PM Transcripts

Transcripts from the Prime Ministers of Australia

Gillard, Julia

Period of Service: 24/06/2010 - 27/06/2013
Release Date:
11/11/2011
Release Type:
Speech
Transcript ID:
18261
Released by:
  • Gillard, Julia
Address to the Business Council of Australia Annual Dinner, Sydney

Our economy is not perfect - there's pressure on many sectors from the strong dollar and pressure arising because of cautious consumers and competition from overseas.

But believe me, the leaders who I sat with at the G20 table last weekend would dearly like to swap these challenges for their own. And many would view an unemployment rate of 5.2 per cent as a distant dream.

This meeting of the G20 came at a very important time for the international economy, especially for Europe.

And the meeting itself was made more demanding, more crucial, by the breakout of domestic political uncertainty in Greece.

Precisely because the G20 matters - and because of the very serious state of the European financial system - the outcomes of the meeting have been heavily scrutinized.

As a participant, I can say the G20 made progress in addressing the current eurozone crisis.

It set the ground for important steps to be made in the medium term to restore balanced, sustainable world growth.

But I can also say, there is still more work to be done and that work will be critical to restoring confidence to the financial markets of the world.

Before I sketch out the progress that was made in France in tackling the immediate crisis, and developments since the summit concluded, I do want to reflect on the wider context - on the perspective I brought to the meeting.

Because I did join the table with some satisfaction.

Proud to represent a country whose economic fortunes are so different to almost all other countries whose leaders were there.

In the meeting, I reminded my counterparts that while some of our talk may appear esoteric - as we talk intently about financial transactions, institutions and markets, discuss leveraging, and distinguish the solvency and liquidity of nations - our task outside the summit meeting room is to explain.

So that our peoples know that the ultimate purpose of our work is creating jobs for the people of our nations.

Delivering this message to that audience was made easier for me than almost any other leader - for the simple reason that here in Australia we have created over seven hundred thousand new jobs over the last four years.

In a period when the world has shed around thirty million jobs.

And of course unlike most other G20 countries, which are subject to disturbing discussions about sovereign debt, Australia has extremely strong public finances.

But alongside some satisfaction in our own economic strength at home, I participated in the meeting with a real sense of active concern for the future economic course of the world.

As you well understand, Australia has a strong stake in Europe getting its house in order - and maintaining the stability of the eurozone.

Because the Australian economy - and public revenues - are most definitely touched by the developments in Europe.

We live in a world where movements in financial markets in the North Atlantic are felt through the markets of Asia and beyond - a fact we have seen reflected just today.

Our real economies, through direct trade and investment, and the trade and investment of our major trading partners, are deeply interdependent too.

So, from an Australian perspective, it was vital that the G20 meeting delivered important steps towards dealing with the current eurozone crisis.

Any threat to the stability of the eurozone, in turn a threat to European banks, could decimate - not just devalue - Europe's domestic currencies, and cause havoc throughout financial markets.

So the G20 simply had to make progress - and it did.

Leaders retraced the plan outlined by European leaders on 27 October - and urged that rapid steps are taken by European Finance Ministers over the coming days.

European Finance Ministers must now detail how a larger European Financial Stability Facility will be financed and how it will operate.

The lack of clarity over Greece's political future is certainly troubling.

But the G20 meeting brought Greece back from the brink of a referendum that threatened to derail the October plan.

A development which the G20 did not foresee leading into the summit, but which was vital once Greece moved itself so close to the edge.

And the very real consequences of Italy having to govern with a watchman at its door each quarter have rapidly unfolded this week.

A political reflection of the economic reality that strong steps had to be taken to get Italy back on track - and that they were.

With markets now questioning whether Italy and Greece can deliver on their commitments, the consequences of any indiscipline and indecision in Europe could not be clearer - nor the need more urgent.

Markets are looking for reassurance that there is the political will to find solutions to these problems.

The message to European governments could not be clearer too.

As I told European leaders in Cannes, it is time to turn words into deeds.

The G20 also laid the basis for IMF resources to be increased so the Fund can play its role as the bulwark of global economy.

As it has in the past in our own region during East Asia's own financial crisis of the 1990s.

The barriers to protect contagion from weak countries spreading through other parts of the global economy were fortified at the G20 - by the absolute commitment to ensure that the IMF has the resources it needs.

This stands even as the eurozone needs to detail and implement its plan.

Strengthening the IMF is a significant outcome, one clearly flagged and strongly advocated by Australia in the weeks leading up to the G20, and embraced by other leaders at the summit.

And given some political discussion in Australia, the BCA's support was well received this week.

Following the work of eurozone Finance Ministers, we can all expect G20 Finance Ministers to meet to flesh out the arrangements for strengthening the IMF.

The G20 took important steps towards restoring sustainable global growth.

The G20 agreed that Doha is not delivering what the world needs.

I argued in the lead up to the Summit that if we can't just press rewind and replay on Doha, we can't press pause either - we need to stick a new disc in the machine.

That is what the G20 has agreed to do.

It also agreed to an action plan for growth and jobs.

Countries with surplus savings committed to increase social protections, to drive domestic demand and counter high rates of household savings born of the need for self provision.

There was also a clear recognition of the importance of market-based exchange rate systems, which augurs well for Australia's trade-exposed sectors.

Meanwhile, deficit countries agreed to continue to pursue structural reforms, consistent with a clear and definite path to fiscal consolidation, especially across the US and Japan.

Finally - in what has fuelled an outbreak of competitive federalism amongst Premiers and Chief Ministers - Australia secured the rights to host the G20 in 2014.

This outcome recognizes Australia's economic strength and leadership ... a great opportunity for the Australian business community as well.

