23 June 2015










Good morning everyone, it is fantastic to be here.

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

Thank you for this invitation to be here and thank you for saving the most important meal of the day for the Leader of the Opposition.

There are three more sitting days before parliament rises for the winter recess…but who’s counting.

The winter break gives all of us in this place a chance to go home to our communities – and to get out and about around the whole nation infact.

To listen to Australians, to talk with them about their hopes and aspirations, as well as the challenges they’re facing in their daily lives.

To measure our policies and our ideas, against their priorities.

It’s a kind of a mid-year stocktake for all of us in public life.

And this annual CEDA conference is also an occasion for a national stocktake.

A time to look at the big questions, time for a broader look.

A chance for all of us to reflect on the state of our economy, the shape of our society and the health of our democracy.

And an opportunity to turn the temperature down a bit.

To step back from the day-to-day, verbal jousting which probably doesn’t contribute too much in Question Time.

And instead, start to answer the dissatisfaction in the Australian public about the state of politics.

A time to move away from the slogans and the dumbing-down of the debates to who said what when and the gossip.

It is the ‘overriding’ view as our chair said today.

This is what motivates me. The over-the-horizon view.

And of course, transitioning from the old to the new - the theme of your conference – is squarely one of the key questions for the next election and the people of Australia.

Preparing the Australia of 2015 for the Australia of 2025 and 2035.

So this morning, I want to talk to you about the future.

Australia and businesses understand already the trends of the next 10 and 20 years regardless of who is in power.

We know the trends which are underway, the tectonic plate movements which are irresistible.

  • The transformation underway in Asia

  • The seismic shift of digital disruption

  • The move to a low pollution economy

  • The inexorable march of women through institutions of Australian life to true equality.

  • And demographic change, two generations of retired Australians alive at the same time.

These are the facts, ladies and gentlemen.

Asia, the digital economy, energy efficiency and sustainability, the equal treatment of women and growing older.

This isn’t a ‘Labor’ list.

These are non-negotiables.

They don’t align with any electoral calendar and they don’t respect any partisan agenda, any short-termism.

The question in our public life is not what the trends are. It is what we will do about them.

The challenge is if we meet here again in 10 and 20 years’ time is could we look back to 2015 and say that the 2015 Budget was that magic moment where we set Australia up for the next decade and the next two decades.

And if the decisions we make in this parliament do not pass the reunion party in 10 and 20 years’ time and looking back saying: ‘Did we get things done this year’. Was that the year we decided to step up?

The question of these trends are: do they shape us or do we shape them?

Whether we ride the waves, or are left waiting out the back.

This was very much the focus of my Budget reply speech.

In that Budget reply speech, I didn’t want to just be negative about the government.

But much more importantly in my mind, was that the Budget reply has to be the start of outlining a response, a reaction and do more than reacting to the government’s election pitch and do more than just dealing with the Budget.

Instead, I wanted to start a bigger conversation and set a new direction.

So, in my budget reply speech, I said we wanted to talk about jobs, everything for me is about the jobs.

And to have the jobs you need to have the knowledge, skills and industries of the future.

A plan to balance demographic change with a productivity boost.

And we need to end the partisan squabbling and uncertainty holding back infrastructure delivery.

Encouraging investment and enhancing confidence now, that is the job of our economic leaders – build confidence.

You and I know that confidence is like holding water in your hands. One small change and you can lose it all.

I will return to those ideas in a moment.

But I believe they are best understood, in the context of the current state of our nation’s economy.

You all know the broad brushstrokes:

Mining investment is returning from unprecedented highs to the historic mean.

From 8 per cent of GDP at the top of the boom, to 2-2.5 per cent.

It is the same as a $100 billion withdrawal from our $1.6 trillion economy.

And while all of that represents a step change in mining production which will continue to be a central part of our exports and our prosperity – we won’t see mining return to the peaks of last decade.

So the overwhelming, number one economic priority for Australia has to be identifying and developing the next engine for economic growth.

