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The Reform Agenda Series:
A Conversation with the PM, 4 August 2011

Thank you to all those who joined us in Melbourne at Corrs Chambers Westgarth for A Conversation with the Prime Minister, Julia Gillard.

It was an exciting event for Per Capita, as the Prime Minster launched our Reform Agenda Series. The Prime Minister paid tribute to the work of Per Capita, keeping progressive issues on the agenda, something we will continue to do through this series.

The Prime Minister's speech focused on the economic policy challenges in the coming years, saying these are "rich, complex, promising and challenging years". While decades of reform and a well-managed stimulus meant Australia was able to "dodge a bullet in the GFC", we are “not immune to the uncertainties and risk in the global outlook”. The Prime Minister particularly emphasised the policy impact of rising life expectancy, noting that, for the first time, there are now two senior generations, and that the younger senior generation, the baby boomers, is the healthiest, best resourced and best educated to ever stop full-time work. The Prime Minister was clear, though, that she doesn’t view this as a "problem", but rather sees it as extra time to spend with friends, nieces, nephews and grandchildren.

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Address to Per Capita: The Reform Agenda Series, Melbourne

Thank you Josh. Can I acknowledge also Per Capita’s Board, Fellows and friends, as well as Corrs, our hosts.

It’s good to be with the Per Capita circle again this morning.

And here with all of you, I do want to pay particular tribute to David Hetherington’s thoughtful, progressive leadership, which has driven Per Capita’s growing success for four years now.

In 2007, in your post-election Memo to a Progressive Prime Minister, you reminded us:

Successful government demands strategic vision, policy experimentation, embrace of risk and most importantly, an articulation of values.

And in 2010 you wrote to me:

A successful government delivers a small number of outstanding reforms each term.

If you are able to kick-start productivity, unlock 'hard' and 'soft' infrastructure investment, and put a price on carbon, you will have played your part in a proud Australian tradition of progressive reform
.

Good advice at the time – and a year on from the election, a measure I’m happy to be tested against.

Because we’ve achieved agreement for a carbon price, to cut carbon pollution and build a clean energy economy

Inked a once-in-a-generation reform to health financing, unlocking the quintessential "soft infrastructure" investment.

Passed the flood levy, to pay for rebuilding the nation’s devastated "hard infrastructure".

And the long-term push to get productivity growth going again informs every area of our reform.

From cutting taxes on low-paid workers and improving training and incentive to get into work, integrating enduring Labor values and the economy’s contemporary needs – through to the structural separation of Telstra, a real “white whale” which has escaped many a reformer’s harpoon in the past.

While doing what needs to be done. A good solution, a regional solution, to the difficult problem of people smuggling.

So David, if you’re adding a one year report card to your Memo, I’m sure you’ll be kind!

But the real test for Government is not resolving issues on our to-do list or getting good reviews from commentators.

I don’t seek elegant policy solutions for their own sake: I seek better Australian lives.

And I also seek to make enduring changes, changes which will command the support of the community as a whole in the years to come.

So for policy to make a difference now and for it to endure for the future it must be grounded in a deep and sympathetic appreciation of the way our people live.

This is why the reform agenda for the Government I lead is alert to the hope, but also the uncertainty, felt by many Australians about the course of future events.

We know the fundamentals of the Australian economy are strong – very strong.

The Treasurer made some similar observations when he spoke at Per Capita following this year’s Budget.

Growing employment, low inflation, interest rates still well below those when we came to office four years ago.

Low public debt, a stable and liquid financial sector, $1.3 trillion under management in our super funds.

A strong pipeline of mining investment.

And we are in the right part of the world at the right time.

Ours is an advanced and educated economy at the outset of a new Asia-Pacific century – poised for long-term prosperity through trade with the new Asia-Pacific middle class.

The long-term story is one of long-term strength and I believe Australians know this.

But we are not immune to the uncertainties and risk in the global outlook – there are patchwork pressures in our own economy – the natural disasters of the summer have cost the economy more than we anticipated even in their immediate aftermath.

Australians sense these things too and are making adjustments in their own behaviour.

After the global financial crisis, there’s a new understanding of economic fragility: if we dodged a bullet in the GFC, perhaps it’s no surprise that when a car backfires, people duck again.

As the real economy globalises, so does economic and political sentiment.

We can see similar trends, indeed more sharply expressed, at work throughout the English-speaking world, in southern Europe and elsewhere.

And while the fundamentals of the economy remain strong, it’s also clear things aren’t as they were in the 2000s.

In the last decade, personal debt rose as people spent more than they earned but enjoyed the lifestyle benefits.

