Thanks Mark, for the introduction and invitation to speak today at this wonderful Museum of Contemporary Art, on Gadigal country.
I pay my respects to elders, customs and traditions.
I also want to thank my Parliamentary colleagues Anthony, Ed, Chris, Dan and Pat who are here today and will be speaking to you later on –
Citi of course, for getting us together –
And give a shout‑out to my friend and our Consul‑General in New York, Heather Ridout as well.
Heather and Mark have both played an instrumental role in getting A50 back off the ground after it was last held here in 2018.
A big thanks to both of you and your teams, because this gathering couldn’t come at a more important time.
In the 6 years since you last met, the global economy has faced a series of shocks that we’re still grappling with, at the same time as we manage rapid social, environmental and technological transformation and geopolitical risk.
Our task amidst all this churn and change is to create a more productive, more modern, more competitive economy.
One that creates better returns for investors, and a better future for our people, businesses and communities.
Today I want to talk about Australia as a compelling and essential investment destination.
And in an uncertain and unstable world, it’s more than that too.
Australia is an island of opportunity in a sea of uncertainty.
Because of our strong institutions, and robust financial system.
Because of our deep links into the Asia‑Pacific.
Because of our well‑educated, resilient and adaptable people.
Because of our unique combination of geological, geographical, geopolitical and meteorological advantages.
And because of our reform agenda to better attract and deploy the investment that we need.
Today, my colleagues and I want to flesh this out for you, and listen to you, and work with you.
The timing couldn’t be better, because the opportunities couldn’t be bigger.
This week and the next has and will remind us of the challenges we face, together –
The choices we must take, together –
And the critical role that we envisage for the $27 trillion worth of capital represented in this room.
Housing, inflation and a soft landing
A bit later today, you’ll be talking through how we can work together to build the homes that we need, with Daniel Mulino.
He’ll guide you through our $32 billion Homes for Australia plan with $6.2 billion of new investment in our last Budget.
More skilled workers, simpler approvals and streamlined investment opportunities will help us reach our goal of building 1.2 million more homes by 2029.
An ambitious target, but an achievable one for the medium term if everyone does their bit.
In the short term, we know that housing is a big pressure point for our people.
It’s not just harder for Australians to buy or build a home, it’s harder to rent one too.
We’ve done important work to take the edge off here – rents would’ve risen by an additional 1.9 percentage points over the past year without our boost to Commonwealth Rent Assistance.
But there’s no doubt that supply shortages are pushing up rents, and that’s contributing to our inflation challenge.
We got a reminder of that in Wednesday’s monthly CPI figures.
Inflation edged down in monthly terms, but at 4 per cent annually it’s still too high – and we acknowledge that.
But it’s much lower than the 6.1 per cent that we inherited from our predecessors –
It’s less than half its peak –
And there are 3 other things worth keeping in mind, that an audience this informed will understand.
First, these monthly figures are volatile, as they don’t measure the same set of prices.
Second, they’re susceptible to base effects, which can mechanically elevate the reading we get.
And third, the final stretch of our journey back to the band will not be smooth.
Let me explain this third point in a little bit more detail.
Generally, but not universally, goods inflation has slowed across the world.
And that’s a positive development.
It shows that pandemic‑induced supply shocks have faded and global markets are functioning more normally.
But it also means the trajectory of inflation is now more dependent on services.
And we know that services inflation is generally slower to rise and will be slower to moderate – in theory and in practice.
We’ve seen it overseas.
Inflation ticked up before continuing to temper in the US.
In Canada and the Euro area, it rose in the most recent data.
So, for all these reasons:
The shape of the inflation profile.
The nature of services inflation.
International experience of the ‘last mile’.
We know that the final stretch of the fight against inflation will be the toughest, but our overall progress has been meaningful and substantial since the peaks of 2022.
While the challenge is not over, it’s important to keep perspective on how far we’ve come.
We’re currently ahead of where we thought we’d be on the way back to target this time last year.
And you can see this borne out in the data and our forecasts.
