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Good afternoon. Great to be back to start the political year.

I first of all wish to acknowledge the traditional owners of this land, I pay my respects to their elders past and present.

And can I say how pleased I am that the National Press Club will be hosting Kevin Rudd next month, to mark the 10th anniversary of the Apology to the Stolen Generations.

As Prime Minister, Kevin had the courage to tell the truth about our history, to say Sorry for the injustices and indignities inflicted on our first Australians.

And it is indeed courage - and imagination - that I wish to talk about today.

That’s what Australians are looking for in 2018 – and that’s what politics has been lacking.

I want to talk about how we can do better.

One, by restoring faith in parliament.

Two, by making our economy work for all working Australians – so that people who work hard can get ahead and that people who are doing it tough don’t get left behind.

And three, by making 2018 a year where we tackle the issues - the important, generational issues, the important cost of living issues - that have been ignored and put in the too hard basket. 

First of all, let’s start with improving our democracy and making politics better. 

And let me put it as bluntly as most Australians do: 2017 was a particularly bad year for parliament.

I’m not here to point fingers, or to play the blame game - I’m prepared to take my share of responsibility.

Parliament should reflect the finest qualities of the Australian people: their courage, imagination, their creativity and practical capacity.

But in 2017, there was too much circus, too much bickering and squabbling.

Don’t get me wrong, as Leader of Opposition it’s still my job to argue against policies that I disagree with, and to put forward positive alternatives.

We’ll keep doing that: on cost-of-living, better schools, stronger wages and a fairer health system…

…but that doesn’t mean reducing every political debate to a petty squabble. 

None of us can change the past - but we can do better in the future.

This starts with more transparency, greater accountability and rebuilding trust in our public institutions, rebuilding trust in democracy itself.

This question is far bigger than Malcolm vs me, or Liberal vs Labor – this is about restoring confidence in our democratic system and our public institutions.

We should treat this mission as seriously as we take national security.

Because the most corrosive sentiment awash in Western democracies around the world is the idea that politicians are only in it for themselves.

And that’s simply not true.

It’s not true of me or Tanya or any of our team - in fact, it’s not true of nearly everyone I’ve come across in politics in my ten years in Parliament, from all viewpoints and all political parties.

But so long as the political news is dominated by the minority who do the wrong thing: the travel rorts and dodgy donors and sinecures where Cabinet Ministers walk one day from their job, the next day into a cushy job in the same sector…

…then we will always have a hard time convincing the Australian people that we’re serving their interests and not ours.

Business as usual, politics as usual, won't cut it in 2018.

We need to show some real courage.

We need to show that we’re fair-dinkum – not feathering our own nests.

That’s why - if I’m elected Prime Minister - my government will create a National Integrity Commission.

A federal body, modelled on the lessons of the state anti-corruption bodies. 

The National Integrity Commission will resolve the gaps and inconsistencies in the current system, designed to ensure the highest standards in public administration.

We want to get it underway within our first year in government.

And if the Liberals and Nationals want to work with us to get it done sooner – be my guest.

This is not about partisanship - it is about trust.

I’m not putting this policy forward because I’m aware of any corrupt conduct – if I was, I would report it.

I’m doing this because I want to restore people’s faith in their representatives and their system of government.

So the following are key design principles for our National Integrity Commission.

It has to be independent and well-resourced, secure from government interference.

It needs a broad jurisdiction, effectively operating as a standing Royal Commission – with all those investigative powers - into serious and systemic corruption in the public sector.

The Commission will also have the discretion to hold public hearings, when it considers this to be in the public interest.

We would have one Commissioner and two Deputies – but importantly, appointed by the Parliament on a bipartisan basis – each serving one fixed, five-year term

The Commission would make findings of fact, not law, and then refer them to the Commonwealth Department of Public Prosecutions, if appropriate.

And it would report to parliament annually – overseen by a Joint Standing Committee.

This is a big move - it’s not a decision that I or my colleagues have taken lightly.

