Speech to AMEC Convention
TUE 04 SEPTEMBER 2012
It’s great to be back in Perth – the city that says so much about where our nation is headed.
It’s great to be back talking with the mining industry – the sector that says so much about how we will get there.
I’m here because AMEC’s member companies are the explorers; the discoverers.
If it’s there, you’ll find it.
If you find it, you’ll dig it up.
You are tough and resourceful.
Qualities I know a bit about myself.
And so I meet with you here today in a genuine spirit of respect and shared concern.
Nothing has preoccupied me in public life more than how we ensure our nation remains prosperous and opens up that prosperity to all our people.
Yes, last week we saw some outstanding capital expenditure figures.
Mining investment was $47 billion in 2010-11.
$82 billion in 2011-12.
It’s set to hit $119 billion by the end of this financial year.
That's 13 times higher than before the mining boom, much of it from overseas.
Let's make sure Australia’s door remains open to foreign investment based on clear national interest rules, rather than the populist posturing we see in some quarters.
We can also take heart from Monday’s exploration data, which showed that trend exploration expenditure rose 3.1 per cent in the June quarter, up 23 per cent on the same quarter last year.
But I know there is uncertainty out there as well –
From depressed conditions in Europe and the US.
From a softening of growth as China prepares for its new leadership and rebalances its economy.
And from the rise of resource competitors elsewhere in the Southern Hemisphere.
These factors are being reflected in commodity prices, with coal and iron ore coming off their highs.
And some of the stuff close to your hearts and hands – like zinc, nickel and mineral sands – are suffering set-backs as well.
I also know that investment decisions are becoming more complex as projects become more complex.
But let's be clear.
Reports of the mining boom's death have been exaggerated.
This is a boom with three distinct phases:
A prices boom - which is now passing.
An investment boom - still to reach its peak as seen in those remarkable capex figures.
A production boom - as all that effort comes to fruition in the years and decades ahead.
I talk of "decades" because the Asian Century stands firmly behind the peaks and troughs of the business cycle.
It’s a transformation on the scale of the Industrial Revolution.
It’s happening on our doorstep.
And it’s not even half-way done.
China is still - in broad terms - only 50 per cent through its process of urbanisation and industrialisation.
JPMorgan chief China economist Haibin Zhu recently noted Chinese demand for Australia's resources would slow but remain at a very high level over the next five to 10 years.
Likewise, Rio Tinto CEO Tom Albanese said recently that Europe would contribute to a "soft demand period" until early next year, while China’s industrialisation would drive healthy commodity prices for decades.
Again that word "decades"; and that’s just China.
India is yet to undertake the most dramatic stage of its rise.
To say nothing of the development we expect to see in South-East Asia, South America and Africa over the next 50 years.
That’s the race we’re in.
A race that’s ours to win or lose.
It was famously said that Battle of Waterloo was won on the playing fields of Eton.
It could be said that the race of the Asian Century will be won in the classrooms of Kent Street Senior High School down the road from here and its sister schools around the nation.
Our 9500 schools are the crucible where Australia’s economic future is being forged.
That’s why I was so proud yesterday to launch the Government’s National Plan for School Improvement.
Nothing is more important to our future.
Because schooling equals skills equals jobs.
High skilled, high paying, high value-adding jobs.
And a mining conference is a great place to explain why higher school standards will make us winners in the Asian economic race.
Think about this way.
You are risk-takers – renowned for your drive and determination.
But what about our teachers.
They turn a four-year-old who has just graduated from pre-school into a twenty-four-year old engineer who has graduated with world-class mining skills.
Teachers see the potential in kids, you see the potential in a landscape.
You invest in mines.
They invest in minds.
Both yield big returns but only by playing it smart.
It wasn’t luck that built a mining industry.
It was skill.
Our human endowment realising the possibilities of our natural endowment.
It’s the common ground we share here today.
To put it simply:
You want skilled workers in Australia.
I want working Australians to have skills.
It would take a special sort of contrariness for us to find a way to disagree about that.
But we don’t.
Some of my most productive discussions have been with the mining industry about skills.
I know that the struggle for skills raises your costs and blows-out your timelines.
When you undertake a big project, you can line up the funding, the approvals the equipment but still be left asking – where do I get the people?
Government action is part of the answer.
That’s why our new HECS for Skills plan and our $700 million National Workforce Development Fund matter.
It’s also why things like the Jobs Board matter.
There are more than fourteen hundred jobs on offer at the moment.
Australians need to be willing to take those jobs – and they are.
Over sixteen thousand job seekers are registered on the Jobs Board.
These are hardworking Australians looking to your industry for a chance.
The nation as a whole is looking to you as well.
Yes, migration has a place but it is not going to be the cure-all that some may think.
Why fly workers in from Manila or Shanghai when they could be flying in from Hobart or Adelaide, especially given the softening of construction and manufacturing in many parts of the nation?
Why hold job expos in the eastern states of America when you could be holding them in the eastern States of Australia.
I don’t want the mining industry to hire a single foreign worker if there is an Australian worker who can do the job.
The heavy lifting will need to be done by the skills system and by your own efforts, in conjunction with the Commonwealth and State Governments, to attract more domestic labour to the opportunities on offer.
Of course, I recognise it’s not always as easy as that.
Many Australians have the ambition to work in your industry but not the skills.
In some cases their lack of skills goes beyond VET certificates to the foundational skills of reading and writing and the whole ability to learn in a formal setting.
I see that among the unemployed in my own electorate in Melbourne.
I see it – and I’m angered by it.
These men and women are a lost educational generation.
The cohort our system has failed.
