LABOR AND THE FAIR GO IN THE NEW MACHINE AGE

I’d like to begin by acknowledging the elders and customs of the Wurundjeri people of the Kulin nation, whose lands we meet on today. It’s always fitting, but especially at the Wheeler Centre – the epicentre of storytelling in the written form in Melbourne – to pay tribute to a culture whose vibrant stories and history have passed down on these lands for tens of thousands of years.

 

Liberty [Sanger], thank you for that introduction.  Thanks Josh [Funder] – for the invitation to be here, your company from time to time, the odd lunch, and your friendship – I’m very grateful.  It’s important I also take a moment to pay tribute to the late Fiona Richardson, who gave last year’s lecture.  And to everyone who is working so hard in Northcote right now, every power to your arm.

 

We appreciate very much the sponsorship of Maurice Blackburn Lawyers, where John Button worked before he became a Senator, a path that has been retraced by some of my current colleagues as well.  And finally to all of you, from the Richmond branch and beyond, thank you for the opportunity to spend time with you and especially with James [Button] and Nick [Button], and Joan [Grant] tonight.

 

James, being here gave me a reason to re-read that wonderful piece you wrote about your dad, for the Monthly back in 2008.  I was moved again by your reflections on not just a political life but a family life as well, what kind of dad he was, his attempts to be a good one despite all the travel – territory you explored beautifully in your book.  I say this because as a father of young kids I think there’s more than one way to be inspired by John.

 

But we’re compelled in these speeches to pick one of the facets of John to admire and to illuminate the present, and I do want to land on policy. It’s a truism to say John was Australia’s most consequential and successful Industry Minister – a title I think none of his predecessors or successors would begrudge him. Tonight I want to go a little further and locate the source of his success in his broader approach to politics: his deep concern – his deep Labor concern – for how real people fit into the big transitions in our economy.

 

I never met him, but he was a big part of my early work life because in the late 1990s I had the privilege of working with the Griffith University academic, Pat Weller, as his research assistant, at the time Pat was finishing his Button biography.  It was called Dodging Raindrops – which is a lovely phrase – but I took away the sense of a politician who never dodged or dogged a fight – not in Labor’s organisation, not in Labor’s cabinet, or the boardrooms and lunch rooms beyond.

 

He never dodged the fight, and perhaps just as important, he never dodged the argument – and they’re not quite the same thing.

 

Today’s instant political gratification via tweets, posts, ‘Facebook lives’ and news channels that run day and night would be unrecognisable to a minister in his time.  And for a man who once suggested a fellow Senator in the Parliament had been a “cashier in a Cairo brothel”, perhaps that’s a good thing!

 

Today for better or worse there is no shortage of avenues for a politician to have our say.  You can throw a punch, sure.  But there are few big, cherished opportunities for us to pay tribute to his legacy by sketching out some bigger thoughts and visions. 

 

To make the argument.  Opportunities like this one.  Here, you’ve created an outlet for a lot of my colleagues through the years to have an extended say about the things that matter.

 

Gillard on education reform; Wong on renewal and progress; Combet on climate change and future industries; Shorten on reward for effort at work; Tanner on Party reform; Roxon on lessons from the last Labor Government; Swan on Springsteen as a powerful soundtrack for social and economic justice and inclusion.

 

Preparing for tonight, and thinking through some of those lectures – so various in their way, so diverse – I was nevertheless struck that they do all relate, in one way or another, to the topic I’ve chosen for tonight, a piece I have coming up in the Monthly with Andrew Charlton, and the book I’ve just published with Mike Quigley called Changing Jobs: The Fair Go in the New Machine Age.

 

It’s my belief that the impact of automation and artificial intelligence at work is one of the key issues for Labor in the time I hope to serve my community and country. 

 

Technology has the wonderful potential to overcome so many of the barriers to a good life in a thriving society.  But how do we unlock the tremendous upside of technological change while acknowledging the very real fear people have about workplaces increasingly dominated by machines?  How do we address the most difficult challenges associated with this change without denying ourselves the most promising benefits?  And perhaps above all, how do we ensure bursts of new technology are accompanied by bursts of fresh thinking, not bursts of new inequality and social immobility?

