Chifley Research Centre
Wednesday, 13 March 2019

Inaugural Chifley Lecture: Chris Bowen on “Ambition and Aspiration: Chifley and modern Labor”

We meet on the traditional lands of the Kulin Nation.

In acknowledging their elders: past, present and emerging, we record that a vital part of Labor’s governing agenda must be more progress in closing the gap in jobs and justice, health and housing and enshrining a voice to Parliament for indigenous people in the Constitution.

I’m very honoured to have been asked to give this, the inaugural Chifley Lecture for the Chifley Research Centre.

Of course, some of you would be aware that while this is the first Chifley Lecture for the Chifley Research Centre, it is by no means the first Chifley Memorial Lecture.

In the 1950s the Chifley Lecture was given under the auspices of the University of Melbourne Labor Club.  Such greats as HV Evatt gave the 1954 lecture, Heinz Arndt the 1956 and Gough Whitlam the 1957 lecture.

I want to congratulate Brett and the Chifley Research Centre for rejuvenating and renewing this tradition, another valuable contribution to the public policy debate in Australia.

In our Party, a collective memory in action, built on the dreams and achievements of so many, none stands taller than Chifley.

The locomotive driver who became Treasurer and then simultaneously Prime Minister and Treasurer, who bequeathed to us the Light on the Hill, to which our eyes are always turned, our efforts always directed.

The humble man who never forgot whom he served: who was so humble that as Prime Minister in Old Parliament House, with a direct line telephone number one digit different to the Canberra butcher shop, would patiently note the meat orders of people who had rung him by mistake, never revealing they were talking to the Prime Minister, and then pick up the phone ring through their orders to the butcher.

As Treasurer, the indispensable partner, friend and sounding board to his Prime Minister John Curtin during our nation’s darkest days.

The man who never gave up working for the Labor cause.  Out of Parliament for nine years.  But what a productive nine years they were.  He didn’t need to be in Parliament to make a massive contribution, including to the rebuilding and unification of our party following the 1931 split.  He had physical and political courage.  Taking on Jack Lang as the official Labor candidate in Lang’s home seat was not a task for the faint hearted.

The post war leader who dreamed big things: who knew that every single Australian regardless of wealth and background deserved their fair share of the dividends of post war growth and deserved a decent home.

Who imagined a bigger, better country and who set about building it.

Who, together with Arthur Calwell, designed and implemented the immigration system that has been so important to modern Australia.

Who knew that education and building our skills, what we might today call human capital and lifelong learning were a key to the future. After the war, his government persuaded universities and technical colleges to enrol ex-servicemen for free.  Education and training was at the heart of his Labor Government.

Almost 70 years after his death, he and everything he stood for is as important as ever for these and many other reasons, and it is appropriate we honour him.

But honouring Chif’s legacy is not enough.

It’s important we remember his invocation to us to keep our eyes on what he called “the great objective” the Light on the Hill, and refresh the governing Labor mission.

And this speech comes at the beginning of an election year, so it’s a good opportunity to comment on Labor’s governing mission in that light.

Labor has not one skerrick of complacency about this election.  We have too much respect for the Australian people to take anyone or anywhere for granted.  We know we need to earn every vote and every seat.

But, we also know the importance of our task: not only to win but to win with a strong mandate and be a good, reforming, competent government.

The importance of doing so is manifest.

We owe it to the people to end the cycle of lack of reform, personality conflict and the revolving door prime ministership.

We are well placed to do so.  We have more than five years of leadership stability with Bill, Tanya and Penny in their roles.

Five years with one Shadow Treasurer (I’m now facing my third treasurer), and as the incumbent government has been unable to set on a consistent and logical economic policy over that time, we have spent the time developing an ambitious agenda to promote economic growth and ensure it is fairly shared.

