E & OE proof only
Thanks very much, Michael, and thank you all for being here today and welcoming me to this marvellous building. This is the most impressive railway bridge garter I've ever been in anywhere in Australia, so for those of you who work here this is an extraordinary piece of redesign and the use of an old building for new purposes.
I begin by acknowledging the First Australians on whose land we meet, and whose cultures we celebrate as among the oldest continuing cultures in human history.
Thanks, Michael, for the invitation to address you today on the critical challenges focusing on Australia's future. As you all know, there is no shortage of those challenges.
The critical factor, of course, in responding to each of them is to have a clear-cut strategy dealing with each element.
Standing still has never been an option for Australia. In fact, standing still is the only sure-fire option for falling behind. Policy, if it's to be real, must be dynamic, forward-looking and forward leaning.
The Government is committed to building a strong economy, protecting the jobs of working families and keeping Australia out of recession while most of the rest of the world has gone under: to change the nation for working families; to change the nation for senior Australians; to change the nation for generations of Australians to come.
In our first two years in office, we've begun this work. We've begun by:
- Bringing in fair and balanced laws for the workplace through the abolition of Work Choices;
- Lifting our investment in and improving the state of our schools through the Education Revolution;
- Delivering better health and hospital services through the biggest reform of the system since Medicare.
On top of this, the Government has also committed to delivering a better future for all Australians:
- By laying the foundations for long-term, sustainable growth by investing in the drivers of productivity growth in skills, infrastructure and regulatory reform;
- By properly planning and investing in our major cities and in our major regions to deal with the challenges of a growing population; and also
- By acting on the great intergenerational challenges of climate change and water.
The core to all the above is to build a strong economy for the future.
The first two years that the Government has been in office have seen wild swings in global economic conditions - from the inflationary boom of 2007, to the dramatic global bust of 2008-09, and the emerging dawn of a new era of growth following the worst global recession since the Great Depression.
Through these radically changing circumstances, the Government has sought to apply consistent principles of economic management - countercyclical macroeconomic policy to maintain stability while continuing to prosecute a comprehensive program of microeconomic reform.
The Government's economic strategy has therefore been to manage the economy through fluctuating short-term economic conditions while at the same time implementing long-term economic reform. These are the two continuing arms of the Government's economic policy - both for the first two years that we have been in office and for the future.
In my address today I want to remark upon three points:
- First, to report on how we have implemented this economic strategy through the boom and bust cycle of global economy in the last two years;
- Second, to identify the emerging challenges associated with a return to growth following the global recession and the Government's response to those challenges;
- Third, to lay out our plans to build a platform for sustainable growth over the long term, including by building more productive, more sustainable and more liveable cities.
When this Government came to office, the Australian economy was in the full blush of an historic mining boom, fuelled by strong global economic growth:
- Nominal GDP growth was running at 8 per cent.
- Record commodity prices had driven up our terms of trade up more than 20 per cent since the mid-2000s, the sharpest increases since the wool boom straight after the Second World War.
- BHP Billiton and Rio Tinto were in the process of securing a record 85% increase in iron ore prices and a 200% increase in the coking coal price, delivering record corporate profitability for these mining giants;
- And these historic prices pushed mining's share of Australia's total GDP back to levels not seen since the end of the late 19th Century, when Western Australia was in the midst of a gold rush and Broken Hill was first opened up for development.
But, after 15 years of uninterrupted growth, Australia was in danger of falling into the trap of its own prosperity. The economy was suffering from capacity constraints including widespread infrastructure and skills shortages:
- First, infrastructure bottlenecks emerged with bulk commodity ships queuing off our ports, urban congestion clogging up major cities and a broadband network that was among the slowest and most expensive in the world;
- Second, employers were suffering chronic labour and skills shortages as they struggled with the tightest labour market in 30 years;
And this combination of a booming economy and constrained economic capacity threatened to undermine Australia's macroeconomic stability.
