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Good morning everybody
I'd like to acknowledge the traditional owners of this land and I pay my respects to elders, both past and present.
At the moment, the national debate, like this summit, like this stage, is dominated by the word ‘trust’.
Because it’s a lack of trust in politics, in businesses, in institutions which is hurting our economy and our people.
It’s frustration with political instability, frustration with policy chaos, fed by shameless self-interest.
And right across our country, it’s leading to a widespread, dispiriting, exhausting sense that individuals can't make a difference, that fix is in, the deal is done. That individuals no longer have the say in their community which they once had.
This sense of powerlessness in our broader community is toxic, it’s corrosive. It's corrosive and toxic for all of us: for businesses, employers, community organisations, for political representatives.
And when some leaders dismiss the aspirations of ordinary people as “envy” or resentment or trying to drag others down, it actually makes things worse.
Because I genuinely believe that when people lose faith in the system, in the institutions we grew up with, in the rules which we say people should play by, when people feel like there’s no fair reward for their hard work and sacrifice, then you cannot achieve change.
It puts a handbrake on reform, it puts a handbrake on change and progress.
I read periodically business leaders bewailing 'where is the sense of change, why can't things get done?'
But when people feel that the system is not working in the interests of everyday Australians, you will find it harder - if not impossible - to build consensus and common purpose.
And whilst we are not at the levels we see in the United Kingdom or parts of American politics or European politics, if we don't do better at rebuilding consensus, we open the door to those who preach the politics of blame and division, those who would seek to blame minorities for the problems of majorities.
We see more political airtime given to those who urge a descent into extremism and fear, an extremism that Australia rejected, a long time ago.
It was actually way back at the end of the 19th century in the 1890s when Australian politics, in a remarkable era of fusion, of agreement, we turned our backs on left-wing ideology and right-wing ideology, we rejected zealotry.
In the new world, we were going to have no part of religious extremism.
Our country invented the ‘third way’ long before anyone else coined the phrase, we invented our own way in Australia, the Australian way.
We built a political and economic system on the centre ground.
A commonwealth in spirit, as well as name.
In our earliest days, we produced a unique wages system that encouraged employers and employees to find common ground, to work together.
We are the inheritors of one of the best social safety nets in the world.
And over the generations, we have expanded that model of the Australian way of a strong safety net and we've included more people in our nation's opportunities as a result.
We've expanded the Australian way with Medicare, with universal superannuation. More recently, a National Disability Insurance Scheme
We've expanded the Australian way of bringing people with us by ensuring the ongoing erosion of prejudice and discrimination in our laws and practices
And through all the ebbs and flows of our nation's history, the spirit of that model, the Australian way of a new continent rejecting the ways of the old world and working together, that has served us very well.
It's possible in the digital media age to perhaps not look at the sweep of history and where we have arrived at but the Australian way has served us well.
Labor has fought to protect it – and modernise it.
Really, it's only been three conservative Prime Ministers who have seriously attempted to dismantle this framework of which I speak:
Stanley Melbourne Bruce, back in 1929.
John Howard with WorkChoices.
Tony Abbott with his 2014 Budget.
Now, the first two lost the elections that followed their policies, and indeed, their own seat.
The third, was replaced by his own party, and who knows what will happen in Warringah.
I want to submit to you this morning that the reason why Australia came through the Global Financial Crisis stronger and more cohesive than any other developed nation, the reason we avoided recession, when it struck the rest of the world was not just because of the Labor Government’s gold-standard stimulus package.
It was because of the Australian model – and at its best, what it delivers - the shock absorbers in times of economic stress.
We had a system which meant that we had stronger wages than other countries, meaning at the time of the GFC, fewer people trapped in working poverty. Stronger wages, which meant that fewer people were retiring poor.
And the Australian tradition is, proudly, one of co-operation between employers and employees.
Co-operation on training and skills, on superannuation. On wages, with a system that encourages negotiation, encourages compromise, encourages increases in productivity and consequent pay rises.
And, of course, the best example of co-operation is on health care. One of the most important, yet least-celebrated, qualities of our Medicare is that the cost of health care isn’t carried by the employers in Australia, like it is in the United States for example.
When Australians are looking for work, they don’t have to worry about whether their prospective employer will pay their health insurance.
Our system has delivered. But the truth we have to face now, on the threshold of the 2020s, is that our system needs to be renovated and renewed for the future.
