1 August 2019
Thank you, Deputy Speaker. I acknowledge the traditional owners of the land on which we meet and I pay my respects to their elders past, present and emerging. I add my wish to those who have spoken before me that the 46th Parliament can achieve overdue meaningful constitutional recognition for this nation’s Indigenous peoples.
During my inaugural speech in the Victorian parliament, my then six-month-old daughter Carina left the chamber in tears. She is yet to indicate which policy position she found the most objectionable! Carina, who is here today, is now five — and may last longer this morning.
In preparing this speech, I’ve tried to write for two people. The first is Carina in 30 years’ time. When Carina downloads this speech in 2050, her AI assistant will inform her that it has been accessed seven times since it was delivered and that she is the first person to download it other than the author or his mother! Although I can even now see her roll her eyes at my attempted quips, hopefully the values I profess and the aspirations that I outline inspire her to press the ‘like’ button.
The second person is the younger me, when I joined the Australian Labor Party 30 years ago. I enter this place less animated by idealism and ideology than 30 years ago and more focused on using experience, consensus and realism to achieve practical sustainable benefits for the people in the community I now represent. I hope that this speech reflects sufficient foresight to resonate with Carina in 30 years’ time and that it is also ambitious enough to satisfy my earlier self who started the long journey to this place with such hope.
I have the great honour of being the first member for the new seat of Fraser — named after the 22nd Prime Minister of Australia, Malcolm Fraser. While naming a Labor-leaning seat after a Liberal Prime Minister might appear somewhat incongruous, it quickly became apparent to me that there is a meaningful connection. The Vietnamese community is a large, growing and vibrant part of the Fraser community, constituting over 30,000 people. Many in that community still remember with great respect Malcolm Fraser’s generosity after the arrival of refugees following the war in their country. One woman told me she named her son Fraser and took him to be photographed with the then Prime Minister. She is now an ALP stalwart but still remembers with great fondness Malcolm Fraser signing that photo with her son.
The division of Fraser reflects Australia’s multicultural tradition at its best. In addition to a thriving Vietnamese-Australian community, there are many other large communities drawn from the four corners of the globe now proudly calling Fraser — and Australia — home. On Harmony Day earlier this year, I visited a primary school in Sunshine West, with an enrolment of fewer than 200 students, displaying flags from 45 countries, all represented among the student body. Those students’ journeys to that school reflect my own family’s experience.
I was born in Italy. To any High Court justices in the gallery, I renounced my citizenship long ago. My mother, who is in the gallery today, was travelling in Europe following success at Teachers College. She met my father and the rest, as they say, is history. When my father and mother emigrated to Australia in 1970, they had nothing but a suitcase and an 18-month-old son who, before each mealtime, was already honing his vocal chords for future stints in question time.
Much as political families are team efforts, my father’s success in completing high school equivalence at night while working multiple jobs and becoming a nurse reflected both his hard work and my mother’s tenacious support of him. She provided this support while raising my sister and me and working full-time as a teacher. My mother and father created a happy and fulfilling life for my sister and me and, in doing so, also contributed greatly to the broader community.
This is a story repeated thousands of times across Fraser. Australia is not unique in having a large foreign-born population, but I don’t believe that any other country is better at knitting together disparate communities.
Reflecting on the privilege of being the first person to represent the new seat of Fraser made me think about my own journey to this place. I was inspired to join the Labor Party by the transformational reforms of the Hawke-Keating governments. These reforms spanned the full gamut, including major social, economic and environmental policies. The economic reforms of that era made our economy more competitive and outward looking. These policies weren’t slavish gestures to economic abstractions. They were motivated by outcomes: higher incomes, better quality of life, access to services, and security in retirement.
In outlining my vision for the next wave of economic reform, I believe we must craft a new agenda for new times — one that is as unrestricted by comparisons with this earlier era as it is proud of that legacy. I believe that, at its core, future reform should balance reward and risk.
