SPEECH

 

SYDNEY INSTITUTE

‘THE AUSTRALIAN MODEL FOR INCLUSIVE GROWTH’

 

THURSDAY

13 NOVEMBER 2014
SYDNEY

 

***CHECK AGAINST DELIVERY***

 

It’s a great pleasure to be here tonight - and I’m very grateful to Gerard for the kind invitation.

Yesterday we were all witness to something truly extraordinary.

An historic announcement from the President of the United    States and the President of China.

The world’s two largest economies.

The world’s two biggest polluters.

The two superpowers whose actions and decisions will define this century and the next.

The leaders of the United States and China, standing side-by-side.

Declaring, wholly and boldly, that global climate change is one of the ‘greatest threats facing humanity’.

Recognising, without caveat or qualification that ‘human activity is already changing the world’s climate system’.

Acknowledging the effects of global climate change: increased temperatures, rising sea levels, more droughts, more floods, more bushfires and more severe storms.

And dispelling, once and for all, the false dichotomy that says we have to choose between growing the economy and protecting the environment.

One section of yesterday’s historic declaration is worth quoting in full.

…smart action on climate change now can drive innovation, strengthen economic growth and bring broad benefits – from sustainable development to increased energy security, improved public health and a better quality of life.

Tackling climate change will also strengthen national and international security.

Yesterday, China and the United States – more than one third of the world’s economy and 40 per cent of its emissions renewed their commitment ‘to work constructively together for the common good’.

And they matched their words with actions, they put forward an ambitious set of new national targets for cutting pollution.

As a result of yesterday’s landmark agreement, the United States is committing to cut pollution faster and deeper.

For its part, China will be cutting CO₂ pollution sooner rather than later, and is setting a new target for non-fossil fuel power of approximately 20 per cent of electricity generation by 2030.

To give you some sense of the enormity of that commitment, China moving to 20 per cent non-fossil fuel, is the equivalent of closing every coal-fired power plant in China.

Make no mistake, the depth and breadth of ambition is entirely deliberate.

The China-United States intent is twofold:

First, to restore much-needed momentum to global climate action negotiations.

To resuscitate the urgency, intent and co-operative spirit that took such a battering at Copenhagen.

And second, to prepare the ground for a substantial and ambitious international agreement at the United Nations Climate Conference in Paris next year.

China and the United States have signaled their preference: they believe nations should adopt an emissions reduction agreement with international legal force.

Not a voluntary code of conduct or a set of unconnected aspirations - a protocol that binds every nation that is party to it.

This marks a momentous change of course.

Until now, in the climate change debate, multilateral solutions have been dismissed as ‘irrelevant’ or ‘meaningless’ because they lacked the endorsement of the United States and/or China.

Those days are behind us.

The argument that Australia should wait upon the world before addressing climate change has run its course too.

The world is not waiting for Australia – because the economic, environmental and security challenges of climate change cannot and will not wait.

And the trillion-dollar clean energy revolution will not wait for us either.

Ladies and Gentlemen.

This landmark moment in world affairs offers Australia an historic chance.

Just imagine, in the lead up to next year’s Paris Conference we could be talking about the ‘Brisbane Declaration’ as the turning point in global climate negotiations.

The Brisbane G20 could become famous for the fusing of the economic, environmental and security imperatives for climate action.

As G20 President, we have an opportunity to marshal co-operation on climate science - driving discovery and innovation for mitigating and managing the consequences of climate change.

We have an opportunity to forge a global consensus on renewable energy.

Negotiating with the world for a new focus on clean energy sources that create jobs and bolster global energy security.

Australia should do everything in our power to utilise our international comparative advantage in renewable technology.

The sheer magnitude of China’s new commitment to renewable energy means that if Australian firms only capture a small percentage of China’s growth, it will massively grow our industry – an industry that already employs tens of thousands of Australians in high-skill, high-wage jobs.

