Sussan Ley delivers the John Howard Lecture

sussan ley joins john howard for the flagship event of the menzies research centre.

Firstly, may I acknowledge former Prime Minister John Howard, the Menzies Research Centre Chair, of course Brian Loughnane, and other members of the MRC board. Director David Hughes, thank you for all the work that you do.

To my parliamentary colleagues, thank you very much for joining me here. I want to give a shout-out to Deputy Ted O’Brien, whose deep knowledge of energy policy has helped us land the position that we’re in today. But every single one of my colleagues has, over the last couple of days, been a little bit locked in Canberra to talk about something that is important to us, important to the economy, but most importantly, vital to our national interest.

So, I thank my colleagues for being here and I thank all of you, especially, for attending.

BECOMING A HOWARD LIBERAL

It’s almost—well, it probably is exactly—24 years ago that the seat of Farrer had not yet been decided. It was the election of 2001, and it took ten days for the seat of Farrer to be counted. I was the last person to walk into Prime Minister John Howard’s party room. During that time, I was biting my nails, wondering what came next, and thinking it was all over.

I was outside feeding the poddy calves in my gumboots in the pouring rain on the farm, and my middle daughter, Georgina, aged ten, rushed out and said, “John Howard’s on the phone!” I ran in and broke the rule that you don’t run inside with your gumboots on, raced up to the phone, picked it up and said, “Mr How—oh—Prime Minister—oh—oh—” and John Howard said to me, “I don’t know if you’ll get there, but I just want you to know that every single one of us in Canberra is gunning for you.”

It was a wonderful feeling, because it was the first time I felt part of this team. I’d obviously been part of the Liberal Party branch I was a member of for a long time, but my heart really warmed at that moment.

Some of you may also know that the reason why the seat of Farrer took so long to be decided was because I was contesting it against the National Party. And I didn’t need a single National Party preference to win the seat—that’s just how the lay of the land went.

Since then, I’ve had cause many times to think about those early years, the privilege of learning from our greatest Prime Minister, and the lessons of leadership that it gave me: how to be a leader, how to be a leader in government, and how to be a leader of a team.

HOWARD IN THE DROUGHT

Some of you have heard this story before, and Mr Howard has heard it many times, but it’s worth repeating because it’s very significant.

I was, and am, a rural member of Parliament. Sometimes rural Liberals feel a little bit forgotten—because rural Australia, let’s face it, can feel a little bit forgotten. And we, in the Millennium Drought, were struggling in quite an extraordinary way and I felt that pain from the constituents I represented because I knew it from my own life. I knew what it was like to struggle with the highs and many lows of life on the land. I knew what it was like not to be able to pay the bills, to have your sheep needing to be shot because the price was too low.

I felt that pain for my constituents, and I invited the Prime Minister to come down. John Howard came to the town of Finley in the Riverina—and no Prime Minister before or since has ever visited Finley.

In the Finley Memorial Hall, the farmers gathered. And as farmers do, there were no sensitivities; they just marched straight up and said, “This is what’s going on, and we want you to know about it.” They were so pleased that the Prime Minister of this country was there to listen to them.

The big thing then was something we can trace back to Menzies: how important small business is to us, what it means to us, and how we always feel small businesses are forgotten by the other side.

I said, “We’re going to visit an accountant in town. She does all the books, so she knows exactly what’s going on.” We went in there and she had this sponge cake—it was the most amazing sponge cake. I’ve been a shearer’s cook, but I could never cook sponge cakes.

We sat down and had a slice – she’s no longer with us – and she was one of the most articulate people I’ve ever met. She described what it was like for small businesses. As we walked out of there, the Prime Minister said to me, “We need to do something about this. When we get back to Canberra, you can be involved, and we’ll develop a package that gives exceptional circumstance drought relief to small businesses.” And we did.

HOWARD LISTENING

For me, it was a lesson about how you listen, how you learn, and how you implement what you need to do to look after the people you go to Canberra to represent.

