Release type: Speech


Reforming Education And Skills: Challenges Of The Twenty First Century

The City Of London Corporation, London, United Kingdom - 30 June 2008

Thank you for that introduction.

It’s a marvellous pleasure to be here at the Painter Stainers’ Hall and I thank the Corporation of the City of London for generously hosting me.

Last November the Australian people did something that defied the electoral norms of our country – they changed government during a time of economic prosperity.

There were many reasons for that historic decision. I have described it as a "benign dismissal". The public did not hate John Howard, but parted company with him because they were convinced it was time for a change for the better.

In my portfolio area of workplace relations, Australians were particularly clear that they wanted a change for the better. The Howard Government had gone too far with its Work Choices reforms, which undermined the basic rights of individuals and offended the basic Australian value of a fair go. Australians believed that only a government which had lost touch with their day to day realities could enact such laws.

Positions like unwavering support for the Iraqi invasion, denial of the scientific evidence for climate change and refusal to acknowledge the depth of injustice experienced by indigenous Australians, became evidence that the Liberals had not only lost touch with the every day realities of life, they had also lost touch with how to build for the future.

Politically, the Liberals had no clear strategy for succession in leadership and had also lost touch with how to professionally manage themselves.

Labor’s victory was a conscious decision for generational change and for a government that understood the lives of Australians today but wanted to meet the challenges of the future including global warming, the digital economy and the rise of India and China.


Australia’s place in the emerging world of the 21st century is unique.

It is a modern, western nation perched on the edge of Asia. It supplies many of the resource needs, both in minerals and agriculture, of the wider world.

It enjoys the benefits of our special and shared history with the United Kingdom.

It enjoys close and strong ties to the US and Europe, alongside its essential and growing links in Asia.

Alongside its natural resources, its financial and educational services are a major part of Australia’s trade with the rest of the world.

A country built on immigration, it also has a diverse and highly skilled diaspora – around a million Australians – living and working in major cities like this one around the globe.

And our stake in the global minerals and commodities trade is as great as our national interest in tackling climate change.

In other words, we face challenges – and opportunities - which could place us at the leading edge of global change over the next generation.

These long term challenges manifest in many forms.

Inflation has risen above 4 per cent.

Food and fuel prices have risen in our country as they have risen around the world.

The international credit crunch has led to tightening in credit markets and pressure on some of our financial service providers.

Interest rates have risen twelve times in a row.

And this has created financial pain for Australian working families. This was reflected in a byelection swing against the Rudd Government on the weekend in a traditional conservative electorate.


In facing these challenges and delivering our reform agenda, the Rudd Government is unapologetically busy.

Many of the specific actions we have taken are emblems of the wider change we are bringing.

For example, the Prime Minister’s first act in Government was to ratify the Kyoto Treaty.

He visited our troops in Iraq before Christmas and confirmed that combat troops would be withdrawn, as they have been over the last month.

Our first Budget delivered on our election promises and addressed the need for downward pressure on inflation and interest rates.

It sparked fierce debate by, among other things, equalising the level of duty paid on pre-mixed drinks with other like alcoholic drinks, a move which has focused attention on preventive health.

In my own portfolio, the first piece of legislation passed by the Rudd Government put an end to the making of Australian Workplace Agreements, the start of burying the hated Work Choices.

Perhaps the most powerful symbol of change was the Prime Minister’s apology to the Stolen Generations of Indigenous Australians who were removed from their parents and their families.

The apology has had a tangible effect on the perception and discussion of indigenous issues in Australia and created fresh hope for the future. At the same time, the Prime Minister’s determination to close the gap in health, education and employment between indigenous and non-indigenous Australians has had a galvanising effect on our national efforts for change.

And our focus on the future was underlined by the 2020 Summit – a unique gathering of 1000 Australians drawn from all walks of life to discuss new ideas and priorities for 2020.

The summit produced many ideas and proposals, ranging from carbon-neutral building standards to supporting community service by students. The Government will respond to all of them.

As a way to focus national debate on the future and demonstrate the importance of public inclusion in setting the nation’s agenda, it had a powerful effect.

Both symbolism and action matter, and our early decisions have sent a clear message about our long term intent.


To deliver in the long run requires a distinctive approach to governing.

Our proposition is that Australia can sustain its prosperity by becoming fairer, so that everybody has a fair go, and stronger, by deliberately building the resilience to adapt to new pressures.

It is best understood as ‘the new politics of the progressive centre’, adapted to Australian needs and conditions.

