Thanks very much for the warm Adelaide welcome. And it's great to be back into the city of my wife's birth, and a city which I've come to know and love over many years now.
The list of representatives of federal, state and local government have all been acknowledged appropriately and I don't choose to repeat them. Other than to say this, that the reason we are gathered here today in Adelaide is to talk about something which is important for the nation, important for this community.
And that is what do we do about cushioning the impact of this global economic recession from the lives, the working lives and families and community life of this important part of the Australian family.
This is as much a question about national economic policy as it is about how we work together effectively, as all levels of government work effectively as local community representatives and business representatives to make a difference.
In the last few weeks since returning from the G20 Summit in London, I've attended two gatherings like this around the country. As I got off the plane from London, I went to Melbourne and spoke to a gathering of about this size, from a community there which is suffering the direct impact of the global economic recession on them, and we spent time working through what we could do to make a difference there.
Not to promise the undeliverable which is to say that this global economic recession can be wished away, you can't do that. But to engage in very practical business of what you can do to reduce its impact.
And a week later I did the same in north western Tasmania where again the impact on local jobs is being felt sharply and keenly. And now, here in Adelaide where I know in this part of Australia, particularly given the concentration of manufacturing jobs, but particularly given the weaknesses which are emerging in that sector of the economy nationally and globally, the effects are also real.
It's an important opportunity also for us to remind ourselves that when we look at the statistics on unemployment, when we look at the statistics on economic growth, when we look at the statistics on trade, at one level these are pieces of economic data. And they guide and shape the decisions which policy makers must take.
But at a quite different level, each of these represents a human being. Each of these represents a family. Each of these represents the impact on a local school community. Each of these represents an impact on the fabric of a local community more broadly.
And part of our challenge as Australians in dealing with the impact of the global economic recession is this - to remind ourselves afresh on every day that we get up, on every day that we confront the global economic news, to recall and to record and to remind ourselves that Australians of one core principle and it is as follows - we are all in this together, each and every one of us.
Doesn't matter what part of the country we're from. Doesn't matter whether we're from business, whether we're from the unions, whether from the community sector, the church sector, the charitable sector, whether we're from federal government, state government or local government.
We are all in this together. And the actions we take together are infinitely more powerful, infinitely more potent, if they are taken together in a coordinated manner, one reinforcing the other.
The worst thing that can happen and you see this occurring in various societies and countries around the world, is where the impact of external economic shock fractures societies, fractures local communities. That's not the Australian way, that's not the way in which we design, that's not part of the Australian DNA. We're actually designed to do things differently.
At our absolute best we are a mob who get on with the business of sorting out practical solutions, looking after each other on the way through in the hard times. And that's what we are here to do.
Not to engage in the unrealistic politics of saying you can wish these things away. You can't. The fact is, you're all familiar with, you've read the international media, you've read the reports, you understand what's happening with the global economy.
But the core challenge is how do we cushion the impact in communities such as this and economies such as this, in order to make a difference in the lives of local business people, the lives of local workers, the lives and fabric of local communities, until such time as we can negotiate a trajectory for global economic recovery.
When I was in London recently, we sat down as the G20, the Group of 20 leaders from the largest economies in the world. As I listened to the presentations from my colleagues from all parts of the world, the President of Communist China, the President of capitalist America, the King of Saudi Arabia, and all points in between, what was extraordinary was the commonality of the challenge.
That is, all government leaders from whatever political systems they came from, whatever part of the world they came from, wrestling with this extraordinary event which has occurred - the worst in three-quarters of a century of global economic history.
Let's make no mistake about it. This global economic recession is the worst global recession we have seen since the 1930s. That's the reality. And each economy, each country, each society, is seeking to work effectively to respond to the challenge which has been presented to it.
But my comments to my colleagues from around the world, was the same that I've reflected to you here in Adelaide this morning. And that is, we are all in this together. Because this is not a time with such a globalised economy for an individual national economy to think that they can somehow wave a magic wand and produce a solution to the problem. They cannot.
However, if you do act together, and do act together effectively, you can begin to chart a strategy for economic recovery, and you can cushion the impact of the global economic recession on the way through.
If you look at the London Communiqué a couple of weeks ago, that's what the leaders of 20 or so governments from around the world sought to do. And we came out with a positive declaration as to the course of action that we would embrace.
