Address to the Sir Roland Wilson Scholars, Australian National University, Canberra
Thanks Martin [Parkinson] for that kind introduction and for the opportunity to acknowledge country and the elders, customs and traditions of the Ngunnawal and Ngambri people as we meet today.
I’ve known Martin well enough and for long enough to be confident you’re as committed as I am – as committed as the new Government is – to the implementation of the Uluru Statement from the Heart.
I’m also really pleased that this foundation has an emphasis on First Nations people as well, and I extend my gratitude to First Nations people participating today.
Good morning to all of you scholars.
Today I want to talk about the economic institutions that you will play such a crucial role in shaping into the future.
In my experience the three things we have going for us in uncertain times are good people, good institutions, and the willingness to renew them.
This seems particularly appropriate having just come from a press conference announcing the details of our review of the Reserve Bank and the making of monetary policy in Australia.
But before I turn to that, I want to give you a few reasons why it means so much to me to be here with you this morning.
It’s not just because Sir Roland Wilson and the Foundation that bears his name has become synonymous with public service excellence.
Not just because I am a graduate of this outstanding national university – and I absolutely love coming back here.
Not just because I worked closely with Martin, as he said, when he was Treasury Secretary and I was Wayne Swan’s chief of staff.
Nor just because I still rely on Martin for his ideas and advice, or that he invited me here and it’s the least I could do.
Though these are all good reasons to be here.
But mostly because I know how fortunate we are as a country to have people of your calibre willing to front up and skill up to become the next generation of very senior policy makers and shapers in our system.
I find that genuinely exciting.
It gives me great confidence.
You don’t get a Sir Roland Wilson scholarship without being seen as the future of the public service, people who are worth investing in.
That was true of my friends Ange Grant and Nathan Deutscher – no doubt true of each of you here, and those who came before you too.
We need you now more than ever.
We need all of your effort and energy and talent.
All your ideas and experiences and expertise.
Just consider for a moment, in my area of primary interest, the economy, the kinds of challenges we confront.
High and rising inflation.
Falling real wages and flatlining productivity.
Rising interest rates and downgrades to growth.
Food and energy insecurity.
Climate change and global tensions.
Tightening financial conditions and serious fiscal constraints.
I’ll have more to say about all of this in the Ministerial Statement I’m providing to the parliament, complete with updated forecasts, next week.
But as I told Treasury officials in a speech a few weeks ago, if we were making a list of all the things going for us, it would have them on it.
And it would have you on it.
On two main occasions now I’ve seen for myself the remarkable capacity of people like you here.
First, as the decisions Treasury helped us make got Australia through the Global Financial Crisis in better shape than our peers.
And now as Treasurer, having spent most of the past two months as the major beneficiary of first‑class incoming government briefs; engaging with counterparts at the G20 meetings last week in Indonesia; working on next week’s Ministerial Statement to the parliament; shaping October’s Budget; turning our mind to climate modelling; starting to put wellbeing, progress and mobility at the core of measuring what matters in our country and in our economy.
And from all these experiences, past and present, I’ve learned those three things relevant to our discussion here today.
Each gives me great confidence that we can navigate the dangers in the economy and build a better future together.
The first is the quality of our people.
I’ve touched on that a bit already, but I’ve been really blown away by the horsepower in my department, starting with my friend, Steven Kennedy, but all the way through the organisation.
The second is the quality of our public economic institutions – the Treasury, the Reserve Bank, our regulators.
But the third is that we have been prepared to adapt those institutions to the circumstances as they evolve.
Again, consider the conditions.
We are in the midst of a difficult if not dangerous time for the global economy.
In our conversations with counterparts at that G20 Finance Ministers Meeting in Indonesia over the weekend, and with the heads of the major international economic institutions, we heard a similar story.
The story of high and rising inflation, rising interest rates – and the impact that has on economic growth.
The International Monetary Fund told us they will soon issue another downgrade to their global growth forecasts.
In my Ministerial Statement to the Parliament next week, I will provide updated Treasury forecasts for our economy – and there will be some pretty confronting truths in that.
So this is tricky terrain to tread when it comes to deciding and determining policy.
That’s certainly the case for monetary policy.
There is a critical role for the RBA here – to try and get on top of the demand‑side pressures that are contributing to rising inflation.
But they are doing so at a time when the economy is also being buffeted by supply‑side pressures.