First, reward: with the right policy settings, our nation could reap huge rewards. Many economic reforms over recent decades created productivity growth by tearing down comfortable yet unsustainable decades-old arrangements and unleashing competition, creativity and responsiveness to price signals. We should continue to embrace this agenda.
We also have an opportunity to add to it through effective, targeted regulation that achieves co-ordination and co-operation in ways that have only recently become possible. Our modern, interconnected society is fuelled by technological advances across many fields, including computing and telecommunications. However, much of the innovation we experience on a day-to-day level depends not just on increasing the number of diodes we can squeeze on to a pinhead, but also on advances in fields such as economics and psychology — and usually without us realising it.
For example, ride-sharing applications rely on remarkable telecommunications and computing technology, and combine these almost instantaneously with optimisation and coordination algorithms to achieve vastly improved outcomes for consumers. Recent public sector policy successes offer a glimpse into the benefits that flow from governments embracing this convergence of innovation occurring across seemingly disparate fields.
In Victoria last year, in coordination with some of the world’s top market design experts, the state government created a market for bus routes for a special school. At this school, students with autism were travelling for up to four hours every day, and some also had to change buses. This was terribly stressful for students and their families and also disrupted students’ learning time. However, after a route optimisation and a separate purpose-designed auction for each of seven bus routes, travel times were reduced by over 50 per cent with no students required to change buses. And the cost to government fell.
One mother said she was a ‘big fan’, and stated that her son’s travel times:
… have been cut from 90 minutes each way to 30 minutes and that he is much, much happier and his behaviours are much more manageable both at school and at home.
This is an example of using modern technology not for profit but for the public good.
Markets like this could be used to benefit the students of every regional and rural school in Australia. Markets like this could improve access to train stations, shopping centres and healthcare providers in the outer suburbs of every capital city and in regional cities, places just like Fraser. This is where public transport options are often limited and force people into their cars or into isolation. Markets like this, which harness the confluence of emerging technology and regulation, could drive positive change that reaches every part of society.
Even now, governments in Australia and overseas are developing modern markets that dramatically improve outcomes in relation to biosecurity, environmental regeneration, educational placements, matching organ transplants with donors and many other life-changing applications.
The next wave of microeconomic reform should simultaneously harness cooperation and coordination through communication technology; competition through efficient markets with rules designed for consumers’ benefit; service differentiation through big data with consumer controls; and optimisation through advances in computing.
Of course, not all areas of service delivery are the direct responsibility of the Commonwealth but, by creating appropriate incentives and regulation that creates more opportunities for transparent and informed choice, the next wave of productivity enhancing reform could benefit the public, private and not-for-profit sectors alike. And that is the grand trifecta.
Why do incremental improvements in productivity matter so much for our quality of life and, more importantly, for our children’s quality of life?
Albert Einstein once described compound interest as the eighth wonder of the world. Long-run economic growth is like compound interest. It has a transformative power that almost defies comprehension. Even a slight change in economic growth, if sustained over time, makes a huge difference in living standards. Australia’s per capita GDP growth has grown at around two per cent per annum on average since World War II. Even though this ranks highly for an advanced economy, our rate of per capita GDP growth has slipped in recent years.
We are currently experiencing the steepest decline in living standards since the early 1980s. This is also reflected in our multifactor productivity, which has stagnated since 2000, having grown strongly in preceding decades. To give a simple example: if our GDP grew at an average of 0.5 per cent per annum for the next 30 years, GDP per capita would be 16 per cent higher in 2050 than it is today. If it grew at two per cent per annum for those 30 years, it would be 81 per cent higher. This is the marvel that Einstein described.
We must ensure that the Australia of 2050, when it looks back on 2019, knows that it didn’t miss the opportunity for economic development and the better living standards, social outcomes and environmental protections that come with it. I’m very optimistic about Australia’s prospects for growth.
The technological and regulatory advances, however, that could drive that growth worry many people who, rightly, fear that they might be disadvantaged by the disruption that change brings. The flipside of reward is risk, and risk is not borne equally among all Australians.
