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Keeping the whole economy strong: address to the Business Council of Australia Dinner

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“Keeping the whole economy strong.”


21 JUNE 2011


Thanks Graham for that introduction.

Can I also acknowledge Jennifer and all the BCA members here tonight.

As well as the Deputy Prime Minister and Treasurer, Wayne Swan.

And my ministerial colleagues Penny Wong, Anthony Albanese, Jenny Macklin, Greg Combet, Tony Burke, Robert McClelland and Craig Emerson. Your presence is important too.


It is good to be with you all tonight and it’s good to have the chance for the kind of deep conversation about reform that isn’t always possible in the daily political combat or with the cameras rolling.

Not only because of the individuals gathered here, though as I look around the room I see some good minds and good Australians who I’m looking forward to hearing a bit from shortly.

But also because the individuals gathered here are gathered by the Business Council of Australia. And I’m more convinced than ever that the Council has a critical role to play in our national affairs.

I do feel that our policy debates are getting more political, our political debates are getting more partisan and our partisan debates are getting more personal.

There are many explanations for that.

I’d run against my own instincts - that the country needs a serious reform contest, not a yes-no shouting match - if I laid the blame only at my political opponents’ feet.

And in truth it doesn’t matter why the national debate is changing in character ... it matters to agree that leaders like all of us here can help it be better.

To agree that we have an opportunity and a responsibility to build public respect and pursue deeper reform conversations.

Not just to lift the standard of our public culture but more importantly to serve the long term national interest.

The Council has a key role. You’re uniquely well placed.

Uniquely well placed to make a case to the public and to state a position to Government which is grounded in how Australian business at large sees Australia’s national interest as a whole.

That was true at the creation of the BCA.

After the Economic Summit of 1983 it became obvious to many that the voice of business needed to organize around well-researched, carefully balanced positions appropriate to national needs and purposes if it was to command the

influence and respect that was necessary in the national interest.

That’s been true in the years since.

In debates on tax reform, national competition policy, the national skills agenda, Australia has benefitted from the unique contribution that the BCA can make, ensuring that the business voice heard in the national debate is the most representative and the best informed, not just the longest or the loudest or the most extreme.

As the nation debates pricing carbon, we need that approach more than ever before.

Government has a key role too.

I know that respect is a relationship and I believe that we can’t ask for respect if we don’t show it ourselves.

In the last year, I’ve worked hard and my ministers have worked hard to do that.

I’m determined to show respect and good faith.

Of course, while that respect and good faith is vital, it’s not enough on its own.

I believe business and government must have a deep reform conversation - ranging across a broad agenda and supported by quality policy research and new ideas - a serious discussion that is grounded in the facts.

Because for us to be our best selves, listening and leading, we need you to be your best selves too, putting that characteristic BCA voice into the public debate.

The authoritative, non-partisan contributions which are vital not just to deliver difficult reforms now but to keep public policy on the reform road for the future.

Other people can talk about the easy issues; when CEOs and Ministers get together the only stuff left for us to discuss is the hard stuff.

That’s what we come for.

And as I travel Australia and listen to Australians I often reflect that if the voices of unreason succeed now, we will lose the long term politics of reform.

I said last year that I feared a new economic Hansonism was at large in the country.

This was before Pauline Hanson turned up at the anti-climate action rally outside Parliament House!

George Megalogenis is one of our most respected analysts.

His warning has been less colourful but just as grim - of the risk of a return to pre-reform politics - to Fraserism.

He traces it to 2001 and the third term of the Howard Government and, yes, he holds both sides to account.

Ten years later we’ve got a national political leader who is a creature of that style of Government, who can proudly state

In a choice between policy purity and pragmatic political pragmatism, I'll take pragmatism every time.

Australia can’t afford more of that.

The opportunities are too great, the stakes are too high, for us to do anything less than our best for the nation.


So tonight I want to speak more broadly about our vision for our economy.

To lay out the goals that reform can achieve for us all.

To look beyond the debates of the day and talk to you as business leaders and fellow Australians about the economy we seek to have in coming years and the reform road that leads us there.

As I look at the economy today, I’m an optimist.

By nature, but the balance of the evidence is with me.

That’s optimism based on our unique opportunities today.

I’ve got no doubt that our prosperity creates more opportunities than challenges.

The language of “managing the boom” and “two-speed economy” can really mislead us.

It’s a mistake to see the shadows without noticing that the sun is shining.

We have entered a new phase of prosperity driven by demand for our mineral wealth.

The increasing prosperity of China and India, among others, is creating strong demand for commodities and we’re well placed to respond.

Demand for our resources is creating a huge inflow of national income.

Many jobs are being created in mining, construction and related sectors, shareholders see increasing wealth, and the income generated drives demand for goods and services right across the economy.

Add to that, significant demand for health and care services as the population ages.

And a growing Asian middle class that will want quality goods and services from Australia.

I travel widely and speak to many people.

I know there’s pressure on prices for many Australians, especially those on fixed incomes and those who spend much of their income on the essentials of life.

I know there’s pressure on many sectors from the strong dollar, wage pressures and competition from overseas.

But I’m deeply convinced that the long-term news is good news.

I’m also optimistic based on our record of reform.

Australians have seized the opportunities presented by past economic transitions.

Floating the Australian dollar, financial deregulation, reducing trade barriers, increasing competition, introducing enterprise bargaining, and reducing personal income and business tax.

These are the reforms which have driven strong economic growth over recent decades.

