Address to Australia-PNG Business Council Breakfast

Speech, E&OE, (check against delivery)

Gateway Hotel, Port Moresby

6 February 2014

Thank you Phil [Franklin] for your introduction and your words of advice. I do appreciate the role that the Australia Papua New Guinea Business Council plays in enhancing the bilateral relationship between our two great countries.

I also acknowledge Peter Taylor. Thank you for the welcome this morning. Sir Rabbie Namaliu, who is here today—the former Prime Minister—thank you Sir Rabbie for being here. I acknowledge Charles Lapani, the High Commissioner to Australia from PNG. Charles and Catherine have become very dear friends, he is a source of advice and support for me in Canberra and has made it so much easier for me to maintain my ongoing interest in Papua New Guinea, so thank you Charles. The Australian High Commissioner, Deborah, thank you for being here and the Australian team from the High Commission. There are a number of diplomats here, your Excellencies—thank you for attending this breakfast. The heads of other business chambers and business organisations. I am absolutely delighted that there are so many people here to greet me on my fourth visit to PNG since becoming the Shadow Minister – and now the Foreign Minister of Australia.

When you transition from Opposition to Government, there's always a challenge that your words in Opposition will come back to haunt you in Government. It's not always easy to fulfil the promises you made in Opposition when you actually see the state of affairs that you inherit when in Government. For example, the Australian budget is in a worse position than we had assumed. We're facing significant debt and deficit, a deficit of about $A47 billion and cumulative deficits of about $A123 billion and Government debt heading towards $A660 billion. Nevertheless, the promises we made in Opposition, we will deliver in government.

There is one statement that I made as Shadow Foreign Minister that is even more true today than it was when I made it. That is the Australia—Papua New Guinea relationship is one of our Government's highest foreign policy priorities. That will remain the case for as long as I am Foreign Minister and Tony Abbott is the Prime Minister of Australia, that I can assure you.

What I want to do today is talk about the agenda of the new Government of Australia; some economic considerations that we are facing; the economy in Papua New Guinea; and our bilateral relationship—how it stands, how can be enhanced.

On election night in Australia, on 7th September, Prime Minister-elect Tony Abbott declared that Australia was under new management; itis open for business. By that he meant that he wanted to ensure that the Australian economy could thrive;we could create an environment in which business could thrive and Australia could attract foreign investment. Our country—like Papua New Guinea—has been built on foreign investment. A number of the projects that are sustaining our standard of living, sustaining our economy, just would not exist if it were not for foreign investment.

In order to create that positive environment where business and investment can thrive, we have to get our house in order. We have focussed on getting rid of unnecessary taxes, getting rid of unnecessary red tape and regulation, which is such a burden to business in Australia and elsewhere. We've set out a very ambitious agenda to increase trade, increase investment, increase business activity – because unless you have a strong economy, you don't have a strong society, and that's our aim.

In fact, in our first week in the Parliament, the first four pieces of legislation that we introduced which rid of the Carbon Tax, which was effectively a tax on electricity and was not having the desired effect of reducing global greenhouse gas emissions. And it was was a cost on business.

Secondly, we introduced legislation to repeal the mining tax. This was an additional federal tax on the mining and resource sector that we believed was making Australia internationally uncompetitive in one of the areas of strength in the Australian economy.

We also had legislation to reintroduce the Australia Building and Construction Commission. This is an organisation established in Australia to stamp out lawlessness on the building and construction sites around Australia. We had a Royal Commission a number of years ago that found widespread, in fact, rampant unlawful behaviour. This Royal Commission recommended the establishment of a tough cop on the beat: the Australian Building and Construction Commission. It had an impact in stamping out unlawful behaviour by the unions and by employers, but it was dismantled by the previous government in 2012. There have been some pretty disturbing reports about increased illegal activity on building and construction sites. We are determined to put back in place the Australia Building and Construction Commission to clean up our building and construction sites across Australia.

