Thank you for the invitation to address the Fabian Society. In the last 12 months we have seen just about every Shadow Minister address the Fabian Society. To my recollection, this is a dramatic change. Labor Shadows used to be more often seen addressing CEDA or the Sydney Institute or the BCA. This is a great development because it's about getting the party members and supporters involved again in policy development - which is one of the goals of the party reforms I have made. It's about reconnecting with our base and good Labor ideas.

Over the next couple of weeks we will be celebrating the thirtieth anniversary of the election of the Whitlam government. The Fabian Society was heavily involved in the development of Gough's great reform program, which changed Australia forever. Race Matthews in particular had a central role and served in Gough's caucus. So as we celebrate our victory in 1972, we celebrate the contribution of people like Race and the many, many other Fabians who worked so hard to make it happen.

As everyone knows, the Fabians are named after the Roman General, Quintus Fabius Maximus, who led Rome in its war with the Carthaginian General, Hannibal. His nickname was derived from the Latin word for delaying - 'Cunctator' - not the sort of name you want to try to pronounce after a few beers or glasses of wine at a dinner like this. Despite this, the story of Fabius - I'll call him that, not his nickname - is perhaps instructive.

During his struggle against Hannibal, Fabius was always being criticised for not rushing into battle at every opportunity. He'd seen his generals destroyed time after time by his opponents when they'd adopted a hairy-chested approach and attacked without thinking first. Fabius believed in a more strategic approach. He was resistant to the quick fix and rightly ignored the critics of his day. But he was determined to win. He had one policy - defeat Hannibal and save Rome. Nothing would shift him from it. He won. There's a lesson for Labor today. Just as Fabius defeated Hannibal, who was considered invincible in his day, we will defeat Howard - or Costello, should he ever replace him - and save Australia from their right-wing agenda. We will do this by fighting our opponents on our issues, in our way. We will not be shifted.

Our first twelve months

It's been a tough 12 months in opposition. Opposition is always hard, especially after three consecutive defeats. And it's even tougher when the domestic agenda is crowded out by security issues. Let's look at the last twelve months. There have been two distinct phases.

The first was marked by the election of a Shadow Ministry full of new talent; the kids overboard affair; the attempt by the Prime Minister to embarrass Justice Kirby; the Hollingworth fiasco; and Labor's successful criticism of a federal budget that attacked the most vulnerable people in our society. Those measures still haven't passed the Senate thanks to our principled stand. The first half of the year was also marked by important new Labor commitments:

• A population policy for Australia;
• A more compassionate approach to asylum seekers;
• A commissioner to protect our children from child sex abuse;
• Four-year fixed terms for the parliament and an independent speaker;
• Paid maternity leave;
• Giving every Australian the chance to own assets;
• Community Safety Zones to tackle crime;
• Engagement with Asia;
• And a visit to China to lay the basis for a new partnership with China - an old friend of Australia and Labor.

The second half of the year started with internal party reform. This reform was essential to tackling branch stacking and creating a more inclusive, open and democratic party. It involved tough decisions and shifted much of the public's focus onto our internal processes. It was difficult for us, but we simply had to do it. The party's failure to make these reforms much earlier contributed significantly to the poor outcome in Cunningham. Then the Bali bombing took place, and turned the electorate's focus again back to security issues. This political environment clearly suits incumbents. Despite this, we have continued to put out policies:

• On manufacturing;
• On innovation in industry;
• On improving superannuation;
• And on improving corporate governance standards.

The way forward for Labor is to engage with the electorate with constructive proposals for national security, and to have a strong domestic agenda which identifies the problems people are facing, the pressures they are under and the solutions to them. You get my drift. I don't want us to just oppose; I want us to propose - with a message that will resonate with the Australian people. It resonated in the first half of this year, and when we get clear air to focus people's minds on the domestic agenda, it will again.

My values and beliefs

We need to have a strong position on security issues because they are so important, and I will come back to them later in my speech. But I want to deal now with the next couple of years in the lead up to the next election. I also want to deal with the values and beliefs that underpin my leadership of the Labor Party. Three things differentiate us from our opponents: tolerance, fairness and opportunity for all, not just the lucky few.

A strong economy for a fair society

The major debate between left and right today isn't so much about how we create wealth, it's about how we distribute it. That's why in the 1980s, as leader of the trade union movement I supported reforms to create a stronger Australian economy - not as an end in itself, but to create more wealth for everyone to share, not just the lucky few. Those reforms led to the introduction of superannuation for everyone. They lifted the real disposable incomes of low to middle income earners. They created a more diversified economy through better trade and industry policies, and created jobs. I want a strong economy, but I want it for a fair society.

