Melbourne
Thank you very much. Thank you to everybody here, and particularly thank you to Ian and the Boeing team for having us here again.
I've always enjoyed coming here because I do feel as I wander through that I'm seeing the future of Australian manufacturing.
So thank you for having us. And it's good to join my ministerial colleague here, Minister Combet.
I want to say a few words about a plan we are announcing today and it is a plan for Australian jobs.
I believe that modern Australia can have a great blue collar future.
By that I mean that we can continue to be a manufacturing nation, we can be a nation in which people make their living through blue collar jobs.
Blue collar jobs that aren't intermittent or insecure or low paid; blue collar jobs that are highly skilled and highly paid.
But we aren't going to get there by accident. We have to make sure that we shape that future.
Which is why you need a plan that shapes that future for you and is right for current economic conditions.
And if I can say a few words about current economic conditions, and it's a discussion I've had with Ian and others through the Prime Minister's Manufacturing Taskforce.
The world in which we live today has been shaped by the global financial crisis and its aftermath.
What that means is that a number of the wealthier countries around the world that have been our traditional customers for exports are still struggling with their economies.
President Obama presides over an economy where 12 million people are unemployed. That is the size of the Australian labour force unemployed.
Around the world, 28 million people have fallen into unemployment because of the effects of the global into financial crisis.
And if we look to Europe, what we see is over the last 12 months, they have gone backwards by around 1 per cent, and even an industrial powerhouse like Germany, in the last quarter of last year, went backwards by 0.6 per cent.
So when we look at the global economy, developed nations around the world are struggling in the aftermath of the global financial crisis.
And that has an effect on us because they are nations to whom we want to sell the things we make.
At the same time we have seen a resources boom in our economy and, of course, that's a good thing. It's been creating jobs and growth.
We are yet to see the peak of the investment phase in the resources boom but $270 billion of investment has been committed in the Australian economy.
What that means is that we are seeing a big capital inflow to our country.
So combined with global economic weakness and Australia's status increasingly as a safe haven currency, because of our strong economy, we are seeing the Australian dollar very high.
Now that means there are some good reasons why our dollar is high.
Of course, we want the resources boom and of course, we are proud that everyone worked together during the days of the first impact of the global financial crisis; employers, unions and government, to save jobs in this country.
And we're glad that in this country we do not see unemployment rates like you see in America and Europe.
But it does mean that our strength, the inflow of money into our resources sector compared with weakness around the world is keeping the Australian dollar very high.
Indeed, our dollar has gone up by more than 50 per cent in the last few years.
What that means is that the things that we sell overseas are now more expensive for people to buy.
Put simply, something that we used to sell into Europe for 500 euros now cost 750 euros.
So what do we have to do in the face of these economic conditions, knowing that by the standards of the world our economy is strong?
Unlike nations around the world we have got low unemployment, low inflation, continued growth, triple-A rated strong public finances; but with this ongoing pressure from the Australian dollar, what should we do faced with those economic conditions?
Well, we could simply hope for change and hope that our dollar was going to go down.
Economic orthodoxy tells you that as we move beyond the peak of the investment phase in the mining boom that our dollar should come down.
But our dollar has been stubbornly high now so I don't think we can just rely on that working for us.
We need to have a real plan to deal with a persistently high Australian dollar.
Some would say to you ‘Well it's all about cost cutting. If we just keep cutting and cutting and cutting, if particularly we cut wages and conditions, then we will be able to compete around the world'
But that ignores the fact just how severely you would have to cut in these conditions. If your currency has gone up more than 50 per cent, if you were looking at your wages cost in your business to try and get back to something that looked like square, with you would have to be cutting wages by 30 per cent.
We would have to see the average wages for a full-time income earner move from $70,000 a year to $50,000 a year.
Well Australian working people don't want to see that and I don't want to see that for them.
Which is why the plan that I outline today takes a different path.
It recognises the pressures that are on the Australian economy through current economic conditions, but it charts a path to a high wage, high skill future.
And it is particularly pitched at making sure we get the opportunities from what is going to change in our region of the world during the economic times in which we live.
For much of my life, the place that we wanted to sell things to were places that we were far away from.
We wanted to sell things to Europe, we wanted to sell things to the UK, we wanted to sell things to America.
Now, in this economic time, whilst we still want to sell to those economies, we have actually got a geographic advantage.
We are in the right place of the world to sell things to the booming Asian region and by 2030 there will be more than 3 billion middle class consumers in the world in which we live.
More than three billion people in our region of the world where we are geographically near, who want the kind of things in their lives that we are able to make and sell, whether it's manufactured goods like getting a ride on a tremendous plane, whether it's food, wine, whether it's services like health and education.
So I want to see us with a plan that makes sure we seize the benefits of these opportunities.
So that brings us to the focus today, and the focus today is on making sure we get high skill, high wage jobs in the future by focusing on innovation.
When people hear the word ‘innovation,' many would think about a person in a lab wearing a white coat who is coming up with something that that's never been invented before and then taking it out into the business community.
