The Courage of Our Convictions Mark Latham - Shadow Treasurer, Manager of Opposition Business in the House of Representatives

Speech

Transcript - The Light on the Hill Lecture, Bathurst - 20 September 2003

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."

Tonight I know how he felt. This is a great city with a great Labor tradition. I am honoured to deliver the 2003 Light on the Hill Lecture.

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. Among the many honours and achievements in his life, the one Chifley valued most was the Freedom of the City of Bathurst, conferred on 27 August 1949.

At the official ceremony he said that: "We are only figures passing along the highway to eternity. It is friendships, rather than distinctions, that have the most meaning in life's journey." And his greatest friendship, of course, was with the people of this city.

More than ever, it is important to understand this local history. The Chifley legacy is one of the contested items of Australian politics. Ashamed of their own history, Liberals like Howard and Abbott have tried to rewrite Labor's history instead.

They maintain that the modern Labor Party has drifted away from the simplicity and humility of Chifley's lifestyle, that we have lost touch with our working class roots. But who are they to talk? Tony Abbott is so working class he reckons that a $10,000 donation is not money. For a son of the North Shore elites, it must look like chicken feed.

The first casualty of the Howard Government is truth. It is always dispensable. It always goes overboard, this time at Ben Chifley's expense. Let me set the record straight.

The image of Chifley jumping off his locomotive, like some noble savage covered in soot, and racing into parliament is mistaken. Like most Labor MPs, he served a long and testing apprenticeship inside the party. He was a union official and a party official. He never hesitated to accept government-funded appointments and opportunities for public service. For most of his life he was a professional politician, in the finest sense of the term.

After losing the seat of Macquarie in 1931, Chifley never returned to the rails. By this time, he was a man of independent means: a company director, shareholder and property owner. He 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.

The engine drivers of the early 20th century were highly skilled and responsible workers, the equivalent of airline pilots today. Their employment gave them considerable social status. Chifley's latest biographer, David Day, puts it this way:

"Engine drivers were at the forefront of the ‘new men' of the industrial era, presaging the respectable breadwinners of the interwar years … the relatively high pay of the engine drivers had established them as the aristocrats of the working class."

Chifley also 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. He later 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.

I would argue that, for all our dramas and deficiencies, today's Labor Caucus has remained true to this ideal. Chifley came from the back streets of Bathurst. We come from the public housing estates and country towns of modern Australia. He was a self-educated railwayman, one of the aristocrats of the working class, who wanted a higher education for all. We are the university-educated products of that vision, as implemented by the Whitlam, Hawke and Keating Governments.

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. Our organisation is not perfect, our beliefs are not always popular, but we are no less typical of the Australian people than Chifley was in his day.

In any case, the Liberals cannot have it both ways. They cannot argue that Labor has lost its working class ethos but then scream blue murder when someone like myself hops into them in an old-fashioned working class way, boots and all.

But the bigger point is this: Chifley did not merely reflect Australia. He reconstructed it. He knew that the Labor Party's role was to change Australia for the better, to seize the opportunities of the new world that was emerging from depression and war. He wanted to deliver a growth economy and a just society.

This is the real Chifley, not the one recast by the far Right or the far Left of Australian politics. It is Chifley at the centre, Chifley in the mainstream of Australian values:

• A belief that economic aspiration is good, and social mobility is even better.
• A society based on responsibility as well as rights, on obligation as well as entitlements.
• A commitment to socialism as a form of fellowship, where good deeds are reciprocated and people care for the poor and less privileged.
• And always, a down-to-earth, honest approach to public life: no spin, no nonsense, just straight talking and straight shooting.

The Courage of our Convictions

Through these values and the hard work that came with them, 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.

Chifley never abandoned his convictions for the sake of opinion polling or spin doctoring. If something was worth fighting for, he would fight all the way. He saw this as the key to keeping Labor alive and relevant.

Indeed, 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.

Just look at Brendan Nelson and Peter Costello, who changed political parties the way most of us change lanes. The only arrow on their political compass is personal ambition and convenience. They have all the sincerity of a rat with a gold tooth.

Legitimacy in public life relies on more than electoral convenience. Followers need something positive to follow: beliefs that define a sense of purpose and hope for the future. The true believers need something to believe in.

This is particularly important for the ALP. We are more than a political party. We are a movement that needs to inspire passion in people, holding out hope for the good society. By definition, a movement must move – identifying new issues, launching new campaigns and picking up new supporters in the slipstream of reform.

This is where the Federal Labor Party is now headed. Under Simon Crean's leadership, we are fighting for the things we believe in. We are following our beliefs, not the opinion polls. The small target strategy has been consigned to the dustbin of history. Policies and principles are being advanced well ahead of the next election.

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

• On 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.

As the Prime Minister has grown older, his Government has grown more arrogant. It sees the national security environment as a political winner, giving it a licence to do whatever it likes on the home front. Tell any lie, pull any rort, deny any reality.

Howard has argued in Parliament that ethanol from Brazil is not an import. Then he defended Wilson Tuckey when Tuckey said that, in asking for his son's court case to be reconsidered, he was not asking for it to be changed. And then Howard defended Tony Abbott when Abbott said that $10,000 to cover court costs was not money.