The fourth piece of legislation was to make it easier to get approvals for projects and we have in fact seen a significant number of major projects approved under this streamlined, fast tracking of approvals. Overall, we are committed to lifting unnecessary red tape and regulation off the back of business. We want it to be easier to do business in Australia, not harder. In fact, one of our ministers has been tasked with identifying one billion dollars of unnecessary red tape and regulation each and every year that we will then seek to repeal. We are setting aside entire days of our Parliament to be called 'repeal days,' when Parliamentarians will do nothing but repeal legislation. This would be quite a change from when governments used to boast about the amount of red tape and legislation and regulation that they were aiming to impose. We want it to be easier to do business in Australia so that our economy can keep growing.

We are in the 23rd consecutive year of economic growth in Australia. That's unparalleled by any comparable economy. We do have a resilient economy; extraordinarily resilient. It's been 23 years since there was anything like a recession in Australia—again an unparalleled performance. On a global index, we have been in the top five over the last five years of the most resilient economies around the world. We can't take that for granted. We need to continue to ensure that economic reform is part of our everyday thinking so that our economy can remain strong, that the job opportunities are there, that businesses can prosper and grow.

Our economy is in transition. Having been so reliant on the mining boom—I like to call it the 'period of sustained growth', not a boom, but I come from Western Australia—where we have had periods of sustained growth. As a result of that, the Australia economy was able to weather the global financial crisis, was able to be that resilient economy.

We are moving from that construction phase of the mining period of sustained growth through to the production and export stage. We need to manage that transition by ensuring that other parts of our economy are also thriving. There's been considerable debate about manufacturing and how our manufacturers can compete. We are a relatively high cost economy and we are surrounded by lower cost economies. We have to be smarter, more nimble, more flexible in the way that we can boost our manufacturing areas and the like. We do have challenges ahead, but we are determined to ensure that the business environment in Australia encourages business activity and foreign investment. Global capital will go to the most attractive destination and we want to ensure that Australia gets its fair share.

In relation to the Papua New Guinea economy, obviously the people in this room are experts at analysing, reviewing and talking about the economy, but if I could just make some observations. I believe the Papua New Guinea economy is also in transition. The fantastic PNG LNG project is completing its construction phase and that means that PNG likewise will be moving to the production and export stage which will then be dominant in the economy. Like Australia, that means that PNG should look at other areas in its economy to ensure that it can diversify its economic base. Papua New Guinea has so many natural assets, natural resources upon which it can draw.

You have an extraordinary group of young people in this country. Your demographic profile is such that over time there will be more young people in this country than old. It's a question of ensuring that you can harness their talents and their abilities to take part in the economic sectors of the future.

You have some extraordinarily enterprising women. I note Lady Winifred is here today. Yesterday, if you've seen the front page of your morning newspaper, I had a meeting with the leading business women, leaders in the law and justice sector, in politics, in business, private sector, public sector—and they are brimming with enthusiasm and ideas and ways that women can contribute to the overall economic strength of Papua New Guinea. They just need to be given the opportunity.

We are very supportive of the PNG Government's work in putting together a Sovereign Wealth Fund. In Australia, during our boom years, we established a Future Fund into which we put the proceeds of the mining and resource sector. That money is there to meet future liabilities of the Federal Government so that the next generation of Australians are not burdened with liabilities incurred by past generations. The Future Fund model is there for the PNG Government to consider, but there are certainly other models around the world that would be a great example of how to maintain the benefits of the current mining boom and resources boom in a way that lifts the standard of living and alleviates poverty for all citizens of this great country.

In my own area of Foreign Affairs and Trade, we've made a number of significant changes. Our focus is going to be on "economic diplomacy" – let me put that in context. Just as traditional diplomacy aims to achieve peace, economic diplomacy aims to achieve prosperity.

We intend to use all our foreign policy assets in a way that promotes our national interest in growing our economy into a strong and resilient economy into the future. It's also in our national interest that our neighbouring countries, our region is also prosperous with strong economies. Prosperity should bring peace and that is what we want for this region: stability, prosperity and peace. We are the twelfth largest economy in the world, but we have got the 53rd largest population. We need to ensure that we can continue to grow our economy and the Foreign Affairs and Trade department is determined to play its part.

