Brisbane 11 June 2013. It is a pleasure to be here in Queensland again, during an all-too-short break from the cold of Canberra’s winter and the heat of our last month of parliamentary sittings before the September election.

Today I will be talking to you about the proper role of governments in building jobs and growth. In particular, I will focus on the contrast between the approach of Federal Labor and the Queensland experience under the LNP Newman Government, because I think what has happened in this state gives us an indication of what would happen to the national economy if an Abbott Government is elected in September.

Put simply, it is not possible for a government to cut its way to growth.

It is not possible to create jobs by firing people.

And it is not possible to create a better state or country by ripping away services or much needed investment in education and infrastructure, which boost productivity and create prosperity in the long term.

Although economics is a subject of relevance to every minister in our government, macroeconomic policy is not a major part of the Attorney-General’s portfolio.  However, as Special Minister of State and Minister for the Public Service and Integrity I do have a particular interest in matters related to public sector employment, and it is in this capacity that I am addressing you today.

The Role of Government

It is ironic that many of the conservative politicians who are in government today – or who are feverishly striving to win government – are in the thrall of an ideology which holds that government is a burden on the community that elects it, and that the size and role of government should therefore be reduced as far as is possible.

The truth is that all democracies are founded on the contrary premise. Demos – the people, kratos – ‘rule’– is a doctrine that, at its most basic, holds that as the elected representative body of the people, government plays a fundamentally important role in furthering the public good.

Rejecting this basic doctrine, the hard right conservatives of today and their awkward political partners – the free market libertarians –often display an antipathy toward the institutions of state, and to those employed by the state to serve the public good.

These laissez faire ideologues fail to understand that there is more to good governance than ‘getting out of the way’, and that a key role of Government is to facilitate the success of private industry through investment in the education and infrastructure necessary to nurture growth.  Some of that infrastructure is physical, such as roads, rail, ports, and their 21^st century equivalent – the National Broadband Network.  And some of the infrastructure we provide as government is institutional. For example, our court system and agencies of law enforcement ensure that ours is a nation under the protection of the rule of law.  This means that property rights are respected, that contracts are enforceable, that misleading and deceptive conduct in commerce is prohibited, and a host of other rules necessary for successful free enterprise are firmly in place – and enforced.

However, as Special Minister of State, the issue that I am particularly concerned about in this context is the attacks we have been seeing on the public service as an institution, and on public servants in particular.

It is common to hear politicians on the right attacking the alleged ‘fat cats’ of the public service. While I entirely agree that it is important to manage the public service so that it provides an efficient and effective service to our community, the attacks on those who work in our public service are often predicated on hostility to the idea of public service itself.

This hostility is deeply misguided. Public servants are integral to the proper functioning of our society, and to our long term economic growth.

Public servants educate our children. Public servants nurse our sick. Public servants make our communities secure.

For many of those who chose a career in the public service, theirs is more than a job. It is a professional calling that they undertake with a commitment to the public good and service to the nation.

In Queensland in particular, the critical role of government and of hard working public servants– both state and federal – has been emphasised in the response to the natural disasters that have been battering this state with particular ferocity.  The Herculean task of responding to natural disasters, both during the emergency itself and during the long rebuilding period afterwards, clearly requires that the resources and energies of the community are marshalled to the task.  And it is mostly public servants who are at the front line of our emergency response.

Unfortunately Campbell Newman’s thinking and his first Budget embodies all the failures of the conservative ideological stance that attacks the size and role of government.

Mr Newman’s first Budget was clearly a disaster.

The savage cuts to jobs and frontline services, particularly in health and education, smashed confidence in the Queensland economy, as well as causing personal anguish to the 14,000 people he threw out of work.  Consumer confidence has still not recovered, and despite a pipeline of investment in Queensland worth nearly $80 billion, in the past 12 months job creation in Queensland has been the weakest of all mainland states.

A significant cause of the damage to the Queensland economy over the last year has been the Newman Governments’ slash-and-burn approach to the public service in this state.  Whether it is providing support to those affected by natural disasters, medical care to the ill, or security to the wider community, Queensland’s public servants play an important role in the life – and economy – of this state.  Cutting the jobs of public servants inflicts great hardship on those workers and their families, and the loss of their earnings and consumption of goods and services in turn impacts other parts of the Queensland economy.

