Noel, thank you so much. It’s a great pleasure to be here to deliver the inaugural Sir William Tyree Address.
Before I do that, I guess I have to respond to the Graham Kraehe address. I dare say there’s been many Graham Kraehe addresses over the years, but the one that he gave us just a few moments ago was certainly full of interest and full of value.
Graham, I want to assure you that we are a Government which is focussed on tomorrow as well as yesterday.
We are appreciate that we’ve already done some good things to help the businesses in this room, but we also know that we are judged not on what we have done, but also what we will do. I want to assure you that while tax reform starts with the repeal of the carbon tax, it certainly doesn’t end there.
While workplace reform starts with the reestablishment of the Australian Building and Construction Commission, it doesn’t end there.
While energy reform also involves repealing the carbon tax and some work with the Renewable Energy Target, it doesn’t end there either.
This is a Government which is doing its best to purposefully and methodically address the fundamental long-term issues that our economy and our country face.
There’s always a lot of static in government – always a lot of static – but I want all of you to know that this is not a Government which is easily distracted, not a Government which is easily put off, and behind the headlines the hard work is being done to ensure that our economy is stronger and our country is safer and stronger in the months and years ahead.
But it is a great pleasure to be here to celebrate the life and work of Sir William Tyree.
It was said of him that he had “always been a thinker”.
His ingenuity started as an 8 year-old with the famous toaster made from a kerosene container and it continued throughout his long and productive life.
His legacy includes a laboratory in power engineering at Sydney University and an energy technologies building at the University of New South Wales, both of which bear his name.
He was an industrialist, a philanthropist, a brilliant engineer and, of course, a dedicated supporter of the Australian Industry Group.
He was an inventor who turned ideas into reality; he turned concepts, into plans, into products; he built businesses and he created jobs.
In doing so, he grasped the interaction – the essential interaction – between ideas, policy, competitiveness, success in business and ultimately our nation’s economic strength.
He understood that economic reform not only required direction from government but also advocacy from business.
His involvement in the AI Group was recognition that business, as the beneficiaries of economic reform, also had a responsibility to be advocates too – to be compelling, frank and fearless advocates of the policies our country needs.
I want to thank the AIG for the work it has done in recent years. I really do want to thank the AIG for the work it has done in recent years, particularly in the work that it’s done to help us with the campaign to repeal the carbon tax.
I want to thank individuals in this room, perhaps Graham Kraehe most of all, for the work he did in this area.
Sir William Tyree’s companies, specialising in transformer manufacturing, are indeed a niche manufacturing success story.
What could be more fitting, in this inaugural Sir William Tyree address, than to focus on our nation’s competitiveness?
As he often said, “My companies have never stood still.”
It’s the same with countries – we can’t sit still – because if we do, we lose.
John Howard often said that national competitiveness is like a race with an ever-receding finishing line.
That race is a race that you run, not so much governments, for it is businesses that create wealth, not governments.
It is business that innovates, invests, takes risks and employs people.
Our job – the job of Government – is to take the weights off you so that it is easier for you to compete here and in the wider world.
The Government’s Economic Action Strategy is about building a strong and prosperous economy for a safe and secure Australia. We do that by creating the conditions under which businesses can best prosper.
After all, you can’t have strong communities without a strong economy to sustain them and you can’t have a strong economy without strong and profitable private businesses.
A strong economy makes everything else so much easier.
Building a strong economy, therefore, has to be at the heart of everything we do.
We know that Australia has now experienced some 23 years of continuous economic growth – most likely the longest economic expansion in our history.
This owes much to the economic reforms of the Hawke and Howard governments.
But you can’t take growth for granted, especially when government pursues policies that make growth harder.
I want to assure you that after a six year interruption, Australia is returning to the path of economic reform, for countries, like businesses must not stand still.
The key elements of our plan to improve the competitiveness of Australian business are very clear: lower tax, less red tape, better infrastructure, freer trade, higher participation and stronger productivity.
As Graham has pointed out, we have reduced costs for households and businesses alike by scrapping the carbon tax.
Labor’s carbon tax, which the Opposition still supports and very much wants to bring back, was a reverse tariff.
It made our exports more expensive.
It gave imports an advantage over locally made goods because locally made goods attracted the carbon tax while imports did not.
In fact, the more energy used to produce something, the heavier the burden.
It was a tax whose creators actually boasted of the jobs it would destroy as prices went up and up.
The aluminium industry was forecast to shrink by 60 per cent, the iron and steel industry was forecast to shrink by 20 per cent and gross national income per person was forecast to be $4,000 a year less by 2050 because of the carbon tax.
It was a $9 billion a year hit on the Australian economy and scrapping it will save the average Australian household $550 a year.
It is gone, but it could come back.
It could come back if the people were to make the wrong choice at a subsequent election.
As well as scrapping the carbon tax and keeping it scrapped, this Government is absolutely committed to abolishing the mining tax – a tax that has raised next to nothing yet has robbed an important industry, and all the other businesses dependent upon that industry, of confidence while harming our country’s reputation.
