Thank you for the invitation to speak here tonight. As I stand here I am reminded of those other members of Australian Labor Party who have spoken over the years to the Fabian Society.

One of the most memorable was Gough Whitlam who, forty years ago, came to the Fabian Society Conference at Olinda, outside Melbourne, and made a characteristically eloquent appeal to people with ideas to contribute to Labor Party policy development.

Gough's call to arms was not empty rhetoric. It was made in the realisation that the Party had to somehow harness the capacity, abilities and energy of those who weren't being heard.

As John Menadue, Whitlam's chief of staff describes in his autobiography,

'we knew that there was a whole new constituency of people with ideas who were attracted to the values of the ALP but lacked a means to contribute and participate.'

The people who responded to Whitlam's call were instrumental in developing the policies Australia needed to grow. They helped Labor develop the arguments against trade protection and for a universal health care system - to name just two groundbreaking policies that emerged from that period.

The Labor tradition of transforming progressive ideas into workable policies was also the trademark of the Hawke and Keating Governments. Their success in opening up the Australian economy to the world, establishing Medicare and introducing compulsory superannuation are a testament to the long-term benefits of good policy development.

Labor succeeds when it reaches out to people, embraces new ideas and keeps its heart and its mind on the future - on where we need to go and how we bring everyone with us.

As Paul Kelly noted in his book, The End of Certainty:

"Indeed, the greatest quality of the ALP seems to be its capacity for self-renewal."

The policy review process is, at its heart, all about renewal. It's about deciding where we want to go, how we get there and sweeping up and inspiring our fellow-travellers along the way.

So tonight, 40 years on from Whitlam's Fabian address, I make a similar appeal to people with ideas to contribute to the current Labor Party process to develop new policies.

The aim is to create the policy environment where as many people as possible are motivated to contribute. 

Policy Progress Report

Tonight I have been asked to give a progress report on the ALP's policy review. This may seem a little premature, just five months since the election, but it is a very good time to take stock and consider the policies that we've already announced as well as those issues we need to pursue.

As witnessed by the recent media coverage - Labor has been more than occupied holding the Government accountable over the 'children overboard' affair, the Wooldridge House money swap and Senator Bill Heffernan's cowardly use of parliamentary privilege. But while all this has been going on, we have also been doing a lot of policy work.

In the first four weeks of Parliament this year Labor introduced proposals to:

• Improve Parliamentary standards, through an independent Speaker, question time limits and a requirement for ministers to answer questions;
• Lift the BAS red tape nightmare from small business; Establish a scheme to guarantee payment of wages and other accrued entitlements in the case of employer insolvency without placing a burden on small business;
• Allow sub-contractors to recover wages from a principal contractor if another sub-contractor further up the chain collapses; and
• Introduce a 12-month cooling off period for former Ministers to prevent a repeat of the Wooldridge House and Reith/Tenix affairs.

The Labor Party has also successfully amended the Government's asylum seekers legislation and outlined a policy framework for a comprehensive long-term approach to the issue of asylum seekers.

Labor has called for the release of all children from detention centres.

In addition, under our policy:

• The government would take back control of the detention centres, with Australian Protective Service replacing the ACM security firm;
• Woomera would be mothballed, as recommended by the Government's own Independent Detention Centre Advisory Group (IDAG), and detainees moved to other existing facilities;
• Media would be given access to detention centres, with appropriate protocols; and

The recently announced Afghani resettlement allowance would be extended to Afghanis on Temporary Protection Visas and to other ethnic groups, to assist their return home.

And just yesterday Simon Crean endorsed a framework for tackling salinity and better management of our natural resources and in particular a halt on land clearing.

This policy work will continue over the coming months as Shadow Ministers continue their search for new ideas and talk to the community, interest groups, Labor Party members and unions. Policy forums and discussions are underway on many issues.

Transformation of Work

The policy review process is about developing Labor policies for a new era.

Economic growth, jobs and equality of opportunity are enduring Labor goals but the society we confront now is very different one from the 1980s and 1990s.

One example is the transformation of the labour force. It's a changing picture, which is now dominated by the:

• increased participation of women;
• shift from full-time to part-time work and increasingly casual work;
• striking growth in low paid jobs;
• growing gap between the overworked and the out of work;
• growing regional variation in unemployment rates;
• persistence of the high unemployment and a hard core of long-term unemployed.

These are all significant changes that impact not only on our working lives but also our living standards, our family life and the cohesiveness of our society.

They all present significant policy challenges.

Change is rapid, so it is vital that all Australians have access to the quality education that will equip each of us with the skills and confidence to initiate and adapt to change. Flexibility does not have to assault our well-being.

A Labor Party with its heart and its mind focused on the future must respond to the demands and needs of Australians as they encounter a rapidly changing work environment.

The increasing polarisation of the labour force -- where the workforce is sharply divided into a high paid group at the top, a substantial low paid group together with the long-term unemployed at the bottom and a shrinking middle -- presents specific and very urgent challenges.

Casualisation of Work

Labor's policy work must begin with an understanding of the nature and consequences of the increasing casualisation of the Australian workforce.

In 2000, 27 per cent of all employees were in casual employment, up from 16 per cent in 1984 and this proportion is growing. Most casual jobs are part time jobs.