The bottom line: that our income per person is 4th highest in the OECD today, compared to 10th in the early 1980s.

So that’s my optimism.

Second, looking at today’s economy, I see great change at play.

Change is happening in our economy regardless of what government and business do.

The Australian economy is essentially dynamic.

More than 600,000 people move into or out of employment each month.

In recent years, over 300,000 businesses have closed down or been taken over each year, while around 320,000 have started up.

And that dynamism is expressed in a period of extraordinary transition.

Global economic weight in transition from West to East — bringing growth and dynamism closer to Australia than ever before.

Global production in transition to the clean-energy technologies of the future - encouraged by the actions of the governments of the world.

While the investment boom in mining sees regions and sectors in transition at home - growing at different rates and needing assistance to adjust.

These economic transitions - the rise of Asia, the shift to low-emissions growth, the boom in mining investment - are happening regardless of anything we say tonight.

The question for us is whether we seize the opportunity and shape it to purposes of our own or whether we let it overwhelm us.

For an activist like me there’s only one answer.

Because these transitions create pressures and stresses but they create even greater opportunities and they are opportunities I am determined to seize.

Above all, an opportunity to keep the whole economy strong.


I’ve said on many occasions that my vision for Australia is a strong economy and opportunity for all.

I want our whole economy to be strong, and I want every Australian to share in the opportunities that creates.

This is the economy we seek, the society we can be.

We have lived through prosperity.

Twenty years of pretty much uninterrupted growth.

Remember “five minutes of economic sunshine”? That was in 1995.

Ask yourself though - what have we done with it? All of us? Have we done enough?

Well, look back to the first decade of growth.

I reckon we essentially spent the 1990s recovering from the 1991 recession - putting people back to work, rebuilding wealth, yes, riding out the Asian financial crisis.

We can debate the significance of the fiscal consolidation and tax system changes of that period but in hindsight I see it as a decade of recovery.

The second decade of growth?

We spent the first half on not enough - we missed opportunities in infrastructure and skills and federalism - did not much more than churn bracket creep into tax cuts - and the end result saw inflation get away in 2007.

Reform slowed, labour productivity growth slowed.

As the Intergenerational Report demonstrated, falling from 2.1 per cent during the 90s to just 1.4 per cent in the 2000s.

And we spent the second half beating the GFC.

From 2008 on we had to steer the economy away from the ditch.

And we did, we managed, government and business together, to protect jobs then and grow jobs since.

Now you only have to travel in the United States or Europe and see what we’ve gained from that.

But it was still overcoming a threat, avoiding a catastrophe, rather than seizing a new opportunity.

Our people deserve more from their leaders than to say ‘we dodged a bullet’ - as important as missing that fatal shot was.

We’ve got a chance now to do something pretty amazing.

We can turn a once in 150 year investment boom into a once in 150 year opportunity boom.

Our whole economy strong.

A strong high tech economy, a strong economy of the future.

An economy where a small manufacturer of generic pharmaceuticals has a video conference with his supplier in Delhi and Shanghai every Monday.

An economy where an engineer visiting a mine in the Pilbara doesn’t have to fly back to Perth to get in for a check up with his GP.

An economy where logging on from home isn’t more frustrating than driving to work forty minutes away.

An economy where great ideas in a digital age aren’t born in Australia and then raised in Korea or the US, they come to maturity in innovation hubs of our own.

Not just a high tech economy, a human capital economy.

Where a principal has the ability and the incentive to drive their school to perform better every year.

Where the CEOs in this room worry that their best young staff will leave and become teachers.

Where local clinicians can run the local hospital, responding to sound economic incentives created by a national efficient price for hospital services.

Where industry wants to invest in the skills system because their needs are at the heart of it, where it’s always worth sending staff away for more training and where newly trained workers can do the jobs you need them for.

A seamless, national economy.

An economy where to run a national business you don’t need eight different law firms on retainer.

Like our national transport regulation to harmonise trucking industry laws and charges across state borders.

Like our harmonised occupational health and safety regulations across Australia.

An economy where carbon finally has a price, an economy which has decoupled economic growth from emissions growth, where the new capital which flows to energy-efficient economies flows to us.

The whole economy strong.

Not to fall to boom and bust, not to let inflation get away, not to see mining choked off by shortages in skills and infrastructure, not to see non-mining unable to compete in the world as part of a strong currency economy.

And in turn, if we can have the kind of economy we want, it will pay for the kind of society we hope for.

We can spread the opportunities that a strong economy creates. To all, not some.

This the big thing for our nation now.

This fantastic opportunity to use these years to fundamentally change the way opportunity works in this country.

To make these years when we change our culture of work and spread the benefits of work to people who have been locked out of it, when we change our education system and stop leaving poor kids at the back of the class as if no one can fix that.

To make these years when we remake how we experience what it is to be Australian.

In a window in our history when we can reshape how we distribute opportunity in this society.

When a once in 150 year investment boom can become a once in 150 year opportunity boom

We should, we can, I believe we will.

I believe the reform road can lead to a new Australian experience.

To years of prosperity and opportunity like none we have known before.


But only the reform road gets us there.

Only if walk it together, only if we walk it every day.

I have no doubt we can.

We would be mad at this moment to go back to the old politics of Fraserism, of the 1970s, to lose sight of the reform road.

Everyone here tonight is better than that.

And millions of Australians need us to be.

I’ll do my part to be sure we are.

I’m sure you will too.

The reform road can lead to a new Australian experience.

Now let’s have a conversation about how to walk it together.