The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

14 August 2008

NO.030

Address to the
Queensland Leaders 2008/2008 Series

Brisbane

14 August 2008

Thank you for the invitation to this Queensland Leadership Forum.

I think the real value of tonight will be the informal yarns we have as we move around the room - so I'll keep my remarks pretty brief.

I want to just say a few things about our policy agenda and the role business can play in building, with us, a more modern and competitive future economy.

I want to suggest that the consultative way we're going about delivering on three big reforms, is indicative of our broader new approach to governing. And there are also parallels between the openness with which we conduct the business of reform, and the openness of the economy itself.

Labor people like me take great pride in my Party's role in the opening up of the economy, and we relish the chance to now embark on new reforms for the future economy.

It dawned on me the other day that this June this year marked 20 years of my formal involvement in the Queensland Labor Party. And one of the things I've been most proud of in that time is the role that Labor governments have played in opening up this state to the world. This openness has been critical to our economic success.

In that 20 year period, the state economy has more than doubled in size [109 per cent to 2006-07]. This growth has out-paced every other state in the Commonwealth.

A lot of that growth has been driven by industries as diverse as property and business services, construction, manufacturing, bio-technology and mining. And it's also come from courageous leadership, and the foresight of people like Wayne Goss and Kevin Rudd, who championed initiatives like Asian languages in schools. It's come from our ability to shake off the scourge of Hansonism, and all the economic damage she did to this state, and this nation, in our region. Our growth reminds us all of the importance of governments and business working together, and of economic leadership that opens us up to the world.

Now, thinking about the subject of Queensland and leadership reminded me of a story about a great Queensland leader: Alan Border. Those of you with an interest in cricket may remember the Madras Test of 1986, which is famous for three things:

  • It was only the second tied test in cricket history;
  • It was played in unbearable 45 degree heat; and
  • Dean Jones scored one of the gutsiest innings of all time, whilst suffering from dehydration and coming close to dying.

Midway through his innings Jones, who is Victorian, turned to his captain and suggested that, given he probably required hospitalisation, it might be a good idea to retire hurt. I'm not saying that AB lacked compassion, but he gave Jones a look that could be interpreted as questioning his manhood.

And, knowing that the next man in was Greg Ritchie, suggested that, yes, as the going appeared to have gotten tough, perhaps it was time they got another Queenslander to the crease. Jones decided to bat on, and, unable to run, took to hitting fours and sixes instead and made 210 runs.

Let's just say that Alan Border was one of those Queensland leaders who knew how to get increased productivity out of his human capital.

And need I add that given Border's example, it's good that in challenging economic times we've got a couple of Queenslanders at the crease!

GLOBAL CHALLENGES

Things definitely aren't as hot for us as they were in Madras, but there's no denying that our economy is being buffeted by global forces. Like all the world's economies we're facing turbulence resulting from conditions in the U.S. recession and the state of international markets.

We also have to face up to the reality of dangerous climate change to start building a low-pollution economy for the future.

There are also homegrown challenges - like the neglect of investment in education, skills and infrastructure that's been exposed by high domestic demand fuelled by terms of trade at historic highs. The result of which are sluggish productivity growth and increasing inflationary pressures within our economy.

We have to meet these challenges head on. Which is why the Budget was geared towards addressing these issues. Because some of the key global economic challenges are beyond Australia's control, the Budget focused squarely on those things we can influence.

We made room for a $55 billion Working Families Support Package, including $47 billion in tax cuts directed to working families. We also delivered a surplus to act as a buffer against global turmoil. A surplus which also gives us flexibility to meet today's challenges, and a foundation for $40 billion worth of responsible investment in nation building and growth for the future.

THE FORWARD AGENDA

We could have drawn a line there. It would have been easy for us to say ‘wait a minute', let's get through the immediate problems caused by the world financial problem before we tackle the wider long-term problems. But that's the coward's way out which would simply put those necessary reforms off to a later date. I think there's been enough of that sort of short-termism in recent years.

And I firmly believe that we need to undertake our reform project because of global challenges, not despite them. I believe that the changes we've begun making now will modernise our economy, and help lock in future growth and prosperity.

Today our economic challenges are more diverse than they have been in a long time. Productivity, for instance, so high in the previous cycle, has stalled. Globalisation means turbulence in one part of the global economy ripples through to others, in one form or another.

The human capital revolution has raised education and skills to new levels of importance and made the tackling of social disadvantage an important economic priority. We have to bring disadvantaged Australians back into the economic mainstream to get participation levels up.

As I say: Inequality is bad economics.

And climate change is requiring us to cost carbon emissions and re-tool our economy for a carbon-constrained world. This requires a reform agenda far broader in scope than that attempted by previous generations.

It has three main elements.

The first is the modernisation of the federation through the COAG reform process. The far-reaching reforms to federal-state relations will provide a platform for long-term, fundamental microeconomic and social reforms to boost participation and productivity.

The changes underway are:

  • Increasing the capacity of our education and training systems from the early years to university level;
  • Making our health system more efficient;
  • Tackling the disadvantage faced by Indigenous and non-Indigenous Australians alike; and
  • Eliminating regulatory inconsistencies between the Commonwealth and the States and Territories - to create a seamless national economy.

The second is the Carbon Pollution Reduction Scheme. Its goal is to ensure Australia makes the transition to a modern, low-pollution economy at least cost. The Government will introduce the Scheme in a measured and responsible manner.

And part of this approach means taking decisive action now. The longer we wait to take action on climate change, the sharper the adjustment to the economy will be when we are forced to act. The timetable for action on global warming can't be based around federal elections - it has to be based on the rate at which the world's ice sheets are melting and the speed at which our great river systems are drying up. Some are arguing that we should sit back and wait for the rest of the world to act before we change our behavior. This ignores the fact that much of the developed world already is acting.

But I think Queensland economist John Quiggin got it in one when he said waiting around for others to reduce their carbon pollution is like telling your children it's okay to keep dropping litter because everyone else is still doing it.

I want Australia to get ahead of the game and create the low emission energy generation and transport industries of the future. That's where the jobs and the prosperity are.

I want us to see cutting carbon pollution as an economic opportunity - and the CPRS combined with our renewable technologies assistance, including clean coal development, will help us succeed.

And the third element of our future agenda is tax reform. The conversation about Australia's future tax and transfer system is now underway with the release of the architecture document last week. It's the most comprehensive examination of Australia's tax and transfer system in half a century.

That process will underwrite Australia's global competitiveness, remove the disincentives to workforce participation, and simplify the tax system further. And in implementing all these reforms we want to be as open to the business community as our economy is to the world.

When the document for the architecture of tax reform was released last week I was struck by the number of commentators who remarked on how open the dialogue seems to be. We don't see anything unusual with that. It's what we've been doing across all areas of reform.

We want a national conversation on tax reform, just as we're having one on our Carbon Pollution Reduction Scheme and the need for a reform of federation.

On all these issues this is the beginning of the conversation, not the end. We want input from all sections of the community, including business, and that's one reason I'm looking forward to the discussions with you this evening.

So thanks very much.