We have an ambitious free trade agenda. Australia already has a number of free trade agreements with countries, notably the United States, Singapore, Thailand, Malaysia, Malaysia, Chile and with ASEAN, but we believe that, in the absence of a global multilateral trade agreement under the WTO, we shouldn't stand still and we should negotiate and conclude as many bilateral or regional free trade agreements as we are able that are in our national interest.

The new Government has concluded the free trade agreement with South Korea. This was absolutely essential for us because we were losing market share in the lucrative South Korean market to other countries, particularly the United States who had concluded their own free trade agreement with South Korea. US beef producers are getting their beef into that market tariff-free, we are still facing significant tariffs. It's our aim to conclude free trade agreements with Japan and China in the near future. In the meantime, we are also negotiating a Trans-Pacific Partnership—a much larger trade agreement involving 12 countries, the US and Japan in particular. If that Trans-Pacific Partnership is able to be concluded along with the RCEP, which is the Regional Cooperation Economic Partnership between ASEAN countries and China and Australia—if those two free trade agreements are able to be concluded, the vision of an Asia Pacific free trade agreement – a free trade zone across our region – will come to pass, and we all stand to benefit from that. We are quite ambitious in our free trade agenda.

We've also in my area integrated the former agency, AusAID, into the Department of Foreign Affairs and Trade. Australian aid is now delivered by the Department of Foreign Affairs and Trade. This was a deliberate decision to align our interests, our message, our policies, so that Australian aid is used as part of our whole push for economic sustainability. Providing aid for the purpose of alleviating poverty, lifting standards of living, but through building sustainable economies. Economic growth and job opportunities have to be the outcomes that we are seeking.

We are moving away from direct service delivery through our aid program. It is the responsibility of a sovereign government to provide basic services for its people. In the discussions I have had with the ministers of the Papua New Guinea Government, they agree that the Government provides those fundamentals. For a developing country, aid should be there to put resilience into the economy. Our focus will be remaining on health and education outcomes because they are the building blocks for sustainable economies. We will also be leveraging the private sector to work with the private sector to get better outcomes in our aid delivery and particularly focusing on providing productive infrastructure, ways and means of ensuring that the Papua New Guinea economy can be resilient because it's got the infrastructure behind it to enable it to achieve that. Papua New Guinea is still Australia's largest aid partner but I believe that we will be able to do much more with the money available if we focus on specific areas where we really can make a discernible difference—focusing on productivity and growth.

Overall, as Phil mentioned, the Australia-Papua New Guinea economic relationship is strong. Australian investment translates to about nineteen billion Australian dollars or thereabouts—that's roughly the amount that Australian invests in China. If you put it in that context you can see it's a pretty substantial investment. We are in the process of finalising an Economic Cooperation Agreement between our two governments. Foreign Minister Rimbink Pato and I discussed that yesterday, it's just a question of getting a few words in the right place and then we will have that signed and that will cement this strong economic relationship between us.

We are also both committed to a trade agreement in the Pacific: PACER Plus. I believe that Australia and Papua New Guinea, as two of the dominant economies, along with New Zealand as the third, I believe that our three economies have much to offer other Pacific nations in giving them the opportunity to tap into our economies to trade with us. We have a responsibility—they're our neighbours, they're our friends—we have to ensure that other Pacific nations are able to share in the opportunities that our economies provide.

