PRIME MINISTER:
...And congratulations, let me join the praise bearers for your term as President of the BCA. It is – you have been a beacon of innovation, above all, from your own experience in the business world. You have been able to speak knowledgably about innovation and I have to say as Chairman of Telstra with David Thodey in particular, as CEO of course – ably succeeded by Andy Penn, you were able to take a huge Australian business, which of course had formerly been the Postmaster Generals Department, and turn it in to a business with a thoroughly innovative culture and I saw the acknowledgement of the work with muru-D which is one of the incubators that Telstra established – a very good and inspiring example of cultural change and leadership.
And so now you’re really just moving the initials, really a little bit – you’re exchanging the BCA for the CBA.
So again, you’ve got another large Australian institution that used to belong to the government to deal with. May be a pattern – perhaps it just may take a while, you could be ready to take over the NBN when it’s privatised in about 20 years. It might be sooner than that but it will be a while.
Finance Minister Mathias Cormann would not complain if it was sooner of course.
Congratulations to you Grant King, the new BCA President.
We’ll have a great relationship and I know you will as Catherine said, engage right across the political spectrum.
I’m delighted that you are going to be engaging, perhaps more innovatively, using more social media, more direct digital media. We have – I was just talking to Paul Whittaker about it a moment ago, I think Paul each of us with rather mixed feelings about the change in the media landscape, but we have moved in really less than a generation, much less than a generation in fact, from a landscape where all of the media was curated by editors, by producers, by directors. And now, into a landscape where so much of the media, so much of the opinion is generated by consumers, it’s generated independently.
The challenges that poses for business, the challenges that poses for governments, not to speak of established media businesses, is considerable. And one of the clear lessons of modern business and political engagement is the need to engage directly. And to use direct digital channels to do so.
But, that’s a topic for another occasion.
The common ground we stand on tonight, here with the BCA’s members, so many of its supporters, so many of my parliamentary and ministerial colleagues, the NSW Treasurer – we’re all here standing on common ground which is our desire for a strong and resilient Australia; an Australia at home in the 21st century, rich in possibility and generous in prosperity.
When I came to the dinner last year I was a very new Prime Minister, looking ahead with great optimism about what we could achieve.
One year on we are well advanced on the tough work of reform. And my optimism, it won’t surprise you, is absolutely undiminished.
We have embarked upon our 26th consecutive year of economic growth. Last year, our economy grew by 3.3 per cent, faster than the US, the UK, Japan or any of the major advanced economies.
We came through the Asian financial crisis, the dotcom bust, the global financial crisis, the largest cycle in mining investment and commodity prices in our nation’s history—all without experiencing a recession.
This record of resilience is a tribute to the enterprise and hard work of millions of Australians. Many of whom work for the companies you lead.
But it is also testament to the strength of our policy-making institutions and the reforms undertaken by our predecessors in government in the 80’s and 90’s: floating the dollar, central bank independence, inflation targeting, competition reform, deregulation of product, financial and labour markets and tax reform - just to name a few.
Those reforms lifted our national productivity and permanently increased the capacity of our economy to produce the goods and services we enjoy and export today.
It is incumbent on any government that inherits such a legacy to continue the work of reform.
Quite rightly, Australians expect us, their elected officials to make the hard decisions that will underpin continued growth in national prosperity.
This is particularly the case in the highly competitive global environment in which we find ourselves, where we need to work hard just to retain our current standing in global trade and investment markets, let alone get ahead.
However, there is no doubt that the environment for reform has become more challenging.
Now that isn’t a statement about the composition of the 45th Parliament.
Rather, it’s an observation that after 25 years of growth, the need to undertake reforms that will deliver long-term gains for all Australians— which may create winners and losers in the near term—isn’t keenly felt in many parts of Australian society.
We risk becoming victims of a complacency that fails to recognise the hard work that enabled our economic success and the need for it to continue if that success is to be enduring.
My Government’s commitment is to deliver a strong national economic plan that drives more growth, more jobs and ensures we remain a prosperous first world economy able which can afford a generous social welfare safety net.
This plan includes our innovation and science agenda – fundamental to competitiveness in the 21st century, our big export trade deals; our tax reforms to encourage investment, guaranteed funding for infrastructure, health and education. And of course, the important industrial reforms which were the triggers for the double dissolution – restoring the rule of law to the construction sector and ensuring unions and employer organisations are as accountable to their members as you are to your shareholders.
But it must also include a strategy to bring the Budget back into balance.
This is not just an economic priority, it is an issue of fairness. It’s an issue of intergenerational equity.
Our young people already face the twin challenges of getting a foot in the door of the job market and saving for a deposit on a house.
How does it help them if, by reason of our inability to live within our means, we shoulder them with higher taxes or reduced services in the years ahead? One or the other or more likely both are the inevitable consequences if we are not able to address the deficits, the debt we face today.
