The Australian/Melbourne Institute Conference
After the Crisis
Hard reform for a better future
Melbourne University
5th November 2009
Introduction
Let me begin by acknowledging the traditional owners of the land on which we meet.
It is a pleasure to be able to join you today. I won’t attempt to acknowledge the many colleagues and experts in the room individually. The Melbourne Institute and The Australian coming together to focus on genuinely long term issues is very welcome.
We live in an time of unparalleled uncertainty and anticipation.
Of course, seen rapid change has occurred before, from the industrial revolution to the era of post-war growth and the ‘Sixties with all its freedoms and disruptions.
If you’re in your mid forties or older, think of the Australia you knew in the early ‘Eighties and compare how much more prosperous, culturally diverse, healthy, educated and globally connected we are now.
The past, they say, is another country. And the early 1980s now seem so different that they are the subject of pop culture nostalgia, though it still seems too painful to revisit our fashion mistakes of the time.
In the 1980s, Australian governments began an era of reform to increase our prosperity through education, a social wage, market liberalisation and globalisation.
Towards the end of that reform process, its effects were multiplied by the minerals boom thanks to the growth of the nations of the Asia-Pacific rim.
Luck played a part in this story, but luck is only part of the story.
Largely, we made our own luck.
The question now is, after a deep shock to the global financial system, can this run of success last?
I believe the answer is yes, but only with dedication to a new era of reform.
When I was sworn in as Deputy Prime Minister less than two years ago, with my responsibilities for developing our human capital, I inherited an education system going backwards and a “too hard” basket where major reform projects gathered dust.
We have seen a sharp debate this year about whether the Coalition Government never had reform zeal or whether, over their time in office, they ossified and lost their desire to reform.
And I am sure Paul Kelly and Kevin Rudd aren’t done with that debate yet.
But the view from my in tray is clear. The Coalition Government lacked the drive to reform because it lacked a clear vision of why reform was necessary.
Long term reform is difficult work – hard to get right, hard to convince people of its worth because it involves uncertainty, disruption and upfront investment.
For the Coalition, too often it was easier to ride the short term wave, whether political or economic, and make easy promises to the punters.
When it did implement reform, it looked to the past for inspiration, not the future. It squandered its fast-diminishing political capital fighting the union bogey of the 1980s through Work Choices. And it did this while denying the very existence of the real reform challenges of the future. Challenges like:
- tackling climate change,
- reforming and investing in the enablers of productivity growth - education, broadband, hard infrastructure and better regulation,
- confronting the consequences of ageing for Australian society and the economy, including for services and most importantly health,
- modernising the nation’s governance, including new ways of working with and listening to citizens, communities, State, Territory and local governments and;
- addressing social exclusion by both demanding and supporting greater economic and social participation among marginalised Australians.
The Rudd Government was elected in 2007 because Australians wanted more action for the future than the Coalition were delivering.
The previous Government sought to bank the benefits of globalisation without taking responsibility for the stewardship needed to sustain prosperity and extend its reach to all Australians.
As an alternative, we spoke to the Australian people about actively building a better future together.
In less than two years of government we have embarked on, and delivered, reform to do just that.
Crisis and opportunity
Of course, when we were elected, a Global Economic Recession was not widely predicted.
I will not list our actions in response to that crisis or to debate their merit in detail. We see plenty of that in the daily newspapers.
What I will say is that our actions are consistent with the long term reform priorities that the Government had already established.
We were driven by the risks that people would lose their livelihoods, that skills and capital would be destroyed, that social and economic divisions would be further widened.
I will also not mechanically list all of the Government’s actions, investments and reforms in addressing those five challenges of the future so neglected by our predecessors – climate change, productivity improvement, ageing, modernising government and social exclusion.
But I am intending to reflect on the results of two years of hard reform in education and workplace relations.
And I will outline the next steps to be taken in reform to improve skills and productivity.
Beyond the days of dust and decay
Given the policy challenges I have outlined, the core of our strategy should be clear.
It is to broaden the economic and social participation of Australians, across the lifecourse and across the whole population, while deepening their education and skills.
Doing this effectively will increase the resilience of Australians, their families and communities.
It will help to reduce the future costs of ageing and social dysfunction.
And it will equip Australians to thrive in a changing economic and environmental landscape.
But doing this effectively requires us to deliver hard reform.
Let me take you back almost two years to give you a sense of the dust and decay I found when first sworn in.
In early childhood development we were firmly at the back of the class in the OECD.
In school outcomes, international testing showed Aussie kids were slipping down world rankings and too many poor Aussie kids were being left behind.
Schooling reforms that should be crucial for better learning outcomes were debated in the media. But nothing was actually happening.
Nothing was happening on developing a national curriculum, in part because the whole idea had become a political plaything in the hands of the Liberal Party’s culture warriors, who shouted about supposed Maoists on curriculum boards rather than lifting the quality of what children learned in schools.