There are many other anecdotes I could tell. I always knew, though, that with the backbench we had in 2001—well, it was quite a large backbench—people got antsy, they didn’t always agree with everything, and sometimes they felt disconnected from the ministers or the decision-making.

If there was an issue, everyone would get in a room. John Howard, Prime Minister, would walk in, say nothing, and listen to all the grumbling backbenchers—who grumbled a lot, which was perfectly fine, by the way; I don’t mind it either. At the end, he wouldn’t just say, “Well, thanks everybody, great meeting.” He would stand up and say, “Right, this is what we’re doing,” and spell it out. The staff with him would be furiously writing it down, no doubt thinking, “How are we going to deliver this?” But we did. And they did. And that mattered. I’ve never forgotten it.

If you walk into the John Howard Prime Ministerial Library at Canberra’s Museum of Australian Democracy, you encounter the following words emblazoned on the wall:

“Politics is not a public relations exercise. It is fundamentally a contest of ideas about what best serves the national interest. It is the ability to evaluate competing visions of the common good that marks out a truly great people.”

Those words ring in my ears as I speak to you today.

And while you read a lot of what journalists think goes on behind closed doors within the Liberal Party, can I tell you—and all my colleagues here will attest to this—that as we discussed energy policy over the last two days, the national interest came up in almost every single contribution.

Consistent with that mantra is, my engagement in the contest of ideas is to craft and prosecute the contemporary Liberal Party’s vision of the national interest in 2025 and beyond.

Just as Menzies, in establishing our Party, spoke of the forgotten people—the salary earners, the shopkeepers, the skilled artisans, the professional men and women, the farmers, and those not rich enough to have individual power, all taken for granted by each political party—and just as the genius of John Howard was to identify the forgotten people of his time, those history lessons gave us the Howard Battlers: the people who were dismissed and disregarded by Paul Keating—the small business owners, the tradies, the parents, the retirees.

Another great memory from my years serving in John Howard’s Government was the focus on family: the family at the heart of our society, everything we believe in and everything we strive for.

I’ve been thinking about—well, not that I want to have a term that directly maps onto this—but a word does keep coming into my mind about the people we need to be here for today. Yes, they’re hardworking Australians, but they are the disenfranchised people.

THE DISENFRANCHISED GENERATION

Disenfranchised because Generation Z and the Millennials are in an altogether different category. One of the things that we have to understand, as the modern Liberal Party, is just how different that is.

I said, when I became Leader, I said I would meet modern Australia where they are. I have—and so have all my colleagues. We’ve been listening, we’ve been learning, and we’ve been understanding. And we know that Gen Z and Millennials are right now the disenfranchised people, because they are facing a future of unaffordable housing, of stagnant wages, and of spiralling costs of living.

We know that they—and their children—are set to inherit a worse standard of living than we have. For the first time, a standard of living that is declining. For the first time, since the Second World War. And I just don’t think it’s good enough that we, in positions of leadership and arguably power, think that’s okay—because it’s not okay.

When I look at my children in their thirties and my grandchildren—six of them aged six and under, of course—it does concentrate your mind and you do think about what you want for the future, for your family. That is the pressing call to action for all of us: what are we going to do for this disenfranchised generation of Australians?

Wherever I go and meet with young people, I ask, “What matters to you? And, obviously, why didn’t you vote for us at the last election? Did you even think of us? Maybe not. Do you know what we stand for? Maybe not. Did you have any idea?” Maybe not.

We ask those honest questions because we need to—because we have to develop a sound, sensible, contemporary set of policies to meet modern Australia where they are at the next election.

No young person ever lets me out of that conversation without talking about housing. Because it is just so important, and it is just so unfair, that we found our pathway into a home of our own, but there’s a generation that has absolutely given up on that dream.

So, we are so determined to take action on that.

HARD WORK REWARDED

Now Brian Loughnane, you were generous enough to compliment me on my two speeches so far, and I just want to remind everyone here and put them in the context of this Howard Lecture.

