Keynote address at the CEDA 2017 State of the Nation Conference

Speech
31 May 2017
Canberra
Prime Minister
E&OE
Business and Employment, Economy and Finance

PRIME MINISTER:

Yanggu gulanyin ngalawiri, dhunayi, Ngunawal dhawra. Wanggarralijinyin mariny bulan bugarabang.

We are meeting on the lands of the Ngunnawal people. We acknowledge their elders past and present.

Thank you very much for your kind introduction. It is wonderful to be here at CEDA and with so many of my parliamentary colleagues. You’ve identified the Foreign Minister Julie Bishop, Josh Frydenberg is there and so many others, so many other senior members and Members of the Parliament here today.

We are committed to the great work that you are engaged on, the great work of national prosperity.

Policies and platforms will come and go, but right at the heart of our political contest is this very clear line - on our side of politics, we believe that Government’s role is to enable you to do your best. Our opponents in the Labor Party believe that government’s role is to tell you what is best.

As Liberals, we know that while we are all born with equal rights we do not always have the same opportunities and so our job is to ensure that the opportunities are there to get an education, to get a job, to start a business, to realise your dreams.

I believe that in an egalitarian nation such as ours, it is the birthright of every Australian to have the opportunity to achieve their potential, through hard work and determination. 

The Government that I lead is committed to providing the opportunities for Australians to achieve their best, built on a foundation of security that enables them to strive, and to thrive.

And that is the starting point for all of our policies, our economic plan and the Budget.

Now joblessness entrenches poverty and inequality.

As Dr Phil Lowe the Governor of the Reserve Bank, said recently: “The best thing we can do for income inequality is to make sure people have jobs”.

The disadvantage of joblessness is not just borne by those who are unemployed, it affects their family too. One of the greatest challenges facing successive governments is the number of jobless families in Australia, and the impact of intergenerational joblessness.

Academic performance is highest among children from a family with no history of joblessness and lowest for children with two generations of joblessness, of family joblessness.

The best way to share the opportunities that come with economic growth is to make sure families at risk have someone in a job, bringing home a regular pay cheque. This improves not only their prospects and living standards but that of their children for years to come.

And so that is why every element of our economic policy is directed towards this goal - getting more people into jobs.

So we are breaking down barriers to employment with policies that support those most in need, while maximising people’s ability to support themselves and carve out their own future.

We are encouraging Australians off welfare and into the workforce by strengthening participation requirements.

And we are better targeting the government’s support so that it gives jobseekers what they need to find a good job.

For example, we have earmarked $263 million to expand ParentsNext, which supports young parents to plan and prepare for employment.

Our childcare package will support around one million families who rely on childcare to participate in the workforce, providing the highest rate of subsidy to those with the lowest income.

And we are investing $840 million in a Youth Employment Package to increase the employability of vulnerable young people.

So our policies are not just breaking down barriers to work, but they are also supporting employers to create more jobs.

We are reducing taxes on business to keep Australia competitive. We’re replacing the 457 visas with two new programs with stricter entry requirements that ensure we can still bring in the best and the brightest - after all immigration policy is in a sense a recruiting tool but at the same time making sure Australians are first in line for jobs.

And alongside the new visa programs, the $1.5 billion Skilling Australians Fund will support young Australians to develop skills in the priority areas through apprenticeships and traineeships, and ultimately help turn our skills gap into job opportunities for Australians.

Now a world-class education is one of the best ways to enshrine that equality of opportunity, of which I spoke.

Now I’m an example of the motivation behind our education policy - great teachers change lives. Great teachers changed my life.

And I watch proudly as does Lucy every day, as our daughter Daisy changes the lives of her students.

I want all Australian children to have great teachers who encourage them to reach their potential.

Shortly before the budget, we announced a major education reform - the introduction of transparent, needs‑based, school funding as recommended by David Gonski. Often cited, but until now never carried into effect.

We have to confront the fact that more money has not meant better results for our students. The evidence is unequivocal.

Despite record increases in funding, national and international reports have shown at best stagnating, and at worst, declining performance in our education system.

Students are becoming less competitive internationally and their results in absolute terms have been going backwards.

