Address To Business ObserversALP National ConferenceSydney31 July 2009Introduction
Thank you for this opportunity to talk to you today and provide some observations about the issues being discussed at the Conference and the progress of the Government’s reform agenda.
This is an important conference for the Labor Party – one that has endorsed the directions we have taken in office so far and set out the long term direction for us as we seek a second term.
As you will have noticed, it has not been the sort of stand-‘em-up and knock-‘em-down affair of days gone by – where the opposing factions came out of opposing corners and gave each big right and left hooks, occasionally landing one on the poor old Independents and Centre-Left standing as referees in the middle.
It may be illegal to thump the umpires on the football and rugby field, but it never was here!
I’ve been to a few of those previous conferences and while they were a lot of fun admittedly, they did have the portent of doom about them. If you’re condemned to permanent opposition, you may as well be having some fun. And for this reason, I’d just love to be a fly on the wall at the Liberals’ next get together.
There has, however, still been plenty of passionate debate here in Sydney – as there should be. But it has been mature and reflective.
I think the reason for the comparative harmony is quite easy to figure out. Over recent years a consensus of sorts has developed across the Labor Party about what it means to be a progressive in politics at the start of the 21st Century.
It means being pro-business – although it also means believing in an active role for government.
It believes in liberating the full potential of individuals – but also believes that such a thing as society does exist.
And it recognises the threat to prosperity caused by climate change and the need to share responsibility for the solution.
Labor’s progressive consensus
Of course, our last twelve months been dominated by global financial crisis and global recession and determining the right response to them.
This conference has heard plenty about those issues and so have you has business observers.
As I said yesterday I believe Australia’s response is setting the bar for progressive governments, showing the importance of proactive public policy and the role that government can responsibly play to intervene against market failure and provide long term stability and investment.
This has been an extraordinary period and we are not out of it yet. But it is still clear that recovery and sustainable growth will require us to pursue the model of responsible, progressive reform that the Rudd Government has always put forward.
Wealth creation, social equality, community building, long term investment and protecting the environment – today these things go hand in hand.
The things we believe in are now the things Australia and the world needs.
- more human capital
- less social exclusion
- greater tolerance of difference
- more workplace cooperation
- shared investment in innovation and productivity growth and
- advances in environmental sustainability.
If I could quote John Howard –the times suit us.
Our approach is definitely centrist – but progressive in a way that a coalition made up of conservatives like Tony Abbott and antediluvians like the National Party could never be.
As the Prime Minister wrote in his essay last week, in recent years our opponents got the balance totally wrong.
Their obsessive devotion to the cause of neo-liberalism helped produce a world economy dangerously out of equilibrium – an economic and financial model that disconnected reward and effort from real people, products and communities.
And their increasingly out-of-date social conservatism put them at odds with the hopes of a new generation.
To believe hired cranks over an overwhelming worldwide scientific consensus isn’t just embarrassing, it’s the height of political irresponsibility.
In fact, if I could comment on my opponents’ bleak future for just a moment, by ignoring the reality of climate change, the Liberals and Nationals are putting their rural base at risk – because it’s rural Australians who will likely feel climate change’s effects the hardest. They already are.
Australia’s Coalition has a lot of re-thinking to do before it can be regarded as a credible alternative government.
Long term progress, not boom and bust
Of course it is true that economic dynamism requires a degree of creative tension and flux. It’s not the job of governments to remove all risk from the economy or people’s lives. But it is the role of government to ensure that periods of prosperity lead to something better and to act against the waves of economic contraction when they occur.
The great tragedy is that the last decade of unmatched economic growth was partly wasted.
The prosperity generated by our export industries should have massively improved our education system, transformed our welfare system into something much more pro-active and put us ahead of the world in fields like renewable energy and efficient transportation.
But instead of progress, we got boom and bust.
So the challenge, as the Prime Minister, Treasurer and numerous Ministers have argued this week, is to ensure that the next decade brings lasting progress.
In a carbon-constrained world where international competition will continue to intensify, we need a stronger platform for growth than simply riding the resources boom. We must find a path of economic growth that has a broader base and can be sustained for longer without distortion or systemic risk. That base will come from innovation, from material resource efficiency, from international collaboration and from human capital.
As the world economy recovers, knowledge, skills, workforce participation and sustainable production are going to be needed more than ever.
There’s no point coming out of this global recession and returning to a situation where skill shortages and export bottlenecks are holding us back.
We must be fully prepared for that increased need.
That is why our responses to the global recession have focused on interventions that not only stimulate demand for jobs, but continue to stimulate demand for skills.
And it is why, the reform agenda for education, skills and human capital that we have been setting out since day one of this Government is an integral part of both our response to the global recession and our strategy for the years ahead.
Investing in human capital for the future
All in all, the Government will increase its total investment in human capital formation by around 50 per cent in its first five years.
Our agenda extends from the early years through to adulthood.
This means building a sound, long term platform for high quality early childhood education.
Lifting the quality of teaching and the rewards given to excellent teachers.
Investing in the digital infrastructure that will support 21st century skills and knowledge.
Developing partnerships with business and local communities to support educational achievement.
Funding more than 700 000 training places for adults.
Uncapping the funding of university places to support the expansion of higher education.
As I have argued this week, these changes have already recast Australia’s educational landscape.