After we lost, in 2022, John Howard came and addressed our party room. He said, “If you’re the Liberal Party and you’re not working on tax reform or industrial relations reform, then you need to question what you’re doing.”

I haven’t forgotten that, and I’ve taken it on board.

With respect to tax reform, it is absolutely in the DNA of the Liberal Party that you should keep more of what you earn. When you work really hard—if you’re someone who takes risks (this is something the Labor Party doesn’t understand), works hard, steps out, and gives back—you deserve to be rewarded for your effort, and not feel that you have anything to apologise for.

I think of my dad, who was the son of an English schoolteacher. He had absolutely nothing growing up. He worked in the intelligence services, did his stint in the War, and migrated to Australia looking for a better life—basically starting again, almost in his early fifties.

All through his life, he saved. When I was growing up, I assumed we didn’t have much money, because there never was money for “this, this or this.” It was all being saved, invested, and carefully put away.

That’s a nice story, and I know everyone can’t achieve what my dad was able to achieve given his circumstances. But when people do work hard, they should be rewarded.

I remember—many of you know—that I fly aeroplanes. I remind people of that quite a lot! I decided I wanted to fly aeroplanes, which was very disappointing to my father, who said, “Well, this is no good—there’s no money in this. It’s not a good career for a woman. You need to get a good job in the public service.”

Well, I did get a good job in the public service, but even back then, I was working hard to save for my flying lessons. I got a second job working in a takeaway food caravan in Canberra called, Gilly’s Roadside Diner, making horrible hamburgers.

Then I’d finish at 10 o’clock at night, go and vacuum a department store, and save and save for my flying lessons. I had to do a lot of this because, frankly, I wasn’t very good when I was starting my flying lessons.

But I noticed how much money was going in tax by the time you got to your second and third job. “What am I doing?” And I thought, ‘this isn’t right, I’m having a crack!’ I’m doing something that’s important to the future, because I’m going to have a job in this field, which I did, etc etc.

Later, when my flying career landed me in western Queensland, I worked in the shearing sheds—the hardest job I’ve ever done. A long, hard, hot day teaches you something about the dignity of work.

I met my then-husband, who was a shearer. He was shearing so he could get a start on the family farm. We lived in a caravan and saved every dollar. I sent the money home, and my dad put it in the cash management account.

He started to forgive my strange choices when he saw I was saving money. He was always very happy to see those cheques come in and go into the account, earning interest. That gave us the start on the family farm. If we hadn’t done that, we wouldn’t have had it.

We were able to get a start, support the next generation—or the generation of his parents, which you always had to do, as people familiar with farming families know all about. There were tough times, yes, but the point I make is that building something for the future—for yourself and your family—is just a worthwhile thing, and governments should back it in every single day of the week.

Now, four of my six grandchildren are the sixth generation on the family farm, and that makes me very proud indeed.

When John Howard left Office, personal income tax was about 22 per cent — the average rate a person was paying. It’s now heading above 24 per cent, and in another five or so years it’s going to get close to 28 per cent. It’s just creeping up.

It’s time we put a line in the sand and said: this is who we are, this is what we believe in, and we are going to reduce personal income taxes.

So I have committed that we will take a package to the next election which will contain substantial personal income tax cuts.

Some people say, “Oh, well, that’s pretty difficult.” Yes, it is. I’ve also talked about budget repair—which I’ll come to—but when you see Labor making an announcement, being very generous with borrowed money, remember that. Very generous with borrowed money.

Know that, in assessing those proposals between now and the next election, we will dedicate where we can to budget repair and personal income tax cuts.

Now, budget repair is vital, and there was no better example than John Howard’s Government of living within your means.

We’ve got a government that simply doesn’t live within its means. And when you’re talking to your friends and family, you only have to remember one statistic: every minute, $50,000 in interest on the debt, goes on the national credit card. Every minute, $50,000 in interest on Australia’s debt.