And we should use the G20 to enhance market mechanisms for reducing emissions.

Labor is committed to an Emissions Trading Scheme because we are determined to fight climate change in the most cost-effective and efficient way possible.

We believe in harnessing the power of the market to reduce emissions and grow our economy, driving investment in clean energy and creating new high-skill jobs.

And we support an Emissions Trading Scheme because it represents a global economic opportunity for Australia.

In 2014, the world’s emissions trading schemes have a collective value of more than $30 billion.

China’s seven pilot schemes are the second largest carbon market in the world.

South Korea will introduce its ETS on 1 January 2015.

Some commentators complain that the United States does not have a national ETS, but New York and eight other North-Eastern states are part of the Regional Greenhouse Gas Initiative.

Oregon and Washington are exploring carbon pricing options, and California – itself the world’s 8^th largest economy – already has an ETS in place.

Science, innovation, renewable energy, emissions trading are essential to 21^st Century economic growth, and all of them have been deliberately excluded from the Abbott Government’s G20 agenda.

How can this be?

How can it be that just as the world’s biggest players change the game, Tony Abbott is doubling-down on denial, and dealing Australia out.

The progress of China and the United States only highlights our failure.

Their focus on the future exposes the Government’s short-term approach.

Today the Prime Minister said:

“I’m focusing not on what might happen in 16 years’ time, I’m focusing on what we’re doing now”

I fear it will not be long before this stubborn isolationism takes a toll on our international competitiveness.

To put it in the Government’s language, Australia cannot expect the rest of the world to do the heavy lifting on greenhouse gas pollution, while ignoring our inaction.

Sooner, rather than later, Australia’s refusal to act on climate change will affect our trade negotiations.

I would not be surprised if future international trade agreements included a carbon-price equivalent as a mandatory condition.

This could become all-too-relevant if any impending Free Trade Agreement with China becomes subject to a two-stage process.

Yesterday certainly proved that 24 hours is a long time in geopolitics.

On any analysis, the China- United States agreement poses two fundamental questions for the Australian Government’s foreign policy.

One - given the weight placed upon next year’s Paris Conference by the President of the United States and the President of China - does the Prime Minister of Australia still plan on playing truant?

Or will he now change his mind and attend one of the definitive international meetings of the decade?

Two – given that the world’s two largest economies chose an economic forum announce a climate change agreement and made the effort to explicitly identify climate change as an economic issue, how on earth can Tony Abbott argue that climate change is not central to the G20 agenda?

Surely Tony Abbott, the man who infamously described himself as a ‘weathervane’ on climate change, can tell which way the international breeze is blowing.

Throughout this year, I and Labor have consistently advocated that climate change should be at the core of the G20 agenda.

Its inclusion shows that Australia and the G20 forum are capable of rising to the challenges of the 21^st Century:

Addressing global climate change - and tackling inequality by building inclusive growth.

Using international co-operation and a multilateral framework to:

• revitalise free trade


• drive innovation


• tackle youth unemployment


• and crack down on multinational tax avoidance

That’s what I want from the G20.

International collective action on the problems that confront every nation.

Making the G20 Work

And as we prepare for the final weeks of our G20 Presidency, Australia must ask itself:

Have we provided the leadership and vision that the G20 needs?

Have we left this international forum in better condition than we found it?

Have we done enough to put the global economy on a pathway to strong, sustainable and inclusive growth?

Make no mistake – these are the questions the world will be asking of us.

In the wake of the Global Financial Crisis, the G20 proved its value as an international crisis-response body.

President Obama described the 2009 London summit as the ‘turning point’ in the world’s efforts to avoid ‘international catastrophe’.

Kevin Rudd and Wayne Swan overcame significant international resistance to elevate the role and responsibility of the G20, and they should be proud of that historic meeting - an unprecedented collaboration between the most significant developed and developing economies.

As much as it was then lauded for the rapidity of its response – the G20 has since been criticised for its inability to plan for the long term.