A sustainable economy

I don't just want a stronger economy, I want a sustainable economy as well. As Shadow Treasurer I recognised that environmental sustainability was a mainstream economic issue. I recognised that growth must be economically and environmentally sustainable, and that issues like land and water management and greenhouse emissions can no longer be treated as sideshows. Our continent is fragile. We are its custodians. And we have a responsibility to future generations to preserve our environment as much as we have a responsibility to create future economic prosperity.

I will use COAG [the Council of Australian Governments] in a new way. Through a heads of government and whole of governments approach, COAG will find a solution to the salinity and land clearing crises, will improve water and drought management, and will curtail greenhouse emissions. I am committed to ending the buckpassing that is preventing Australia from solving these problems. That's why a new commitment to national co-operation is essential.

We can't just deal with issues of sustainability as a nation. They require a global response. That's why I will ratify the Kyoto Protocol. It's the best international framework to achieve such a solution and it's in our interests to sign it. It's good for the environment, it's good for Australia, and it's good for jobs. Australia must have a seat at the table in the creation of a sustainable planet. By not ratifying the Protocol, John Howard is also denying Australian industries access to the emerging market for tradeable credits. It's absurd that a party supposedly so committed to the free market is dealing Australia out of this market.

Six years of Howard has changed Australia - for the worse

John Howard has no agenda to implement important reforms such as these. His speech on Wednesday night was meant to outline a third-term agenda, but all that it demonstrated was that he has run out of puff. It was pathetic. It contained no new policies and no long-term strategies to change Australia for the better. Just ten committees, taskforces, trials and reviews. Under his leadership Australia will continue to become a country we won't recognise just a few years from now. It will be a less tolerant nation, a more divided nation, and a nation less engaged with our region.

Just look at the changes for the worse that we've seen in the last six years. Families are under increasing financial pressure, and no wonder. Under this government we're paying more tax than ever before. The Australian people now know one crucial thing about this government; they are the party of high taxes. Peter Costello never saw a new tax he didn't like. Consumer credit and household debt are at record levels. Australians now owe twice what they owed in 1996. Young people can't afford to buy a home any more. The Howard government's housing bubble is pricing too many Australians out of the housing market. Buying a home is now taking an extra 14 months of average wages. Health costs have gone through the roof and bulk billing is disappearing.

It's no wonder people are putting off starting a family and are being forced to work longer hours to make ends meet. It's ironic that the country that pioneered the 8-hour day now has the second longest working hours of any country in the world - behind only South Korea. Middle-income jobs are disappearing. Over the past three years, the government has created only 700 jobs that earn average wages. Retirement incomes have stagnated. The superannuation agenda has not been advanced at all in the last six years. Job security is being destroyed by the Coalition's industrial relations changes. And if you lose your job, they won't guarantee you 100 per cent of your entitlements, unless you work for John Howard's brother, Stan. Inequality is increasing. While the banks are making record profits ($10.5 billion this year), ordinary people are paying record transaction fees (up by $804 million to $7.1 billion this year). While farmers are waiting for decent phone coverage, Ziggy Switkowski is getting his own personal phone tower. While public schools are being starved, private schools are getting millions more and still putting up their fees - by an average of 8 percent this year alone. It's clear: this is a government of the wealthy, by the wealthy, for the wealthy.

Peter Costello tells us we've never been richer. That might be the view from the Melbourne Club, but it's not the view from the kitchen table of ordinary Australians. John Howard wants to talk almost exclusively about security and migration issues for one reason. By asking us to get mad at each other and at other nations he thinks we'll stop looking at him and asking, why are our taxes are the highest they've ever been? Why are we paying massive fees to the banks while they are recording record profits? Why are we working longer hours when there's so much unemployment? Why can't young people afford to buy a family home? Why can't we do something about the state of our rivers and our soils? A big difference between Labor and Liberal is this: Whilst we're both committed to fighting the war on terrorism, only Labor has a plan for the future of the country.

A better vision for Australia

John Howard has changed Australia for the worse. I want to change it for the better. I want the economy to work for all of the people all of the time. Not just a few of the people all of the time. How do we use the stronger economy to create the fair society?

The disappearing middle

I want to address the problem of disappearing middle by targeting tax cuts at them through a system of tax credits. Done properly it can address welfare to work problems and the costs associated with raising a family. I want more family-friendly policies so that people are not forced to make the choice between being a good parent and being a good employee. They can be both. John Howard makes a lot of noises about paid maternity leave, but he has no intention of doing anything about it. We have already announced our commitment to paid maternity leave. But if we are to seriously face up to the challenge of balancing work and family life, we must also improve childcare, improve kindergartens and early childhood education and improve workplace flexibility.