Australian Labor is rightly credited with helping to invent this form of modernising, social democratic politics.

In the 1980s and ‘90s, former Labor Prime Ministers Bob Hawke and Paul Keating led the way for the worldwide progressive movement. They demonstrated that achieving prosperity with fairness requires:

  • Strong economic and fiscal responsibility,
  • Recognition of the wealth-generating power of free markets, and
  • Active investment in opportunity for all through increased educational participation, better public services and active communities.

Their approach meant floating the Australian dollar, reducing tariffs, decentralising workplace relations and embracing a vigorous competition policy.

It also included the creation of a mass higher education system, underpinned by the Higher Education Contribution Scheme (HECS), and a long term savings base through compulsory superannuation.

Taken together, it produced an outward-looking economy better suited to international competition and more adaptable to change.

This example influenced heavily the Blair Government and the Clinton Administration.

Over the decade, this progressive reform agenda has naturally evolved, and modernisers in this country have led the way.

Very few countries would seek to avoid open engagement with the global market. But how best to combine it with building the protections and capabilities needed for equity and sustainability remains an open question.

Today we know that even more emphasis is needed on developing our human capital, strengthening our communities and tackling climate change.

In essence, the politics of the progressive centre now seeks to answer two key questions:

  • How do we ensure that all of our citizens are able to take part in the dynamic, wealth-creating opportunity that the market and society combined represent?
  • And how does this happen in a way that contributes to the battle against climate change?

The need to utilise the talents of every citizen in production and the long-term challenges to growth posed by climate change, mean that social equity, environmental sustainability and prosperity are part of the same overall process.

Our task is to ensure that over time, there is a virtuous cycle between prosperity, fairness and resilience.

That is, our investment in people and communities over time leads to a growth in opportunity, and to a greater capacity to adapt, for example by innovating to reduce carbon emissions and to create the jobs of the future.

The economic windfall provided by the global resources boom provides a once-in-a-century opportunity for public and private sector investment to make our economy and society future-ready.

Can I take one specific example. Over the last decade in Australia, the focus of the schooling debate has been the competitive relationship between government and non-government schools.

The previous government funded and pursued the growth of private education in the name of parental choice, but the international studies show that Australia’s schooling outcomes stood still, at best. In 21st century education, standing still means going backwards.

The Rudd Government supports the right of parents to choose a school for their children. We believe that diverse provision is needed to meet the needs of a diverse and growing population.

But we reject the proposition that there is a conflict between diversity and universal excellence. Our aim in schooling is to invest in the facilities, the equipment and the specialist expertise that will enable every Australian child to achieve their full potential.

It does not serve the interests of Australian students to have schooling policies delivered through funding structures and reporting systems which operate in parallel but allow no meaningful comparison or exchange between them.

We have an historic opportunity to overcome this public-private divide.


To translate that intent into national reform, we have begun an unprecedented process of cooperative reform with the Australian States and Territories, through the Council of Australian Governments (COAG). Our federal system can be a competitive strength, if its decentralisation and diversity are able to feed substantive reform.

Seven Working Groups, each chaired by a Federal Minister are working to:

  • reform our education and training systems;
  • modernise our physical infrastructure;
  • address climate change and water supply;
  • combat indigenous disadvantage;
  • strengthen our health system;
  • improve housing and welfare; and
  • unlock economic growth through regulatory reform.

A huge amount of work is going on.

There is a shared theme across all the groups. For the nation to progress, we must find the best ways to renew the shared resources – or commons - that allow people to lead successful individual lives.

Whether it is our rivers and carbon emissions, our transport connections, our public health system, or our investment in early childhood development, we know that in a generation’s time Australia’s progress will have been influenced by the choices we make now.

Getting them right needs good public management and readiness to invest.

But it also requires something else, which will take us beyond previous manifestations of the progressive, reforming centre.

In the UK, much of the policy reform and domestic political debate in recent years has focused on how to diversify service provision in order to make it more responsive and cost-effective.

In Australia, we already have very diverse systems such as an internationally high percentage of non-government schools, a mixed health system which combines private insurance and universal public access, widespread use of public-private partnerships to fund infrastructure and highly developed superannuation funds.

The challenge is notwhetherto combine public and private resources in these essential sectors, buthow bestto do it.

This means recognising the importance of strong, autonomous local institutions – like great firms, community focused hospitals, excellent schools – in creating lasting value for the public.

The next generation of reform challenges are all about how the power of the market interacts with the surrounding framework of institutions and the actions of individuals themselves.