Because right now, our economy is not growing as fast as we would like - or going as well as we would hope.

Growth at 2.3 per cent, is nearly a full percentage point below trend.

And it has been that way for a while.

Our annual economic growth has been below-trend for 11 consecutive quarters, and all but 3 of the last 27 quarters.

Some of this can be explained by the Global Financial Crisis, changes in the domestic economy and the severe impact of extreme weather events.

Yet this is still the longest period of below-trend growth for more than 50 years.

And, as a result of this:

Our unemployment rate has a six in front of it, has for more than a year.

Long term unemployment is at a 16 year high.

And more than 188,000 Australians have been unemployed for more than a year.

Now, the orthodoxy of the last thirty years tells us things will get better.

If we look at the current situation as just as short-term challenge…

…then the official prescription of low interest rates to stimulate demand and some fiscal stimulus makes sense.

But we must also look at the big picture, the long run, the need to plan for the jobs and prosperity of the future.

This is why we need to change our methods, our model and our mindset.

We need to think about new investment in infrastructure, innovation and education.

This is not about turning our back on past reforms - it’s a question of shaping new reforms for the new century

In the 1940s, John Curtin and Ben Chifley forged new reforms to win the peace and build a fairer post-war world

In the 1980s, Bob Hawke and Paul Keating transformed Australia and brought down the tariff walls to prepare us to be an international economy.

Not frightened of the region we live in, not a colonial outpost of another country.

But you can only open your economy once.

Now we have to create reforms for Australia to deal with the challenges of infrastructure, innovation and inequality.

Combining the egalitarian, communitarian spirit of Curtin-Chifley with the market dynamism and Asian engagement of Hawke-Keating.

Once again, Australia must choose.

We must choose to be open, not closed.

We must choose renewal, not decay.

Innovation, not stagnation.

We engage with our region and that is our choice.

We compete and succeed in the world, on our terms.

The truth of the matter is that the levers available to a Labor government in the 1980s, no longer respond to a government’s touch. Your airline, your exchange rate, your telecommunications company, they are just not there.

But there are levers still available to the Commonwealth.

Infrastructure is one of the levers the Commonwealth can drive.

Education and skills are a lever the Commonwealth can drive.

In 2025, an extra five million Australians will live in our cities.

And millions more in our regions will depend on cities: as providers of the services they rely on and markets for their products.

It’s up to the Commonwealth to use its fiscal horsepower to work with the states, to make our cities more liveable, more sustainable and more productive – and to connect them better with our regions.

Australians are good at living in our cities.

The most effective way of unlocking our cities and engaging our regions is to invest in infrastructure.

Substandard infrastructure costs us all.

Infrastructure Australia’s recent National Audit shows traffic congestion will cost the economy $53 billion by 2031.

And the distance between where Australians live, and where we work, is growing fast.

Most of the new jobs are within 10km of our CBDs.

Yet most of our population growth is occurring in our outer suburbs, more than 20kms out.

Today, nine out of ten of us spend more than 90 minutes a day travelling to and from work.

This poses a fundamental question about our national quality of life, our lives outside work.

Do we want to be a country of three big cities, ringed by drive-in, drive-out suburbs?

A nation where parents are never home in time to kick a ball in the backyard, help out with the homework or share a family meal?

A country where the next generation of Australians feel shut out of the housing market.

Infrastructure means new roads and public transport, new ports and bridges, better social housing, smart energy grids, efficient irrigation projects and, of course and the best digital infrastructure.

Yet, based on the latest figures, there has been a 17.3 per cent fall in spending on public sector infrastructure in twelve months.

And the latest Akamai study shows that Australia is now ranked 42nd in the world for internet speeds.

New infrastructure projects boost demand in the short term and they lift supply over the long term, creating jobs and generating national momentum.

Sea ports, airports and their interaction with road and rail networks is critical.

And there are opportunities before us, in rail freight and export shipping.