Increasingly, the G20 has been portrayed as a forum more adept at tactics than strategy.

Brisbane gives Australia the chance to correct this perception.

To lay out a plan for strong, sustainable and balanced global growth.

Making the G20 work is our international responsibility and it is a national economic necessity.

More than ever, the strength of our economy depends upon the health of the world economy.

Australians are engaged, we are involved in the world economy in a way unimaginable 20 or 30 years ago.

Our national pulse beats in time with the heart of the world economy – and it’s in our interest to keep it healthy and strong.

There is another fundamental reason why Australia must enhance the relevance and worth of the G20.

Because if we fail to do so, any alternative or replacement forum will not include Australia.

If the G20 is deemed incapable of delivering substantial results, the most likely outcome is a reversion to the G8, with the G20 convening on an ‘as-needed’ basis - if at all.

Even an expanded or ‘outreach’ group, a G8 plus China, India, Brazil, Mexico and South Africa – would see Australia excluded.

I believe that Australia’s interests are always better served when we actively involve ourselves – when we take a seat at the table.

VISION and VALUES

That’s why foreign policy success belongs to leaders who broaden Australia’s role in the world.

John Curtin put Australia’s strategic interests first – and ‘looked to America’ after the fall of Singapore.

Ben Chifley drove mass-post war migration and supported an independent India and Indonesia.

Doc Evatt served as the first President of the United Nations – enhancing the role of smaller nations and helping draft The Universal Declaration of Human Rights.

Menzies and McEwen reached out to Japan, signing the historic 1957 trade agreement.

Gough Whitlam preceded the US in recognising China.

Malcolm Fraser took on elements of his own party to condemn Apartheid, a very brave decision.

Bob Hawke and Paul Keating built APEC and sought security in Asia, not from Asia.

John Howard drove international action in East Timor.

Kevin Rudd and Julia Gillard elevated our dialogues with China and India and secured Australia’s seat on the UN Security Council where we serve as President this month.

They also expanded the East Asia Summit and enhanced the G20 forum, leading to Australia’s presidency.

This is a bipartisan tradition I aspire to.

It is the foreign policy framework I believe in.

I am an internationalist, but I am not an adventurist.

I acknowledge the importance of rational risk assessment - but I firmly believe in our global responsibility.

I believe Australia has an obligation to do more than assert our view and defend our interests.

We should be good international citizens, a nation and a people engaged with the challenges facing the world – doing our part to deliver solutions.

This is why Australia has fought wars, joined peacekeeping missions, ratified human rights conventions, facilitated economic co-operation, supported free trade, protected our wilderness areas and oceans and set emissions targets.

And our global responsibility doesn’t just overlap with our national interest – it serves it.

Former Foreign Minister, Gareth Evans has argued that being a good international citizen – and being recognised as one – is a ‘mainstream national interest’, every bit as valuable and as important as geopolitical security and economic prosperity.

Enhancing our reputation as a nation that acts on its principles and meets its obligations delivers long-term benefit for the Australian people: in trade, aid and security.

Put simply, by following our values we advance our interests.

By fulfilling our ‘responsibility to protect’ the vulnerable in Iraq, we are preventing the spread of extremist hatred in our region and in our communities.

Taking action against Ebola means helping desperate people in West Africa and tackling the contagion before it reaches our shores.

Foreign aid alleviates poverty and raises living standards and it also creates new economic partnerships.

50 years ago the Republic of Korea was one of our major foreign aid recipients – today it is one of our biggest trading partners.

And doing our fair share in fight against global climate change, underpins new investment and new jobs in clean energy

As our world becomes more interconnected, as more and more barriers and borders are broken down, Australia cannot afford to narrow our approach, we can’t afford to pull up the drawbridge and abandon internationalism.

It is not good enough to say yes to Iraq, but no to action on Ebola.

It is not good enough to say yes to free trade agreements, but no to global action on climate change.