Here in Australia, services inflation is lower than in the US and the UK, and it’s lower over the year –
The ABS confirmed again this week that our policies are directly reducing inflation –
And despite all the uncertainty, Treasury brought forward their forecasts for a faster return to the target band.
Back‑to‑back surpluses
We are confident about the future trajectory of inflation but not complacent about it, we need it to moderate further and faster.
Because while our economy remains in an enviable global position, we know the real pressure that Australians are under right now.
Consumption is weak, with families prioritising the bare essentials.
Savings ratios are around their lowest levels in 15 years.
And in the last 2 quarters, the economy grew by less than the decade quarterly average.
In these difficult conditions, doing what we can to responsibly help our people has been our number one priority.
And it’s making a real difference.
Take our energy rebates as one example.
Today, the ACCC will release the latest Electricity Market Inquiry Report.
It shows that without our cost‑of‑living relief, the median residential bill would have been 14 per cent higher across the country in the third quarter of 2023.
And from next week, more help is on the way.
Tax cuts for every Australian, to return bracket creep where it has the most impact.
Plus, cheaper medicines, pay rises for the lowest paid, 2 weeks more paid leave for new parents –
And new energy rebates for every household.
These policies are an important part of our plan to fight inflation without smashing an already weak economy.
And we’re putting the budget on a more sustainable footing, while setting us up for the future as well.
We receive constant reminders of how important this strategy is.
Wednesday’s CPI result would have been higher without our responsibility and restraint and the design of our policies.
And today, we’ll get another indication of how this disciplined approach is delivering results.
May’s monthly financial statements will confirm that the Albanese Labor government is on track to be the first government in almost 2 decades to deliver back‑to‑back Budget surpluses.
But the high figure you’ll see published today isn’t necessarily where we’ll end up.
Some softness in our tax take, when compared to payments, might still result in a surplus that’s a bit smaller or a bit bigger than we forecast in the Budget.
But whatever the final result it’s already clear that delivering back‑to‑back surpluses for the first time in nearly 2 decades is the right thing for our economy, for interest costs in the budget, and as a buffer against global uncertainty.
Very significantly, the Governor of the Reserve Bank has confirmed that our 2 surpluses are helping in the fight against inflation.
Our forecast surplus is a huge improvement on the $56.5 billion deficit our predecessors budgeted for 2023–24.
Since coming to government we’ve cumulatively improved the fiscal position by around $215 billion.
This stunning turnaround in our fiscal standing is the product of direct and deliberate action to bank the vast majority of revenue upgrades, find savings, and restrain our spending.
Investment and financial services
Our approach to responsible economic management is helping us respond to near term pressures and support our people.
But today is a really welcome opportunity to focus on longer term priorities too.
Nothing could be more important to this than the opportunities that will come from cleaner, cheaper, renewable energy and the global net zero transformation.
There’s no better person than Chris Bowen to guide you through that session this morning.
I work closely with Chris, who legislated our net zero targets last year, to give investors certainty.
He’s directing our efforts to get our electricity grid ready for more renewable power.
And he’s getting more private investment into the transition, through our Capacity Investment Scheme.
But as important as these individual initiatives are –
We know that they’ll only work the way they should, in an economy that can absorb and deploy capital effectively.
That means turning potential barriers, into enablers – which is exactly what our broader reform agenda is all about.
Repairing important trading relationships and building new ones, and more secure supply chains.
Investing in our skills base, so that our people have the capabilities they need for the jobs of the future.
Improving the competitiveness and dynamism of our economy.
Streamlining and strengthening our regulatory approval processes.
And modernising our financial system.
I just want to take a moment here, to explore this last part of our agenda in a little bit more detail.
Because a strong financial system is important to everyone here today.
And because it will allow me to put an important decision that I just made, in a little bit more context.
We want to create a more dynamic, diverse, and resilient financial system.
One that can efficiently process payments.
That can effectively locate investment opportunities.
That can safely, and securely mobilise private capital.
And that is accessible to all of our people.
Balancing up these goals have guided our actions to strengthen the financial system –
And they guided the decision announced this morning.
Approving ANZ’s acquisition came after careful consideration, much deliberation and consultation, and a long and thorough process.
