For sixty five years, CEDA and your members have been part of the big economic conversations shaping our nation.
In 1960 bureaucrat, economist and academic Sir Douglas Copeland formed CEDA. His life story from New Zealand to Tasmania to Melbourne and eventually the forming of the Economic Society of Australia and New Zealand and then this organisation is fascinating.
And it was Western Australia’s only Prime Minister, John Curtin, who placed Sir Douglas at the heart of Australia’s economic policy during World War II. From 1941 to 1945 Sir Douglas served as Economic Consultant to the Prime Minister. Developing Curtin’s National Economic Plan, uniform national income tax, large scale entry of women into the paid workforce, the post war world of international trade at Bretton Woods, and an objective of full employment.
After this minor effort he was appointed Australia’s Minister to China and then inaugural vice-chancellor of ANU. Australia now convenes an Economic Reform Roundtable where many of Australia's best and brightest who will advise us were educated at that very institution. We do so in what the Prime Minister clearly described as “the most challenging strategic circumstances since the Second World War, both in our region and indeed around the world.”
This is all to say that the need for reform is always there. But the circumstances we face now, like when Sir Douglas was advising Prime Minister Curtin, demand that we keep our eyes clearly on the opportunities and challenges of the circumstances in which Australia finds itself.
Economic Reform Roundtable
Australia has a solid economic foundation. Three years of continuous economic growth. Emerging from the global spike in inflation stronger than almost any other advanced economy.
One of only two G20 countries to record uninterrupted economic growth last year.
Inflation starting with a 2. An unemployment rate in the low 4s.
Therefore we must focus on bigger, longer term structural challenges in our economy.
We have been crystal clear about our three economic priorities for this term:
- Boosting productivity.
- Strengthening economic resilience, and
- Improving budget sustainability.
This is how we will lift living standards. How we will deliver better social outcomes for the Australian people. We seek to build a way forward for our nation. And do so with a big and broad base of support.
So the roundtable will include leading voices from business, unions, civil society, and our key economic institutions. We want them to engage in dialogue. Then we want to build consensus on our vision for Australia’s economic future.
Ensuring a clear direction of economic reform for this term of government and beyond.
So we can, as the Prime Minister has said:
“build a more secure and prosperous future, the Australian way — with no one held back and no-one left behind.”
Productivity
Productivity is first of the three key areas the roundtable will focus on.
We have placed productivity at the heart of our second term in government. Because improving living standards, enhancing competitiveness, and fostering prosperity benefits every Australian.
The challenges Australia faces in productivity have been more than a decade in the making.
Turning things around will take time. But we are taking steps in the right direction.
In our first term, we advanced Australia’s productivity agenda by streamlining and strengthening approval processes in foreign investment, energy and environment. Introducing the biggest changes to merger laws in 50 years. Abolishing around 500 nuisance tariffs. Creating a $900 million National Productivity Fund to incentivise states and territories to implement reforms that promote competition. Introducing the Capacity Investment Scheme to accelerate investment in renewable energy generation and storage.
This scheme is supporting 654 megawatt hours of energy right here in WA.
Now, we are progressing further reforms, including banning non-compete clauses for most workers. This is expected to add five billion dollars a year to our economy. It is estimated this could increase wages by up to 4 per cent.
Our new national licensing scheme for electrical occupations could become a template for national licensing of other occupations. Driving innovation and building new opportunities in artificial intelligence.
According to the AI Adoption Tracker, released by Minister Ayres in June this year, more Australian businesses are using artificial intelligence. Powering their operations and enhancing their productivity. Forty-one per cent of small and medium enterprises are currently adopting AI – an increase of 5% on the previous quarter. Twenty-two per cent of businesses are seeing improvements in decision-making speed and 18% highlighting optimised productivity.
The Tracker is providing a real-time picture of the AI landscape in Australia, as our Government progresses our work on AI. Attracting more investment to deepen the capital base of our economy.
Reducing red tape where we can, without lowering standards.
Importantly, as the Treasurer said in his Budget speech in March:
“Our plan for productivity growth doesn’t mean making Australians work longer for less.”
Instead, it is about empowering people, and making the most of our human capital. By training workers in new technologies, unlocking innovation, boosting competition and making it easier to start and run a business.
Our plan is for an economy where growth, wages and productivity rise together. In other words, an economy that works for people, not people working for the economy.
Government has an important role in this. To get the settings right, ensure appropriate regulation, and make targeted interventions in areas like energy and housing.
But boosting productivity is not something we can, or should, tackle alone. It requires a national effort. So businesses need to step up, too — and invest in new technologies, more efficient operations, and skills. So we are looking to you — the businesses represented in this room, and the millions of others across the country.
You have a role to play. Your ideas matter. And we want you to help drive progress, and share in the benefits.
Economic resilience
Our second priority is strengthening economic resilience. We are in volatile and uncertain times for the global economy.