Over the last 12 months, I’ve met personally with and spoken to experts about the principles which I’ve outlined to you today.

I want the National Integrity Commission to be a clear, concrete and impartial mechanism to help restore trust, accountability and transparency in the Commonwealth sector.

This is a first step, a foundation.

But to go further, if we really want to lift confidence in our parliament, if we want to rebuild a sense that our citizens believe that we work for and not ourselves, we need to demonstrate that politics has the capacity to make the economy work for working Australians. 

If you come to any of my town hall meetings - and you are invited – whether it’s with Luke Gosling in Palmerston or Fiona Phillips in Nowra - you’ll hear the same story.

The cost of living is rising – and the kitchen-table economics of paying the bills and balancing the family budget are getting tougher.

It costs more to see your GP or get that scan or test you need - and even if you can afford Private Health Insurance, that’s going up and up.

Buying a house is getting harder, and if you can’t afford that – rent is going up and up.

Household bills are simply through the roof.

Things have always gone up, people understand that.

The big difference is that this time wages are staying down.

Our economy has grown since the Global Financial Crisis.

Workers are more productive than ever, company profits went up 20 per cent last year alone.

So why are big companies keeping workers’ wages low?

It’s the same reason that they are farming people out to labour hire companies.

It's the same reason they try to turn every job they can into a casual job.

The same reason CEOs put up their own pay and up again.

…It is because they can.

And what are the Liberals doing about it?

They’re attacking unions who fight for pay rises for workers.

They back arbitrary cuts to weekend penalty rates – for some of Australia’s lowest-paid workers - people who give up their Sundays and public holidays to provide for their family.

Now perhaps Mr Turnbull and co genuinely believe that if you give corporations everything they want, the world will be a better place.

But – for the life of me – I don’t see how dumping a big truck full of taxpayer funds into the pockets of multinationals in the form of a tax cut is going to help ordinary people.

I mean, in what universe do big corporations cut prices when they have a stranglehold on the market?

In what universe do corporations pay their fair of share of tax, if they can find a loophole, or a Singapore licence agreement or a tax haven they can use instead?

These are companies and CEOs whose profits and pay packets come from the hard work of Australians - we buy their stuff and use their services.

But if we don’t have the right rules and strong standards, if we don’t push big companies to pay a fair day’s wage for a fair day’s work…

…if we don’t demand a better deal and greater security for working Australians...

…then it just won’t happen.

I spent two decades representing workers – and hard experience has taught me that without representation, corporations don’t just hand out pay rises to their employees.

You have to argue for it, you have to organise for it, you have to push for it - even if that means taking on vested and powerful interests.

For me it comes down to a simple question: do you think Australia can be better than this?

Do we accept the slide into insecure work and low wages is inevitable?

Can we stand up and say no more pushing everyone onto short term contracts?

No more trying making every job a casual one.

No more law of the jungle and survival of the fittest.

No more taking billions away from public health and schools and TAFE and universities and giving it to big business in the form of tax cuts.

Can we do better than a society where your postcode and your parents’ wealth determines your destiny?

My parents weren’t wealthy – they were a long way from it - they sacrificed a lot so my brother and I could get the best possible education.

Because Mum – as a teacher knew herself – that education changed lives.

My Mum’s decision certainly changed my life, it’s while I am able to stand here today.

But this week, as school starts again, there a lot of parents out there who are worried that – no matter what they do – because of cost-of-living and cuts to schools, their child will go without the best possible education.

Too many parents who feel like the deal they’re handing on to their kids is a lesser deal than the one they inherited from their parents. 

So I ask again – can Australia be better than this?

Can we do better for all those people who feel like they’re getting left behind?

Can we be a country who properly values older workers looking for reemployment in their 50s and 60s?

A country where women are paid the same as men.

A country where our First Australians enjoy equal opportunity.

A country with a proper NBN?

Can we be a country where the generation of people who loved us and nurtured and looked after us as we grew are properly cared for as they grow older?