More affordable housing

I want to rekindle the Australian dream of home ownership for everyone. By using the Commonwealth-State Housing Agreement negotiations with the states and local government, we can implement new policies to make housing more affordable; policies like those we have already floated:

• Encouraging superannuation funds to invest in affordable housing for average-income earning families.
• 'Matched Savings Accounts' that match, dollar-for-dollar, the savings that low income earners make towards saving for a house.
• And 'Nest Egg Accounts' that provide a lump sum for children from low-income families to give them capital that they can put to their education, starting a business or saving for a home when they turn 18.

And we can also implement policies that will improve the liveability and security of our communities through ideas like community safety zones and better cities programs.

Taking superannuation forward again

I want to further improve our superannuation system as our population ages and there is an increasing tendency to retire earlier. Labor spread superannuation to the whole of the workforce and we will improve it for the whole workforce.

Improving our public health system

I want to improve our public health system. Bulk billing is in freefall - down from 80 percent in 1996 to 71.2 percent today. Without bulk billing there is no Medicare.John Howard once said he wanted stab Medicare through the heart. Now it's death by a thousand cuts. When she visited Australia in 1996 as the First Lady, Hillary Clinton said something at the Opera House that we should never forget: "hang on to your Medicare; it's the best scheme I have ever seen." We will not only hang on to it, we will restore bulk billing and strengthen Medicare.

The key is education

Underpinning all of these initiatives has to be a national recommitment to education and skill development. Education and skills are the great liberators of individuals and the great civilisers of societies. They lay the basis of greater tolerance and compassion - two values seriously lacking in the ranks of the Howard Government. My objective is to see every child achieve the equivalent of a year-12 qualification. We need to be innovative in how we achieve it and much more responsive to our children's needs and problems. Our children must be given a choice between a job, a university or TAFE place or some other form of structured training. Unemployment must not be an option. Gough Whitlam talked about his ambition 30 years ago to ensure that every child had a desk with a lamp on it. Today my objective is to equip that desk with a lamp and a computer.

It's not just about helping young people. That's why I am committed to making lifelong learning a reality for everyone through ideas such as learning accounts. Access for all to the benefits of the information age must be our objective. It is the bridge to the future. To do this we must upgrade our telecommunications infrastructure and connect the nation. It's a key reason for keeping Telstra in public ownership. But enormous potential also exists in our other significant public institutions - our schools, TAFE colleges, tertiary institutions, post offices, libraries and our ABC. Through broadband and fast speed Internet connections we can use them to the benefit of the whole community and expand lifelong learning opportunities even further.

The Liberals have spent the last six years opening doors for the favoured few, slamming them in the face of those without money and privilege. They did it by under-investing in our public schools. They want to do it again with their proposal to deregulate university fees. My leadership will be dedicated to unlocking the doors to new skills and knowledge so we can give every Australian the opportunities they need. We know that quality early childhood education significantly increases opportunities later in life. That means our investment in people must start at birth and continue throughout their life.

National Security

The Australian people are currently preoccupied with the threat of terrorism. Labor has adopted a responsible approach to national security and we will continue to do so. I've welcomed the decision to return the SAS to Australia and concentrate more effectively on our region. I've been calling for that since the Bali Bombing. But for all the credit the government has got - and I'm prepared to give them credit where it's due - they have no plan. They've been too reactive. They've played partisan political games. And I don't think they've always put Australia's interests first.

It was on display again yesterday when the Prime Minister equivocated over the provocative statements about Muslim women and the clothes they wear. National leaders have responsibilities to respond to these statements immediately and unequivocally; to speak up for the nation and the need to tolerance; not to promote division, blame or scapegoating. His equivocation at the time of the rise of Hansonism showed what damage that was caused to the social fabric of the nation by poor leadership of this kind.

Labor will continue to put forward constructive initiatives. If we are to genuinely secure our borders there are a number of other things we must do. We need a more independent foreign policy that puts Australia's interests first and make a stronger commitment to ensuring that international law and diplomacy is upheld within the UN system. This government uses the UN only when it suits it. Labor has a fundamental commitment to promoting Australia's role as a good international citizen. We have always held this view and it is even more important now in this time of international uncertainty. We need a UN-based solution to the Iraq crisis. We need a new national security policy to coordinate our security and intelligence effort. And we need an Australian Coast Guard - a cop on the beat - to defend our coastline from drugs and guns and people smugglers.

Conclusion

At this time of national pain, we're all rightly reassessing what's important to us. That's what Curtin and Chifley did during the Second World War. This war of course isn't as intensive as the Second World War, but the principle is the same: we have to win the war and win the peace. Let's not forget what we're defending. We're defending great Australian values like tolerance, fairness and opportunity for all. Those are the values I will defend. And over the next year Labor will be releasing new policies to give new life to these values.