over 8,100,000 Australians in full-time work and another 3.5 million people approximately in part-time work.

 You know, the Intergenerational Report, prepared roughly 12 years ago by the previous Government, said that the ageing of Australia was a crisis. Well I tend to think the alternative's more of a crisis. But what I would say about that is that it predicted declining participation rates in Australia. And as they used to say in Ancient Rome, I imagine, something funny happened on the way to the Forum. I mean, they would have said it in Latin.

 But - and I did do five years of Latin which is of no great use to public life now - but what has happened is that our participation rate hasn't fallen away.

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 Conservative opponents tend to eschew global comparisons. The fact is we live in a global world. These numbers are remarkably good. Now I'm not saying there's a cause for complacency, absolutely not. And again I would say, as I've said at each press conference, there is softness expected in the labour market. We've seen the dramatic news of Fairfax in the last 24 hours. Mind you, unlike the Senator Brandis and the Coalition, I don't blame the carbon tax for Fairfax. Mind you, I don't blame the carbon tax for the poisoning of Phar Lap either.

 But what I would say is that there is softness and there are sections going through significant structural change. And I understand the impact of the high Australian dollar and it's accelerating industry adjustment. I don't think it's creating industry adjustment because I think that some of the industries under pressure were going to be under pressure, but with the high dollar they've reached the pressure points more quickly than they might have otherwise. But that they would have reached these destinations of that I have no doubt.

 So there's something going on. And when you look at where the job losses are, you also see where the job success is. And the stand-out performer is health and aged services. There are a quarter of a million jobs which have been created in the last four years. We've seen, in professional scientific technical services, tens of thousands of new jobs created. So there's financial services, which has been battered, is still adding more jobs than shedding. So there's been remarkable development. Our Australian economy is a modern, diverse economy.

 Now there are things that our economy doesn't yet do and I'll return to that in my final of the three points I want to make about the future in leadership. But we are a more sophisticated, modern economy, I think, than our iconic portrayal represents. I'm not sure that many people here would see themselves as shearers. Some of you might have had lamb last night. Some of you may well have come from the land. But in 1900 there were 30,000 full-time shearers. Now there's about 3,000.

 But in 1900, there wasn't a single personal trainer to be seen. Even Edward Flack, who won our first gold medal, had to train in London. Now he'd probably be running a series of gyms, you know, training people in parks. There are 86,000 registered personal trainers in Australia. I mean, you know, we have Waltzing Matilda. I don't know if we have Waltzing Derrick, the step trainer, but you know maybe our anthems need to be uplifted.

 The point about that isn't to dwell on that particular change in industry. But it's to recognise that industries change in Australia. It's to recognise that services have exploded. So the first point I really want to make to you today and see it as a great opportunity to have a national conversation, not just about the present and the next 24 hours and the next 12 hours and how will Sky fill the four to five o'clock capital round-up or ABC 24. But what is happening in our Australian economy? What is the future?

 And I think that we need to, in Australia, recognise that we're a modern, diverse economy. Mining's been a significant and much lauded achiever for Australia. But our services industries have been doing the heavy-lifting of jobs creation in Australia. Small business has been doing the heavy-lifting. Women returning to work more than ever before in part-time work has been a heavy-lifter. Flexible employment practices encouraging women to return to work.

 Our participation rate last month grew from 65.2 per cent to 65.5 per cent. So the monthly unemployment was 4.9 the month before, participation 65.2. Unemployment ticked up to 5.1, but our participation rate ticked up 0.3 from 65.2 to 65.5. If the participation rate in May had remained the same in April, unemployment would have gone to 4.8.

 So I recognise that there are pockets of long term disadvantage. There is intergenerational unemployment in parts of postcodes of Australia. I recognise that people with disabilities are not sharing equally in the wealth of Australia and the employment opportunities. I recognise that older Australians do find that they have longer periods of unemployment and receive discrimination because of some myths around that the best workers to hire are people in their twenties. I also recognise that we still need to be more flexible in our employment of women and the opportunities to fit work around people's family patterns of organisation. I recognise that indigenous Australians still have unacceptably high levels of unemployment. Although, you know, hats off to companies like Rio Tinto and others who are - and the AFL - have certainly reached out to employ indigenous Australians in proportions which just weren't occurring a decade ago.

