MONDAY, 4 MAY 2015
THE UNIVERSITY OF SYDNEY
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It’s an honour to be here at this great Australian university, at the invitation of the McKell Institute.
I’m here today with three objectives:
One, to explain what the transition underway in our economy means for Australian jobs – today and tomorrow – and what this transition demands of our national budget and national leaders.
Two, to outline the tests the next Abbott-Hockey Budget must meet, in our national interest – not just the government’s political interests.
And three, to dedicate Labor to the positive plans and policies Australia needs to succeed in the future.
The Australian Economy in Transition
When William McKell was Governor-General, he delivered the opening address at the “United Nations Economic Commission for Asia and the Far East”.
It was time, he said, for Australians to start thinking of the “Far East” as our “Near North”.
Back then, this was headline-making rhetoric.
Today, it’s an unremarkable statement of fact.
Seven decades of work has gone into this transformation.
Opening ourselves to mass migration, offering opportunity to people from every faith, culture and tradition.
Dismantling the tariff wall that crippled competition and kept prices high.
Demanding a shift in the national mindset…urging Australians to see ourselves not as a British outpost perched fearfully on the edge of Asia, but as engaged partners in the economic and strategic security of our region.
None of this was without risk or universally popular.
We all know someone dislocated by change, we can all feel anxious about the future - and there are always people prepared to pander to this fear: be that on immigration or economic reform.
But, long ago, we realised that digging ideological trenches and building economic walls was not the answer.
Australians chose optimism over isolationism, renewal over decay, action over complacency, hope over fear.
We looked over the economic horizon and backed ourselves to compete and succeed in the new world.
And there is always another horizon.
Right now, with the biggest mining investment boom in our history drawing to a close, we face the choices and challenges of a new era.
An era defined by clean energy industries, digital and technological innovation, the equal treatment of women, a booming services economy and two generations of retirees alive at the same time.
It’s time to start building for the Australia of 2025.
Time to plan for the next decade: creating jobs today and preparing Australians for the jobs of tomorrow.
Twenty-seven million people will live in the Australia of 2025, five million of us will be over 65 and five million of us will be between 15 and 24.
An extra four and a half million people will live in our capital cities.
A woman aged 60 in 2025 will expect to live for at least another 30 years. A man, at least another 27 years.
We’ll have a superannuation pool of $4 trillion.
And of the two million new jobs created between now and then, two-thirds will need a degree.
These are non-negotiables, they are global shifts, they will be the challenges and opportunities for whoever governs in the decade ahead.
Yet our opponents only ever talk about the future as a dystopian mix of The Hunger Games and Mad Max.
Their language is always threats, not opportunities.
I take a different view, I think we’ve had enough negativity.
I’m not daunted by the challenges ahead, I’m energised, I’m ambitious for what Australia can achieve.
The end of the mining investment boom must not mean lowering our expectations or settling for a lesser future.
We weathered the storm of the Global Financial Crisis, and now, in the second decade of the Asian Century we stand as the world’s 12th biggest economy in the world’s fastest growing region.
Australia is uniquely positioned to seize the opportunities of this moment.
We hold a hard-won AAA credit rating from the three major ratings agencies, giving confidence and certainty to business and investors – and we must preserve it.
Our banks are some of the largest and safest in the world, our legal system and institutions are stable and respected.
Our superannuation savings pool is the largest in Asia and the largest per capita in the world.
Our education system supports a high quality, productive workforce, our cities are great, diverse destinations to live.
And we adapt faster and better than most – Australia went from lagging the smartphone revolution to number two in the world in smartphone penetration in just one year.
But a good barrier draw doesn’t mean the race is won.
We have to put our hard-earned advantages to work.
As Treasurer, Paul Keating used to talk about ‘pulling the levers’ of economic reform.
Today, we seek government in a different world, a digital world where we engage with the complexity of an economic touch-screen.
This means being selective and strategic in where we invest and what we prioritise, getting behind our best natural resource: the creativity and genius of our people.
Building an Australia where the bright line of self-improvement runs right through pre-literacy in child care, technology in schools, science at university and re-training for mature-age workers or parents returning to work.
This is my vision for the next generation of Australian prosperity.
We are a fair wage nation, in a low wage region.
We can’t win a race to the bottom with our neighbours on pay and conditions - they will always have more people willing to do low-skill work for less.
This is why I’m focused on creating the high-wage, high-skill jobs of the future, nurturing and attracting the best minds.