Our understanding of risk has been deepened by the work of Robert Shiller, who won the Nobel prize for economics in 2013 for his research that included many practical policy applications. Among Shiller’s lesser accolades was teaching me macroeconomics when I studied for a PhD at Yale. His approach has shaped my thinking on policy ever since.
Risk pooling, the idea that we are better off working together and sharing risks, has been central to social interactions ever since humans started living together. In comparatively recent times, the modern welfare state represents a bold expansion of risk management practices. While the welfare state is partly motivated by the need to provide some services on a universal basis, such as education and health, it is also designed to protect those suffering unexpected loss.
It is no accident that three of the key pieces of legislation underpinning Bismarck’s revolutionary safety net included the word ‘insurance’ in the title: the Health Insurance Bill of 1883, the Accident Insurance Bill of 1884 and the Old Age and Disability Insurance Bill of 1889. Similarly, Labor Prime Minister Andrew Fisher’s age pension and FDR’s New Deal framed the provision of unemployment and retirement benefits as insurance schemes.
Australia’s most significant policy reform of the past 30 years, the National Disability Insurance Scheme, extended risk management to an area where government already provided some support but where that support was ‘underfunded, unfair, fragmented and inefficient’. The NDIS is universalist in spirit, but it is also designed to deliver the advantages of better risk management.
I believe we need to extend risk management further. Much of the frustration and disillusionment with political, economic and social systems that has been expressed so vocally through social media and at the ballot box in recent years is driven by a feeling that the risks and benefits of technological change and globalisation are not being shared equitably.
Most of us benefit almost imperceptibly from globalisation and technological change: we casually buy a fancier phone each year or a well-priced bottle of red from an exotic location. But for some people — for many people — the changes wrought by automation, by trade and by organisational restructuring bring uncertainty and loss. These people may experience lower incomes, greater job and financial insecurity, and possibly redundancy and long-term unemployment. These people may have mortgages. These people may have dependants. These people may have insufficient savings for retirement. This is the lived experience confirmed by research that shows a hollowing of Australia’s middle class in recent decades.
Globalisation, deindustrialisation and an expansion of the so-called knowledge economy have driven rapid growth in the employment share of high-skill jobs. At the same time, medium-skill jobs susceptible to automation have fallen significantly as a share of employment. The share of low-skill jobs has not changed greatly, but the quality of many of those jobs has worsened, thanks to the ‘exponential growth in the relatively unregulated gig economy’ and the weakened bargaining power of many workers.
We as democratic representatives, and especially as social democrats, must listen to recent expressions of discontent aimed at our political and social institutions. We must avoid the trap of dismissing these concerns as ‘populism’, unworthy of serious consideration.
I believe that one of the great lessons of recent elections here and abroad is that we ignore the human cost of change at our peril, no matter our party allegiance. Like many advanced economies, we have some programs to assist with people’s vulnerability to this change. But much like pre-NDIS supports, I believe that these are ‘underfunded, unfair, fragmented and inefficient’. We need a better way.
I propose an approach that could be described as productivity insurance. As a nation, we should commit to sharing a proportion of the benefits of productivity growth with those most adversely affected by change. A new, risk-management-oriented approach could be built around several core principles.
First, existing programs should be coordinated to create a holistic and lifelong approach for each individual. I again think about Carina and her generation in 2050. Her generation will change careers far more frequently than mine did. Our society will have to invest far more in skills, training and education, particularly for mid-career transitions. As a nation, we cannot afford to be glib about lifelong training and learning.
Second, I believe that assistance should be targeted. Some people cope well with economic disruption and may thrive on the opportunities it creates. Many won’t, and government should target assistance to those who are most at risk of long-term unemployment and underemployment.
Finally, each person’s individual path needs to be practical and sustainable. We can’t comfort people losing well-paid jobs in manufacturing, the resources sector or the energy sector with the vague notion that they might get a job in a totally unrelated field, thousands of kilometres away, and expect them to be satisfied.
