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Address to the AEIOU Foundation's business leaders lunch, Brisbane.



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NO.032

ADDRESS TO THE AEIOU FOUNDATION'S BUSINESS LEADERS LUNCH

BRISBANE

4 DECEMBER 2009

Thanks for that introduction and for that very warm welcome. It's always a pleasure to speak at home in Queensland, and I'm honoured to get the chance to lend my support to the AEIOU Foundation.

I personally know from my electorate work that the Foundation has touched many, many lives here in Brisbane and throughout Queensland. And I want to especially acknowledge Don Button here today; Don and I go back a long way and I'm proud to consider him a good friend.

Year in Review

Today, I'm asked to review the year for Queensland businesses just gone, and cast ahead to what 2010 offers. Those of you involved in business and community life know this past year certainly has been a rollercoaster ride.

Just cast your mind back to this time last year:

z The Reserve Bank had just cut rates by 100 basis points, after cutting by 75 basis

points the month before - the quickest and sharpest cuts in our history;

z Our first cash stimulus payments were about to be rolled out;

z And we were receiving a set of September national accounts which began to show the

global recession buffeting our economy.

In the year since then, families and businesses in Queensland and throughout the country stood on the precipice of a recession, and shared a sense of relief when we averted it.

As we start our end of year celebrations and prepare for the Christmas break, it is an appropriate time to reflect on the unique social contract that underpinned our economic successes in 2009. I believe a real partnership was forged - between government, families and communities, and businesses.

Unemployment, which was forecast at Budget to peak at 8½ per cent, is now expected to peak at 6¾ per cent in the middle of 2010. That's too many unemployed Australians, to be sure, but far better than it could have been and far better than in comparable countries.

Back in February, the economic outlook was bleak. We were facing the sharpest

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synchronised contraction across the global economy since the great Depression. It was a time our nation required bold and decisive action to stimulate the economy. It was a time when the country required unity of purpose from politicians, business, unions and the community.

As a Government, we were proud to lead that action. We did what we could to cushion the impact of the downturn, injecting three timely waves of stimulus, supporting families and businesses, supporting demand, and investing in nation-building for the future. And we were even prouder to see the Australian people and businesses respond. And I'd like to pay tribute to the businesses gathered here today for your part in that.

The fact that we were all in this together was one of our nation's great strengths during a difficult time. It's why we wanted bipartisan support for our stimulus policies at the time - I'm sorry to say we didn't get it. As you'd recall, for a week, Australia's response to the global recession was held hostage to the Opposition. Had we not secured the votes of two Independents, the package would not have passed and Australia would now be in recession.

I say this not to just have a flick at the Opposition, but to make the point that partisan conflict can have damaging results. It's what most concerns me about Mr Abbott's elevation to Opposition Leader this week. Because he makes no bones about the fact that

he's in the partisan conflict business - indeed, it was his platform for victory.

Partisan conflict back then was nearly disastrous for working people and business, small and large. Our economy would have contracted by 1.3 per cent in the year to June without stimulus. But with stimulus we were the only one of the OECD countries to grow. Our world-beating performance was made possible by an unprecedented degree of cooperation between business, government and the community. I'm proud of our part in that performance, proud of all the employees and employers who did their bit too, and I want to thank you very sincerely for all your efforts.

Year Ahead

As we look to the future, I think Queensland businesses have every reason to be confident, but no reason to be complacent. As you probably know, Queensland is the third largest state economy, contributing 19 per cent to GDP in the latest available figures. This means your economic performance is absolutely crucial to the performance of the broader Australian economy.

In the last two years of available data, Queensland had the second strongest total growth of all states in Australia. But in the three quarters to June this year, the state economy contracted, reflecting challenging times for the nation as a whole.

Queenslanders certainly felt the impact of the biggest synchronised global downturn in memory, but we can take heart from Access Economics' prediction that Queensland will have the strongest growth of any Australian state over the next five years. We've seen some encouraging data already, like a 2.4 per cent increase in retail trade in Queensland in the June quarter - the equal top result of all states and territories. But the success of the Queensland economy, and the success of the national economy more broadly, depends heavily on what we do to turn the success of stimulus into something more enduring.

Just as we did the hard yards to position us as the best performing advanced economy during the global recession, we will do the hard yards during the recovery. That means getting the difficult long-term reforms right. That's why we're putting so much effort into cutting red tape, and making the tax system fairer, simpler and more competitive for Queensland businesses. And why we're making critical nation-building investments in

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capacity-building infrastructure, education and skills.

Let me flag just a few things you should keep an eye out for.

For starters, Standard Business Reporting is now in the testing phase and will be available from July 2010. This initiative will reduce the burden of government reporting for businesses, which currently negotiate 12 different agencies across the Commonwealth and Queensland governments. Participation is voluntary, but this will offer businesses genuine ways to save time and money on government reporting. The scope of SBR is currently

around 80 forms - including the business activity statement and payroll tax periodic and annual returns - but there are already signs it will have an even wider application across government.

The superannuation clearing house is another important reform. We provided $16 million over three years for an optional superannuation clearing house service that will be free of charge to small businesses with fewer than 20 staff from July 2010. Businesses will be able to meet their superannuation guarantee obligations by paying to a single location, starting in May 2010 when registration commences. It is a demonstration that we're about cutting red tape and reducing costs for small business.

A third area of serious reform is tax. It is no surprise what the Secretary of Treasury, Dr Ken Henry, is leaving under my Christmas tree - the long awaited Henry review. This is the largest review of our tax and transfer system, including of state taxes, for more than half a century. While I won't open the wrapping for you here today, let me say the review will help set a blueprint for reform for the next decade and well beyond that.