And if we are successful at the election, the incoming Cabinet will be the most experienced ever for a new Government.  The majority of those of us in the Cabinet will have prior Cabinet level experience.  In fact, fifteen out of the twenty one of us in the Shadow Cabinet have previously served at the Cabinet level. That’s unheard of for a newly elected government.

And it will stand us in good stead.  We have an extraordinarily talented front bench, but the benefit of our experience will be invaluable in restoring the government in Australia to levels of competence and stability required.  We’ve learned a fair bit along the way, including lessons from the past and our government will be all the better for it.

We also feel the importance of being the representatives of the social democratic tradition in Australia at a time when right wing nativist populism is on the march around the world and some traditional progressive parties, like the French Socialists have effectively ceased to exist.

Since the Global Financial crisis, the party of the left, the progressive party winning election in a major advanced economy has been the exception.

Instead, nativist right wing populists have been breaking through.

We need to reflect on that for a minute. At a time of undeniably rising income inequality, of stagnant wages growth, at a time when the covenant of the post war settlement: that the fruits of increasing productivity are shared with the workers who help create it through wage rises, has been broken.  It hasn’t been the parties that stand for fairness and redistribution that have benefited, it has been the sirens of closing off: closing off trade, closing off immigration.

Parties that haven’t had clear plans to deal with the concerns of the community have been beaten by movements and individuals who offer no coherent policy solutions but at least pay lip service to real and genuine concerns in the community that not everyone is getting a fair go.

Chifley would not have approved.

After all, Chifley was the leader who insisted – in the face of opposition from his own Cabinet – that Australia be part of the international economic and trading system, joining the World Bank and the IMF.  The man who believed that post war immigration was so important to building a better country would not have had any truck with the populists, with the nativists.

He believed in economic growth, in building, and in taking the decisions to connect us to the rest of the world to make it happen.

But he also knew that every Australian should contribute to, and benefit from that growth. That home ownership was a pathway to broader stakeholder ownership of our economy and our society.  This was in the interests of all.

His is a tradition modern Labor has been true to.

Hawke and Keating grew the economy by opening it up.  Taking hard decisions like floating the dollar, knocking down tariff barriers, introducing national competition policy.

But at the same time, investing in society, lifting community standards – and setting new ones; building Medicare and universal superannuation. Making sure that the growth was fairly shared with all in our society. And Rudd and Gillard: Seeing Australia through the global financial crisis without recession, and lifting the community standards of investment in public education and how we care for those who have a disability.

Now, every so often someone will write a column saying modern Labor has abandoned the tradition of, ‘insert past legend here’.

But when you look at set of achievements, across the generations. You can see that while times change and circumstances change –the Labor tradition runs unbroken through those governments.

And if we are successful at the next election, that same Labor tradition of inclusive prosperity, of stronger growth, more fairly shared, will be at the heart of the government Bill Shorten will lead.

And, for me, that’s the value of reviving this Chifley lecture.

Not just to venerate the achievements of 70-odd years ago, but to understand the spirit which drove them, the ambition which fueled them.

In my 2013 book Hearts and Minds, I wrote about a hardy old hypothetical question: Would Ben Chifley, the son of a blacksmith and an engine driver by trade, win Labor pre-selection today?

I repeat today what I said then, with respect, it’s the wrong question.

As a young man, Ben Chifley was a voracious reader, his thirst for knowledge and learning was insatiable.

But a university degree wasn’t even a dream for someone of his background.

Today, because of Whitlam opening the doors to university, because of Hawke and Keating and Rudd and Gillard extending the opportunity of skills and training and study to Australians from all walks of life…

Ben Chifley (the man who said to Nugget Coombs in 1944, “I’d rather have had your education than a thousand pounds”) would certainly have gone to university, he would undoubtedly have followed a very different road.

And he would have done so, because of Labor Governments that recognised this fundamental truth: a society and an economy thrive when everyone has the ability to pursue their passion and fulfil their potential.

I want to reflect on the Chifley tradition today: ambition and aspiration.