Our NAPLAN results have not changed significantly over the last few years. Many have been the same since 2008.

And we are being outpaced by poorer nations.

Our maths and science results, for example, have mostly plateaued since 2011, while countries like Kazakhstan and Slovenia have gone past us.

Now not every Australian school has the funding resources that it needs. Some schools were badly under funded by Labor’s mismanagement.

Our new, needs-based, transparent, consistent funding will address that mess which they left us with.

So this week in the House we passed legislation which deliver a $18.6 billion increase to schools funding.

And Labor voted against it, revealing that despite talking about needs-based funding, they prefer the special deals, 27 in number, which were entered into in great rush at the end of the Gillard government to shore up their political fortunes.

Our funding model will correct the inequities and inconsistencies in the current system by ensuring students with the same needs attract the same support from the Commonwealth, regardless of where they live.

We must move on from the funding wars. We have to move on to ensuring that our children get the quality education and the outcomes that they need to strive and thrive in the 21st century.

So that is why we have asked David Gonski to lead a new inquiry - Gonski 2.0 - to advise the Government on how extra Commonwealth funding should be used to improve results and give our future generations the best start in life.

Now our approach to schools funding is another demonstration of the great truism in Australian politics: if you want policy that’s more than empty rhetoric - policy that is properly funded, implemented and works for the nation - elect a Liberal Government. Labor floats grand schemes. Liberals fund and deliver vital services.

Labor failed to deliver the funding required to guarantee quality education, a health system that we can rely on and pay for and a Disability Insurance Scheme that protects Australians living with permanent and severe disabilities.

In the case of disability funding, it was a shameful abdication of responsibility to some of our most vulnerable.

Rolling out the NDIS and ensuring that it is properly funded, is a key priority for government and for people with disabilities, their carers and families.

The NDIS savings fund, once legislated, will make this a reality.

We have established the Medicare Guarantee Fund to secure the long-term future for the Medicare Benefit Schedule and the Pharmaceutical Benefits Scheme. The money will be placed in the fund every year - transparently, assuredly, responsibly.

This is the great modern test of political character. It's one that our opponents have failed.

Only Liberal governments are able to deliver the services and the quality of life that Australians have come to expect and we will do so living within our means so that we are not asking future generations to pay for it.

Now if we recognise that we are all born equal, then surely it follows that everyone deserves an equal chance of improving their stocks in life.

One of the marks of an advanced society in a developed, well-functioning economy, is that each generation strives to improve on the last and has a good chance of doing so.

Liberals not only believe in this ideal, we believe it is the government's duty to enable it.

Remember the clear line between us and our opponents - we believe that government's role is to enable you to do your best, our opponents believe, deep in their DNA, that government's role is to tell you what is best because they believe government knows best.

We are enablers. We know that you cannot reduce inequality of opportunity by putting up barriers that stop people getting ahead. Rather, those barriers entrench the wealth or the poverty that people are born into.

What more hopeless, defeatist principle could there be than the one that tells people they cannot aspire to outdo their parents?

What is more natural, more human, than to do all we can as parents, to ensure that they can outdo us?

That is at the very core of our egalitarian nation, that we are not limited or defined by where we are born, who our parents were or where we went to school.

There is nothing more Liberal than doing all we can to ensure that every Australian has the same opportunity, the same chance, with hard work and enterprise, to get ahead and realise their dreams.

That's why our housing policy improves the integrity of negative gearing, rather than banning it.

We don't want to stifle the aspirations of the mostly middle class wage earners who wish to create a better future for themselves and their families.

We won't deny workers that path to prosperity. Instead, we have taken a comprehensive, multi-layered approach to the complex problems of housing affordability.

It includes a new approach to urban infrastructure in cities, with the Commonwealth acting less as a dumb ATM and more as an investor.

A partner in City Deals, taking a stake in city structure not in the sense of only an asset or portion of it, but in owning the outcome of the planning and collaboration.

For the same reasons, we do not believe that permanently increasing the combined top marginal tax rate to 49.5 per cent will make us a more prosperous nation.

