MELBOURNE CONVENTION AND EXHIBITION CENTRE
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Good morning, I am pleased to see my former Parliamentary and Cabinet colleague, the Hon Martin Ferguson, AM, and the Chairman of Infrastructure Australia, the Hon Mark Birrell.
I acknowledge the President of Engineers Australia, Professor Alex Baitch, and the Chief Executive, Mr Stephen Durkin. Thank you for inviting me to speak at your national convention.
You know that you’re talking to an audience of engineers when you look at the schedule of events and see that you’ve been slotted to speak at 11.28.
Not 11.15, and not 11.30. Not even 11.20. But 11.28 precisely.
I’m only half joking, because the kind of precision that went into the planning of this convention does say something about engineers – and why they are important to all of us.
Correctly calculating quantities and durations obviously matters to engineers. But as all of you know, that isn’t only about getting a particular task done.
And it certainly isn’t about what in some other contexts would be thought of as pedantry.
It’s about an approach to problem solving: an approach that opens up new possibilities for doing things better. That approach, that mindset, makes engineering a creative profession.
What engineers do is crucial to what we call innovation, which means that what engineers do is indispensable in building and sustaining a modern economy.
The American economists Robert Atkinson and Stephen Ezell define innovation in this way: it is the activity of
“… bringing to production, to the market-place, and to society, new products, processes, services, and functionalities that consumers and organisations find valuable”. Innovation Economics: the Race for Global Advantage, p9
Innovation is what happens when a small factory adopts advanced computer-controlled machining cells that are twice as productive as the ones they replaced.
It is what happens when the travel industry relies more and more on the Internet and self-servicing by consumers.
It is what happens when a new motor vehicle is fitted with a GPS location system that is accurate to within several centimetres.
Innovation is what happens when any improvements of this kind are conceived, implement and brought to market.
And although they may not all be directly the work of engineers, none of them would be possible if the knowledge and skills that engineers possess were not involved at some stage of the process.
Nations that want to foster economic growth do not have a choice about whether to innovate.
Without a strong culture and practice of innovation, no nation can diversify its economic base by creating new industries or extending existing ones.
For Australia in particular, that challenge is urgent.
The commodities boom that sustained growth for much of the past decade is over, with iron ore and coal prices continuing to fall.
And manufacturing, which employs nearly a million Australians, is in crisis because of the announced shutdown of motor vehicle production and the uncertainty over whether the Government will renew the naval shipbuilding contracts.
Carmaking and shipbuilding have been the core of advanced manufacturing in this country: these industries are the nation’s great repositories of technological and engineering skill.
When the carmakers go, the impact on the economy will be devastating. Fifty thousand jobs will be lost directly, and 200,000 indirectly through the local supply chain.
Many of those jobs will be engineering jobs. The crisis in manufacturing is a crisis for your profession.
But this is not a time for Australia to be reducing its commitment to the education and training of engineers.
Nor is it the time to reduce commitment to standards. It concerns me that four of the 33 Australian universities with engineering faculties admit students with ATARs between 50 and 60.
If we do not have sufficient engineering talent and expertise we shall cease to innovate.
The existing industrial base will wither, and there will be nothing to take its place.
The industrial capacity we have will not be redirected to new forms of production and new markets.
Now more than ever, what engineers do matters profoundly.
I am not alone in saying this. Earlier this year the Chief Scientist, Professor Ian Chubb, released a report in which he deplored Australia’s lack of commitment to producing graduates in the so-called STEM disciplines – science, technology, engineering and mathematics.
He pointed out that globally successful competitive economies were characterised by:
A strong basic research enterprise providing a wellspring of technical know-how.
Rich and deep connections to the global science enterprise.
A culture of risk – assessing it, managing it and taking it.
Openness to new ideas.
Career pathways from academia to industry and vice versa.
A reliable supply of STEM graduates whose skills employers value.
A STEM-literate population that celebrates discovery and entrepreneurship.
The Chief Scientist’s message was that by global standards Australia is not doing well in achieving these goals.
The Global Innovation Index offers an annual snapshot of Australia’s performance. In the 2014 index, Australia is ranked 17th out of 143 countries, up from 19th last year.
It is an incremental improvement, but the index also records our lack of investment in STEM disciplines.
We may be placed 17th overall, but we are placed 73rd out of 143 for the proportion of engineering and science graduates in the total population.
And Australia ranks 81st as a converter of raw innovation capability into the outputs business needs: new knowledge, better products, creative industries and growing wealth.
There is no quick fix to turn that around. When Labor was in office, we budgeted to increase public investment in universities by 100 per cent over the 10 years from 2007 to 2017.
We developed a 10-year national innovation agenda, Powering Ideas, to encourage firms to engage in research and development, to foster the commercialisation of ideas, and to forge links between industry, the universities and research agencies such as CSIRO.