We had a long period of rising asset prices and rising superannuation returns.

Ten Budgets in a row starting in 2001 cut income tax.

In the last term of the former Government, revenues were so high and grew so fast that the Commonwealth Treasury had its own group who joked their job as the Budget was put to bed was to dump out the cash and keep the surplus down.

No more.

Decades of reform and a well-managed stimulus did mean no descent into recession – but with that, no soft gains in recovery.

Utility bills are the new petrol prices.

Decades of infrastructure underinvestment deliver not just the reality of increased costs but a ‘sticker shock’ which many suggest is having a disproportionate impact on sentiment and behaviour.

Australians are conscious of the importance of China’s demand for our resources and concerned about the malaise of the American economy.

They understand that our strong dollar is a true mixed blessing, both a reflection of strength and a cost to many sectors.

And from the Cabinet table to the kitchen table, fiscal consolidation is the order of the day.

This economic story – rich in opportunity, complex in detail, promising for the long term, challenging in the present – is of a piece with Australians’ wider experience of our times.

Consider our national security.

We have a “continent for a nation” with an enviable diplomatic and military strength, in a strong alliance with the strongest democracy, but we recognise the new threats of terrorism, rogue states and cyber attack, while the old threat, nation-state rivalry, never went away.

And it is rightly sobering to the national mood when Australians are dying for us in uniform overseas.

We had our summer of sorrow, as natural disasters here, in New Zealand and in Japan transfixed us and left us troubled about how violent and unpredictable our world can be.

Yes, these are rich and complex, promising and challenging years.

And as for individuals, so for nations:

Faced with challenge and change, we can pull the doona over our heads and leave the blinds closed all day, or we can get up and get our boots on.

I know what I’ll do.

Because we’ve got a chance now to do something pretty amazing: To take a once in 150 year mining investment boom and make of it a once in 150 year opportunity boom.

Offering a good education for every kid, a good job for every family, good choices and true security for every older Australian.

And also providing more information and choice – creating options for communities, citizens, parents – empowering them to insist on better, to insist on productive change.

My Child, My School, My Skills ... My Unis, My Hospital.

Helping mortgageors to switch banks.

Empowering regional communities to direct the various instruments of three levels of government in the one place they call their own.

Consider the way our Minerals Resource Rent Tax will fund future savings.

Funding contributions to 10 million sovereign wealth funds in which 10 million Australians make super investment choices of their own.

Not dumping cash into one big sovereign wealth fund controlled by the eminent and the grey.

Or the way we’ll cut carbon pollution through a well designed market, aggregating competitive responses on the energy supply side and price-driven consumer choices.

Not a giant taxpayer funded slush fund to pay polluters to do the right thing.

You’ll see the same approach over time as we work though new ways to extend the fair go to disabled Australians.

As we consider the best polices to provide reassurance to people with disability, and those who love and care for them.

It’s right to aspire to be a country where disability services are based on people’s need for those services, not the lottery of what kind of disability they have, how they acquired it or what postcode they live in.

Where parents of children with disability know that their children will be safe, well caredfor and happy when they grow too old to provide that care themselves.

And where Australians with disability have good choices in their own hands – taking away the barriers to finding work, to being involved and active in their communities.

I believe seizing opportunity and offering choice lies at the heart of progressive responses to the emerging social reality of having two senior generations.

The ageing of our population is a big new change all over the developed world and I want to discuss it at some length today.

A cause of uncertainty – people see it in their own lives and know in part what it means for them.

But at the same time, they wonder what it means for the nation.

And an issue people do identify – and do nominate as a big challenge.

Not least, because Australia’s former conservative Government saw and said that this was a “problem”.

Now I don’t think the “burden” theory of ageing is right at all – nor do I think we have a “problem” of “too many old people” – or a “solution” which lies somewhere in the population policy menu.

I see a change: one driven by wonderful good things, by last century’s amazing collective achievements, victories over disease and squalor and want, with rising life expectancy for all.

People are living longer than ever before.

When Australian Labor introduced the aged pension and I won’t tell you what the conservatives said about the aged pension in 1909 but here’s a hint, it started with n and rhymed with “go” when Australian Labor introduced the aged pension, life expectancy – 57 years – was lower than the age for the pension itself – which was 65.

In the century since, life expectancy has gone up twenty years.

We hear that so often that we can race over the thought.

So for a moment, pause and think about it: twenty more years in your own life.

All the books that you can read, the time to teach nieces and nephews to sing or knit, the time to work with wood or to fish with grandchildren, the extra day to reconcile with your parents or partner or friend.