Because in the aftermath of the Global Financial Crisis and through the Abbott-Turnbull-Morrison years, we’ve seen a splintering of these old certainties.
We now have record lows in wages growth, stagnant real wages and cuts to penalty rates.
Inequality is at historic highs.
The enterprise bargaining system is collapsing.
The rise of insecure work, casualisation and labour hire and a million Australians every month recording their desire to work more hours than they are getting
And combined with these changes in the workplace and the stalling wages system and growth we have, under this government, big increases in what Australians pay for health care:
- A 25 per cent increase in out-of-pocket costs to see a GP under this government
- A 40 per cent increase in the out-of-pocket cost of seeing a specialist under this government.
In fact, big increases in the cost of living across the board.
Family budgets are being squeezed in a vice.
On one hand, you have rising living costs tightening family budgets and on the other hand, trapping them in the vice, you have stagnant wages growth.
And after years of everything going up except their wages, our fellow Australians are now digging deeper into their savings or putting themselves deeper in debt, just to pay the fortnightly bills, the expenditures.
Household savings are shrinking. And it doesn’t take long for savings to run down or run out, or credit card debt or interest to overwhelm you.
And we see this pressure, that everything is going up except wages, reflected in diminished confidence in the broader economy.
Retail trade in December fell by 0.4 per cent.
This heavy slump was broad-based and led by discretionary consumption, such as household goods.
In the December quarter just past, volumes barely lifted by 0.1 per cent.
For the year, a 1.6 per cent increase, this is a full percentage point below the ten year-average.
Now, the reason people are spending less on discretionary spending, on little luxuries, on the Sunday breakfast, on the Christmas presents, on the things which give you that edge of quality of life is because, after 5 and a half years of Liberal-National Government:
- The cost of electricity is up 15 per cent
- The cost of long day child care is up 24 per cent
- Private Health Insurance premiums are up 30 per cent
For years, the Reserve Bank Governor – who I’m pleased to see here this morning - has been warning of the economic consequences of stagnant wages.
He calls it “The crisis in low pay”.
He’s spoken of the way that flat wages “diminish our shared sense of prosperity”.
And, last month, the cumulative pressure of shrinking household incomes – in his words: “less free cash”, “more difficulty”, “can’t spend.”
He is not alone.
Saul Eslake, Michael Blythe, Alan Oster have all made the same important point.
It is a very interesting time in Australian economics and Australian politics, that getting wages moving is not anymore a war-cry for class warriors but is regarded as the number one social and economic issue in the nation.
It is a fundamental economic imperative to get wages moving.
The truth is that at the moment, the unique spirit and achievement of the Australian way that I outlined at the beginning of my presentation, is under threat. It cannot be taken for granted.
Fixing it is going to require us to return to what has served our nation best in the long run: co-operation, consensus, common purpose.
Now, this isn’t a matter of winding back the clock to 1983. The way Australians work, the way we buy and sell and trade and communicate has changed – fundamentally, permanently and forever.
Thirty-six years ago, when Hawke and Keating came to government, if you’d just finished a trade or a university qualification, you could pretty much walk into a full-time job. And you’d reasonably expect to stay with that employer, for decades.
Thirty-six years ago, over 80 per cent of Australian workers were employed full time.
Today, it’s down to 69 per cent.
Back in 1983, around 1 million people worked part time. Now, it’s 4 million.
Our opponents, they like to say the word “jobs”. But they never actually talk about the quality of the jobs, the conditions, the job security – and the pay.
And when jobs growth is absorbed by casual work, by part-time work, by contract and labour hire, by insecure work, when the new jobs that are created are ones where you find out your shifts the night before by text, if you're working, this means that more people are in roles where they don’t have the power or the certainty or the position or the luxury to bargain for better pay and better conditions.
This is one of the biggest changes that we’re facing. It's right up there with the end of industries or changes in technology.
We are witness to the end of the old economic orthodoxy, the notion that supply and demand in the labour market is enough to boost wages - that as the labour-market tightens, workers are able to demand better wages.
What we've actually had is more than five years of wage stagnation under the current Government.
It is proof that ‘just leaving it to the market’ leaves Australians stuck in working poverty.
So yes, we need to breathe new life into the Australian way. We need a renewed sense of co-operation, a renewed willingness on all sides to sit down and negotiate.
But to achieve these things, we need a system that makes negotiation worthwhile, for both employers and employees.