One, that as governments around the world, we would engage in the business of economic stimulus. Because as governments around the world, we concluded that if you simply stand back and allow the ravages of this recession to wash over people's shores, then the impact is extraordinary. And we need to reduce that impact on the way through.
Trillions of dollars of invested activity by governments around the world in a coordinated action since we first met in Washington in November last year, through until March/April this year. Were that not the case, the tens of millions of people around the world who would now be out of work would be extraordinary. Again not eliminating the problem of unemployment but reducing it.
Similarly, dealing with the problem which lies at the core of the global economic crisis which is the state and the financial health of our principle financial institutions. Dealing with that in an effective way which makes a difference.
In the professional debate it's called how do you manage and restore to health toxic assets on the balance sheets of the world's most principal financial institutions. And there was a problem there. But what we agreed in London was a framework , an international framework which we assisted in crafting as Australia for the world's largest private banks to resolve their balance sheet difficulties, their toxic or impaired assets over time with one objective - to restore private credit flows to something approaching normal.
Because until that happens, the flow of credit through to Australian financial institutions and the flow of credit from those institutions and through those institutions to businesses which make a difference to employment here in this community in Adelaide is suspended.
And thirdly, a combined piece of action we did was this. We agreed to provide proper resources for the International Monetary Fund. And you might say well what on earth has that got to do with me here? Let me explain it. Right now there are emerging problems in the economies of Central and Eastern Europe, and in their financial institutions. And if they are not dealt with in an effective way, that will in turn ricochet back into the financial institutions of the rest of the world, and we'll have a second round effect of what we've already seen over the last year or so.
We don't want that to happen. And therefore, what we sought to do in London was to say, here is the international global institution which is relevant to handling these challenges, the International Monetary Fund. How do we make sure that it's got sufficient resources to deal with the challenge?
And how do we know, and how can we ensure that it's got the policy flexibility to act early and decisively and effectively, with financial institutions which show themselves to be in diabolical trouble in the emerging economies of Central and Eastern Europe. And that was core to the decisions we took in London as well.
Absent that with those problems emerging, the crisis of confidence which then could prospectively emerge in other financial institutions around the world, would pose great consequences for us all.
And finally, to work together on designing the rules for the future global financial system. None of us want to see what is happened most recently happen again. None of us want to see such unrestrained greed at work, inappropriately regulated by the rules governing financial markets and financial institutions.
And the resolve of governments around the world is to make a fundamental change to the way in which we design the rules of the system. Complex work, detailed work, now charged with the appropriate institutions working for us. To make sure that we get the balance right in the future between proper regulation and to ensure still, that there is sufficient flexibility for the private economy to get out there and do its thing as well.
And to draw a line also as governments around the world on the challenge of protectionism. Some people will argue that the best way to handle this challenge of the global economic crisis is to shut the gate. And that is that if you keep out imports from the rest of the world, it's the best way ahead.
Can I say that if every government did that around the world, where do you think we'd land up? If you had retaliatory action of that order of magnitude across the world today, then Australia's export markets would shrink and disappear.
And if there's one core lesson to learn from the events of the 1930s, it is this - when you are faced with a synchronised global economic recession, don't make it worst by erecting protectionist barriers against one another, because you take what is already a bad situation and make it much, much worse.
You shrink the global economy even more. You shrink jobs even more. You shrink those businesses which here depend on exports for their survival.
For the good news I have for you, coming out of the events in London, is that global governments in their own imperfect way, given the fact that global governments like domestic governments are made up of politicians and you may have observed, that there are some flaws in our political processes, and there are even some flaws in the politicians themselves. And none of us have perfect knowledge.
But the good news I have for you today is that governments meeting around the world in London were faced with two stark choices. To retreat into themselves and to take uncoordinated national actions against one another, or to act as a community of governments. And the good news so far is that they have taken the second course of action.
As we met at No.10, I also reminded my colleagues from around the world that there was a similar meeting in London in 1933. They brought together representatives from the economies affected by the events of '29-32 to London for a global conference on the global economy and its future directions in 1933. 66 economies from around the world.
It was a complete unmitigated disaster. And the result was the construction of protectionist walls. The extension of the economic pain of the early '30s throughout the '30s, and we know the consequences which then erupted by the end of the '30s.