Chifley did not lack ambition.  The ambition of the right kind.  Ambition for his country.

He dreamed of universally affordable medicine, the PBS, a massive home building scheme and an immigration program previously unimaginable.

He dreamed of them, and then he went about building them.

Now, under Bill’s leadership we decided a long time ago to eschew a small target strategy, to avoid the temptation to say very little while the Liberals and Nationals imploded and rather, to seek a mandate to tackle things which have been in the too hard basket for too long.

And I put it to you, our political success so far: winning all by-elections for our seats and forcing the Liberal Party to such desperate measures that they have removed not one but two prime ministers to try and hold on to government is not despite our ambitious agenda, but because of it.

Our agenda to invest in schools, TAFE’s, hospitals and vital nation building infrastructure but also to pay for our program in a prudent way by examining and reforming tax concessions which are:

  • Unsustainable
  • Unfair
  • And a drain on the Commonwealth budget

Consider this.

This financial year the Commonwealth Government will spend $1.8 billion on TAFE.

But we will forgo more than $2 billion in revenue because we don’t properly tax family and discretionary trusts.

We’ll spend $8 billion on childcare.

But we will lose $11 billion because we have the most generous property investment tax concession in the world and a generous capital gains tax discount.

In 2014-15, the Federal Government spent $5.2 billion on public schools, but provided $5.9 billion being the only country in the world that sends tax refunds to people who have paid no income tax. $5.9 billion to the 4 per cent of the population which owns shares but does not pay income tax.

Dividend imputation refundability is an example of what I call ‘reverse means tested’. The more shares you own, the bigger the cheque the government, that is, the tax payer, sends you. Even though you have not paid any income tax.

Frankly, I find it perverse that we send cheques to people with big share portfolios that amount to more than we provide a pensioner with no assets and no other income source.

Governing is about choices, about priorities.

Those priorities are measured by the things you choose to invest in.

And also the behaviour you reward through the tax system.

Labor’s plans reflect the fact we think investing in a world class education system for future generations is more important than funding the world’s only tax giveaway to shareholders who didn’t pay tax. Because the real question with any tax subsidy is: who benefits? For what purpose?

70% of the subsidy provided by the capital gains tax discount goes to the top 10% of income earners.

50% of the negative gearing tax subsidy goes to the top 10% of income earners.

The average amount held in private trusts by the wealthiest 20% of households is more than thirty times greater than the next 20%.

Half, fully half, of the benefits of dividend imputation refundability that go to self-managed super funds go to balances greater than $2.4 million.

Simply put, each of these subsidies have become a vehicle not to make Australia a fair place, but to provide further support to those who need it less than others.

In many cases, it’s welfare for the wealthy – at the expense of every other Australian and the schools, hospitals and services they rely on.

We are taking these issues out of the too-hard basket, we’re trusting the Australian people to recognise the fairness and necessity of our reforms.

But we’re not doing this to prove some academic point, we’re not seeking a spot in the tax reform hall of fame.

We’re doing this because of our ambitions for Australia, because of the country we want to build and the opportunities we want to create for our people.

We’re doing it because of what Chifley called “the things worth fighting for”:

  • Great public schools
  • Better hospitals
  • National infrastructure

And there’s another reason our agenda for government must be bold and economically ambitious – that’s because of the challenges created by 6 long Liberal years of squandered opportunities, selfish short-termism and shocking neglect.

A government whose economic strategy essentially amounts to the worst of all worlds: cuts to those who can’t afford it, refusing to make the tax system fairer for all, and no regard for a future beyond election day.

It’s because for six years, this government has put its short-term political interests ahead of the long-term national interest.

This is the true state of the economy under the Liberals.

Let’s deal in the simple facts:

  • The Australian economy isn’t growing as broadly, as strongly or anywhere near as fairly as it should.
  • Australia’s GDP growth has slowed and our growth outlook is increasingly disappointing. The Government itself is now forecasting weaker GDP growth as well as flatter wages and investment growth.