- Inflation rose to 16-year highs, peaking at 5 per cent in September 2008 - the highest recorded inflation rate in Australia since inflation targeting was formally introduced in 1996;
- And the Reserve Bank responded by slamming on the monetary policy brakes, delivering 12 consecutive interest rate rises, leaving Australia with the second highest interest rates in the developed world.
In my first speech on economic policy as Prime Minister of Australia, delivered in Perth in January 2008, I committed to tackling these problems, these economic challenges, through the principles of responsible, conservative economic management. In that speech I committed to: "direct all arms of economic policy ... to take the pressure off demand, reduce costs in the economy through regulatory reform, and further boost the supply side capacity of the Australian economy to alleviate inflationary pressures" - and that is what the Government went about doing.
In the following months, the Government's razor gang worked tirelessly to deliver savings of $33 billion over four years in our first budget - more savings than our predecessors delivered in the entire previous term that they were in office.
The forecast 2008-09 budget surplus of $22 billion was the largest surplus as a share of GDP in nearly a decade and achieved by delivering the lowest real increase in government spending in nearly a decade.
Of course, in the last quarter of 2008 global economic conditions changed rapidly and dramatically. On September 15, nine months after the Government came to office, the collapse of Lehman Brothers brought the global economy to the edge of a precipice.
In the months following the Lehmans' collapse, global stock markets fell by more than 50% from peak to trough - a steeper fall than had been experienced in the Great Depression. Credit markets experienced unprecedented dislocation, the global banking system recorded almost 3 trillion dollars in losses, and more than 120 banks failed or were bailed out.
Rapidly, the financial crisis also spread to the real economy:
- Major developed economies fell like dominoes into recession;
- Global trade fell by more than 40 per cent - also the sharpest fall since the Depression;
- And corporate titans, including Ford, General Motors and Citibank teetered on the brink of bankruptcy.
At the time, many commentators were seriously fearful of a return to the 1930s.
The Australian Government knew we would not be immune from these global events. It wasn't a question of whether the global economic storm would hit Australia - it was only a question of how badly we would be hit and what we could do to reduce the damage.
By early October, Australia's economy began to slump, with leading indicators including, retail trade, consumer and business confidence, and stock market indicators collapsing.
But it was not just about statistics - it was about avoiding the very real impact of recession on the lives and aspirations of working families and hard-working small businesses right across the country.
Towards the end of 2008, I received a letter from a shop owner in regional Queensland. He wrote the following:
"I write to you at my wits end ... The people who shop in the shopping centre I am in are struggling... my business has dropped 65 per cent in sales over the last 3 months. I have already had to lay off three of my seven staff... I'm scared I'm going to lose my business to bankruptcy. I'm scared my parents are going to lose their family home as it is security for my business loan."
As the global recession hit Australia, letters like these began to come in as a trickle, and then a flood.
As the economic situation changed in Australia and around the world, the Government was faced with a radically new challenge of countercyclical fiscal policy.
Being an economic conservative doesn't mean standing idly by while the Australian economy is destroyed by forces for which we had no responsibility. Being an economic conservative meant rapidly expanding the direct role of government in the economy as private sector activity collapsed.
This Australian Government, despite the clamour of opposition, decided to intervene dramatically to maintain financial market confidence and to support the real economy:
- The Government moved quickly in October 2008 to prevent a financial panic by guaranteeing the security of all 16 million Australian deposit holders for the first time in this Government's history.
- Second, the Government also guaranteed bank wholesale funding, giving Australian banks access to the foreign capital they needed to continue the flow of credit to Australian businesses - again, for the first time in Australia's history.
- Third, to keep the economy afloat in the short term, we implemented an immediate stimulus of $27 billion, including cash payments, the trebling of the first home owners' boost and an increased business tax break for private investment - actions we added to in December 2008 and February 2009 as we calibrated a series of short-, medium- and long-term stimulus measures to make a difference in the real economy.