In the European Union, the idea that government should contract in the face of hard economic times has recently taken form in what has been called, somewhat hopefully, policies of ‘expansionary austerity.’ I say ‘hopefully’ because while the slashing of public service jobs and government spending have certainly produced austerity in the EU, they have spectacularly failed to produce economic expansion. To the contrary, the austerity measures imposed in England, Spain and elsewhere in the EU have resulted in rapidly increasing unemployment and decreasing economic growth.

The failure of these austerity measures to stave off recession in the EU since the Global Financial Crisis have been painfully, and predictably, clear. Yet in its first Budget, as the failures of the European austerity measures were being splashed across papers around the world, the government of Campbell Newman embraced exactly the same approach.  Motivated by ideological belief rather than a rational economic analysis of what was in the best interest of Queensland, the Newman Government chose to slash jobs and spending in this state, with the same predictably calamitous results as we have seen elsewhere in the world.

Ultimately, austerity measures such as those imposed by the Newman Government are self-defeating.  Slashing government services and jobs inflicts pain on those who are sacked, has serious negative impacts on the wider economy, retards growth, undermines the quality of life of those dependent on those services, and threatens to reduce, rather than to increase, government revenue in the future.

And Tony Abbott has already made promises – for what they are worth – that should he win Government in September, he will be making his own cuts to Queensland’s economy and confidence through measures such as axing of the Schoolkids Bonus and cutting the aged pension and assistance to families.

More significantly for our national economy, Mr Abbott appears determined to follow in Campbell Newman’s footsteps with an attack on employment in the Commonwealth public sector.  Labor has been working to improve efficiencies in the Australian Public Service, and the Government has already made substantial and responsible savings through increased administrative efficiency of more than $14 billion since December 2007, while still continuing to deliver the services Australian families rely on.

But while Labor is committed to making careful savings to improve efficiencies without compromising service delivery, last month Mr Abbott gave a typically imprecise but chilling statement with respect to his plan to slash at least 12,000 jobs from the Australian Public Service across the country.  Mr Abbott declared that “The fact that under this government there has been a very slight reduction in numbers demonstrates that it can be done and it will be done much better and much more effectively under a Coalition government.” If implemented, these cuts would not only impact the national economy, but would damage regional communities wherever the cuts were made.

And yet a number of statements from Abbott’s frontbenchers suggest that the Coalition would not stop at slashing 12,000 jobs, with the figure of 20,000 often mentioned.  For example, in March this year Mr Abbott declared: “We are talking about cutting the public service … We will trim the public service by at least 12,000 because we don't need the extra 20,000 Commonwealth public sector employees on top of those that we had back in 2007.”

We have seen how Campbell Newman’s attack on the public service has adversely impacted the economy and the people of Queensland. It is appalling that Mr Abbott is planning, despite the abject failure of these policies in Queensland, to do the same thing at a national level if he is given the chance.

Labor’s approach to promoting jobs and growth

While the federal Opposition have been running a deeply dishonest but sadly effective campaign to talk down the Australian economy, destroying confidence and engendering fear about our future, the truth is that far from being in some kind of crisis, or ‘budget emergency’, the Australian economy is now among the strongest in the world.

Federal Labor acted decisively to keep our economy strong through the Global Financial Crisis.  When economic activity in the private sector contracts, governments can maintain jobs and growth by counteracting that contraction with spending in the public sphere.

Early this year The Economist magazine ranked Australia as the second-best country on Earth to be born in, just behind Switzerland. And two weeks ago, Australia was ranked the best developed country in the world to live in under the OECD’s ‘Better Life Index’ – the third year in a row that we have been awarded this ranking. This Index is particularly revealing, as it measures matters that go beyond the crude metric of raw GDP per capita, including matters such as health, community, education, civic engagement, safety, and environment.  Australia’s truly exceptional standing under all of these criteria is a testament to the success of our Labor Government in delivering efficiency and productivity, while at the same time upholding the values that we believe are also fundamental to building a good life for the Australian people, such as equity, social justice, health, security, a sense of community and an effective rule of law.