As well, from the 1st July next year, the company tax rate will be reduced by 1.5 percentage points to 28.5 per cent.
At the same time as we are lowering the tax burden, we are also tackling the costs of compliance that plague every business, because every regulation has a cost, to government and to the wider community.
For example, the Australian Taxation Office has spent over $50 million administering the mining tax, the tax that raises hardly and revenue; just 3 per cent in fact of initial revenue forecast.
The Clean Energy Regulator that administered the carbon tax was provided with $60 million a year to monitor the world’s biggest and most complex carbon tax.
The Australian Charities and Not-for-profits Commission, responsible for administering the red tape that charities are required to comply with, costs $15 million a year.
These are just the costs to government on top of the costs to you.
All this regulations is well-intentioned. The problem is that there has been this massive accumulation of good intentions.
This continual encroachment of regulation at Commonwealth, state and local level is not strengthening our country, it’s weakening it.
It’s stifling creativity and progress and robbing us of the risk-taking that drives successful economies.
The fault lies with governments that all too often respond to every risk, accident or mistake with the promise of yet more regulation.
Occasionally, more regulation does mitigate risk, but often it does not.
More regulation has become the default option for governments eager to be seen to be “doing something” even though knee-jerk reactions rarely provide long-term public policy benefits.
This Government is determined to change the culture of regulation in this country.
Engaging in due diligence need not mean procrastination, clearer standards do not mean lesser standards and certainty in decision making is nearly always less costly than hand-wringing and delay.
One area that’s been marked by a culture of delay, obfuscation and reluctance to say “yes” or “no” has been the provision of environmental approvals.
But that’s changing.
Since the election, Environment Minister Greg Hunt has been clearing the backlog of stalled project applications.
All up, he has made 310 decisions to approve or progress projects resulting in approvals to projects worth over $800 billion.
The end result of clearer standards and more timely decision making is more investment, more construction, more trade and more jobs.
In this area, the Government is tackling red tape by establishing one-stop shops with the states and territories for environmental approvals.
Right across government, we are cutting unnecessary red tape and changing the way we do things to guard against its regrowth.
We had the first Repeal Day in March which saw 9,500 unnecessary or counter-productive regulations and 1,000 redundant Acts of Parliament thrown out.
Part of that means that businesses will no longer be required to administer the former government’s paid parental leave scheme, saving them an estimated $48 million.
National businesses will soon be allowed to operate under one workers’ compensation scheme right around our country rather than have to operate in up to eight.
Businesses, for instance, will no longer have to re-apply to use agricultural chemicals and veterinary medicines because one approval should be enough.
But these repeal days are the start of what the Government wants to be a real and lasting change of culture – a real and lasting change of culture that we are determined to bring to every aspect of administration and programme delivery.
Every Government portfolio is auditing its regulations and estimating the compliance costs those regulations impose on businesses, community organisations and individuals.
Ministerial advisory committees are now providing a real-world assessment of what to cut and what to keep and to ensure that the balance is as right as it can be.
I would say, Noel, to you and to Innes, and to your senior leadership that if the AIG has more kindling for the next bonfire of red tape later on this year, please let me know, because our commitment is to reduce red tape costs by $1 billion, not just once, not just twice, but every single year.
To date, there’s 50,000 pages of regulation to go, and that will save hundreds of millions of dollars. But this is the low hanging fruit; this is the start, not the finish.
I want to make it clear that regulatory overreach has not only harmed business, it’s harmed government too.
Government, to be effective, must know its limits.
Also, it must live within its means.
The best way to protect Australia from the higher taxes which do damage our competitiveness is to get government spending under control.
As I hope most of you know, without policy change, Australia was on track to $667 billion in debt with interest costs rising to almost $3 billion every single month.
This Budget – the Budget that we are now negotiating through the Senate – reduces peak debt by almost $300 billion and that means more capacity, over time, to make long-term investments and more capacity, over time, to reduce tax.
Investment in infrastructure is an essential part of improving our national competitiveness, because the opportunity cost of poor infrastructure is not paid by government, it’s paid by you – it’s paid by business.
To give you perhaps the most obvious example, for 50 years, governments have procrastinated on building an airport in Western Sydney.
Sydney’s airport is the gateway to Australia’s largest city; it accounts for 40 per cent of international arrivals and 50 per cent of international air freight every year and it’s rapidly approaching full capacity.
If no action is taken on a second airport, Australia would lose 80,000 additional jobs and $34 billion in economic activity by the middle of the century.
So the Government is building a second airport for Sydney, or as I prefer to say, we are building a first airport for Western Sydney.
Western Sydney is already Australia’s third largest economy and, in its own right, would be our fourth largest city.
You here at the AIG recognise that inadequate infrastructure is one of businesses’ top frustrations.
As you know, poor infrastructure means delay, higher costs and a wider gap between business and its customers.
Transport and logistics companies and their customers pay every day for the indecision of successive state and Commonwealth governments.