 

Before I try and address these questions, let me briefly set the scene.

 

Frankly, the challenges we face today don’t catch our society at a moment where we are of great strength, forward-looking and leaning.  Quite the contrary.

 

[if !supportLists]·         [endif]Wages growth is at historic lows and actually went backwards in the most recent national accounts, which also showed a decline in broader living standards;

 

[if !supportLists]·         [endif]Underemployment is at or near historic highs, just one way that work is increasingly insecure and precarious;

 

[if !supportLists]·         [endif]The worker share of national income has not been smaller in the 60 years that the relevant records have been kept;

 

[if !supportLists]·         [endif]GDP has a “one” in front of it, Australia’s gone from a leader in the GFC to lagging the US, Canada, New Zealand and the OECD average in annual economic growth, and the growth we do have is not the inclusive, people-powered version we need; and

 

[if !supportLists]·         [endif]We have record net and gross debt, the latter having reached half a trillion dollars for the first time in Australia’s history, and rising, and with no peak in sight – made worse by a $65 billion tax handout to foreign multinationals and the big four banks.

 

That’s the policy context for these tough questions – difficult as it is.

 

Now, consider the political context.  Political discontent and low esteem for politicians is not actually anything new.  It’s written like it is, but it isn’t.  But today it is fed and fuelled by a political system, judged by the community – not without justification – to be focused on precisely the wrong things: a divisive and unnecessary marriage equality postal survey when the parliament should decide; ministers who can’t tell us whether they can legitimately sit in the parliament; and a Prime Minister more focused on shoring up his position in the Party room than showing some leadership – on energy, on marriage equality, on anything. 

 

Labor’s instinct is to work with the government when we can and win the fight with the government when we must.

 

We know we must resist the temptation to be the gleeful spectators at the federal political circus.  We want to be more substantial than the proverbial ‘last angry paragraph’ of a news story. We don’t want to be the lesser of two evils.

                                                                                                               

Allow me just one long quote from John, who wrote that:

 

 

No Opposition in my 21 years as a member of the Labor Party has better or more substantially met this test, than the one Bill Shorten leads now.

 

We are determined to enter government via the front door of substantial policy work, not sneak through the back door of despair or disappointment with our opponents’ failures. Not because we think it’s the only way that works, but because it’s the only way we want.

                                      

Consider even just the last few weeks: Chris Bowen joined with Penny Wong and Matt Thistlethwaite to launch a policy which recasts our relationship with Asia.  Ed Husic and Kim Carr gave thoughtful, forward-looking speeches about technology, industry and jobs.  On the weekend Bill Shorten and Brendan O’Connor made important policy announcements about industrial relations.  And just in the last few hours Bill, Mark Butler and Jason Clare released the latest instalment of our energy plan at a forum in Sydney.

 

I could go on but the point is, we are playing the leadership role on policy that I know many of you gathered here tonight want us to play.  And it’s that leadership role, from Bill right down our whole front bench and bolstered by a pretty extraordinary couple of recent parliamentary intakes, which is why I’m focused tonight on how we advance the fair go in the new machine age.

 

[if !supportLists]·         [endif]On how we have inclusive growth and reward for effort and a decent social safety net for those left behind; 

 

[if !supportLists]·         [endif]On how we reject the false choice between ‘let it rip’ technological trickledown on the one extreme and holding back the technological tide on the other;

 

[if !supportLists]·         [endif]And how we agree on the most meaningful interventions in our economy and society that capitalise on our national strengths and properly distribute the new opportunities.

 

To think about those things is to think about the future.  To think about those things is to engage with those questions I posed earlier.  And the answers don’t easily or evenly separate themselves into speech sections or book chapters.

 

But to give my thoughts some shape, I organise my contribution tonight into five different imperatives, which I hope are resonant for those who celebrate John Button’s contribution and style:

 

 

 

All of this begins with recognising that the impact of new technology on jobs is the defining anxiety of our time.  Not the only one, not necessarily more important than terrorism or climate change, but the one raised most frequently with me.