Time to see the Bulldogs win another flag.

Years of productive work, years of volunteering and caring, learning and leisure and years with loved ones too.

It’s an incredible change when you think about it.

Longer lives, more older Australians, this will never be a bad thing to me.

And as people live longer, we’ll have two senior generations.

A new group of people are retiring, while the already retired are living longer too.

Over the next forty years, the over 65 population goes from one in six Australians to one in four – a big change in our lives.

But the over 85 population will go from one in two hundred Australians to one in twenty – almost a new way of living.

For now, those two senior generations in practice are the parents of the baby boomers, and the boomers themselves.

Think of the 90 year old woman with the 65 year old son.

And that younger senior generation is the healthiest, best resourced and best educated ever to stop full-time work.

For the first time, there’ll be more part-pensioners than pensioners by 2030 – which tells us both what a significant shift there is to more affluent ageing but also the limits of that shift.

That private wealth will create new choices – while the state will retain a vital role in guaranteeing income and security for all.

Not everyone will have a Winnebago or a trip around the world.

Many will work hard: some will share caring responsibilities for frail parents and young grandchildren at the same time.

We will not do away with hard times or the long responsibilities of life, but ageing will change.

And the baby boomers do bridge a historic change in human life.

Their grandparents were born in the nineteenth century and their grandchildren are born in the twenty first.

Even fifteen years ago, retired Australians had lived through a period defined by Depression and war, today, people retiring whose life was defined by post-war prosperity and the sexual revolution.

They’re going to want different things.

Not just security, they’re going to want choice.

They changed what it meant to be young and they changed what it meant to form families and adult relationships and they’ll change what it means to be old in just the same way.

These two senior generations are with us now: we are living this way already.

It’s a big change, based on good things we have done together, creating a new opportunity in turn.

An opportunity to make choice and security the hallmarks of every older Australian’s life.

Where individuals, couples, families, will want new ways to make decisions for themselves – while no older Australian should be left behind.

This goal is implicit in many measures the Government has delivered since 2007.

Lifting the pension rate and lifting super, while lifting the pension age from 65 to 67 between 2017 and 2023.

Cutting effective tax on older workers who get the pension through the Work Bonus.

Broadband for Seniors, an amazingly popular grassroots initiative to introduce older Australians to the internet.

Almost 100 000 older Australians have used the popular Broadband for Seniors kiosks.

More than a third had never used a computer before, and almost half had never used the internet.

It’s a very good thing.

We’re also seeking new ideas.

Wayne Swan has appointed an Advisory Panel on the Economic Potential of Senior Australians, chaired by Everald Compton, to push along solutions as well as to sell the benefits of a seniors’ workforce to sceptical employers.

The Panel will examine how we can best harness the life experiences and intellectual capital of the older members of our community.

We need to look at our older Australians as an asset to be valued, rather than as a problem to be solved.

Next week, I’ll release the Productivity Commission’s final report on Caring for Older Australians.

We asked the Commission to make recommendations, not with a view to the next five years, but the next twenty, in one of the important areas that arise from two senior generations: caring for Australians as they age.

What I want to emphasise as we begin that debate – not just the debate on the Productivity Commission’s report but the debate about the wider implications of our two senior generations – is the values this Government will bring to judging the proposals.

Choice for each older Australian – and security for all older Australians.

New opportunities – while no one is left behind.

And we’ll apply some practical principles to new ideas as well.

First, older Australians have earned the right to be able to access the care and support that is appropriate to their needs, when they need it.

Second, older Australians deserve greater choice and control over their care arrangements than the system currently gives them.

And third, funding arrangements for aged care must be fair and they must be sustainable – both for older Australians themselves, and for the broader community.

I believe we can seize this opportunity of our ageing society – this new reality of the two senior generations – to build choice and security into the lives of every older Australian.

I know we can do this because of the things we have done before.

I think of what Australians did together when we created the aged pension in 1909.

The very meaning of ageing, what it meant to get older, changed, changing how people felt about their own future, by offering better standards of living, offering freedom from want.

I think of what Australians did together when we created universal superannuation in the 1980s.

The very meaning of ageing changed again, changing how people prepared for their future, by offering better standards of living again but offering new choices as well.

And I look forward to the things we will do together in coming years to seize the opportunity of the two senior generations.

Years when what it means to age will change again.

As a generation retires which changed everything it touched, we can be sure that what it means to age will never be the same.

Yet we can also be sure that the values we share will be our guide.

Just as they have been through the great changes of the past.

Opportunity for every older Australian.

Choice for each older Australian.

Security for all older Australians.

And leaving no one behind.