Bill's Speeches

CEDA CONFERENCE, STATE OF THE NATION ADDRESS - CANBERRA - TUESDAY, 11 OCTOBER 2016

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Good morning everyone and thank you for that introduction.

I acknowledge the traditional owners of the land upon which we meet, I pay my respects to elders both past and present.

Welcome back to parliament – and thank you for having me back to your breakfast.

CEDA has a long and proud tradition of taking the long-term view, of bringing intellectual rigour to the big questions.

And at this conference you’re turning your focus to the future of our rapidly-changing economy.

We live in a time, in a moment when many of our fellow Australians feel forgotten by change, unrepresented in decision-making. 

Many look upon the chambers on either side of this hall less as an arena where we compete for their interests – and more as a hothouse where nothing grows.

This is by no means a uniquely Australian phenomenon.

Last month, I visited Canada and the United States.

I met with leaders of the centre-left parties from Europe and North America.

Two topics dominated the formal presentations and the informal discussions on the margins of the conference.

The first, was how do we make change work in the interests of middle and working class people.

It was a little bit of an eye-opener for me, talking to the Prime Minister of Sweden or Vice-Chancellor of Germany or Leaders in France or Canada and the United States.

And whilst we may care to believe our debates in the south may be different to those in the north, there is more similarities in our political debates than perhaps we would first assume.

This question of how we best represent the interests of a squeezed middle class.

A middle class feeling under pressure, and of a working class not quite sure how they can better themselves and their children's lives. 

This is indeed a big topic in first-world nations. 

And there was a second major issue which was discussed, perhaps a little more informally – the prospect of President Donald Trump.

A campaign that began as a de facto reality TV show, grew into a circus and has now gone beyond farce.

Thankfully, with every passing day, with every ridiculous and disgusting remark that is uncovered, the possibility of a Trump Administration fades.

By his own words and his own actions, he has confirmed the worst fears of millions in the United States and beyond its borders – that he is entirely unsuitable to be leader of the free world.

What happens in the United States is ultimately a matter for Americans but what happens in the United States ultimately affects many of us.

Trump, like some of the extremists in Europe, like extremists from every point on the political compass - left and right, draws his power from the people who have felt the rough edges of globalisation and economic change.

Workers who’ve been outsourced, downsized, rationalised.

Families feeling the pinch of flat wages, widening inequality, falling living standards.

Marginalised, alienated groups being told that migrants, minorities, ‘big government’ – are to blame. 

That’s the low road of change – lashing out, scapegoating.

The myth that a strong man or woman has the simple solutions.

We need to take the other path, the high road.

There are solutions to change - skilling our people, investing in education, addressing inequality, promoting inclusion, demanding the equal treatment of women in our society.

Today is the United Nations Day of the Girl Child. 

But why is it that little girls, even in Australia, have less chance than little boys?

This message of sustainable growth through addressing inequality was one which I heard from the remarkable and charismatic Prime Minister of Canada, Justin Trudeau, from the amazing London Mayor Sadiq Khan, from the impressive Mayor of New York, Bill de Blasio.

But they also emphasised our citizens cannot be discarded and left behind.

It is not enough to simply promote change, without explaining to our fellow citizens where they fit in.

We need to win the argument; we need to overcome the false choices and simple solutions - the proposition the only way we deal with change is there are 'winners and losers', ‘us versus them’.

We must recognise the mantras of ‘innovation’ and ‘disruption’ can be a confronting message for Australians in insecure work.

We need to understand that when a lot of Australians hear the word ‘automation’, they think ‘redundancy’.

That when many Australians hear the call for ‘flexibility’, they believe our system is good at flexibility for employers, but not so good at flexibility for employees.

That many Australians know the calls for a low-wage, easy-to-hire, easy-to-fire, deregulated labour market do not and will not deliver hundreds of thousands of new, quality permanent jobs.

And as analysis from CEDA and others has made clear, the march of technology in our workplace is unstoppable and it is unsentimental.

It’s our job, as policy-makers, as leaders of the Australian community to harness change and make it work for our people’s benefit.

Making change work in favour of the 45 per cent of Australia’s current manufacturing workforce who have no post-secondary skills. 