I can't get away from a certain topic however much I try in PNG, so let's go to the subject of visas. One would think that is all we talk about! In fact I had a very productive discussion with both Prime Minister O'Neill and with Foreign Minister Pato yesterday about the issue of visas. Of course we want to see greater mobility between our two countries and I believe that the introduction of online visas is the way to go. It's much preferable to be able to apply for a visa online before you leave the country, before you spend your money on an air ticket, rather than getting to the airport, lining up, applying for a visa then and there, but having something go wrong and you can't get into the country. What we have offered Papua New Guinea—and it's the first time we have made that offer to any country in the world—is the ability to apply for a visa online. Now that means you have got to have access to a laptop or a PC of course, but it can be done by third parties on your behalf, it can be done by friends, relatives employers—a whole range of people are able to do it. Even travel agents, so if you are buying a ticket you can apply for your visa at the same time. I think that that is a much more sophisticated way to visa on arrival and I did put to both Prime Minister and the Foreign Minister that Australia would very much enjoy a reciprocal arrangement whereby we could apply for visas online to visit PNG and that's been taken on board.

The example of New Zealand is often put to me because Australia does not have a waiver system for visas with any country in the world, but it is often pointed out to me that it seems to be easier to get from New Zealand to Australia and vice-versa. That's because over four decades we have managed to integrate our behind-the-border systems and access to criminal records, family court records—a whole range of records that exist that otherwise have to be checked in the visa process. This has been in existence for many, many, years and I have inquired as to whether there is some kind of technological solution that we could come up with that would enable PNG and Australia to have a similar arrangement. We have spoken to some experts, they have offered to have a look at the issue to ascertain what PNG would need to do to be in the same position as New Zealand in relation to the arrangements with Australia. I think that's a step forward which we are certainly going to pursue – so unless anybody has any burning desire to hear more about the issue of visas, I'll move on.

We want to enhance the people-to-people links between Australia and Papua New Guinea. Our focus in foreign policy terms is unmistakably on our region: the Indian Ocean, the Asia Pacific. This will find expression through the focus of what I call our foreign policy assets on the region. So whether it's our military and defence capability, our economic and trade capacity, our aid and diplomatic efforts—our focus is our region. I believe that it's where we can make the biggest difference with our friends, our neighbours, the countries in our region.

One of the signature policies of the Abbott Government will be what we've dubbed the New Colombo Plan. Back in the 1950s my predecessor, Percy Spender, signed up to a student scholarship program that was signed in Colombo in 1950, hence it was called the Colombo Plan. This saw thousands and thousands of students from the region over forty years come in to Australia and study in our universities. About 40,000 students came to Australia over that period. They studied in our universities, they lived with our families, they got to know the Australian people and understand who we are. They formed friendships, they built networks and they went back to their countries. Today some of them are leading figures, business people, politicians, regulators, community leaders—and their perceptions of Australia and our place in the region were formed during those years as a student in Australia.

I believe it is time that we did the Colombo Plan in reverse, hence the New Colombo Plan will be a Government scholarship program that sends our young people, young Australians, to study at universities in the region. Some of the universities across the Asia Pacific are amongst the best in the world and yet that's not often recognised by young Australians who, if they are going to study overseas, often head to Europe or the United States. We want them to become what I call "Asia literate"—to be able to spend time studying at a university in the region, learn another language, if that's necessary or appropriate – and hopefully it will be. But not only just study in the region but have an internship in a business or an organisation that's operating in the host country.

In this way young Australians, having spent this time overseas in their undergraduate years, will come back with new perspectives, new ideas, new insights—not only will they be an addition to our prosperity and productivity but they will have built those relationships, those networks, those connections, that hopefully will last a lifetime. I am passionate about this program. I really do believe that it will be transformational—so much more than just a study experience for young Australians—it will provide a whole new approach to our thinking and our outlook about the Asia Pacific.

We've set up a pilot program this year—two locations in South East Asia: Singapore and Indonesia; two in North Asia: Hong Kong and Japan. We've had our first round of applications from 26 universities have put in applications. By April we will see several hundred students under the New Colombo Plan in those locations by September we'll have the next tranche. By the end of the year, about 760 Australian students will be studying in those four locations. Come 2015, we'll be ready to roll the New Colombo Plan out further into more countries in our region.

