Future challenges for the Australian Nation: the changing Australian society

First among the future challenges is the need for an ongoing response to a change of historic proportions within our society – the ageing of our population.

Australia is no different from most other developed countries in facing an unprecedented ageing of its population. By the time today’s toddlers are starting their own families, the ratio of working-age Australians to retired Australians would have fallen from more than five to one as it is today to less than three to one.

This development demands many responses.

Most critically, it requires a future revenue base that will not only grow with the economy so that we can fund the services needed by an ageing population but also in a way which does not impose an incentive-sapping burden on working-age Australians through ever-increasing income tax.

That is one of the major reasons why we introduced a goods and services tax. That is why the GST’s maintenance is essential to our economic and social future.

History will judge that the government’s introduction of the goods and services tax has done more to prepare our economy for the demands of an ageing population than any other single tool of public policy.

We recognised the shortcomings of Australia’s old indirect tax base. We understood that unless there was change, the retirement of baby boomers in coming years meant that an ever-increasing tax burden would fall on Australian workers through higher rates of personal income tax.

Those people who argue that the GST should be rolled back must be held accountable – they are, in effect, arguing to consign our children to ever higher rates of personal income tax.

The first step in ensuring the long-term viability of the health system and its ability to cope with the demands of an ageing population has been taken by our promotion of choice in health care and greater usage of the private system. The health reforms have enabled millions more Australians to take more responsibility for their own health and medical care and, in doing so, eased the growing pressure arising from an over-reliance on the public system.

Our vastly stronger fiscal position has increased our capacity not only to support but also reinforce the social security safety net via the pension system which is so crucial for retired Australians.

The massive repayment of Labor’s debt has provided $4 billion a year in interest savings which can now be invested into areas of social need.

The absence of the government from financial markets has helped lower interest rates. The earlier repayment of mortgages which this has facilitated will allow Australians to boost their capacity to save more and build up their assets for retirement.

We will also encourage the wider spread of employee share ownership which builds on the reduction of capital gains tax and encourages asset acquisition. This will also foster a more balanced approach to retirement planning.

Superannuation is at the heart of the retirement plans of millions of Australians. Governments must always ensure that it operates simply and as far as possible in a fair and efficient manner.

Pursuit of this goal must be balanced against the need to avoid endless changes which have been an often unwelcome feature of the operation of the system over the past 20 years.

The impact of our changing demographics will accelerate in the next few years.

A continuation of the more balanced immigration program fostered by this government, with its much greater emphasis on skills, will be part of our response to the challenge of an ageing population.

The proposition, however, that the impact of an ageing population on our economy can be reversed by a sharply increased migrant intake over the next few years is not supported by critical analysis.

For social as well as economic reasons, our response must include greater use of the skills and experience of the increasing number of Australians over 55 – Australia’s ‘gold collar’ workers. Expert opinion agrees that even if only 10 per cent of people aged between 55 and 70 choose to remain in the workforce, on either a full-time or part-time basis, it would have a significant effect upon our national per capita productivity.

For this to happen, labour markets will need to be sufficiently flexible to suit their needs and respond to the choices they wish to make.

In recent years, we have driven industrial relations reforms to promote this kind of flexibility and choice in the labour market. In coming years, I intend to explore every opportunity to bring about even greater cultural change within the Australian workplace.

In contrast, the ALP’s stated aim to return to a highly prescriptive, regulated labour market would diminish the capacity of older individual Australian workers to choose when they wish to retire, the hours they wish to work and the specific rewards they want to receive. And it would diminish the capacity of Australian business and industry to maintain the level of success and productivity so evident in recent years and that would leave all Australians worse off.

Balance between work and family

Intertwined with this need for a workforce structurally equipped to meet the future is the issue of the quality of working lives.

We all know the importance that individuals place on their family and social relationships and I, for one, do not aspire to an Australia where our growing wealth has been built at the expense of our families and communities.

The key to ensuring that this does not happen is choice – the greater choice of individuals in respect to their working conditions, the ability to leave the workforce but re-enter it later on, the means for a parent to remain at home caring for children themselves if that is their wish, and in areas such as the provision of more sophisticated and flexible childcare arrangements.

The return of more than $2 billion a year to in family tax benefits to more than 2 million families and $12 billion a year in income tax cuts to them and others in the general community has been a great step forward.

As importantly, we’ll continue to pursue an industrial relations model that entrenches an individual’s right to negotiate for conditions that suit his or her own circumstances and needs while ensuring proper standards are protected.

In this area also, a crucial start has been made. Hundreds of thousands of individual workplace agreements and certified agreements have been negotiated. Agreements that Labor has vowed to tear up should they come to office, forcing these workers back to either unregistered common law contracts, collective agreements negotiated by union bosses or more lowly-paid awards.