That is one script which is alive to the world community and presents itself as a possibility. It's not one which this government of Australia will ever be party to. This government of Australia is into the business of how you cooperate and coordinate your actions with your colleagues and counterpart governments from around the world.
But let us be clear about the dimensions of the challenge. I've described the global action that we have taken, but let's be very clear about what we now face. 28 of the 30 most developed economies in the world are already in recession, or have experienced at least one quarter of negative economic growth in 2008.
Be very clear about that - 28 of the 30 most developed economies in the world are either already in recession, or have already experienced one quarter of negative economic growth.
Second, seven of Australia's 10 largest trading partners are already in recession. Seven of them. The severity of the global recession has made it impossible for Australia to avoid a further period of negative economic growth.
The worst global economic recession in 75 years means it's inevitable that Australia too will be dragged into recession. The challenge for government is to cushion the impact of the recession on businesses and jobs, through the actions we take through our economic stimulus strategy.
That brings me too what we do nationally. I've described so far what we've sought to do internationally. Our national actions have sought to be consistent with the principles of how do you deal with maintaining financial stability in the here and now. How do you also deal with providing jobs and stimulus and support for business and the economy on the way through.
On providing stability for our financial system, the terrible and dark days of last October need to be reprised for us all. Following the collapse of Lehmann's in the United States, there was an audible tremor across the global economy as financial systems around the world began to shake and financial institutions, some of them, collapsed.
The actions we took in October last year to provide a guarantee for bank deposits for Australian bank deposit holders in banks, building societies, credit unions across Australia, the first time this has ever been provided in the history of the Commonwealth, is absolutely fundamental to maintaining confidence and stability in the Australian financial system.
For those who have from time to time chosen to criticise that decision, I ask them one simple question: And what was the alternative? And furthermore, what would have happened had we not taken that early and decisive action, clear for all to see?
And parallel to that, to engage also in an unprecedented position to provide government guarantees for the term wholesale funding or inter-bank lending of Australia's banks to make sure that their lines of credit could remain alive from around the world.
Why is all that important? Because such a large slab of the finance which is delivered into local businesses in this community here comes through the Australian banks, a slab of which in turn is accessed through their access to global capital markets.
And if that tap was being turned off as it was in the last months of last year, we had to find a radical means by which to turn it back on. And we did so. And we do not apologise for it. It was absolutely the right thing to do. Tough, early, decisive action necessary to stabilise the financial system of Australia.
And if I look at the comparisons between the stability of our financial system in the months since then against what is occurred in so many economies around the world, this was the right thing to do.
Stimulus, however, to provide support for jobs and businesses in the interim is of equal importance. And that's why from day one, the Government has also embraced an economic stimulus strategy. Not for the sake of simply spending money, but for the sake of stepping in to provide support for the private economy when it's taken such a battering, when businesses are taking such a battering through no fault of their own through the global factors that I've described before.
And so that's why we took a decision unapologetically to step in and say we will support the one and a half million Australians who work in the Australian retail sector by providing support to pensioners, veterans, carers, families in need of support to make sure that the retail sector would get a necessary shot in the arm on the way through in order to support the one and a half million Australians who work out there in that sector. And the businesses who provide so much of the products which are sold in our major retail outlets.
Secondly, if you look at the international economic data of what happened around the rest of the world when governments, countries and economies did not act to support consumption in their economies, did not act to support retail employment, the absolute killing fields that you have seen in retail sectors around the world as people have lost their jobs, hand over fist.
Compare and contrast what happened with Australia's retail sales figures for the December quarter last year and into the first months of this year against most other economies in the world. There is one difference between our performance and that of the economies around the rest of the world, and that is that we intervened, acted decisively to provide direct and deliberate support for consumption in the economy through the payments we made to pensioners, carers and to others, for which we make absolutely no apology.
The consequence in terms of employment in the retail sector and the roll on consequences of so many people in retail losing their jobs, had we not taken that action, would have been catastrophic for the general economy.
Consumption, however, and support for that sort of short term stimulus is one thing, it's also creating for us time to invest in long term infrastructure of the type that we need for the future and to provide also an opportunity for stimulus and the creation of jobs on the way through. That is why we have invested in a $30 billion nation building and jobs plan. The $30 billion nation building and jobs plan is about one thing: how do you provide as much activity and support for jobs in the economy now, most particularly through construction, and at the same time build the infrastructure we need for the 21st Century?