 So the story of employment is a positive story. It's not easy. It is affected by the high dollar. We have more jobs in some parts of Australia available than in other parts of Australia. But I can advise you, for the first time, that the Government recently, in the context of negotiating an enterprise migration agreement to allow the Roy Hill Project to go ahead, part of that has meant that to bring in guest labour, temporary guest labour, is that we've developed a jobs board, whereby mining jobs can be advertised on a website and Australians, wherever they are, can have a look at those jobs. From the announcement, Sunday week ago to last Friday, 60,000 visits to that site. So Australians are interested in working. I think we are a hard working nation.

 There are groups of people on the disability support pension, there are groups of people who are long term unemployed who are missing out and that is a definite priority of building up their skills. But in conclusion, my first point is that there is a silent revolution going on in services and that in terms of Australian economic policy, we need to respect and work with our services industry just as much as we respect and look at construction, manufacturing or indeed mining.

 The second point I wanted to make perhaps goes to the direct area of the other part of my portfolio which is industrial relations. What I would ask is that the sort of people in this room, you are leaders. You are interested in where this nation is going, you're hearing from people who are interested in where this nation is going. There is little that is more important than the future of work.

 Now I may be guilty of saying that my own portfolio is an important area for the national discussion of its future. But the CEO of the Gallop Corporation - and they've been studying the world's attitudes for decades - the CEO, or the Chairman I should say, of Gallop said in 2007 that what the whole world wants is a good job.

 And to me, when I was looking for a description of what is the future of work in Australia, a good job summarises a lot of that vision. Sometimes there's a complaint in the business pages or indeed a complaint in the local football club. We just want people and politics to think about the next twenty years, not just the next opinion poll.

 I had recently the privilege of becoming a parent - well, it's not so recent, but a few years ago - of becoming a parent. What I realised, without digressing too much, is that when you're a parent whilst the kids have their up and down days, what you really focus on is making sure that in a couple of decades' time, they're healthy, they're resilient, they're ideally well educated, they have the capacity in their twenties to survive the world they're entering and have the skills and the imagination and the sense of wellbeing and resilience to cope with our changing world.

 Now recently, an older relative in my family passed away. He'd been a printer his whole life. Now he had to change from typesetting to lithographic printing. That was the big technological change. But he'd had the opportunity to be in one profession and calling his whole life.

 Now if you're a printer, the world is changing at a rate of knots. What we have to do, I think, in politics is translate that passion we have as parents, that forensic passion which we have for the next 20 years for our family. Translate that forensic passion to the next twenty years of what will the public policy look like.

 My ideal outcome as a minister in this Government, would be to meet you in 20 years time - maybe that would not be your ideal outcome - but my ideal outcome - that wasn't a laugh line - but my ideal outcome would be that we could talk in twenty years time and say, remember when you addressed us in 2012 and I'd like you and I to be able to say, what are the things that we did in 2012 which are still contributing to this nation's progress in 2032.

 Now the future of work is just such a topic. It's interesting when you look at printing. Now printing has always been at the forefront of technological - it's been one of those industries which has seen the application of technology. It doesn't matter if it was the Gutenberg Bible or William Caxton. It doesn't matter now if it's the fact that you can go on holiday, take digital photos - I don't know if there's anyone here from the Apple Corporation but free product placement this next sentence - but now on the digital cameras, you can take the photos of your family down at Philip Island and you can order them, put them in a sequence and they come back as a book.

 I tell you, it beats other forms of Christmas presents, I can tell you. What's interesting is this is a $1 billion industry globally now. In the next couple of years, it will be an $8 billion dollar industry. To my relief there's at least one company in Australia who's got these machines that can actually print digital books. It's up in Glen Innes, which I hadn't necessarily seen as the new Gutenberg.