The 2020s have already seen a global pandemic, global inflation, and the threat of a global trade war. And we are only halfway through this pivotal decade. Australia is neither uniquely impacted, nor immune, from these pressures. But we are among the best placed to navigate them.
Our Future Made in Australia plan is all about Australia’s economic resilience. Making more things here. Building a more competitive and diversified economy.
As a result we will boost our self-reliance and safeguard against future global volatility.
How will we do this in practice? By focusing our investments and efforts in areas where we have a comparative advantage.
Renewable energy is a prime example. Australia has abundant wind, solar, hydrogen, and other renewable energy resources. We are close to key markets, and our major trading partners have expressed a significant appetite for importing our resources.
We have a highly-skilled workforce, and world-class research and development capabilities. This gives us the opportunity to become an indispensable part of the global net zero economy. Through our Future Made in Australia agenda, we are encouraging and facilitating the private sector investment needed to make this happen.
Green metals are another area of focus. They are pivotal to global decarbonisation efforts. And it is estimated that green iron, steel, alumina and aluminium could be worth up to $122 billion a year to Australia’s economy by 2040. Our $1 billion Green Iron Investment Fund is supporting early-mover green iron projects and unlocking private investment at scale.
We also recently announced a $19.8 million grant to develop the production of low emissions iron using Pilbara iron ore in Kwinana. West Australians are experts at making and exporting high-quality metals. Producing low-emissions iron will give us yet another selling point in global markets.
As the Prime Minister said in China:
'Steelmaking value chains are also responsible for 7 to 9 per cent of global emissions. Achieving the goals of the Paris Agreement will require the decarbonising of steel value chains, presenting an opportunity for Australia and China to progress our long-term economic interests.'
Australia is also in a strong position to supply the critical minerals needed for solar panels, wind turbines, electric vehicle batteries, and other clean energy technology. Some of the world’s largest reserves of lithium, cobalt and rare earths are right here. And global demand for critical minerals like these is expected to increase some 350 per cent by 2040.
But our goal is not to just place them on a ship. We must capture more value onshore by refining and processing them here. This will develop new industries. Add more value to our resources.
Strengthen our supply chain resilience.
Already, some $30 billion worth of projects have been proposed or are in development. In areas like green hydrogen, critical minerals, and clean energy manufacturing.
We are determined to build on this progress. So we can create a more diversified and resilient economy, powered by renewables. So we can create more secure, well-paid jobs. And so Australians can be primary beneficiaries of the global clean energy transition.
At the same time, the Government is also investing in artificial intelligence and other critical technologies. We are determined to develop the right framework and make the right investments in skills and training. To seize the opportunities and manage the risks of AI.
More than 1,500 AI companies already play a part in Australia’s AI ecosystem. We all know that number is increasing month by month. We are also growing our data centre infrastructure — and last year, Australia’s data centre capacity ranked in the top globally. Our local talent and technological know how means we’re also attracting pioneering developers in all kinds of AI tools and applications.
So we are consulting widely on how we can build on our comparative advantage, drive investment, and scale up our capability. More broadly, against a backdrop of global volatility, it is imperative that we make our economy as resilient as possible. By maximising our comparative advantages. Diversifying our trade. Shoring up our supply chains. And ultimately, building a Future Made in Australia.
Budget sustainability
Last but not least is budget sustainability.
Since coming to office Labor has made the budget more sustainable. Billions of dollars in improvements from the bloated Budget we inherited in 2022.
We have restrained spending. Found savings without impacting social services. We have made progress on longer-term spending pressures. Including structural improvements to the Budget across the NDIS, interest costs, and aged care.
All of this has made a helpful contribution to budget sustainability. We know that, while important, surpluses, savings and a massive turnaround in the budget are not an end in themselves. Rather, it is about how they take pressure off inflation. Build a buffer against global economic uncertainty and free up funds to invest more in the things we value as a government and society.
Because a strong economy allows us to build a better society. A society that provides equal opportunities for women. Works to close the gap in opportunities for Aboriginal and Torres Strait Islander Australians. Provides care and support for Australians with a disability. Honours and supports our service personnel and veterans. And delivers better living standards for people today, and future generations.
Conclusion
When I addressed CEDA last October, I ended my remarks by saying:
“Politics is all about choices — and the choices we make now will define us for this century.”
I believe that even more today. We must not miss our moment. This is a defining decade for Australia. It sets the course for our future as a productive, dynamic and equitable country — with a quality of life that continues to be the envy of the world.
Thank you to all of you in this room for everything you are doing to achieve this goal. The upcoming roundtable is a genuine attempt to find common ground. Whether or not you are a formal participant, we want you involved in the conversation.
We have an open mind. We are looking for good ideas. I encourage everyone in this discussion to take the same approach as the government. Thank you very much.