Thanks to Brett Gale and his board for getting us together today and for the opportunity to provide some perspectives on Labor and the economy, and to Michael Cooney for the introduction.
Michael and I are both really pleased to see how well the Chifley Research Centre is going now, no longer burdened by the stifling inadequacies of Galey’s two predecessors as Executive Director!
We acknowledge the elders, customs and traditions of the Gadigal people of the Eora Nation, the custodians of the lands on which we confer today.
And what a time to gather. Seven months from our election and still two or more years until the next one. Five days before the British election. Eleven months from the American election. Two days since parliament rose for the year. Three days since the release of the National Accounts and nine days from the release of the midyear budget update. A few months from the release of the Government’s Intergenerational Report and Retirement Income Review.
And if there’s a common shadow enveloping all of this – and a big theme of what we’re talking about over the course of this weekend – it’s the costs and consequences of the type of populism which stalks our polities and our economies.
Populism that tries to appeal to ordinary people but is designed to divide, de-stabilise and further disempower them. Of course, this type of populism should not be confused with advocating popular ideas or building popular support for ideas.
The will and wisdom of the people gives our democracy legitimacy, it gives life and context to our policy debates and our legislative decisions. And our job, our purpose, as a party of reform and progress is to make change popular. It’s to gain a mandate for ideas that will extend opportunity to more people and deepen the definition of the fair go.
That doesn’t mean blowing in the breeze or aiming everything at the lowest common denominator – but it does require generating popular momentum for the cause.
We are at our best when we make it our business to convert once-radical propositions into basic rights like a fair day’s pay, universal health care, or compulsory superannuation. These are reforms the labour movement carried from the political fringe into the law of the land. They show we succeed by engaging and including the Australian people in the big conversation. When we trust their wisdom, their instincts and their ability to see a big picture where more Australians hold a brush.
That’s the tradition gatherings like this belong to – and a guiding principle as we look ahead.
And the fundamental difference between those great achievements, co-authored byLabor Governments and the people of Australia, and the type of populism we see corroding democracy and eroding faith in politics around the world today, is that for these populists, campaigning, advocating, governing, is just a performance piece.
For them, politics is beyond ‘show business for ugly people’, it’s reality TV without the authenticity. For us, the great privilege of office is the chance to make a difference to the life of our nation.
For them, it’s as basic and dishonest as saying what they imagine people want to hear, promising what they assume people would like to see…but looking for excuses to do nothing.
And the brutal reality is that –in the short term – some of the time, for some of the people, some of this works. Because it’s easy to trade in nostalgia, easy to appeal to prejudice and – having vandalised the political system – deploy that distrust and cynicism and fatigue to drive people away from engaging in the debate.
This brand of populism is a significant challenge to social democratic parties, around the world. That’s why we need a response focused on our institutions and our grassroots – founded on some of the principles Anthony outlined in his terrific speech about democratic renewal this morning.
And that conversation with my friend Grant Robertson showed we can look overseas for inspiration too. Prime Minister Ardern’s courage, conviction and competence, her ability to reach people otherwise disinterested in politics and distrustful of politicians is a powerful example.
For Australian Labor, re-engaging people in the politics of progress must always begin with the economy, especially when the economy’s not working for ordinary Australians.
We saw that in this week’s National Accounts. Growth has slowed in the quarter, slowed since the election and slowed since the Liberals came to office. That meagre annual growth of 1.7 per cent is below trend, below budget forecasts and half of what it was before Scott Morrison became the Prime Minister last year. The economy is barely growing faster than the population, and the private domestic economy has experienced its biggest decline since the Global Financial Crisis. Consumption growth is the weakest since the crisis, and business investment and productivity are going backwards.
The mid-year Budget update on the 16th will tell a similarly disappointing story: Weaker economic growth forecasts; Further downgrades to wages growth – a feature of almost every single Budget and budget update under the Liberals; The double whammy of record high household debt and record government debt, more than double what they inherited; A surplus propped up by high iron ore prices and profits and on denying the vulnerable, older Australians and Australians with a disability the care they need, deserve and were promised;
And another missed opportunity to address our major and longstanding economic challenges, like weak consumption, stagnant wages, falling productivity and high underemployment.