So every time Anthony Albanese sounds really generous—“Oh, we’ll continue these energy subsidies”—every time we ask him in Parliament, “What are you going to do to bring electricity prices down?”, he says, “Oh, well, you didn’t support our subsidies,” as if that’s the answer.

Not having an affordable system in the first place, but finding money from somewhere else—or borrowing it overseas—and delivering it to people in subsidies.

So it’s critical that we start to address that.

I’ve talked quite frankly about a culture of dependency—and that gets the Labor Party very excited. Because they say, “Yes, you see, the Liberals—the evil Liberals—always there for the top end of town, always there to make cuts.”

Well, two points. The personal income tax cuts will be for low and middle-income earners, because they’re hurting the most, not for the top end of town.

And obviously, our tax relief needs to extend further and wider. We have to address a few simple truths—one of which is that more than fifty per cent of Australian voters receive more than fifty per cent of their income from the government, either by way of a wage, a subsidy, or welfare.

Now, I have nothing against the public service. I’ve been a public servant. We back the public service. But we also know the public service can’t be the engine of growth in this country.

Right now, that’s what’s happening. Eight out of ten new jobs are created in the non-market sector. So the private sector is being pushed out, crowded out, punished.

We know how it feels to be punished if you run a small business right now. I’ve spoken to so many small business owners who are weighed down, crushed by cost, exhausted by regulation and red tape, wondering where on earth it’s all going to end—and deeply unhappy.

And that matters.

It’s interesting because Prime Minister Howard said, leading into 1996—and he was lampooned for this, ridiculously—that he wanted people to be “relaxed and comfortable.”

Well, right now, people are incredibly stressed, incredibly upset. You know, the elites at the time laughed at this. Let them. But I don’t know how many small businesses they’ve met, and I don’t know how many people they know are struggling as hard as these.

We just can’t accept a situation where government is there to provide all the answers. Government should set the rules—not run the race.

PRODUCTIVITY AND REAL WAGE GROWTH

The giant missing piece from the economic policies of this government is productivity.

Again, that’s something we understand—businesses understand, households understand, and economies that are progressing in the world understand as well. But right now, productivity is flatlining.

That’s because this government doesn’t know what to do about it because the levers they are pulling are all anti the productivity generational challenge. That’s where they need to land—and that’s not where they are.

When you think about productivity, I think about the importance of the private sector because public demand in Australia is growing at 55%, private demand is growing at just 16%—yet another indicator that the private sector is being squeezed out, not rewarded but punished.

That brings me to another of the lessons we learned from the Howard era about what Liberal parties should be engaged in—industrial relations.

Because the modern Labor Party has run a hundred miles from the Hawke-Keating-Kelty 1993 to 1996 reforms, when there was a clear understanding that you should move from arbitration to enterprise-based bargaining.

And the secret ingredient there is that if productivity is going up, so do real wages. That’s the way to get increases in real wages—to have productivity increases.

So, right now, we’ve got these sort of artificial increases in nominal wages that aren’t flowing through to real wages. Inflation is high and sticky, costs are going backwards, and meantime you’ve got a government with emergency fiscal settings in a peacetime economy.

Because, ultimately, the test for all this—when you talk to Bob and Nancy Stringbag—is: Do you feel that you’re getting ahead?

The government’s spending all this money—$1.2 trillion by the 2028–29 Budget, that’s the forecast—and big numbers don’t really mean anything to people but do you feel any better? Well, no you don’t. And unfortunately, people don’t feel any better.

We’ve got massive spending that’s not translating into anything for Australians.

Where we need to focus is on fairness for the disenfranchised generation—Gen Z and Millennials.

Because the reason why we need to manage the budget responsibly, and we need to reduce income tax, and we need to make changes to workplace relations law— that address multi-employer bargaining craziness, the definitions of “casual workers”, by the way there are about 37 and counting, how do you even deal with that as a small business, unfair dismissal claims in the Fair Work Commission are at record highs – which demonstrates there’s something really badly wrong with the system, probably that employers are getting the real rough end of the deal. “Same job, same pay,” and so on—these are things we’re going to turn our attention to.

