Address to the Australian Industry Group

Thank you Chris (Jenkins), thank you Innes (Willox).

Good morning ladies and gentlemen.

I want to pay tribute to Ai Group for its 140 year history of representing Australian businesses, servicing Australian businesses and being a strong advocate for them.

For the first 30 years of your life, or your predecessor's life, the free trading colonies in Australia were able to ensure that we had one of the highest standards of living in the world and then we had about 70 years of protectionist policies where the Australian economy did not achieve the levels that it could have achieved and in essence it stalled.

Then for the last three decades we have been an open, export-oriented market economy.

We are now in our 26th consecutive year of economic growth and that is a world record – we've just overtaken the Netherlands – who had a period of unbroken economic growth.

Our period covers the Asian Financial Crisis, the Tech Wreck, the Global Financial Crisis, so this is an extraordinary performance by Australian businesses, Australian exporters, with the right government policy settings.

But economic success is not given, it is earned and we do not take for granted our economic success, our standard of living, or the prosperity that we've been able to achieve. We have to continually embrace economic reform to ensure that we are internationally competitive in a globalised world.

Since coming to office, we have embraced a clear and consistent foreign policy and in such a volatile world that clarity and consistency is absolutely vital.

As Chris said, this is a time of unprecedented change, the technological advances, the scale and pace of them are disrupting the way we live, the way we work, the way we communicate.

In a geostrategic sense there's political instability – Brexit, the election of Donald Trump, the level of conflict that we are seeing in the Middle East, the unprecedented humanitarian crisis in Syria and elsewhere, the rise of global terrorism and the evolving nature of that threat. The world is a very, very volatile place at present.

That's why we need a clear and consistent and steady foreign policy.

We brought together the Department of Foreign Affairs and Trade with Tourism and Investment and International Education. We brought in the separate aid agency, AusAID, so that we now have within the Department of Foreign Affairs and Trade all the tools we need to enhance Australia's international engagement overseas, which is for the direct benefit for citizens in Australia. It's what enables our nation to be so highly regarded in our region and globally.

We have a network of about 105 missions: embassies, consul-general offices and Austrade offices.

We are increasing it significantly; in fact under our Government we've seen the single largest expansion of Australia's diplomatic network in more than 40 years.

Each one of our embassies has been charged with the mission of enhancing the economic engagement between the host country and Australia.

This is now a key performance indicator for every one of our Heads of Mission.

I have required them to prepare a business plan to set out how they, how our mission, will enhance the trade, investment, commercial activity between the host country and Australia.

Now, as business people you will say well that's obvious, but they've never been asked to do it before. Now the Head of Mission is responsible for the performance of that mission and some of the missions are obviously accredited over a number of countries, and so our engagement with business, Australian business, is deeper than ever before.

Our network exists to support Australian businesses, increasing trade and investment opportunities and it is having a profound impact: it's changed the culture, it's changed the outlook, and it's changed the outcomes of our diplomatic engagement.

I'm finding that as I travel around the world just as traditional diplomacy was about achieving peace, economic diplomacy is about achieving prosperity, which leads to peace.

The more we engage, the deeper our economic engagement with another country, with a region, the more likely we are to achieve peace, stability, prosperity in our region and maintain it at home.

We have a very ambitious free trade agenda and at a time where protectionist sentiment in on the rise, where economic nationalism is being seen in some countries, it's more important than ever before for Australia to be a champion of free and open trade and to support the liberalised trading system.

The international rules based order is also under challenge, that is, the set of rules that was instigated by the United States, promoted, guaranteed by the US over the last 70 years, that international rules based order is also under pressure.

Again, Australia as an open, liberal democracy committed to freedoms, committed to democratic institutions, the rule of law, must be a vocal champion, advocate, promoter of that international rules based order.

On the economic front, we currently have 10 free trade agreements.

They are all comprehensive, they are all high quality and I particularly refer to the free trade agreements with China, Japan and South Korea.

They are providing enormous opportunities and benefits for Australian businesses, Australian exporters – small, medium, large – to increase their opportunity to send goods and services into some of the largest markets in the world.