Something the status quo under the current conservatives is manifestly failing to deliver and they simply can't because of their ideology.
I want to put to you today that the minimum wage is nowhere near adequate as a living wage - $18.93 an hour, if you were trying to live on it and I don't know if many people in this room are, it is difficult.
Award rates are now so far behind the market rates of pay that they actually belong in a different decade.
And the traditional method of climbing the ladder from the award minimum wage, enterprise bargaining is in a very, very weakened state.
Because the promise is, if we have a minimum wage, then you can do better than that through negotiation and bargaining.
But in 2018 we saw the lowest level of ratification of enterprise agreements in over 20 years.
You can't climb the ladder if the ladder is not there.
Put another way the system is failing those who need it most.
Think about it, the people who work for funded services, the people who have little or no bargaining power, people who work at the end of the supply chain.
Our system is failing Australians in labour hire, people who are trapped as those mythical unicorns of the employment market ‘permanent casuals’.
And it’s failing good employers too.
Because there are many good employers, those who've sat down and negotiated in good faith, who've moved beyond the award, have negotiated agreements with give and take, given pay rises better than their competitors because of improvements in productivity.
But every employer who has ever bargained now is facing an existential challenge, because those employers who never bothered bargaining have now got a competitive advantage because there is no movement in wages.
The good employers are at a competitive disadvantage, they are stranded by a system that now rewards the opposite approach to engaging in negotiations with employees.
We have a wages system that has degraded to reward a win-at-all costs mentality, a system that reinforces insecure work.
A system that treats Australian workers as mere commodities and their wages as costs to cut.
If we are elected as the next Government we will fix the wages problem.
- We will restore Sunday and public holiday penalty rates arbitrarily cut by the Fair Work Commission.
- We will crack-down on sham contracting and the rorting of skills visas.
- We’re going to stop the use of labour hire being used as a tool to drive down wages and job security of permanent labour in a business.
- And we're going to make equality for working women a priority: in pay, in leadership and in superannuation.
And business, in the end, will say well done, because business will benefit just as much as the workers when workers have more income to spend.
For all these reasons, the next election will be a referendum on wages.
The next election will be a referendum on wages.
It will be a contest about who the economy should work for, in whose interests the system should serve.
I believe we need to renovate our system to revive negotiation and co-operation.
Our wages system, our remuneration system, need to be renovated to prepare our workforce for an economy that will change as much in the next twenty years as it did in the previous one hundred years.
To prepare for an economy shaped by artificial intelligence and automation taking over repetitive function.
To prepare for an economy where climate change creates new possibilities.
To prepare for an economy where the population is ageing, where communications are simply revolutionised.
Where mobility is increasing, where there are new vocations to be taught.
Where the economy shifts further to services and sharing.
An economy where we reject discrimination against women and take further steps to equality.
And a wages system that sends the right signals about professions that the community needs to value better – from early years educators to paid carers.
And let me now talk where some of the commentators here might not expect me to: about the employers.
I recognise that the work of renovation starts with employers.
I recognise the future of work and productivity begins with adaptive, innovative employers:
- investing more capital
- taking risks
- being entrepreneurial
- employing new skills
- applying – and expecting – the highest levels of community standards.
In my working life I’ve never begun from the premise that the majority of employees don’t want to pay fair wages, abide by the law or create a safe working environment.
I understand and have witnessed and appreciate that the great majority of enterprises recognise that these things are good for their employees and good for their business.
And experience teaches us all that when society is adjusting to generational economic change, whatever the reason, we are best able to adjust to change in a society when we do so with a greater common understanding of each other’s needs, with a sense we are in this together. And we are.
Because when wages growth is too low, when consumption can only be funded out of personal indebtedness then demand is too low, confidence - I guarantee you - is too low.
When wages are set too low, we send the wrong signal about the values our society places on vital professions: education, caring, the people who look after us when we’re sick, or as we grow older.
When out-of-pocket health costs increase, they put pressure on the living standards of all Australians and they put even more weight back on the wages system to compensate.
When retirement incomes are inadequate, that creates uncertainty and underinvestment for the elderly.
I understand that the best employers seek to meet the best standards:
- for their customers
- their suppliers
- their shareholders
- and their employees
I understand that the greatest threat to good employers are those competitors who seek to extract the lowest wages, inflict the worst of conditions and start the race to the bottom.
My party and I, we are not class warriors, we know that employers are not a class enemy.