The 2016 Budget path of fiscal consolidation strikes a balance between constraining future spending growth and allowing revenue to recover.
The judgement of the ratings agencies is a very interesting one. They are not concerned about the fiscal plan charted in the Budget.
They are concerned that the belligerence and partisanship that were so dominant in the 44th Parliament will put that return, that budget plan, at risk.
I am determined to do everything I can to ensure the 45th Parliament works and so pragmatism, negotiation and consensus, should be the order of the day.
The Australian people elected the 45th Parliament, they expect us - all of us – everyone of us – government, opposition, crossbenchers, to get on with the job.
I’m pleased to say that already we have passed $12 billion in Budget improvement measures, income tax cuts to prevent half a million Australians from entering the second highest tax bracket. We’ve passed a law to protect the integrity and autonomy of volunteers and emergency services workers – the Country Fire Authority volunteers being clearly the focus there.
But these cannot be one-off deals or goodwill gestures.
We can’t entertain another term of Parliament that features three years of furious posturing by our political opponents, followed by a series of conveniently timed backflips when promises are put under the microscope during an election campaign.
We approach these challenges with a global economy that still carries the scars of the financial crisis. And we know that one of the reasons growth has slowed, here and abroad, is weak investment.
We also know that the more you tax investment, the less investment you get.
In a competitive world, global investment can go anywhere, which is why our tax cuts for business are so important.
More investment makes workers more productive, it means greater demand for workers, it means more jobs and over time, higher productivity, as we all know, everybody knows, is the bedrock, the foundation of higher wages.
We need also to capitalise on this moment in the global economy by seeking out new openings for trade and investment.
Countries that have embraced open trade and investment policies have experienced, as we know, significant gains in income, employment and living standards. In our own region, this have lifted billions out of poverty.
But we are living in a time where the pace and scale of change is without precedent in human history.
Change is unsettling, and as people see things change around them, they are concerned they could be left behind. Weaker growth in incomes is feeding uncertainty, helping anti-trade sentiment find a foothold.
In the past year, we have seen economies introduce new protectionist trade measures at the fastest pace since the global financial crisis—the equivalent of 5 per week.
But retreating from policies that have delivered us prosperity and opportunity is the wrong call. We ignore the gains from openness at our peril. As Paul Samuelson once remarked:
“Economic history and best economic theory together persuade me that leaving or compromising free trade policies will most likely reduce future growth in well-being in both the advanced and less productive regions of the world. Protectionism breeds monopoly, crony capitalism and sloth. It does not achieve a happy and serene egalitarian society.”
And we know this; this is not a theoretical matter. We know this from economic history and economic theory. So we must, instead of looking backwards, make the case to increase global economic integration.
But we must not ignore the fact that the impacts of change can be borne unevenly across the community. To overcome disquiet, we must ensure that the benefits of open markets deliver and are seen to deliver for all Australians and not just a few.
If the results of the recent election in the United States have taught us anything, it is that policy changes must be seen to be fair and be seen to be fair in a very broad sense.
But fairness does not mean examining each decision in isolation, looking at a narrow set of winners and losers. And this is a challenge for us, for our advocacy. It means making sure our overall system is fair, examining the transfers of goods and services over a person’s lifetime and asking ourselves, does this reflect the benchmarks we set ourselves of an open, fair and just society?
That is why our economic plan is built on recognising these intrinsic links between economic and social policies. A fair society, a society that grows, that is new opportunities, greater opportunities for a children and grandchildren. That is fundamental; it can only be delivered if we continue to tap into the enormous worldwide flows of technology, innovation, knowledge and commerce.
Instead of retreating from the world, we need to strengthen our engagement internationally and with the fastest-growing nations in our region.
The big free trade agreements with China, South Korea, Japan and Singapore are already driving economic growth, and employment around Australia, as you know, especially in our regions.
We have high hopes on our discussions with Indonesia and India on new deals and while the prospects for Congressional approval of TPP have dimmed, there is still strong regional interest in broader multilateral trade and investment deals.
There are few countries that have so clearly benefited from being part of a larger, dynamic global marketplace as Australia.
We have to make the case for trade. To fully realise the potential of global trade however, our economy must become even more flexible and even more competitive. And that’s why we need a vigorous structural reform agenda.
This next COAG meeting—the first for this term of government —is a chance for the Commonwealth and states to establish a shared vision of reform for the next three years.
We will discuss how we’ll work together to develop a new reform agreement to improve competition and productivity.
It will draw on the work of the Harper Review and will focus on four priority reform areas:
* removing unnecessary regulatory barriers to competition;
* enabling innovative ways to deliver high quality and effective human services that prioritise the customer’s needs;
* promoting efficient investment and use of infrastructure —for road transport, water and energy; and
* additional productivity reforms to grow the economy and improve living standards.
