PRIME MINISTER: Thank you very much, Elena Douglas. And thank you very much, Paul Kelly.
It has never been a more exciting time to be an Australian – and with the arrival of Paul Whittaker as editor-in-chief, it’s never been more exciting to be at The Australian.
My friends, the transition from the mining construction boom to the ideas boom is a critical turning point in Australia's progress.
We have enjoyed unprecedented rise in national income and driven by the terms of trade boom – commodities boom – and that was followed, the growth, the rapid growth, in demand for our commodities particularly the makings of steel was followed by massive investment, mining construction investment alone, rose to above 7 per cent of GDP.
That obviously couldn't go on forever. The mines would get built, the investment would be made. The volumes have never been higher and they'll remain very, very high. The prices have come back, and so the economy is one that is in transition and it is transitioning well. The transition is working and it is working because of the enterprise, the innovation, the entrepreneurship of millions of Australians.
And that is what we – Christopher and I and our colleagues in the Government – are committed to backing. We are backing Australian innovation. We are encouraging Australian innovation. We are doing that not because we want to win an economics prize, but because we want to see our children and our grandchildren have more jobs and better jobs in the years ahead.
The news on jobs remains good. Obviously, these figures can bounce around a lot, but here in November despite all the predictions to the contrary, instead of unemployment going back over 6 per cent it went down again to 5.8 per cent – the lowest level in 19 months. That's something to be very pleased about.
Now we have extraordinary fundamental strengths as a nation. We have had 25 years of growth, of uninterrupted growth. We are the most successful multicultural society in the world and in an economy that is increasingly globalised, which has expanded exponentially at an extraordinary unprecedented pace, having that strong multicultural harmonious society is of enormous importance.
It is absolutely true, but worth restating that our greatest assets are not the rocks under the ground, but the intellects, the imagination, the creativity of the 24 million Australians walking around on top of it.
We are also right here on the doorstep of Asia.
We are in the most exciting times in human history, where the pace of change has never been so rapid. And just one reminder of the pace of change, 40 years ago – I know most of this audience is under 40 so it seems an extraordinarily long period ago, but for the handful of us that can remember what it was like 40 years ago – 40 years ago, China barely participated in the global economy. Now it is by many measures, if not most measures, the world's single largest national economy and that is just one of the transformations. Half of the world's middle class now live in East Asia and before long, it will be the very large majority of the world's middle class.
We're seeing economies that had been driven by investment, by state-sponsored investment in large measure and China being the standout example, moving to a more conventional, consumption-led economy which obviously has a wider range of demands for every manner of goods, every manner of services.
The opportunities for Australia in those emerging markets has never been greater and what do we need to tackle those markets? What do we need to succeed in 2015, in the 21st century? Well, we need some institutional things. We need good free trade agreements and we've delivered those. Andrew Robb has delivered those in Japan, in Korea and above all, in China. The ChAFTA is the highest quality free trade agreement China has entered into with any country. The TTP itself, 12 nations around the Pacific representing 40 per cent of GDP – again, opening up new markets.
So the world is open there. It's rapidly changing, it's disruptive. There's a lot of uncertainty and the enterprising, optimistic, innovative, agile Australia sees that as full of opportunities.
You can see it as full of threats if you like. You can hide under the doona if you like, but you'll miss out on all the fun and we believe that the 21st century is the century for an agile and innovative Australia. And so we see that the mining boom may have receded somewhat – mining hasn't receded, but perhaps the boom has receded – but the ideas boom is the boom that can continue forever. It is limited only by our imagination and our commitment, as long as we are prepared to be innovative, as long as we're prepared to say, 'we will do things today differently than we did them yesterday or last week'. As long as we're prepared to look afresh at problems without preconceptions, as long as we're prepared, while remaining courteous of course, not be deferential simply because somebody has said it before, but be prepared to change, to unleash, as Christopher Pyne said, his inner revolutionary, if we're prepared to do that, then we will succeed and seize those opportunities.
They are all there for us.
Now let me give you some examples.
In the five years to 2011 alone, 1.4 million new jobs in Australia were created by firms aged less than 3 years old and while I don't have a more current statistic, that trend has been accelerating.
So new firms, start-up firms are very good for the economy and I'll tell you what , they're good for the economy even if they don't succeed - even if they don't succeed.
Because if you start a new business, let's say it might be a new technology business, it might be something different, another business. If you start a new business. And it doesn't work out for whatever reason, you've learnt something, your employees have learnt something. They've all had income, they have all paid tax, they've contracted with people, the lawyers have learnt something. Everybody has learned. The ecosystem benefits.
Innovation start-ups, business, the creation of business is good for the whole economy. If you happen to invest in too many that don't succeed, you might need to take up another line of work. Nonetheless, overall the system benefits.
And so, that is why with our new Innovation Agenda we're going to accelerate that by incentivising early stage investment, in high-growth businesses through 20 per cent capital offset and capital gains tax exemptions on investments held for more than three years.
We believe, and I'm sure this is correct, there's $2 trillion in super in Australia, there is plenty of capital, there is plenty of money.