Right now, we’ve got indicators that the CFMEU and other unions are behaving just as you would expect. So none of this ever goes away. It’s a constant challenge, and we are up for it.

But the reason is because we’re not going to give up on Generation Z and Millennials.

And it’s right that we fight for a future for them.

When I talk to people in big numbers and statistics—and I don’t blame them for eyes glazed over sometimes—but when you say, “Do you really think it’s fair that the next generation has a lower standard of living than you do?”, they don’t agree.

Now, the big announcement we made today was about energy, and I want to spend a bit of time on that, because the Liberal Party principles were the ones we applied to the announcement that we made today.

If I look briefly at John Howard’s approach to energy and emissions policy, it was technology-neutral and it was anchored in affordability. Because he understood the importance of Australia’s economic interests, and that energy policy must strengthen—not weaken—the foundations of the Australian economy.

All of the policy initiatives implemented in this area by the Howard government demonstrated a clear-eyed commitment to the national interest—and that Australia should play its part to reduce emissions, but not at the expense of our competitiveness as a nation or our hard fought living standards.

So, John Howard’s approach was to take account of national economic circumstances, natural resource endowments, and to allow a range of market-based policy measures. And he also advanced the view that new technologies were crucial —breakthrough technologies and I talked about those today— to achieving lasting reductions in emissions.

So, I’ve been the Shadow Minister for Industry for the last three years. A lot of my experiences on the ground have informed the decision I led today.

I have travelled around many many factories, many many heavy industries, and I’ve met many people who are involved in something we in Australia should be incredibly proud of—our sovereign manufacturing capability.

They’ve told me they can’t do it with Labor’s energy price, with Labor’s lack of reliability, with Labor’s workplace laws and with the uncertainty of the investment landscape because of all those things.

But if we talk about productivity, we know energy is a key factor in productivity in this country. And when energy is unaffordable, everything is unaffordable because energy is the economy and it really is the economy in this country.

A week ago, I was standing at Tomago Aluminium. And I stood in the very same spot the Prime Minister had stood in January this year. He stood there and he said, “This is fantastic. This is what a future made in Australia looks like. This factory will be making aluminium and employing these amazing workers for forty more years.”

Well, I agree with him on one thing: the workers are amazing. Because they have some of the highest and best aluminium production in the world.

Because you measure the efficiency of an aluminium production process by something called current efficiency, which basically says if the current efficiency was 100, it would mean for every amp of electricity would be converted into aluminium. Well, in Tomago Aluminium, it’s 95.5—it's almost the highest in the world.

When I took the brief walk around that I did, I saw the pride in the eyes of the people who worked. Because they know, like many Australian people in manufacturing, that they’re doing what they do better than anyone else in the world.

The Tomago Aluminium Smelter was turned on in 1983. It has run 24 hours, seven days a week, since 1983.

Can you imagine what Australia will feel if, or should feel, if in 2028, the switch is turned off—because we don’t make aluminium anymore?

“Oh, but that’s okay,” someone will tell you that “we can import it.” We can get it, along with everything else in our renewable energy economy, from China, or Europe if it’s a high-tech thing.

But this wasn’t just a warning about aluminium or a warning about Tomago—it was a warning about Australia’s energy policy. A massive warning that we needed to heed and everyone needs to heed.

Because if the biggest energy user in Australia—who arguably could accumulate the best possible contracts for price of electricity—is telling us that in 2028 it is not commercially viable to have aluminium smelted in this country, there’s a big something wrong there.

So, that’s aluminium, aluminium is pretty important, in fact there’s a lot of aluminium in the renewable energy economy. But don’t worry if Tomago closes, I’m sure we’ll be able to import it from China—along with wind turbines, along with solar panels, along with solar inverters, and all of the systems that try very very hard to stabilise and add inertia to a renewable energy grid.

That in itself is a huge challenge—and one completely misunderstood, I have to say, by the Prime Minister.