People don’t generally expect government to protect them from all uncertainty. But, when government rightly assumes some responsibility for helping individuals and communities cope with change, people will only have faith in that assistance if they believe that their personal transition is both realistic and fair.
Fraser is home to the historic Harvester decision. It was a world-leading judgement that set a benchmark for how we think about fair rates of pay. More than a century later, we need to build on this fundamentally humane approach so that our social safety net includes protection not just for how much people are paid but also for how they are provided assistance in transitioning from one career to another.
A key challenge for our nation is to find the right balance between reward and risk. With better risk management, people will be in a position to take on more risk, and that can drive productivity growth. In turn, with better risk management, we will share the benefits of that productivity growth more fairly.
I conclude by thanking the many people who made it possible for me to be here today — first, the hundreds of ALP members in the Fraser electorate. These people are the lifeblood of the party. Many thanks also to my incredibly dedicated campaign team, who put in a 24/7 effort, come rain, hail or shine. Special mention is due to my campaign manager, Jake Cripps.
The Fraser community constantly reinforces to me the legacy of the four members that precede me. I acknowledge Bill Shorten, Tim Watts, Maria Vamvakinou and Brendan O’Connor. I also thank the state MPs who so ably represent the Fraser community: Natalie Suleyman, Marlene Kairouz, Katie Hall and Natalie Hutchins.
In addition to acknowledging the member for Maribyrnong’s outstanding representation of almost half of Fraser, I thank Bill Shorten for the privilege of working in his office on some of the great Labor reforms of recent times. In a crowded field of achievements, one stands out. Success has many parents, but the NDIS is the brainchild of one MP.
I also acknowledge Jacinta Collins, who gave me my first opportunity in this building and was a great role model on many fronts: her integrity, her policy rigour and her courage.
My association with the labour movement started over 30 years ago when I worked at Big W when at high school, joining the SDA and then becoming a shop steward. The SDA taught me the importance and impact of collective action and has supported me in innumerable ways since those days on the shop floor. I thank Michael Donovan for his support over many years, and my good friends Senator Raff Ciccone and Lizzie Blandthorn.
I also acknowledge the union movement as a whole, which is so critical to underpinning social justice and delivering equitable economic outcomes in this country. An occasionally disruptive and unruly young man I worked alongside at Big W and attended school with was called Dave Smith — or should I say, Mr Speaker, to preserve order, the member for Bean. Dave and another high school classmate, Stuart, joined the ALP slightly before me, and Dave entered the other place around a year ago.
Given that I am giving my first speech 20 minutes before Dave, perhaps after three decades, I am finally catching up. You have both been role models to me throughout my life, and I thank you for a lifetime of friendship. I also thank my good friends Jules and Paul, who have always supported my political career, even when they were highly sceptical of my policy positions.
Thanks to my parents for a lifetime of support, even when the inner workings of politics often appear inexplicable; to my incredible sister, a remarkable mother and decorated police officer, and an inspiration to all who know and love you; and to John, who enthusiastically shares my wonkish interest in policy.
Lastly and mostly I thank Sarah and Carina. Sarah and I met while volunteering together tying ALP balloons to the arms of unsuspecting small children in the Kmart car park in Boronia, in Melbourne’s outer suburbs. We have not yet made a pilgrimage back to this place that is so easy to underestimate for its romantic potential. Since working to a common cause that day, Sarah and I have maintained a unity of purpose: sharing our lives and, now, building a family.
Sarah and Carina, you are both my motivation for being here and also the reason I desperately want to leave at the end of each sitting week. I hope that the tension between me wanting to be in this chamber and wanting to return home helps to make me a better father to Carina in 2019 and able to contribute positively to the world that she will live in over the coming decades.
First Speech: Dr Daniel Mulino MP – Parliament of Australia (aph.gov.au)
1 August 2019