Despite the Global Financial Crisis we have maintained strong economic growth, low unemployment, low interest rates and low inflation. And these excellent economic indicators are reflected in the fact that Australia now has AAA credit status from the three world rating agencies for the first time, one of only 8 countries in the world that does.   Our economy has grown by 13 per cent since 2007, even though the impact of the Global Financial Crisis is ongoing, and a spate of natural disasters has affected many parts of Australia since then, particularly Queensland.

I am sorry to repeat economic facts that I imagine you are all well aware of as journalists, but with the fear-mongering Opposition claiming that Australia is in a ‘budget emergency’ of some kind being hammered in their daily messaging, emphasising the truth of our nation’s economic strength is an unfortunate necessity.

Long-term investments in our future

In addition to a responsible economic approach that maintains jobs and growth in the short term, Labor has been investing in our long term prosperity. I realise that phrases such as ‘investing in our future’ are now well-worn, but I hope that does not detract from their important meaning.

One of the foundations of our long-term economic prosperity is our education system.  Through education our children can reach their full potential, live full and rewarding lives, and in turn, enrich our nation.  An economic analysis of the value of education to our country carried out by PwC last year found that if we were to improve our schools to world’s best practice standards, equivalent to schools in countries like Finland, the benefit to our economy from a generation passing through those schools would be in the vicinity of 3.6 trillion dollars over the lifetime of the generation born in 2012.

And the counter-factual is also true: failing to lift our educational performance would significantly reduce our national wealth over the coming decades, particularly as educational standards rise in other nations. This kind of economic analysis underpins Labor’s commitment to the National Plan for School Improvement, an initiative that exemplifies the kind of long term investment in our prosperity that Federal Labor is committed to.

In this regard, it is disappointing to see that Mr Newman is still refusing to sign up to the National Plan for School Improvement. This means that the Newman Government is putting at risk $3.8 billion in Commonwealth funding for Queensland schools, which would deliver an average of $2.2 million extra for every school in the state over the next six years. Fortunately, it is not too late for the Premier to sign up to the National Plan for School Improvement – and I hope that his government does so, putting the long-term educational interests of Queensland’s children and the financial future of this state ahead of the short-term political interests of the Liberal Party.

Another major investment in our long-term prosperity is embodied in our improvements to Australia’s superannuation system.  National superannuation was introduced by the Keating Government, and our scheme is now recognised as one of the best systems in the world.  Labor’s measures to increase compulsory superannuation contributions from 9 to 12 per cent from July 2013 to 2019 will build the retirement savings of working Australians, lessening the burden on public finances in future years.

Infrastructure is another important area for government investment, and we have almost doubled per capita spending on infrastructure compared to the Howard Government, with some $60 billion committed to projects identified by Infrastructure Australia as important to building our prosperity.

The Government’s National Broadband Network is one piece of critically important infrastructure, putting in place the foundations for Australia’s new digital economy.

Labor is making other major investments in our long-term prosperity that go beyond pure economics, such as DisabilityCare Australia. The extension of our social safety net to those suffering from disabilities is expensive.  But it is an embodiment of the basic values of fairness and equity for which Labor stands, and it is a mark of our character as a nation that the Australian people have embraced this historic reform.

Conclusion

The question for those in public life must not be, as the conservatives and their brains trust at the Institute of Public Affairs seem to believe, “How can we diminish the national government of the Australian people?”  The questions we ask as Labor politicians concern how we can continue the noble endeavour of making Australia a more harmonious, a more prosperous, a more secure, a more egalitarian, a more just nation.

We should grasp the opportunities that our current prosperity provides to invest in our future, and to realise our more lofty ideals.

We should disprove the sometimes-stated thesis that Australia handles adversity well, but prosperity badly.

As the experience here in Queensland and abroad demonstrates, a more prosperous and fair society will not be created by cutting services, slashing investments in infrastructure and vilifying public servants.

Such a society can only be created by careful investment in the future, in services such as health and education, and in infrastructure.

I am proud to be a member of a government with a demonstrated commitment to making these investments for the prosperity of our nation.

Thank you.