Because energy is not power. Energy is, of course, the wind and the sun. But what you have to do to convert it to power, to deliver what it needs to for Australians—if it’s renewable—is actually very expensive. And it doesn’t always work as well as you think.

And you only have to ask the people on the Iberian Peninsula—in Spain and Portugal—who completely went when in fact the renewable energy grid, a few months ago, turned itself off.

Now, before that happened, they’d been saying, “Oh you know you can run everything on renewables.” A bit like the Prime Minister – you can run everything on renewables and that was supposed to be where the whole world was looking, to where you could run a whole grid on renewables.

There was a slight change in the oscillation of the frequency of the grid—by, I think, 0.2 hertz. That became 0.6. So, the grid did what it tries to do when something like this happens, is to stabilise, but because renewable grids don’t have the inertia that a spinning turbine does—which gives breathing space when there’s a fluctuation—the next thing that happened was a whole lot of solar panels switched themselves off, which sent the wrong demand signal into the grid, which caused more things to switch themselves off.

Now, there’ll be energy experts in the room who can give a much better explanation than me but I think you understand where I’m coming from.

Pretty soon there was a cascading series of failures of generators. At some point the operator tried to add some more traditional power, but it was too late—because by then everything had turned itself off.

Eleven people died in that. Some people died because their ventilators turned off and they suffocated, some people died because they breathed in carbon monoxide poisoning because they had the wrong sort of heater and so on.

But I worry that this government doesn’t understand renewable energy at all. And I worry about what it means for us and our future.

So, with that in mind, well not with just that in mind—with critical affordability questions in mind, affordability and reliability questions in mind—we made a key announcement today, which is that:

The Liberal Party will remove a net zero target from our policy. And if elected, we’ll remove Labor’s 43% 2030 target and its net zero by 2050 target from the Climate Change Act.

We remain committed to the Paris Agreement and committed to doing our fair share to reduce emissions in the following way: we will reduce emissions on average, year on year, as we did when last in government—in line with comparable countries, and as far and as fast as technologies allow—without imposing mandated costs.

This is going to be a policy that actually recognises Labor’s failures. Because having told us they’ve given Australians a pathway to lower emissions and lower power prices but in fact, they’ve done neither. Because emissions are flatlining, if anything, and power prices have gone up 40% since Labor into came to power.

We can look everyone in the eye and absolutely make it clear that our policy is about the things that matter but giving priority to affordability always.

Energy affordability has to be the main game. If you are a government responsible for your citizens, you have to provide affordable energy. And you also have to have sovereign manufacturing capability in this country—something that, sadly, I don’t think this government cares about with a safeguard mechanism that basically puts a carbon tax on anyone who is in an emissions-intensive industry.

CONCLUSION

So, in conclusion, the Liberal Party has always drawn strength from our universal principles: belief in the individual, the dignity of work, the strength of families and communities, the importance of free enterprise, and a government that enables rather than controls.

These are the foundations of our future prosperity.

When the Liberals have triumphed, it’s been because we spoke plainly and we acted boldly—not by borrowing the language or instincts of our opponents, but by drawing confidently on our principles.

We will have a compelling, principled, practical vision. We’re developing such, right now—to meet the aspirations of Australians.

And at the top of that list today is affordable energy.

The Forgotten People are waiting. The Howard Battlers are waiting. The disenfranchised Australians are waiting.

They want a government that respects their choices, rewards their effort, and secures their future.

I am determined that we meet this moment with a bold vision for growth—because growth pays for better services, growth lifts incomes, and growth gives hope.

We are all inspired by the words of John Howard:

“The things that unite Australians are infinitely greater than the things that divide us.”

And I am convinced that the principles and the policy initiatives that we have announced today can unite Australians behind a policy that’s focused on one of the key components of everything that matters—affordable energy and a responsible approach to emissions reduction at the same time.

Thank you.

This is an edited transcript of the 12th John Howard Lecture delivered by Leader of the Opposition Hon Sussan Ley on November 13 in Sydney.