Thank you very much and thank you for inviting me to join you.
Congratulations to everyone who's been involved in the important work of the B20. I certainly believe that it's very important alongside the G20 meetings, we have a vehicle to bring together the voice of the business community. So, congratulations to everyone for participating in it and I can see some Australians hanging around and I hope they haven't been giving you any trouble and that they've been making good contributions, I'm sure that's true.
What I wanted to do is proffer some thoughts about where we are in the lead up to this G20 and then some thoughts directly on the question of youth employment.
As we start this G20, I quickly have to recognise that we're facing the most testing time in the global economy since the depths of the global financial crisis and of course that testing time is being shown by market volatility, but it's being experienced by real people, as joblessness. You use the global statistics and they are truly startling, but even here in the Eurozone we're talking about 16 million people being unemployed and in the United States - and I see Andrew here - in the United States the unemployment rate above 9 per cent.
So, the issues that we are confronting, will cause people to talk about all sorts of complicated financial transactions and vehicles, but at the end of the day it matters to people because it manifests as joblessness for real human beings.
Here in Europe, Australia has been consistently raising its voice to say it is critical that European leaders come together to resolve the problems of European financial stability and the sovereign debt problems in Greece.
We certainly were supportive of what European leaders came together to do on 27 October and said the challenge was then to make sure all of the details were defined and that the plan was implemented. In the last 36 hours a new challenge has arisen, with the statements from Greece and I believe one of the things that will be a very big focus of attention during the next few days will be how that plan for Europe can be implemented, given the announcements that have been made by Greece.
And sitting here right now, I'm not sure we know the answer to that question, how the plan can be implemented and what else can be done to drive growth and life back into Europe's economy. But those questions need to be answered and answered quickly and I believe the answers will flow from implementing the work that European leaders did on 27 October defining these details and getting on with the job of implementing it.
I do think at the G20 meeting, leaders assembled can assist European leaders by bolstering political will to act, but I also think we can also assist in a practical way. The issue of increasing the resourcing of the IMF, I think is squarely in front of us. The IMF does need more resources in order to be ready and prepared in case there is a bigger spread of problems and certainly Australia is prepared to play its role in increasing IMF resources and I've already conveyed that in some discussions today and I intend to take that perspective into the G20 meeting itself.
So, that is a view about the immediate crisis that confronts us and that is going to be a pressure on everyone as we move into the next few days, but here at this forum you've been talking too about longer term drivers of growth and what can be done to stimulate employment and I wanted to touch on those briefly as well.
We do need to see across the global economy, countries both developing and developed nations focus on new sources of growth.
For developed countries it's very important that people get their house in order and make sure that their budget position is sustainable. I'm thinking here, obviously of nations like the US and Japan, where we do need to see fiscal sustainability and we need to see a focus on new sources of economic growth.
For developing economies and surplus economies there is a need to focus on lifting domestic consumption, whether that be individual private consumption, or whether that be consumption in the form of new social protections that flow to the population and of course we do also need to see a move towards market based exchange rates and that's another issue that presents in the context of the G20.
For all economies, whether developed or developing, we need to see the political will to keep pursuing structural reforms. I very much agree with the perspective that has clearly been developed around this table, that there does need to be advocacy of social protections, social protection floors across the global economy. This is important as a matter of social justice to people around the globe, but it's also important as a driver of demand in its own right, that by better sustaining populations people will better sustain the ability of individuals to consume and to prosper within their society.
The focus on skills that you have obviously come to is one I very strongly endorse. Human capital reforms are central to any economic strategy. They are central to our own economic strategy in Australia and in the long term there is nothing more important to the productivity and prosperity of any economy than the performance of its human capital and the investments that have gone into the skills and knowledge of its people.