It is not good enough to attack the unemployed, yet ignore tax havens.

All these problems demand an international, co-operative approach.

Only an international approach can address climate change.

Only an international approach can deliver action on multi-national profit-shifting

Only an international approach can deal with refugees.

Only an international approach can eradicate poverty and inequality.

Only an international approach can secure peace.

In the 1980s, some on the far left never appreciated that peace can never be unilateral – it must be international, it must be multilateral.

That same lesson now holds true for the isolationism of the far-right anti-science climate sceptics.

I reject both extremes.

I believe in an Australia that serves its national interest by playing its part in international action.

An modern, outward-looking Australia, a country not afraid of the world or our place in it.

A nation of confidence and conscience.

An Australia confidently asserting our interests and conscientiously fulfilling our responsibilities – knowing that one reinforces the other.

An Australia that rejects the false choice of Jakarta or Geneva, and the self-defeating, self-perception of a small country far away, waiting on the sidelines for the verdict of the world.

We are not an outpost, a branch office, we are no-one’s ‘deputy sheriff’ – and we should never see ourselves in those constricting terms.

We should not shrink from big ideas as ‘above our station’.

We should not deal ourselves out of global opportunities – on climate change, or forego enhanced multilateral engagement in the Asian Infrastructure Investment Bank.

I believe we should be ambitious about our role in the world.

I want Australia to reach for higher ground.

We should be prepared to use our values and our vision to address the challenges of the 21st Century.

Building Inclusive Growth

In the same way that yesterday marked a seismic shift in global climate change policy – the fall-out from the Global Financial Crisis has reignited debate about inequality.

A growing legion of leaders from politics, private enterprise, academia and the public sector are recasting the relationship between growth and fairness.

The International Monetary Fund, the World Bank, the Bank of England, OECD and the Vatican - are sending the same message: fairness and inclusion drive growth.

Equality is not an option – it is essential.

Tackling inequality creates prosperity.

We don’t build a strong economy just to pay for opportunity – we create opportunity to build a strong economy.

This principle is at the heart of our fundamental Australian institutions of fairness:

Decent wages: delivering strong living standards and empowered consumers.

Affordable and accessible higher education: enhancing social mobility - preparing the skilled and productive workforce of the future.

Medicare: universal healthcare boosting productivity and participation.

Universal superannuation: creating a pool of savings for the nation - and providing security and dignity for individuals in retirement.

The National Disability Insurance Scheme: empowering hundreds of thousands of Australians with disability and their carers.

Increasing participation of women in the workforce: delivering an extraordinary boost to our GDP.

And an Emissions Trading Scheme: opening new global markets for Australian firms and creating jobs and investment in clean energy.

These aren’t feel-good, bleeding heart gestures.

They are economic reforms.

They are acts of wealth creation, not distribution.

They are the foundation of inclusive economic growth.

They underpin the modern Australian economic model.

They’re not relics of the past, they’re the building blocks of the future – at home and abroad.

And if we fail to apply the lessons of our success – then we will soon deal with the consequences of failure.

Because neglecting inclusive growth weakens demand and consumption.

It frustrates the dreams and aspirations of the global middle class.

It creates perverse incentives for enterprises to move from value creation to value extraction – undermining investment in innovation or productivity.

Yet, just as the world’s economies are recognising the centrality of fairness and inclusion, Tony Abbott offers up some of his Budget’s most unfair and regressive measures as the core of Australia’s G20 ‘growth plan’.

Surely this is not the extent of his vision?

Surely Australia can offer the world’s leading economies something better than a GP tax, slashing support for jobseekers and a plan for $100,000 degrees?

This narrow view, this “little Australia” approach sells us short to the global community.

It sets us against the grain of the new economic consensus.

It neglects the strategic value of the G20, the opportunity to use global cooperation to build prosperity for the next generation, for the world we will live in, in 2020, 2030 and 2050.

