John, thank you so much. Stephen, thank you so much and yes you did throw me out a couple of times when I was a very new of Member of Parliament, but your role now is more elevated and you’re doing it splendidly if I may say so.
Ladies and gentlemen, it is a real thrill to be here because this committee of yours, this committee for the economic development of Australia has for a very long time now been one of the best forums for the development of serious thinking about where our country is going.
For over 50 years, CEDA has helped to drive debate about our country’s social and economic development.
Most people have an opinion about what’s best for our country – unsurprisingly, it’s often whatever’s best for the person expressing the opinion but because CEDA has no institutional self-interest to push, it’s been better than most at taking a long-term view focused on what’s genuinely in the national interest, so congratulations.
The decisions that we now acknowledge have shaped our country and have set up our prosperity have often been unpopular in the short-term and initially difficult for the governments that made them.
Prime Minister Menzies for instance opened up trade with Japan at a time when Japanese cars were still banned from RSL club car parks.
Prime Minister Whitlam opened the door to China when many Australians thought that communism and trade could not mix.
Prime Minister Hawke’s opening to foreign banks, privatisation and tariff cuts were deeply unpopular inside the Labor Party.
Prime Minister Howard’s tax reforms, waterfront reforms and welfare reforms were ferociously opposed by the then-opposition.
It’s always easy to pander to fear and short-term self-interest but Australia has succeeded because at least some governments have been better than that.
Especially between 1983 and 2007, a golden quarter century of political courage and economic reform, good governments from both sides of the political fence made Australia more competitive, more innovative and more productive. As this State of the Nation Conference meets, we again face tough choices that will lay the foundation for a stronger Australia.
What must surely be clear is that doing nothing is not an option.
In 2007, the Commonwealth government had a $20 billion surplus and $50 billion in the bank. But by 2013, consistent surpluses had turned into the six biggest deficits ever with no end in sight under the policies of the former government despite the best terms of trade in our history.
The former government was addicted to borrowing and spending. In real terms, spending grew almost twice as fast as the economy and debt was forecast to grow to $667 billion. So the task for this government has been to get spending down while maintaining and even increasing economic growth.
We need to boost the three “Ps”- population, productivity and participation without taking the soft option of pretending to do so just by spending more.
Today, I want to focus on the Government’s measures to encourage more people to join the workforce or to stay in the workforce. But first, we need to be clear about the scale of the challenge: Longer lives are a cause for celebration – I am celebrating more the older I get! But all these extra retirees have to be paid for. The ratio of working age people to people over 65 will decline from five to one to under three to one by 2050.
To preserve generous social security benefits and good health and education services, we need relatively more tax payers. We have to find ways of increasing the proportion of workers in our economy. We need more people who are “having a go” in order to preserve the “fair go” that has always been such a crucial part of the Australian way of life and we need to start addressing these issues now, and changing policy now, rather than later when change will be even harder.
Policy drift is the refuge of the political opportunist who has forgotten the purpose of public life.
Now almost everything that this Government does is designed to ensure that more people have jobs. But there’s a right way and a wrong way to boost the number of jobs: more government spending might boost employment in the short term but, in the long-term, more government spending usually makes it harder to sustain the profitable private businesses that are the real engine of jobs growth.
Lower tax, less red and green tape, and freer trade are the best and most successful means to higher economic growth and more jobs. But in particular, we need to make it easier for young people, for older people and for women to enter or to re-enter the workforce because these are the groups with the most potential to boost employment participation. Lifting participation among these three groups is an important economic outcome that would help offset the pressures of an ageing population.
Over sixty years ago, Sir Robert Menzies put the case for greater workforce participation. He said: a job “is much more than source of income…it is also a source of personal satisfaction and individual dignity….The pursuit of happiness lies along a self-made road; seldom along a road made by others no matter how good their intentions”. “The sense of individual dignity”, he said, “which comes from doing a job gives to the doer the personal satisfaction of helping one’s self, rather than having to rely on a social security benefit”.
So the policies of this Government are very much in the tradition established by our distinguished forbear.
You’ll note that Menzies wasn’t just referring to more self-reliant people; he was celebrating more self-fulfilled people.
This Government is not promoting more jobs because that’s what economic theory tells us to do. We are promoting more jobs because that is most likely to lead to happier, more-self-fulfilled people. We are building a stronger economy because that will lead to a happier society.
Empowered citizens can do more for themselves than government will ever do for them, and the best form of empowerment is a job.
My friends, work is so much more than just a way to gain a living. Work gives people’s lives meaning and purpose. Work gives individuals the satisfaction of providing for themselves and their families. Work helps to give people the practical, intellectual and social skills needed for a full and rewarding life. Indeed, the camaraderie of workmates is something we don’t often appreciate fully, until we don’t have it anymore.
