Closing remarks at the Prime Minister's Economic Forum, Brisbane
WED 13 JUNE 2012
Last night, I said that we would be discussing the strength of our economy - and that’s been acknowledged by participants in the room from many different perspectives today.
I also spoke about the very difficult circumstances affecting the world economy and new ideas to address uneven growth at home.
I said that in today’s discussions we would not shying away from hard questions because we are committed to keeping our economy strong: creating jobs, driving growth and improving productivity – they’re all critical to securing our economic future.
And we have not shied away from those hard questions.
Together we have spent the day framing new grounds for confidence and new ideas for reform.
So allow me to try and summarise what’s been a big day of discussion.
We’ve certainly heard about the need to bolster confidence - to appreciate our strengths and to forge together to build confidence, and to recognise that our glass is more than half full.
We’ve heard about the structural shifts underway in our economy.
The high terms of trade and high dollar - and the benefits and challenges presented by those.
The normalised levels of wealth accumulation and consumption, after a period of unusual growth in both of these areas and the ageing of our population, and what the means for employment of the future.
We’ve heard a lot about the need to focus on productivity and lifting productivity growth.
And we’ve heard about the importance of investment in developing human capital, in developing our people.
The importance of the education system, the importance of maths and science of skills development or research and development.
You would have seen Governor Stevens this morning, in what I thought was a very description of the circumstances of our economy, talk about the need to address and then somewhat modestly suggest he wasn’t the expert and people searching for ideas should go to the Productivity Commission.
It’s not necessarily fashionable in life today to suggest someone might know better than you but he did point to the Productivity Commission.
And I would remind on this question of human capital that the Productivity Commission has found that VET reform is crucial to lifting productivity and delivering the COAG reform goals that we’ve set ourselves would raise GDP by 2 per cent.
So skills work is underway and vital to our productivity.
On infrastructure, we discussed new financing opportunities, risk management, how we use new infrastructure and maximising investment opportunities.
We had a discussion about construction costs particularly for multi-dwelling residential projects and I think it was good that we saw in the room in that discussion, the preparedness of stakeholders within this room to collaborate on this question of construction costs.
We also heard more broadly about the importance of collaboration right across our economy, the creation of such relationships within workplaces through management practices as a way of increasing productivity.
I was especially pleased to see the acknowledge of the effective and ongoing dialogue that there is on these questions maximising collaboration within firms and maximising our use of R&D, employee engagement and minimising conflicts at work.
A clear thread running through today’s discussions has been the acknowledgement that technology, is changing the way we live and work and will change the productivity of our economy.
That it’s driving innovation in sectors like manufacturing and agriculture.
It’s changing the way we do things and it’s certainly changing the way government does things too – our ability to deliver services in a different and smarter way.
We heard in this last session a recommitment to the deregulation and competition agenda first outlined at the Business Advisory Forum which met with COAG in April, and I do thank people for the kind words about that initiative, bringing business leaders together for the first time with the Prime Minister and Premiers meeting in COAG to talk directly about deregulation.
It’s imperative that we bring the reforms that we outlined through that process home this year and next year.
And coming back, once again to the Reserve Bank Governor pointing to the Productivity Commission and its analysis.
The Productivity Commission recently examined 17 deregulation priorities and estimated that these reforms could increase GDP by over $6 billion in the longer term - so working through that forum, an important productivity initiative.
So in thinking about these issues in advance of our Forum and thinking about the in the course of discussions today, I do now want to outline some priorities for attention.
On the key issue of competitiveness, we have had discussions in the sessions and through the proceedings, and I want to say this.
To the business representatives in the room, we’ve heard you loud and clear on the company tax rate and we see it as a priority for the next steps in tax reform, building on the Government’s substantial record of tax reform.
Now I've lost count of the amount of times that Wayne, Penny or I have said we're in the cart for a lower company tax rate.
But it has to be affordable and that means that it has to be funded by other changes in the business tax system.
So today though, let’s be very clear.
From today I want to see achieving this company tax rate reduction as the absolute top priority of the Business Tax Working Group.
I want it to be the focus, and I want it to be the outcome.
I want it dealt with before the other business tax issues in the Working Group’s in-tray are dealt with.
And if we do that, if we have the Business Tax Working Group addressing the questions of the right offset, you will get your company tax cut as a down-payment to help you be more competitive in this the Asian Century.
That's what we're on about, what you're on about, and ultimately it’s why we're here.
To help our businesses be competitive, to ensure our economy remains strong and becomes stronger.
Another theme to emerge from the discussions today is this question of labour mobility.
There are thousands of jobs being created in our strong economy, but there are also some areas where industries are struggling and jobs are being shed.
And it’s our collective task, for everyone in this room - as a matter of good economic management and good social policy - that we do our absolute best to match the demand for labour with those who are seeking employment.
