It is a pleasure to be here with the Whitlam Institute and the University of Western Sydney.

I am delighted to be here at the Whitlam Institute for a number of reasons.  First, the emergence of Institutes such as this one act as important conduits in a democracy.  We live in the age of the sound bite aimed at the 6 o’clock news and I welcome the opportunity to engage in a more considered discussion of the issues that face us as a state and nation. 

One of the concerning features of modern democracies is that we are losing the ability to have informed cross party discussions, to focus on our common values rather than our differences. It is to our detriment that partisan approaches not collective minds often consider the issues that matter.

This Institute, I hope will in coming years, take an increased interest in State issues and help all of us raise the academic foundation of policy considerations – change the ways of old. The sad reality is that a win in Macquarie Street is often claimed for a good story on the evening news or a photo in a paper. Quite frankly we need more and my hope is as the best minds in the nation consider the many challenges of State Government the debate will be more informed and long term in thinking. We will move to shaping our State not the next opinion poll.

I am also pleased to be here today with the University of Western Sydney because over the next nine months, the Coalition will be working night and day to convince people, particularly in Western Sydney, to make an historic decision. 

A key part of encouraging the people of Western Sydney to make such a change is to provide a meaningful response to the issues of fairness and opportunity that are outlined in today’s program.

21^st economy

As I began to look at how to tackle the topic at hand it became very apparent that determining the critical elements of the 21^st century economy let alone concluding “how to build it“ could take many papers and seminars well beyond today. So forgive me for making just a few observations and instead focussing on what State Government can do to make a “fairer society” in the economy that is to come.

To provide context I looked back at commentary in the late nineties as a means of getting a flavour of what was forecast, what was expected in the 21^st century economy before we got there. I was particularly taken by some analysis in Newsweek in August 1998, which forecast technology, innovation and financial services would be key planks of the 21^st century economy. In an almost chilling insight they said;

“To be sure, the emergence of the 21st century economy does not put an end to recessions, financial crises, or the other ills that afflict market economies. Quite the contrary: Times of intense technological change are often volatile, as corporations and workers try to adjust to new technologies. Indeed, some of the deepest downturns in  history have come during periods of rapid productivity growth such as the first half of the 1900s. And, as the Asian crisis shows, the global economy exposes countries to risks that they did not face before.”

What was also clear was this sense that the new financial world was not only going to help underpin a new age of economic growth but also rival the discovery of the micro-chip and DNA in terms of its long term impact … seems they got that one wrong but the sentiment, thoughts and hopes were clear;

“The finance revolution in the past 25 years rivals the one that gave us the microchip. Look at the changes: Mortgage loans are cheaper because financiers have found a way to repackage them so they can be resold. Profits are more predictable because companies hedge risks. Employee stock options align workers' interests with shareholders'. Initial public offerings are fast and easy. And people have more investment choices than there are flavours of ice cream.

This is only the start. The new finance will master money in the same way computers master data and biotechnology has begun to master DNA. With their new theoretical tools, financial engineers can break down any raw investment into its components, then synthesize from them something more saleable: not just mortgage-backed securities but also strips, swaps, swaptions--the list goes on.”

So the forecasts saw growth in technology that were partly undone by the “tech wreck” and the growth fuelled by the so-called “new finance” will be a noose around the 21^st century economy for potentially decades to come.

There is no doubt that the 21^st century economy will be shaped by the continued impact of technology, finance, the new green economy and in Australia the unique position as a provider of raw resources to the developing world. The rates of growth may be different but all of these will play a role in the next century.

However rather and try to be Wayne Gretsky the greatest ice hockey player in the world who said the secret of his success was skating to where “the puck was going not where it is”. I would argue today that a critical element of creating a fairer society is getting the basics right. Before we anticipate the changes to come we need to improve what we are already doing.

Many experts more equipped than I will give comment today on the shape of where the 21^st century economy is going.

Proposition

With this background I feel I can now argue that State Government, obviously my focus in the 21^st century economy, can play a key role. Whatever the shape, size or growth of the upcoming economy, Government will continue to play a key role. The State Government represents 15% of the NSW economy and has a pivotal role in creating a fairer society. In hockey talk what can we do with the puck at our feet?