Last quarter, GDP growth slowed sharply to just 0.3%.  Quarterly consumption growth was the weakest in six years and private investment went backwards.

As we know, a key driver of growth is productivity growth.  But seven of the past nine quarters of productivity growth have been negative, based on GDP per hour worked.

This is contributing to the stagnating of living standards. The last Labor Government saw a 7.6% increase in living standards – despite the Global Financial Crisis.

Over the same period, living standards have lifted by just 2.5% under the Liberals in much better international circumstances.

Last quarter, they actually declined.

Australians are reminded of this every time they get paid, with wages growth at record lows.

The government might actually be the last people in Australia to realise this.

Because in every single Hockey and Morrison budget, the wages growth forecasts have had to be downgraded.

And in this April’s Budget, we will inevitably see last year’s Budget wages growth forecast downgraded again, because yet again, wages aren’t growing as fast as they promised.

Wrong 5 years running.

And as Bill has said so many times, everything is going up except people’s wages. Since the Liberals were elected:

  • Electricity prices are up 15 per cent
  • The cost of long day child care is up 24 per cent.
  • Private health insurance premiums are up 30 per cent

Prices racing ahead of wages means more and more families are dipping into their savings just to keep the show on the road.

The household savings ratio has fallen to 2.4%: its lowest level in over a decade.

And that’s not a long term model for economic growth, sooner, rather than later, the money put aside for a rainy day runs out…and household consumption takes the hit.

This is closely related to household debt, which is at a disturbing level. Household debt, at 120% of GDP is the second highest in the OECD, a record we should not be seeking and indeed should be concerned about.  Other countries have reduced household debt in the years following the GFC, we have been increasing it, leaving us more exposed in the event of an international downturn.

And finally, the employment situation in Australia is nowhere near as good as the incumbent government would have us believe. Australia’s unemployment rate was better than in comparable countries during the GFC and immediate aftermath.  Now, we are underperformers compared to similar countries such as the United States, United Kingdom and New Zealand.

But more concerning than the headline unemployment rate is the fact that it masks deep and persistent underemployment.  There are 1.1 million under-employed people in Australia and another 666,700 who are unemployed, meaning there are 1.8 million Australians who want more work.

Simply put, the economy isn’t delivering for ordinary people.

  • Growth is underperforming.
  • 1.1 million people are under-employed.
  • And far too many working Australians are underpaid.

The cost of living is rising but living standards themselves are stagnating.

And this isn’t because of bad luck or unfortunate timing.

It’s because of the bad policies of an incompetent government.

Underemployment, skill shortages and faltering productivity growth are the direct and dire consequence of five Liberal Budgets which have cut human capital: schools, skills, training, TAFE, apprenticeships and university.

Rising power prices are the obvious result of ongoing LNP ideology and idiocy, preventing Australia from having an energy policy and resulting in an investment killing policy vacuum.

Renewable energy should be a magnet for international investment and a driver of cleaner, cheaper power, instead it’s merely treated as the battlefield for the ‘heart and soul’ of the Liberal party.

And – of course stagnant wages, shrinking consumer confidence and rising household debt are the inevitable product of a government dedicated to wage suppression, cutting penalty rates and undermining workers’ rights.

Under this government, far too many Australians have spent the last five years chained to a treadmill.

Chained to a treadmill of low wages, insecure work, unaffordable housing and the rising cost of living.

Under the Liberals, too many Australians feel like there’s no possibility of getting ahead because it takes every drop of sweat and every bit of effort and energy just to hold their ground.

Under the Liberals, the economy is not working for working people.

Too many Australians are being pushed to the margins, ignored by the Liberals in the suburbs, let down by the Nationals in the regions.

Squeezed out of the middle class, cut-off from the fair go, denied the chance to fulfil their potential.