I've laid the challenge on the table to the Papua New Guinea Government. We want PNG to be part of our New Colombo Plan. We want young Australians to have the opportunity to come here, study at the universities here, get to know the country, understand the country better, build friendships and connections. There are a lot of issues that have to be resolved, of course, including accreditation, whereby the Australian universities have to recognise the work and the study done overseas. Visas (I've said that word again) – visas will have to be looked at. Obviously mutual recognition, accommodation arrangements and also the opportunity to work—to do an internship or mentorship in Papua New Guinea. I hope the business community embraces this idea. I think it will lead to more students from PNG going to Australia because they'll be getting to know their Aussie mates and we'll see that true exchange that has existed in the past but we need to revitalise. So the New Colombo Plan is very important for us.

Another change I've made in our portfolio is to bring Tourism Australia, the promotion of tourism aspect of the Federal Government's policies, into the Department of Foreign Affairs and Trade. This is the first time it's happened. Tourism is one of our strengths and we believe that the Federal Government's role in tourism is to make it easier for international visitors to come to Australia. Once they are in Australia, it is up to the state governments to determine whether they can attract tourists to Queensland, or Western Australia, or wherever. The Federal Government's role is to make it easier for international visitors to visit Australia and that's going to be the focus of our efforts for tourism within the Department of Foreign Affairs and Trade.

We have so many areas that we can work together. I've mentioned my enthusiasm about the opportunities for young people in PNG. We do have a Seasonal Workers Program available but at this stage that hasn't been embraced at the level that I hoped they would be. Compare these two statistics: under our Seasonal Workers Program, 1200 young people from Tonga came to Australia, last year—but just 26 from Papua New Guinea. I think we can do better and give people an opportunity to work in Australia on a seasonal basis, earn some money, make some friends, come back home. Likewise we have a Working Holiday visa program where we want to encourage young Papua New Guineans to come to Australia for a working holiday. There are 100 places available and there's a little bit of administrative delay on this side. We want to clear that bottleneck so that we can get those Working Holiday visas underway.

Overall, it's not just about Australia and Papua New Guinea, it's also our place in the region. My vision for the Pacific is for a much more integrated region. If Australia and Papua New Guinea can more closely integrate our economies, we can do that with other countries as well, as we have done with New Zealand. So much more integrated systems will be a priority for us going forward.

There's a regional issue in relation to people smuggling and the irregular movement of people through our region. I want to place on record our thanks to the Government of Papua New Guinea and, in particular, Prime Minister O'Neill for cooperating so quickly and so effectively with Australia in relation to regional processing. The processing centre on Manus Island is an example of how we can work together. The Australian Government's policies on dismantling the people smuggling trade are having an effect. We resolved that we would stop the boats coming. About 1100 people died at sea trying to make that journey to Australia. It's utterly unacceptable that that situation could be allowed to continue. The policies we've put in place have over the recent weeks been seen to be effective and there haven't boat arrivals for some time and we do want to thank Papua New Guinea for playing such an important role.

Papua New Guinea is about to be showcased on the world stage. The APEC meeting in 2018 will be a significant moment for this country. It will be a mammoth undertaking to accommodate the world leaders of the APEC countries – but, nevertheless, we certainly support your ambitious plans to host APEC here in 2018. I know your friends will support you in this because we too want the world to see what a wonderful place Papua New Guinea can be and will be. It will take a lot of work across the Government, the business community, the community generally. We are getting a taste of this because we are hosting the G20 meeting in Brisbane this year. The logistics are something else again. I know that you will have an early run at this by hosting the Pacific Games, which commence on the fourth of July in 2015; I spoke with your Minister for Sport and Events yesterday and got a firsthand update on how preparations are proceeding for that.

Papua New Guinea is certainly making its mark and it will take its rightful place as a leader in our region through these events and others including working with Australia and New Zealand to normalise relations with Fiji—another major economy that we need to bring back into the family. Fiji is holding elections this year. I think that it's time for us to move more closely to embrace Fiji and assist in their transition back to democracy.

There are so many areas where we are closely engaged. In Defence, we support the Defence White Paper. We think that will be an important blueprint for PNG's defence and security arrangements in the future. It certainly coincides with our thinking in our Defence Cooperation Program.