The current challenge is to achieve the right linkage between the immediate responses to the economic situation and these longer term reforms.In the recession of the early 1990s in Australia the number of Australian Apprentices reduced sharply, by as much as 20 000. Even at the height of the boom, in the mid-years of this decade, we struggled to achieve the numbers of apprentices hired before 1990. In other words, the temporary downturn in skilling contributed directly to the long term skill shortages that we know constrained the Australian economy in recent years.We must avoid this boom and bust cycle in human capital investment. Just as we are acting through stimulus to counter the cycle of contraction in general demand, we must counter the downturn in skills investment that will otherwise hurt individual life-chances and national resilience.You have heard from Wayne Swan and from Kevin Rudd about the investment priorities laid out in The Nation Building and Jobs Plan and in the 2009 Federal Budget.
Schools, housing, energy efficiency, community infrastructure, roads and support to small businesses. Road, rail and ports infrastructure. Hospitals and medical facilities. Clean energy. The National Broadband Network.
Developing the skills to support this investment is one of the reasons we are supporting more than 700 000 Productivity training places. It is why we have added structural adjustment places specifically to support workers who are retrenched in industries forced to adapt to the change in conditions.
In addition, we are marrying our long term reforms and our response to the global recession with the challenge of shifting to a low carbon economy will create new green jobs.
But none of us can know exactly what those jobs will be or how the different sectors of our economy will change.
When the first personal computers appeared in the 1970s, they were first treated as oddities, then it was assumed that they would be used mainly as calculating machines and typewriters. Then we imagined that there would be raft of new IT jobs and an army of Bill Gates look-alikes. Nobody foresaw how they would combine with the internet and telephone technology to change everyone’s job and so many aspects of the way we now live and work.
There will be jobs in a green economy that we cannot even imagine. Just as we would not have predicted in the early days of the ICT revolution that people would become web designers, encryption experts or full time bloggers. But we also need to be prepared for the changes to how we all live and how we all do our jobs.
We have taken the first steps towards preparing for this new world of work.In the budget we announced Skills for the Carbon Challenge, a $25.7 million initiative to drive the development and take-up of the skills and knowledge that will help make this huge transition a successful one for Australia. New qualifications and training standards. New methods and techniques. Awards for educators and for educational institutions. Yesterday we announced another step towards making sure that skills and knowledge for a low carbon economy are embedded right across our education and training systems and available to support transition right across the economy.
10 000 places in a new Green Jobs Corps for unemployed young Australians to get job-ready skills and contribute to local community projects.
4 000 training places to boost the skills of jobseekers as they take up employment opportunities through our national home energy efficiency program.
6 000 jobs created through local projects created by the $650m Jobs Fund.
30 000 apprenticeships and traineeships, across many trades and occupations, that will include the skills and knowledge required for success in a low-pollution economy.
Building partnerships for the future
What I see emerging from these efforts are the seeds of a longer term and more comprehensive approach to battling disadvantage and to building a sustainable, productive economy.
The same is true of our workplace reforms.
They represent a huge change – an enormous reform task whose implementation is just beginning.
A lot has been written about this subject and continues to be – from both business and union perspectives. The real fact is that the Government’s replacement for Work Choices is not only fairer for employees, it’s simpler for employers, involves fewer public servants, and will – as the OECD has remarked – boost productivity by encouraging enterprise bargaining.
I’ve developed a mental rule for assessing complaints about the new workplace laws: the more ideological the complaints sound, the more economically marginal their impact is bound to be.
At the last ALP National conference, when we presented the Forward with Fairness policy, a wave of reaction predicted economic meltdown, the end of the mining and service industries and a disastrous collapse in business confidence.
Since then we have seen a genuine economic crisis, caused overseas and the Rudd Government has shown that it can respond effectively to it. Business confidence is back up, neatly coinciding with the beginning of the new Fair Work regime.
Ahead of this conference, a similar range of apocalyptic predictions were made about supposed ‘great militant union fightback’ against our construction industry reforms, our occupational health and safety reforms and so on.
But, just like these dramatic conflicts with business failed to emerge when the Fair Work Act started, the predicted dramatic conflict with the labour movement has failed to materialise.
Instead, in the design and the negotiation of all our reforms, what you can see is a sober, step by step approach to working through the issues and building new systems that really work.
I find it encouraging to see signs among business and the unions of a shift in their approach to engagement with these issues.
I never expect that policy will be unopposed or that debate will not be fierce – I relish that contest. But it is true that, for all of us, there are smarter and more responsible ways to engage in the policy process which improve the quality of debate and the quality of the outcomes. I thank those who have engaged, in that spirit, in the huge amount of work that has occurred since we were elected.
Beyond the way governments make policy, the quality of collaboration is a major part of our productivity challenge across the economy.
As we work to encourage innovation, productivity growth, high performance and family-friendly work practices, we will find ourselves focusing more on how to build partnerships that really work.
These changes are slower to take root than rapid structural reform. Perhaps more dependent on the goodwill and motivation of those who take part. But in the long run it is equally influential on our economic prospects.
A progressive age
So as you can see ladies and gentlemen, Australia’s economy is in a period of significant transformation.
Big changes are underway.
Many led by Government.
But while ambitious, our response has still been measured and well within our national economic capacity.
If our opponents persist with one big mistake, it is that belief in power and potential of the market also entails a belief in conservative social values, social inequality and environmental skepticism.
But we will not grow wealthier by neglecting public education, or ignoring socially excluded communities, or turning Australians against refugees, or calling Al Gore a hypocrite.
If we help every individual to attain the full measure of their talents, and if we guide our businesses along the path to sustainability, the opportunities, both global and local, of the world we are living will do the rest.
This reform path is the new centre ground of Australian politics. It is increasingly influential around the world. At this conference the Rudd Government has set out its long term aspirations for the country. I look forward to working with the Australian community to realise them.