The Panel has been giving serious thought to the wide range of community views it received during public and industry consultations. It doesn't get much tougher than tax reform. To be honest, I expect it to be the hardest reform job I'll face as Treasurer.

I'll be studying the report very closely over the summer, and I'm looking to release the report, along with an initial response, in early 2010.

I've made my priorities pretty clear: simplicity, fairness and competitiveness. There might be things that we can start on straight away. Others may not proceed without a mandate from the community. But rest assured we will continue to take a measured and consultative approach - and that includes listening to you through what will be a very difficult reform process.

The '10/40/600' Campaign

The reforms we're undertaking in business deregulation and tax reform show we haven't taken our eye off important, long-term reform as we battled the global recession. It is equally true that we haven't taken our eye off our broader responsibilities to each other as Australians, to ensure everyone gets a fair go, and to ensure our kids get the opportunities

to grow and develop that they deserve.

That's why I'm really pleased today to help the AEIOU Foundation launch '10/40/600' - a corporate sponsorship program that brings Australian businesses like you into a partnership with the public and community sectors.

Under this program, your business contribution of $10,000 a year, combined with a $30,000 contribution from governments and families, will help AEIOU provide a full year of early intervention services that increase a child's long-term life outcomes. And it is a terrific investment. AEIOU estimate that the yield to the community of early intervention is some $600,000 for each year that child is in the program.

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People whose lives have been touched by children with autism know very well that these children have special needs but also have very special gifts. Autism Spectrum Disorders, or ASDs, affect one in every 160 Australian children, and it is a condition a child carries through their life. It takes special and dedicated care to give each child their chance of learning skills, of adapting to life, and of achieving their potential.

Since the AEIOU opened its first centre in 2005, it has led the way in early intervention and learning programs for young children. We can see from today's launch that their leadership in this field continues. I congratulate the Foundation and wish them every success.

With your help, I hope the Foundation can reach their goal of establishing another two centres. This would be another milestone, bringing AEIOU's total to seven centres by 2010; centres that set the standard for other centres across Australia.

Investing in our Kids

Since coming to government, we have worked hard in the area of early childhood and early intervention, particularly for under sevens.

The Government committed $190 million over five years for the Helping Children with Autism Package, to focus on early diagnosis and treatment for children with ASDs, and to build skills and expertise in schools for working with students with those disorders.

In last year's Budget, we provided funding to establish six Autism Specific Early Learning and Care Centres, including $4.1 million for a new AEIOU centre here in Brisbane - one of those I mentioned a moment ago. AEIOU, in partnership with Griffith University which is itself a national expert in this field, will open that new centre in early 2010.

We also introduced new Medicare Benefits Schedule items in 2008 for diagnosis and early intervention treatment for children with autism, which more than 10,000 kids have already benefited from.

We are funding 150 playgroups specifically for families and children with ASDs and continue to provide workshops and information sessions, across Queensland, and here in Brisbane. And we are developing a national Register, to better track the incidence of the condition in Australia.

But let me assure you we know there is always more to be done to live up to our responsibilities to our kids and our communities.

Philanthropy And The GFC

Philanthropy has a role to play here as well, and that's why we're here today. We are a generous nation - your attendance here is evidence of that.

In 2005, the Giving Australia project found that Australians and businesses gave more than $11 billion the previous year. This included donations from 87 per cent of all adult Australians, or 13.4 million people, who donated an average of $424 each.

But just like businesses, the philanthropic sector faced challenges this year with the GFC. Corporate philanthropy is a mixed picture. Multi-year partnerships were mostly stable, while one-off donations and sponsorship such as in arts and sport, felt the pinch. Not surprisingly, reports indicated some big falls in revenue from the not-for-profit sector's own investment income sources.

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There were noticeable decreases in funding from philanthropic trusts and foundations. Many businesses reduced their financial support during the downturn, but we saw individuals switch to support in other ways, such as volunteering, staff fundraising and

pro-bono work.

I know governments can play an important role in encouraging a thriving philanthropic sector. On 1 October 2009, a new regulatory framework came into effect for Private Ancillary Funds. The framework is aimed at improving the integrity of private philanthropic trust funds, whilst maintaining their attractiveness as a vehicle for philanthropy. These funds are a significant contributor to the growing commitment in Australia to structured philanthropy, enabling individuals, families and business to take a strategic and intergenerational approach to charitable donations.

The Government has also taken action to promote corporate social responsibility and responsible practices here in Australia. We have supported the St James Ethics Centre to house the Australian focal point for the Global Reporting Initiative and the UN Global Compact, and provided $2.5 million to the Responsible Investment Association of Australasia to establish a world-first Responsible Investment Academy.

There are the little things as well. Like the efforts of the blokes in my office, who along with many across Australia, grew their moustaches for Movember to raise money for men's health awareness including something I'm very passionate about - prostate cancer research. They raised over $12,000 and I'm really proud of them. Though needless to say it was a great relief to their partners, their mothers, and to female members of my staff, when they finally shaved them off this past weekend.

Conclusion

Let me wrap up by saying we've learned a lot about our country this past year and the unity and resilience of our people. We've learned we do best when the community, business and government pull together - that we're most effective as a nation when we have all shoulders to the wheel. That's what accounts for our success in withstanding the worst the world economy could throw at us. And it will be crucial to our ability to address all the social challenges confronting our community as well.

The "10/40/600" program follows in that tradition - harnessing families, businesses and government - and I'm proud to be associated with it today.

I wish you all a joyous, healthy and safe Christmas and I look forward to seeing you again in the new year.

Thanks again for having me and I look forward to your questions.

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