That's why in that $30 billion injection into the national economy we've embraced three main projects.
One, out there with the single largest school modernisation that this country has ever seen, $15 billion to build state of the art libraries, 21st Century libraries for our primary schools to make sure that they have the best by way of multi-purpose halls. That our secondary schools have access to the best science centres, the best language centres. And to do all these things in a way which makes our schools the best schools that we can have for the 21st Century and on the way through, turning every single primary school in Australia into a construction site with no apology.
The whole purpose is to make sure that we are generating economic activity here at the grassroots in the schools in these communities here in Adelaide. Each one of them now working with their State Education Authorities or in the case of the Catholics or the independents, their respective education authorities to make sure that you're getting the best deal possible for the new and additional classrooms or facilities that you want to build at a particular local school.
The objective? Build the education revolution for the future. Make sure that we have state of the art teaching infrastructure for the future and at the same time generating tens of thousands of jobs on the way through: tradies, sparkies, electricians, those who are concerned and engaged in the business of design and project management and project completion. That's what it's about.
The other part to it is this, as I look across the nation and I've looked carefully at the census date in recent years about the level of homelessness in Australia, how can we have according to the census data in a country such as this 100,000 Australians who are still homeless? And so what we committed ourselves to do some time ago when we produced our Homelessness White Paper was to ensure that we radically invested in the amount of social housing available in Australia because there is a huge undersupply of social housing.
And the one directly relates to the other. You have a whole lot of people who are homeless because we have such a radical undersupply of social housing. And again what the Government has done through a $6 billion investment is to undertake the biggest single national investment in social housing that the country has ever seen. 20,000 units of social housing right across the country, in order to make a difference, in order to make a radical difference. Of course the work will still not be complete as far as homelessness is concerned. But it is the single largest step in responding to the challenge that the country has seen so far. But critically, employing and creating jobs for people in housing construction.
The third thing we have done, complementary to the second, is of course to introduce a First Home Owner's Boost. Treble the rate if you're out there buying a new house, double the rate if your new home is an existing dwelling and again I ask you to look carefully at the economic data. Look at the housing construction statistics for Australia since the end of last year to the early part of this year relative to any other economy in the developed world and ask yourself this question: why are we doing better? It ain't perfect, it's still taking a battering but relative to the rest of the world let me tell you it is a significant and radical improvement.
And that is because you have these arms of Government policy directly engaged saying we can help first home buyers take advantage of low interest rates by getting into the housing market by trebling the first home owner's grant on a temporary basis in order to provide people with the incentive to enter and secondly this significant injection in social housing at the same time, as well as some of the other housing initiatives which the Minister Tanya Plibersek currently has underway.
The housing data is extraordinary relative to the rest of the world. And when I look at housing construction I say to myself, this helps preserve asset prices for working Australian families across the country, it also helps provide employment in local communities across the country and keep going a vital industry which is taking an absolute pounding in so many other parts of the world.
The third part of what we've done or the fourth part of what we've done on stimulus is this. Looking again to the future and what do we do to act to reduce greenhouse gas emissions. The decision we took is that a practical ambition for the nation was to ensure that each owner occupied dwelling in Australia should have ceiling insulation, pulling out the equivalent of 50 million tonnes of greenhouse gas equivalents across the country. A massive investment in energy efficiency, a massive investment in reducing electricity costs for families across the country and a $4 billion investment on our part therefore to work with the industry in supplying insulation material, the transportation of insulation material, the installation of insulation material and all the things that support that and the jobs and employment process, again making a difference in terms of local employment.
So my message to you as this community is that what you see us doing nationally on the question of supporting stability in the financial system and providing economic stimulus on the way through to cushion the effect of this recession on local communities is of the type that I've just described. These are not just a series of statistics which are put out from the nation's capital, they reflect concrete projects on the ground in each community across the nation, including those here as well.
If I was to look for example at the impact of what's underway with some of these decisions here in these suburbs of Adelaide, the impact of the school program for example is significant. 237 schools in northern and western Adelaide regions of South Australia will be eligible to share in approximately $454 million under the plan that I've just described. This is not a small amount of money, this is not sort of a (inaudible) press release from you know someone on the edge of a Friday news cycle. This is real money, real investment in order to make a real difference in these communities. That's half a billion dollars spread across 237 schools in these regions of South Australia.
