Thank you Ellis [Connolly] for that introduction.
The economics profession plays a central role in public policy debates in this country and I welcome the opportunity to talk to future leaders in the field today.
As Finance Minister, my role, along with the Treasurer, is to achieve the right fiscal settings, and to implement the right policies to secure Australias sustainable growth and Australias prosperity.
Managing the economy is core business for governments - it defines the task of fiscal management and the policies we implement.
And, although from a different perspective, my previous Ministry Climate Change had a strong economic focus too.
What I tried to do as Climate Change Minister was tackle an environmental problem with an economic solution.
I have always been of the view that setting a price on carbon was the right solution, that markets would achieve allocative efficiencies better than government.
I am also of the view that economic reform today underpins future prosperity.
That is why it cannot be shirked.
These are views that I have taken into my current role which is focused on getting the fiscal settings right to see the Australian economy grow making sure that the impact of government spending both in aggregate and its composition are right for the circumstances we face.

Understanding Change
At a time of significant change in our society, an understanding of the economy could not be more important to navigate the challenges and opportunities before us.
Understanding these changes is vital for all of us for firms, employees and the parliament.
Because the choices we make today will set our trajectory for the coming decades.
Government has an important role in promoting this understanding.
Ministers in fact, all members of parliament have a role in informing the public, enabling people to make sense of the changes occurring in their lives.
And the economics profession must also be active participants.
Because the challenges and opportunities before us as a country require a serious debate and require an informed debate.
To enable Australians to understand the tangible changes that the broad shifts in our economy bring.
A discussion which not only focuses on the big structural shifts globally and in Australia; but also one that explains how this manifests in peoples lives.
A discussion that enables Australians to better understand the drivers of and the answers to the day to day changes they see.
In the current environment, economists see sustained high terms of trade, a strong dollar likely to persist, and a mineral sector that is closely tied to the growth of Asian economies.
As economists, you would understand what this results in; the economy adjusting and reallocating resources, labour and capital.
You would be able to reconcile the relative pay of a manual labourer working in the resources sector against someone highly skilled in manufacturing.
But the insight you have this comprehension of the forces that shape the Australian economy is not universal.
Because where economists see these changes, many Australians will see something different.
Consumers see cheaper DVDs from overseas; an opportunity to travel with a strong dollar; the cost of electronics going down; they see job losses, despite unemployment at 5.1%.
Firms that have been in business for several generations, wound up inside a couple of years.
They may struggle to find employment in regional areas, or small country towns, yet theyll also see the unemployment rate drop.
Indeed, and not without reason, there is confusion.
Our economy is seemingly one of contradiction, being pulled in different directions by market forces.
With the daily news focus often on single events job losses, a new high for our dollar against the greenback and solid employment figures comprehension is difficult.
From where I stand as Finance Minister, we need to narrow the gap between these two perspectives.
The tangible and the immediate impacts will always be most prominent.
They will grab the headlines.
But there is a need to give Australians the tools and perspective to provide the context for these events.
We all have a responsibility to equip people to make more informed decisions.
The provision of robust advice from all in this room whether advising banks, businesses or government is important in broadening the understanding of the change occurring in our economy.
In the coming years and decades as we enter the Asian Century, these insights could not be more important.
In 2012, Australia stands tall at the beginning of the Asian Century.
The rise of the Asian economies coupled with our geographical advantage presents infinite opportunities for the Australian economy.
Our Government understands that this will see transformative change as the international forces shape our domestic economy.
And we will respond accordingly.
We have a proven track record for making the right calls on the economy.
When the GFC hit in the second half of 2008, our Government acted swiftly to support jobs and business, and stave off recession.
We understood the importance of stepping in to boost demand as the private sector retreated.
Simultaneously, the RBA Board eased monetary policy to free up credit markets, providing support to business.
The combined effect bolstered confidence and saw Australia come through the GFC in one of the strongest positions of all major economies.
