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Building Australia's capital base: address, National Conference, 31 July 2000.



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Building Australia's Capital Base Simon Crean - Deputy Leader of the Opposition and Shadow Treasurer

Address - National Conference - 31 July 2000

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I talked earlier of the need to achieve higher sustainable economic growth.

The path to it is through a focus on the investment needs of the nation.

This chapter highlights Labor's understanding of this priority.

It's a priority not shared by the government. Investment is under-contributing to the nation's growth. Both its level and its sustainability.

Our current account deficit has hit a record high, while foreign debt is now 32 per cent higher than when John Howard and Peter Costello took over the economic management of this nation.

I also raised the issue of the budgetary choices made by this government - choices which have seen a $13 billion deterioration in the fiscal position and which commits over $20 billion of the surplus over the next three years to buy the GST.

But it hasn't been used to finance the necessary:

Investment in our schools, universities, and TAFEs; ● Business research and development effort; and ● Road and rail investment. ●

And importantly, the government's approach to the information technology challenges of the digital revolution is backward looking.

The Coalition's spending priorities have been wrong.

While there's been no money to invest in our social capital, our physical infrastructure or the knowledge nation, it's been a blank cheque for the government's advertising budget, for example.

Labor recognises that investment and innovation are the key drivers of economic growth -sustained economic growth.

Investment in infrastructure can reduce business costs, build services in our communities, and generate a high social rate of return for the economy.

These investments are critical to Labor's objective of ensuring that all Australians, particularly those living in outer urban and regional and rural Australia, share in the benefits of economic growth.

John Howard now wants to be remembered as a 'nation builder'.

But his imagination doesn't stretch beyond a rail track winding through marginal Coalition electorates from Melbourne to Brisbane, or a fast train based on Sydney to Canberra only.

As important as tradition infrastructure is, Labor understands that building our capital base must go much further.

It must encompass not just physical capital, but also human and social capital.

The key to our future prosperity lies in the innovative capability of our nation. We are already great adoptors of new technology. We must continue to become creators and diffusers of technology.

Technological change and the growth of services demands a greater role for human capital in our economic prosperity.

This is the path to a high wage, high skill society.

There are many pressing investment challenges we face:

Natural resource management and salinity; ● Education and training; and ● The challenges of digital conversion. ●

These are not fringe issues.

They are the major micro-economic agenda we must confront. They are critical to our growth prospects and to its sustainability, to the productiveness of our economy, and, importantly, to the health and access to services of our communities.

Labor recognises that a growing number of Australians have committed their savings to shares. Labor encourages good portfolio share management by Australians but wants to see it broadened.

Just as Labor broadened superannuation from its narrow elite base to the broader community, so too must this occur with share ownership.

But along with this is Labor's push for greater corporate governance. It is the necessary complement to Labor's democratisation of capital.

Only Labor believes that investment is critical to both our efficiency and equity objectives. Not only is investment good for business, but it is also the means by which we deliver to our communities.

For instance, while the Coaltion has an ideological obsession with the sale of Telstra, Labor believes that the majority ownership of Telstra is the best means by which we can deliver both new communications technology and services to those living in regional and rural Australia.

This is a means by which we can build greater communications capacity in the regions and ensure access to and opportunity in the emerging digital age. Without this, many of our communities will be left behind.

So we must look to use our public institutions more creatively in delivering the benefits of

growth and opportunity to all Australians. The use of Telstra is but one example, the use of Australia Post is another.

It is only Labor that is focussed on the investment needs of the nation, of our communities, of our citizens - using what the public has invested in to respond more creatively and effectively to the new needs of our communities.

It is with a view to our existing investment needs and to the future needs that Labor has shaped its economic agenda. That is how Labor has always operated. We will do so again.

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.