As we implemented our economic stimulus plan, we had one eye on the urgent need to support the economy rapidly, and one eye on the future needs of sustainable economic growth:
- That is why 65 per cent of total direct investment under the nation-building for recovery strategy is investment in medium- and long-term infrastructure
- Over the medium term, the Government launched an investment program that would involve around 50,000 construction projects in every corner of the nation, including the largest school modernisation program this country has ever seen and record investments in social housing and shovel-ready local infrastructure projects.
- Over the longer term, the Government's committed to major infrastructure investments including major rail, road, port, education and clean-energy infrastructure projects, and a national high-speed broadband network
As the IMF concluded: "the increase in public investment will continue to support activity in the near term, while addressing infrastructure shortfalls in the long term".
The Government was upfront with the Australian people about the magnitude and complexity of the challenges we faced, and of the magnitude and complexity of the economic strategy we were embarking upon to deal with the crisis, and we admitted from the outset that there would be many bumps along the way.
12 months on, I am proud of the success of Australia in navigating the global recession. It is a testament to the resilience of our people, the ability of the whole community - businesses, unions, workers, government - to pull together, and the clear direction of government economic policy from the beginning.
I am proud of the success of the Government's economic stimulus strategy.
I am proud of the more than 200,000 jobs that Treasury estimates were saved by the stimulus.
I am proud that so many Australian businesses kept their doors open while so many millions of businesses closed their doors abroad.
I am proud that Australia has had the shallowest downturn of all the major advanced economies.
I am proud of the fact that Australia was the only one of the major advanced economies not to go into recession.
And I am proud of the fact that we emerged from this global recession with the lowest debt and deficit of all the major advanced economies and our AAA credit rating intact.
Australia has therefore emerged from the global recession with one of the strongest economies in the developed world.
This should be a cause for confidence. It should be no cause for complacency. Being confident but not complacent means looking over the horizon at the challenges that are now developing beyond the here and now.
It means not resting on our laurels but capitalising on our successes. It means building lasting improvements to our economy by building new foundations for sustainable growth for the future.
Just as we worked hard to ensure our economy was the envy of the world during the downturn, we now must work hard to capitalise on that position as we move through the economic recovery phase and return to economic growth.
There is no doubt that Australia has rebounded from the global recession faster than most public and private sector forecasters had expected.
- In the May 2009 budget, the Government forecast a contraction of GDP of half a percentage point for 2009-10.
- This was revised up to positive 1.5 percent in Mid Year Economic and Financial Outlook, and the February 2010 Statement on Monetary Policy in which the RBA forecast 2 percent growth for 2009-10.
As we emerge from the global recession, I am stating unequivocally that the Australian Government's economic policy will continue to apply the principles of our economic strategy that we have implemented from the beginning:
- one, maintaining macro-economic stability through countercyclical fiscal policy;
- while two, continuing to build the foundations of long-term economic growth by continuing to invest in the drivers of productivity growth.
The Reserve Bank has already begun to adjust its policy settings to changing circumstances, gradually moving to lift interest rates from the historic lows reached at the depth of the crisis, although official rates as of today remain 3.25 percentage points lower than they were at pre-crisis levels.
Similarly, the Government's own fiscal settings have already passed the peak impact of growth because our stimulus strategy had been constructed to be targeted, timely and temporary. The impact of the stimulus peaked in the June quarter 2009 and has been phasing down ever since.
Importantly, the Government also announced in the May 2009 budget, fiscal rules that will calibrate fiscal policy for the recovery as we sought, once again, to be ahead of the curve:
- The Government's 'expenditure rule' will cap the real growth in government expenditure to 2% once the economy returns to above trend growth - and this will apply until the budget returns to surplus.
- Second, the Government's 'offsets rule' is already in force - requiring offsetting savings for any new expenditure.
- Third, the Government's tax to GDP rule will ensure that the level of taxation remains lower on average than the level we inherited in 2007-08.
These fiscal rules are among the strongest and most credible in the world. As the IMF commented last year: "...the [Australian] Government's commitment to return to surpluses and achieve a positive budget balance on average over the medium term is commendable.
Few other advanced countries have adopted such a clear commitment".