People who came to this country, off the boats and into the factories, gave their all physically and emotionally for 20 and 40 years, should not be told there is nothing for them any more except the disability pension.

These are the people that will be stranded by innovation and change unless we help them re-train and re-skill.

The last Ford Falcon has rolled off the line. It’s worth looking at how the Mitsubishi workforce fared two years after their plant closed.

We always hear that Australia shouldn't be in the business of making cars – but what about the people who make the cars and the auto-component companies?

We can't treat change as a postcard as we move on to our next adventure, leaving people behind.

One third of the workers are back in full time employment.

One third are unemployed or out of the workforce.

·    And one third are under-employed – working casually or in jobs where they can’t get enough hours.

When you hear those statistics, we cannot be surprised if more extreme politicians and more extreme politicians get the ear of people.

If that experience is repeated across our community, for all those who are displaced by technological change in the years ahead – there will be a massive waste of our fellow Australians' potential.      

We need a targeted growth plan that includes these Australians, that values their contribution.

And we should not imagine that advanced manufacturing is somehow remote from the world of innovation.

Australia’s manufacturing sector is the largest investor in research and development as a share of sector GDP.

Investing almost 5 per cent back into innovation compared to an average of just 1 per cent across the economy.

Government needs to match that energy and focus of innovation on renewing the skills and capacities of our workforce.

In arguing to look after people in the process of change, I'm not putting forward a hypothesis to say we need to put up the tariff wall or defloat the dollar.

Nostalgia is no kind of economic strategy. After all, in the lost ‘golden age’ of 40 and 50 years ago:

·       Living standards were far lower

·       Exporters that could have flourished, suffocated

·       Less than three in ten Australians finished high school

·       University was a privilege reserved for the few

·       And the number one cause of personal bankruptcy, was medical expenses.

It’s not just dishonest to suggest we can turn back the hands of the economic clock, it’s wrong to think we would want to. 

We must be careful of political parties and leaders who are combining the rose-tinted view of ‘how it used to be’ with a dark shadow of ‘who is to blame’, seeking the dividends of fear.  

The call we can just turn back the clock, that there is someone else to blame for our problems, is a challenge we have to address. 

For many working people in Western democracies around the world, the vanished past is a more attractive prospect than the uncertain future.

And for as long as people feel that their representatives are talking at them - or over them, we will continue to lose ground to people who rail against ‘the system’ from the outside.

The defining argument of the decade ahead depends on making the case for a modern, growing, fair and inclusive economy.  

Mindlessly preaching ‘excitement’, or accusing people of ‘hiding under the doona’ won’t do the job.  

The proof of the benefits we offer has to be practical, tangible, real.

Deeds, not words.

We need to demonstrate our parliament can deliver a genuine improvement in the lives and living standards of the people we serve.

Australia has achieved a full quarter-century of economic growth – but inequality is at a 75 year high.

Unemployment has a 5 in front of it – but we are on our way to being a part-time nation.

Between 2001 and 2006, 60 per cent of the jobs created were full time.

Between 2011 and 2016 – that fell to 38 per cent.

In the last year, only 1 in every 10 jobs created were full-time

In July, the number of full-time jobs as a share of all jobs in the economy hit the lowest ever level on record.

There are fewer Australians working full time today, than during the GFC or the recession of 1991.

And while there has been a 3 per cent increase in the male, working-age population.

There has only been a 1 per cent increase in men working full time.

The underemployment rate for women aged 35 to 44 is more than double the rate for men the same age.

There’s nothing wrong with part time work, if that’s what you choose – but a lot of Australians aren’t getting a choice.

The Liberals keep trying to spruik ‘jobs and growth’, as if repetition will get the results – but the growth is narrow and the jobs are part time.

People in work are seeing their wages grow at the slowest rate on record, opening up a widening gap between pay packets and the price of life’s essentials.

Our national bargaining structure is stuck in neutral.

There is now almost a premium for employers not to bargain, because if they bargain in some cases they are in danger of putting themselves at a disadvantage compared to those who treat employee wages as a cost, and nothing more.

Instead of using enterprise bargaining to drive productivity, many employers are merely seeking to freeze pay, or cut it.

Meaning Australians take less home at the end of the day.

Real wage rises don’t just measure the health of our economy – they drive it.