 But nonetheless, technology is changing radically. In the printing industry, for instance, it's now a whole communications process. It's a whole ‘organise’ for your client and your clients' clients, a whole communication strategy. The future of work is a good job.

 And a lot of the future of work is not described by the current industrial relations debate. I am wryly amused when I see some complain that, oh the unions are tail swishing dinosaurs. I'm only wryly amused in that because the debate is a prehistoric debate.

 I didn't come down in the last shower. I know that in some aspects to the Australia economy, be it greenfields agreements on resource projects, getting IR right is important. The desalination plant in Wonthaggi is a good example of what happens when you don't get IR right.

 But there is so much going on in the Australian workplace at big businesses and small, which is not simply described by an arcane debate between, on one hand, fairness and on the other hand, flexibility. What I believe the future of work and that goal of a good job, which the Gallop Corporation says is what's going to tax the minds of the world for the next fifty years, is how you create value in the enterprise.

 Productivity is best resolved in the enterprise. I don't make this as a plea but I make it as an observation, can we for goodness sake let go of some of the argument which says that if only we could externalise all of our productivity issues into getting rid of unions or to getting rid of the Fair Work Act that somehow we'd enter this nirvana of milk and honey. That's just wrong.

 What we require is debates about collaborative work forces, high performance work forces. What you want in a work force is where the employees' objectives are aligned to that of the company. You'd ideally like your employees to say I like working at this company, I'm motivated. You'd ideally like employees to say when they see an inefficiency or a wasteful act happening that they say, let's stop that and do it differently.

 I think the future of work and the future of industrial relations is how to harness the productive value of individual discussions at workplaces. And before anyone leaps on the word individual, I don't mean statutory AWAs where you just photocopy the same contract and put a different name on it. That's not an individual negotiation. Spare me. That's just photocopying a document and putting a different name on it.

 What I'm interested in, is what are the most successful workplaces doing? Too much of the industrial relations debate is about the minimum standard regulation. Should we have a 60 day timetable for someone to file an adverse interest unfair dismissal claim or should we have a 30 day period.

 This debate which says that, you know, the enterprise agreement is too long. Let's move towards this debate which says that we've just got to look at, you know, put twenty steps into how you conclude an industrial negotiation in terms of industrial action. Too much of the debate in workplace relations is about the lowest common denominator. I am not naive.

 I've seen both sides of these arguments, I've employed hundreds of people, I've engaged in negotiations. Periodically even I've engaged in industrial action in a previous career. But what I do know is that these are last resort matters. What I do know is that the modern trade union movement, by and large, the vast majority understand that where they've got happy members at work, that you've in fact got happy workplaces.

 What I understand is that employers and employees would eschew conflict in the workplace given their choice. What I understand is that people want to be able to go to their work and feel fulfilled. What I understand is that people want to go to work and not just feel like a number. What I understand is that people would like to go to work and think their company has got a plan for the future. What I understand is that people when they go to work and a company announces changes would like to know where they fit in, in the changes. What I understand when people go to work, because they don't want to be told, you've got a job, you've got a job, you haven't got a job, pack your box and off you go.

 That's not the way to treat people who've served you for ten years on an assembly line at Toyota. That is not the way to just read in the newspaper you've lost your job. Let's treat people with the respect which we wish to be treated ourselves. Let's at least treat people - perhaps if that test doesn't matter because there's probably a lot of, you know, A type personalities here who are very capable of handling themselves in all circumstances.

 What I would say is let's see people treated at work the way we would see our family members treated. Workplace relations is not as hard as it's made out to be. How you fire depends on how you hire. Diversity in the workplace generally encourages people to be better at dealing with customers, consumers and multiple stakeholders in workplaces.

 I'm very optimistic about the capacity of Australians. But this is the third point I want to make. My second point has been that workplace relations, the debate needs to move on between employer groups and unions arguing about where you put the pendulum. This idea that somehow industrial relations is like the arms or the ticking sort of pendulum on a Swiss clock between three o'clock and nine o'clock.