These rules represent the continued embodiment of the Government's core commitment to fiscal conservatism - as the private sector rebounds, the Government's support will contract.
In summary, the Government's core economic principle of conservative countercyclical policy interventions is standing the test of the gyrations of the economic cycle. From boom to bust and recovery, the Government continues to apply constant principles to changing economic circumstances.
Thus far, I have been focussing primarily on the Government's strategy to deliver stable macroeconomic conditions across the economic cycle. However, as the Government has focussed on the various short-term economic challenges that we have confronted, we have never lost sight of our core long-term economic strategy - to reform Australia's economy for a sustainable economic future.
As I said in my first address to the Business Council of Australia after I became Leader of the Opposition back in 2007: "To stand still in a dynamic, competitive world is to go backwards. That's why I'm committed to the continuation of the reform process."
That reform process must be anchored in productivity growth, workforce participation and the development of a seamless national economy.
Let me turn first to productivity.
The long-term decline in productivity since the late 1990s is one of the most disturbing trends in Australia's economic performance. Between 1994 and 1999, Australia's productivity growth rate was second among OECD countries. However, since this surge, Australia's productivity growth has slowed. Between 1999 and 2007 we have slipped to 14th among OECD countries.
If we do not act now to lift Australia's productivity growth rate, the rate of improvement in Australia's average living standards will decline. That is why the productivity agenda lies at the heart of the Government's long-term economic strategy, and that is one of the core themes of the addresses I delivered prior to Australia Day this year around the nation in each of our nation's capital cities and states - focussed exclusively on the productivity challenge.
Without productivity growth, we do not have sustainable, long-term economic growth, and absent long-term sustainable economic growth, we do not have the enduring basis for rising living standards, let alone the investment in the social and economic infrastructure we need for the future.
Infrastructure is a critical ingredient for our future productivity growth.
According to the International Monetary Fund, in developed countries like Australia, an increase in the public infrastructure stock by 1 percentage points leads to an increase in output by around 0.2 percent. Yet despite this link, measures of Australia's infrastructure investment in recent decades show a trend decline. A 2009 OECD report shows that Australia's investment in transport, storage and communications infrastructure as a percentage of GDP fell between the 1980s and 1990s, and fell again in the first decade of this century.
If this trend continues, Australia will fall further behind other nations on productivity and therefore in the long term on future growth and living standards.
Australia's shortfall on infrastructure investment has generated a gap between the infrastructure we've got and the infrastructure we need. We see this in our ports, in freight, in rail, on our roads and in broadband, in the clogging of our cities.
Over the past two years, our Government has been acting decisively to turn around this national infrastructure performance. We've established Infrastructure Australia to provide national leadership to setting priorities and evaluating projects. We've undertaken regulatory reforms to remove roadblocks to infrastructure investment. And we have embarked on the biggest nation building infrastructure program in this country's history:
- A $36 billion transport infrastructure plan including doubling investment in roads, quadrupling investment in rail and investing in the nation's ports for the first time.
- A $43 billion investment in a National Broadband Network - the infrastructure of the 21st century that will deliver super-fast broadband, turbo-charging businesses and transforming our classrooms and our hospitals.
This investment in transport and communications infrastructure is helping support the economy during the economic downturn, filling the gap in investment activity caused by the global financial crisis, but in the long run it helps build our future prosperity.
The Commonwealth Government also recognises the continuing important role of state governments in infrastructure provision.
I'd make the point that the Australian Government's health reform package of itself represents a significant step forward in freeing up state government balance sheets to re-focus their effort on critical state investment in infrastructure. Embarking on health reform, the Government is also therefore undertaking reform to the finances of the Federation.
Treasury estimates that without action, health and hospitals spending would consume the entire revenue raised by the states and territory governments of Australia over the next 20 to 30 years - the entire revenue.
The Government's reforms are estimated to relieve state budgets of some $15 billion of health spending over the coming decade. This will provide the states with additional capacity to invest in the roads, the public transport, the urban infrastructure necessary to support our cities and our regions in the future.