The Government’s going to continue to provide leadership, and work with other governments, other levels of Government and business and unions to promote a more mobile labour force - including through measures like ensuring skilled trades people can move seamlessly from one part of the country to another without having to get a new license.
And it might seem puzzling to some that we are still in the modern age working on these questions like recognition of occupational licenses but we are – a simple measure, a very important measure and we’re very determined to get it done.
But there is always more we can do.
The Government invests over $6 billion every four years on jobs services.
That’s the services that go to assist people to find work.
These are the services right around the country, who reach out and help people who are out of work including those who have just lost jobs.
Our current arrangements for our employment services make it easier and more convenient and financially rewarding for a provider to place someone in a job in their local area, and less convenient and rewarding if a jobseeker moves out of the region or interstate.
To help us improve labour mobility, as a result of today I commit the Government to providing stronger incentives for our employment services to grasp interstate opportunities available in the jobs market.
We need to provide better incentives for employment service providers to put people into jobs wherever they are in the country, including the growing resources sector but let’s not forgot to the growth we’re seeing in the services economy including particularly the health and caring sectors.
Of course looking out on this room of many business leaders I would say this, employers also have a responsibility to train-up and employment people who are prepared to move.
We’ve got to help get the match between the people and the places that are available.
In a similar vein, I took a lot of notice of worthwhile comments made during the course of the day about training and income support and making sure that we have a better package of the two.
I’m keen to pursue the ACTU idea to better marry up income support and training.
Job services bring these things together already. But as an outcome from today's discussion, I want to explore further options to combine Government efforts to support individuals who need income support, many of whom also require further training to be successful in the labour market.
I also noted the suggestion made by small business here, by Peter of better integrating the training needs of small business into our training system and that is both employees and owners.
I think he made a powerful point about the need for our training system to work for owners as well.
And making sure that people in small businesses have the opportunity to up-skill even as they operate their business so we will be looking at that.
The new HECS for TAFE arrangements will help workers undertake further training to get those skills without forgoing income, that is without paying up front fees.
Of course, last night we heard from business and unions alike a desire to better capture the opportunities of this Asian century – our desire to make sure that Australia is a winner in this period of growth.
We articulated that last night as a search for greater people to people links and stronger economic integration.
It is my view that Australia has been slow to participate in global value chains, by one measure ranking third-lowest among OECD countries.
As Minister Emerson, the Minister for Trade and others mentioned, if Australian businesses participate in global value chains they can be producing for the vast and rapidly growing markets of Asia instead of relying on our relatively small domestic market.
This economic transformation would be a big boost to both Australian manufacturing and to all the service industries that can participate in value chains.
My Government is willing to support this transformation, integrating our manufacturing and services industries more fully into the opportunities in the economies in our region.
The Government will deploy the expertise and resources of Austrade and the Export Finance Investment Corporation in encouraging the participation of Australian manufacturing and service businesses in global value chains.
We will also ensure the Export Market Development Grants Scheme is helping to capture these new opportunities for Australian export businesses.
With my Ministerial colleagues and I intend to deal with many of the other very important points that have been raised today in the period ahead.
We are going to take what you have said forward and feed it into the ongoing policy processes we have underway.
By that I mean the business tax working group, with a renewed focus on company tax cuts.
The manufacturing taskforce, with an even further impetus for policies which drive innovation and high performance workplaces.
Through the high-powered Business Advisory Forum, which is working at great speed to deliver the deregulation agenda and of course in the vital work that is being undertaken to prepare the Asian Century White Paper.
Working through these processes will allow people in this room to continue to collaborate on solving some of the big economic challenges before us.
These processes, together with today's Forum, are helping to re-enliven important reform important conversations in the context of an economy that is once again undergoing structural change.
To make sure, at the end of the day, that we deliver the very best policy outcomes on the key questions that will govern our future, our economic security and our prosperity as a society.
I’ve certainly heard in the room a real hunger to continue these kind of collaborative processes and we will.
It’s the best way of making sure that our policy outcomes are informed by a broad cross-section of views. It’s the best way of making sure that we are taking those views and using them to secure our aim of more prosperity in our society and more fairness.
Finally, there have been a number of observations during the course of the day about the nature of the international economy and about how fortunate we are to live and work in an economy as strong as ours.
Many reflections both formal and informal about how there is no place in the world you would want to live or work than Australia.
Next week, I will be sitting at the table of the G20 and in view with that spirit about the Australian example I will be calling on my European counterparts to take the decisive action we all want them to take.
That means greater banking integration, greater fiscal integration and a strong focus on growth and jobs.
And that last point is particularly important.
As our own experience shows, and this is the power of the Australian example, growth and fiscal consolidation are not mutually exclusive.
But growth is a necessary precondition for strong public finances.
The Australian model has worked well for us and we’ve been remarking on it today just what we have achieved together and I will be commending it to my colleagues at the G20.
For the sake of the global economy, and for the sake of our own economy within that global economy.