As a nation, we need to bring major new projects to market.

But there have been far too many delays caused by political bickering, between different parties and between different levels of government.

High bid costs, commercial risks, forecasting errors, long procurement and uncertain processes…

….have made new infrastructure investments less attractive to long-term equity investors, constructors, governments and financiers.

Every day of inaction dents confidence, which in turn erodes trust.

It undermines certainty for investors – and it increases pressure on State government budgets.

Breaking the political deadlock and closing the infrastructure gap demands a new approach.

This is why, last month, I announced Labor’s plan to boost the powers and resources of the Infrastructure Australia – and put them at the centre of decision-making.

It is a plan to create a strong and consistent pipeline to provide a signal in the market.

We want to adopt the Reserve Bank model: an independent authority at the heart of capital investment just as the Bank is to monetary policy.

And I was pleased to hear Ross Garnaut offer his support for this idea at CEDA’s conference yesterday.

Our model will replace petty, narrow, short-term politics with certainty, confidence, transparency and rigour.

We want IA to play an active role in structuring and generating new projects.

A model which will ensure projects which have clear benefits to our cities and regions they do not languish on the National Infrastructure Priority List.

Let’s take the politics out of infrastructure and put the people, the certainty and the generational change decision making back into it.

We need a model that addresses the trust deficit between project proponents.

Instead of politicians choosing projects based on the electoral map and according to our too-short election timetables…

Infrastructure Australia will recommend projects based on three key criteria:

  • Does it benefit our economy?

  • Does it benefit our community?

  • And will it enhance the capacity of our national productivity?

If we are to be nationally and globally competitive into the future Australian infrastructure needs to be benchmarked against world’s best practice in our Asian Pacific region.

And whilst the Government doesn’t understand this following sentence, I hope you do.

A Labor Government will offer the Opposition of the day a meaningful say on every Infrastructure Australia appointment.

Bipartisanship is a word which is invoked often in this place.

It’s something governments love to demand…rarely welcome…and, these days, almost never offer.

I am different to the current Prime Minister in this regard.

My union background taught me that you have to work with each other. You can both sit in your corners but nothing will get done. You must bridge the gap.

Bipartisanship is about recognising no-one has a monopoly on the good ideas.

Instead, the more people of goodwill and expertise you can bring together, the more co-operation and consensus you can achieve on the long-term generational decisions the better your chances of a successful, enduring solution to the big questions that we can say in 10 years that was right.

And when the experts at Infrastructure Australia get behind a good project - like the Cross-River rail in Brisbane or the Melbourne Metro, they should have the ability and authority to act as an active broker:

Bringing together:

  • state and local governments

  • construction companies and financiers

  • long-term investors like our super funds

Maximising consumer and productivity benefits and mitigating project and financial risk

In turn this will ensure that costs in developing new projects can be streamlined over time…

Two weeks ago, the Governor of the Reserve Bank, Glenn Stevens, spoke about creating a new ‘upside’ for the Australian economy – he called for:

“an agreed story about a long-term pipeline of infrastructure projects…

…surrounded by appropriate governance on project selection [and] risk-sharing between public and private sectors at varying stages of production and ownership…”

This is exactly what my and Labor’s plan for a stronger, more independent, more empowered Infrastructure Australia will deliver.

In the same speech, Glenn Stevens also said:

“Physical infrastructure is, of course, only part of what we need.

The confidence-enhancing narrative needs to extend to skills, education, technology, the ability and freedom to respond to incentives, the ability to adapt and the willingness to take on risk.”

If we accept - as I believe we all do - that technological change is going to be the number one factor in economic performance in the next decade…

Then the core question and defining measure of a government’s economic credentials must be:

What is being done to prepare the economy for new technology?

What is being done to provide people with the skills to master new technology and to encourage the innovation to deliver it?

Nobel prize-winning economist Joseph Stiglitz puts it another way.

