E&OE...
Thank you very much Gus, you're very kind, very kind indeed. Could I, on a necessarily sombre note join Peter Thompson and David Murray in extending to my good friend, the Ambassador for the Republic of Indonesia my condolences on the significant loss of Indonesian lives and the tragedy of the loss of some Australian lives, I think inevitably, as a result of what happened in the accident in Yogyakarta. It seems Mr Ambassador that our countries have been united in a wave of tragedies. The Bali attack, both the first and second one, the terrible Indonesian / Asian tsunami which exacted such an enormous toll on the citizens of your country and now this latest event. But it brought our two countries closer together and I know that there are so many positive and joyous aspects of our relationship that are very, very important to me and very important to our entire nation.
Your Excellency, the Governor of Victoria, other very distinguished guests, ladies and gentlemen. I want to thank the Global Foundation for asking me to deliver some reflections tonight on the essence of your discussions over the last couple of days. There was one phrase in particular that jumped out at me from the documentation that was produced and that is the growing awareness in Australia that we can now get big things done as a nation and I think that did encapsulate the reality and it also captured the sentiment that so many of us now have about our country. And it is a sentiment that I wholeheartedly endorse and we certainly confront some formidable challenges of an economic, of a security and of an environmental and social kind.
And yet we possess a rare moment of opportunity to forge an even greater era of national development, an era of greater prosperity and greater opportunity. And inevitably I ask myself, what are the things that we need to do in order to translate that opportunity into reality? They're simple yet they're profound. Firstly, we need to keep our economy strong because however many speeches we may make that contain phrases saying life is about more than the economy, the reality is that a strong economy gives us a capacity to do so many things. The second thing is that we need to engage both globally and regionally. It's inevitable we have an emphasis on our region and I'll say more about that a little later, but we should never lose sight of the fact that historically and culturally, we are very much a citizen of the world and the shaping of this nation owes much to our inheritance of western civilisation and the impact and the enlightenment and the Judaeo/Christian ethic on the formation of our country. And thirdly I think we need to maintain and reinforce our social cohesion at home; and each of these three objectives is bound up with the other two. They are self-reinforcing goals, part of a potentially virtuous circle of national progress.
In a speech last week to the Menzies Research Centre I talked about Australia becoming the best country in the world to live, to work, to start a business and to raise a family, and this relies on unlocking the talent and the potential in every home, in every neighbourhood, every place of learning and every workplace. It does require bold and energetic government. But it also requires a measure of humility because getting this balance right is the essential art of modern government. Why do I say this you might ask? I say it because our future is open-ended, rather than a fixed, pre-determined destination. It relies as much on the local and the particular as it does on the bold, grand design.
The American writer Virginia Postrel makes this point in her stimulating book, The Future and its Enemies. She writes and I quote, how the very nature of progress dictates an inherently open, and imperfect, future. The future will be as grand and as particular as we are. Our progress as a nation is not something that can be engineered top-down by Australia Inc. or by technocratic design. It will arise, albeit imperfectly, from the creativity, dispersed knowledge and diverse choices of individual Australians. Those who crave predictability will be invariably disappointed. That's why the key to truly successful societies is what I've called in the past well-governed flexibility.
Above all, it is a well-governed flexibility that has seen Australia reclaim her place in the top rank of OECD countries, where our living standard now exceeds all G-7 countries except the United States. It fits with our philosophy of government which is to create the conditions for the Australian people to pursue their own dreams and aspirations for a better future. It's why we believe that a strong economy is the foundation for achieving all our other goals. In the last 10 years, Australia's economy has experienced sustained growth, with low inflation, historically low interest rates, and a decline of unemployment to its lowest level for more than three decades and a couple of weeks ago I was reminded of just how significant that had been when I was provided with some figures which told me that the long term unemployed in Australia, that's the people who've been out of work for a year or two a three or four, had actually fallen by 24.7 per cent over the last year which indicates that the strong labour market is really eating into the lean meat, if I can put it that way, of our long term unemployed.
It will not surprise you for me to claim - and I think with some justification - that the Government's disciplined economic strategy built on returning the budget to surplus and paying off government debt has in turn opened up new opportunities to get big things done. Our $10 billion water security plan is a prime example of this. It's the direct result of sustained growth and strong budget position. That sort of investment simply would not have been possible 20 years ago, certainly 10 years ago and perhaps not even five years ago. I remain, incidentally, as I speak here in Melbourne, hopeful, confidently hopeful, the Commonwealth can secure Victoria's agreement to putting in place a truly national approach to managing the Murray-Darling Basin, so crucial to the water security of our country bearing in mind that 70 per cent of the water consumed in Australia is consumed by agriculture and bearing in mind my very strong belief that the great conservation challenge of our age is water security because we can in our generation do something about it which will be realised within the lifetime of the generations around at the present time.