And that is one source of innovation and we want to see more of that kind of invocation.
But innovation too is what is happening in this factory behind me where a different way, a different material for the building of the flaps on planes is going to change those planes forever and that work can be done here because the intellectual work to make it happen, happened in Australia.
Innovation can be coming up with new ways of combining old things.
We are all used to opening a tin and getting fruit out to have for dessert. But, of course, it was innovation that put that fruit in a plastic cup with a lid you could peel back so that you could take it with you to work to have at lunch time or you could put it in the kids' school pack for lunch at school.
Those things are all innovation, and if we can focus on innovation, that will drive productivity growth and new jobs.
In developed economies like our own, half of productivity growth comes from innovation.
So today I announce a plan for Australian jobs; a plan that focuses on innovation; a plan that means we will be seizing the opportunity in our region as well as the opportunities at home.
It's a plan for blue collar jobs. It's a plan to make sure that we are a manufacturing nation and we have many diverse sources of strength in our economy.
The plan has three essential component parts.
First, it's about making sure we win business here in Australia. Australia is home to many big projects in the resources sector and beyond.
The plan I announce today means that when there are projects worth more than $500 million, they will need to have an Australian Industry Participation Plan.
They will need to look to how they can involve Australian businesses and create Australian jobs in what they do.
Many of our big businesses, whether it's resource companies or other forms of big business, are integrated into global supply chains.
That means that they can often look to suppliers that they deal with overseas for things that could be made here.
Through our Australian Innovation Plans, we will be getting the focus on those big businesses creating jobs and opportunities in our country.
We will bring to the parliament the Australian Jobs Act to put this focus on Australian industry participation in businesses worth more than $500 million, projects more than $500 million. This is all about getting work at home.
The second component of the plan is making sure that we are supporting businesses to win work overseas. We are living in a region of huge growth and change.
We need to be supporting our businesses as they seize those exports and seek to grow.
So we will be investing in up to 10 industry precincts which will begin together researchers, innovators, sources of new knowledge with businesses so we can get the move from the creation of that new knowledge into new products, new ways of doing things, so we can seize that innovation and we can be the best at what we do and sell it into the region and sell it into the world.
We have the 13th-largest economy in the world, but when we look at how well we do at innovation, unfortunately we tend to lag behind.
And many Australians would know that intuitively, that Aussies have invented great things but we haven't been the nation that has got the benefits of that great invention.
These industry precincts will be focused on making sure we capture that benefit.
There will be a manufacturing precinct located in Melbourne and in Adelaide.
These precincts will be networked together, and there will be a precinct which focuses on food too, because supplying food into our region and making sure we get to process that food is a big part of our future as well.
Third, we will ensure that we are working with small businesses to help them grow.
Australia is actually a nation of many small businesses, micro-businesses who have fewer than five employees.
Indeed, when you look at that percentage penetration into our economy, we are right up there in the world for numbers of small businesses.
But it can be hard for those small businesses to grow, to upscale, to get to a bigger size, to employ more people. And one of the constraints on their growth has been lack of access to finance.
And so we will be making sure that there are new ways of businesses that have got a great idea getting access to the finance they need in order to grow Australian jobs and opportunities.
All in all, this is a $1 billion plan for Australian jobs. It's a $1 billion plan for our opportunities in the future.
In the world in which we live, we do not want to be adding to the budget bottom line, not one cent.
We, as a government, want to make sure that when we come up with good new ideas like this plan for Australian jobs, we do not add to the bottom line.
And so we have identified a saving which means bigger businesses currently benefiting from a special research and development tax advantage will be foregoing that tax advantage in order to fund the rest of this package.
We, as a nation, have seen government revenues written down by $160 billion as a result of the global financial crisis.
Now there was no way of cutting government expenditure to match that $160 billion write-down.
If you had chosen to do that, you would have had to do something as big as cut out all payment to aged pensioners, cut out the pension for older Australians.
That, of course, would have driven our economy into recession, put people out of work, destroyed our skills base and thrown Australians into poverty.
So we have seen a big write-down in government revenues, but the right focus now is to make sure that new expenditure is offset with savings and that's what we are going to do today.
What does this all mean for the nation's future? How will we know that we have succeeded?
Well, I think we will know we have succeeded when we see Australians working in the kind of opportunities that we can see here today; that we can see Australians in good blue collar jobs for the future.
We will know we've succeeded when we can see Australian exports penetrating increasingly into the Asian region.
We will know we've succeeded when we combine all of the things that we are putting forward to create the economy of the future; clean energy, the National Broadband Network, traditional infrastructure, a new approach to schooling and a new approach to schooling and a new approach to skills developments, all combining with businesses to make a difference to opportunity and growth for the future.
So I'm pleased to be here. It's good to be here in such a wonderfully modern establishment, so proud of its innovation record, to talk about jobs, innovation and prosperity for the future.
So Ian, to you and the team, thank you very much.