At Cannes, I spoke at a meeting of what is called the B20.

A gathering of international business leaders which develops recommendations to the assembled G20 leaders each year.

The group had a rich exchange over two days leading up to the leader's summit - and was addressed by a range of leaders, including President Medvedev of Russia, Prime Minister Noda of Japan and President Lee of Korea.

So in 2014, leaders of the world's businesses and governments will meet here in Australia, overlooking the shores of - well we'll see which river, harbour or lake it is in due course.

Friends, sharing up close the worries of other leaders and reflections on their economies and the global economy, reinforces my resolve that the task for Government and business is to walk the reform road together.

Our prosperity will not shape itself - our productivity will not grow itself either.

We must be determined to make the whole economy productive, to make the whole economy strong.

And that's what this Government is doing.

Through investments and reforms in education and training.

Much-needed investments in quality - and fundamental reform, by building productive economic infrastructure.

Above all, high speed broadband, allowing every business in the country to do business more cheaply and more quickly.

Building our clean energy future.

Carbon pricing now moves to become part of the economic fabric of this nation - business can now get on with the job.

Of particular interest to your Council of course - pursuing smart deregulation for a seamless national economy.

There's generally been effective cooperation between all jurisdictions to deliver these reforms, but I share the frustration of business with the pace of change.

There's clearly a role for business to make your case clearly to the States as well.

The delays in implementing harmonised work health and safety laws in Victoria and Western Australia are quite unnecessary.

It's important that parties in all States deliver on reform.

You've also made clear your keen interest in progress with the development of a National Trades Licensing System.

Vital for increasing labour mobility - another important implementation priority for the Territories and the States.

And of course, we are working with you to reform the system of tax.

Not just using our resource wealth to fund company tax cuts, build our pool of national savings and build new infrastructure - though better tax of mineral resource rents is important.

But finding new ways to give you the flexibility to make change work for your firms, to reward imagination and invention, innovation and ideas.

That was our goal for the Tax Forum and by any measure it, like the Future Jobs Forum which followed, was a success.

Both considered as a process and considered by what it has delivered.

The BCA's own contribution at the Forum, and I well recall Jennifer Westacott's discussion of the risks of our narrowing tax base over time, was valuable.

And the business tax reform working group, chaired by Chris Jordan from the Board of Taxation, now has the job to carry the torch for reform.

I'm grateful to the Australians who've volunteered their time to serve on the working group - and I'm looking forward to their reports.

It's said that the monthly instalments of Dickens' The Old Curiosity Shop arriving by ship drew crowds of New Yorkers to the quayside desperate to know if Little Nell had lived or died.

I'm sure Chris and his team are expecting that tax commentators and advisers will await the working group's discussion of loss carry back, uplifting losses, and the value of losses when business change composition or ownership with just such excitement, but speaking for myself, and I expect for some others, I'll also take great interest in the other side of the group's advice.

Identifying options from within the business tax system to fund any proposals.

In a period of fiscal consolidation, that's literally the bottom line on reform.

Have no doubt: the Government will hold our fiscal discipline.

It is vital at a time of heightened global instability and intense market scrutiny of high sovereign debt levels.

The recent turbulence in global markets is due in very large part to the failure of too many Governments around the world to develop and then deliver credible fiscal paths back to surplus.

We won't make that mistake.

A strong and credible fiscal strategy like ours underpins confidence in our economy and supports job creation.

And because the fastest fiscal consolidation on record also gives the Reserve Bank room to move on interest rates, as we've seen with the most recent rate cut.

For the people in this room, rate cuts mean more customers coming through the doors with more money in their purses and wallets.

Last week's cut has already provided some much-needed relief for businesses and households and boosted confidence too.

The Government's continued commitment to fiscal discipline should ensure room for appropriate monetary policy flexibility.

It also ensures that we will continue to make some difficult decisions to protect our strong public finances.

My Government will stay on the reform road.

It'll be easier to do that when business walks with us.

On your best days, the BCA has understood that too.

Knowing our door's always open to good ideas .and knowing that we respect straight dealing as well.

That's how you've approached the Tax Forum and the Future Jobs Forum and it's a good thing.

Making contributions to a real and responsible reform conversation.

Ranging across a broad agenda, supported by quality policy research and new ideas.

Through authoritative, non-partisan contributions, to a serious discussion grounded in the facts.

Based on an understanding of the direction of public policy in this country and an engagement with the Government's overall approach.

Taking your part in our processes which - like the business tax reform working group, like the Tax Forum, and like the White Paper on Australia in the Asian Century - reflect my preference for the methodical and respectful development of ideas.

I want business to play a key role in the intellectual work to shape Australia's future prosperity over the coming century.

That's the role you've played in making the case for tax reform this year.

That's the role you've often played in making the case for economic reform with a social purpose as well.

Understanding that a strong economy is an economy with jobs and growth, offering opportunity for all.

Understanding that a strong economy allows us to pay for the services and the safety net on which, as your Council put it recently, the “Australian social compact is predicated”.

And that this social compact is in turn the predicate for public support for continuing economic reform.

These are things we have done together well in the past and which I am sure we can do together well in the future.

Together, we should be optimistic.

Not because change is always good - but because Australia is always good enough to make the best of change.

Together, we should be determined too.

Because in an Asian century, with a productive economy, working together for reform the prize for Australia is rich indeed.

A strong economy and opportunity for all, more jobs and better jobs.

Spreading the benefits and dignity of work to every corner of our country.

Turning a mining investment boom into an opportunity boom.

Great opportunities are there for us when we work together well.

My Government will do its part to be sure we do that. I'm sure you will too.

18261