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Warwick Smith reflects on productivity panel -

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ELEANOR HALL: One of the most energetic and diverse streams at the 2020 Summit was the productivity
panel, where there were some lively exchanges.

The group included business leaders, unionists, education experts and one of the ideas that made it
through to the final stage was put up by a Queensland retiree who won a newspaper contest to attend
the summit.

The productivity panel's co-chair was former Howard government minister, Warwick Smith, who has
been in investment banking for the last decade and is the chairman of the advisory board of the
Australian Capital Equity group and also chairman of ANZ's ETrade.

Warwick Smith joins us now in The World Today studio.

Thanks, Warwick, for being there.


ELEANOR HALL: Now, Warwick Smith, there's been some criticism of the summit, as we're been hearing.
What's your feeling though today about the value of the weekend?

WARWICK SMITH: I actually think that it was extremely useful. There was a broad diversity of views
that were put, represented by the great diversity and the number of people and some of the
vocations and locations, it was geographically spread, that were there.

I think that, I just heard that Brendan Nelson was there and Warren Truss was there and other
representatives. I saw the leader of the Liberal Party in the ACT was there. So, I think it's not
quite right to say it wasn't broadly diverse. Everyone had the opportunity to register to go and
others were encouraged too go along and we had broad views from business as well.

A lot of these issues were hotly debated, it was very open. Every session was open to everybody and
media as well, so it was transparent. The outcomes, a combination of new ideas, re-badged old
ideas, but whatever it is, there's distillation process that took place and a lot of these matters
would be around for a long time.

It would be surprising if any event we had as many people discussing issues facing Australia that
you wouldn't see some existing issues come forward. Bill of rights has been around for a long time.

ELEANOR HALL: It didn't worry you that the ideas weren't all new?

WARWICK SMITH: No. I think we're debating the... we're debating them in the context of where we are
today in Australia and our future and what's impacting on us, so we have global difficulties in
financial markets which is impacting on Australia as in many countries. How are we going to respond
to these things?

I wouldn't be too worried about having broad views placed into what I describe as a national ideas
bank, which is basically going to allow the government of the day to be benchmarked against all of

Now, the Government, I think actually, rather than trying to have a political exercise is taking a
fairly big risk because it's now going to be more highly scrutinised and that's the role of the
Opposition and think thanks, such as represented by the one we just heard.

You got a hold government's accountable, and the very best thing for any government is that there
be a strong opposition, and the strong opposition needs to be informed and that's why I was pleased
to see Brendan Nelson there and Warren Truss there. I mean, to hear the views of many of their own
supporters were there and present.

So let's move beyond the ideology and look at what's necessary for our nation. And that's why I see
such a positive reception that's being dealt out across the nation today for the idea and the
implantation of it. It's had its difficulties. A thousand people in one location is not been easy,
but it was a very fulsome debate.

ELEANOR HALL: Well, Glyn Davis said before the summit that some of the best ideas come from
disagreement. There were some fiery exchanges in your group. What were the key areas of

WARWICK SMITH: Our group is a, you just say "productivity" and the eyes glow. But actually
productivity is about human capital, trying to actually get greater support for human capital and
therefore great focus on education.

So some of the old debates about education, central funding, but then trying to work out how we
improve worker participation. So you have the ACTU and other thinkers there as well. So, lots of
different views about collective bargaining and how that needs to be reflected. And remember, we're
looking out to 2020.

We don't want to have today's debates today. We want to be thinking about where we're going to be
in 12 years time and beyond. So, there was lots of exchanges. Innovation, if you went back 12
years, the level of innovation that applied to our everyday lives 12 years ago, it's very different
to what it is today. Well where's it going to be in another 12 years?

How do we capture public policy to embrace those sorts of changes that we know are coming, and yet
equip Australians, young Australians, older Australians to be able to be participants to actually
drive our productivity. But the important thing is to get growth in productivity. It underpins the
wellbeing, sustainable growth and prosperity of our nation and it is the same for every country in
the world, regardless of which ideology it happens to be in the cheer in the day.

ELEANOR HALL: One of the words that came up a lot in your report at the end of the session was
"creativity". It seems there was quite a lot of crossover of themes between the different groups,
but were you able to cross-fertilise ideas with the other participants, were you able to sort of
wonder into the creativity group?

WARWICK SMITH: People could wonder around if they wished and some did. We actually even came to a
view that the idea of creativity, imagination, knowledge and innovation is part and parcel of the
same thing.

I mean, if you can teach, and this is why there's a focus on young people so much during the course
of the discussions, because if we put resources to and encourage young people to be imaginative, to
be innovative and to be creative, they are actual drivers for the long-term wellbeing of the

So, you don't want to grow up just seeing things narrowly. This is a global world and so the
crossover between creativity and innovation and all the great ideas that have come out of
Australia, and there's been some absolute rippers, particularly in medical research in more recent
times and in innovation. They are the things that will actually make a nation great, but make a
nation possessed of prosperity, in which citizens can have a good life.