In simple terms an economy that is growing will deliver more revenue to Government. This revenue despite conflicting claims has an opportunity to help facilitate a fairer society. So a simple premise that Government’s should pursue policies that facilitate economic growth are a given.

The challenge for any Government is that new programs or initiatives compete with multiple worthwhile claims. How can you argue the relative importance of one over the other of caseworkers for DOCS, health workers for mental health or programs for gambling addictions? All needed - just as basic requirements for public transport and schools are the daily bread and butter of any State Government.

My thesis is simple and that is there is no perfect solution but, rigour in the allocation and protection of finite resources is a start in securing better outcomes. I propose there are three ways this can be dramatically improved.

1. Take politics out of the process

When allocating finite resources – they should be done on the basis of greatest community need and broadest economic impact. For too long, issues regarding access to services and infrastructure has been determined, not by actual need, but by polling and the electoral pendulum.

I cannot say that this approach is exclusive to one side of politics or the other but, issues of fairness cannot be realised when your postcode determines if you pay a toll, have a bridge built, access to an emergency department or are provided with appropriate public transport.

I will say that the current State government appears to have made an art form of these type of allocations denoted most recently in our analysis of funds allocated from the parking space levy (currently $100 million per annum) to public transport projects. A review of projects undertaken shows that more than 90% is provided to Labor held seats with no detail on the basis for such allocation.

If this approach is repeated across health, transport, policing, roads and our schools you begin to see that the provision of a fair society is compromised. This has to stop.

The Coalition believes we need to make assessments for funding based on a real assessment of need and indeed opportunity. Barack Obama noted in his election campaign that America was not a collection of red and blue states but, the United States. This has to be our view at a State Government level. NSW is not a collection of marginal seats but a collection of communities with equal need.

The Coalition has committed more than words to this approach. We have announced the establishment of Infrastructure NSW which will be an agency overseen by an expert Board. They will be charged with prioritising infrastructure spending on the basis of need and broad economic benefit.

The additional broader benefit will be the increase in expertise in planning and execution of infrastructure, which will minimise waste and is further discussed a little later.

The issue of donations cannot be ignored in this context and the need for radical reform is something I am proud that the Coalition has committed to undertake if elected to Office. There can be nothing more destructive to outcomes of fairness than someone having the ability to obtain outcomes through donations.

I said in my maiden speech that a donations culture had reached corrosive levels in NSW. I believe this remains the case and if nothing more was followed in my speech today, I strongly believe that donation reform would lead to a fairer society.

2. A broader sense of public value

As some of you would know, I am a banker by trade.  Bankers do have a predisposition to numbers and data.  I am no different.  But I also know that determining what you measure is sometimes the most important decision you can make – because deciding what you measure, is effectively deciding what you value.  It’s about deciding what’s important.

Let me give an example – of one of the more public failures of this government, and that was the public private partnership involving the Cross City Tunnel.

You will recall the government, took around $100 million up-front from the Tunnel operators when they won the contract, which on the face of it could be used for broader government services. However in exchange for that $100 million the government agreed to funnel just about all the traffic from the Eastern Suburbs through the tunnel by closing roads.  The result as we remember was traffic gridlock. The government then broke the contract, the Operator went broke and the matter is still before the courts.

The failure of government in this instance was that its measures of public value were too narrow.  The RTA and indeed the Government only assessed the dollar payment.  It did not assess public value in terms of amenity, community traffic flow, the ability for commuters to choose, pollution, toll levels and the wider ability of the city’s streets to function. In other words any increase in the finite resource of revenue must also be considered in terms of concurrent community impact.

In seeking greater contestability, measures of performance and any form of partnerships with Government, our analysis cannot be just monetary.  We need to understand the broad community impact and I say here today that any such partnerships that I would oversee would start and end with how does this benefit the community not what will it provide to the Government bottom line.

Monetary value is one measure of public value, but there are others in every area of service delivery.  The tragedy of the State Plan, introduced by Morris Iemma in 2006, was that the concept of measuring government against outcomes was sound, but the outcome was hijacked by spin doctors ensuring that the government never failed to meet a target.