The Labor Party are the true custodians of the political centre of this nation – and we put people at the centre of decision-making.
Our policies are built on an understanding that the economy works best when it creates opportunities for middle class and working class people.
Yesterday was the 36th anniversary of Bob Hawke’s election victory.
Bob’s government helped draw me to the Labor cause, it inspired me to get into politics.
I have always been very comfortable and drawn to the notion that Australia works best when all are included, when no-one is left behind.
That we judge the quality of our society not just by the wealthiest but how we treat the least advantaged.
Our country works best we create common wealth by working together.
And the industrial relations system he and Paul Keating and Bill Kelty and others created is the environment in which I spent the first 15 years of my working life.
I’ll always be proud of my time in the union movement, I’ll always be grateful for what working people taught me.
And I’ve never made a secret of my respect for unions, the belief I have in their representative role, their vital part in our democratic and pluralist society.
But my time representing workers from the farms, to the oil rigs to underground mines and factories also taught me the importance of good employers, their irreplaceable contribution to the creation of national wealth. No employer, no job.
And these are lessons I’ve held onto ever since: the value of consensus and negotiation, the spirit of the Accord. I do not believe in winner-take-all.
And if I am elected as the Prime Minister of Australia, this will be very much the approach I’ll take.
My colleagues and I will work with business, big and small.
We’ll work with farmers and start-ups and entrepreneurs.
We will encourage businesses to grow and invest and employ and export.
We will represent Australians looking for work, training for work, Australians in work and Australians retired from work.
And we will work with unions too.
We will urge unions to take their members into the 2030s and 2040s.
We will listen and negotiate and engage with all points of view.
But – as Bob Hawke himself said – we won’t be a handmaiden for any particular organisation or sector.
Our Accord will be with the Australian people.
Our Accord will be with the Australian people.
If my colleagues and I have the privilege of forming the next government of Australia, we will govern for everyone.
We will be a government for everyone, building an economy that works for everyone.
At the moment, though there’s one, unforgiving tax system for people who pay as they earn.
And then there is a whole exotic menu of loopholes and deductions and options for people who use their wealth and resources to opt-out of paying tax.
We will create one clear, fair set of rules.
At the moment, there is one inaccessible, unfair housing market for young people looking for a home.
And then another market awash with subsidies for investors seeking to expand their portfolio.
We’ll create a level playing field for everyone.
At the moment if you are a single parent, or on the disability pension, you get a threatening letter over a handful of dollars.
And yet some employers can withhold superannuation – and pay – for years without consequences.
We’ll apply one fair standard, for everyone.
At the moment, if you’re an Australian seafarer, you can be marched down the gangplank and off the job in the middle of the night.
But if you are a Cabinet Minister, you can jump ship straight away into a cushy private sector job.
We’ll bring fairness back in the workplace and integrity in politics with a national anti-corruption commission.
At the moment, if you live in the regions you're often denied the chance to go to uni, or learn a trade, or find a good job close to home.
We’re going to open the doors of education, for all Australians, no matter what their postcode. An extra 200,000 places to go to university in the next decade alone. Paying the upfront fees of 100,000 TAFE apprentices in the next three years alone.
At the moment, in Australia if you steal from a bank, you go to jail. If a bank steals from you they get a slap on the wrist.
We will hold the banks to account and get fair compensation for the victims.
At the moment, the Government is so consumed by the flat-earth arguments of whether climate change exists, they are simply too divided and incapable to do anything serious about this.
We will take real action because our children shouldn’t be left with a harder task and a worse planet, because of political infighting and paralysis on one side of politics.
Now, none of this is a matter of envy or grievance or resentment.
None of this is about picking one side of the argument against the other side, it is about the fundamental test that these times present us for all of us in politics and business.
We must rebuild trust, we must restore faith.
We must prove to the millions of people who will never set foot in a room like this, that they haven’t been forgotten, that their point of view matters.
We must prove that this country still works best when we work together.
Now is the time to renew and renovate our political discourse.
There is nothing wrong with consensus, there is nothing wrong with co-operation, there is nothing with compromise.
There is nothing wrong with leaving something on the table for the other point of view.
There is nothing wrong with conceding that no one side of politics has a monopoly on good ideas.
There is nothing wrong with conceding that regardless of how you contribute, you still have a point of view worth listening to.
And fundamentally, it is about rebuilding trust. It's about proving that we are in this for all Australians, not just for ourselves.
Thank you and good morning.