Consumption is half of Australia’s GDP and it is driven in large part by the 60 per cent of households who spend as much or more as they earn each week.

If working and middle class families see their wages stagnate – or worse, cut by the abolition of penalty rates – then demand will suffer.

Retail trade is already lacklustre, in the last quarter, household consumption grew at its slowest rate in more than three years.

In order to restore sustainable economic growth, we need to build trust in an economy that delivers for working and middle class people.

This means:

  • Reforms that boost productivity growth – because you can’t generate real income and wage gains without a stronger economy, regardless of distribution. Boosting productivity isn't just interfering with CFA negotiations in Victoria, it's a plan for workplace relations across the nation.
  • Tackling inequality – it isn't just about social justice, it is an economic tool. Because hollowing out the middle class, undermining reward for effort, only weakens demand and holds back growth.
  • Ensuring everyone who wants a job can find one – this is not only central to boosting living standards, but critical to maintaining and upgrading the skills of our workforce.

This is about tackling inequality, promoting fairness – but also offering reward for effort, encouraging aspiration.

Aspiration is a word I want to reclaim for the Labor side of politics.

Because aspiration is owning your first home – not negatively gearing your fifth.

Aspiration is knowing you can look after your children when they are sick – and afford the medicine to help them get better.

Aspiration is a student becoming the first in her family to go to university.

Aspiration is a young Aboriginal man in a Ranger’s uniform, applying his knowledge to care for our natural wonders.

Aspiration is a mature-age worker in their 50s, learning new skills for a new job.

Aspiration is a superannuation system providing security in retirement for all – not acting as a tax haven for a fortunate few.

Aspiration is a devoted couple, doting parents, who deserve the right to get married.

Labor is at its best when we speak for, and serve, these aspirations.

We are more than a helping hand for the people who’ve fallen off the pace – we are the party of fair reward for hard work, of opportunities earned by effort and on merit - not on postcode, gender or ethnicity.

This is why I am determined to put the great Australian aspiration - home ownership - back in reach of ordinary working people.

Today, home ownership has fallen to its lowest-ever level among middle- and low-income families.

This time next year, homeowners will be in the minority, with more than 50 per cent of people renting because they cannot afford to get into the market

This issue cuts across generations as well as income levels.

In 1990 – before Australia’s last recession - a typical home in Sydney cost 5 times a young person’s average income.

Saving for the 20 per cent deposit took about 3 years.

It seems incomprehensible.

Today, the same home costs 15 times a young person’s average income. 

And saving up a 20 per cent deposit takes nearly 10 years, and their parents.

Are we honestly a nation which thinks a tax break for property investigators and speculators is more important than helping young families buy their first home?

The secret to success in this country is a large growing middle class, with more opportunity for those who are less well-off to join it.

This is how we restore the equilibrium to our political process. 

When it’s getting harder and harder for Australians to support their family, to pay the bills, to start a business, to put a roof over their head, or save for their retirement… the last thing they need is a lecture from a well-off leader about ‘living within their means’.

If you live in a regional town and are struggling to find a job – and you hear reports of 457 visas being corrupted and rorted, workers being brought in and exploited – it’s tough to believe that an open labour market is working for you.

When a much-vaunted trade deal doesn’t deliver local jobs that were promised, it’s hard to have faith that free trade is living up to its part of the bargain.

When interest rates are at historic lows – but credit card rates are at astronomical highs…

When thriving small businesses with great ideas are denied access to the capital they need to grow…

When, weekly, we hear stories of Australians being ripped off by banks and financial services, but the big four banks post a combined $31 billion profit…

It’s hard to accept that the price of strong banks is a failure of ethical standards. 

Of course, the Liberals reject these grievances, outright.

But in the Labor party, we want to address them, to solve problems, to build a system that works for everyone.

I want to make our citizens partners in our politics, not strangers at the door.

If you want banks to be strong and profitable, but I also want them to be better. 

This is why we need the scrutiny of a Royal Commission.

If you genuinely support an international labour market – you want the best possible standards, safeguards and controls.

Protecting foreign workers from exploitation – and upholding local jobs, and apprentices get a start.

And if you truly believe in free trade – you know the playing field has to be fair, so all benefit.