 

In Eagleby, for example, when Bill Shorten and I held a town hall meeting, I was approached by an older couple who didn’t want to talk about cuts to pensions, veterans affairs, ageing or even the recent flooding – as important as those things were to them and us.

 

They wanted to talk about ‘the kids’. Not their kids, the kids, – about the challenges in the job market for young people now and in the years ahead.  I raise this because that real concern, the furrowed brows and the uncertainty in their voices is not unique, it’s common.

 

People have genuine fears about where, or even whether, they fit in a workplace increasingly dominated by machines. And, as that couple from Eagleby reminds us, it’s more than that. It’s a fear about what jobs there will be in the future for the next generation and the one after that.

 

Yes, it’s fear of the unknown.  But here’s the thing – it’s not ignorance.  They are right to say they don’t know what’s coming next.  Even the best experts we have can’t agree on which jobs, or how many, will be created and destroyed. The most influential study, by Carl Frey and Michael Osborne at the University of Oxford, predicts 47 per cent of all jobs in the US are at risk of being automated. Similar studies found 35 per cent on the chopping block in the UK and 40 per cent in Australia.

 

But at the other end of the scale, the OECD put that figure among 21 of its member countries, including the US, at nine per cent, on average. A McKinsey Global Institute study published earlier this year is even more conservative, predicting less than five per cent of today’s jobs could be fully automated.

 

From less than one in 20 to almost half of all jobs – that’s the range experts are working in – even the different horoscopes in the Saturday papers don’t drift that far apart in their predictions.

 

And it’s not just the future of jobs in the economy as a whole that defies expert opinion, it’s entire industries. Nissan announced a couple of years ago that it expected to have driverless cars on the road by 2020. BMW’s put their estimate a year later. Both wildly optimistic views if you listen to the Boston Consulting Group – who says that only 10 per cent of new cars will have fully-autonomous driving capability by 2035 – or research engineer Steven Shladover, who thinks it will be more like 2075.

 

Predictions about specific technologies have been way off going the other way too. In 2012 it was thought it would take at least a decade before a computer could beat the human world champion at Go – the complex 3000-year-old strategy game. That happened last year. The computer needed only four years, not 10.

 

The classical account is that in human history, our species has already been through six revolutions in the world of work, starting way back in the Agricultural Revolution 12,000 years ago. Each time jobs have been lost. But, each time, more jobs, and more meaningful work, has been created.

 

We know there is the potential for new technology to bring with it immense benefits. History tells us that there is tremendous upside to technological change and I am personally upbeat about it. But there is a new veil of uncertainty hiding the effects of revolutionary changes from us; a reason we can’t rely on the results of revolutions past to show us what will happen this time around.

 

Where the other major shifts replaced human effort, this one replaces a lot of the intrinsic traits that make us human – like thinking and problem solving. And the extraordinary improvements in computing power, algorithms and data mean machines can learn and improve. That gives us cause to believe that this revolution will be more rapid and potentially more unsettling than the ones that came before it.

 

Addressing these fears, and responding to the uncertainty, is a big challenge for political leaders. I carry around on my phone the piece that former Canadian Opposition Leader Michael Ignatieff wrote in the Financial Times about the historical role of figures like William Gladstone and Teddy Roosevelt. Leaders who dealt well with technological change, in favour of the masses, at key inflection points in history.

 

I think people are right to be worried.  And leaders are right to acknowledge and to understand.  But acknowledging anxiety isn’t the same thing as surrendering to fear.

 

As it stands, we’re dangerously ill-prepared for the changes to come. We not only need to ensure people aren’t left behind when the nature of work evolves, but we need to make sure the benefits of the new machine age are distributed widely and not just concentrated in the hands of the few.

 

We can’t use unpredictably as an excuse to do nothing. We can’t just throw up our hands because the challenge might seem too hard. Doing so won’t just expose Australians to the potential pitfalls of technological change; it will also leave them unable to grasp the benefits.