The last time the top rate plus the Medicare levy was higher, was in 1988 when it was 50.25 per cent. Now returning to that bygone era would send a very poor signal to Australian workers - don't bother trying to earn just over two times average weekly earnings because once you do half of every additional bit of effort, half of every extra hour you work, half of every new idea you generate, indeed half of your extra perseverance, determination and enterprise, belongs to the government.

That undermines aspiration and fairness while worsening incentives and economic efficiency.

Just as we seek to improve the equality of opportunity for today's Australians, we are determined that future generations will not be stuck with the bill and have their opportunities diminished as a result.

It isn't fair to ask our children and grandchildren to pay for the lifestyle we demand today.

It's not fair to shirk the hard decisions now, to do so would put our hard-earned AAA credit rating at risk, drastically reducing the quality of life of Australians in the future.

So we have made the tough and pragmatic decisions to put the budget in a stronger position.

Yes, Liberals prefer lower taxes but we dislike unsustainable deficits and mounting debt even more.

We have delivered all of this while sticking to our values. All of our new spending decisions were paid for by reducing spending elsewhere in the budget.

Government spending will fall to 25 per cent of GDP by 2019/20, around the 30-year historical average. And average real growth in spending under the Coalition Government, is lower than the average of each of the previous five governments extending back almost 50 years.

We have been criticised in some quarters for taking new steps in the budget and in our economic plan that preceded it. It’s been suggested, in some areas, that that is somehow or other inconsistent with the traditions of the Liberal Party.

Paul noted that Larry Marshall of the CSIRO and Jeff Connolly of Siemens were here - their organisations, their companies being the sponsors - and each of them great sentinels of innovation.

CSIRO in particular, Australia’s pride, an extraordinary powerhouse of innovation and research that has spanned generations.

But you know, when you talk about generations and you talk about the traditions of my party, the Liberal Party, and cast back to a speech Robert Menzies gave on the 12th of April 1965 here in Canberra. He reflected on the success of his governments since they had come into office from 1949.

This is what he said: "Over the whole of this period of 15 years, we have won because we have been the party of innovations. Not the party of the past. Not the conservative party dying hard on the last barricade but the party of innovations".

We see the world as it is, as Menzies did. We see it as it is and we adjust, we develop, we innovate. We are a dynamic political party, a dynamic government that recognises that we must be prepared, as Larry and Jeff understand very well, to do things differently to achieve our objectives and to realise and embody our values.

Every day we have to ask ourselves this question - are we enabling Australians to realise their dreams? Are we giving Australians, born equal, but too often denied equality of opportunity, are we enabling them to have that equality of opportunity? Are we doing everything in our power to encourage them to learn and to earn, to strive, to thrive, to get ahead? Are we doing everything we can to harness their enterprise, their ingenuity, their creativity?

And when we do, we are doing our duty to them.

It's our commitment to Australians, their enterprise, their passion, their genius.

We are the enablers of Australian politics and our budget, our policy, our economic plan, every element in our program enables Australians to be their best.

Thank you very much.

MR JOHN LYDON - MCKINSEY & COMPANY:

The Prime Minister has graciously agreed to take questions from the audience. Who would like to ask the Prime Minister a question?

QUESTION:

Steven Harrison from the City of Adelaide. I’d just like to acknowledge that first of all, your awesome investment into our defence sector in South Australia. It’s a real game-changer. But I’d like to focus on the City Deals. We’ve got what we think is pretty out there and would change Adelaide for the next 50 years but I’m interested in what your thoughts are this year about what you expect to see in a City Deal and what would win your signature on a City Deal?

PRIME MINISTER:

The whole idea of a City Deal, and it is an innovation and it involves the Commonwealth not being a dumb ATM. I saw the Treasurer of Victoria was quoted in the newspaper today complaining about that. Of course, from his point of view I guess it’d be better if the Commonwealth just continued doling out billions of dollars and didn’t ask how it was spent or want any influence in it.

But I think the reality is we have to make government dollars go further. That’s the bottom line.

We will do that better if we collaborate. So a City Deal involves the federal government, state government, local government and indeed local stakeholders – it might be a university as in the City Deal in Launceston, it might be the football club as it is in Townsville. You know, bringing the major players together. The community together, saying: ‘Right, let’s agree on the vision, let’s ensure that everything we do is going to drive towards our common objectives’.

