Adelaide
It's always good to be in Adelaide.
I never feel like a visitor. Adelaide for me is Mum and Dad and Uncle Frank and Aunty Glad, backyard fruit trees and Brown Hill Creek, learning to knit and learning to read ... I'm glad I'm here today.
Adelaide's also one of Australia's serious cities, a place where we can talk about ideas. So I'd like to begin by reflecting on 2010 so far.
By any measure, this has already been a tumultuous year in politics.A change of Prime Minister in office, the closest election campaign in sixty years, the first minority government since the war.
So much of 2010 has been defined by immediate events.
Now, I believe Australians want to know more about the long term. With the immediate politics of the election and the new Parliament behind us, Australians want to know what's next. Of course I see this reflected in some ways in political commentary and I'll come back to that.
I also hear it from people I meet as I travel around the country.
From an apple storage cool room in Narre Warren outside Melbourne to a liquefied natural gas project in Karratha to the mess hall in Tarin Kowt - the Australians I've met since the election haven't been asking me who is going to win that day's argument on that night's news.
We've been having a much more interesting and more challenging conversation than that.
Australians are really asking me three related questions:
What drives me, personally, in politics - why do I do it, what gets me out of bed every day?
What's the Government's vision for Australia - what do we want Australia to look like in five years, ten years?
And what's the Government actually doing? What are the goals which make that vision real?
They're all fair questions and I've tried to answer them as they arise. But today, in Adelaide where so much for me began, I want to speak in more detail about each.
First, what really drives me, personally, in politics? It's a question I've answered before, and I know I need to keep answering it as I go to new places and as I meet new people.
Hard work. The benefits and dignity of making your own way. Everyone who can, should.
A fair go through education. I know as much as anyone does that learning is the great life-changer.
Respect. That great Australian belief that no one is a lesser person simply because they have a title, occupation or background different from your own.
Other people have other passions that brought them into politics - care for the sick, or homelessness, or a fair go at work - and a Labor Government gains so much from the diverse motivations of our people. But those are mine.
Hard work. Education. Respect. And when I think about policies and politics, those values come back to me all the time.
What's my Government's vision for Australia?
A strong economy - and opportunity for all. That's really it, in a nutshell.
In five years, in ten years, I want our economy to be strong. And I want more people to share in the opportunities that creates.
It's not complicated, it's not grandiose, but that's what I see when I think about the future of Australia.
I think it's the vision of any Australian Labor Government. More jobs, more opportunity, better life chances. For all, not some.
A strong economy - and opportunity for all.
What are we doing about it?
My Government is working methodically to ensure our economy stays strong today and is ready to meet the challenges of the future, in order to create opportunities for all Australians to prosper and succeed in life.
To conquer the challenges of the future we need higher skills, higher workforce participation, higher productivity, better infrastructure like the national broadband network, a low-carbon economy and a strong Government budget.
I will not let this nation drift into the future and be mugged by change. We will plan for it, prepare for it and prosper.
We have a strong platform to build on.
Since 2007, we have created 600 000 jobs and doubled funding for education.That is my values and our vision brought to reality in the most difficult global economic circumstances.
Now we have new opportunities with a new Government.
We've been dealing with the immediate requirement to form government and working with a new parliament. Australians now have the stable, effective administration they deserve, and the new Parliament is working well.
We've been establishing a way ahead on three difficult challenges: asylum seeker processing, a mining resource rent tax and a consensus on a carbon price.
None of these things will be concluded tomorrow but each is on course.
At the same time that has been happening, the Cabinet is also investing time thinking through and delivering our plan for three years of Government and beyond. I believe it is crucial we do this early in the term, and that's why we have spent so much time and energy on it since the day we formed Government.
I've brought my values to the table, and we've had that shared vision of a strong economy and opportunities for all to guide us.
And we are working through the hard grind of bringing together our values and our vision in the things the Government actually does.
As Prime Minister, I have chosen five goals to aim for. Increased prosperity ... sustainability ... and fairness. Govern for all Australians. And stay strong in the world.