While, casual employees are the most vulnerable workers in our labour force they are not a homogenous group. It is important to acknowledge that casual work is the preferred option for some workers seeking the benefits of flexible working hours.

However, over 400,000 part-time workers say they would like to work more hours or find full-time employment. For these workers, part-time and casual employment is not a 'preferred' option. It is the 'only' option in an economy that is providing a shrinking pool of permanent full time jobs.

Over the last three years, the economy has created a grand total of 600 new middle-income jobs, compared to 462,000 low-pay jobs.

Almost nine out every ten jobs created in the last three years are in low-skill areas that pay less than the average wage.

The evidence suggests that Australia is on a downward spiral to a low-pay, low-value employment market.

This means a dearth of opportunities for people to move out of low-income jobs and into higher paid positions, as well as too few job options for middle Australians.

This trend is not unique to Australia. Internationally the growth of knowledge-based occupations linked to the new economy has also been associated with the growth of low-end, unskilled, service occupations.

As the sociologist Manuel Castells warns:

"advanced, informational societies could be characterized by an increasingly polarized social structure, where the top and the bottom increase their share at the expense of the middle."

The Australian Bureau of Statistics most recent employee earnings figures confirm Castell's analysis.

According to those figures 87 per cent of all net job growth for employees in the past three years was in jobs paying less than the average wage. The remaining job growth since 1998 has been in jobs that pay at least twice the average wage. Only 0.1 percent of employment growth since 1998 has been in middle-income jobs.

The question then that the Labor Party's policy review must ask is -- how do we avoid this shrinking in middle-range jobs and the increasing polarization of the labour force?

How do we skill a workforce and build an economy that takes all Australians up the 'high road' and avoids the dead end 'low roads'?

Education

Skills are the currency of the future and we need to be equipping Australians with the skills they need to compete in the changing job market.

The best way to avoid the 'low road' is to develop a skilled work force by investing in education. Through education, Australian workers can obtain the capacity and confidence to back themselves. Education gives workers the confidence to adapt to new and diverse occupations as they emerge.

An educated workforce is an investment magnet for the industries that create the jobs of the future.

A 1997 French study concluded that half the occupations that will need to be filled 20 years from now, do not yet even exist today. But it goes without saying that they will be knowledge and information-based.

Australia must create a labour force that has the ability and attitude, to chase down high wage new economy jobs as soon as they emerge. This just won't happen without an educated labour force.

Under current policies, the only significant growth in participation in education and training is in so-called "new apprenticeships". They are generally of short duration, with high drop out rates, and lead to low paid and uncertain employment futures.

Developing high skilled jobs won't happen in a vacuum

We need to invest seriously in developing a critical mass of educated people with the ideas, creativity and skills with the capacity to meet the demands of the knowledge economy. These Australians will not just be content to react to the demands of the new economy; they will want to shape it.

Achieving these conditions won't be easy. One thing is certain: we will fail to develop the high-skilled population we need if we continue with current policies that are producing highly polarised education and training outcomes.

The evidence is clear. Success in education, whether expressed as test results or as pathways to employment or further education and training, is closely related to where you live. We need to find new ways of breaking this cycle of disadvantage. This will mean targeting regions and communities with a high concentration of poverty and unemployment.

It will require a concerted focus on early childhood, schools, TAFE, universities. We must be innovative and find the policies that break down the barriers discouraging people from continuously upgrading their skills.

A lot of work needs to be done. Rated on its educational qualifications, Australia's labour force is ranked third last amongst 16 industrialised nations surveyed - only Italy and Portugal have a less qualified labour force.

While Australia performs well in terms of its proportion of tertiary graduates in the adult population (ranking sixth out of 28 countries), many other young people miss out in relation to education attainment.

In terms of upper secondary school completion, Australia continues to rank behind most other OECD countries (ranking 17th out of 28 countries).

It is this gap between the education 'haves' and 'have nots' that is not only undermining Australia's ability to compete in a global knowledge economy. It is also likely to further increase income inequality and contribute to the polarisation of our workforce.

Too many young Australian are missing out on making the transition to further education and a higher standard of living.

Education is the best insurance we have against the long-term polarisation of the Australian labour force.

It is therefore alarming that the new Education Minister, Brendan Nelson, has no problem with young Australians not completing high school because:

"...not all of us are biologically or emotionally, equipped or want to undertake that level of study"

According to the Minister, Australian kids are dropping out of school not because the education system is failing them or because schools are starved of funds -- but because some students are just not biologically or emotionally up to it.

Those that aren't up to it, he says, can spend their lives in "a quiet pond"! I would call it a stagnant pond.

Conclusion

Australia needs more debate and discussion about how we respond to the transformation of work and the increasing polarisation of the workforce.

By stimulating debate, Labor's Policy Review will once again demonstrate to the Australian people that the Labor Party is the Party of ideas.

Labor's policy review process is not only about formulating policies; it's also about creating the environment that encourages participation and stimulates debate - the essence of an enlarged society.

This review is part of our determination to re-invigorate and "upsize" the democratic process and, I can promise you, it will be inclusive, transparent and broad ranging. This is no quick political fix. It's part of the development of policies that recognise and define the needs of all Australians and then do something about them.

Nationally, Labor can only succeed when it restores people's faith in the political process.

When it encourages all Australians to once again become enthusiastic about the policy process.

When it inspires them and includes them and, above all, when it convinces them that they CAN make a difference.