Is this the Government of Australia or a scene from Alice in Wonderland? "When I use a word", the Prime Minister said, in a rather scornful tone, "it means just what I choose it to mean, neither more nor less". Howard has given new meaning to being liberal with the truth.

And the really sad thing is this: if the Australian people can not trust their Prime Minister to tell the truth on matters as simple as these, how can they trust him on the big ones: the health care and education of our children, the strength of the economy, the soundness of national security? When Shane Stone called Howard mean and tricky in the middle of 2001, it was more than damning commentary. It was an act of prophecy.

This is a government of insiders, a government that favours the few at the expense of the many. Given a choice between backing the powerful in our society or backing the people, it always picks the powerful. This is the paradox of conservative rule: how they have excluded the majority, not just minority groups.

The defining characteristic of the Howard Government is cronyism. First it was Stan Howard. Then it was Karim Kisrwani. Then it was Dick Honan and Michael Tuckey. And now it's Abbott's $100,000 slush fund. The Government's mates have been invited into the Cabinet Room to make public policy. They are de facto Ministers in the Federal Government.

Somehow the Liberals have managed to turn the reward system in our society upside down. The powerful are given the inside running while other Australians are left on the outside. Hard working families are paying more but getting less: record taxes, upfront fees at the doctors, increased costs at the chemist and huge expenses to put our children through university.

If the economy is so good, how come people are paying so much for the basics of life? The Government may have reduced public sector debt (by selling off assets) but it has pushed the debt burden onto everyone else: record household debt, record credit card debt, record foreign debt, higher HECS debt and new family debts at Centrelink. This is Costello economics at work: it's all smirk and mirrors.

Higher taxes and charges are forcing families deeper into debt. They are also taking away the incentive to work hard in our society. Figures released earlier this week show that nearly one million Australian families face Effective Marginal Tax Rates of 60 percent 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. For a dual income household with combined earnings of $31,000 and a student on Youth Allowance, the Effective Marginal Tax Rate is 102 percent. That is, for $100 of extra earnings, the family is actually $2 worse off after tax and the withdrawal of social security benefits. The Howard Government has knocked incentive in Australia as flat as a tack. It is punishing work, not rewarding it. This is sending all the wrong messages to people.

The harder people work the more likely they are to fall into the top marginal tax rate of 48.5 percent (for incomes over $62,500). Australia has a vast army of wage and salary earners – people who have studied hard through TAFE and university and got themselves into decent jobs – who are now paying up to 48.5 percent in tax. Yet for the owners of companies and capital, paying more than 30 percent is optional.

This is the great imbalance in the taxation system. Honest, hard working PAYE taxpayers are cross-subsidising the corporate sector – in some cases, cross-subsidising high-wealth individuals who are avoiding tax altogether. The incentive system is all wrong. The hard workers are being punished while the rorters are being rewarded.

The same thing is happening in the education system. The harder someone studies, the more likely they are to incur heavy debts early in life – victims of the Howard Government's higher education reforms. Yet in wealthy families, students can clock-off at school, knowing that they can buy their way into university through upfront fees. Debt for the hard workers, easy street for the bludgers: this is the Liberal way.

A Something-for-Something Society

This system would have been anathema to Ben Chifley. He believed in reward for effort. He believed in the virtue of hard work, a society where everyone pulls their weight. Effort from all, opportunity for all – this was the Chifley way. As he told the NSW Party Conference in 1946, governments need to expand services but also demand responsibility:

"There must not be any slackers in the community", he said, "because every slacker throws a greater burden on a fellow worker and it is a great injustice. Every man or woman in the community, whatever they are doing, should do it to the very best of their ability. That is the only road to success."

For me, those words remain a light on the hill. They reflect Labor's belief in the importance of reciprocity. Governments must ensure that people who contribute to the community are rewarded and those who benefit from the common wealth are obliged to give something back. The rights we share as a society need to be matched by the obligations we owe to each other as individuals.

A good society is not based on rights alone. It is based on duty: our obligation to look after each other and leave something better for the next generation. 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.

Ultimately, it is the best way of meeting the challenge of globalisation. At a time when our loyalties are being stretched from the local to the global, where traditional institutions and identities are under pressure, obligation is the only answer. 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?

It is sometimes said in the media that we have become a more selfish society, with less concern for each other's interests. While selfishness of any kind is a worry, I do not believe this is a good description of society today. The number of Australians who contribute to community causes and help their fellow citizens far outweighs the number who do not.

People have not withdrawn from the public realm. They are just looking for new and better ways of helping out. The balance between work, family and community is obviously an issue. We have become a time-scarce society. We are also a society in transition, moving beyond the certainty and conventions of the past.

For many people, with the decline of traditional institutions, life has become more chaotic: how do we relate to each other and make best use of our social freedoms? Thirty years ago we had institutions that told us what to do: strict parents, churches and workplaces. Today people are more self-reliant but also more confused.

