"Great reforms endure", speech to the McKell Institute, Sydney
WED 04 JULY 2012
Sixty-five years since Bill McKell last held elected office in this State, his story still has much to tell us.
His was a truly remarkable Australian life – from our meanest streets to the very summit of our society – or as his biographer put it, “from boilermaker to Governor-General”.
He was born in the same year as our grand old party – 1891.
Raised by a hardworking single mum, he left school to help support his family at 14, before winning a prized spot as an apprentice in the noise and heat of the workshops in Balmain.
There he gained more than an apprenticeship in boilermaking – he gained an education in Labor values.
Bill McKell rose through the union movement and the Labor Party through his ability, his decency and his integrity.
At just 26 he became a member of the NSW Parliament representing the inner city neighbourhood of Redfern.
As an MP, he put himself through law school and became a reformist Minister for Justice.
He served as Party Leader and Premier – uniting NSW Labor after the disastrous Lang split and leading the State through the Second World War.
In doing all that he created the model of steady and methodical, practical and progressive government which became the template for his great successors – like my own Foreign Minister, Bob Carr.
In Government, McKell expanded or created miners’ pensions, workers’ compensation, work safety laws and annual leave.
He founded the State’s first conservation department, saved the Macquarie Marshes wetlands and established Kosciusko National Park.
He extended electrification to rural areas, and sat down with Chifley to help create the Snowy Scheme and the Commonwealth-State Housing Agreement.
A lifetime later, these achievements still benefit the people of this city and this State.
Why? Because great reforms endure.
Friends by next year, pricing carbon will be part of the “lived experience” of more than 860 million people worldwide.
Polluters are paying a price – in Ireland, $24 per tonne of carbon – in Sweden, $145 per tonne from fossil fuels for heating.
It’s a reality seen and understood by more than 500 million Europeans, more than 200 million Chinese and starting this week, more than 20 million Australians.
Now, the facts are on the table – indeed, on the kitchen table.
For years, our people have heard extraordinary claims about what carbon pricing will be like.
Now, Australians can finally judge for themselves.
This is a point we reach, eventually, in debate about every reform.
Progressive governments always try to make important changes for the future.
Someone always says it’ll be the end of the world.
When reform becomes reality – we find out who’s right.
The doomsayers said that universal superannuation was “one of the biggest con jobs ever foisted by government on the Australian people” – that the Mabo and Wik decisions would veto mining investment – that our Fair Work Act would cost jobs and threaten the economy.
But Australians judge reform, not on the rhetoric, but on the reality.
After months of the doomsayers predicting chaos and preaching despair, the reality can now emerge. The simple facts can become clear.
First, that our carbon price will cut carbon pollution.
Because we now have a price on carbon, Australia’s pollution will fall by at least 160 million tonnes a year in 2020 – a cut equivalent to taking forty five million cars off the road.
All the evidence shows that this is the right contribution for Australia to make to the global effort now.
Our world faces real and urgent threats from climate change like rising sea levels.
A one metre rise would see a million people in our region on the move.
Our country faces very direct threats too: worsebushfire conditions and droughts, more days of extreme heat, increased cyclone intensity, bleaching of coral reefs.
Climate change is a global issue that threatens us here, so we are doing our bit.
Second, our carbon price will not only cut carbon pollution – it will strengthen our economy.
I can see the world changing to cleaner sources of energy right now and I know we must not be left behind.
There is a clear threat to our future prosperity if our economy does not keep up.
I don’t want all the scientific and technical expertise we have – especially in solar research and development – only to benefit companies in China and India, Europe and the United States.
I don't want precious investment funds to be lost to more energy-efficient economies.
I want Australia to develop and benefit from new technologies – whether that’s energy efficiency in our commercial and industrial buildings and our homes – whether that’s on our farms and in our food processing factories – even in our landfills and down our mines.
And the sooner we begin making the transformation, the sooner the benefits will be felt.
Did you know the Chinese company Suntech – whose CEO, Dr Zhengrong Shi was educated at the University of New South Wales – became the world’s largest producer of silicon solar modules in 2010?
Or that a decade ago China had no sizeable wind turbine makers – and now, Chinese makers occupy four of the top 10 slots in the industry worldwide?
Individual examples of a worldwide transformation: in 2010, global investment in generating renewable energy such as solar and wind power overtook investment in generating energy from fossil fuels.
We’ve got to start the transformation to cleaner energy now
With our price on carbon in place we can already forecast $100 billion flowing into renewables by 2050, the power of a market mechanism driving investment in the power of the earth, wind, water and sun.
And revenue from the carbon price is funding complementary measures.
This is a transformation incentivised by a price signal and supported by public investment.
The $10 billion Clean Energy Finance Corporation will operate in the so-called ‘market gap’, opening up new opportunities for business to invest in clean energy technology and infrastructure.
Financing viable start-up projects, ones which in their nature find it difficult to attract bank finance – like community wind farms, modelled on those already built in Hepburn in Victoria and Denmark in Western Australia.
The Clean Technology Fund will deliver thousands of projects to help manufacturers modernise their businesses and cut energy use.
And the Carbon Farming Initiative will support new methods for farmers to reduce carbon emissions and earn extra income.
Under the Carbon Farming Initiative Australian farmers have the opportunity to save carbon through proven methods – like environmental planting of native species, destroying methane generated from manure in piggeries and carrying out savanna burning early in the dry season.
And more opportunities are on the way.
Right now private industry and our leading scientific bodies, like the CSIRO, are working to research and develop new ways to cut carbon emissions from the land sector – as well as new methods to measure on-farm carbon savings.
Our Solar Flagships program is supporting AGL Energy and First Solar’s solar projects at Nyngan and Broken Hill.