Can we be an energy super power? Harnessing clean energy as our international competitive advantage.

Now there is no doubt in my mind that when put our minds to this exercise and when our hearts are truly in it, the answer is we can be this country - yes, absolutely, Australia can be every one of these things.

And in 2018, my side of politics is going to lay out our vision for that Australia – fairer, stronger, more inclusive – where no one gets left behind.

This starts with stronger wages for working Australians.

Our wages system is no longer delivering - and it’s not just cuts to penalty rates, or the exploitation of labour hire.

Enterprise bargaining itself is on life support.

It should be a driver of both wages growth and productivity.

But the number of enterprise agreements ratified by the Fair Work Commission last year was the lowest number since 1995 – when the enterprise bargaining system was in its infancy.

It’s never been easier for business to take the drastic option, nuclear option, detonate negotiations, terminate agreements and threaten to send workers back to award minimums unless they accept a cut to their wages and conditions.

In last financial year, agreement terminations by employers were more than double the long term average.

And in that process, all those carefully negotiated conditions are wiped away – you start again.

Every enterprise agreement, every pay rise negotiated was in turn for improvements in the workplace.

But now the game of snakes and ladders is simply a game of snakes for workers.

And for people who can’t bargain together, they are now reliant on a minimum wage which has been going backwards – relative to median wages – for years.

This disadvantages employers who do the right thing and negotiate.

I was brought up in a system which said you wanted employees and employers to negotiate together to create value, to create growth and productivity and in return better conditions.

We now have a system that creates incentive and rewards the employers who are not interested in negotiating and that sets everyone back.

When you look at the proportion of workers who rely on award wages, it's grown from 16 per cent in 2012 to 24 per cent.

In the Hawke-Keating years we were told that the award system was the safety net and we would have a better outcome with more agreements. Now the awards system is more relevant and more central to how people were paid than we were ever promised two decades' ago.

This is a big deal. It is a vicious cycle.

Brendan O’Connor spoke about this here at the Press Club a few months ago – but when was the last time you ever heard our Minister for workplace relations talk about this problem?

When was the last time you heard a Government Minister say anything about workers and wages and bargaining and productivity that wasn’t bookended by union bashing?

Business leaders under what I am talking about; economists understand it.

Getting working Australians a pay rise is key to confidence: the confidence which keeps your wallet, your purse and, indeed, your business open.

I start from the basic proposition that a wages policy which only looks after the very wealthy is a wages policy not worth having.

That’s why we will:

• restore Sunday penalty rates
• crack-down on the exploitation of labour hire
• put the bargaining back into enterprise bargaining
• and lead a new national push to close the gender pay gap – the biggest job growth is in feminised industries but as there is a gender pay gap, that is increasing the problem of low wages across this country.

Having said all that, I’m still conscious that for millions of working people, business as usual, wage stagnation as usual, simply isn’t good enough.

The minimum wage is no longer a living wage.

And the current framework simply doesn’t give adequate consideration to contemporary cost of living pressures that working people are battling.

Let me use some examples: over the past year, the increase in electricity prices has been nearly six times wages growth.

The rise in health related costs has been double wages growth.

Residential house prices have increased by more than eight per cent over the past year – that’s four times faster than wages growth.

The current system of slow, incremental increases is seeing too many working people fall behind.

There are many things to admire about the United States –but their wages system isn’t an example, it’s a cautionary tale.

I don’t want us to be a nation that pays adults $7 and $8 an hour, where people work full-time but still rely on food stamps and charity.

Of course we have to be mindful of the capacity of industry to pay, but let me make this clear: we need to fix the disconnect between wages and productivity.

We need repair the link between hard work and fair reward and rebuild the idea that a fairly paid workforce is a more productive workforce in a more profitable business.

Our goal should be a real, living wage - effectively raising the pay of all Australians, particularly the 2.3 million who depend upon the minimum rates in the awards.

That’s my vision for the economy: grow the economy, increase productivity and fairly distribute the awards. Effectively jobs growth and wages growth; prosperity which works for everyone.