 We've got to learn that it's not an X, Y access where the employer wins or the union wins but rather there's value to be created in the middle of that graph where you actually can create productive value. But what we need to do in order to do that is to have a debate how do we promote the best practice of workplace relations?

 It's funny, and full marks to the AFR and The Oz, they remind me of that old - this is not an anti press comment - but it's just the nature of the news. It's an old Celtic saying, I'm told, that when good news is getting up in the morning and putting its pants on, bad news is already off and running. And I get that it's bad news that sells newspapers. But we do need corporate leadership to encourage the debate about best practice.  Reg Ansett once said at the end of the 1960s when he purchased the 727s that these planes apparently, he didn't say apparently, I don't think he was given to conditional comments.  But he said these planes are the best in the world so they're only just good enough for Ansett. 

 I want to know in Australia who is the best workplaces here and around the world then that's only just good enough for what we should do.  And there are plenty of success stories.  So this really comes to the third point which I wanted to make.  One, the silent achievers, the quiet achievers is the services sector, two, the future of workplace relations.  Whilst you still have to have an appropriate safety net, whilst you still have to ensure that there's balance in terms of the particular sections of the economy where you get pretty tough bargaining. 

 I think the third, I don't think, but the third point I want to make builds on the second.  What we need in Australia is more leadership.  We need leadership in industrial relations and workplace relations about what is the best practice.  Where is our university of leadership?  Where are our business skills promoting the skills of understanding of organisational behaviour?  Where are we discussing from shop floor right through to boardroom how do we train our best leaders?

 Now there are plenty of individual efforts going on but where's our national focus on leadership in the workplace?  Leadership in the workplace is eclectic.  It can be the leading hand in an electrical transformer company.  It can be the senior sales person on the retail shop floor.  It can be the small business who understands how to work and interact with other contractors.  Where is the leadership?  People say you're born with leadership.  That may be true.  But I've very rarely seen any set of skills which can't be honed through the application of our experience and knowledge and leadership to me is a missing link in a lot of what we do.

 Now there are many clever companies who do it.  Again, without seeking to embarrass I had a good session with McDonald's recently.  Now they've got this leadership training down pat.  Many people may wander into McDonald's part-time work, not seeing it as their future.  But when you see the experiences they get there they've got a focus on leadership.  I know in my old union in the AWU I sent 140 of my shop stewards to university, to TAFE to get Cert threes, Cert fours and OH&S and HR.  Because what I realised is my shop stewards, some of them were just going to cause trouble and some of them weren't particularly interested.  They just did it because there was no one else to do the job, which is not unusual in a whole range of callings sometimes.

 But a lot of them were natural leaders but their companies were too busy or not sufficiently focused to realise that the person raising the problems is actually the person with the solutions.  So how do you get the best out of people?  So I think there is a marvellous opportunity to go on what some people would dismissively call the soft stuff but I actually think is at the nub of the success of future generations of Australian workplaces.  It's leadership.

 Leadership means different things to different people.  There have been more books written about leadership than probably many other topics.  Certainly one definition of leadership which I accept has some validity, is it's involved in taking people in directions which they mightn't initially want to go.  But see I actually think the Australian people are smarter than often they're given credit for.  Australians are already organising their lives for a long life full of quality and meaning.

 I made that joke about personal trainers but the point about it is we are seeking to be healthier than we've ever been before.  We are seeking to smooth our prosperity for a longer life than ever before and thank goodness the Labor Government, despite the teeth of Coalition intransigence increased compulsory superannuation from nine to twelve, I think that'll pass the twenty year test if we have a reunite - if CEDA calls back its people in 20 years' time - I don't know if they will.

 But we also know that we'll have more than one job in our life.  The Australian people know this.  Do you really think there's parents telling kids when you're fifteen leave school, get a job in the bank?  You'll eventually become the bank manager.  Maybe they are but I think they're probably saying we'd like to stay at school longer.  If you want a trade go and get a trade.  But they also understand that you probably need skills which will be needed for more than one job. 

