Australian Chamber of Commerce and Industry Leaders’ Summit
Good morning, thank you Terry for the short introduction.
To James Pearson, Paul Nicolaou, ladies and gentlemen good morning.
I am in a very good mood because overnight we were informed that Australia had been elected overwhelmingly to serve on the UN Human Rights Council, the first time we have served on that body, and it is great international recognition of Australia as an open, liberal democracy, committed to freedoms, rule of law, democratic institutions.
I also have to be back at a Party Room meeting at 9:00am to discuss the very important issue of energy policy, which I can assure you will be a game changer, and I hope you get an opportunity to discuss that during your deliberations today.
I am really pleased to have this opportunity to speak to the Australian Chamber of Commerce and Industry Leaders' Summit.
Much has been said over recent years about the pace of global change – and in particular about the economic dynamism being demonstrated by our neighbours to the North and the opportunities that are opening up in our region, and the contours of this story are of course familiar to you.
As the economist Richard Baldwin outlines in his fascinating book "The Great Convergence", the G7's share of global manufacturing output has dropped from more than 70 per cent in the 1970s to less than 40 per cent today.
Just six nations account for most of the shift in output, five of which – China, India, Indonesia, Korea and Thailand – are in Asia (you have to guess the sixth – it's Poland).
While opportunities abound in our region, we also face a range of challenges – global macroeconomic vulnerabilities, the changing nature of work, changes in the security environment or any number of risks that could change our operating environment.
In this time of great global change we must work to balance opportunities and risks in order to best position Australia for success.
Technology of course is a major driver of this change.
The information revolution has enabled ideas to travel instantly across the world, unlocking insights and innovation as they go, and creating a vast array of new opportunities.
Technological change though, brings with it disruption, disruption in economies, to markets, to societies, to individuals.
McKinseys estimates that almost half of the world's economic activities – or 1.2 billion workers – could be affected by the adoption of currently available automation technology.
Already we've seen retail stores without any staff, people checking into hotels online, driverless vehicles in industrial settings, and drones in an ever-increasing array of scenarios.
In the years ahead we'll see more automation in warehousing and wholesaling, in manufacturing, 3D design, and software, as well as artificial intelligence activity involved in finance, technology and education.
Businesses and governments alike are only just beginning to understand the scale of change underway, both in terms of the opportunities it presents and the demands it places on all we do – the way we live, work, travel, communicate, how we lead.
As the World Economic Forum notes in its most recent competitiveness index released just last month, Australia remains a highly competitive nation.
This year, we were the 22nd most competitive nation worldwide, holding our own even as other nations all around us worked hard to lift their game.
Indeed in East Asia, Australia had the sixth most competitive economy, beating giants like China and peers like Malaysia and South Korea, the report giving Australia a tick for reducing our fiscal deficit, despite softening commodity prices.
I have often described Australia as a Top 20 nation.
With the 13th largest economy in the world, we are a G20 member.
After Switzerland, we're the second wealthiest nation in terms of wealth per adult; we have the sixth largest pool of funds under management, and we are a highly attractive investment destination.
We hold top place in the Global Creativity Index – and we're a world leader on a host of other measures.
Second on web participation, equal third on global dynamism, fifth for economic freedom, and so on.
Still, Australia's ability to adapt to this change is critical to maintaining and improving our global competitiveness.
The good news is that Australia is well positioned to capitalise further.
We recently completed our 26th consecutive year of uninterrupted economic growth, and we are entering our 27th – that is a world record, no other economy has achieved that feat.
Our record is no accident.
Successive Australian Governments opened up our economy by lowering tariffs and other barriers to trade and investment over several decades.
According to the Reserve Bank, average income per Australian household has doubled since the early 1960s.
As household wealth has grown, Australians have more disposable income and they have used that income increasingly to access services they previously could not generally afford – whether it is dining out or travel or health care and the like.
The rise in household wealth has helped stimulate the growth of a strong domestic services sector.
We are renowned as a commodities superpower, the largest exporter in the world of iron ore, coal, aluminium ore.
We are a huge exporter of copper, lead, zinc, diamonds, beef, wine, wheat, wool, but our services sector is where the potential lies.
For example, Australia today produces some of the best financiers, accountants, lawyers, architects, software engineers and educational professionals anywhere in the world.
Services now account for more than four in five Australian jobs and contribute to around 75 per cent of our domestic GDP.
They account for around 22 per cent of our trade, so you can see there is great potential for us to increase our services exports.
Attracting investment and finding new markets for our exports, both goods and services, requires us to put our best foot forward and we must innovate to stay competitive – playing to our strengths while continuing to seek out fresh opportunities.
When I became Foreign Minister in 2013, I set out a roadmap for our international engagement that put advancing Australia's prosperity in the driver's seat of our foreign policy.
Our economic diplomacy agenda has since delivered on that promise, helping keep Australia safe and prosperous and strengthening our neighbourhood through a focus on four pillars:
- Promoting trade;
- Encouraging growth;
- Attracting investment; and
- Supporting Australian business in its international engagement.
In 2014, I tasked our 117 overseas missions, that includes Austrade, to prepare strategies for how they would take our economic diplomacy agenda forward in their host country.
Their business plans reflected the diversity of the countries they work in, and they came up with ideas from hosting food festivals through to facilitating billion-dollar investment deals.
For example, in November 2016, our embassy in Cairo hosted a 'Taste of Australia' barbecue to promote Australia as a reliable producer of safe, healthy and Halal-certified produce.
The event was attended by over 60 representatives from leading importers, hotels and restaurants, encouraging key government decision-makers to remove trade barriers on Australian beef and lamb, and the exports have grown.