Here in Victoria, it will mean reduced funding pressure on the Victorian Government of $3.8 billion over the next decade. That is $3.8 billion that can be spent on Victorian infrastructure that in the absence would not be possible if we do not bring about our health reforms, and it is another good reason, therefore, why we should all, as a nation, pursue fundamental health reform.
Today I'm in Victoria, and tomorrow again I look forward to meeting with Premier Brumby and looking forward to further constructive discussions on the future of our health and hospital system. The time for reform is now.
Another part of the Government's productivity agenda lies in skills. The Government is building a world-class education system, skills and training that will provide and prepare our kids for jobs in both the traditional trades on the one hand and in the industries of the future on the other. We want to give Australian children the skills and tools to compete with the rest of the world for the high-skill and high-wage jobs of the future.
That is why we are right now in the process of:
1) Establishing a single national school curriculum with an emphasis on the 3 Rs: Reading, Writing and Arithmetic.
2) Providing parents with information on their children's' and schools' performance at school to help lift the standards of all schools, not just some.
3) Building state-of-the-art Trades Training Centres to service each of our nation's 2,500 secondary schools to help kids learn a trade and address future skill shortages.
4) Delivering the digital education revolution to schools so that by the end of 2011 each of our nation's Year 9-12 students will have access to computers in their school.
5) Undertaking the largest school modernisation program in Australia's history, including state-of-the-art 21st century libraries, totally digitally connected, as well as science centres, language centres and other classroom innovations.
6) Providing an additional three quarters of a million training places across the economy.
7) Investing in a further 50,000 university places across the country.
These are among the critical building blocks of an education revolution, a skills revolution, an innovation revolution - all as part of what must call in time a productivity revolution.
One of the most significant consequences of an ageing population is lower levels of workforce participation. The ageing of the population is expected to reduce the workforce participation rate from around 65 per cent now to around 60 per cent by 2049-50, which has the potential to result in slower economic growth and slower growth in family incomes.
To express this expected fall in workforce participation in another way, consider the following:
- In 1970, there were 7.5 people in Australia of working age to pay tax and support every person over the age of 65.
- Today, there are five.
- By 2050, there will be just 2.7 people of working age to pay taxes for every person over the age of 65.
These are dramatic changes. To counter the effect of the ageing of the population on prosperity, we must support higher real incomes through productivity growth and encouraging the participation - the maximum participation - of those working age Australians in our workforce. Since coming to office, the Government has already implemented major long-term initiatives to this end.
- We have established Australia's first-ever of Paid Parental Leave, coming into effect from January of next year.
- We have increased the child care rebate from 30% to 50% to support parents return to work.
- We have introduced a 'Compact with Young Australians' called 'Learning or Earning', which means that means that young people under the age of 21 without a Year 12 or equivalent qualification must be in education or training in order to qualify for youth allowance.
- Our national health reform agenda includes the largest-ever commitment to preventative health initiatives, and initiatives to improve management of chronic diseases, to help prevent ill health from excluding Australians from work and further impeding workforce participation.
Health has a major impact on workforce participation. Efforts to reduce chronic disease could result in as many as 175,000 extra people into the workforce in the decades ahead.
Access Economics estimates that illnesses associated with chronic pain cost Australia $11.7 billion every year in lost work days. It is estimated that there is a $16 billion annual loss in productivity due to mild to moderate mental illness in the community.
Boosting workforce participation represents another reason for backing long-term health reform. Let me be even blunter: unless we act on comprehensive health reform, we will see a radical reduction in the number of Australians of working age participating actively in the workforce, thereby undermining long-term productivity, living standards and overall economic growth.
Health reform is not just a social policy imperative. Health reform, equally, is an economic policy imperative.
If we are to lift productivity growth, foster greater workforce participation and manage the challenges of population growth, we must also plan and build better cities.
Australia's major cities contribute nearly 80 per cent of national Gross Domestic Product.
They also provide employment for 75 per cent of the nation's workforce.