Our free trade agreement with the United States has been an extraordinary success.

Yes, there's the trade imbalance in the US's favour, but it's a trade imbalance that actually serves us well because we are able to access the kind of equipment, resources, support that we need to drive businesses in Australia from the largest consumer market in the world. We have access to government procurement opportunities that we would not have otherwise been able to pursue.

I think of Austal in my home town of Perth, that is a preferred supplier of vessels to the US navy – you've got to be pretty good to be in that company – and so under the US free trade agreement Australian companies are having unprecedented opportunities.

But we are not resting.

We are pursuing free trade agreements with Mexico, with Peru, with Indonesia.

We understand that some countries will be more embracing of a free trade agreement with Australia than others, and India is currently considering how it will pursue deeper economic engagement.

We, in the meantime, are pursuing an India economic strategy from our side, as we work with them towards a closer economic partnership.

We are pursuing free trade agreements with the European Union.

On the weekend I signed a framework agreement with Frederica Mogherini - the equivalent of the EU's Foreign Minister - and that is setting the platform for formal negotiations for a free trade agreement with the EU and of course following that there will be free trade negotiations with the United Kingdom once Brexit is finalised.

The Trade Minister is pursuing these opportunities because it provides economic opportunity here in Australia, it provides jobs.

A country of our size doesn't become the 13th largest economy in the world – 24 million people and the 13th largest economy – by selling to ourselves.

You don't get richer by selling to yourself, you expand your opportunities by focusing on markets, established markets or new markets around the world.

We're also taking a very proactive role in encouraging countries in our region to open up their economies and join the world trade system.

For example with Vietnam. Australia has partnered with Vietnam to take it through the accreditation process so it becomes part of the WTO and we've been supportive of Vietnam and of course Vietnam is now a great destination for Australian goods and services.

Australia is playing a very positive role in ensuring that economies in our region are also opening up to become stronger economies.

In fact one of the extraordinary phenomena over recent years has been the shift of economic power from West to East and ours is now the most dynamic economic region in the world.

We are also ensuring that Australian business is innovative and able to focus on the opportunities that arise in this fast paced world in which we live.

The Prime Minister announced last year a National Innovation and Science program and that has many facets to it but those that impact on my portfolio include our landing pads that we have set up, innovative hubs for Australian businesses in Berlin, Shanghai, San Francisco, Singapore and Tel Aviv.

Australian start-ups and companies wanting to break into these particular countries have a base there where they can access those representing financiers, venture capitalists, other partners.

We are already seeing some amazing results from the presence of our hubs, our landing pads, in these cities.

There's an online events group, Event Workforce Group, that are now counting among their clients Super League and the Rugby League World Cup because they've been able to – it's just an Aussie start-up – they've been able to present their credentials on the world stage.

There's another little company called Koala Safe and it's got a parental lock-out system for wi-fi and they have now done a deal with Walmart for distribution through Walmart stores.

There's another Aussie start-up called Open Cities which has some kind of city management platform and they are now getting contracts in Michigan, Orlando, Miami and the like.

These are Australian companies taking their ideas to the world and the Government is facilitating those opportunities with our Innovation Agenda.

Within the Department of Foreign Affairs and Trade we have embraced innovation at the heart of our aid program and we are partnering with the private sector to have a much more creative way of delivering Australian development assistance.

We have about a $4 billion a year aid program, over 90% of it is invested in our region but when I became Foreign Minister I was frustrated to find that even though the previous government had increased the aid budget enormously the outcomes had not improved at all. In fact some countries where there was reinvestment of a significant amount of money, were going backwards on every relevant social indicator.

So whatever we were doing was not having the outcome we needed.

So I set up within the Department of Foreign Affairs and Trade an innovationXchange, it's an ideas hub.

We brought in people from the private sector, some of the most creative minds from the public sector, we've got people from Google, USAID, from the World Bank, and we come up with some of the most intractable aid challenges and say start with a blank sheet of paper – what would you do to fix this problem, how would you do it?

Now, governments are, by their very nature, risk averse, of course, you've got taxpayers funds, so you should be.

