Innovation and Social Policy: How Social Policy works in the New Economy
Speech delivered by Pru Goward, Federal Sex Discrimination Commissioner at the Canberra Business Council Annual Gala Dinner, Hyatt Hotel, Canberra, 17 October 2002
Thank you for inviting me to speak at your Gala night this year - I am very excited to be here and pleased to catch up with so many Canberra friends and colleagues.
Gala nights are wonderful opportunities to not only catch up with friends but to celebrate the successes of the past year.
They're also a time away from the daily stresses of actually running a business to think about our future.
The future of Australia is in the hands of us all, but it will only be as great as the foresight of today's leaders. As employers and leaders of the business community in the nation's capital, that includes all of you here tonight.
Of course, the future is already here, beginning in the "now".
The "now" is about three key changes. Three tides we cannot turn back, three movements we cannot slow, three directions we cannot reverse.
Change one, the epic struggle between brains and brawn is over. Brains have conquered.
Ever since homo sapiens stood upright, this has been humanity's path- away from the rule of the jungle, from the dominance of physical strength, towards the dominance of the human mind.
Information technology, from which have flowed the extraordinary advances in genetic engineering, biotechnology and, unrelentingly, mechanical engineering, have been responsible for the rapidity of this movement throughout the past century and for the increasing rate of change we are witnessing today.
But with change comes opportunity.
Physical strength is not as valued, good brains are more valued. This is more than the revenge of the nerd.
This is the revenge of the people with brains, people with enough emotional intelligence to manage complex groups, people with highly developed oral skills, and a keen sense of group politics - practice in organizing small disruptive groups of people under the age of 18 is also useful!
No, we are not talking about teachers here, we are talking about women - in particular women with children.
The road to gender equality still stretches far into the horizon but there's no doubt, womankind are further along it than at any other time in our history, thanks to this one fact.
Obviously it is not women only whose professional lives are enriched by these changes, but they are relatively more favoured by them.
But work in the new economy has threats as well as opportunities. There is a price to be paid.
IT and economies based on high tech are economies that require skilled workers.
Today, one third of people between the ages of 20 and 24 undergo post secondary education and training, the highest proportion in our history.
Likewise, the numbers finishing secondary school have never been higher.
Where once a teenager could leave school at 15 and knock about doing a bit of physical labouring and unskilled factory work, a teenager today has more options for skilled work, but fewer for unskilled. Teenage unemployment rates bear this out.
This training requires considerable financial investment by the state and the individual, and also delays the entry of people into the labour market.
Change two - Globalisation dictates today's world order.
Globalisation is more than free trade in goods and services, including government services, it encompasses the global movement of labour.
Again, we have IT to thank for this free movement of labour.
The implications of globalisation for the nature of government are significant.
The pressure is on governments to ensure their countries are internationally competitive. That means they need to provide a social, economic, industrial and security environment that is able to attract and keep investment, and hang on to these new international globe-trotting workers.
Basically, the western world is dealing with these new international forces of competition in two ways, and there is some tension between them.
Through international treaties, such as those developed by the United Nations, they are continuously establishing and developing minimum human rights standards for the world.
The European Union has done much the same thing for its member states.
Domestically however, these same governments are deregulating, and have been for the past twenty five years, to allow themselves to become more competitive.
The net effect of this is to lessen the competitive advantage currently enjoyed by developing and low wage countries while significantly improving working and living conditions in those countries.
Meanwhile in the west, industrial deregulation has meant greater flexibility for employers and employees but also greater risks.
The number of people in the Australian work force today who are not in permanent work has risen steadily since the 1980s.
Reduced job certainty has profound implications for the way people plan their lives, not least of which is the need for two income families to make sure there is always one income coming in.
Governments and employers ignore this at their peril.
Change three - Western society is aging rapidly.
With the exception of the United States, all western countries, including Australia, now have birth rates lower than the magic figure of 2.1 children per woman required to maintain our present populations.
While this doesn't convert to declining populations for another decade or so, in the mean time Australian society is rapidly aging.
More pointedly, there are fewer young people entering the workforce than a generation ago. This means we have fewer people starting off with up to date skills and education.
When globalisation interacts with a relative shortage of skilled labour, you produce a highly competitive world market.
That's happening to our teachers, nurses, our doctors and scientists already. The best and brightest will be wooed by the companies prepared to pay and countries prepared to pay, the rest of us lose.
So there we have it - a future requiring more and more skilled workers, drawn from a decreasing domestic pool and with Australian employers subject to increasing competition from foreign companies. There will be trickle down effects to low skilled people.
Unemployment in Australia is now just over 6%, the lowest it has been in well over a generation.
BIS Srapnel forecasts unemployment to fall to 4% in the next two years and remain low for the foreseeable future, thanks not just to the competitive conditions of the moment but also the long run shrinkage in numbers.
Low unemployment is a source of great industrial strength for employees.
You don't have to be Einstein to predict that workers entitlements are set to take great leaps forward. If history is anything to go by this will either be the result of direct action or government re-regulation.
How Australia maximises its labour force, ensures it is internationally competitive and then retains it will be a challenge we have not had to consider in the modern era.
The tyranny of distance coupled with a high tariff wall and a healthy export trade reliant on commodities have protected the Australian economy for a long time. Among other things, they enabled us to have the sort of industrial conditions and protections we believed in, as well as social norms like one income families.
But no longer.
We paid a huge price for these privileges and the economic reforms from the 1980s onwards have all been about ensuring that Australia is equipped to take advantage of world economic development.
