HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
ADDRESS TO THE WA ALP STATE CONFERENCE, PERTH
"The Future Versus The Past"
SATURDAY, 28 JUNE 2008
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Thank you so much for that warm Western Australian welcome.
At the outset, can I acknowledge your Premier, Alan Carpenter; ALP National President, Mike Rann; your branch President, The Hon Sally Talbot; and Bill Johnston, the State Secretary.
It's always great coming West – the pride and joy of the Australian export economy – but even more special to finally be able to address you as a member of the new federal Labor Government. It's been a long, long time delegates, but doesn't it feel terrific!
At last, a reforming Labor Government in Canberra to work hand in glove with a reforming Labor Government in Perth, led so ably by Alan Carpenter - both responsible economic managers; both investing in the future; and both delivering for working families.
But winning Government, as you know, is no reason to pop the champagne corks and engage in some sort of perpetual celebration. We want to be here for a long time. We want to do things that last. That's why we see our first Budget as just the first page of what we hope is a very long and successful reform story.
Delegates, this is a big State, well-known for its tough, down-to-earth, hard-working people, who roll up their sleeves and get on with the job. Unfortunately for you, it's also known as the State that gives us Julie Bishop! The shadow minister for IR who just can't bring herself to let go of WorkChoices.
What a performer, delegates. Last week she walked into the Parliament and ridiculed me for giving my constituents useful tips about how to beat the rising prices of goods in the supermarket. This is a challenge so many families confront. But obviously not the Deputy Leader of the Liberal Party. She almost had her fingers on her nose as she read out my list – things like "shop around", and "shop for specials". They're the simple things millions of Australian families do every week. But not Julie. They don't do red-spot specials at Versace. When it comes to the cost of living Julie and her colleagues have a sneering, snobby disdain for families finding it hard to meet rising prices for essentials.
And as I was looking at the Liberal Front Bench – and contemplating the leadership choice they're going to have to make one day soon – I thought perhaps they could recycle some of my shopping advice.
So here are my tips for them:
Friends, the Liberal leadership shelf is completely bare.
One of their options is, of course, Malcolm Turnbull. He's also had a pretty ordinary fortnight – especially after we were able to reveal that he'd been conducting and paying for market research into himself. Apparently he's got something to sell us! I wonder what it is? It can't be substance. After all, it wasn't that long ago as Environment Minister that he was greener than Kermit the Frog.
Now he's as modern as a caveman. The climate change Neanderthal from Wentworth. So stuck in the past, so selfish, he's prepared to sell out future generations for cheap votes.
He's the one who told families facing the highest inflation in 16 years that it was a "fairy story", "mission accomplished", and that rising mortgage costs were over-dramatized. That says so much about today's Liberal Party – the Party of WorkChoices, the Party of tax cuts skewed to the top, the Party of the past. They don't have a clue what's going on around the kitchen table.
Well delegates, we're throwing WorkChoices out. We're making the tax system fairer.
Thank you for all you did last year to make these things possible. You changed the government and together we're changing the country.
Because delegates, under the Liberal Party, working Australians constantly felt like they were peering through the window of somebody else's party.
A bit like that great old Cold Chisel song: "standing on the outside looking in". "I'm standing on the outside looking in; a room full of money and 'born to win'."
Well, that begins to change next Tuesday, when our Budget initiatives kick in – and working families finally get a fair deal to help them cope with the rising costs of living.
It's why we've been itching to get back into government for so long – the chance to help working families doing it tough – the people who our opponents didn't believe existed. Just last year they lectured families they had "never been better off".
And for almost 12 years they sat around the Cabinet table trying to attack working conditions in spite of rising mortgages, rents, petrol costs and food.
This coming Tuesday is a big day for working families – when we begin tipping the scales back in their favour.
I encourage you to see our 1 July initiatives for what they are: a genuine attempt to give families the relief they deserve, from skyrocketing prices. It won't solve all their financial problems, but it will make things just that little bit easier.
In coming weeks all Australians can look forward to significant financial relief to assist with financial pressures.
Age pensioners and seniors get their $500 bonus over the next week, and the next instalment in the $500 utilities allowance is to be paid in the next fortnight.
We know there's more to do here, because we understand how tough it is for pensioners, and for single pensioners in particular.
On Tuesday, we're also delivering fairer tax cuts for working Australians.
A typical young family will be $51.54 per week better off as a result of Budget initiatives which kick in next financial year.