And of course, income tax also has an impact on the family budget.

That’s why Labor is opposing the Government’s plan to increase taxes for Australians earning up to $87,000 – over 7 million people.

The Prime Minister and the Treasurer keep talking about an income tax cut someday, somewhere – but their last Budget actually included an income tax increase for everyone but the top income earners.

How cynical is this? They hike your taxes now so they can claim credit for cutting them later.

So before this debate goes any further this year let’s be very clear: the Liberals are budgeting for higher taxes on workers and lower taxes from millionaires – whereas Labor has a tax cut for middle and working class Australians on the table, right now.

• If you’re a teacher on $65,000 – you’ll be $325 better off under Labor.
• If you’re a nurse, working overtime, earning $70,000 – you’ll be $350 better off under Labor. 

We start 2018 one big middle-income tax cut ahead of the Government.

And if the Liberals want to talk about putting more money into the pockets of families, they can start by dropping this tax hit on working people.

For two years the Liberals have been spruiking a hugely expensive, unfunded tax cut for big business.

And now they’re talking about an unfunded income tax cut – all on the never-never.

If you’re fair dinkum about tax relief, then you have to explain how you pay for it.

Chris Bowen, Jim Chalmers and Andrew Leigh have helped me lead the policy debate on tax reform and on Budget repair that’s fair.

We will close tax loopholes at the top end – like income-splitting through discretionary trusts, or unlimited deductions for high-priced accountants to minimise your tax.

And we will not be spending $37 billion of taxpayer money subsidising property investors…

…not while school results in English, Maths and Science go backwards…

…not while 100,000 older Australians are on waiting lists for aged care packages…

And not while young Australians are priced out of the housing market. 

We don’t support spending $65 billion – the bulk of which will benefit foreign shareholders – when we could be investing in Australians and their opportunities. 

So yes, there are big policy differences this year.

If you’re a multinational, a millionaire, or someone looking to buy up a swag of investment properties you will no longer receive the excessively generous taxpayer handouts that the Government thinks is more important than investing in services.

But if you’re a working Australian, a pay-as-you-go taxpayer or a first-home buyer, a young person looking to go to uni or get an apprenticeship, we are on your side. 

I said earlier that there would be issues we will lead on in 2018 that are being ignored by this government.

Aged care is one, tackling dementia properly is another; these are massive, inter-generational challenges that all Australians face.

But there’s another much more immediate problem: massive increases in the cost of health care.

The Liberals’ Medicare freeze has effectively done the job of the GP tax they wanted: it’s driven up out of pocket costs.

• Costs up 20 per cent for a visit to the doctor.
• Costs up 25 per cent for a consultation with a specialist

And the price hikes don’t end there.

As someone wryly remarked last week there used to be two certainties in life: death and taxes.

Now it’s three: death, taxes and big increases in private health insurance premiums.

For years, PHI premiums have been rising at triple the rate of inflation, way above the pace of wages.

Families are paying an average of more than $1,000 than they were when the Liberals came to power in 2013.

Prices are up, profits are up – but quality and value are way down.

Australians are paying a lot more for their health insurance policies and getting a lot less.

Ten years ago, only 8.6 per cent of health insurance policies contained exclusion, now it’s 40 per cent.

These exclusions, often hidden in the fine print, mean that people are paying for insurance without being covered – it’s turning health insurance into a con.

You know the stories…people who go to their doctor needing cataracts removed or knee surgery or a hip replacement, or a hysterectomy…

…and are told that even though they are paying some of the highest out-of-pocket costs in the OECD…

…and even though they’re paying in excess of $4000 to their private provider…

…it just so happens the particular procedure isn’t covered by their insurer.

I’m not talking about the small operators in this industry or the not for profits.

But I’m talking about an industry that raked in $1.8 billion in profit before tax last year.

Most publicly companies get a return on equity of about 8 per cent.

The banks average well north of 10 per cent.