With the future we are now facing, more change is now necessary and it is not entirely about further commercial alignment. Social change will play a big part and be much more contentious.
This brief analysis of where we have come from and where we are going is the easy part; identifying social policy innovations that accommodate this future is much more difficult.
But we can make a start tonight.
First, for you as employers, in the future we're headed for there are probably three main goals of social policy.
- Goal One - we need policies that will maximise the size of our labour force
- Goal Two - policies that will keep them here and
- Goal Three - policies to ensure our workers are high standard and competitive with those of other countries.
I am here tonight because those three goals fit in exactly with the expectations of many Australian women and the choices they both want to make and are entitled to make.
The stars are in alignment.
Human rights and economic progress make common cause.
In my view, we can only meet those three goals of economic progress if we have genuine equality of opportunity between the sexes.
This means an industrial and social environment in which women can choose the combination of job and motherhood that best suits them. It never did make sense to squeeze women into the Motherhood Box and pay them to stay home, or the Career Lady Box, where we pay them to go to university, but provided no boxes for women who wanted to do both.
As the Swedes have found, the quickest, cheapest and best way to expand the size of their workforce is by keeping more women in work for longer. Currently the overall participation rate of women is 54.5%, almost twenty percent lower than the male rate. This largely reflects the departure of women from the workforce to have children.
As a nation we have prided ourselves on our tradition of one income families and seen them as a source of stability and community strength. The international changes we are facing today, however, increasingly make this tradition a luxury.
What's more, there's been so much investment in the education and training of women and girls since the 1970s, we have to ask whether it makes sense for them to stop work after a few short years to stay home.
But if we keep more women in the workforce (and that trend's already there) then we don't have to throw away the stability and strength of our families.
It's not an either or or.
We have to find ways of doing both.
We have to plan ways of ensuring our families stay strong despite the absence of a primary home-maker.
Up until now, there hasn't been much planning - women are still expected to work the same hours as men and family needs have often been ignored.
Paid Maternity leave giving women a chance to be full time mothers for at least the first three months of a baby's life, flexible hours, working from home, permanent part time work at middle and senior ranks, are all necessary if we want to keep women in the workforce. Remember, allowing them to drop out of the workforce is no longer an option.
There are probably many other measures that would make work life balance easier for parents and better for their children, that would keep Australian families strong and the workforce full.
Offering free university and TAFE places to parents seeking to return to the work force is one option suggested to me. Extensive industrial re-regulation might be part of the package. In the UK they have begun to require employers to reasonably consider part time positions for parents of pre schoolers, for example. I do not endorse or condemn any of them, but leave them with you to get creative.
Not surprisingly, the sorts of measures that increase the numbers of women in the workforce are also likely to keep them here.
People don't pack up shop and move countries easily.
Women don't often leave workplaces that allow them to live sane family lives. That's goal two.
Goal Three - making sure we have the best and most competitive workforce we can- is also by ensuring we appoint and promote people on merit and from as large a pool as possible. That pool must include women with children.
The question is who pays?
At the moment, you are paying.
All of these measures are either there as award entitlements or included as part of enterprise bargaining - well and good you might say, there are trade offs in there and it is efficient.
Well yes, to a point. But it is inevitably an additional cost for the employer and makes employing females slightly less attractive. What is more, you are at a disadvantage compared with your international western-world competitors.
Why?
Because in those countries, business does not pay directly for measures like paid maternity leave, there is no full- cost addition to the price of a good or a service. Instead, the community pays, Governments pay.
They spend a lot more on paid maternity leave than anything being contemplated in Australia - most Europeans provide it for 6 months, some for a year and for as much as 90% of full salary.
Compared with this, our Government will be asked to fund a more modest scheme for 14 weeks at a minimum rate of pay. Sure, this can be funded through increased taxation, but it might also be done through a reworking of existing payments or a reassessment of spending priorities.
(As industrial pressure mounts for paid maternity leave, particularly today with the ACTU's announcement of a test case in the absence of a government-funded scheme for paid maternity leave, you might have thought business would be clamouring for a national government funded paid maternity leave scheme to head this off. Instead, the silence is deafening).
Australia may be an island, but it is no longer at the a-end of the earth, as a former prime-minister so inelegantly once put it.
We are not immune from the pressures that are reshaping the rest of the industrialised world and in many ways, we would not want to be.
But we need to face this, face what it means for us, make sure we can harness these changes together with our great Australian values so they work together, instead of against one another.
This is a new challenge for social policy - social policy is not just welfare policy, it is not just about helping out the poor and making sure the middle class doesn't get to double dip.
Social policy is any policy that makes society work better - for us, this means making sure that families and work are better integrated.
Let me finish on a word of warning about what will happen if we don't face up to the new world of work and family.
We promised the first generation of Sixties Feminists the world - they got their degrees and their financial independence, but they also got a double-shift and a double dose of guilt. Many are bitter.
This new generation of daughters is their revenge.
These young women are not interested in guilt or double shifts or being super women. They think we were crazy! They are right!
This time, they won't be cheated. They won't back off, the force, they know, is with them.
If we don't give them what we promised their mothers, they will make their own choices, and we may not like it.
They will take off overseas. Go work in countries which are genuinely committed to making it possible for them to work and mother.
Or, they will choose not to have children - "Someone else can do that, I have worked too hard for this" says my twenty something pedicurist building up her beauty business.
Ladies and gentlemen, while our generation is still in charge, it's up to us. Leadership never was about making easy decisions.
Thank you.
Last updated 17 December 2002