This comprises $419 million under the primary schools for the 21st Century program and up to $35 million under the National School Pride program. 158 schools in this region have already had schools approved under round one of the National School Pride program, this is for much-needed maintenance programs by the way, within schools and that in itself totals $23.5 million. This include $5.7 million allocated to schools in the electorate of Makin such as the Modbury Special School and Golden Grove High School for refurbishments and reconstruction. $8.3 million allocated to schools in Wakefield such as the Gawler High School and Elizabeth North Primary School for refurbishments and construction.
These funds also build on what we've invested in trades training centres and the provision of computers for the 21st Century. $16.6 million for three trades training centres benefiting seven schools in Makin and $9.6 million for two projects benefiting eight schools in Wakefield.
And across the computer program, 1,921 new computers in 14 schools have been funded in Makin; 1,780 computers in 19 schools in Wakefield. These are practical investments aimed to make a difference in this local community. A difference in terms of jobs and economic activity but a difference also in terms of what we do to create the best possible learning environment for our kids for the future.
A stimulus of the type that I've described also involves how we engage with the real challenge of local jobs here in communities such as this. The jobs figures coming out of these suburbs has been really bad. I don't intend to gild the lily, let's just be upfront about this. I don't think anyone's interests are served by us pretending a problem doesn't exist when it does. Our responsibility in positions of leadership is to embrace the problem, understand it, explain it and to reduce it. That's the business of practical leadership and that's why we're engaged in these important projects.
Since January 2009, over 450 redundancies have been announced in Northern and Western Adelaide. In Elizabeth, 12 jobs gone at Ceva Logistics, 40 at Exide Technologies, 38 at Hirotech Australia, 49 at Premoso Pty Ltd in Elizabeth South. In Edinburgh, 50 jobs gone at Futuris Automotive Interiors, 24 jobs went at Codan in Newton in February, and 44 at PMP in Salisbury South - just to name a few.
That's what's happening and you know it far better than I because these are your communities. The purpose of my mentioning them is to underline the fact that I see, as I underlined before, no point whatsoever in trying to gild the lily about this. This is happening, it's real. Our challenge is to take the bull by the horns and cushion the impact of it through the proposals that we have explained so far and ones which I will now turn to in addition.
When I returned from the G20 I said we needed to act nationally, we needed to act globally but I also said we needed to be acting locally. And I've described already some of the projects which give rise to a credible strategy to see Australia through this global economic recession.
What I described in a speech in Melbourne was that we needed a new compact on jobs and training for Australia to deal with the impact of this global recession. A compact with young Australians who are going to find it tough to land a job out of school or out of university or out of TAFE, and some of them finding it tough to keep a job out of school, out of university or out of TAFE.
Secondly, a compact with workers who have been retrenched through no fault of their own and what we provide to them by way of support.
Thirdly, a compact with local communities so that we can make a further difference on the ground in areas where we have higher levels of unemployment than would be the case nationally.
On a compact with young Australians, we are proposing to the Council of Australian Governments which will meet at the end of April that every young Australian is guaranteed access to a school, apprenticeship or higher education place. The goal is to ensure that our young people are properly skilled when the economy recovers.
We'll also be asking the Council of Australian Governments to lift the mandatory age at which young people must be in school or engaged in training or employment and we'll ask them to bring forward the already agreed Council of Australian Governments' goal of year 12 or equivalent attainment from 2020 down to 2015.
The purpose of these elements of our compact with young Australians is to make a difference because when I look back in economic history, when previous recessions have hit the Australian economy, one of the tragedies which has occurred is that we have lost too many of our young people not just for the one or two years of economic dislocation, then for a generation, then beyond a generation. Our resolve as an the Australian community and our combined resolve as a local community must be to exert every effort from preventing that happening again and that underpins our proposed compact with young Australians. So that with our young people, whatever qualification they may be, for whichever course they may be qualified, be it at university, be it TAFE, be it an apprenticeship, be it at school, that we the Governments of Australia would make that possible for them.
To use this time of economic downturn to obtain new skills to sustain the skills that you've got but also and much more critically to equip yourselves most effectively for the economy once it recovers.