And you are now starting to see the big institutions investing in innovative companies more than before, that's true. But at the very early stage, it is still quite hard. Getting the first foot on the first rung can be difficult, and so we've provided some incentives there.
I was just saying to Paul and Elena earlier that I was very impressed at an event at Stone & Chalk earlier in the week to see First State Super, a big institution investing, I think, $140 million in a Fintech start-up fund. That's very - solid, old-fashioned institutional money, if you like, but they're starting to see that there are real opportunities there, and that's very good.
Now, of course, another part of this cultural change that Elena referred to - or quoted Ian Chubb referring to - is with our young people. I was yesterday at Landsdale Primary School in Perth in the electorate of Cowan with a whole lot of great young kids, primary school, learning coding, using computers, unleashing their imagination in the digital world of the 21st century in which they are growing up into.
We need to do more than that. So we are going to spend - we're spending $84 million over four years to support and promote greater use of STEM or greater application of STEM subjects in schools and in particular computer science and coding.
We think this is very important.
We need to produce more university graduates in computer science. Some people have said, 'Why have you got a new visa as part of the innovation and science agenda that is aimed at graduates, foreign graduates in STEM subjects, in particular in ICT?'
Well, one of the reasons, quite a practical one, let me tell you, three-quarters of the young people doing graduate degrees in computing science and related disciplines are in fact not Australians. So we want to - we see that as a very important recruiting skill to be able to keep more of them here in Australia.
But there are some very troubling trends which need to be arrested and reversed, as part of this cultural change that we're leading. A generation ago, 94% of students doing Year 12 did science. Today it's only 50 per cent.
Now, let's look at girls and women. Women and girls. There is - this is a major problem. Women hold up half the sky, but they are not participating in half of anything like half of the ICT world. A really significant market failure whose foundations must be cultural, when you look at other professions and other lines of work.
The percentage of girls who do no mathematics after Year 10 has trebled from 7.5 per cent in 2001 to 21.5 per cent in 2011. The percentage of boys doing no mathematics has trebled from 3.1 per cent to 9.8 per cent. That makes no sense at all.
Here we are in the digital age when quantitative skills are more important than ever and students are going in the other direction. So the investment that we are making - I said 84 million over four years, 112 over five years, supporting digital skills, quantitative skills, STEM skills right across the board is a very big part of the Innovation and Science Agenda.
Now a week ago when I was in Paris, I told the world that 60 per cent of the world's solar cells use technology developed by Australian researchers, which I got a very nice thank-you from David Gonski for giving the University of NSW a plug. He was very pleased about that, and it as true, but what I didn't say, is that for most of this Australian technology to be commercialised it had to be taken overseas. There is a real problem that we have - again, it's one of these anomalies that has to be addressed.
We have some of the best researchers in the world no question. Primary researchers at universities at the CSIRO and so forth and yet when you measure the level of collaboration with industry or business, according to one measure we are last in the OECD, and there’s another table which is slightly more optimistic, which says we are second last. But either way we’re not doing very well at all. It doesn’t make any sense when you consider we are so far behind for example the United States and the United Kingdom where our academic cultures are so similar.
So plainly the incentives are wrong. So as you know we are changing the incentive so that research grants will not only be made on the basis of citations, you know how many of your peers and colleagues got to refer to your paper in their footnotes, but will determined in part by industry engagement.
You could say if you wanted, I'm not sure this is the quite the right phrase - you could say instead of ‘publish or perish’, or ‘publish or perish’ will be complemented but not entirely by ‘collaborate or crumble’. We want publishing or collaborating to avoid perishing or crumbling. You’ve got to do both.
There are some wonderful smaller measures in dollar terms in the National Innovation Science Agenda that I think are very exciting. We are investing, as you know, $26 million over five years into the quantum computing program at the University of New South Wales. This is absolutely cutting-edge technology. This is among the most exciting work being done in computing science anywhere in the world.
Ian I'm thrilled that the Commonwealth Bank and Telstra have, are following the Government investment with $10 million each. This is very - this could be an enormously valuable technology. The IP that will come out of that, the spin-offs that will come out of that, it can be enormously important in so many fields. It's great that the Australian Government and of course two of our big companies are getting behind it to ensure that it stays in Australia.
Finally, let me just make a couple of observations about some other features that haven't got perhaps as much press – relating to NISA as they deserved. We had for many years a corporate or business culture that over penalises failure. Even the word "failure" I struggle with because the truth is that nature - humans, all of nature has been in beta for millions of years. We are constantly evolving.
So everything is a question of trial and error. So you can't improve unless you try things that don't work. You are never going to change unless you decide that something you are doing is not successful or you could do it in a different way that would be more successful. So, trial and error, experimentation, failure, failure, success not so successful, more success, all of that process is absolutely critical to creation. It is inherent in nature and it should be inherent in our culture.
So, one of the important things that we are going to do here, that we are setting out here in the agenda, is to change the approach to bankruptcy, particularly corporate bankruptcy, where we have had a bias against business continuity.
Now, I think many of us are familiar with the chapter 11 system in the United States which we are not proposing to reproduce here because it is - it's very idiosyncratic in the sense that the Americans have got a very, very legal culture, as you know, or lawyered culture.