That's the measure of progress. As I lead, I will ask: is Australia reaching these five goals?
I know there's so much else Government does. Everything from addressing problem gambling to preparing for the centenary of ANZAC in 2015. It should be true that nothing Government does is unimportant.
But this is the list I work from when I say, are we getting the job done? Are we getting closer to the vision ...
A strong economy - and opportunity for all.
Now. I said I'd detected a similar mood in the people who ask me what the long-term holds, and the media commentary.
That sense that after a momentous year of immediate events, people are asking "what's next" and looking to the long-term.
But I do want to challenge one strand in the commentary on the Government's values and vision, and in the debate over our seriousness about reform.
I'm glad when commentators take up the chant "What do we want? Long-term reform!" It keeps me honest.
I am accountable to the public, I am responsible for leading on issues and managing events as they develop in the public arena. That's the media's job, to make life tough for politicians, and we'd all be much worse off without them.
But that does not mean that the task of government is to deliver reforms exclusively in line with the contemporary media cycle.
I can only put it this plainly. I do believe I will convince you of my long-term reform credentials.
I do not believe I will convince you of my long-term reform credentials tomorrow.
I quite literally, and by definition, cannot.
And I am not about to try.
"What do we want? Long-term reform."Yes, agreed."When do we want it? Before we tape our Insiders segment."Sorry, ain't gonna happen.
To suggest that an effective approach to reform requires sweeping proposals to be put forward and enacted within weeks defies logic.
No successful reforming government has ever worked this way and mine certainly will not attempt to.
I chose my words carefully when I said I would walk the reform road.
I believe this is how reform must work in modern politics.
Leaders must lead and Governments must show resolve.
But that resolution must be shown over months and years, not hours and days.
That is real reform courage.
There are two equal and opposite mistakes on the reform road.
One, the negative tactics of political wreckers creating excuses for interminable delay.
The other, just as wrong, the false urgency of commentators demanding a decision in time for the weekend's features.
When my Government honestly believes a reform is good for Australia for the long-term, we must also honestly believe that in a genuine conversation withAustralians, the majority will come to share our view.
So we will lead a reform conversation which brings Australians with us.
And we will begin the work early enough to be sure there is time for that conversation to take place.
The measure of progress is in the years. I said that one of my Government's goals is increasing sustainability.
So today I want to talk about our plans to make smarter use of energy and water.
These are big challenges for our future, challenges I hope we can meet together.
So following the election, I announced that the Government would establish a Multi-Party Climate Change Committee to look at the best way to deliver a price on carbon.
The Committee held its first meeting last month and includes representatives from the Government, the Australian Greens and the Independent MPs Tony Windsor and Rob Oakeshott.
It meets again tomorrow.
Listening, consulting and collaborating.
The economists like to say the solution to climate change is "decoupling economic growth from emissions growth".
I think of it this way.
We want to grow our economy without growing our pollution.
We want more jobs and higher incomes ... without putting out more carbon and higher emissions.
Because carbon pricing puts a dollar value on cutting pollution, it allows the market to find the cheapest sources of emissions reduction.
This means it can deliver the greatest reduction for the least cost.
That is why the best way to cut carbon pollution is with market-based tools.
This point was made in Parliament earlier this year, by one of the speakers for the Government's legislation for a carbon pollution reduction scheme. He said
Market forces deliver the lowest cost and most effective solution to economic challenges ... Gas is expensive and clean; brown coal is cheap and dirty. If there is no cost charged for emitting carbon, there is simply no incentive to move to the cleaner fuel.
The speaker was Malcolm Turnbull. He had a point.
To really see the importance of using market-based tools in action, we have to think about where electricity comes from - how it is produced and sold in Australia.
This is the hard work of market-based reform.
Understanding a sector, looking at the needs it must serve, and then methodically working to create the conditions in which markets serve the public interest better.
