I welcome the opportunity to return to Consilium tonight - I'm told for the sixth time.
And I look forward to returning in the future.
Because I welcome all substantive contributions to Australia's policy debates.
I don't think that think tanks should find themselves in or out of favour simply because of a change of government.
Policy ideas should be evaluated on their merits, not by their letterhead.
Australia is facing some complex, long term challenges - challenges that go to the heart of Australia's prosperity and security in the changing world of the 21st century.
These challenges don't have easy solutions.
If we're going to tackle them successfully, we must have thoughtful, robust debate and exchange of ideas.
As we saw at the 2020 Summit in April, Australians are genuinely interested in new ideas for our future - and I thank Greg Lindsay and others here today for their participation.
Australians today are not much interested in the old battlelines of yesterday's ideological wars.
Watching the traditional Right and Left of politics in today's policy debates sometimes reminds you of seeing your kid trying to put on last year's jumper only to realise it no longer fits.
The old Right and Left thinking is often an ideological straitjacket.
The solutions to today's challenges - on productivity growth, on welfare reform, on Indigenous policy, on workforce participation and on climate change - won't come out of conventional Right or Left paradigms.
The solutions will come from people willing to challenge the false choices of the old paradigms that said that our only options are heavy-handed regulation or unrestrained market forces.
We simply don't have to choose between Hayek and Brezhnev.
The Australian Government sees itself as being at the reforming centre of Australian politics.
We believe unapologetically in the power of market forces as the most efficient and effective means of generating economic prosperity.
Just as we also believe in the public goods that constitute the pre-conditions for a market economy to perform efficiently and effectively.
We also recognise that markets fail.
As a matter of general principle we believe in using market mechanisms and incentives to design innovative approaches to these long-term challenges.
We also believe in a compassionate society that endeavours to pick up those who have fallen down, and help them back on to their feet. Not through the episodic acts of private philanthropic endeavour, but through the actions of society through the State.
Always, however, with an open mind as to the agency through which a compassionate society should act.
That is why we explicitly reject Hayek's view that society has no obligation to others who are unknown to us - and Hayek's preparedness to allow fundamental social institutions like the family to fend entirely for themselves against unrestrained market forces.
That is why for example we have a different approach to industrial relations, because we believe families need certain fundamental protections in the workplace.
This broadly is the philosophical framework we bring to government - again what we would describe as the reforming centre of Australian politics - recognising the power of markets, but recognising equally the limitations of markets.
Consider for example climate change - perhaps the greatest market failure in history.
Yet we believe a market mechanism - emissions trading - is the best way to find the lowest cost and most efficient route to cutting carbon emissions.
Consider also how micro-finance has proved so effective in developing nations in our region. Even very small amounts of financial capital have been effective in helping millions of people to start a business and start the climb out of poverty and despair.
The most productive intellectual and policy debates today often lie at the intersection between market failures and market mechanisms.
And the challenges of policy innovation and solving complex problems today often arise from the nuts and bolts questions like how we design markets:
* that harness the innovative potential of market incentives
* that operate transparently with informed and empowered consumers, and
* that are supported by the most appropriate provision of public goods.
...while intervening where necessary when markets fail.
The Government's priorities
Tonight I would like to discuss our long-term priorities for government.
Australia like other nations faces tough economic times ahead because of the state of the global economy.
That is why the Government is building a stronger, fairer, and more secure Australia to help meet the needs of families and to see Australia through.
The Government also has a plan to tackle the long term challenges we face for the future.
Our first responsibility is the nation's security.
The Government prioritises the defence and security of our nation, its people and their interests through:
* building a strong defence force;
* shaping the regional and global environment in ways consistent with Australia's national security, and
* planning for long-term energy security.
Second, the Government is committing to building a stronger Australia for the future through:
* responsible economic management to put downward pressure on inflation and therefore on interest rates, and
* a major economic reform agenda to strengthen our long term competitiveness - the heart of which is how we build long term productivity growth through an education revolution, and an ambitious program of business deregulation and tax reform.
Third, the Government is committed to building a fairer Australia that:
* delivers a balanced, fair and flexible industrial relations system;
* helps working families, pensioners and carers with cost of living pressures, and
* endeavours to bring all Australians into the mainstream of Australian economic and social life - including action on closing the gap between Indigenous and non-Indigenous Australians.
Fourth, the Government is committed to preparing Australia for the great global and domestic challenges of the 21st century, through:
* a responsible and comprehensive plan of national action on climate change;
* securing our long-term water supplies, both the Murray-Darling and our urban water systems;
* reforming the national health care system so that it can cope with the demands of an ageing population, and
* working internationally to build a more secure and prosperous world for the 21st century by seizing opportunities for creative middle power diplomacy.