 

Tech-optimists Andrew Charlton and his team at AlphaBeta predict that by 2030, we’ll all be spending two hours less per week on repetitive tasks. Machines will relieve us of the burden of most mundane and humdrum, allowing us to spend our time doing things much more worthwhile. On a more macro level, automation has the potential to add $2.2 trillion to the Australian economy by 2030, AlphaBeta estimated in its recent report.

 

It’s easy to get bogged down in the doom and gloom of what might come.  So this optimism from people like Andrew and others serves as a refreshing reminder of the rewards and opportunities that can be reached in the new machine age.

 

It is a reminder that machines can be harnessed to augment – not replace – human work. That ATMs didn’t send all bank staff to the unemployment queue; they allowed them to focus instead on customer service and specialist advice. More than that, they helped create new jobs for armoured vehicle drivers and technicians.

 

It’s an optimism shared by a young bloke called Scott Millar or, as he’s referred to on Steve Austin’s morning radio show back home in Brisbane, as, the “Hologram Kid”. Steve and I were chatting on air recently and he brought up Scott – a 17-year-old who’s invented a hologram and built his own company – and how excited he was about the flexibility that technology brought to the work place.

 

Where others saw precarious and insecure work, Scott saw the kind of freedom and opportunity that we want to see more widely enjoyed.  Not every kid is going to be inventing a hologram and building his or her own company, and we’ll make the wrong policy choices if that’s our sole aim.

 

The point about this new age – about any new age, really – is that there will be big upsides and big challenges. We need to prepare for both.

 

It needs to start with the students currently in our classrooms. Reforming our education system is the first step to prepare for the new machine age, regardless of how it turns out.  For example, proper and full needs-based funding for our schools will combat technological inequality. But providing equality of opportunity for all children, irrespective of their parental incomes and home environment, should be core business for governments anyway.

 

In the same way, other policy directions in education, like training and mentoring more STEM teachers; or emphasising the need for computational thinking; or early education and intervention, especially in poorer communities, will boost learning outcomes for our kids no matter what happens.

 

Whether we see opportunity or threat, the course is the same: capitalise, not capitulate.  And how we see is as important as what we see.

 

 

Perhaps John Button’s greatest attribute in his approach to industry policy was vision.  He found a way to see where the world was headed, and to work out our place in it and how to get people to the other side. He helped free Australia from the shackles of protectionism and helped mark out our place in a globalised marketplace.

 

That same forward-looking approach still has a place today, particularly as we prepare for the new machine age. We know that school leavers today will have so many different employers and even careers across their working life. With the trend only likely to accelerate with the rise of the gig economy and other forms of casual work, it makes no sense to work off the old blueprint: study, work, retire.

 

Our focus must be on how best to assist with and ease those inevitable transitions that workers will go through.  There are a few ways we think we can do that.

 

First, we need to encourage lifelong learning. Singapore already does this through an initiative called SkillsFuture which encourages workers to update their skills constantly and habitually as part of work, based on what employers think they’ll need to know in the next three to five years. Singapore’s vision for its future is a “meritocracy of skills, not a hierarchy of grades earned early in life”. It’s a good start.

 

We also need to ensure people are less susceptible to the peaks and troughs of unemployment, particularly if that cycle is more volatile in the future. Income smoothing could help, whether that’s through supplementing income once a displaced worker is forced to accept a far lower-paying job, or incentives to encourage workers to take out wage insurance.

 

Workers in the gig economy, or those working several jobs at once, will need to be able to pool or take their entitlements with them. Portable entitlements will give those in insecure work the opportunity to save for retirement and insure against sickness or other risks.

 

In a world where some jobs will become obsolete, we’ll also need to help workers find completely new jobs. This can be done by focusing on the skills within jobs, rather than job titles.

 

Labour market programs focused on the skills people have, not just the occupations they have filled, could make a big difference here.  It’s with these kinds of changes in mind, that I come to the fourth imperative:

 

 

This is crucial: while we look to great reformers like John Button, or Paul Keating, or Bob Hawke, or Gough Whitlam, for inspiration, we do so to be motivated by the spirit behind their actions; not necessarily the time-stamped actions themselves.