So we're making changes that will ensure that company directors in Australia, if they are facing financial problems, have - if they can put in place a restructuring plan will not have to rush off and call in the administrators.
We're also going to outlaw the ipso facto clauses which is what that means is that in many contracts there will be a provision that says if an administrator is appointed, then the contract terminates. So what that means is that when a company puts in an administrator, it is basically out of business, that is it, it is essentially a death warrant.
What do we want to promote? We want to promote jobs, we want to promote growth, we want to promote resilience. We want to promote enterprise and what that means is you need a more resilient corporate culture as well, and some - I'm sure there will be plenty of critics, but you can point to the example in the United States.
It doesn't seem to have held them back over many years by having a much more resilient corporate culture. Let me conclude where I began with jobs. We've got some good employment figures today, but don't hold your breath, they do tend to bounce around a bit. But I think the critical thing for us today, if we want to remain a high-wage, generous social welfare net, first-world economy, if we want to ensure that we have good jobs, our kids have jobs and our grandkids have jobs in the years ahead, a generous social welfare safety net, a fair Australia, Australia with the values that we love, then we have no choice but to be more innovative, to be more creative, to be more entrepreneurial, because the opportunities have never been greater.
That's a fact. What I've just said is as Lucy's father Tom Hughes would say a penetrating glimpse of the obvious, but regrettably it is glimpsed all too rarely and we need to recognise that this is the best time to be an Australian, these are the greatest opportunities, and the only brakes on our realising them are lack of imagination, lack of enterprise, lack of determination.
I have so much confidence in the Australian people, I have so much confidence in this country, I know that those big opportunities will be seized by Australians, they will be seized by men and women like the 100 leaders here today, and all of those that you inspire.
So finally, thank you, thank you for your leadership, thank you for your inspiration. Many will follow in your footsteps. Some will overtake you, some will pull alongside you, some will fall by the wayside, but the fact that they have a go is what will build this country's wealth, it will build our security, and it will build an even more exciting future. Thank you very, very much.
PAUL KELLY: I’ll just make the point that I’ve been covering Australian politics for a very long period of time and I’ve never heard an Australian Prime Minister talk before in this fashion. Now we’ve got a very tight timetable but we can take a couple of questions from the audience so you’ve got about five seconds to devise your question. I’m certain we’ve got a very agile audience here today so if I can’t see a hand up very soon I’ll kick it off by asking the Prime Minister a question.
If you can identify yourself and your organisation and we do have microphones on the floor thank you very much.
BARRY MARSHALL: Barry Marshall, University of Western Australia. I ‘d like to see more resources into the taxation department so people who are donating money to companies or intuitions can get a reading before they start on whether its tax deductible.
I see great paranoia in my university recently I donated $5,000 to get something done, but they’re every paranoid about whether it could be tax deductible because I may be living down the hallway on that part of the campus and would see some benefit from a new projector or whatever it was and so I think this is holding it up. People are not really sure whether they’re going to see a tax deduction when they make an investment and it would be great if they could get a reading beforehand and have some confidence about it.
PRIME MINISTER: Well thank you I’ll take that up with the Assistant Treasurer, Kelly O’Dwyer. You can actually, it’s pretty easy to determine whether an entity is a deductible gift recipient so that’s actually all available online so it shouldn’t be that hard but I’ll raise it with Kelly and see if we can make it easier. Perhaps Paul Shetler from the Digital Transformation Office can develop an app you can perhaps scan somebody who’s asking for your donation and it will tell you whether they are a deductible gift recipient!
PAUL KELLY: I think we’ve got a question to my far right over there.
KATHERINE MCMANUS: Thank you Prime Minister, Katherine Caroline McManus, I focus my work in smarter cities and intelligent asset management but I suppose just a reckoning of an observation and I welcome the innovation statement on Monday, I’d be interested in your thoughts on whether or not the government is going to look at potentially changing some of the models we have in the university and research sector just more in line with what we see in the US where in the first year the students are creating their idea, in the second year they’re pulling together their business plan, in the third year they’re pitching them to VC’s and in the fourth year they’re kind of get going with regards to making that happen so just some perspectives there.
PRIME MINISTER: Well thank you, I think perhaps Christopher as a former education minister can address that. I can say that there is actually a entrepreneurship is becoming more prevalent in the culture of universities and learning generally. I mentioned I was at a Primary School yesterday in Perth and some of the kids – the 11 year olds – and year six kids were actually working on a game that involved building, that they were building a theme park on the moon. And they had a budget and everything had a cost and they had to balance their budget within a certain amount and one of the kids solemnly told me that one of the big overheads was water. He said, there’s no water on the Moon Prime Minister and it’s very expensive to get it there and I sagely nodded and being a former water Minister of course I knew that.
I’d never regarded the Moon as being – we had enough dry parts in Australia to deal with without getting to the Moon. It was very interesting that they were thinking about all those business issues as children long before I suspect most of us did when we were 11.
PAUL KELLY: I think we’ve been beaten by time unfortunately. I’ll now call upon the Chief Executive Officer of the Australian Nicholas Grey to formally thank the Prime Minister and introduce Christopher Pyne.
Ends