But we have to be able to try new ideas and if they work, scale them up, and if they don't work, don't scale them up.

And that's not the way the public service has been trained to behave in Australia.

So now we have this ideas hub that is coming up with some brilliant new ways of delivering assistance and much of it is in partnership with the private sector because the private sector understands supply chains, the private sector understands how to resolve challenges and how to resolve issues, that's where we are getting our ideas.

We are hoping that our innovation approach will seep through the public policy approaches of all departments.

In fact, we set up the innovationXchange in offices outside the very grand RG Casey Building, they are in much more casual, informal offices so that it represents that kind of start-up and we have people from all over the world now coming to our innovationXchange and coming up with partnerships for us to invest in.

We have now been involved – we're probably one of the only governments to do it – we've now been involved in a number of global solve-a-thons or hack-a-thons, putting up prize money, coming up with a challenge, and saying how do we solve this challenge and getting input from consortia from around the world – we've got an idea from a university in France or a private sector company saying we've got an idea.

We then select the best, we trial them, if they work we scale them up in the Pacific, particularly being our area of responsibility, and some of the results have been amazing.

We're partnering with Google, with MIT, with a whole range of companies, Atlassian, who see the benefit in working with government in this space.

We are also ensuring that we are doing our part to build a skilled and flexible workforce.

The Department of Foreign Affairs and Trade has a role to play in skilling the Australian workforce.

We are doing it in two ways.

We are marketing Australia as an attractive destination for international students and international education is one of our recognised strengths around the world – more and more people see Australia as a place to gain qualifications and train in one of our education institutions.

Now some will stay here, others will go back to their home country, but they have an engagement with Australia as an alumni of Australia that will last a lifetime.

In reverse, we introduced the New Colombo Plan.

Wherever I go in our region the New Colombo Plan of the Australia Government is held up as the best example of soft power diplomacy that's been seen for a generation.

The original Colombo Plan back in the 1950s was all about national building after the Second World War and students from our region came to Australia, studied in our universities, gained qualifications and went home to help build their economies, their societies.

We have reversed it; we are now providing support for Australian undergraduates, young people who are at Australian universities and they have the opportunity to undertake study and an internship in one of 40 countries in our region.

This has required partnerships at a government-to-government level – some countries have had to change visa arrangements and immigration arrangements – at a university-to-university level because of course the study that they undertake has to be recognised as part of their degree back here, and at a person-to-person level, getting young people connected up with a family or an institution that will care for them while they are there, and then business-to-business because what's different about the New Colombo Plan is that these students are being exposed to the work life, the culture, of another country through a practicum or some kind of work experience.

The results have been amazing.

We commenced the New Colombo Plan in 2014 with a pilot scheme in just four locations, Hong Kong, Japan, Indonesia and Singapore.

In 2015 we rolled it out, it's now 40 countries in the Indo-Pacific and at the end of this year over 18,000 Australian students will have lived and studied and undertaken work experience under the New Colombo Plan.

The companies overseas that are taking Australian undergraduates, Mitsui, Mitsubishi, the Ministry of Foreign Affairs in Indonesia, many companies in China, are welcoming Australian undergraduates and then offering them jobs after university or in fact, their Australia equivalent is offering them jobs here – and the connections, the networks.

I invite you to become a business partner with the Australian government through the New Colombo Plan and I think you will be delighted with the connection because you will have access to some of our bright young people who have gained new skills, including language skills, new perspectives, new insights, new ideas, having spent time as an undergraduate, living and studying and working in our region.

These are the commitments that the Australian Government is making to ensure that our nation remains open, remains free and internationally competitive and while we are working very hard on the domestic front to ensure that we have in place the economic reforms and the agenda that continues to drive growth in this country, we know that it's by our international engagement through trade and investment, that this country will continue to grow and continue to be widely admired around the world.

I want to thank you for your support for some of our initiatives.

We obviously consult with you, seek feedback from you, seek to partner with you.

The Coalition knows that our economic strength and therefore our standard of living owes so much to the enterprise, initiative and the risks that Australian businesses take and we want to thank you for the support that you give to making this the best country on earth in which to live.

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