Our broader transition to an advanced manufacturing depends on embracing new markets and making new investments in return.  

It is the job of good government to guard against this, to stand up for the jobs, conditions and opportunities of its citizens.

A rising tide just can't afford to lift the yachts - it must lift all the boats.

It's not enough to merely shrug our shoulders and say:

‘The strong do what they can, while the weak - that’s just life.’

Half a century ago, the Labor party believed the best way to grow the economy was to row every oar.

Now we know it is our job is to steer, to help Australians navigate their futures.

But that doesn’t change the basic obligation of a good government.

When we can make a difference, when we can set an example, when we can invest in people’s capacity to succeed, when we can encourage investment, when we can create conditions for a market to thrive – we should.

We absolutely should.

Take public infrastructure.

With the decline in mining-capital expenditure, public infrastructure can be the ‘missing link’ in our growth story.

We know of the China story, the innovation story, the skills story, the fairness story and with that, there has to be an infrastructure story.

Creating good blue-collar jobs in the immediate term – fuelling big contractors and small-businesses, boosting the productivity and liveability of our cities and regions in the long term.

From better ports, to road and rail - there is a national to-do list of value-for-money projects ready to go.

And I want government to be a force for good here, an enabler, opening the way for private investors – particularly from our $2.5 trillion national savings pool.

Encouraging a ‘Reserve Bank’ model of decision-making, taking away the short-term politics to provide the stability and confidence needed for private investment in infrastructure.

And any conversation about infrastructure needs to include a discussion about our large-scale, long-term energy generation needs.

Around our country, there are extremely old, highly polluting electricity plants.

As we transition away from our excessive reliance coal power and broaden the mix toward renewables, we need to offer investor certainty in this space too.

And we need to offer certainty for the workers and communities affected by this change – making the move to renewables fair for everyone. 

That’s why the recent flurry of government comment from the Prime Minister and the rest of the chorus line, seeking to blame wind turbines for South Australia’s one-in-50 year storm while locals were still mopping up the damage, was so unhelpful. 

I understand we need energy security and a national energy grid - but we need to understand renewable energy is the way going forward.

Creating investment-uncertainty by waging ideological campaigns against renewable energy undermines the market for investment.

We are the sunniest continent on earth – and one of the windiest places in the world.

And thanks to the work of the CSIRO and our universities, Australia leads the world in developing the technologies that can turn these resources into clean, safe and reliable energy

If we are strategic, if we are smart – renewable energy can power a whole new wave of jobs, investment and energy for Australia.

This is a conference that doesn’t just assess the State of the Nation – it looks to its future.

The future I see, the future Labor believes in is an Australia where your postcode doesn’t pre-determine your destiny.

We repudiate the false binaries of the short-term – because we know Australia doesn’t have to choose between:

-      Growth or fairness

-      Between profitable enterprises or well-paid workers

-      Between jobs or the environment

-      Between strong banks or ethical ones

Our economic plan prioritises education – the great equaliser, ensuring every Australia can fulfil their potential.

And it is built on family values, because we don’t want middle-class and working-class Australians to constantly trade off family for work.

I believe that Australian families come in all shapes and sizes - not just the nuclear family: sole-parent families, blended families, gay families.

We need to be a nation that embraces diversity, not just tolerates it.

You tolerate a traffic jam, you tolerate Brussel sprouts, we embrace diversity.

We also need to recognise today’s immigrants and refugees are tomorrow’s business leaders, community leaders, doctors, teachers and nurses.

We know embracing diversity is smart – because it makes us a greater nation.

We understand seeking a more even economic playing field for all, helps us all to succeed.

And we know retreating to isolationism doesn’t stop crises, any more than ignoring climate change prevents its consequences.

But – to return to where I began - achieving this model of inclusive growth, tackling the discontent of our democracy, depends above all on our citizens feeling a sense of partnership in our politics.

Demonstrating to Australians that the decisions we make here are not removed from their daily lives.

Proving we are planning for their jobs, their futures – not our own.

Showing it is still possible for our democracy to serve the common good and reward the common efforts of our people.

This is the key to making economic change work for all, to building a stronger future of aspiration and fair reward.

That’s where to next for Labor, that’s the ground we want to occupy.

This is our focus, for the year ahead. 

ENDS


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