But in our first Budget, this Government has committed a record $50 billion to the infrastructure of the 21st century.
New roads will cut the wait for freight and speed the movement of people and goods around and between our big cities.
It is, in fact, the biggest road building programme in our country’s history and we all know that our country really needs it.
Every infrastructure project will benefit from re-establishing the Australian Building and Construction Commission because our building and construction industry does need a tough cop on the beat to tackle lawlessness.
While it is business’ job to grasp the opportunities that markets provide, it is government’s job to improve the environment in which businesses operate.
To support businesses as you respond to market opportunities and challenges, in the Budget, the Government announced the establishment of an Industry Skills Fund.
This will be a $476 million investment to support the training needs of small to medium enterprises and it will provide up to 200,000 training places over the next four years.
It’s a fund that will prioritise small and medium enterprises, because every large business started as a small business.
Sir William Tyree started his business by scraping together £5,000 and then getting a loan for another £5,000.
This Government is working to lift apprenticeship completion rates because those dependent on skilled labour are finding it harder and harder to attract and to keep trained staff.
Only about 50 per cent, as you well know, 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, especially when their workmates are earning more in less skilled jobs.
The Government will reinvigorate vocational training with a focus on the needs of industry rather than the preferences of government and bureaucrats.
We need a whole gamut of skilled tradespeople – bakers, electricians, panel beaters, locksmiths, sheet and metal workers. We need skilled workers across the whole range of Australian businesses.
They are all first class occupations and all of them are needed to underpin our future growth.
That is why the Government is now providing concessional Trade Support Loans of up to $20,000 over a four-year apprenticeship with the loans structured to encourage the completion of the apprenticeship.
And from 1 July 2016, we will remove the 20 per cent loan fee that’s applied to VET FEE-HELP for eligible full-fee paying students in higher level vocational education and training courses.
So let me go back to the basics.
On election night, I said that Australia was under new management and once more open for business.
Freer trade is central to growing a stronger economy with more jobs and more profitable businesses.
As some of you know, because some of you were on them, I have led business delegations to Korea, China, Japan, Canada, the United States and PNG over the last 11 months.
We have new free trade agreements with Korea and with Japan to further open the door to these important markets.
Once the FTA is ratified, Korea will provide duty-free access to 84 per cent of Australia’s current exports by value, increasing to over 95 per cent within 10 years.
To illustrate what this means in 2013 – last year – Australian auto manufacturers exported $101 million worth of gear boxes and $51 million worth of engine parts to Korea and under the FTA they will do so without the burden of an 8 per cent tariff.
Korea is Australia’s second largest market for pharmaceutical products with significant potential to grow now that the tariffs on almost 90 per cent of our pharmaceutical products will be eliminated, with the remainder to be phased out within three years.
With Japan, the door to trade has also further opened and this is our second largest trading partner with two way trade of over $70 billion a year.
The Japan-Australia Economic Partnership Agreement, signed last month, is the most liberalising bilateral trade agreement that Japan has ever concluded.
It will benefit agriculture, financial services, education, telecommunications, legal services, and yes, manufacturing.
We now have free trade agreements with seven of our top ten trading partners.
And, as you know, we have accelerated talks with China which is already our largest trading partner, which I hope can be concluded later this year.
In addition, we are working to free up trade in our region, through the Trans Pacific Partnership, the Regional Comprehensive Economic Partnership Agreement and the Pacific Agreement on Closer Economic Relations.
All of these measures, lowering tax, cutting regulation, concluding free trade agreements and investing in Australian skills are part of our desire, as Government, to make it easier for you to grow your businesses.
We are opening the door so that you can walk through it.
We aren’t providing you with corporate welfare and that’s not what you want. What we’re giving is business a ‘fair go’ so that all of you can ‘have a go’ to run your businesses to exploit your opportunities better.
I have long said that government should be at least as interested in the creation of wealth as in its redistribution.
Governments should make it as easy as possible for people like Bill Tyree to take a chance and to create a business.
We are all on a journey; a journey to make our country stronger by doing our jobs better.
Government’s job is to get the fundamentals right so that business can do its job of being more competitive and more successful, not just here, but right around the world, because the world doesn’t stay still – and none of us can stay still either.
So thanks everyone for the chance to deliver this inaugural Sir William Tyree Address.
Yes, Noel, you gave me a challenge. The question that Bill always put at every gathering: what about nuclear power?
Well, you know, it’s hard enough to deliver gas, let alone nuclear!
I would like us to be one of the world’s affordable energy capitals. We have an abundance of coal, we have an abundance of gas; let’s make the most of this natural advantage.
We can’t dramatically increase our population, we can’t change our geographical location and move ourselves closer to markets, but we have got the energy – let’s make the most of it.
Now, who knows one day what our energy mix might be?
Who knows one day where the market might go and what other forms of energy might come into their own?
But right now, we have massive reserves of coal, massive reserves of gas; let’s make the most of them.
I hope Sir William will be satisfied.
[ends]