This has become the dominant public mood. I see it in my work all the time. People do not necessarily ask for more market forces or more government intervention. They want more society: a sense of community and common purpose in their lives. In effect, they are longing to belong, to rediscover the shared values of a good society. They want to resolve these issues, but are waiting for others to show them how.

This is the pressing challenge for modern politics and political leaders. In recent decades, governments have emphasised the importance of social provision and punishment, but have disengaged from the bigger issue of community. 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. (An exception is Lindsay Tanner in his new book, Crowded Lives).

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. The modern state has a vast array of powers and resources available to it. It is time to use this capacity in a different way: an aggressive campaign to reward effort and encourage reciprocity.

I see this as a campaign for fairness. In recent years there has been a backlash against some of the poorest people in our society. The reason for this backlash is simple. It is not because Australians have suddenly become cold hearted. They are not against helping others.

They object, however, to helping people who are cheating the system. There is a perception that too many recipients of their taxes are not doing the right thing. This feeling has not been driven by bigotry or greed, more a sense of outrage and injustice. Australians are happy to give, but only if the assistance reaches those in genuine need.

The Howard Government has tried to exploit this sense of injustice by denigrating all disadvantaged people. But Australians also object to their taxes being used to support cheats at the top end of town: the tax avoiders, the corporate rorters, the special pleaders and deal-makers. But you never hear the Liberals talking about this. They want to keep the focus on the poor and disadvantaged. This is the essence of right-wing politics: penalties for the poor and privileges for the rich.

This is why reciprocity is so important: one rule for all Australians, whether rich or poor. A universal expectation that people need to do the right thing: rewarding those who put into the community and helping those who help themselves. We need to replace John Howard's right-wing revolution with a right-thing revolution. A new standard for social justice in this country.

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. The Liberals want to deregulate the labour market and create even bigger disincentives for people to move from welfare to work. Labor believes in the dignity and importance of work – making work pay: in the pay packet and through the tax and transfer system.

Let me give another example: the need to reward 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. I have never understood why the best teachers are not automatically allocated to the worst schools, with financial bonuses and incentives for improving classroom performance. Quality teaching is a passport out of poverty. It must be available to every poor student.

Governments also need to improve the home learning environment. Learning doesn't begin the first day of school. It begins the first day of life. The greatest gift parents can give their infant children is reading aloud. If we read our children three storybooks a night, studies have shown that they will be able to read and do numbers by age five. This is why 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.

It is hard being a parent these days, getting the balance right between work and family. But it is even harder being a child from a broken family. More than 700,000 Australian children are living with one parent only. For boys without men in their lives this can be a particular problem: a lack of male mentors and role models teaching them the difference between right and wrong. For fathers who want to see more of their children, the obstacles to access should be reduced. For fathers who try to avoid their children, new standards of responsibility should be imposed.

There are many more examples of the right-thing revolution: encouraging community service by school children, rewarding public housing tenants who do the right thing, incentives for people who care for the aged and infirmed, demanding corporate social responsibility. And the list goes on.

But the policy I want to finish with tonight is about our economic future. Australia needs a new culture of savings, new incentives for people to put some money aside and plan ahead. At the moment, Australia draws heavily on the savings of other countries. This is why we have a record Current Account Deficit (6.7 percent of GDP) and record foreign debt.

Consumer spending is also reliant on dissaving and debt. The household savings rate has fallen to an all-time low (minus 1.2) 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. This is why I want to introduce a system of Nest-Egg Accounts, to help families save for the future needs of their children.

Tomorrow I will be releasing a new report from the Chifley Research Centre on Matched Savings Accounts, a new way of helping low-income families save and accumulate assets. 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.

This 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. Labor wants to establish a national program of Matched Savings Accounts. Income support for the poor is vital. But nothing beats new ideas and new ways of beating poverty itself. It's time to tackle the root causes of disadvantage, fostering self-reliance and dignity through savings.

This is the pathway to a fair society. Karl Marx was wrong. The trouble with assets and capital is not that they exist but that too few people have them. Opportunities for saving and owning assets should not be restricted to high-income earners. They should be universally available. I believe in a stakeholder society in which all Australians are encouraged to save and take an ownership stake in the economy.

Conclusion

People say to me that the Labor Party has changed a lot. That's certainly true. But just as much, the world has changed. The policies of the 20^th century will not solve the problems of the 21^st. A fast changing world demands new solutions, new Labor policies. As a Party, we can either move with the times or be swept away by them.

I would argue that through our journey of change, Labor's core purpose – our hopes and objectives – have remained the same. 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.

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. This is one of the great things about our side of politics and, better still, it drives the Tories mad. It's the continuity of Labor.

The doyen of Labor speechwriters, Graham Freudenberg, once described our movement as a collective memory in action. That's why we are here tonight – to honour the memory of Ben Chifley and to recommit ourselves to Labor in action: to defeat the Howard Government, to win back the Chifley seats of Calare and Macquarie and to implement the Chifley vision of what Australia can be – a fairer place, a place where we look out for each other, a place where we work hard and reward effort. A place where we still strive for the light on the hill.

End. Check Against Delivery