Stronger, more sustainable and more liveable Australian cities mean a stronger Australian economy and an enhanced lifestyle for our people. This is an important long-term priority for this Government, and one which cuts across many portfolios including infrastructure, transport, water, housing and the environment, and at all levels of government as well.
Unlike our predecessors, we believe that the Commonwealth Government has a significant role to play in the future of cities policy. Our first step when we came to government was to re-engage with cities policy after a decade of neglect:
- We moved quickly to establish Infrastructure Australia and alongside it we established the Major Cities Unit.
- We started a major investment program for our cities in transport, communications, housing, health, education and community infrastructure.
- And for the first time in the federation's history we have reached a landmark agreement with the states and local governments to have strategic planning in our cities that meets national criteria as a precondition - as a precondition - for further federal investment in urban infrastructure.
Earlier this month, the Government also produced the nation's first ever State of Australian Cities report. The report benchmarks Australian cities with key cities abroad and represents and presents the facts about our cities across a range of indicators - economic, environmental and social.
The State of Australian Cities report will inform Australia's national urban policy to be released later this year with a focus on three core themes - productivity, sustainability and livability:
- To have productive cities, we need cities with world-class transport and communications infrastructure that are well planned and that create hubs of innovation and high-paid jobs.
- To have sustainable cities, we need to have cities that use less energy, produce less carbon emissions, have more public transport and less reliance on cars, and sustainably use our water resources.
- To have liveable cities, we need to have affordable housing, communities that are linked to schools and hospitals and health services, and local infrastructure that creates a sense of community and promotes active lifestyles.
Already, the Australian Government is engaging in the key areas of city policy - productivity, liveability and sustainability.
First, we recognize that productive cities are critical to creating jobs and supporting high standards of living. The key elements of city productivity are infrastructure, innovation, and planning.
As I said earlier, we're investing a record $36 billion in transport infrastructure. This infrastructure will make our cities more productive, and connect our towns and regions like never before.
Here in Victoria, we are already investing the following:
- almost $1 billion to upgrade the Western Ring Road - a key freight route; and
- over $3 billion in the Regional Rail Link, the first major, new rail line for metropolitan Melbourne in 80 years. Think about that - the first major, new rail line for metropolitan Melbourne in 80 years.
- For the first time, the Australian Government has taken a decision to invest in urban rail.
- For the first time the Australian government is investing in urban water, and that is because these are fundamental underpinnings of the future efficiency of our cities.
We're also supporting innovation in our cities. When we look at the critical role being played by infrastructure, we turn also to the National Broadband Network, which will transform Melbourne and our nation's other major cities.
- NBN Co has announced that construction in Melbourne will commence in Brunswick, with a pilot program of 3,000 homes and businesses.
- The roll-out of fibre-to-the-premises technology has already commenced in Tasmania.
- And a rollout almost 6,000 km of new fibre optic backbone links will connect over 100 regional locations along the routes to the six priority areas of Geraldton, Darwin, Emerald and Longreach, Broken Hill, Victor Harbor and South West Gippsland - parts of Australia that currently are not properly serviced by this information highway of the 21st century.
As I said, we're also supporting innovation in our cities. Here in Melbourne, we have invested in key university infrastructure that will support innovation, like:
- Latrobe Institute for Molecular Sciences
- Centre for Neural Engineering at Melbourne University
- The National Centre for Synchrotron Science; and
- The Melbourne Neuroscience Project.
Furthermore, the Government is working to improve city planning. As I noted before, in December last year the Australian Government led a landmark agreement for the first time in the country's history with states and territories for national criteria for the strategic planning of capital cities.
- This deal will ensure that states and territories will have in place best practice capital city strategic plans by 1 January 2012.
- Future Commonwealth funding to state governments will be contingent on this objective.
- COAG has also agreed to the COAG Reform Council driving this reform process, with the support of a small expert panel, jointly appointed by all jurisdictions, and reporting to the Council of Australian Governments.
Finally, on liveability, our investments are also designed to make our cities more liveable.
In particular, the Government is working to make housing more affordable. The Government began by establishing a Minister for Housing. Before we came to office, there was none at the federal level. This was a problem.