For a taxpayer earning $50,000 a year the tax cuts will deliver an additional $19.23 per week from 1 July 2008.
When fully implemented they amount to almost a 20 per cent reduction in their tax bill, and are a massive 50 per cent more generous than the average tax cut provided by the Howard Government to middle income earners.
These Australians will also benefit from our decision to make the Medicare Levy Surcharge fairer.
For a single taxpayer earning just over $50,000 a year our changes to the Surcharge will result in a further saving of around $500.
Those with children also stand to benefit from the new 50 per cent Education Tax Refund, and the 50 per cent Childcare Tax Rebate.
These measures are about much more than just easing the pressure on strained household budgets – they are also essential economic reforms for addressing the longer term challenges facing the economy.
Delegates, the fault line in national politics is between a long term, future focused Government and the short term headline-chasers in the Liberal Party.
That's what separates us here, from them: we are the ones who front up to big challenges. And our most pressing economic challenge is inflation.
The Government inherited an economy with underlying inflation running at a 16-year high.
And interest rates have risen eight times in three years, putting pressure on families and businesses.
The economy had been crippled by capacity constraints, a result of long term neglect by the previous government in areas like infrastructure, and skills. This is something the Reserve Bank warned them about 20 times.
The inflation challenge isn't a charade; it's not a fairy story. Ask any family: it is a real threat to living standards and our future prosperity.
Can you believe Malcolm Turnbull went into the Parliament and said it was "mission accomplished" on inflation? Fair dinkum – "mission accomplished" – all he was missing was the aircraft carrier, a big banner, and a flight suit!
Delegates, overcoming the inflation challenge now is an investment in securing our economic future. To do otherwise would be short sighted. If we don't get on top of the inflation challenge now, we will face the consequences of even higher inflation and higher interest rates later. That's why we are determined to tackle the inflation legacy.
And it's why we are delivering a responsible Budget, carefully designed to fight inflation. Why we built a strong surplus, brought spending back under control and have begun critical investments in building future capacity.
It's particularly important that we get the long term fundamentals right in the face of significant challenges emanating from the global economy.
The Australian economy is being buffeted by powerful global forces.
This is perhaps the most difficult mix of economic challenges we have faced in the last quarter century.
And it's been added to by the continued upward march in global oil prices. The global benchmark oil price has nearly quadrupled in the past four years. And in real terms, the global oil price is higher now than the peak reached during both oil price shocks of the 1970s. This is one of the key challenges facing the world today. It is a complex global problem that will require sustainable long term solutions.
There is of course another side to rising global commodity prices – our rapidly rising terms of trade.
Australia's terms of trade have risen to their highest level in more than 50 years, and are set to go even higher. This, of course, means a very big increase in export income.
The WA economy has felt the effect of this boom more than any other State. Over the past four years, WA has accounted for one-fifth of Australia's economic growth and almost half of Australia's mining production. Output has risen faster than in any other State and employment growth has been second only to Queensland. You have contributed $457 billion to national income and around $200 billion to exports.
But even as the Western Australian economy continues to grow, like the broader economy, it faces challenges. Not just the expected supply constraints, which were a product of Howard Government neglect, but the unexpected ones too.
We were reminded of the impact of unexpected challenges with the recent explosion at Varanus Island, which cut off 30 per cent of WA gas supplies. It is likely this disruption will have a serious impact on the Western Australian economy, with flow on effects to the national economy.
Dealing with unexpected challenges like this, highlights the importance of addressing those challenges which we can foresee, and which determine how successfully we can deal with those we can't.
Our primary challenge is to build a modern economy that is strong enough and flexible enough to tackle the challenges that are now unfolding. That means tackling the inflation legacy. It means building future capacity, in infrastructure and skills. It means responding to the global economic challenge of climate change as well as energy security. And it means investing the proceeds of the boom in future prosperity, so we can say to our kids and grandkids we didn't waste this extraordinary opportunity.
Even before the gas explosion, there is arguably nowhere in Australia where capacity constraints are more evident than here in Perth.
The strong demand experienced in the Australian economy in recent years has not been matched by a similar expansion in supply. This neglect is why future generations will curse the Howard Government. The build‑up in underlying inflationary pressures on their watch, have challenged our ability to extract the full dividends of the mining boom. While the value of commodity exports is up – because of higher commodity prices – export volumes have been sluggish.