But some of the biggest health insurance providers pocket a return of over 20 per cent.

This is an industry that’s holding about $6 billion over and above the legal capital requirement – and receiving $6 billion in taxpayer funded subsidies, each year. 

Yet, despite having a stack of cash in the bank, profits in the billions and government support, the private insurers keep aggressively increasing their premiums each year.

I though Greg Hunt premature last week, when he was declaring ‘Mission Accomplished’ when premiums ‘only’ went up by twice the inflation rate.

For some families with two kids, this means $200 more they have to find.

I understand balancing family budgets, I get that a $200 increase has to be found by the family from somewhere.

I’m fed up with the Private Health Insurance industry treating Australians like mugs, gouging people on the basis of a con.

Public healthcare costs are up. Private health insurance costs are up.

When it comes to health – right across the board – we can do better for Australia.

There’s another generational challenge that I want to put back on the national political radar: climate change. 

Any political party with an ounce of character will go to the people at the next election with a proper economic and environmental recognition of the reality of climate change…

…a proper demonstration that we have the courage to do what has to be done, even if that might be politically difficult.

For the last two years, the Great Barrier Reef has suffered severe bleaching.

And – over summer – it was revealed emissions have continued to increase, making it likely Australia will miss the government’s already modest 2030 target.

Australia doesn’t need to spend $1 billion lending money to a coal-mining billionaire…but we do need a national energy policy.

We have all the sun and wind you could want and with it we can make an endless supply of the energy the whole world is moving towards.

Of course, we know that Tony Abbott went to open war with renewables – crushing confidence, spooking investors and shedding jobs.

Now, just as the sector is recovering, I'm concerned the Prime Minister is willing to sell it out to placate his angry backbench.

Every time a light globe flickers, the Government spend a whole Question Time blaming renewables.

Yet analysis from Bloomberg New Energy Finance shows the Liberals’ so-called Energy Guarantee would see annual investment in large-scale renewable energy cut by 95 per cent.

No serious energy plan, anywhere in the world, is built on the assumption of a decline in renewables investment.

It’s like releasing a roads policy based on the resurgence of the horse and cart…or an National Broadband Network based upon copper.

Labor’s objectives are clear, achievable and responsible:

• 50 per cent renewables by 2030
• A 45 per cent cut in pollution by 2030
• And zero net pollution by 2050.

If we want lower prices and more secure energy we have to back the transition to renewables.

If we want new industries and new technologies creating new jobs here, then we have to back the transition to renewables.

And if we want our kids to be able to take their kids to the reef, then we have to back the transition to renewables.

We’re Australians, we’ve got the brains and the getup and go – you bet we can build an energy system where everyone can have energy at an affordable price and indeed, renewables helping the environment.

So in conclusion, when you cut through the noise, the Prime Minister’s central argument is you should stick with him, because this is as good as it gets.

Growth is up, the top end of town have a tax cut coming, business as usual and trickle-down economics are all we need from here.

Apparently, flat lining wages though is as good as it gets for working families.

Insecure work at irregular hours is all they can hope for.

Soaring power bills for houses and business are as good at it gets.

House prices which push people out of their communities are OK, as long as investors are able to get a taxpayer funded subsidy.

Rising levels of inequality are fine, as long the right people are still inheriting their opportunities.

The Prime Minister seems to think that if he sets the bar just low enough, he can keep claiming victory for climbing over it.

I believe politics should be better than the bare minimum, better than a low risk, low ambition pursuit of the lowest common denominator.

And I’m going to spend 2018 explaining to people why I think we can do better.

• By restoring faith in the way that government works
• By restoring faith in an economy that works for all people, all Australians
• And by taking on the hard generational issues, even if it they are politically difficult, even if it means confronting scare campaigns or vested interests.

To my team, I say that Australia can be better – and Labor can be better too.

In 2018 we will need to be as courageous, imaginative and practical as the Australian people themselves.

And I’ll have a lot more to say about that in the year ahead.

Thank you.