His new book talks about the difference between ‘static’ and ‘dynamic’ efficiency in an economy.

Static’ efficiency is the model we’re all familiar with by now: reducing red tape and spending efficiency.

This is important – but it’s not enough.

‘Dynamic’ efficiency comes from a high-skill, fast-adapting workforce.

An economy that absorbs new technology – and puts it to work.

A society that values and supports lifelong learning.

This is behind Labor’s focus on the jobs of the future:

These jobs will need new skills.

Three out of every four of the fastest growing occupations in Australia will require skills in science, technology, engineering and mathematics.

This doesn’t mean everyone will grow up to be a computer programmer, or a biology professor.

It’s about smarter farming and more advanced manufacturing, plumbers and electricians using new technology and new, more efficient ways of doing business.

We’re not at the dawn of the information technology revolution – we’re in the middle of it.

But right now, in our schools, TAFEs and universities, not enough Australians are acquiring these skills.

We have to change this.

And this begins at an early age.

We believe coding - computational thinking - should be a core part of the National Curriculum and taught in every Australian school.

I learned Latin when I was at school.

It still comes in handy, every now and again.

Illegitimi non carborundum, and all that.

But if we want the next generation of Australians to succeed in the digital age, they have to learn the global language, they have to know how to code.

How to instruct machines, and program them.

I know we can do it, because I’ve seen it.

At Springwood Central primary school in Brisbane, their ‘code club’ is full of enthusiastic, engaged students learning the skills of the future – in their own time.

One of the students told me that their parents thought it was a “club for computer games”, until they came to visit one day.

This was an innocent remark – but it nailed the big truth.

Coding is the difference between Australian kids growing up playing with technology – or growing up with the skills to design, and adapt technology.

CEDA’s report, last week, noted as much as 40 per cent of jobs in Australia could be replaced by computers and automation within a decade or two – this should spur us to action.

And I was pleased to see Malcolm Turnbull support our call for coding in a speech to CEDA on Friday.

I hope it marks a shift in government policy – or at least a willingness to take this issue seriously.

I am prepared to sit down with Malcolm Turnbull or anyone else in the Government to see it delivered.

After all, the last time I asked Tony Abbott about teaching coding in primary school, he accused me of a Dickensian plan to send kids off to work at the age of 11.

I’m all for improving the participation rate – but I don’t think we need these mocking debates. Let’s investigate the ideas.

Of course, teaching coding is only the beginning of the story.

We need more Australians to fall in love with science, maths and IT at school – and study these subjects at TAFE and university.

And we need our hardworking STEM teachers to have the support and resources they need to get kids hooked on science.

This is why Labor will:

  • Boost the skills of 25,000 current primary and secondary teachers with new professional development funding.

  • Create 25,000 teaching scholarships for science and technology graduates

  • Write off the HECS debt of 100,000 science technology, engineering and maths students in the next five years.

  • And encourage more women to study, teach and work in these fields

And for Australians eager to turn good ideas into thriving businesses:

  • We will establish a $500m Smart Investment Fund, in line with the model that supported Seek, Pharmaxis Bionomics, Alchemia, Spinifex and BTS.

  • As well as working with the banks to create a Partial Guarantee scheme to provide micro-financing for start-ups.

This is how modern Labor engages with the market – creating and underpinning markets, tilling the soil for success.

We will have more to say, about all of this, in the months ahead.

But we are content on making our science future one of the key propositions at the next election.

A competition about who has the best policies on science and research and its applications is no bad thing for the Australian people.

We are at the end of the biggest mining investment boom in our history so we have to secure the next wave of prosperity and jobs depends upon investing in our best natural resource…The skills and smarts of the Australian people.

This morning, I have told you that we believe in new investment in education, a new model for infrastructure, new support for innovation and a new focus on growth industries - that is how we win the future.

It’s how we smooth the transition from the old economy to the new.

And the sooner we make this shift, the sooner we start building for the long term…the better.

Have a nice morning, thank you.