 

Those great reformers themselves never simply implemented the solutions of a previous era – they adapted to the times, and struck out in new directions, true to the enduring values that animated them and animate us.

 

Nostalgia for the politics and policies of a bygone era is never enough. It won’t make sure the “fair go” is a defining feature of our future and not just a cherished relic of our past. Looking back in the rear-view mirror is the conservative style of politics and not something a progressive party like our should have to – or want to – aspire to.

 

We need new ways to advance the fair go in this country.

 

 

One of the most valuable insights someone in my line of work can have is to understand that they don’t have all the answers.

 

Effective policy come from reaching out to lots of different people: conversations with the people we represent; discussion and debate with experts, who are masters in the fields and whose wealth of knowledge is invaluable for public policy development; and of course the policy and political entrepreneurship people expect (well, should expect) from their politicians.

 

Collaboration isn’t just desirable, it’s essential.

 

The book I’ve written with Mike is just one example. We both come from very different backgrounds, and I think we produced a better book for it.

 

I’m a politician with an economic portfolio; he’s a technologist and former telecommunications CEO. I read the Financial Times; Mike can’t go past Scientific American. I’m from the suburbs of Logan in Queensland; he lives in the centre of Sydney. I’m Gen X and Mike’s a baby boomer.

 

I’m sure you get the point I’m trying to make.

 

Mike could have written the book without me, but there’s no way I would have been able to write it without him!

 

Collaboration is also fun.

 

The entire experience would not have been anywhere near as satisfying and enjoyable without Mike’s enthusiasm and friendship. He’s an extraordinary guy, a very generous co-author and has one of the most inspiring outlooks and hugest brains of anyone I’ve ever met.

 

It’s a shame Mike can’t be with us tonight, it was going to be a double act.  And I know he desperately wants to be. He was at pains for me to tell you he’s not being rude, it’s because he’s crook at the moment getting treatment for the leukaemia which showed up in a regular test only a couple of weeks ago.

 

I’m confident he’ll overcome it just like he did when it first appeared 26 years ago.

 

Of course, Mike and I didn’t only collaborate with each other. The idea for the book was spawned during a meeting of the Courtyard Group – a gathering of progressive thinkers, economists, academics, analysts and experts who come together periodically in Sydney and Melbourne to sketch together a centre-left vision of a progressive and modern Australia.

 

Josh Funder is one of the Group’s members and we greatly valued his reminders that we have choices in this country, and we can decide the level of tech-induced inequality we are prepared to accept.

 

We also heard from experts like Deborah Cobb-Clark, and teachers on the frontline in my electorate and elsewhere.  Our educators are already doing some terrific work, particularly in my part of the world, and it was a privilege to listen to and take on board their views when forming our ideas.

 

Those collaborations inspired Mike and I to donate the author proceeds from the book to four terrific schools in my electorate – the robotics program at Browns Plains State School; the learning centre at Woodridge North State School; the Girls Excelling in Maths and Science (GEMS) program at Mabel Park State High School; and Code Club at Springwood Central State School.

 

We wanted a book that would make a difference in a field that matters.  So, whether people love or hate the book and its ideas, we know at least the proceeds will do some good.

 

 

Let me make one final set of observations before some of us go next door for a bit more discussion and something to eat.

 

In one of his characteristic moments of mordant wit and ingenious self-deprecation, John Button once said if there was a Labor leadership conversation to be had, he was sure he’d be “on the short list”.  Evidently, that was John.

 

I’d just say this: as someone who aspires to be a Labor Minister, if you said to me or my colleagues you can have the achievements, the respect and the integrity of any Minister since Federation … he would be on our shortlist.

 

Ten years ago in April the Button family lost John.  They must miss him dearly still.

 

But I like to think his Labor family has not lost the spirit and courage with which he approached the big changes in our economy and society.  And I hope tonight to have given you a sense of how seriously we all approach the task of:

 

 

Thank you again and I look forward to your questions and feedback.