The Australian Federal Police are here in significant numbers. We now have 50 working with the Royal PNG Constabulary to enhance the capacity of your police force to do its work. I hope to meet a number of our AFP officers in Lae later this morning.

In Treasury, we have twinning arrangements —getting people from PNG into our Treasury, our Treasury officials here, so that we can share experiences and build capacity.

In the area of sport, I am so pleased to hear that PNG will be fielding a team in the Queensland Cup and let's hope that that is the start of many more sporting exchanges between two nations whose peoples are utterly and totally obsessed with sport.

Overall, one of the more important initiatives that we have announced will be the Australia-PNG Network that we discussed at the Ministerial Forum held in Canberra in December. This Network will be a means of enhancing the business links between our two countries. In Australia, it will be managed by the Lowy Institute and Jenny Hayward-Jones from the Lowy Institute is here today. This Network is going to be a great opportunity for us to ensure that the business links that already exist can be enhanced.

So, ladies and gentlemen, from Opposition I spent a lot of time thinking about how we could take the myriad connections that exist between our two countries—the historic, the cultural, the geographic, the economic, the social ties—how we could build that into an even stronger partnership. I believe that it is happening. The governments of our two countries are determined to transform this relationship into one of an economic and strategic partnership. With the political will, with the support of our business communities, and with the understanding of our people, that vision will be a reality. Thank you.

QUESTION: Morning Minister, you mentioned PACER Plus. One of the major stumbling blocks for PACER Plus, particularly from the perspective of Pacific islands, has been around the access, or the temporary movement of persons – both and unskilled. Given that you've signalled a shift from Australia, a serious shift, that you wish to pursue that movement, does that also mean that Australia's willing to look at the issue of temporary movements of persons?

JULIE BISHOP: We are committed to PACER Plus and I am aware of some of the obstacles. I think the freer movement of people around and across the Pacific is important. It is one of the fundamental aspects of the agreement and I understand that for other nations to sign up to it, they would want to see some gains in that regard. It's a negotiation—obviously there is give and take on both sides. We are determined to do that and my colleague, Minister Andrew Robb, who is the Minister for Trade and Investment, will certainly be taking on the PACER Plus responsibilities and he will be in the region for the purpose of promoting it. Currently I have to say his hands have been full with the South Korea free trade agreement and China, Japan and the TPP – but PACER Plus is a priority for us. I've been travelling through the region. Last Christmas I visited the Solomons, Nauru and Vanuatu, and I have earlier been to Samoa, I have been around the region promoting the benefits of freer trade and we're committed to concluding PACER Plus. So, as a negotiation, these are the matters that we'll certainly be grappling with.

QUESTION: I think people will welcome your comment about the employment scheme, the labour scheme into Australia. I think it's good that you've mentioned that so many people are coming in from Tonga and so few from PNG. The New Zealand scheme has worked pretty well in the Pacific and it worked well partly because the private sector has managed it to a large extent itself. The scheme with Australia seems almost to have been designed not to work. Every person who goes down under the scheme seems to have half a dozen bureaucrats handling at both ends. I'd like to hear your comments on how you can make it more operable.

JULIE BISHOP: The scheme came in under previous government and there wasn't a level of bureaucracy or red tape or regulation that they didn't embrace, I can assure you. We have a very different view—that the private sector should be the heart of the scheme. It's not in my portfolio area but most certainly I will be working closely with the department involved to ensure we can make it easier for people to come under the scheme. We are encouraging Papua New Guineans to take part in the Seasonal Workers Program, and if they are not because of a surplus of red tape, then we need to have a look at that to see what we can to make it easier. It could be that because it's a pilot that our public servants want to ensure that it worked. So you might find that during the pilot phase, that there was an inordinate amount of scrutiny because they wanted ensure that it worked. I agree with you that the private sector has to be at the heart of it to ensure that it is operating the way that it's intended. If there are bottlenecks, if there's an excess of regulation around it that's preventing it from achieving its purposes, well then we certainly want the Government to change that.

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