That means we are focusing on the fundamentals ofmarket design.

Whether it is an Emissions Trading Scheme – a market in carbon – or a national water market capable of incentivising water savings – or the growth of renewable energy sources – or the role of the labour market in lifting social mobility and workforce participation – or the adaptation of our tertiary education sector to a new global landscape – the same issues emerge. How can we develop markets which interact productively with strong public institutions and empower users to participate successfully in them?

This is quite different from the approach taken by the former Liberal Government.

Their version of being pro-market was to subsidise the growth of private providers and encourage private consumption, without much regard for the overall performance of that sector in service, innovation or cost-effectiveness.

For example, the Howard Government’s growth of funding for private schools left the issue of quality largely unaddressed.

They also subsidised private health insurance and penalised those who stayed in the public system, but did not build a long term framework to ensure that health outcomes and value for money actually improved. There are many other examples.

Rejecting this approach does not mean that we seek to control and direct market activity from within government.

Instead, we need to ensure that, in sector after sector, the design of key institutions, the shared investment in knowledge and skills and the approach taken to regulation increase the distinctive strengths, innovative capacity and adaptability of that field.


Immediately after my swearing in as a Minister last December, I made a speech that detailed the policy rationale for my very broad suite of portfolios and said I would be happy to be described as ‘the Minister for Productivity’.

And since that first day, we have set a cracking pace in implementing our agenda of delivering anEducation Revolutionand bringing balance and fairness to Australian workplaces.

We have commenced delivery of our new early learning agenda, including universal access to pre-school and new assistance to meet the costs of childcare.

We have signed partnership agreements to deliver Trade Training Centres and commenced the rollout of our Digital Education Revolution in schools.

We have determined to address educational disadvantage and teacher quality through COAG National Partnerships.

We have invested $11 billion in an Education Investment Fund and disbursed $500m to meet the infrastructure needs of universities.

We have commenced the Bradley Review of Higher Education, to examine the long term issues and opportunities facing our universities.

We have commenced the allocation of our promised 630,000 adult skills places.

We have established Skills Australia, our new vocational educational and training leadership body

We have put forward a new model of Employment Services focused on achieving sustained participation in work, including for the most disadvantaged jobseekers.

As noted earlier, we have passed legislation to end the creation of new Australian Workplace Agreements.

We have published and consulted on 10 draft National Employment Standards and started the process of award modernisation.

And we have agreed a framework for collaborative reform of Education and Training systems through the Council of Australian Governments.

Through this COAG process, we have commenced discussions relating to teacher quality.

But of course the term "teacher quality" does not fully reflect the significance of teachers and their work in the school setting.

Our work on this area, through COAG, will also extend to teacher training and reward.

If we are truly serious about having the best schools, we need to have the best people become the best teachers.

As last year’s study by management consultants McKinsey, "How the world’s best-performing school systems come out on top" says, "The quality of an education system cannot exceed the quality of its teachers".

I understand that here a huge effort has been put into improving the desirability of teaching to graduates, and therefore raising the quality of entrants so that people who might consider careers in finance, law and academia will also contemplate serving as teachers.

I am inspired by the positive effect of campaigns like ‘Those who can, teach’ and ‘Use your head: teach’, making teaching one of the most popular graduate career choices in a short space of time.

I am exploring the possibility of similar campaigns in Australia, combined with measures to help ensure that the best teachers are able to teach in the most challenging and rewarding locations.

Without wishing to proselytise, as a nation committed to education there should be no higher calling than being a teacher.


Almost three months ago, the Australian Prime Minister Kevin Rudd made a speech not far from this Hall entitledHard Heads, Soft Hearts.

He used that term to succinctly describe the global movement of progressive politics at its best.

Seven months in, our Government is pragmatic and open to learning from others, and principled in its pursuit of long term reform for Australia’s future.

I hope that others would judge us as a Government of hard heads and soft hearts.

We have much to learn from countries like the UK which have followed similar paths, and from working in partnership with the private and voluntary sectors.

And we are now in a position to blaze a trail, as a nation adapting to the opportunities of a new century, championing innovation from the progressive centre.

In time, I hope we will be a nation of new ideas and path-finding practices where other nations can learn from us.

A nation of thinkers and doers.

Australia remains the prosperous and optimistic place people love to visit and make their home.

Our Government is busy making a country where every Australian can face the future with confidence, and where we can responsibly take our place among the leading nations of the twenty first century.

Thank you.