This is the humiliating product of a Liberal National Government in their third term and seventh year delivering: Anaemic economic growth, Flat-lining living standards,
and punishingly low wages growth. All from the so-called party of good economic management!
Wages growth has been so persistently low under the Liberals that last week the Reserve Bank said it was the ‘new normal’. Most Australians would consider this to be an appalling outcome that the Government should be ashamed about. But the Liberals think it is a triumph. For them, it’s mission accomplished.
We know this because, in a burst of honesty, Finance Minister, Mathias Cormann admitted that low wages growth is a ‘deliberate design feature’ of their Liberals’ economic agenda.
This is why suburbs and towns feel cut-off from prosperity and opportunity and why populism has flourished.
It’s why people feel like no matter how hard they work they just can’t get ahead. That the system is busted, or rigged.
The economy has weakened on the Liberals’ watch because they haven’t had a genuine plan for strong, inclusive and sustainable growth.
And that’s because they’re frozen in an ideological no-man’s land.
They don’t know whether they’re populists or neoliberals. They can’t decide between Hanson or Hayek. Trickle-down or turn-back-the-clock. Small government or Big Stick.
The Liberals know what they’re against but not what they’re for. Their election victory has masked this deep ideological confusion.
That’s why Morrison’s always talking aboutLabor – to distract from his failures on the economy and his lack of a comprehensive or coherent plan to turn things around.
This is why he obsesses over rewriting the past – especially about and the GFC – to hide from the future. That’s why it’s a sad inevitability that the intergenerational review will become politicised and compromised just like the last one was. And how the Retirement Income Review will be used as a Trojan horse for an ideological attack on one of finest creations – compulsory superannuation.
But there’s another thing too, the Liberals’ dirty little secret. At one level, they’d prefer the economy grew strongly because after all their talk about superior economic management it’s humiliating for them to fall so short. But they’ve also been well-served by economic insecurity.
It gives them an excuse to revive old scare campaigns, rewrite the past and close their eyes to the challenges of the future. Because, for the families of middle Australia, focusing on the future is hard when you’re struggling right now.
And under the Liberals, quality of life is getting worse not better. Living standards have declined. Our economy is weaker and less resilient. The Australian economy is dropping down the global rankings – and so are our school results. No-one here thinks that’s a coincidence.
Our middle class is under attack from stagnant wages and crippling increases in some living costs. Poverty is on the rise and more Australians are homeless than ever before. The proportion of Australians who own their own home is at 50 year lows. Too many older Australians are living without adequate care or retirement incomes. Workplaces feel less secure and fulfilling work is harder to come by. Inequality between the regions, outer suburbs and inner cities are becoming more entrenched.
For too many people, this is a recipe for insecurity and anxiety.
This isn’t just the consequence of a Liberal Government – it is a deliberate strategy to make people fearful of change, even when they’re not happy with the status quo. But the status quo is now the dangerous default.
Thankfully not everybody shares the conservatives’ backward-looking populism.
Last month I spent time with students of Mabel High who sketched out on butcher’s paper a more compelling and coherent sense of the future than anything we’ve heard from the Morrison Cabinet.
By the time those kids are my age: Asia will account for over 50 per cent of global GDP; Renewable energy will our dominant source of power; Over 75 per cent of all vehicles could be autonomous; Sydney and Melbourne could be home to 8 or 9 million people; The average baby born will live 5 years short of a century; Nanobots, Virtual Reality and Artificial Intelligence will be common place.
How we anticipate, deal with and capitalise on these types of trends will determine whether Australia stays in the first rank of nations.
The CSIRO’s National Outlook 2019 shows this isn’t pre-ordained, that there are two alternate futures for Australia. In one future, the policy malaise continues and we drift into the future with weak economic, environmental and social outcomes. In the alternate positive future, Australia embraces reforms which underpin strong economic, environmental and social outcomes.
In this positive scenario Australia’s GDP grows on average by one percentage point more than current growth and more than half a percentage point higher than the Liberals’ malaise scenario.
This growth will be underpinned by significant increases in productivity and the demand for high quality Australian goods and services from our Asia-Pacific neighbours, where by 2030 65 per cent of the world’s middle class will reside.
Our national GDP will rise to $5.5 trillion in 2060 – nearly three times the size of the current Australia economy and more than 30 per cent bigger than the malaise scenario.