So the challenge for economic policy now is to push out the productive envelope of the Australian economy – so we can sustain the economy's growth, deliver higher incomes and build a more equitable society.
Our opponents will never take responsibility for creating these problems, but from day one we have taken responsibility for fixing them. This means investments in infrastructure and skills. This is a Party and a Government of nation builders, not shirkers.
That's why the Budget provides funds to make an early start on key infrastructure commitments across the country.
Here in Perth this includes:
We also earmarked more than $40 billion for critical, overdue nation building.
This includes a $20 billion Building Australia Fund – which will undertake unprecedented and sorely needed investments in critical economic infrastructure, such as roads, ports, rail and telecommunications.
For the Western Australian economy, this means a future with less urban congestion and where it's more efficient to get goods and services to market – both here and abroad.
To make sure we get the most out of investments in physical capital, the Government is also committed to crucial human capital investments.
A more skilled population will have higher rates of participation and will also be more productive.
To help achieve that, the Budget includes:
The University of WA, Curtin, and Murdoch Universities will all benefit. These measures will begin addressing our medium to longer term skill needs.
The payoff for all these investments in Australia's productive capacity – across infrastructure and skills – will be low and stable inflation accompanied by stronger growth in incomes and living standards for decades to come.
One of the biggest challenges we face is shoring up our future energy supplies.
No forward-looking government can separate the issue of energy security from the issue of sustainable energy sources, and the need to reduce greenhouse gas emissions. That's why we are progressing reforms to support efficient and well-functioning energy markets, and modernising our infrastructure, to lift productivity, and to help us meet rising demand for our commodity exports.
We are also contributing to global energy security cooperation. This is about being part of global solutions, and enhancing the energy security of our major trading partners while protecting our own economic future.
Global oil prices have risen sharply, doubling in the last two years.
The rapid rise in global oil prices is a threat to global growth and global inflation, and is impacting on fuel users around the globe.
We have called for oil producing countries to increase their production immediately, to reduce pressure on prices. This sentiment was supported by many other countries at last week's Jeddah Oil Summit in Saudi Arabia, where Martin Ferguson represented Australia.
In response, King Abdullah announced that his country would increase daily oil production from 9 to 9.7 million barrels and improve transparency and regulation in financial markets to combat speculation.
But back at home, this problem needs leadership to develop a long term energy security strategy. And the Government has set to work on this too. Martin has begun leading the Government's work on a National Energy Security Assessment, which will lead into a national Energy White Paper.
The economic case for measures that address energy security in the short and long term is clear.
It impacts on us all; it affects our standards of living, the operation of our businesses, and growth in our economy.
Some of the problems – like rising world oil prices in an era of climate change and rising world demand – can be foreseen. But others – like the gas explosion at Varanus Island early in June – cannot.
It's obviously hitting the Western Australian economy hard – families, domestic businesses and exporters. And will inevitably hold back national economic growth in the September and December quarters.
I also want to praise the leadership of Alan Carpenter and his Government, who have acted quickly and decisively to share the pain evenly and get remediation action underway.
The public reaction bears testament to the resilience and enterprising spirit of the Western Australian people and their economy. And for our part, the Government is working closely with Western Australian authorities to help minimise the impact on the community and the economy as a result of this incident.
Now, delegates, our first half year in government is now behind us.
As I said earlier, the first page in a long reform story. It's been a tough assignment. Long hours, hard work, and our fair share of criticism. But we all signed up knowing what lay ahead.
To borrow a great phrase of John F. Kennedy's: reformist work in government is worthwhile not because it is easy, but because it is hard.
When governments in this country have introduced the most important reforms – the ones that have made the greatest difference to our national well-being – they have been hard, not easy. We see real value in the long, hard slog of stable, enduring reforms.
There's a new optimism and a new hope throughout our country today. Not because things are going to be easy, but because at last there's a Government who'll front up to these challenges that are hard.
Modernising the tax system will be hard. Implementing an Emissions Trading Scheme will be hard.
Modernising Commonwealth-State relations will be hard. But shirking these big challenges, would mean selling out the generations that follow us.
Delegates, ours is a Government of reform and a Government of the future. Ours is a big agenda for change. And we are in the fight of our lives. We are in the front line of a brawl between the future and the past. The most important fight in national politics today. Between a Labor future for our nation, and the backwardness of a Liberal Party clinging desperately to the past. And we won't rest – not for one moment – until we've won.