And because only seven per cent of future new jobs will be unskilled, a lack of skills is a passport straight to the dole queue.
We do still have a great education system.
But as places like China and South Korea aim higher, our educational performance is falling behind, especially in those key areas of science and maths.
Even our top students are not quite achieving what they did a decade ago.
Nothing should keep a leader, indeed a mining executive, awake at night more than improving the quality of education in this country.
Consider my “in tray” when I became Education Minister five years ago:
We didn’t have nation-wide testing of English and maths.
We didn’t have a national curriculum.
No way to reward top teachers.
No national plan to devolve more power to school principals.
We didn’t know the names of the worst performing schools or how to find them.
The only thing worse than seeing those results is hearing the Coalition say there is no problem and we should just stick with the status quo.
Well, we knew there was a problem, and here’s what we did about it:
We doubled Federal investment in education.
Introduced new teaching requirements for literacy and numeracy.
A National Curriculum.
Measure to attract high quality teachers and empower principals.
New research into high performance and how it can be spread to every school.
We made NAPLAN testing universal and compulsory.
And we published the results on the Internet so every Australian can see the results.
You can look the numbers up right now and they'll tell you this:
Australia’s school results are good but not good enough.
Over the last decade, we’ve fallen from 2nd to 7th in reading and from 5th to 13th in maths.
The average 15 year old maths student in Australia is more than two years behind a 15 year old in Shanghai.
And children from the poorest quarter of Australian homes are two years behind children from the most well-off quarter in reading and mathematics by Year 9.
That is just not acceptable to me.
It should not be acceptable to you as the employers of Australia.
Or as the parents of Australia.
That's got to change – and it’s going to change.
The blueprint is the Gonski Report, done not by an academic but by a hard-headed businessman well at home in the nation's boardrooms.
The first comprehensive funding review in 39 years.
Gonski tells us the same thing that the Karmel Report told us all those years ago:
Some Australian schools don’t have the resources they need.
So we need a resource standard that ensures every school has the funds it needs to do the job.
Karmel thought we’d get that standard in place by 1979.
I’m just glad we’ll start getting it in place from 2014.
But Gonski is not just a funding review.
It’s an historic opportunity to stop school resources being the issue and instead make school improvement the issue.
By giving every school a benchmark funding allocation, the issue of resources can finally be taken off the table.
Performance stays on the table.
That’s why I’ve called it a National Plan for School Improvement.
It will do all those things industry has been advocating for years:
The best teachers appointed, appraised and appreciated.
Strong principals with the right powers.
A strong ethos of learning in the school.
Using data to make sure all students are learning.
A strong partnership with parents and the community.
And the resources our teachers and principals need.
These are the things that will improve all our schools – government and non-government, religious and secular, city and bush.
Like any company here today, we have a strategic goal behind our thinking:
A child starting school next year will graduate in 2025 – thirteen years’ time.
That’s as long as it can take to plan a big resources project.
You understand a thirteen year pipeline of investment in mines.
I have a thirteen year pipeline of investment in minds.
So by 2025 I want Australia to be back in the top five countries educationally.
Getting there won't be easy.
It will take money for sure; but as we saw with the NDIS, the availability of money depends on the availability of will-power and cooperation.
Now the mining industry knows a thing or two about lobbying.
Let’s say you can be influential when you get together.
So use that tremendous organising power to say to the Premiers and Chief Ministers: get on board with Gillard’s plan.
This plan requires a nation-wide effort.
A nation-wide effort to get schooling right, and to keep it right.
It’s no accident that our National Plan for School Improvement is being announced in the same year we launch our White Paper on the Asian Century.
The two are linked, and they are linked fundamentally.
There is no question about whether we have a boom.
The issue is whether we make it last.
My school improvement plan is a plan to make the boom last.
Along with all our other work in broadband, infrastructure, clean energy, innovation, universities and skills, tax reform and deregulation.
It's the sophisticated, evidence-based package that will ensure the productivity of the future.
Not by raking over old debates or transporting us back on a cosy tide of mythology to an imaginary past.
Remember what Australia was really like five years ago:
Inflationary pressures were building and interest rates were high.
The tax take was at a record high as well.
Households were borrowing more than they saved.
Industry was complaining about skill shortages and falling educational standards.
You didn’t have the infrastructure you needed.
And we didn’t have a broadband plan two decades after the World Wide Web had been invented.
All that despite the biggest growth in national income our economy had ever seen.
Thoroughly unworthy of the great nation we are and can be.
We’ve set out to fix all that.
To identify the drivers of growth in a mature, developed economy where we compete on quality and value-adding.
To get beyond this myth we can ever drag our wages and taxes low enough to match our Asian competitors on price.
And we wouldn’t want to.
For two hundred years, we’ve worked hard to build what we have today.
A prosperous, advanced, resilient economy that offers wealth and opportunity for its people.
If you want to find the government and the party that has a plan for the future of such a country, look for the outfit that has a plan for education.
We have that plan.
And if we hew to the right path, it will take us where we need to go.
It requires something else too.
Something the kids down the road at Kent Street Senior High understand because it’s their school motto: Courage.
We didn’t get where we are as a nation by cringing in the face of challenges.
Or wrapping ourselves in the comfortable blanket of nostalgia.
Winning in the Asian Century will take courage.
It’s not a journey for the faint-hearted.
And I don’t believe for a moment there’s a single faint heart in this room.
So I present to you my plan for educational improvement today as business leaders, as parents, and as citizens who hold high hopes for the future of our nation.
It’s a plan to win the economic race by winning the education race.
And I believe with every fibre of my being that we can win those races.
We’re good enough
We’re smart enough.
Let’s show we're courageous enough as well.