Transparency in school reporting was given a bad name by the Liberal Party’s simplistic determination to produce a list telling you that North Shore Sydney schools got better results than schools in the nation’s poorest suburbs and then to do nothing about the poor schools.
Merit based pay for teachers was given a bad name by the Liberal Party floating unbelievably stupid ideas like correlating teacher pay with raw student scores, meaning each teacher in those North Shore schools could expect a pay rise while each teacher in those poorer schools would lose out.
At the same time, businesses cried out for skilled labour while reform and investment in vocational education and training stagnated and too little was done to assure quality.
Every year, we saw the spectre of appropriately qualified Australians denied university entrance because of artificial government caps on the number of places.
Public investment in universities fell away.
Country and disadvantaged young people missed out because of a student financing system bedeviled by rorts and exploited by some of Australia’s wealthiest families.
When it came to the regulatory structures, there were too many examples of Australia being a nation in name only but not in reality.
National curriculum was just one example. In the “too hard” basket were also award modernisation, occupational health and safety laws and a national workplace relations system.
Sorting out the too hard basket
Let’s look at what has happened to that too hard basket over the last two years.
Next July you will be able to read the national curriculum in the four core subjects of English, History, Maths and Science.
Grammar is back. The reading wars are over, with a proper emphasis on phonics. Teaching of this curriculum will begin in 2011 while the rest of the national curriculum is being developed.
Award modernisation will soon be completed, with around 150 new modern, simple national awards joining the ten national employment standards as the safety net on 1 January 2010. They will replace the inherited mess of more than 4,000 industrial instruments and the divisions of Work Choices.
Model occupational health and safety laws are out for consultation now and I remain committed to seeing this reform through, so that by the end of this year we have national agreement to legislating these model laws around the country.
In ending Work Choices we have also fixed the red tape nightmare which saw more than 100,000 agreements stuck in a slow-moving processing queue and decent employers having no way of knowing whether they paying properly.
I believe we will see all States except Western Australia agree to a national workplace relations system for the private sector this year, helping end the confusion for some of our smallest businesses.
This is hard reform being delivered.
Reforms that proved too hard for the previous Government. And yes, reforms that have loud critics who command column inches in The Australian newspaper.
But I recognize that you can’t sort methodically through the nation’s too hard basket and enact reforms that have proven too hard for a quarter of a century without squeals from those opposed to change or those who represent particular interests.
Delivering the education revolution
Hard reform is being delivered in our education revolution.
After almost two years of transformative change and literally millions of words written, today I want to leave you with the two powerful ideas driving our education revolution.
Powerful idea number one – for early childhood and schools, our reforms are all about the kids.
The Liberal Party lost nearly twelve long years in debates for the adults – the history wars, the reading wars, exacerbating the historic divisions between public and private, preening in the pages of The Australian.
Meanwhile, Australia’s children only get one go at school.
I am taking a different approach.
If a reform is going to make a positive difference to the learning outcomes and lives of Australian children, then we will do it. It may upset, discomfort or stress a lot of adults but our focus will remain on the kids.
Powerful idea number two – for vocational education and training, universities and the workplaces of the future, our reforms are about building a better future for all of us by enabling a better future for each of us.
They are about enabling adults, younger and older, from richer and poorer backgrounds, to get the skills and opportunities needed for the nation to prosper and innovate, to lead the world in environmental sustainability, cultural richness, fairness and social inclusion.
In early childhood we are enabling universal access to pre-school.
In December this year we will have the first information from the Australian Early Development Index, giving us the first ever clear view of children’s development as they reach school age and the communities most at risk of children being left behind. This information can drive new efforts to assist those children and communities.
In December this year we aim to have the Council of Australian Governments agree to new quality standards for child care. It has already agreed the nation’s first early years childhood development strategy and early learning framework.
In schools, the reforms have been hard fought for.
In the first months of next year, for the first time ever you will be able to access information on Australian schools which shows achievement in national testing, Year 12 attainment, attendance, the numbers of staff and you’ll be able to compare one school’s result with other local schools and with schools around the nation that serve similar student populations.
This information will drive sophisticated national and local debate about education.
Underperformance and failure will no longer be hidden and tolerated. Our best efforts will be needed to make a difference and we will be ready to respond with new reforms and resources.
New reforms like Teach for Australia, which will also see the first of our cohort of high achieving graduates making a difference in disadvantaged schools.
New reforms like enabling our best teachers to be paid six figure salaries to teach in the schools where they are needed most.
New reforms and resources for disadvantaged schools to improve, for example through extended school hours models like the one proposed by Noel Pearson in Cape York.
Our reforms – transparency, new curriculum, better teaching, empowered school leadership, new resources and actions to address underperformance and failure – partner with our capital improvements to deliver the education revolution.
Principals, teachers, parents and children around the country know what we also know: learning environments and learning technologies matter. This why we are delivering computers, connections, new libraries, classrooms and Trade Training Centres.
Our hard reform extends to the most important changes in Australian universities since the Dawkins reforms of the 1980s.