Free Trade

Meaningful progress on global free trade would deliver trillions of dollars of income gains - substantial, sustainable, inclusive growth.[1]

And the best way to achieve trade liberalisation – is a coordinated, co-operative global approach where every country agrees to reduce barriers.

Labor supports bilateral agreements but a true commitment to free trade goes beyond market access deals done on a give-and-take basis – and latterly on self-inflicted arbitrary media deadlines.

Regrettably, right now, global momentum for free trade negotiations has stalled.

The G20 provides Australia with a unique opportunity to help break the current impasse over the World Trade Organisation’s Trade Facilitation Agreement.

WTO member countries agreed to a series of trade facilitation reforms at the Bali Ministerial conference last December.

The OECD estimates that the Bali agreement would reduce the cost of moving goods across borders by 10 per cent, creating millions of jobs around the world – and the benefits are estimated to be greatest for the world’s poorest countries.

Failure to make progress on Bali Agreement would be a lost opportunity in Brisbane, and a further hurdle to genuine global free trade progress.

We have to work together – business, unions, government, community.

We need to inject new co-operative ambition into multilateralism.

Which is why we have to look again at the Asian Infrastructure Investment Bank what Paul Keating has called China’s attempt to ‘multilateralise itself’.

Multinational Tax

In that same co-operative spirit, we must strive for real action on multinational tax avoidance.

How can we ask our people to work hard, to grow the economy, to improve their productivity – when they know there are multi-billion companies that don’t pay tax?

How can we ask Australian businesses to pay their fair share – to be lifters - when multinational enterprises can shop around for lower taxing jurisdictions – and be rewarded for leaning?

Australia cannot entirely fix this problem alone.

But, building off the work of the OECD, we can make use the G20 to begin meaningful action on multinational tax avoidance.

We can bring the world’s biggest economies together to close the loopholes that are inhibiting growth and undermining fairness around the world.

Youth Unemployment/Higher Education

Perhaps the most fundamental test of inclusive growth is job creation.

A few months ago, I visited the town of Burnie in North West Tasmania.

Burnie is the youth unemployment capital of Australia.

Over 20 per cent of young people in Burnie cannot find work – many of them have never had a job.

Last week it was revealed that Australia’s youth unemployment rate has jumped to 14 per cent - the highest level since 2001.

In the United States, youth unemployment is double the national rate.

In the UK it is nearly three times as high as the national rate.

The International Labour Organisation has warned of a ‘scarred generation’ – a wave of young people lacking the skills, confidence and sense of self-respect that work brings.

And economies and societies deprived of their contribution, their energy, and their ideas.

Overcoming this growing problem requires a new commitment to job creation as well as the right support for skills, training and higher education.

If we fail to co-operate, if we fail to lead, our economies, our communities will pay the price.

Conclusion

The G20 offers Tony Abbott a choice – and a test.

Will he continue the tradition of an engaged, international Australia – or offer the world a reduced, narrow vision?

Will our presidency enhance our reputation as a good international citizen, driving co-operation – or diminish it?

Will the Brisbane G20 be remembered for what it delivers?

Or will it be marked down for what it ignored – inclusive growth, participation and jobs, global free trade and climate change.

Will Tony Abbott show the leadership that this moment demands?

Or will he be bested by history?

Will he be marked down as the Billy McMahon of the 21^st Century?

A foolish hostage of outdated ideology, unable to tell which way the tide of international affairs is flowing.

The G20 is a unique chance for Australia, not to lecture but to lead.

An historic opportunity to showcase the Australian model of inclusive growth to the world

building prosperity by extending opportunity.

It’s a once-in-a-generation chance for Australia to show leadership on the defining economic and environmental issue of our generation.

That’s the higher ground I and Labor want us to reach for.

An Australia facing the world with confidence, and acting with conscience.

ENDS

MEDIA CONTACT: LEADER’S OFFICE MEDIA UNIT 02 6277 4053