To be without work is a disaster, especially for young people. It locks them out of the economic and social mainstream of our community. It stops them achieving their potential. That’s why there’s no compassion in having people start their adult lives on unemployment benefits. Even in difficult times, there’s little that’s more satisfying than finding a job, making a success of it, and providing for yourself.
That’s why all fit young people should be earning or learning – and expected to persevere for six months to find a job or to choose a further training programme before accessing welfare payments. That’s why all young people who do find themselves on unemployment benefits should be working for the dole. Fit young people should be working, preferably for a wage but, if not, for the dole.
From 1 January next year, new jobseekers up to the age of 30 will have to look for a job for six months before receiving unemployment benefits. Young people who have been working will wait a shorter time because they have been having a go and making a contribution. Of course, there’s no change to access to income support for young people in education or training; or for young people with a significant disability or parenting responsibilities.
These changes do mean, though, that the days of doing nothing on the taxpayer are over.
Gone.
The era of something for nothing is no more.
Being an adult means taking responsibility for the choices you make and making the best possible choices in the circumstances you face. Only after six months will young jobseekers receive income support and then there will be a requirement to participate in at least 25 hours a week of Work for the Dole. Work for the Dole is giving as well as receiving; that’s why there’s a dignity to work for the dole that’s not there for people who simply receive unemployment benefit, especially long-term recipients. Given a choice between being useful in the community and taxpayer-funded idleness, governments, parents and society at large should prefer purposeful activity every time.
As Employment Minister, I spent a lot of time with people on Work for the Dole projects. I never saw anyone demeaned by it; I never saw anyone who hadn’t benefitted from participation. Most unemployed people are yearning to show the world what they can do – not what they can’t do – and work for the dole gives them that chance.
Because there is no time to waste, next week, Work for the Dole will commence in 18 areas across Australia for all job seekers between 18 and 30 years old. Work for the Dole will move to a full national scheme from 1 July next year. Under these reforms, young jobseekers, at any time, may commence eligible study or training and receive Youth Allowance for students until this is completed.
Australia’s training completion rates are too low – only about 50 per cent of the people who commence an apprenticeship actually finish it.
One of the reasons young apprentices don’t complete their training is because they can’t afford the costs of being an apprentice – especially when their workmates are earning more in less skilled jobs. So from 1 July this year, we will support those learning a trade by providing concessional Trade Support Loans of up to $20,000 over a four-year apprenticeship – with the loans structured to encourage completion. And from 1 July 2016, the Government will remove the 25 per cent loan fee that applies to VET FEE-HELP for eligible full-fee paying students in higher level vocational education and training courses. Along with support for younger Australians seeking training, this Government is determined to make employment more attractive for mothers.
First, we’ll make the existing child care system more flexible and accessible than it already is – and the Productivity Commission will report shortly to the Government with its recommendations.
Second, we’re implementing a Paid Parental Leave scheme that’s based on people’s actual wage rather than the minimum wage.
It’s important to remember that of the 34 nations of the OECD, 33 offer paid parental leave schemes – and, of these 33 countries, Australia is one of only two that fails to pay leave based on a replacement wage.
Paid parental leave isn’t a gift. It isn’t welfare. It’s a workplace entitlement – and to ensure it doesn’t make it more expensive to employ a woman, it’s administered by government and paid for by a levy on big business.
As well as boost youth participation and female participation in the workforce, this Government is determined to boost seniors’ participation too.
Ability, not age, should be the test for employment – but all too often older workers face prejudice when they apply for jobs. Older workers have the experience, wisdom and stability to be the very best of employees. So from 1 July this year, the Government will introduce a new wage subsidy, Restart, for businesses that take people over 50 off welfare and into sustained work. Employers who hire an eligible older job seeker for full-time work will receive $10,000 over 2 years. This should be sufficient incentive for employers to step outside their comfort zone, and give mature jobseekers a fair go.
As well, we want to ensure that disabled people with some work capacity are supported to seek employment, especially those under 35. So the Government will strengthen the measure introduced by our predecessor to create participation plans for disability support pensioners under the age of 35 with some capacity to work.
I want to stress that Australia has always been the land of the fair go; but part of giving people a fair go is encouraging them to be their best selves; making it easier for them to have a go too.
The new Government wants more Australians to be economic contributors as well as social and cultural contributors and the best way for that to happen is through work.
I want more Australians to be workers; I want our people to be more productive because, that way, our country will be stronger and our citizens will be more fulfilled.
I want this Government to be the best friend that the workers of Australia have ever had and making it more likely that more Australians will join the workforce is part of that.
So ladies and gentlemen, thank you so much for the opportunity to be here this morning.
Again, I very much appreciate the work that CEDA does to promote informed and intelligent debate about the problems that face our country. And I want to thank all of you for your participation in that debate.
Every single one in this room is a busy person; the fact that you’re prepared to give up a couple of days to come to Canberra and participate in these discussions is a sign of your commitment to our country and we need more people more committed to our country if we are to succeed as we should in the years and decades ahead.
Thank you very much.
[ends]