Of course, we can only afford to make these investments if our economy is strong. Today's reforms I've often said are the foundation for tomorrow's prosperity and economic management as I've also often said in the past is something like participating in a never ending race - you never quite reach the finishing line but daren't stop running hard because somebody will go past you in today's globalised world. So therefore, reforms such as WorkChoices, Welfare to Work and successive rounds of tax cuts are essential pillars of our future prosperity. With David Murray present, it would be remiss of me not to mention the Future Fund, another very important plank laying aside today's surpluses for tomorrow's rainy day to use an expression, although it's a bit ironic to use such an expression in the present environment, but it belongs in the Australian idiom to another situation.
The passage through the parliament last week of generational reforms to superannuation is a further part of a reform agenda which is geared to demographic change, and in accordance with the charter of budget honesty, the Treasurer will this year be releasing the next intergenerational report which is a valuable document to understanding the sort of influences that are going to shape the demands on governments at all levels in the years ahead. A few weeks ago I announced a number of measures in the aged care area to recognise the ongoing, indeed increasing, responsibility we have in that area given the aging of our population.
But a number of these polices the Government's already implemented to support future economic growth in the face of demographic change are beginning to bear fruit. We do have already a significantly improved labour force participation, particularly but not only from older workers and we have begun to address in quite a comprehensive way and a lot more rapidly than I thought possible a few years ago the fact that the participation rate in the age cohort of 55 to 64 is alarmingly low in this country compared with the experience of many other countries. And a strong economy and targeted Government assistance for families, including but not only the maternity payment, have supported a lift, albeit early and tentative, in the birth rate in recent times.
Can I say this illustrates perfectly why getting big things done for the nation can never be totally divorced from the immediate concerns of individuals and families. By analogy, getting our policies right at home is central to Australia projecting confidently in the world. And might I say when think of getting big things done in the realm of foreign policy, I can't think of a more compelling illustration of how that has been achieved over the last 10 years than the fact that simultaneously over that period of time this country has developed an even closer relationship with the United States whilst also developing a very strong, constructive and close partnership with China. In fact if one wanted to shorthand the foreign policy successes of the last 10 years one would say China and the United States, or the United States and China, not competing with each other as is the common but mistaken view, but rather given our position in relation to the two countries, complementing each other and my experience has been and it grows over time that China does not see our closeness to the United States as a negative, rather China sees our closeness to the United States as a profound positive.
If anything, the age of globalisation has magnified the power that Australia derives from assets at home. Australia's global engagement rests on core national assets; resilient yet adaptable individuals, stable yet responsive institutions, and enduring ideas and values that bind together our diverse yet cohesive society. We must further develop and play to these strengths if we are to shape our own destiny and not just be a taker of trends set elsewhere. Australians sometimes downplay our influence on international events, perhaps out of a kind of national self-deprecation. Australia can and does make a difference on the world stage and we should be confident in doing so and we should reflect on those areas where we have got the balance better than most other countries. I often think that in areas of education and social welfare, Australia has achieved a better balance between the contributions of the public and private sectors when either on one hand the rather too laissez faire attitude of the United States, which does allow people to slip too frequently through the social security cracks and compounds social tensions and problems, and on the other hand the rather too paternalistic interventionist approach of many countries in Europe. I don't think there is a better blend between the public and private systems in the area of education than you can find in Australia and I think the same observation can be made with all its imperfections about Australia's health system.
Gus Nossal talked about the importance of our links to the nations of Asia and I said 11 years ago when I became Prime Minister that naturally our foreign policy priorities had to be in our region. We would pursue an Asia first policy but not an Asia only policy and undoubtedly the rise of Asia - in both economic and political terms - is redrawing the contours of global power. Asia in coming decades to assume a weight in the global economy that it last held 500 years ago. The transformation over a period of roughly half a century is quite breathtaking. By 2030, Asia's share of world GDP is projected to grow to about 48 per cent, compared with just 20 per cent in 1980. Asia is at the epicentre of a defining trend of our age - the emergence for the first time in history of a truly global middle class.
There are now roughly 400 million middle class citizens in China and India alone. The World Bank estimates that by 2030 the middle class in the developing world will exceed 1.2 billion which is roughly 15 per cent of the world's population. The population of more than 30 developing countries is expected to be 40 per cent or more rich and middle class, creating rapidly growing markets for goods and services of particular relevance to countries such as Australia. This historic development will also exert enormous influence over the course of national and global politics as people demand greater political participation, greater certainty over property rights, better standards of health care and education and stronger environmental stewardship.
One of our great assets in engaging with this process is an outward-looking, hard working and entrepreneurial Australian Diaspora. At any one time, there are up to one million Australians outside Australia, in all corners of the world.
It's true that increasingly we are living in an increasingly globalised labour market and that competition for global talent is intense. We in Australia must work hard to attract and retain our share of the best and brightest. However, I am the last person who gets alarmed by talk about a