Good morning everyone,
First of all, I would like to acknowledge the traditional owners of the land upon which we meet and pay my respects to elders, both past and present.
The best and busiest period of economic reform in Australia’s history began with a summit drawing on the spirt of inclusion, cooperation and consensus, from a broad cross-section of our community.
Back in 1983, it met in uncertain times.
As we do again now.
Gathering at a time of rapid global change, intense competition and also opportunity.
China's rebalancing has generated a global nervousness in our stocks, currency and commodities.
So these are indeed the times of reform.
I believe in reform, but reform with purpose.
My purpose is for our economy to create more goods, services and jobs.
In other words, lifting output, improving equity, and delivering better-quality economic growth.
But now is the time for straight talk.
I believe our economic performance is wallowing in mediocrity.
That's the reality Australians see.
We cannot simply continue as usual without long-term consequences.
And even the current consequences are acute.
The deficit has doubled. Wages growth is at record lows. Economic growth is nearly a full percentage point below trend.
And annual growth has been below trend for 11 consecutive quarters, and all but three of the previous 27 quarters.
Australia's transition from the mining boom has been patchy.
Our terms of trade have fallen 32 per cent from their peak in 2011.
Unemployment has a six in front of it.
Youth unemployment is too high, especially in our regions.
800,000 of our fellow Australians are unemployed, the largest number in 20 years.
There's another 1 million Australians who are underemployed, regularly recording they wish they had more hours and job security.
And there are 800,000 Australians on the Disability Support Pension, without the opportunity to participate in most cases.
Inequality is at a 75-year high.
In the year 2000, The Australian put together a week-long series which concluded that inequality was serious challenge for Australia.
It was true then, and it's doubly true now.
None of this is about being overly partisan, or needlessly talking down the economy.
It is about making the frankest possible assessment of where we are, so that we can openly discuss what we need to do, to get to where we need to be in 2030 and beyond.
Our fellow Australians understand the transforming trends and opportunities facing our nation.
You know them:
- The rise of Asia
- Our ageing population, two generations of retirees alive at the same time for the first time now
- The digital tidal wave making landfall now.
- The equal treatment of women in our society
- The surge in our services sector
- Sustainability, climate change and clean energy.
I think we can largely agree on the current economic numbers - and I believe we would agree that these economic forces are transforming us.
And we can agree that these times are for reform.
The challenge before us now is cooperating to provide that missing ingredient - strong confidence.
The confidence for business to invest in the drivers of growth, here and in our region.
Ladies and gentlemen,
If reform was just increasing taxes, if reform was as simple as increasing the GST, we should all just go home.
When has increasing a regressive tax ever been the solution to a nation's problems?
Surely the standard conservative view - save more, produce more - combined with the standard progressive view - distribute fairly - does have some enduring truth.
Increasing tax is not tax reform.
There are plenty of low-performing economies with high GSTs, where the only net economic benefit here would be a small dividend on consumption.
The problem with our current tax system is that it gives discretionary benefits to some, and a high marginal tax rate to all.
Reform is not on one hand allowing some access to generous concessions and on the other hand offering tax cuts as well.
It is not fair that everyone pays tax, but only a few can claim the full concessions.
The problem with our superannuation system is we have a system which does not address inequality to women and the low paid.
It is unreasonable for a few to have uncapped tax concessions while it delivers far less advantage to millions more.
So reform must always be about increasing Australia's productive capacity – it is productivity.
Productivity is the key to generating new jobs and renovating existing jobs.
Building new engines for growth and for investment.
And improving the Commonwealth Budget over the cycle.
Over many years, I have worked practically and cooperatively with businesses to generate productivity gains.
Negotiating annualised salaries to encourage greater efficiency.
Improving workplace health and safety to reduce compensation costs and boost output.
Adopting more flexible hours and leave arrangements to turbo-charge productivity on major projects.
My real-world practical experience over two decades teaches me that for our economy to adjust, productivity improvement depends upon hard work and hard decisions.
It is a hard path to tread.
Productivity, growth and adaptation is not about writing down the economy.
It's a matter of reform for purpose: increasing output, fairness and equality.
And trying to achieve one of these, without the other two is not enough.
I want to briefly outline now some of the levers a new Labor Government, if elected, would use to increase productivity.
Infrastructure: unlocking the productive capacity of our cities and regions, post mining boom.
Securing a pipeline of long-term projects, empowering Infrastructure Australia to make generational evidence-based decisions, quarantined from political bickering and the Greens and the Nats.
An effective pricing mechanism is needed: if we pay too much for infrastructure, the government fails the people. But we can't fund all infrastructure for free.
Then there's higher education.
A properly funded university system, centred on equity and quality, with support for basic research.
Reform is not about increasing the price of a degree, rather, improving the productivity of universities.
And there's industrial relations.
If we live in a class warfare world waged either by ideological governments, or unions, we fail.
Our focus should be upon bringing interests together.
This could start collaboratively in reforming industrial relations in construction and major projects.
Then there's equality for women - this alone would make Australia a richer and fairer destination.
Removing discrimination in the workplace, equal opportunity, pay and leadership.
Supporting paid parental leave is a foundation for negotiation between working mothers and their employers.
Then there's technology, a skilled workforce prepared for the jobs of the future, a first-rate NBN connecting businesses to the region.
Entrepreneurs supported by a smart investment fund, greater business collaboration with universities, commitment to increased research delivered in part by local Defence procurement.
Education starts with improving teacher quality and support.
Adopting world's best practice, including better pay for our teachers.
Computational thinking and coding available to all children from primary school age.
Incentives to study STEM courses at university.
There’s healthcare: an efficient Medicare system enhances participation and drives productivity.
So does greater focus on primary care and prevention and the empowerment of individuals and their families through the National Disability Insurance Scheme.
Small business, being supported with microfinance initiatives and new taxation structures to allow benefits of incorporation without costly processes and red tape.
And then there is climate change.
It is a big lever for a Commonwealth to pursue opportunity for the nation.
It's a strategic decision worth billions of dollars and it will develop new industries in Australia's future.
Cutting pollution and driving investment in renewable energy lifts productivity in energy generation, distribution and consumption.
A recent Climate Works report shows Australia could nearly double our energy productivity by 2030 by investing in the modernisation of our electricity system.
Al Gore has described renewable energy as the ‘biggest business opportunity in the history of business’.
Opposition to this economic reform often borders on the hysterical.
As leaders in our business and think-tank world, you can play a critical role in elevating this conversation.
40 per cent of the world's economy, and more than 1 billion people, have already embraced the opportunity of an emissions trading scheme.
Australia needs to settle on and lock-in an appropriate design for ours.
If we do not get serious about tackling climate change, if we don't get serious about investing in renewables then we cannot say we are serious about economic reform.
I'm a practical person.
I believe that Australia works best when we are governed from the centre, paid for in our democracy by moderation and compromise.
I believe in social welfare but it should be paid for by increased economic output.
I believe in well-paid workers, paid for through increased productivity.
Our economy requires measures which deliver fairness but the ultimate economic capacity to pay for this will always depend upon the productive capacity of this nation.
Otherwise, we will exist in a zero sum game.
Reform must always be for purpose.
Lifting output, improving equity, and greater quality.
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