Not because they’ve been forgotten – but because they’ve been deliberately excluded.

Not just left behind, locked-out.

It’s why we’re offering policies to get wages moving, to restore penalty rates, to improve job security.

And it’s why I’m proud to say that the first budget I hand down won’t just invest more in schools and hospitals and essential services – it will also contain bigger, fairer tax cuts for 10 million working Australians who earn up to $125,000.

These bigger and fairer tax cuts will give a much needed shot in the arm to consumption while our better tax offering to all businesses, particularly our Australian Investment Guarantee will encourage much needed investment and get productivity going again.

Because these are priorities, not protecting loopholes and concessions which some say are sacrosanct, but are actually just matters of priority.

I said earlier I wanted to talk about “ambition and aspiration”.

I’m sure you’ve noticed that our opponents like to fall back on the claim that Labor’s economic reforms are somehow ‘anti-aspiration’.

As if all Australians aspire to is access more and more tax concessions as they climb up the income scale.

Well, let be clear about a couple of things.  Labor’s reason for being goes to backing Australians who work hard and aspire to lift their incomes and standard of living.

We also relish a debate and an election about aspiration.

About what we aspire for our country.

Chifley aspired for a better country, so do we. And so, I believe, do the majority of Australians.

A country in which every Australian child has the same investment in their education and can grow to their full potential, regardless of their parents wealth or their postcode.

A country in which young people who don’t wish to go university have a properly publicly funded vocational education system in which to build their skills.

A country in which home ownership is not a forlorn dream for many, in which the country doesn’t provide more support to someone who buys their fifth or six home than to someone who is struggling to buy their first.

A country which public hospitals everywhere are world class and you are no more likely to suffer diabetes or heart disease if you live in Broken Hill or Werribee than if you live in Mosman.

A country in which our first peoples have the same life expectancy and life chances as the rest of us.  Which recognises the traditional owners of the land in our constitution and provides a constitutionally enshrined voice for them to Parliament.

These are some of the things I aspire to for our country.

These are some of the things Labor aspires to for our country.

So I say, bring on the debate about aspiration.

A debate about our aspirations for the future of our country.

Labor at its best has always been about aspiring, building, planning for the future.

From Chif to Gough.  Through Bob and Paul and Kevin and Julia. Making big calls to best prepare us for an unknowable future

I don’t mean just preparing for the worst.  I mean arming Australia to make the most of a changing world, preparing our economy for the future and improving our society for all.

Ben Chifley wouldn’t recognise much of modern Australia.

But he dedicated his life to building it and improving it.

And we face this election firmly as the party of the future.

Our opponents, sadly are stuck in the past.  Focussed on the arguments of the past and often longing to return to it.

They spend time thinking of ways to justify spending tax payers on coal fired power generation.

We spend time thinking of ways to make Australia a renewable energy powerhouse.

They rip money out of education and vocational training.

We see education and training as essential to arm our young people and workers with the skills to compete in a rapidly changing world.

They spend ways thinking of how to avoid action on climate change. We spend time developing plans to tackle it, while providing an investment framework to put downward pressure on power prices and generate green jobs.

We’re comfortable with modernity.  They seem determined to avoid it.

We want to embrace the future with confidence.

With big ambition for our country.

And with aspiration to make it better, fairer, more inclusive.

Ben Chifley died twenty years before I was born.

But honouring his legacy is as important today as when Gough Whitlam and HV Evatt delivered Chifley lectures in the 1950s.

And refreshing and implementing Labor’s mission of “bringing something better to the people, better standards of living, greater happiness to the mass of the people” is as important as it ever was.

And Shorten Labor Government will tackle the opportunity of governing in that tradition with relish and big ambition for our nation.

Thank you.

About Chifley Research Centre:

The Chifley Research Centre is the Labor Party’s official think tank, committed to advancing public policy debate and progressive thinking in Australia.