Kevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | Hansard source

Following question time today we can look forward to a very interesting year in Australian politics. This year we will see a battle for ideas for the nation’s future. We are going to see a battle for a vision for the country’s future. We are going to see a battle for policies for the country’s future, and that is a battle for which the Labor Party now stands ready. The battleground on which we are going to engage this fight is one which centres around our two sets of values regarding the way we want to shape this country’s future.

Our view is this in a nutshell: we have to build long-term prosperity without throwing the fair go out the back door and we have to build long-term prosperity and take action on climate change and water. That is our core set of values as we approach the events of this year. There is an alternative view, which is the government’s view, which sees these things as a zero sum game—that is, either you have prosperity or you have these other things. What they say in fact on prosperity is: you do not have to build prosperity; it somehow mysteriously just happens. They also say that if you are going to have prosperity then, as a consequence, you have got to ratchet back and ultimately sacrifice the fair go that is part of the Australian social contract.

So let us be crystal clear about the two paths which lie ahead of us—our approach and theirs—because therein the choice will be made later this year. When it comes to the whole question of long-term prosperity, let us be clear-cut about this. Our approach is that we must invest in the nation’s future. There is a bogus debate about the economy, a bogus debate which has been kicking around in this chamber for more years than I can remember. It somehow assumes that there is a lack of consensus on the fundamentals of macroeconomic policy: the fundamentals of how monetary policy should be conducted in this country and the independence of the Reserve Bank and inflation targeting. There is a lack of consensus, they say, on the question of an appropriate setting for fiscal policy when it comes to achieving a budget balance across the economic cycle. They argue these things as if some consensus is lacking.

Our argument in response is very simple: consensus was achieved on these questions a long time ago. Do not take our word for it. Read the Boyer lectures of Ian Macfarlane, the former Governor of the Reserve Bank. He said it in black and white. Read Saul Eslake, the ANZ Bank’s chief economist. Read the others. The consensus on their part about the consensus across the political divide on these core questions of macroeconomic policy is well set. Where there is no consensus is on what the appropriate settings should be for the reform of the labour market, on how we invest in the future of human capital in this country and on how we deal with the rest of what is called the microeconomic reform agenda for Australia.

Our view is pretty basic. It says: (1) we have had declining productivity growth in this country for several years now; and (2) across those years and preceding those years we have also had declining real investment in higher education and flat investment in other forms of investment by the federal government in education. When you put those two sets of data together, the case becomes compelling. The reason we have declining productivity growth in Australia is that the government, over the last decade, have simply kissed goodbye their responsibilities when it comes to turbocharging our people for Australia’s future—investing in their skills. Therein lies the key difference.

It is not just that productivity growth has been falling. It is not just that the government’s performance on human capital investment has been pathetic at best. It is that, over that period of time, the dramatic nature of these two events has been masked by one thing, and it is called the resources boom. The resources boom in recent years has led to so many truckloads of money rolling in the back door of this economy and into the public financial coffers of this country that it has effectively masked this government being asleep at the wheel on the core question of economic reform.

In our party’s history in government in this country we have been a proud party of economic reform, from the first wave of economic reform in the 1980s and 1990s, following the internationalisation of the Australian economy and appropriate deregulation. From the mid-1990s on, again, there were achievements in the implementation of national competition policy. But since those two great waves of reform and the great yield to national productivity growth which they produced, we have had a government effectively asleep at the reform wheel.

Now we come to the need for a third wave of reform, a reform which goes to the heart of our need to invest in our workforce skills for the future. We call it an education revolution. We have put forward a program whereby we intend to invest significantly in the future needs of the workforce. We want to invest more when it comes to Australia’s future workforce—starting from early childhood, continuing through the schools and through vocational education and training, moving on to the universities and into research and development and on to the highest forms of research science. If we invest the quantum and the quality of our investment there then we will set ourselves up for a long-term prosperity dividend for the country once the resources boom is over. What do we all know? Resources booms come to an end. The government have had literally tens of billions of dollars—and, according to Saul Eslake, hundreds of billions of dollars—flow into the public coffers as a result of the extraordinary resources boom. But have they used this money to invest in our long-term productive potential? No, they have not.

In terms of investment initiatives by the government across the education spectrum, either in education or in infrastructure, can we point to a single, substantial national investment initiative to turbocharge us for the future? We cannot. The story is clear. It is one which rests on the numbers. There is declining productivity growth because, at best, we have had flat performance when it comes to investing in our people’s future. And all that time money has been rolling in the back door and has not been used for these productive investment purposes. That is what we have to say on the economy. That is our message on the economy. For us, education now becomes a core part of the economic debate. It is the engine room of the economy. It is also, for us in the Labor movement, the engine room of equity.

We also believe we must invest in our future when it comes to climate change. On the issue of climate change, the message that came from the government in today’s question time, at the beginning of 2007, leaves most of us gobsmacked. We have the citadel of scepticism when it comes to climate change. In the statement made by the Prime Minister in question time today—the Prime Minister of the Commonwealth of Australia, which has a large economy and 20 million people facing one of the great challenges of our civilisation and certainly of this country’s settled history—he said:

... the jury is still out on the degree of connection.

It is not just the Prime Minister who says that. The industry minister says that he is sceptical about the existence of any connection whatsoever. But what is absolutely stunning is this bloke sitting at the table, the Minister for the Environment and Water Resources. On day 1 on the job as environment minister he took to the dispatch box and said that he also proudly wears the badge of a climate change sceptic.

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