And fifth, the Government believes in practising a new way of governing that is more transparent, more accountable, and more open to contributions from the whole community - an approach reflected in:
* the 2020 Summit;
* the introduction of regular community cabinets throughout Australia;
* an increased engagement with the ‘Third Sector' of not-for-profits, community organisations, corporate philanthropy and volunteerism, and
* reforms to Freedom of Information and processes of making government appointments.
Australia's economic challenges
The Government has embarked on this comprehensive reform strategy for the nation at a time when we are facing the worst global economic conditions in almost twenty years.
The global economy is now 12 months into a global financial crisis with real consequences for global and Australian economic growth.
The crisis in global credit markets has been complicated by what is now the third great global oil shock, alongside soaring world commodity and food prices.
This means that inflation is on the march globally, while the impact of the credit crisis continues to unfold around the world.
These are challenging conditions.
Australia's economic outlook is further complicated by the domestic economic circumstances inherited by the Government: inflation at a 16 year high, resulting in 10 interest rate rises in a row; and the second highest real interest rates in the industrialised world.
Those constraints were not simply the product of the mining boom in Australia.
They also reflect the fact that Australia had not seen adequate levels of investment in education and training in recent years.
Nor had we planned sufficiently for our future infrastructure needs, or sustained the progress on microeconomic reform that was achieved in the 1990s.
Our challenge for the future is to turn around the disappointing productivity performance that we've seen in the current decade, with productivity averaging 1 per cent in the current cycle compared to 3 per cent in the mid-1990s.
Achieving higher productivity growth over the longer term will help us to reduce inflation and therefore reduce nominal interest rates, as well allowing us to achieve faster growth.
The Government's economic reform program
These challenging conditions underscore the urgent need for responsible economic management and a substantive new national economic reform program in Australia.
The Government took a disciplined approach to the Budget.
We brought government spending down to its lowest level as a share of GDP since 1989, and built a strong Budget surplus of $22 billion - one of the largest in a decade and an effective buffer for the future.
The Government also established a $40 billion long term investment framework for infrastructure, education and health care reform - through a $20 billion Building Australia Fund, an $11 billion Education Investment Fund and $10 billion Health and Hospitals Fund.
We did not wait for economic conditions to turn against us before developing our major agenda for economic reform.
In fact, long before the global financial crisis and from the Opposition benches, we began laying out an activist approach to microeconomic reform.
In January last year I released a detailed policy paper outlining the urgent case for an education revolution to lift long-term productivity growth.
The education revolution has now begun - with measures including early childhood education for 4 year olds, trades training centres and computers in schools, targeted investment in university maths and sciences, and a sweeping review of higher education.
Further, for the first time, Australia now has the capacity to begin planning for our long term infrastructure needs through Infrastructure Australia.
And with the $20 billion Building Australia Fund, and the forthcoming guidelines for Public Private Partnerships, we have the capacity to begin to deliver on those plans.
The Government is also driving forward its plan to build a seamless national economy, tackling 27 areas of Commonwealth/State regulations through the COAG business deregulation process.
The Government is preparing for the impact of an ageing population by focusing on long term measures to increase workforce participation, including substantial measures to make childcare more affordable and accessible.
We are also committed to assisting Australian businesses in preparing for an increasingly competitive global economy, by building a culture of business innovation. Later this month we will receive the Cutler review of innovation policy.
The Government has begun to embark upon the most comprehensive microeconomic reform program that Australia has since the early 1990s. It is a substantial program, because serious microeconomic reform has been so long neglected.
This work is long overdue, and critical to the long term competitiveness and productivity of the Australian economy.
A new agenda for a fairer Australia
A strong economy allows us to deliver opportunities and improved living standards for all Australians.
A strong economy also allows us to builder a fairer Australia.
The fair go is a fundamental Australian value - and it is a fundamental part of the Government's vision for Australia's future.
The Government believes in building a fairer Australia by abolishing Work Choices, by helping Australian families, pensioners and carers in practical ways make ends meet as well as offering a helping hand to the most disadvantaged.
That is why the Government has also begun tackling entrenched disadvantage:
* to close the gap in Indigenous life opportunities;
* to tackle the long term causes of homelessness, and
* to build a broader framework for social inclusion of all Australians.
While our commitment to fairness reflects an enduring Labor value, the Government is open minded in how we go about improving opportunities for the neediest people in our community.
We are conscious that in several areas, traditional approaches have not worked - and we need to innovate if we are to be successful in creating a fairer Australia.
New Approaches to Indigenous Policy
Nowhere is there a clearer need for new partnerships and policy innovation than in Indigenous policy.
The problems that we are fighting today have been generations in the making.