To drive excellence, equity and growth we are uncapping places, lifting attainment, driving new partnerships between disadvantaged schools and universities and better targeting student income support.
Many universities are responding positively to our higher education reform agenda: Southern Cross, La Trobe and Monash for example, have indicated they wish to undertake significant growth.
I expect to see universities around the nation expand and compete to better serve the communities who have been left out of higher education.
Skills and Training – The Education Revolution Continues
In skills and training, the Rudd Government has already begun new reform and new investment.
Our Productivity Places Program provided an immediate injection of new training places which became even more vital during the economic downturn.
Our response to the crisis includes major programs to support apprenticeship numbers through the downturn.
Our capital injections into TAFE and adult and community education are addressing years of neglect.
But we need profound reform, because the landscape we inherited was littered with variable quality, unreformed governance and insufficient investment in the future.
As in other areas of education, that reform must broaden participation, lift quality and update the content of training to meet future needs.
We can already foresee enormous workforce demand for skills in everything from social care to engineering.
To meet the challenge of a more knowledge-intensive society and raise productivity, we have to lift quality and participation, through hard reform where necessary.
Vocational Education and Training in this country is a $6.4 billion industry, with close to 5,000 providers charging students almost a billion dollars a year .
More than 1.7 million students and thousands of Australian businesses have a stake.
Growth in VET products and providers has occurred at a cracking pace.
A national training system
Yet for all that growth has not created a truly national training system of consistently high quality, in part because the Coalition Government failed to regulate and reform.
Providers have been able to enter the market without sufficiently stringent checks on quality and reliability.
So we are acting to re-register providers of vocational education to overseas students and deal with the issues of quality and governance that have emerged in that sector.
But building a truly national system requires more than fixing past failures.
So we are also building a national regulatory framework to lift quality overall and improve the alignment between courses, institutions and quality standards across the whole tertiary sector.
Better national regulation will unlock key data about the performance of providers, the value of qualifications and the quality of teaching to help students make more informed choices.
This approach is strongly backed by industry, as expressed through the recent joint AiG-ACCI-ACTU statement on national VET regulation.
I expect training Ministers meeting in Canberra later this month to enthusiastically endorse consistent national regulation of the skills and training sector.
We need a national system to provide for the range and depth of skills to underpin economic recovery.
As a further down payment on that national system, the Government will seek to develop stronger, more enduring partnerships with employers.
That is why I am announcing today that the Australian Government will expand the National Enterprise stream of the Productivity Places Program.
Last year the government piloted Enterprise Based Productivity Places, which help firms to improve their productivity by co-investing in employees and enabling them to undertake training leading to Certificate 3 to Advanced Diploma level qualifications.
The initial pilot supported 1200 workers and showed considerable unmet demand. Today I am announcing that we will build on its success through a commitment of $25 million, supporting up to 11,000 workers.
Industry will be involved in planning, delivering and co-funding this effort.
Small and medium-sized enterprises will be able to participate. All eleven Industry Skills Councils will be involved in delivering the scheme.
I believe this is an important direction for the future..
Green skills
Adapting successfully to climate change also means re-equipping and re-skilling millions of Australians over the next two decades.
So we are now finalising a National Green Skills Agreement between the Commonwealth and the States and Territories to update Training Packages and develop new standards of sustainability practice and teaching.
The response of the training sector to this challenge will be a test of its true flexibility. This is not a time for delay or obstruction or excuses.
I expect that all green skill gaps will be identified by the end of March next year and that the Training Packages will have been revised and in use by the end of 2010.
Conclusion: beyond a two speed economy
Emerging from the current global crisis with a world-leading economic performance would be rightly seen as a major national achievement.
As the Australian economy recovers, we must continue to focus on the long term horizon, just as we did when we were first elected.
Global demand will continue to create a stream of opportunities for this nation.
But whether we seize the opportunities depends on whether we can engage and mobilise the whole population to improve our productivity and reduce social costs by also improving our resilience.
Without proactive reform, the risk that quickly emerges is of a two speed economy.
The immediate effect of economic downturn is to exacerbate problems that already existed: lost opportunities for people on the edges of the labour market, greater negative consequences for those with fewer skills, higher unemployment in regions where jobs were already more scarce.
Despite our encouraging performance, these effects are evident in Australia over the last year.
The risk is that recovery and opportunity return more slowly to those Australians who are already disadvantaged and that past failure to convert potential into productivity becomes a long term drag on national prosperity.
A strong, fair society will always need diverse sectors and diverse talents, as I said, from social care to mining.
But we must avoid a scenario where sectors like minerals which face high global demand are held back by a lack of skilled workers, while significant numbers of Australians remain unable to achieve their aspirations or their potential because they do not have the skills or the opportunities to take part.
A Labor Government’s role is to undertake the hard reform in ways which will benefit the whole nation by supporting all Australians.
At the core of this agenda for a stronger, fairer Australia is a strategy to lift the skills, achievement and productivity of Australians everywhere.
That is the agenda that we will continue to pursue.
Thank you.