THE FIGHT AGAINST INFLATION, THE BATTLE OF IDEAS,
AND THIS DEFINING DECADE
CHIFLEY RESEARCH CENTRE CONFERENCE
NATIONAL PRESS CLUB, CANBERRA
Pleased I could join you here this afternoon at the National Press Club, on Ngunnawal and Ngambri country –
Proud we can be the generation that gives First Nations people a Voice, and proud of the contribution the PM made today to this cause.
Thanks to Jacob Varghese for that kind introduction and for the support you and your firm Maurice Blackburn have shown for events like today’s and for the work you do in our communities.
To David Epstein and the Chifley Research Centre, thanks for getting us together at the beginning of the parliamentary year and for the opportunity to make a contribution today.
As someone who began as Chifley’s first full-time executive director ten years ago this month, it’s so satisfying to see the interest it is generating, and to see you all here participating.
2023 is going to be a big year, an important year, and the economy is going to be front and centre – dominated by global volatility, and by those pressures coming at us from around the world but felt around the kitchen table.
Inflation is the Government’s main economic focus – it was in our first Budget in October, and it will be in our second in May, as Katy Gallagher and I work closely with our colleagues to put it together.
The major priorities will be providing cost of living relief without adding to inflation; growing the economy in a more inclusive and more sustainable way; and repairing our Budget so we can fund what we value and cherish:
By that I mean strengthening Medicare; better pay and higher standards of aged care; bolstering our national security; combatting entrenched disadvantage; taking some of the sting out of electricity bills; and creating better chances for more people.
The Budget is an important part of our economic agenda this year but not the only part.
There’ll be a new Tax Expenditure Statement this month; we receive the RBA Review next month; there’ll be an Employment White Paper, an Intergenerational Report and a wellbeing framework later in the year; important steps on sustainable finance; a new focus for the Productivity Commission; work Stephen Jones and I are doing on crypto and payments; and work Julie Collins and I are doing on the Housing Accord.
But the point I want to make today is that it’s possible to maintain a focus on the pressures people are feeling now, advance a big agenda this year, and still sketch out a framework for the future – all at the same time.
That’s why I spent some late nights over the Christmas break writing a long-ish essay for The Monthly –
Because I wanted to make the point that for too long our politics has created two false choices:
Between the present and the future;
And between our economy and our society.
When it shouldn’t be beyond a country like ours, a people like us, a government like Anthony’s – to illuminate the path between the here and now and the horizon ahead, in a way that aligns our shared economic and social goals.
In other words, if we strengthen our economy, and we strengthen our institutions, we can strengthen our society and strengthen our democracy and keep faith with the PM’s words this morning, in that regard.
I wrote the essay because I believe the 2020s will be a defining decade for Australia.
And that our country can’t afford to waste this next decade like the conservatives wasted the last –
A decade defined by division in our society and mediocrity in our economy –
With stagnant wages, flatlining productivity and business investment, meagre growth and not enough to show for a trillion dollars in debt.
So let me recap here the major arguments in the essay (and I will spare you the Heraclitus this time!):
First, that three economic crises in 15 years have all been different but united by the vulnerabilities they created and by the world’s failure to learn enough from them.
Second, that our big challenge and our big chance is to better align our values with our social and economic goals.
We’ve made a start on this in areas like housing where we’re partnering with key players to promote greater investment – in a way that delivers strong returns for investors and our community.
Third, that we need to take advantage of some of the big shifts underway in our economy – the climate and energy transition, making technological change work for people not against them, and deepening and broadening our industrial base by ensuring capital flows to productive places, and into areas where we have an obvious advantage.
Again, we’ve made progress here with our ambitious climate change agenda, smart investments in skills and training, a Future Made in Australia, the development of our critical minerals strategy, and more.
Fourth, that we can modernise our economy with better informed and better designed markets, better cooperation and co-investment between the public and private sectors, and stronger institutions.
You can see that in our work on the National Reconstruction Fund, on the RBA and the PC, and on climate risk disclosure and sustainable finance –
Which is all about giving investors and businesses greater certainty to unlock more investment in cleaner, cheaper and more reliable energy – and is supported by co-investment in areas like transmission infrastructure.
And finally, that this approach will help build a stronger, more resilient and more adaptable economy that grows in more sustainable, more inclusive ways.
I’m pleased (and a bit surprised) with the level of engagement with the essay – it shows the effort has been worth it.
But it’s called a battle of ideas for a reason – by which I mean, it’s been willing!
We’ve had the usual hyperventilating from the usual suspects – some with such intensity it seemed they might spontaneously combust!
But I’m not too troubled – I’m relaxed and realistic about the commentary.
In most cases they’re responding to a dodgy caricature of the essay, not the essay itself.
Any objective observer would see that I’m not repudiating Hawke and Keating, but embracing them.
Not turning my back on markets, I call them a powerful and positive tool.
Not having a shot at business, but looking for new opportunities for collaboration and cooperation and imploring it to take a bigger, more constructive, more central role.
Not saying investor returns should be compromised, saying here’s a way to maximise them.
Not calling for the return of some clapped-out ideological model from the 1950s, it’s a throw-forward not a throw-back.
In fact, the ideas in the essay are not especially controversial.
They align well with the modern supply side economics being pursued by Janet Yellen in the United States.
And Martin Wolf of the Financial Times has just published a whole book last week on how the problems in our democracies and economies are intrinsically linked.
Wolf believes, as I do, that if we are to make progress, we need to be open to both policy and institutional change to promote the investment and innovation we need.
The kind which can revitalise our growth engine, lift living standards for more people and give us the kind of positive-sum politics we’re after.
Both internationally and in the investor circles I move in as Treasurer, the ideas laid out in the essay are mainstream.
They’re born out of contemporary necessity and corporate reality not ideological rigidity or doctrine.
The leftovers from the Morrison Government don’t get this – they’ve completely vacated the contest of ideas.
They are stuck in the past and scared of the future.
If they had their way, we’d have another decade of deliberate wage stagnation and wage suppression, of Australians falling further and further behind – nothing would make them happier.
But we are showing there’s a better way – in the fight against inflation and in the battle of ideas.
We are realistic about the political and economic challenges we face together in 2023 as we navigate the peril and polycrisis confronting us.
But we’re optimistic too.
Optimistic that we can find a place for real people and real communities in an unfolding story of national economic success, true to our values, and in ways which strengthen our society and strengthen our democracy as well.
In this defining decade, nothing could be more important.
Thanks, I look forward to the discussion – and to Katy’s contribution later this afternoon.