And they will differ from city to city and from location and region to region, but of course key parts of it will be affordable housing, economic development, jobs, improving urban amenity and so forth. It is vitally important to have that coordination. 

You’ll see that already in a number of places. I’ve mentioned Launceston and Townsville and obviously, a very large City Deal is that relating to Western Sydney where of course we are as the federal government are going to build the Western Sydney Airport.

Again an example of the government, federal government operating as an investor, taking a clear-eyed business-like approach which is designed to deliver the infrastructure, the outcomes, the sinews of economic growth that you need to succeed.

So in terms of your city, you are right about the defence industry investment is absolutely without precedent in peace time, it is the largest investment in our history, but it is - in addition to providing our defence forces with the capabilities that they need, the object is to ensure that we have the sovereign defence industry that we should given the size of our defence investment. Because that will then pull along with it other businesses, other industries, advanced manufacturing in so many other areas, it is an absolute stimulant to economic development.

So with our Defence White Paper and our Defence Industry Plan we are securing national security and economic security at the same time.

MR JOHN LYDON:

We have a question, table 13.

QUESTION:

Good morning Prime Minister, Patience Harrington from the City of Wodonga in North East Victoria. We have the City of Albury across the river just going on from Adelaide, I think we’d be prime for a very exciting City Deal. 

But I’d really like to ask you about regional development. There’s a lot of regional councils and the areas of Australia that are so prime to grow, and how we do that and understand the futures of our wonderful capital cities in terms of your governments policy around regional development, I’d really appreciate your thoughts.

PRIME MINISTER:

Well you know we represent in our party room, Liberal and National Party Room, most of regional Australia. So we have a very real connection to and commitment to regional Australia.

Of course, you can generalise about regional Australia up to a point because you’re talking about most of Australia and you’re talking about cities and communities as different as Wodonga and Toowoomba and Townsville that I just mentioned, and Launceston, and so many others. But this is absolutely a key commitment - our regional development funding of course, is substantial and we are committed to doing, entering into the deals and the commitments that I talked about earlier with regions as well.

The important thing is collaboration, cooperation but of course for regions to succeed needs great regional leadership. You have to have an understanding and vision for what your cities can do, what your community is going to do. And you’ve got to have that vision for the future, set that out and then we will be your partners, as opposed to simply being a dispenser of cheques.

In other words, we can add a lot more value by working together rather than just being reactive.

MR JOHN LYDON:

We perhaps have time for one more question.

QUESTION:

Good morning Prime Minister. Thank you very much for your comments. This is more of a comment rather than a question.

I’m a mother of five and I left the country for the last 12 years to be able to provide the education and the life that I wanted to provide for my children.

I would like to state that even though the changes of Gonski 2.0 may be seen as hitting high-income earners, many of us decide to put education as one of the most important gifts that we can give our children. And I firmly believe that that is something that my family decided to do so that I could give my children the best start.

I would like to highlight that I think in terms of addressing education in this country, we need to start at a much earlier age. Having come from Hong Kong where my children were given education from the age of two through ‘til five before they went into primary education and I think if we look at that, that not only provides our children with a head start, it also enables women to get back into the workforce.

So I really do encourage the government to look at those nations in our backyard such as Hong Kong and Singapore who are looking at early childhood education. Child care is not always the answer because it doesn’t provide the education that I think those children need and that will give us much better scores in NAPLAN.

And my experience is only based on the children that I have and I can see quite a significant difference in their ability to be able to go into primary school knowing how to read, write and actually do maths compared to the Australian children that I’d seen since I have returned to my country. Thank you.

PRIME MINISTER:

Well, thank you very much and thank you for that very eloquent endorsement of the importance of early learning and I refer to our important child care reforms which are of course focused on early learning and this is a high priority for us and a high priority for state governments as well.

But you are absolutely right – early learning is critically important and the experience you’ve had with your children, I know many parents will share.

So thank you very much for sharing that experience and giving us that very timely reminder of the earlier you can get started on reading and writing the better.

[ENDS]