Competing and succeeding in our region – on our terms.
Nothing matters more to me than creating good jobs, jobs with a future and jobs of the future.
Some of you may have read The Second Machine Age, Chris Bowen actually gave it to me for Christmas – there’s one passage in there that really made me sit up and think about my kids and their future working lives:
“There’s never been a better time to be a worker with special skills or the right education, because these people can use technology to create and capture value.
There’s never been a worse time to be a worker with ‘ordinary skills’ and abilities to offer, because computers, robots and other digital technologies are acquiring these skills and abilities at an extraordinary rate”.
The choice is this stark, it is this simple: get smarter or get poorer.
My vision for Australia is an invention nation, an innovation nation, investing in science to drive new breakthroughs and discoveries in every field and industry.
Just look at how fast solar technology is evolving.
In the last five years alone, the cost of a solar cell has halved.
The cost of battery storage has been halving every 18 months.
On Friday – Tesla released its plans for a rechargeable lithium-ion battery that you can use at home.
Very soon, someone, somewhere, will find a way to make solar power even cheaper and more efficient.
I want that someone to be an Australian.
I want Australia to own that breakthrough and Australians to share its benefits.
I want us to be building, designing and refining solar technology here.
But wanting Australia to do well, believing in our people’s potential isn’t enough.
Governments have to plan for the future – not just hope something will turn up.
This begins with the Federal Budget.
The Tests for the Budget
Incredibly, a week before this year’s budget, we are still talking about last year’s budget.
Last year, the Liberals called the economy wrong – and Australians have paid the price.
Unemployment is up, confidence is down and wages are struggling to keep up with the cost of living.
The Liberals called the budget wrong too.
All the harm and hardship came without a sustainable trajectory for improving the budget balance.
Now they want to use last year’s failed savings to fund this year’s new spending - this is Escher staircase economics.
In the long months of partial backflips and gradual back-downs, ‘dull’ has become the adjective of choice.
All this shows is the Liberals have learned the wrong lessons from last year’s debacle.
The Abbott-Hockey Budget didn’t fail because it was too exciting, too visionary or too bold.
It wasn’t because Australians are tired of change – or fearful of it.
It failed because it was fundamentally unfair.
The moral of this story is not: ‘give up on reform and tell people what they want to hear’.
The real lesson is: do reform right, make change fair.
When we live and work and trade in a global economy changing faster than any time in history, Australia can’t afford a ‘dull’ budget.
We can’t afford a ‘dull’ budget or an ‘ordinary’ effort, any more than we can afford a re-run of last year’s disaster.
We can’t afford an outbreak of shallow populism any more than we can afford a repeat of last year’s extreme ideology.
We can’t afford a budget that puts Tony Abbott’s job ahead of Australian jobs.
We need a budget planning for the next ten years, not a plan for Tony Abbott to survive to the end of the year.
My intention today is to set out the tests this next budget must pass.
Labor wants Australia to succeed, we want a strong budget for a growing, job-creating, wealth-creating economy.
This means asking three clear questions on Budget night, on behalf of all Australians:
- Is this the right plan for the future?
- Is it honest and responsible?
- Is it fair?
Planning for the future means a plan for jobs – today and tomorrow.
Helping mature-age workers navigate the transition in our economy, addressing record rates of youth unemployment and investing in schools and universities to drive the skills and knowledge of the next wave of industries.
Delivering essential, productive and competitive infrastructure for our cities and the regions.
Universal healthcare, helping all Australians stay healthy at home and productive at work.
The world’s best retirement income system: strong superannuation and a fair pension.
An innovation economy where dynamic Australian entrepreneurs can turn their good ideas into successful start-ups, transforming markets as well as the way we live and work.
A transition to a low pollution economy – making our industries more competitive, harnessing our natural resources and protecting our national estate.
This where the future is heading – and this Budget is the government’s last chance to show it understands that.
Being honest and responsible means an end to Hockey-nomics.
No more mugging confidence in the high street, no more hot air about ‘Budget emergencies’ and ‘disasters’ behind every corner.
No more blaming Labor for anything and everything.
And no more accounting tricks and funny money, counting revenue from ‘dead, buried and cremated’ measures like the GP Tax.
Instead, it’s time for the government to take responsibility: for restoring confidence and for a sustainable budget trajectory.
We have already offered them a firm foundation.