So, we saw that that was possible, you saw that in the economy group, led by David Morgan, you saw
that in the creativity group with Garrett and Blanchett, I mean these were the sorts of things that
were happening, and you know it's quite refreshing.

Whether it will manifest itself in dramatic changes, probably not. I think change is always
incremental, but this has given it a boost, this has given it a focus that it might not otherwise
have had, and it certainly wouldn't have had it if we just left it totally to government.

ELEANOR HALL: The idea of a HECS community service trade-off got a big cheer when you announced it.
There was also this talk of superannuation-style education accounts. Was there one idea in
particular that really inspired you?

WARWICK SMITH: The one I liked and was brought to me by someone who I know well was the community
corps. The idea of saying, okay, we're putting a lot of work into educating our young people, they
get degrees, over 90 per cent of people have got a HECS debt.

Why not, if they feel inclined to say, well we'll give you some HECS debt if you do something for
the nation. And we can send, if they wish, some people, well-educated, out to help in regional and
remote communities, in urban communities and they get a reduction.

Why go away and do a gap year overseas, when there's so much that can be done in our own nation,
and yet we're effectively going to give you the support to do it because we're going to forgive
your debt.

So, we get an immediate return for that intellectual capital that should be enough (phonetic) to
generate at your cost, but the nation needs you and you can do it.

Now, I actually think those sentiments were well received. Have been well received in other
jurisdictions when they've been applied, but we have, because of the way our system is put
together, the architecture of our system enables us to do something like this. So, I thought it was
a good scheme and it was clearly welcomed when I announced it.

ELEANOR HALL: The Prime Minister picked it up in his speech too, but the ideas are out there, the
Prime Minister said he's going to respond to these by the end of the year.

How hopeful are you that the ones that your group put up will make it to implementation and when do
you think they'll be implemented? I mean, some of these are quite complex issues.

WARWICK SMITH: I think what happens in these process is, a government is effectively benchmarked
itself, now there's key performance indicators externally imposed. So the Government will be
watched and I don't doubt that the Opposition will be watching too see the implementation process.

The first thing's you do the ones that are the implemental-ble(phonetic) and are practical and you
can see a good return. The longer-term policy issues take longer-term. Time to put them in place,
but 2020 scholarships, merit-based scholarships in school shortage areas, school shortage is a huge
problem for business and for our nation and it impacts very negatively in productivity.

The parents and child centres are trying to pull people together around those centres, trying to
bring together health and development and learning and pre-school care issues. I mean, all very
important issues, and then of course the community corps.

Golden guru, basically we're an ageing community, yet we've got all these people that have got huge
skills and experience and imagine if we could in some way try and capture some of that in a more
formalised system and take a golden guru into a classroom, into business courses in schools,
providing support to SMEs (Small and Medium Enterprises).

These are good ideas and some of them aren't new, but there's a willingness now to try them because
we need to actually capture and sustain the prosperity of our nation through improved productivity.

ELEANOR HALL: Tell us a little bit about the gentleman that brought forward that "golden guru"

WARWICK SMITH: He's a Queenslander and he is a lecturer and in one of the colleges out there in
communications and he responded to a competition, as I understand it, the Courier-Mail newspaper
and a lot of outlets around the county and schools were running seminars and competitions - and he
won it.

And so I've never met him before, I've read his paper and it came to the group and we divided into
smaller groups and he put it up and everybody thought, well, this is about human capital. This is
about capturing human capital. He was very articulate, very excited about it, he's an older
gentleman, and he could be the first golden guru and he's from Queensland.

ELEANOR HALL: Now, we talked earlier about Brendan Nelson. You said that he should have attended
the summit, but this is a pretty good piece of PR for the Government all round, really, isn't it?

How difficult a position does it put Dr Nelson in? Putting on your old hat as a former federal
Liberal minister, how should he respond this so that it's good PR for the Coalition as well?

WARWICK SMITH: I mean, his task is like the rest of us that were there, to see what the
implementation is, to see what the progress is. This was all done openly and transparently and an
opposition's job is to provide opposition and the best government comes from a strong opposition
and Brendan, being there, seeing what's happening, he will see ideas and opportunities that he will
be able to actually articulate. He is very articulate man, he's very capable man, he works
terribly, terribly hard.

So, he's not the one to be dismissed or underestimated in any sense, but it's good for our country
when oppositions are out there having a go. You don't want to lock yourself off from events like
this in my view, but now let's keep the Government accountable, that's his role.

ELEANOR HALL: Warwick Smith, thanks very much for joining us.

That's Warwick Smith who was the chair of the productivity stream of the 2020 Summit.