Across Australia the electricity sector contributes just over one third of our nation's carbon pollution. So electricity has to be a big part of the solution to our carbon problem.
Basically, we get electricity from brown coal, black coal, natural gas and renewables. That's things like solar and wind.
Brown coal puts out between three and four times as much carbon pollution as the most efficient natural gas generators. Black coal is in the middle.
And of course solar and wind produce no carbon pollution at all.
There's a National Electricity Market, and it's very competitive on price, which is good. Electricity users get the best value for money and electricity producers only sell what people need or will pay for.
But. The price of electricity doesn't include a price for carbon pollution. So lower pollution sources, like gas and renewables, cost more than higher pollution sources, like brown and black coal.
That's what we need to change if we are going to cut carbon pollution. A carbon price could make a difference straight away.
Right now in the National Electricity Market, black and brown coal make up around 58 per cent of our capacity to generate electricity. Gas fired generation makes up about 20 per cent.
But that's capacity.
The electricity actually used is about 82 per cent from coal, and only around 10 per cent from gas. Renewable energy sits at around 7 per cent.
If the cost of electricity from coal rises relative to gas and renewables, there will be more electricity from gas and renewables as a result.
Our existing generators would invest in ways that cut their carbon pollution. There would be extra incentive for investment in carbon capture and storage.
And new investment would flow to new renewable and gas power stations.
South Australia would be one of the winners from this.
Much more electricity generated here comes from natural gas - almost half in fact. And you have one of the highest levels of wind generation in the world, already 18 per cent of the electricity generated here.
So, carbon pricing is good news for the South Australian economy.
Because carbon pricing reform makes so much difference to how the electricity market works, we also have to move soon to ensure the right investments are made in future.
We can see the effects of under-investment in the way electricity prices are already rising across Australia.
The current price rises in a number of states have been principally caused by a sustained period of under-investment in networks and distribution. The surge in investment now needed to catch up is one of the key reasons we are seeing a surge in prices.
Here in South Australia, the distribution network will invest $1.7 billion over the next five years to replace aging assets and meet increasing peak demand.
More than double the capital expenditure of the last five years.
The story is the same across Australia with an estimated $42 billion of network investment being made over the next five years.
It's this increased network investment which is now being paid for in each electricity bill. And over the past three years residential electricity bills have risen by more than 40 per cent across the country.
I understand how much pressure this is putting on families.
Australia cannot afford similar under-investment in generation in the future.
Long-term investment requires long-term certainty.
The lack of a carbon price will distort investment, and lead to price rises.
That is why the Government is committed to a carbon price.
Better energy security and lower carbon pollution.
Anyone who tries to pretend to you that the choice is between higher electricity prices with a carbon price and lower electricity prices with current arrangements is not telling you the truth.
There are real price pressures in current arrangements - a future of uncertainty and under-investment, energy insecurity with the real risk the lights will go out, pressure on prices and then a spurt of catch-up investment paid for through quickly delivered higher prices.
There is another way to reduce carbon pollution - Government can pay companies directly to make changes which cut their emissions - what Mr Abbott sometimes calls "direct action".
In other words - picking winners. Paying subsidies. Special deals.
Companies coming in to the market, with no incentive to minimise their carbon pollution by innovating, just sitting and waiting for a subsidy or a deal.
But as was pointed out in the Commonwealth Treasury's Incoming Government Brief, which is a public document:
...a market-based mechanism can achieve the necessary abatement at a cost per tonne of emissions that is far lower than alternative direct action policies.
Moreover, many direct action measures cannot be scaled-up to achieve significant levels of abatement anyway, and for those that can be scaled up, the cost per tonne of abatement would rise rapidly, imposing further costs on taxpayers and consumers.
I think this is good advice. And under Mr Abbott's model, Australians pick up the bill through their taxes.
Like all structural reforms, we need consensus and discipline to deliver good outcomes which are sustained for the long term.
I know the climate change committee and the business and community roundtables are working hard to deliver this consensus.