A decades-long social decline paralysed by violence, neglect, despair and the breakdown of families and communities.
It is the legacy of successive governments' failures.
This didn't happen overnight and it can't be fixed overnight.
But closing the gap between Indigenous and non-Indigenous Australians must be a national priority. It is a major piece of unfinished business facing the nation.
We have set targets across the core areas of health, education and employment to focus our efforts:
* Over the next decade, halving the gap in infant mortality rates.
* In the same time frame, halving the gap in reading, writing and numeracy for children.
* Over the next generation, closing the 17 year gap in life expectancy.
* And halving the gap in Indigenous employment outcomes within a decade.
Meeting these targets will not be easy.
Government cannot do this alone.
Nor can it be done without the Government.
It requires a plan, with responsibilities shared between local Indigenous leadership, governments, business and third sector organisations.
We are now working through how best to translate our closing the gap targets into community level development plans.
There is no national one-size fits all solution.
The Government's core role to provide the basic building blocks in communities - investments in education, health and housing infrastructure and advice on governance and service development - delivered in partnership with others.
These new local partnerships to close the gap must marshal all the resources and expertise in each community. We must have a three-way partnership at the local level involving:
* government leadership and investment in provision of infrastructure and basic services;
* Indigenous Australians taking individual and community responsibility for their actions and their futures, and
* the active engagement of the business community to help build a lasting foundation for employment and progress.
One of the great missed opportunities of past Indigenous policies has been that we haven't effectively harnessed the potential contribution of the business community.
Even so, recent years have seen some valuable individual initiatives:
* The four major banks are partnering with the Aboriginal employment strategy in Sydney to place hundreds of Indigenous high school students in traineeships.
* The National Australia Bank is also partnering with the Traditional Credit Union to provide access to community credit facilities in the Northern Territory.
* Mining and resource companies are training and recruiting disadvantaged Indigenous job seekers from the Pilbara to the Gulf of Carpentaria.
* The Australian Indigenous Education Foundation is using corporate and philanthropic investment to fund boarding scholarships at leading private schools for young Indigenous Australians.
* The AFL, the NRL, cricket and netball leagues are bringing sport to Indigenous communities and create new education pathways.
* Macquarie and other corporates are financing the Song Room project, to bring music and the arts to children in disadvantaged communities.
These are all outstanding examples where the business community is improving the opportunities for people in Indigenous communities.
This is a clear repudiation of the statist model that says only the Government can solve our major challenges.
Of course governments have unique roles and responsibilities.
But governments do not have the power to rebuild families and communities that have broken down.
What we must aim for, in our Indigenous community partnerships, is to provide all the necessary support and assistance - but ultimately, to empower Indigenous Australians to take responsibility for their futures.
The corporate sector has a very important role to play in these partnerships.
I'm pleased to announce tonight that the Government will support Andrew Forrest in his ground-breaking initiative, the Australian Employment Covenant.
Andrew plans to rally employers all around Australia and have them commit to providing opportunities for 50,000 Indigenous Australians to step out of welfare and step up to permanent full time paying jobs.
Just as the Government has set bold set of targets to close the gap, Andrew is going to ask Australian businesses to be similarly bold.
Under Andrew's plan, all Indigenous Australians who want to work will be encouraged to opt out of the welfare system.
Those who decide to take this first step can then enrol in a short intensive training course that will get them ready for on-the-job training with a participating employer.
Participating employers agree through the Australian Employment Covenant to employ a certain number of Indigenous people qualified to the training-ready level.
The Government's part of the bargain is to help bridge the training-ready gap.
The Government will match this commitment with appropriate pre employment training.
Andrew Forrest and his steering committee - including Noel Pearson, Warren Mundine and Rod Eddington - will be encouraging every Australian employer to join them in tackling Indigenous unemployment in a way that only the private sector can - with real jobs.
I welcome this imaginative and ambitious plan and I look forward to supporting this initiative.
Conclusion
From the day we came to government, we had to make a choice between two paths for Australia's future.
Would we take the easy path of business as usual - hoping that the good times of recent years would just roll on? Would we just hope, as yesterday's neglected challenges became today crises, that something else would just turn up and get us off the hook?
Or would we take the harder path and take on the big challenges - putting the long term interests of Australia ahead of short-term politics?
We are determined to take the latter path.
We know that will often make things tougher for the Government.
But it's why we're here.
Not power for its own sake, but to prepare Australia for the challenges of a new century - a century in which the Anglosphere that dominated the past two hundred years is unlikely to remain in ascendance.
An activist Government like ours is good news for a think tank like the CIS. I think we'll be doing a good deal to keep you in business.
I very much look forward to the CIS's continued contributions to the policy debates that lie ahead.