Labor’s responsible policy for tightening tax breaks on the superannuation accounts of the very wealthy, and our plan to make multinationals pay their fair share will deliver more than $20 billion to the bottom line, without hurting families or smashing confidence.
Unlike the Liberals, Labor is prepared to deal with the structural challenges facing the budget and invest in a growing, wealth-creating, job-creating economy.
Being fair means offering an equal opportunity – and expecting a fair contribution.
It starts with recognising that inequality in Australia today is as high as it’s been in three-quarters of a century.
Egalitarianism is under threat.
Being fair means cracking down on tax loopholes for multinationals – not slugging families with $6000 cuts to their budget.
Fairness is tightening superannuation concessions for the very wealthy, not telling pensioners to tighten their belts.
Fairness means asking those with the broadest shoulders to do the most, not leaving the heavy lifting to those Australians least able to carry the load.
I’m going to do a dangerous thing now – I’m going to engage with a long-running press gallery argument.
Dangerous, but necessary.
Some members of the commentariat say the failure of last year’s Budget proves that ‘weak’ politicians and ‘selfish’ voters have broken our democracy.
They say Australians lack the wit and wisdom to choose the best future for their nation - and leaders lack the courage to offer it to them.
I don’t buy it.
We’re better than the cynics and critics would have us believe.
I know Australians haven’t lost the ability to make hard choices.
From the very first day of the National Disability Insurance Scheme, Labor acknowledged the complexity, the expense and the difficulty of crafting a solution.
Instead of battering Australians with slogans, we engaged them in an honest conversation.
We gave people a sense of their place on the journey of change, and our destination.
And we won support for our cause through the quality of our ideas, and their moral foundation - backed up by the intellectual authority of the Productivity Commission and their advisory panel.
The Abbott Opposition even voted for an increase in the Medicare levy to fund it.
When Australians recoiled from the unfairness at the heart of the last budget they weren’t being selfish, or short-sighted.
Australians rejected the 2014 Budget because they saw it for exactly what it was.
Every day in my job, I am a fortunate witness to the resilience and resolve of the Australian people.
There’s a hunger out there for big ideas, a desire for a government willing to do the big things.
But it has to be done the right way – honest and upfront.
Whether it’s the GP Tax, $100,000 degrees or cuts to the pension, we all know the Abbott pattern by now.
Start by making a solemn promise, then break it…dismiss the public backlash and rail against your opponents…then, as reality bites, begin the slow humiliating retreat into consultation.
This is not my style and it’s not the Labor way.
Last year, we proved ourselves a strong opposition, united in resistance.
We stood by our principles and we spoke up for millions of Australians the government let down and left behind.
This year, we are putting forward our positive plans for the future:
A constructive proposal to build, maintain and sustain the next generation of submarines here in Australia. An investment in our national security and high-skill Australian jobs – clearly supported by today’s Defence Department revelations
Offering certainty for jobs and investors in our renewable energy industry, where Australia should be seizing our natural and competitive advantages.
A new focus on tackling family violence: a national crisis summit within our first 100 days, ending the ‘postcode lottery’ of unequal services and put the focus on perpetrator accountability, because every woman has the right to be safe in her home and in our community.
The next step in university reform, building the bridge between enrolment and completion, a system converting uni places into degrees, into good jobs.
Greater urgency on constitutional recognition for the first Australians and closing the justice gap – bringing together Indigenous leaders to build a consensus for progress.
Making multinationals pay their fair share of tax in Australia and boosting the fairness and sustainability of retirement incomes, delivering long-term structural improvements to the budget trajectory, without Liberal ram-raids on the family budget.
Laying out detail from Opposition carries risks, I understand that.
Straight-talking guarantees you will say some things people don’t want to hear.
There is a risk in amplifying differences, there is a risk in enhancing contrasts.
But to my mind, there is a far greater risk: a second Abbott Government.
More time wasted, more opportunities missed.
More mediocrity born of close-minded, short-termism.
And Australians haven’t come this far, we haven’t worked this hard to settle for ‘ordinary’, to accept a lesser future.
Leadership is all about the future: planning for it, building for it, preparing our people to make the most of it. Under my leadership, Labor will seek an honest mandate.
We will offer the Australian people a vision for the future and a plan to make it work.
A vision for a nation strong in the region and the world, safe at home and fair in everything we do.
And a detailed plan for smart people, working in a modern economy, sharing a fair future.
A smart, modern and fair Australia.
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