To realise Labor's founding ideals, we need reciprocity and economic reform

It is said that Ben Chifley, when asked about the best part of one of his trips to Europe, replied, "The sight of Bathurst as I rounded Brown's Hill".

First and foremost, Ben Chifley was a citizen of Bathurst. He believed in the value of localism, so much so that, even as Prime Minister of Australia, he continued to serve on the Abercrombie Shire Council. He believed in the importance of community and social solidarity.

Chifley also believed in economic aspiration and achievement, for himself and for the nation. It is true that Chifley did not have the benefit of a formal education in his childhood - indeed, he liked to say that he would have given a million pounds to have the educational opportunities of Dr Evatt - but Chifley was no unlettered hod-carrier.

Chifley had an extraordinary hunger for learning and self-help. As a young man he attended classes at the Workers' Educational Association and Bathurst Tech for four nights a week. He had books shipped from Sydney, reading Plutarch and Gibbons and subscribing to the Bathurst School of Arts, with its library of 20,000 volumes. Later, having worked as an engine driver, he lectured in technical subjects at the Railway Institute.

I regard Chifley's background as quintessentially Labor, by the standards of his time and mine. He was a Labor man because he was earthy but also ambitious. He was prepared to see politics as a career, not just for its private benefits but overwhelmingly as a means of serving the working people of this land.

We have got what Chifley wanted us to have: a better education than our parents and grandparents before us. And we are using it, as Chifley used his skills in public life, for the betterment of working people.

Courage of our convictions

Chifley gave his life to the Labor movement. He was a man of commitment, a man of conviction. That's what he meant by the light on the hill: Labor believes in social justice and we will always fight for our beliefs.

Without a structured set of beliefs a political party will simply fall over. It will lack the ballast and direction that comes from principled ideas. At the end of the day, politicians who believe in nothing are likely to do anything.

Too often since 1996 people have said to me: what are the differences between Labor and Liberal? Now the answers are clear:

• Health policy, we want to save Medicare and restore bulk-billing. Only Labor believes in public health care and without public health care there can be no Medicare.
• In education policy, we want to restore affordability and accessibility. The Liberals believe in a system with $150,000 university degrees. Labor believes in a different policy: one by which bright kids from public housing estates can get a good education, all the way to a higher education.
• On the environment, we want to ratify the Kyoto Protocol and save Australia's grand old river system through the Murray-Darling Riverbank.
• In telecommunications, the Government wants to sell off Telstra, while Labor believes the public interest is best served by majority public ownership.
• In economic policy, we believe in competitive capitalism: open and productive markets backed by high levels of public investment in education and training. The Coalition, by contrast, believes in crony capitalism, the sort of special deals and policy rorts we saw recently in the ethanol industry.
• In international affairs, we don't want a world in which one country has all the power. We want Australia to have an independent foreign policy: building a world based on power sharing and cooperation, a world that recognises the importance of the United States but also Asia, the European Union and the United Nations. Labor's foreign policy? It's made in Australia.
• Finally, we want to restore the public's trust and confidence in democracy itself. This is why Labor has announced an ambitious agenda for modernising Australia's constitution and political system. It's time for honesty and transparency in public life.

John Howard: he can't handle the truth. He finds it hard to be frank with the Australian people. There is always something he never tells us. From kids overboard, to the war in Iraq, to the ethanol scandal, to the true state of the Australian economy - there is always a missing piece to the puzzle.

Higher taxes and charges are forcing families deeper into debt. They are also taking away the incentive to work hard in our society. Nearly one million Australian families face effective marginal tax rates of 60 per cent or higher. That is, for every dollar of extra earnings, they lose at least 60 cents to the Government. The disincentives for low-income families are even worse. The harder people work, the more likely they are to fall into the top marginal tax rate of 48.5 per cent (for incomes over $62,500). Yet for the owners of companies and capital, paying more than 30 per cent is optional.

The Howard Government has knocked incentive in Australia as flat as a tack. It is punishing work, not rewarding it.

A something-for-something society

We need to create a something-for-something society, where the more people give the more they gain. And the more they gain, the more they give. This is reciprocity in action. If we don't look after each other as neighbours, as communities, as citizens, then what hope is there in a fast-changing and insecure world?

Politicians know how to build roads and hospitals, they know how to increase penalties and put police on the beat, but they have little to say about social relationships.

We need a new role for government, one that re-establishes the principle of reciprocity in society, one that brings people closer together in support of common interests and common causes. This is the role of government as a facilitator or enabler, offering incentives and rewards for people who do the right thing.

This is why reciprocity is so important: one rule for all Australians, whether rich or poor.

The right-thing revolution

What does this mean in practice? It means making work pay. It means tax relief for working families and reducing effective marginal tax rates. It also means a strong minimum wage and decent labour-market laws.

It means rewarding results in the education system. This is the goal of Labor's higher education policy: 20,000 extra university places, 20,000 extra TAFE places, without the need for upfront fees and higher debt. We also need to reward excellence in the teaching profession. Quality teaching is a passport out of poverty. It must be available to every poor student.

Australia needs an early childhood education program:

• A national campaign to encourage more parents to read to their children
• Retired teachers and community leaders working with parents to lift literacy and numeracy skills, making them more effective educators in the home; plus
• Increasing the number of qualified teachers in childcare centres and improving the availability of preschool education.

There are many more examples of the right-thing revolution but the policy I want to finish with is about our economic future.

The household-savings rate has fallen to an all-time low (minus one point two) while household debt has increased from $290 billion in 1996 to more than $670 billion today. Australia's economic growth rate has been placed on the credit card.

New policies are needed to lift household savings and break the cycle of deficit and debt. This is why Labor has announced a superannuation tax cut, to help working Australians grow their retirement savings and security.

The international experience has shown that poor families can save, as long as they receive the right incentives and support from government. This is the best way of breaking the poverty cycle: building self-esteem and financial success through the virtues of saving.

Labor's matched-savings-accounts program involves the creation of parallel savings accounts. In the first account, low-income families aim to reach a savings target over several years. Matching contributions from government and community groups are paid into a second account. Participants cannot access the second account unless they reach their initial savings target, that is, they help themselves upfront. This is a something-for-something policy.

The accounts can only be used for sound purposes, such as the education of children and home ownership - helping poor families accumulate a home deposit and build up a savings and credit record.

Opportunities for saving and owning assets should not be restricted to high-income earners. They should be universally available.

These goals would be instantly recognisable to Chifley and Curtin. Sure, our methods have changed but how else can a political party respond to changed circumstances? Our policies may be different but our goals have remained timeless.

We want to end poverty and disadvantage. We want to give all Australians decent prospects and opportunities in life. We want to build a society based on reciprocity and reward for effort. We still believe in social justice.