We understand and grappled with the trade‑offs, and so did the Treasury, regulators, industry, unions, the Queensland government, economists, lawyers, analysts and others.
A range of different views were expressed.
But after all the analysis, over almost 2 years, I was advised that it would not be in Australia’s national interest to prohibit this transaction.
The natural progression was to let this deal proceed – but with strict conditions.
These will support jobs, sustain regional banking, and will lead to more private investment in areas like infrastructure, renewables, small business and housing.
A Future Made in Australia
The ANZ‑Suncorp transaction will provide certainty for workers, support banking services in the regions, and help facilitate the flow of capital into the opportunities we’re all here to explore.
In housing.
In renewable energy.
And in the transformative industries of the net zero economy that will be spoken about in the other 3 sessions today.
Ed Husic will lead your discussion on manufacturing and industry.
Anthony Chisholm will draw out the opportunity of the century presented to us by critical minerals.
And Pat Conroy will outline the trading and investment relationships that we’re building in our region.
These colleagues are doing work that’s central to the government’s agenda, and to our discussions today.
Work which recognises our future growth prospects lie at the intersection of our industrial, resources, skills and energy bases and our attractiveness as an investment destination.
Which combines our comparative advantages in renewable energy with traditional strengths in resources and manufacturing to build new opportunities:
In critical minerals processing –
In green metals –
In clean energy technologies –
In low carbon liquid fuels –
As we look to plug into the new supply chains of the Asia‑Pacific and become an indispensable part of the global net zero economy.
To realise this future, we’ll need to find new ways to enable and deploy hundreds of billions of private investment in an environment where competition for capital is intense.
That’s why we’ve devised and detailed a Future Made in Australia agenda.
Our goal here is to power the future, not manufacture the past.
Our strategy is to engage and invest not retreat and protect.
Our emphasis is on attracting private investment, not replacing it.
We recognise public money can only be a sliver of what we need.
It’s investment from the private sector that matters the most.
And a Future Made in Australia is all about emboldening and enabling that.
With funding to commercialise research and innovation in renewable technology.
Financing facilities to de‑risk and reduce upfront capital costs.
And a new front door for investors so that we can partner on transformational projects.
Today, I’m pleased to announce the next 2 important steps of our plan:
The release of consultation papers on our production tax incentives.
And the introduction of our Future Made in Australia legislation into Parliament next week.
Our production tax incentives will incentivise investment in renewable hydrogen, boost production of critical minerals and create jobs and opportunities for Australians.
And the 2 Treasury papers that we’re releasing today are an important way for us to get input on design and implementation of our reforms.
We’ve crafted these tax incentives with the rigour, discipline and ambition which characterises our whole agenda –
And that will soon be embedded into law, through the Future Made in Australia Act.
The Bill that I’ll introduce into Parliament next week will help give investors the clarity and certainty they need to invest and unlock growth in our economy.
All built on 3 pillars.
First, a national interest framework, which will help us to identify sectors where we have a genuine comparative advantage in the new net zero economy or an economic security imperative.
Second, a robust assessment process to understand and remove barriers to private investment in these areas.
And third, a set of principles that will make sure the new investment that flows, creates strong returns and stronger communities.
The robustness and reliability of the new Act will help catalyse the strong and significant investment we need.
Just like a range of other actions we’re taking to improve regulatory settings and mobilise private capital.
Strengthening and streamlining our foreign investment framework to support quicker decisions for low‑risk cases.
Reforming our environmental approvals process.
And the ongoing work of Investor Roundtables.
Wrapping up
So if you take what I’ve spoken about today –
And consider the discussions that are about to follow –
You’ll see what brings it all together is our ambition to manage the pressures of the here‑and‑now –
While we modernise the economy and maximise our advantages –
To do that in a way that makes our people, business and investors beneficiaries, not victims, of the churn and change we all observe in the world.
And to provide you with the clarity, the certainty and the cooperation you need.
That’s what our reform agenda is about.
And it’s what the A50 summit is about too.
So, thank you for hosting my colleagues today.
For the opportunity to open up proceedings.
And to take a few questions to kick things off.