This response was underpinned by our understanding of the domestic implications of the global financial crisis and a determination to not repeat the mistakes of past economic policy makers.
We understood the macroeconomic impact of such a downturn and the long term structural damage that can occur.
But also as a Labor Government we recognised the human face of the financial crisis.
While fiscal stimulus supported demand, it also kept over 200,000 Australians in work.
The stimulus spending was targeted to help lower or unskilled labour because we know that in significant downturns these are the people that are most likely to fall out of employment and stay out.
But such stimulatory intervention into the economy was done with a planned exit strategy.
It would have been reckless to do otherwise.
The economic imperative was matched by the right fiscal settings.
With growth at trend, getting the budget back to surplus in 2012-13 is appropriate and were doing this by sticking to the strict fiscal discipline that has been a hallmark of this government.
Shaped by our understanding of the economic circumstances, the Governments fiscal policies have proven successful.
The IMF and OECD have commented on the success of the Governments decisions both to support the economy when it was needed, and having a clear plan to return the budget to surplus.
Looking forward, we now need to get the economic settings right to support growth and jobs for the decades to come to capitalise on our position of strength, and invest in the future.
The GFC was the worst global downturn since the Great Depression.
We are still feeling some of its effects.
But the significant changes underway in our economy are not shaped by the GFC alone.
They are increasingly driven by a global shift which will inexorably continue into the decades ahead.
We are seeing an iterative process of transformation as the day to day decisions of firms and households aggregate to cause broader shifts in the composition of our economy.
For many in Australia getting a handle on this change is difficult.
And while building an understanding isnt easy - even in a neutral setting - the current political debate in our country only increases the difficulty.
The way that economic change is materialising in the eyes of the general public heightens the opportunities for some to exploit.
The positive improvements in Australians lives occur over time, the benefits dispersed through a number of transactions, including lower costs for some goods, improved wages and better purchasing power compared to other countries.
The positive changes are seen as normal, precisely because they are gradual.
But the negative impacts of change are often much more glaring and obvious.
They are often difficult, with real personal consequences for some Australians and their families.
Workers losing their jobs.
Factories closing down.
Well known Australian brands moving offshore, despite over 700,000 jobs being created since November 2007.
In this environment, the opportunities to exploit the negative effects of change for political point scoring have overridden the need for an informed debate.
Some point the finger and allocate blame.
And by ignoring the facts, they talk down our countrys economic prospects as way of promoting their own.
The Opposition seem determined to play to community anxieties with mistruths.
To give just one example members of the Opposition economic team constantly compare Australias public net debt position to countries like Greece and Iceland.
Australias net debt to GDP position is expected to peak at less than one tenth of the average across major advanced economies - at 8.9% of GDP.
This compares to the IMFs estimates for:
Greece at 153% in 2011.
Icelands estimated peak of 67% in 2011.
The broader Euro zone at 69% in 2011 and expected to peak at 71% in 2013.
The United States at 73% in 2011 and expected to continue to deteriorate to 89% in 2016.
As if ignoring the $140 billion reduction in revenues largely from the GFC wasnt enough, comparing our debt position to these countries is simply reckless.
National interest demands the contrary.
It requires a willingness by all to speak to the opportunities before us.
Because we all know that business decision making, and the choices made by households, are influenced by confidence.
Relentlessly talking down our economy, espousing doomsday scenarios does no favours to Australian businesses nor to Australian workers.
It is unhelpful to business and threatens growth.
And it is dishonest.
As the Secretary of the Treasury noted last week, whether it is the short to medium term or the longer term, [our prospects] are incredibly promising.
And last week we saw employment rise in January, with over 46,000 more Australians in work.
Our Government is putting in place the right fiscal and public policy responses to manage the challenges and take advantages of the opportunities before us.
We have the right policies to deliver.
Embedded in an understanding of the international and domestic economic changes occurring, we are focussed on ensuring Australians have the skills and capabilities for jobs today and tomorrow.