In terms of driving new growth, we believe at the G20 and beyond there needs to be a very strong focus on the trade agenda. It is increasingly apparent that after many long years of trade ministers having many detailed discussions, that the Doha Round has hit gridlock. Our Trade Minister and Australia generally have been pursuing in global forums the need to move beyond that deadlock and if it appears, as it does now, that it is not possible to get a trade round which will have trade changes for everyone, then what we need to do is focus on what can be done - segmenting the round so that for those countries who are able to do some things, we at least get some things done, rather than being in continuous gridlock.
For Australia's part, we have unilaterally confirmed that we will give the less developed countries tariff and quota free access to our markets and we have unilaterally confirmed that we will hold to a standstill with the G20 auspiced on protectionist measures and we believe in the context of this G20 that we do need to see leaders grappling with the fact that the Doha Round isn't going to come to fruition and we need to find some new ways forward for freer trade and to make sure that we don't see a retreat into protectionism.
For the Australian economy, we are in quite different circumstances to our friends on Europe and in the United States. We did come out of the global financial crisis strong. We did not have a recession, that was partly as a result of the advantages of being where we're located in the world, of being a resource rich nation, demand for our commodities was sustained. It also was the result of a timely and targeting government stimulus and it was the result of thousands, indeed tens of thousands, millions, of employers and employees striking cooperative working arrangements to sustain employment during the most difficult days of the global financial crisis.
So we have come out of the global financial crisis in quite a different position than many other economies. We have low debt, low unemployment. We have strong public finances with our budget returning to surplus in 2012-13. So we are in quite a different position to other economies.
Even being in that different position to other economies, we are seeing some differential effects in our own economy during this phase of growth. Because our resources sector is so turbo-charged, with more than $400 billion of investment in the pipeline, that does mean that our Australian dollar is very strong, putting pressure on other industries, particularly industries like manufacturing and that is requiring us to respond with economic policy that helps sustain those sections of the economy that are feeling this pressure.
As Prime Minister I am very determined that during this phase of our economic transformation, that we do maintain a diversified economy and indeed come through the resources boom with a more diversified economy than we went into it.
We are at the start of what will be a profound change in Asia, we have dubbed it the Asian Century, where we will see the rise of the Asian middle class, with everything for consumption and Australia's economic opportunity that that implies, which is why we want to make sure our diversified, resilient Australian economy can respond to those demands.
But with the patchwork we see at the moment, we do also see a patchwork in youth unemployment and it's true to say that there are some parts of Australia that have always had unemployment rates greater than the national average and have tended to have quite high youth unemployment rates and in this patchwork phase of economic development, we are obviously anxious that we could see more of that.
We are therefore focused very strongly on skills development for young people, we are in a stage of major transformation in our education system, we call it the education revolution, where as a government we have focused on improving quality in education at every level, from early childhood education for kids in the years before they go to school, through to improving the quality of school education, lifting both the number and quality and performance of apprenticeships, of young people getting trade and other skills, putting our universities on a pattern for growth, so that they are not constrained by government funding, but can respond to the demand patterns of young Australians and indeed older Australians through university education.
And we have regeared and are still in the process of regearing parts of our social security system, so that particularly for young people the obligations to engage in order to qualify for income support payments are very clear. We refer to this as the ‘learn or earn policy', that there's no third way, there's no ability to just stay at home receiving benefits, people either have to be engaged in training, or they need to be engaged in the workforce. Being out on the sidelines, the economic margins, not earning at all and not learning is not an option open to people.
And in taking that approach we've been very driven by the research that if young people leave school early, if they spend the years immediately post-school unemployed, then that is far more likely than not to lead to a lifetime of disadvantage, if someone does not make a successful school to work transition and is kicking around unemployed at the age of 22, 23, 24, 25, then they are probably on a journey to being at best only intermittently engaged in the labour market for the rest of their lives.
So it's been a very strong focus of our policy work and I can tell it's a very strong focus of work around the table. So with those words, can I once again say congratulations to the B20 for doing all of this intensive work and I'm very happy to listen to and participate in the discussion
Thank you very much.