And the Government is determined to maintain this discipline, by taking the lead in the reform conversation. Water reform is another important step to improving sustainability.
No South Australian audience needs a history lesson on the Murray River and the politics of water reform in this country.
I want to talk with you about what's happening now with the independent Murray Darling Basin Authority's Guide, which has begun the process of consultation on the eventual Murray Darling Basin Plan.
First of all, it's important to understand that the Authority was established by the Howard Government under then-Minister Turnbull, with the support of both major parties.
The process for developing the plan, the timelines for consultation and the way decisions are finally made were similarly established by the Howard Government with the support of both major parties.
This is important because I believe that without building deep and lasting support in the community and across the political divide, we simply won't get water reform in Australia.
That is how the Murray Darling Basin Authority's work began, and that is the best way for it to continue.
My Government's approach to water allocations is consistent with our approach of market-based reforms.
Putting a dollar value on water rights has given water rights-holders a valuable asset, as well as giving them greater flexibility and choice in their own decisions.
But it has also created a market incentive to return water to the river in more cost-effective ways.
In time, the Basin Plan will set how much water is to be returned to the river. This is where the market mechanisms will come in to play.
Because we will have a price for water, we will have a way of assessing what is the best and cheapest way to return water to the river.
We can compare the economic cost of some buybacks with their social and environmental costs and benefits.
And we can compare the economic cost of infrastructure and other water savings proposals with their social and environmental costs and benefits as well.
Now, the Authority is already meeting with communities along the river, and discussing their ideas. My Minister for Water, Tony Burke, is doing the same, along with my colleagues Simon Crean and Senator Joe Ludwig.
Over the last couple of weeks Tony has visited Dubbo, Griffith and Renmark. Simon has been to Wagga Wagga and Albury-Wodonga and is off to Griffith, Mildura and Murray Bridge this week. Joe is in Shepparton today and will be in Albury-Wodonga tomorrow.
And they will continue to visit communities, engaging with them directly to ensure we understand the concerns as well as the opportunities that communities see in this important reform.
We also have the Parliamentary Committee for Regional Australia Inquiry into the impact of the Basin Plan chaired by the Independent MP Tony Windsor, reporting in the first half of 2011.
There is more than twelve months before a final Basin Plan will be presented to the Minister. If he is satisfied, the Plan will be put before the Parliament.Either House of Parliament can disallow the final Plan. So it will have to have majority support to proceed.
The Authority has already said that its original timeline, the end of 2011, will be difficult to achieve.
If a few extra months mean that we can get a workable solution and restore the river to health, then that is the right way to proceed.
And while the final plan is being generated, we will continue taking positive steps to improve the health of the Murray through water buybacks, with 705 gigalitres of surface water already secured, as well as other infrastructure projects.
That said, whether the Plan goes to the Parliament at the end of 2011 or the beginning of 2012, I can absolutely state this.
The Plan will go to this Parliament. And every member of this Parliament will face his or her own reform test. Smart use of energy and water matter to all Australians, but they always seem especially immediate in Adelaide.
Climate change does feel different here.And you know the Murray as well as anyone.
Almost three thousand years ago, an inspired author looked for an example of things which never change.
"All the rivers run into the sea," he wrote.
South Australians could go to Goolwa or the Coorong or Clayton in the last ten years and say, "it isn't always so".
Improving sustainability is an important goal for my Government. We can't maintain the Australian way of life if we don't find smarter ways to use water and energy.
That's why my Government will keep making the changes we need to make for the long-term national interest.
And why we'll listen, consult and collaborate. So that our reforms work.Because the measure of progress is in the years.
That is the way we will govern.
Methodical. Making steady progress on our plans, day by day, week by week. Working hard for all Australians, wherever they live.
Modernising. Preparing Australia for the long-term with modern market-based solutions. Carefully weighing the hard decisions, at the right time, for the right reasons.
Driven by our values and our vision. Hard work. A fair go through education. Respect. Opportunity for all. And always keeping our economy strong.