A suite of measures – tax incentives and industry assistance programs – was put in place to implement that agenda.
But nearly all those measures have been abolished or wound back by the Abbott Government, and $2.5 billion has been ripped out of Industry Department programs.
And in legislation now before the Parliament, the Abbott Government is also threatening to turn its back on public provision of higher education.
The Government wants:
to cut the funding of undergraduate places by an average of 20 per cent,
to allow universities to set fees at any level they wish,
and to impose real interest rates on student loans.
Universities will have to use their new freedom to raise fees in order to compensate for the cuts in funding, and an increased proportion of the cost of a degree will be borne by students.
What will that mean for young Australians aspiring to study engineering? For the STEM graduates whose knowledge, skills and creativity will determine Australia’s ability to innovate and compete successfully in “the race for global advantage”?
Engineering courses are among the hardest hit by the Abbott Government’s funding cuts. If universities simply increase fees just to recover the cost of those cuts, tuition fees would increase from less than $40,000 today to more than $65,000.
For a female student earning the average income of a graduate engineer, that would mean a total repayment of almost $90,000 over more than 10 years.
Remember, though, this $65,000 degree for cost recovery is not the end of the matter. The Government also wants students to pay for other students’ scholarships and for research. They have even raised the prospect of adding GST.
The bottom line is this: Asking 17-year-olds to choose a career with decades of debt is no way to manage the supply of graduates.
But, given the low starting salaries, that is what the Government’s changes would mean.
At a time when engineering graduates are crucial to Australia’s future, the Government is intent on piling up the obstacles facing anyone who wishes to become an engineer.
For students in any discipline, the proposed changes to higher education are an affront to the Australian notion of the fair go.
Obtaining a university education will no longer depend solely on individual ability and hard work, but on the ability of students or their families to pay.
But the consequences for engineering students go beyond the inherent injustice of the higher education package.
They unmask this Government’s pretence that it is committed to what it calls its competitiveness agenda.
An agenda that is a pale copy of Labor’s innovation agenda, with a fraction of the funds.
The Government’s approach is so chaotic that it has not even tasked a single minister to lead its charge.
The Industry Minister, Ian Macfarlane, announced the competitiveness agenda but the Education Minister, Christopher Pyne, is responsible for research. And there is no science minister.
Strangely, after trashing the national innovation agenda, Ministers Pyne and Macfarlane have now asked stakeholders in industry, higher education, science and research to help them put the pieces back together.
They took $9 billion in funding from these sectors, they then turned round and asked for submissions on fundamental questions, including:
The rules for competitive research grants;
Promoting collaboration in using the tissue-thin resources left to the sector;
Further consolidating the limited range of programs that remain.
The ministers have said that they will process all this input by the end of the year, and then announce their new blueprint.
In other words, they’re taking just one month to decide how to replace what they have destroyed.
What they did was a tragedy; what they are doing now is a farce.
If the Government was truly seeking to promote Australia’s global competitiveness, it would not be making the cost of higher education, including engineering degrees, more expensive.
It would not be loading engineering graduates with a debt that could take decades to pay off.
That prospect will be even more burdensome for women graduates, who are more likely to take time out of the workforce.
If they do take time out to have children, the interest on their debt will continue to compound, although they will have forgone the income that would allow them to pay the debt off.
How will that prospect encourage bright and talented young women to take up engineering as a career?
It is difficult to avoid the conclusion that the Government does not care about the answer to that question.
A concern for equity in any form has been absent from the Government’s plans for higher education, and a willingness to match words with deeds has been absent from its announcements of the competitiveness agenda.
Engineers have been hit both ways.
The higher education changes, if they become law, will make it harder to enter the profession.
And the abandoning of a genuine innovation policy is a refusal to use engineers’ creative talent.
If that refusal continues, Australia will struggle to make the transition to new forms of advanced manufacturing beyond the departure of the carmakers.
If that refusal continues, the rich vision of a globally competitive economy set out by the Chief Scientist will not be realised.
Australia will gradually slip further down in global innovation rankings.
The Labor Party is determined, to do everything possible to ensure that does not happen.
I am in politics because I want opportunities – for individuals and the nation – to increase, not to shrink.
When I talk about the need to innovate, to produce more STEM graduates, to encourage more young Australians to take up the profession of engineering, I am not only talking about a set of responses to economic data.
Those responses reflect a vision of the nation we should want to be, and can be: a nation in which opportunities to share in wealth creation are spread as widely as possible.
Politics is about ambition, but that includes being ambitious for the nation.
We have to dream large, and we have to build the Australia that we can be: an Australia in which the door to opportunity, for individuals and for the nation, has not been slammed shut.
FRIDAY, 28 NOVEMBER 2014