Because while the resources sector will drive our economy in the near term, we need to look through the boom and invest in the knowledge, infrastructure and innovation that will ensure that our economy prospers well into the Asian Century.
As demand from Asia draws down our mineral assets, we need to invest in the human and physical capital that will generate growth when our resources are depleted.
By investing a share of the proceeds of a once-in-a-century mining boom in infrastructure and lowering company tax rates, the Government is not only spreading the benefits to all Australians.
It is investing the proceeds of our mineral wealth today, so that the next generation can benefit from the boom experienced by this generation.
The MRRT is only one part our plan of the make the most of the boom.
Our investments in skills and education will ensure that all generations are given the best opportunity to succeed.
In the last budget we announced a $3 billion investment in skills to ensure that all Australians can participate.
Our changes to the higher education funding model will see more students in tertiary education than ever before.
Across all aspects of post-school education and training, our Government has removed barriers, to improve participation and economic contribution.
Through increased skills, we are helping to improve labour productivity and preparing Australians for the workforce of the next century.
But these policies have all been implemented within a strict fiscal framework.
From the announcement of the fiscal stimulus package we have adhered to a fiscal strategy, while also delivering our policy priorities.
This has seen us keep taxes as a share of GDP below the level inherited when we came to government.
Recall that the highest taxing government in Australian history was the Howard Government.
By contrast, taxes are lower under our Government than under Peter Costello, despite the rhetoric we see from the Opposition.
We have found over $100 billion of savings across four budgets to offset new spending.
This strategy will see the budget in surplus in 2012-13.
These are the appropriate fiscal settings with the economy forecast to be back around trend growth.

The reverse is also true
Economics, as a profession more than nearly all others dominates the public policy discourse in Australia and internationally.
The interaction of supply and demand, the use of incentives and taxation, and the adjustments to fiscal and monetary policy underpin policy development across government.
But while it is invaluable, we should not forget that it is not infallible.
So Id also ask you all here today to look beyond the figures and modelling.
Because while I see improving the level of understanding of the economic changes occurring as vital, Id equally argue that economists should be aware of the experiences of ordinary Australians in their analysis.
Contextual analysis significantly enhances the field of economics.
This was a point raised last week by Dr Parkinson at the opening of the ANUs Centre for Economic History last week.
He highlighted the importance of economists being able to place current events in a historical context.
I agree with the Secretarys remarks, I also think that a broader proposition can be advanced.
That economics as a tool of analysis is stronger for having a keen understanding of context whether that is historical or political.
This does not mean any loss of rigour or any weakening of theory.
I believe that situating both analysis and solutions in a real world context only adds to the utility of economics.
It enables more cogent and relevant advice to business, NGOs and government.
This proposition is the flip side of the arguments that I discussed earlier around the importance of informing the public of the economic forces at play in our economy.
Because we all can do more to have an informed and constructive debate, both education and awareness.
And we know this is true because it has happened before.
The Hawke and then Keating Governments implemented economic reform in the 1980s in response to an increasingly globalised world.
They reduced tariffs and floated the dollar at a time when our economy was increasingly experiencing the impacts of international forces.
This is not to say that everyone agreed with the reform direction, or the exact policy prescriptions.
But the participants took the issues seriously.
They debated with passion, but also with purpose, and facts.
Government, the opposition, business, unions and peak bodies all engaged in the economic debate that ultimately produced the foundation of the next two decades of growth.
We face a similar change over the coming years, and need to aim for a similarly informed debate if we are to continue the reform prerogative of the Hawke/Keating era.

Concluding remarks
I have often commented that in an environment where the gap between what is important and what gets a headline is increasing, it is good policy that gets lost in the churn.
Standing at the start of the Asian Century, we cannot afford for this to be the case.
We need to be having a well-informed and measured debate on the future of our economy.
Because it is only through such a debate that our prosperity is secured.
I look forward to the contributions of those in the room to that debate, today and for the years to come.