And that’s really a question of what the Government can do to help out on the supply side – to do our job while the Reserve Bank does its job.
Trying to clear out those clogged supply chains, lifting the speed limits on the economy – with reforms in child care, skills, advanced manufacturing and the care economy, cleaner and cheaper energy.
So the combination of challenges we’re facing is pretty confronting, yes. But this is a pretty big opportunity for all of us as well.
To have a proper think about what’s working well for us, and what can work better – so that we are using a time of great challenge to change the country for the better.
I see our review of the Reserve Bank and the making of monetary policy in that light.
In my line of work, reviews are too easily and too frequently dismissed.
But this risks ignoring the history, and the opportunity.
The Campbell Inquiry in 1981 informed the dollar float in 1983 – which was momentous.
Hilmer in 1993 set the scene for competition reform.
Productivity Commission reviews laid the foundations for paid parental leave and the NDIS.
There has not been a review of the Reserve Bank or the setting of monetary policy in this country for decades, in fact not since the current arrangements were struck in the 1990s.
So this is our opportunity to ensure we have the world’s best and most effective central bank and monetary policy frameworks into the future.
We’ll do this by looking at the Bank’s objectives and mandate, governance, culture and operations, and the interaction between monetary, fiscal and macroprudential policy.
I’ve asked Treasury to staff it and three panel members to lead it:
Carolyn Wilkins, a member of the Financial Policy Committee of the Bank of England and a former Deputy Governor of the Bank of Canada.
Professor Renee Fry‑McKibbon, one of Australia’s leading academic economists and interim director of the Crawford School here at ANU.
And Dr Gordon de Brouwer, an eminent and experienced Australian economist and currently also Secretary for Public Service Reform.
These were my first three choices, and I’m delighted they all agreed.
I know you’re hearing from Gordon tomorrow, so he might be able to talk you through some of his initial thinking.
The panel will work closely with Treasury and consult widely and come to me with recommendations by March next year.
It’s quick, but it means getting the recommendations in time to factor them into some key appointments I need to make in 2023.
I want this review approached with the right mindset.
Not as an opportunity for people to take pot shots at the Bank or its Governor.
It’s not about reprimand or revolution, but renewal and revitalisation.
None of our economic institutions should be beyond this and none of them are.
I’ve already had a number of conversations with Phil Lowe about it, I’ve collaborated with him and consulted the Opposition – because I want this to be above politics and beyond reproach.
Because this adaptability, this willingness to respond and change and evolve, has been the secret to our success since federation.
And what’s true of our economic policy making architecture is equally true of the broader Australian public service.
I’m so pleased that my friend, Finance Minister Katy Gallagher, is in charge of reforming that as well.
Because with a new government comes new opportunities.
For the nation and for the people and institutions who serve it.
And that brings me back to you and some advice if I may, which springs from a story.
It was sometime after midnight on a brutally cold Canberra night in August 2002, almost twenty years ago to the day.
I was out celebrating the end of a project I’d been working on – another review, as it turns out – this time of the Labor Party and led by the late great Neville Wran and the late great Bob Hawke, with me as their researcher.
During a long night at the pub a friend had recalled the time, some half a century earlier, that Bob had swum the length of that fish pond at University House, just a few hundred metres from where we are now.
Foolishly, I agreed to replicate that feat.
A short time later, I had.
The moral of that story is this:
Our job isn’t to retrace the steps of those who came before us, nor to replicate them, not even our heroes.
Not the Bob Hawkes or the Paul Keatings.
Not the Sir Roland Wilsons or the Martin Parkinsons.
It’s not our job to retrace the same roads… or swim in the same ponds…
But to walk further and forward.
From those of you in this room today will come the secretaries and deputy secretaries and governors and chairs of the near future.
Some of you might even settle for Treasurer.
When you get there, remember why you started on this journey.
I was told very early on that having the capacity to speak up for people and stand up for people means you have a responsibility to do that.
So for me it was the chance to do that, to try and weave together the experiences of my community and our country into a story of ongoing economic success that creates more chances for more people.
That’s why I’m here. And you will see it your own ways.
However you see it, be proud of your achievements to date, be enthusiastic about your research here, be alive to the opportunities ahead, and be grateful for the people who have helped you so far.
You’ll write more than a dissertation or a thesis, you’ll write the subsequent chapters of the story of our economy and our people and our institutions.
And our country and its people will be better off because of it.
Thanks and I look forward to your questions.