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Tuesday, 13 May 2008
Page: 1539

Senator CARR (Minister for Innovation, Industry, Science and Research) (5:49 PM) —The incorporated speech read as follows—

In 1993, I had the honour of succeeding John Button as Labor senator for Victoria.

John and I were supposed to trade places when his term expired on 30 June, but during the election campaign he took me aside and said, “I’m not going back to Canberra.”

He resigned soon after polling day and I was appointed to the casual vacancy in April.

John was tired after a decade as industry minister, and he wanted to get back to his writing.

He had written poetry as an adolescent and continued to write short stories into his twenties. He flirted with drama and in the early sixties co-founded the Emerald Hill Theatre.

He thought that in his autumn years he might “have a go at the novel to out-do Dostoevsky” —an interesting choice betraying both the scale of his ambition and the astringency of his vision.

The books he wrote in retirement - including the wonderful memoir As it Happened (1998) - show what a fine writer he was. He often wondered whether he’d chosen the wrong career. Some good literary judges would say he did.

Maybe I’m just not literary enough, but I think John chose exactly the right career.

He had a vision for the future of Australian industry, and he pursued that vision - often in the face of entrenched opposition - until it had been substantially realised.

John frequently had to fight on two fronts. On the one side were the more atavistic elements of the union movement and industry, who resisted any change that threatened their vested interests.

On the other side were members of the economics club, who opposed any intervention that did not fit their arm-chair theories, no matter how firmly it might be grounded in economic and social reality.

John demanded innovation and a global outlook from Australian business and he practiced what he preached in a series of brilliantly creative industry plans which drew in part on what he had learned from Sweden, Japan and other international exemplars.

Several of these plans - for steel in 1983, the car industry in 1984, and the textiles, clothing and footwear industries in 1986 - were to some extent exercises in crisis-management.

But though they might have been prompted by the circumstances of the moment, they were anything but ad hoc.

One hallmark of John’s policy style was his willingness and ability to meet short-term problems with long-term solutions.

Because everything he did was strategic, there isn’t really that much to distinguish his salvage plans for steel, cars and TCF from his development plans for shipbuilding in 1984, pharmaceuticals in 1987 and information technology in 1988.

The same could be said about measures he introduced for other industries such as telecommunications and aerospace.

All involved similar solutions - and those solutions invariably included a judicious mixture of carrot and stick.

As industry minister, John was essentially a deal-maker, a horse-trader - applying the skills he had acquired in the backrooms of the labour movement on a much larger stage.

It was all about give and take:

  • production bounties in return for keeping factories open
  • tariff reductions in return for export facilitation
  • productivity improvements and wage restraint from the unions in return for a commitment to protect jobs
  • anti-dumping measures in return for investment in modernisation product rationalisation in return for R&D funding
  • marketing support in return for employing more apprentices.

And always - always - an emphasis on building resilience by building skills.

That might mean re-training workers who lost their jobs as a result of structural adjustment.

It might mean schooling small-business operators in business planning and management techniques that would help them stay afloat on stormy economic seas.

It might mean cajoling captains of industry to lift their eyes to the horizon and consider their place in the wider world.

John never forgot the lessons he learned on a visit to Sweden in 1984.

As John wrote much later, this was a country where “Government funds were spent on research and development, venture capital for small firms, export incentives, and training and re-training of workers.”

Most of the industry plans had an R&D component. The car and shipbuilding industries received funding for R&D, while pharmaceutical and IT companies had to meet R&D targets to qualify for other forms of assistance.

But the most important fruit of John’s belief in research and development was the R&D tax concession introduced in 1985.

It revolutionised industry attitudes to innovation. Business R&D spending as a share of GDP grew 8.8 per cent a year in the ten years after the concession was introduced.

This momentum was halted in 1996 when the past triumphed over the future and the conservatives reduced the concession from 150 to 125 per cent —this at a time when most other OECD countries were maintaining or increasing their R&D support.

In the following decade, business spending on R&D as a proportion of GDP grew by an average of just 2.5 per cent a year. In several years it actually fell.

By 2005-06 we had tumbled from eighth to fifteenth in the OECD rankings for this measure.