The downside of this approach is that the language of the day shifts to the amount a Government is spending not achieving. The recent Budget trumpeted record spends but the Treasurers speech was very quiet on what was being achieved. We have announced that we look very closely at the measurement of Government performance through the Commission of Audit, which will be a key part of our first term agenda.

Broader measures of public value, and measures of performance are critical if we are to start having honest conversations about how our services are performing – and if they are actually delivering better outcomes and improving the lives and opportunities of citizens.

3. Culture of every dollar matters

Having spent most of my career working in the private sector I am acutely aware of accountability for budgets and the need to demonstrate performance. It is not a culture I have seen evident in the current State Government where projects incurring multi-million dollar over-runs and completion blow-outs are an everyday event.

A society cannot be fair if incompetent managers waste finite resources forgoing the opportunities those dollars could provide. True fairness can only come if maximum public value (or at least close to maximum) is achieved with every dollar.

If elected next March, we will introduce a Cabinet Reporting Framework to ensure every Cabinet Minister is accountable for fiscal direction and infrastructure delivery. This is counter to the current process where managing Ministerial budgets is out-sourced to the Department of Premier and Cabinet.

Ministers need to be conscious that waste matters and I think this is heightened if we consider the needs not being met or opportunities lost should the funds not be available.

The Cooper family in my electorate of Manly know this too well. Phil and Michelle Cooper have a 16-year-old daughter, Georgia, whohas cerebral palsy. They came to see me last year to find out what living options are available for Georgia when she becomes an adult and they become elderly.

The reality is there are no options. Michelle has been told she will need to abandon Georgia if she wants her to get accommodation. Every time there is a report of millions wasted by this State Labor Government, Phil and Michelle Cooper feel this acutely. Whether it is the $500 million plus wasted on the cancelled CBD Metro or the $100 million wasted on the failed T-card project…it is dollars gone.

Phil and Michelle Cooper despair that this money could have gone to provide some support to her daughter when they are too old or not around to look after her. In fact, Michelle said when she heard about the hundreds of millions down the drain from the CBD Metro – she cried.

The Salvation Army’s Paul Moulds is someone who I admire immensely and knowing what he could do with any additional funds to some of the most vulnerable youth in our society at Oasis is a reminder to me that waste is not just dollars on a press release but the loss of an ability to impact people’s lives. This is the culture we must employ.

All of these principles:

• Taking politics out of the process

• Having a broader sense of public value, and

• Culture of every dollar matters

are about improving the quality and independence of decision making and better directing and protecting the finite resources of a State Budget than we are seeing today.

If executed as described the Government of the day will have additional opportunity to address issues of affordable housing, problem gambling, skills training, communication, closing the gap with indigenous Australians, mental health and public transport infrastructure to name just a few of the priorities of NSW today.

Addressing these issues, particularly as it relates to the culture of the government will be difficult, but it is the only way we can improve the quality of services provided by government to its citizens.

Conclusion

I want to leave you with some words of a speech that I have just read;

Do you believe that we can afford another three years like the last twenty months?

Are you prepared to maintain at the head of your affairs a government, which has lurched into crisis after crisis, embarrassment piled on embarrassment week after week?

Will you accept another three years of waiting for next week's crisis, next week's blunder?

Will you again entrust the nation's economy to the men who deliberately, but needlessly, created the worst unemployment for ten years.

He then went on to say:

We just cannot keep going the way we have these past twenty months.

We cannot afford the instability of a government, which has had sixty ministerial changes in the six years.

These words were uttered by the man who this Institute is named after, who in the weeks before taking office asked these questions of another audience in Western Sydney. It is not for me to say today whether these words are applicable here in NSW today for that is an answer you can provide yourself.

However I can say that for NSW to play its part in the 21^st Century economy it needs to do the basics right and if it pursues the agenda I have outlined here today I believe we can see a fairer society here in NSW.

Thank you for giving me this opportunity.

Write Comment

Please keep the topic of messages relevant to the subject of the article. Personal verbal attacks will be deleted. Please don't use comments to plug your web site. Such material will be removed.
Name:
E-mail
Subject:
Comment:
Code:*

Comments (1)