A compact with retrenched Australians. So many Australians through no fault of their own are losing their jobs. One of the key concerns that have been put to us by many people from around the country is what happens if you lose your job and your ability to pay off your mortgage. We've worked with the Australian Big Four banks on a comprehensive package of assistance to working families who lose their jobs. The banks have now indicated to us they will now negotiate with mortgage borrowers suffering from employment hardship to postpone up to 12 months the dates from which payments are due under their mortgage contract, with interest to be capitalised into the loan.
And the banks are also prepared to consider extending the period of the mortgage contract and reducing the amount of each payment due under the contract. They have also indicated that on other loans including car loans they would be prepared to consider providing interest-only repayment options where appropriate. Furthermore they have also indicated their preparedness to consider fee waivers for borrowers in hardship cases.
Of course, these options won't be appropriate in every case. Banks will make assessments based on the borrowers' ability to meet long term contractual obligations. But this is important, there's a set of arrangements with Australia's major banks to remove some of the immediate pressure on families if the breadwinner loses his or her job through no fault of their own and ends up being retrenched.
Finally a compact with local communities. I said before that what we are doing nationally translates through locally in the school projects and the rest. But also what is important to underline here today is what further we can do from the ground up, engaging you as a local community. Each of the projects I've referred to, for example the four to five hundred million dollars in school modernisation projects to generate jobs and activity and opportunities will flow from that.
But we have to be in addition particularly mindful of those areas where there will be high concentrations of unemployment, such as this region. That's why I've announced $20 million for local employment coordinators in the regions most affected by job losses. We will initially appoint them to seven regions including here in the northern and western suburbs of Adelaide. These coordinators will be appointed by next month. In the interim here in Adelaide Lyn Rawley has been appointed to begin the task of working with the local community to identify opportunities at the local level to create and support jobs. She has a long history as a local community champion, having worked with Centrelink previously and with the Commonwealth Employment Service.
The first task of the local employment coordinators will be to identify projects for the Government to support through a special $650 million Local Jobs Fund. Jobs that are ready to go and to work also with proponents for those proposals to ensure effective delivery on time. The coordinator will link with industry and service delivery organisations to identify new jobs in the region and to maximise employment and training opportunities for redundant workers. The intention is for the employment coordinators to work directly with local government in order to make a difference and to coordinate effectively with what local governments have by way of their local, own local infrastructure plans.
We've also been offered the assistance of the Australian trucking industry legend Lindsay Fox who will be working directly with our local employment coordinators across the country alongside Bill Kelty and he'll be providing advice to local employers on practical ways that they can help by keeping on their workers and even taking on new apprentices and employees.
Part of the reason for this discussion this morning, as I conclude my own remarks, is for you to begin to think as a local community about how you could make best access of this Local Jobs Fund to team up with our local priority employment coordinator. This is going to be very important practical work. So much of what I have described so far is what the Government is doing as it works from the national level down but this will only truly work if it is matched by a parallel effort from the community up.
And what I know of Australian communities is that they are full of good ideas, full of good enterprise, full of good initiative, and good and full of good spirit when it comes to making a difference on the ground.
So the challenge I leave you is this. It is not simply to come here and say this is what we're doing, aren't we a bunch of fine fellas. It's to say here actually is a structure. Here is a person. Here is a fund. And here is an opportunity for you as local communities, working in partnership with each other, to make an additional difference as well.
That's the purpose for my being here. To hear from you. From church and charitable organisations, from local chambers of commerce, from local trade unions, from employers. From those who are passionate about the future of their local communities about how we can make this difference also from the ground up.
And you know something? I'm convinced we can make a difference. I'm convinced that if we take to heart the principle that I put to out my colleagues of the G20 meeting only a few weeks ago, that we're all in this together.
That if we're serious about this principle, that we'll make a difference here in this community by being in this together. For the challenge, ladies and gentlemen, lies with you. Work with us. Work through your local members. Work through the local priority employment coordinator. There is no monopoly of wisdom on our part in terms of what's going to work in this community. I know enough about local community life from where I come from the People's Republic of Queensland, that everywhere is different, okay. Everywhere is different. And everyone's got their own best ideas about how things should be done and you've got your own best knowledge and your own best networks.
What I've sought to do is provide the structure and the funding and the personnel to try and make a difference.
Over to you.
[Ends]