These will be amongst the largest solar projects in the world.
The Nyngan project site alone will occupy an area equivalent to two Sydney Olympic Park precincts.
The two projects combined will require over 2 million solar panels, they’ll cut greenhouse gases by over 400,000 tonnes each year and provide enough energy annually to supply over 33,000 average Australian homes.
Now, our economy has had a carbon price for only a few days.
But business decisions have been made with the carbon price in mind for more than a year.
And the sum of all those decisions is this: the Australian economy is strong.
Since the carbon price passed Parliament at the end of last year, the economy has grown 1.3 per cent, household consumption is up 1.6 per cent and new business investment is up 5.5 per cent.
In fact since the details of the carbon price were announced earlier last year, the economy has grown 3 per cent, household consumption is up 3 per cent and new business investment is up twenty per cent - the biggest comparable lift in investment in seventeen years.
There's no better proof that the scare campaign is nonsense. And the economic bottom line: with a carbon price in place, by 2020 our economy will create 1.6 million jobs.
Third, the carbon price is not only good for the environment, it is not only good for the economy but because we are a Labor Government, when we make change, we help working Australians to make ends meet.
I am acutely aware of the financial squeeze felt by many Australians. Not just families, but by pensioners and singles as well.
Wages are growing and overall inflation is under control but parts of the household budget are under tight pressure.
Bills like electricity and insurance add up. People often tell me that some of the small good things in life – an outing with the kids, a family holiday at the end of the year – are starting to feel like luxuries that are out of reach; that the uncertainty in the world economy means that they feel the need to save more and pay off debt more quickly as well.
And that while they hear about a mining boom, they don’t see the benefits in their home.
So our Labor Government is determined to help.
The schoolkids bonus, the childcare rebate, paid parental leave record pension increases and we’ve kept interest rates low.
These are all making a difference.
And now the carbon price is funding real assistance for working Australians.
Household assistance payments which will continue to rise over time – these are permanent increases, indexed like other government payments.
Australian families and pensioners have already received an initial payment in May or June to help with their utilities bills.
This pay day, all taxpayers with incomes up to $80,000 will get a tax cut, with most getting a tax cut of at least $300 a year.
This week, the tax free threshold is tripled: people earning $18,200 or below will now pay no tax.
That means that almost a million people won’t pay any tax out of their next take home pay – including many students who work part-time – along with 600,000 working women.
Single pensioners will get $338 more every year and couple pensioners get $510 more every year combined – and these higher pensions will be maintained in future years.
Put it another way: the average impact of the carbon price on electricity bills will be $3.30 this week.
And this week, we are providing an average of $10.10 to each household, in tax cuts and payment increases.
In fact about 6 million households – two thirds of all households – will get tax cuts and increased payments which fully cover their expected average extra costs.
This reform is building us a clean energy future – with a stronger economy – where working Australians get help to make ends meet.
That’s how Labor does reform in this country. That’s the kind of reform that our country deserves and that’s the kind of reform that endures.
I know we can do all those things – because we have done it before.
Look at our decisive action in the global financial crisis: we saved jobs, stayed out of recession and got back to surplus.
And who would have thought then that we’d be where we are today: where we wouldn’t change places with any economy in the world.
And the same kind of decisive actions are what will ensure that in the decade to come: we’ll be making a difference to the climate – jobs will be growing – working Australians will find it easier to make ends meet and the carbon price will be in place.
The history of our country, our politics, our party, is this: great reforms endure.
And in the end, everyone says they were a great idea.
That day may seem a long time away while we are in the midst of this debate.
But in twelve months’ time, how smart will it look to be promising to bring to a shuddering halt investments being made in solar energy and other renewables?
Or to throw people who work in new, cleaner businesses out of their jobs and on to the streets?
How smart will it look to take tax cuts off working people who are better off because of them?
Particularly when the Opposition promising to do these shocking things believed in putting a price on carbon when it was in Government?
Indeed when every other living Liberal leader has previously supported putting a price on carbon?
Perhaps history is a better guide than today’s histrionics.
One of the proudest days of Bill McKell’s long life must have been 17 October 1949.
When as Governor-General he went to Adaminaby with his great Labor mate, my great predecessor, Prime Minister Ben Chifley, to fire the first blast of the Snowy Hydro Scheme, the vast project he’d done so much himself to prepare.
The Snowy is one of the great nation-building achievements of the twentieth century in Australia.
It’s become an icon of one of our greatest periods of shared national purpose and achievement and surely our most beloved renewable energy project.
But when Chifley was putting the Snowy bills through Parliament, the then Opposition Leader Menzies quibbled and wavered and found excuses to raise questions.
He was too sophisticated a figure for an aggressively negative campaign of the kind we see from the modern Liberal Party – but my conclusion from the record is that had Menzies been Prime Minister by then, he would have proposed a very different Snowy Scheme, if he’d proposed one at all.
Well, the Snowy had already begun when Menzies became Prime Minister in 1949 and Menzies didn’t turn off the tap.
In fact his Government worked for years to finish what Chifley and McKell had begun.
One of the proudest days in this nation’s life was the passage of the Native Title Act in 1993.
Surely no single piece of Australian legislation has done more to right wrong than that great law.
I was privileged to speak in Parliament last month on the twentieth anniversary of the High Court’s Mabo decision and I saw the Liberal leader say, in essence, that the opponents of the Native Title Act which followed had been proven wrong.
Including, presumably, the handful of his own MPs still in the House who said, “no” when that great reform came to a vote in 1993 and none of them will say they would vote against it today.
That will be the story of pricing carbon – because really, that’s always the story of reform.
In the end, the doomsayers always have to admit they were wrong.
In the end, the only question is whether it takes them twenty years or two.
And in the end, great reform endures.