The previous government, apparently, did no attach priority to this. This government does.
The Government has also been active in housing policy.
- Our National Rental Affordability Scheme is stimulating the supply of new affordable rental dwellings across the country.
- Our $500 million Housing Affordability Fund is working to lower the cost of building new homes by removing barriers to supply.
- First Home Saver Accounts are encouraging individuals to save for their first home over the medium-to-long term.
- And we are investing $5.6 billion to build around 19,300 new units of social housing and repair more than 70,000 units of existing social housing the single largest investment by the Australian Government in the social housing stock of the nation.
- Furthermore, more than 200,000 Australians have benefited so far from the First Home Owners Boost.
Making housing more affordable means an increase in the housing stock in both greenfield developments and in brownfield redevelopments.
That is why today I am pleased to announce the next step in our policy to increase housing supply - a $50 million investment in housing-related infrastructure. This is part and parcel of the operation of the National Housing Affordability Fund.
This investment will deliver more than 7,000 new lots and dwellings between 6 and 14 months faster than would otherwise have been the case.
It will deliver cost savings to home purchasers that will average approximately $20,000.
This investment is part of our Housing Affordability Fund, which reduces costs incurred as a result of planning and approval delays and infrastructure costs, such as water, sewerage, transport, and open space.
Here in Victoria we are providing investment to prepare a Precinct Structure Plan for Ballarat. This will fast track land supply in the area, bringing forwarded much-needed construction by some 330 days.
These investments build infrastructure for local communities, unlock housing supply and improve housing affordability. It supports growth in built-up areas, in outer suburban areas, and in regional areas. It will be welcome news for families looking for a new home in many parts of the country - but much more remains to be done.
Too many Australians are locked out of the housing market - working families, in our view, deserve a better deal. Our Government is taking action to turn around this particular challenge, investing in infrastructure and reforming planning so we can build more houses and there are more affordable houses for working families.
The purpose of the housing affordability fund is to begin to bring about fundamental change in infrastructure costs and planning to boost housing affordability for working families. Infrastructure costs are at present keeping too many homebuyers out of the home market. This cannot be sustained for the future.
That's why housing affordability in all of its dimensions will remain a core part of the Government's future reform agenda with state and territories, both in greenfield developments, urban consolidation, and effective social and economic infrastructure planning.
Working families deserve a better deal when it comes to long-term housing affordability and infrastructure charging and in planning reform. That is why we will have more to say in the future through the future operation of our National Housing Affordability Fund.
The Government, also, is seeking to support sustainability in our cities. We are committed to ambitious emissions reduction targets and are implementing a comprehensive nationwide response to climate change.
The Carbon Pollution Reduction Scheme is central to our plan to reduce Australia's greenhouse gas emissions.
- We're also investing $4.5 billion in a Clean Energy Initiative that will support Solar Flagship projects, Carbon Capture and Storage demonstration projects, and renewable technology innovation.
- We are improving household efficiency by mandating new 6-star ratings for new homes.
- We are making commercial buildings more energy efficient through the Green Building Fund.
- And we are supporting public transport infrastructure to give families more choices about how they get around.
Together, these investments are important down payments on creating the sustainable Australian cities we need for the future.
To conclude, I remain an optimist about Australia's future.
This country is a no nonsense country, hardworking and full of hard-headed people who are not afraid of a challenge.
When the rest of the world last year sank into the global recession, our nation kept swimming and kept swimming alone. When unemployment queues around the world grew longer and longer last year, business, unions and the Australian Government joined together to save literally hundreds of thousands of Australian jobs.
When there are battles for the right causes, our nation is always there for the fight, and when our friends are in need - at home or abroad - we are always there to lend a helping hand.
We, therefore, and I, as Prime Minister, am deeply proud of the nation that I lead. That is why I am determined to continue to deliver stable economic management that keeps our economy strong while at the same time building prosperity for the long term, and that includes building long-term, sustainable, prosperous, productive Australian cities.
I thank you.