Our living standards as measured by real GDP per capita in the optimistic scenario will be 30 per cent higher than the malaise scenario and around double our current standard of living as GDP per capita rises to $135,000.
Average real wages would increase to around $150,000 – 35 per cent higher than the malaise scenario and 90 per cent higher than today.
But even in the positive scenario by 2060 Australia will most likely find itself either clinging to a spot in the 30 largest economies in the world or already outside it. We shouldn’t be concerned if our relative decline occurs because of strong growth in developing countries, some of which are our closest neighbours and key partners. That’s a rising tide which will lift Australia.
But we should be concerned if the cause of our relative decline occurs because of the kind of poor economic management we have seen under the Liberal Party over the past six years. That’s a rip tide which could drag us down.
So we’re here this weekend to talk about tackling weakness in the economy now – but also planning for the future. In the jargon, balancing the cyclical and the structural.
Recognising, when it comes to policy, we can do big things slowly or small things quickly, but not big things quickly.
And starting – every time – with a focus on economic growth.
Because growth is what raises living standards, boost wages, strengthens families and communities, brings good jobs to regions and creates new opportunities for the suburbs.
Today, the world’s best economists recognise a truth we have always known: growth is stronger when it is fair, when more people have a stake in it.
Growth matters now and into the future because the right kind of growth means good jobs; higher wages; security in retirement and a decent social safety net. But a foundation of growth also helps us combat a sinister type of populism and distrust and cynicism.
By engaging with what matters to people. By advancing plans that make a meaningful difference to lives and living standards. Enlisting people’s ideas and energy to meet the challenges facing Australia in the decade ahead.
Making the Australian people our partners in tackling climate change, embracing the benefits of technological change, caring for and empowering an ageing population and navigating Australia’s future in Asia. Making the case for change, whole-heartedly and powerfully. Building a new generation of opportunity.
Putting Australia on the path to full employment, higher real wages and closing the pay gap for Australians performing the same work. Restoring and promoting job security, while modernising the world of work for Australians who want flexibility but are currently denied the entitlements and security of a full-time job.
Lifting our productivity, an already urgent task that will only become more urgent as our population ages. Improving schools, a more connected education sector and VET sector that promotes life-long learning and the right skills and qualifications for good jobs.
Investing in people but also places – by linking infrastructure, services and jobs – particularly those in the outer suburbs and the regions.
Taking real action on climate change to maximise the jobs and opportunities in renewable energy and other emerging industries, without abandoning our traditional strengths. Making Australia a world leader in a renewable energy, advanced manufacturing, creative arts, and the service sectors that will increasingly dominate our economic base.
Making the best use of new technologies.
Ensuring we are not letting the most vulnerable slip through the cracks or be penalised by our social security system but helping them connect to good jobs and services and a sustainable retirement incomes system.
And finding and using our voice in our region and the world, to be better neighbours and advance our own interests consistent with our values.
In the last few months I’ve spoken about what a modern Labor Party of the centre-left looks like.
I think it has five characteristics: the party of aspiration and opportunity; the party of growthand redistribution – not growth or redistribution; the Party of the outer suburbs and regional towns; the Party of engagement with the world; and the Party of the future.
And that’s not just a matter of taking-out insurance, planning for the worst, playing the odds and being prepared – important as all that is.
Ensuring the country is ready for the future is a moral imperative for us.
Yes, we are the party of change – but we are the party that prepares people for change, the party that makes change work for people, not against them.
We want to build a future that includes everyone. Our big picture always has people in the foreground. This is why – whether we are in Opposition or Government – the tests we apply to policy draw on the same principles.
Is it fair, is it responsible, is it good for people? Does it fix our gaze upwards; outwards; and forwards?
Upwards means lifting people out of poverty, helping people not just get by but get ahead, improving living standards and making our economy more mobile,
Outwards means reaching out beyond old binary choices, joining up communities, building bridges between people and engaging enthusiastically and confidently with the world.
Forwards means giving people the skills and grounding and self-belief and energy to seize the opportunities of the next decade and beyond as work, and the world, transforms.
This is the big challenge we seek your help with today.
Ensuring that at the next election the people of Australia can vote for a Labor Government which shares their values, addresses economic insecurity now, and invests in their future.