What John understood - and what the Howard government did not - is that industry policy is first and foremost about cultural change.

It is about creating what John called a “culture of innovation”.

This is a phrase I use myself. It’s an ideal I find myself explaining and defending just as John did. That’s how little progress we have made in the last decade of squandered opportunities.

We need innovation to increase productivity and exports. Innovation has the capacity to transform Australian industry, and with it the Australian economy. It is the only basis on which a country like Australia can compete in the global marketplace.

The OECD tells us that “Most of the rise in material standards of living since the industrial revolution has been the consequence of innovation. New or improved products and services - and new and improved ways of producing them - have for a long time been the main motor of economic growth.”

John understood this better than any politician of his generation - with the possible exception of his colleague and occasional sparring partner Barry Jones.

But he also understood that there was more than one way to innovate.

Innovation may mean wiping the slate clean and starting afresh. But more often it means looking for ways to do things just that little bit better - harnessing creativity to make the most of what you’ve got.

John’s interest in science and technology can be traced back to his work with the Fabian Society in the sixties and culminated in his forward-looking decision to add technology to the industry portfolio in 1984.

But his view of science—like his view of most things—was essentially pragmatic. He firmly believed in the transformative power of science and technology, but he wasn’t going to wait around until they delivered us into utopia.

“Protection offered hope from the past,” he once wrote. “Sunrise industries offered distant hope for the future.” His concern was with the here and now.

He was not about to let the allure of the next big thing blind him to the importance of existing industries —industries that account for the bulk of our output and employment now, and that still have enormous scope for growth and innovation in the future.

John was often accused of being too disengaged, and some thought his detachment bordered on disloyalty.

Yet this detachment was precisely the quality that underpinned his success. It granted him the independence to see and think for himself, and to act as an honest broker. It liberated him from the prevailing orthodoxies and enabled him to develop highly original solutions to seemingly intractable problems.

It allowed him to find ways around entrenched positions without attacking them head-on. It was the source of his candour and directness - qualities that sometimes infuriated his colleagues, but which endeared him to just about everyone else.

In a life otherwise full of purpose, the Geelong Football Club allowed John to express his quixotic side.

As a minister he was besieged by proponents of hare-brained schemes, but that didn’t stop him maintaining a one-sided correspondence with the club setting out his ideas for winning the flag.

He tried to impress Margaret Thatcher by dropping Gary Ablett’s name and Ablett by dropping Thatcher’s, even though he was pretty sure neither knew who the other was. Last year’s premiership came just in time.

We are fortunate that John agreed to be interviewed by the doyen of Australian political psychology, Alan Davies, while the two were in London in 1959. John appears in Davies’ Private Politics (1966) disguised as “Tom Barrow, Union Lawyer”.

Davies noted how class was central to the young Button’s worldview —as a child of the manse and the squattocracy trying to make his way in the labour movement, he was acutely conscious of class differences.

But as far as John was concerned, it was values rather than interests that divided the classes. His account of class relations was entirely free of what Davies called “struggle imagery”.

This may have disappointed old-school leftists, but his refusal to see the interests of employers and employees as eternally and irreconcilably opposed was obviously critical to the design and success of those give-and-take industry plans.

John may have been more interested in the contest of values than class warfare, but there was never any doubt about which side of that contest he was on. His values were progressive, humane, and unapologetically social democratic.

He recognised that equality of opportunity was a liberal ideal - there is nothing wrong with it, but it’s a long way short of what social democrats should be aspiring to.

He knew it was unrealistic to demand strict equality of outcomes, but he was never afraid to argue for a fairer distribution of wealth and what he called “all those services fundamental to human security and development.”

For social democrats, he argued in 2002, “The emphasis is on rights rather than opportunity.”

It is the duty of social democratic governments to honour those rights, and to address the many problems and fulfil the many needs and aspirations “for which markets provide no answers.”

Alan Davies describes the lonely migrants and pensioners for whom John did pro bono legal work early in his career. Davies suggests that John idealised these outsiders as Forgotten Men, and may have seen himself as one of their number.

John Button was an insider during some phases of his career and an outsider during others.

Either way, he is never likely to be forgotten.