 We know that the idea that you can grow up in the same town and start working in the bike shop and at eighty-five still run that bike shop is probably not going to happen.  We know that if you want to teach fine arts at university chances are at some point you'll go somewhere else to study fine arts as well.  We know that things are changing.  Australians also know that catastrophe can be part of their DNA. 

 Catastrophe is a big word.  Catastrophe though doesn't have to mean it's a bushfire, it doesn't have to mean that it's a mine falling on your head.  It can be something as basic as a divorce.  It can be something as troubling and difficult as grandparents whose children have fallen into drugs becoming parents again of their children.  It can be something as difficult as going to your seventeenth interview at an aged care hostel to find somewhere which will treat your aging parents, who can no longer look after themselves with dignity, that they be treated with dignity.

 My point about this is Australians actually want - they don't always want to be told certain news.  They get in themselves the world changes.  But it's how you lead people to change.  So I think that if you think there is any merit in what I say about collaborative high value, high performance workplaces, then leadership is the ingredient we need to develop.  I said there'd be one minor point I might make at the end and I'm going to push my luck with your patience and just raise it.

 One aspect in Australia which we definitely need to change - and I think all of us perhaps share some responsibility for what I'm about to describe as a problem in Australia - is in Australia we have too much fear of failure.  We understand you've got to have quarterly reporting, we understand the average length of CEOs is five years in a company.  We understand that opinion polls come out every two weeks because that's the major reason left to buy newspapers according to some, not me.

 But we understand that everything is short term yet we hunger for long term.  One of the things mitigating against the long term is that in Australia I think that we are too harsh on failure.  Now repeated failure, that's different.  But I think you know what I mean and perhaps I haven't quite encapsulated this concept but it's certainly something I'm thinking about.  How do we say that it's okay for our innovators and entrepreneurs to have a go and fail and give them another chance?

 How do we say to people that it's okay to take risks?  Now risk is always a very tricky matter and having been a director of a super fund you understand you never want to put all your eggs in the basket of risk but you never just want to just follow the index, because sooner or later that'll let you down and you've got nothing left to show.  So ladies and gentlemen I'll submit to you this morning and I tried to give a general talk rather than just retailing the Government's achievements which are numerous and I'm happy to retail, if you ask me a series of questions on that I will cover that off. 

 I mean we are doing relatively well compared to the rest of the world.  There's no complacency in the Government.  But for goodness sake, have a look at our net government debt, far lower than most of the developed world.  Our unemployment whilst there's upward pressure on it is pretty good.  You have a look at the cash rates come down at long last.  There are things which are happening which are positive in the Australian economy.

 We do have a mining boom.  Most importantly though, we've got clever Australian people to fall back upon.  Our participation rates are staying higher than lower, although there's a lot more we need to do in the skills and training agenda which this Government is doing.  But friends I've - if I can be so precocious - I'd submit to you that the services sector of Australia, employing over seventy per cent of Australians, delivering a huge part of our GDP is the quiet achiever which deserves more recognition than it gets in the public debates.

 Secondly industrial relations is not as hard as it looks.  This Government will deal with a Fair Work review in the next two months.  I've just received the report, we'll talk to stakeholders.  But a lot of our interest is how do we create more productive workplaces rather than have arcane, old world debates about where the pendulum of regulation sits because one size does not fit all.  And most importantly I wanted to take the opportunity to explore with you the idea of cannot industry partner Government to create new institutes of leadership in this country, which help skill up the many marvellous leaders we have who were overalls, and nurses' uniforms and suits and ties and collars and work in the public sector and work at every level of our community and society?

And perhaps also can we be a little more tolerant of failure so that ultimately we can let people gain from that experience and become a more innovative nation, as is our natural destiny provided we take leadership and acknowledge failure, as part of the DNA of innovation and success.

Thanks very much for listening.

ENDS

Mr Shorten’s Media Contacts: Jessica Lindell 0408 642 804