It’s estimated that three quarters of all workplace agreements and certified agreements contain at least one family-friendly provision. Provisions that include flexible start and finish times to coincide with school hours, purchasing additional leave to spend more time with children, carers’ and paternity leave, job share arrangements, the ability to work from home, community service leave and structured career breaks.

It is glaringly obvious that centralised wage structures are simply too slow to respond to modern workplace needs – both from the employer and employees’ perspective. By relying on precedent, they’re invariably suited to the needs of the majority and by entrenching standardisation, they diminish individual choice.

A future Coalition government will remain committed to pursuing greater flexibility in the workplace. Offering choices to workers does not have to compromise the productivity of Australian business. In fact, balanced lives will contribute best to Australia’s industries in the 21^st century.

Expanding childcare choice has been a high priority of the government, with more than 150,000 funded childcare places created since we won office. Initiatives within the Stronger Families and Communities package have targeted those who traditionally had difficulty accessing childcare such as shift-workers, families with sick children and Australians in regional areas. Last financial year, this government allocated close to $1.4 billion to supporting the childcare system and the latest CPI figures show that cost of childcare has dropped by nearly nine per cent since last July.

In short, supporting the needs of working families and ensuring a balance between their responsibilities will require a whole of government response. In a third term, we can make great progress in promoting choice and opportunity within the workplace while strengthening families and the communities in which they live.

Sustainability

Balance and quality are not just goals for our society, for our working and family lives but also vitally important to our environment. Australia’s current and future success is the combination of its people’s talent and the land’s health and capacity to sustain a prosperous population – both must be nurtured.

Environmental issues should never be dealt with as separate from the profitability and sustainability of our industries and the quality of life we enjoy and hope to pass on to our children. The reality is that sustainability is an expression that increasingly denotes the inter-related health and wellbeing of both the environment and the economy.

A whole-of-government response is vital – the success to date and ongoing potential of both the Natural Heritage Trust, renewed in the budget by a further $1 billion commitment, and the Action Plan on Salinity have convinced me of that. I’ve found that there is great cause for optimism – both in regard to the ability of new technologies to solve once intractable problems and the willingness of communities and impassioned individuals to become involved.

The technological and scientific advances being made would have been unimaginable even a decade ago and increasingly profitable businesses and industries will be marked by their efficient use of scarce natural resources. Australia already has a dynamic and vibrant environmental industry sector, ready to provide solutions. The success of this sector, over coming years, will have enormous implications for Australia, both in its local application and because of its export potential.

There is every reason to believe that these advances can also reinvigorate some of our regional areas and potentially open up vast new opportunities for settlement and industrial development. For instance, new salt- and drought-resistant crops have the potential to revolutionise agriculture.

We have a long-term commitment to regional areas and recognise that, in many ways, those communities have been more practically aware of the consequences of land and water degradation than many others. As the stewards of vast tracts of the Australian landscape, they’ll also play a critical part in the environmental repair so desperately needed.

Gains in areas such as biodiversity and energy must be made, but at the heart of this agenda in the time ahead will be water.

Salinity and water quality issues are seriously affecting the sustainability of Australia’s agricultural production, the conservation of biological diversity and the viability of our infrastructure and regional communities.

In a dry continent like ours, with an economy that derives $28.5 billion in export income each year from the land, with the drinking water of millions of Australians potentially affected in years to come – there is no more pressing issue than tackling water quality and salinity issues. In many cases, water-related issues are as pressing in the cities as they are in regional Australia.

Importantly, co-operative effort between governments at all levels, industry sectors and local communities, pulling together, will be needed to fast-track the behavioural and structural changes required for the future.

This is already the essence of our approach. The Natural Heritage Trust gives resources and accountability directly to local communities to fix local problems and this emphasis on community ownership is also the foundation of our Action Plan on Salinity.

In the process the property rights of individual Australians must be fully respected. The right to compensation must be included in our policy prescriptions.

Conclusion

At the last election I argued for policies that would leave Australia a better country, that would make Australia a stronger country, that would give Australia a capacity to compete more effectively in the outside world.

And we’ve delivered. Whatever the self-serving doomsayers may say, Australia enters the twenty-first century more secure, more prosperous, more respected, with its people possessing greater potential than ever before in its history. This nation is clearly heading in the right direction.

The major policy announcements in recent months, in defence, in innovation, in welfare, and in environmental repair will be pursued with the vigour and determination for which this government is well known. Their successful implementation coupled with the safeguarding of low interest rates, low inflation, high productivity growth and the repayment of Labor’s debt will be key features of our third term in office.