As part of our discussions next year, the priority reform area on removing unnecessary regulatory barriers will include reforming the way planning and zoning rules can support higher value land use and help address the supply and infrastructure issues that affect housing affordability. Which as we know, is overwhelmingly a supply side problem.
On a very recent up to date front, just earlier this evening the Minister for Industry, Innovation and Science Greg Hunt and the Assistant Minister Craig Laundy who are both here tonight reached agreement with States and Territories on a national business simplification initiative to reduce the time to register a wide range of businesses from tourism businesses to cafes. Again a great example of the way my government is leading the way to ensure that we simplify business regulation. In other words, make it easier for business to do its job. Enable business; enable all Australians to do their best.
Another key priority and a new priority, a new initiative from my government is our Cities agenda. Historically Federal, State and Local Governments have poorly co-ordinated policy and investment in cities, often passing like ships in the night. Generally roughly in the same direction, most of the time but certainly with very little coordination.
We don’t have the luxury of working like that anymore. We are determined that the three levels of Government can work better together and we are entering into City Deals to ensure that we agree on the objectives, the plan and the actions to improve the liveability of our major cities and regional centres.
We can already see in Western Sydney the benefits of deeper collaboration between Federal, State and local governments - better infrastructure, better access to jobs, and greater liveability. The Western Sydney City Deal is tied to development of the new Airport and the investment that will result from it.
Collaboration between all levels of government on these reforms holds the keys to tremendous economic advancement and improved living standards.
As with open trade, just because leaders can see the promised land or think they can, does not mean the journey will be easy or that anyone will follow them along the way. We have to tirelessly make the case for reform long before anyone will see in the immediate gaze, its benefits.
You, the nation’s leaders of business, captains of industry, have a key role to play.
Over decades you have made an enormous contribution to our economy through innovation and enterprise.
You have delivered high-quality products and services, you have improved your employees’ skills, you have expanded into global marketplaces. You have made visible the benefits of reform through the investments you have made and the jobs you have created.
But there is more that you can and should do.
Our biggest businesses need not only to be profitable financially; they also have broader responsibilities proportionate to their size and standing in our society.
For example, Australia’s largest businesses have a responsibility to pursue hiring practices that progress the interests of women, both older and younger workers and of Aboriginal and Torres Strait islander peoples. Something I know is a top priority for you.
Appointments of women to boards are steadily rising, but as of June this year women only made up 23 per cent of ASX200 boards. That’s a lot better than 8.3 per cent seven years ago, but we still have much further to go.
The Government must lead by example, so we have a target of 50 per cent women on Australian government boards. As of June last year, women comprised over 39 per cent of all Australian government boards. We’re on the right path, but again, we need to go further.
The evidence is very clear: as you know more diverse companies perform better than their less diverse peers. The evidence is there; the good intentions are there; but we need to see more efforts towards gender parity.
Now we had a wonderful Welcome to Country from Yvonne earlier here on Gadigal land. And I want to touch now on a great initiative of my government. Our Indigenous Procurement policy, which leverages the Commonwealth’s annual multibillion dollar procurement spend to drive demand for goods and services from indigenous owned businesses.
In our first year, that spend increased to $284 million up from $6.2 million in the previous years. I want to recognise that many here in this room are also active in indigenous business procurement.
Together, we can use enterprise and economic development to deliver lasting social and cultural change. This Commonwealth Indigenous Procurement Program is a huge success and I commend that approach to you all.
I am also seeking your support for the Veterans Employment Program I announced this morning at Kirribilli House - many of you were there and I thank you for your support.
This program will raise the awareness of the great, often unique skills our ADF veterans bring to the civilian workforce. We should not forget too that none of our commercial endeavours would be possible unless our men and women of the ADF had kept us safe, had preserved our free way of life.
They have remarkable and unique skills, and we should be, you should be, when I say 'we' I mean the APS as well. We should all be making a greater priority, to take advantage of them.
Governments too must also cooperate and collaborate globally. Just twenty four hours from now I will be in Lima, Peru, for APEC. In the face of slowing growth and rising protectionism, APEC’s mandate for openness and reform in our region is more vital than ever.
We need greater cooperation between governments and business. I say this to you tonight as an invitation to work with me and my Government to deliver the next great era of reform.
As John Howard told the BCA a decade ago, “today’s prosperity is the product of yesterday’s reform, tomorrow's prosperity can only be delivered by today’s reform.”
Australians, as I like to tell other leaders at summits like APEC, are industrious, creative and resilient. None better. We have a history of lifting our sights and showing great courage and determination when it counts.
I believe that we can extend our long run of economic success even further, but we must work together: the business and community sectors, government, and perhaps more in hope than expectation, Oppositions too but let’s be optimistic tonight.
We need to have a stronger spirit of collaboration in the national interest. Together, we need to make the case to deliver the reforms that we know will guarantee our children and grandchildren, the same good fortune our predecessors worked so hard to create. Thank you very much.
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