Australia's Consulate-General in Hong Kong worked closely with the Hong Kong-based China Resources Group to facilitate its $1.7 billion investment in GenesisCare, along with Macquarie Capital, Australia's leading provider of radiation oncology, cardiology and sleep treatments.
Australia is in an informal alliance, you might not have heard of MIKTA – Mexico, Indonesia, Korea, Turkey, Australia – and our alliance is working closely and cooperating and collaborating in a whole range of areas that reflect the interests in each of our regions.
I have established within MIKTA a creative initiative, the MIKTA Innovation Group, and five leading private sector innovators from Mexico, Indonesia, South Korea, Turkey and Australia are building exciting new links between young innovators and innovation hubs in our respective countries.
Likewise Australian Defence Force staff in London last year supported a trade mission to the Farnborough International Air show.
Ultimately it proved the biggest aerospace and defence exhibition of the year with over 1,500 exhibitors and 100,000 trade visitors from across the globe.
As a result, Australian companies immediately reported sales and contracts in excess of $16 million, with many more prospects on the horizon.
One of our most significant initiatives in deepening our engagement with Asia and setting up our leaders of the future to look to Asia for our opportunities, is our New Colombo Plan.
This is a Government initiative that supports Australian undergraduates to live and study and undertake work experience in one of 40 nations across our region, requiring partnerships between our universities, between businesses and entities that provide them with work experience, and of course with the Australian students and their hosts families and entities.
From a standing start in 2014 to the end of 2018, our New Colombo Plan will have supported more than 30,000 Australian undergraduates from 40 Australian universities to live, study and undertake internships in our region.
Thousands of Australian undergraduates are returning to Australia with new skills and perspectives and insights and networks from their experience, particularly their work experience in the region, enhancing our capacity as a nation to engage in our region.
It is a long-term investment in Australia's connection to the Indian Ocean-Asia Pacific.
For New Colombo Plan alumnus and 2015 China Scholar Stephanie Otten, her internship with NAB in Shanghai, National Australia Bank, gave her insights into the business environment that were impossible to gain from a textbook.
In her own words, Stephanie said: "I believe that the experience I gained through the New Colombo Plan in China has already contributed to my future – it's an integral reason why I was offered a graduate position [with] a global advisory firm". Stephanie now works at Pottinger.
2016 Taiwan Scholar Piero Craney did several internships with the Indo-Pacific's largest law firm, King & Wood Mallesons, in Hong Kong and Beijing, and now looks forward to embracing his newly acquired "access to an Alumni network of people who also want to create business collaboration in the Australia-China space".
Around 240 private sector organisations have signed up to support our program, offering internships and mentorships to New Colombo Plan Scholars in the Indian Ocean-Asia Pacific region.
Many of these businesses are providing utterly transformational opportunities for our young people to gain real-life experience in the workplaces in Asia.
Last year, the National Australia Bank offices in Tokyo, Shanghai, Hong Kong, Singapore and Mumbai welcomed our New Colombo Plan students for internships across multiple disciplines including commerce and finance, marketing, human resources and law.
The benefits for business are clear, and Angela Mentis from National Australia Bank and one of our New Colombo Plan Business Champions,has said that engaging with New Colombo Plan students had been a "huge success" for NAB and for the interns who have passed through its regional program.
Angela said: "It's not just about study and business experience – it's about cultural engagement, regional awareness and inspiring a vision that's bigger in our future leaders".
It has been incredibly well received internationally and commended by world leaders including President Xi and Foreign Minister Wang of China, Foreign Minister Marsudi of Indonesia, Prime Minister Najib of Malaysia, Prime Minister Lee of Singapore – in fact Prime Minister Lee welcomed the vision of the New Colombo Plan and said it would "renew the connections and goodwill between our peoples into the next generation".
In 2014, Prime Minister Abe addressed Australia's Parliament and said in his speech: "The New Colombo Plan will certainly give rise to the leaders of the future".
So this is an advertisement – I encourage you and your organisations to seize the opportunity and play a central role in supporting the business leaders of tomorrow, the Australian undergraduates who are alumni from the New Colombo Plan, through partnering with us on this initiative.
The Australian Government is also investing in the international frameworks that help Australians to compete internationally, including the international trading system and of course our free trade agreements.
In a time of uncertainty when some are calling for trade barriers to be raised, not lowered – it is imperative that we push hard to keep world markets open to maintain transparent and predictable rules
Also through Australia's long-standing engagement in APEC, we continue to pursue free and open rules-based trade in the Asia Pacific region that creates opportunities for Australian businesses.
We use our involvement in other forums, including the G20 and the OECD, to advocate Australia's continued support for an open, rules-based trading system.
Ladies and gentlemen, success in the new global environment will require the best of our Australian ingenuity and know-how, coupled with hard work to build our relationships in Asia.
Deeper engagement with the global economic environment is key and will be a theme of our Foreign Policy White Paper which will be released in coming weeks.
The Foreign Policy White Paper, which will be the first since 2003, will examine how strategic shifts in our region and around the world will impact upon Australia's interests, which are of course an issue of key national concern.
It will guide Australia's foreign policy responses for at least the next decade.
Across Australia, our Foreign Policy White Paper Taskforce heard from a broad range of businesses, and I know that many of you here today made valuable contributions to our public consultation process, and I thank you again for that input.
Here we are in 2017 – Australia has a competitive, open and diverse economy. We live in the middle of the most dynamic region in the global economy.
Let's make the very best of the opportunities that are presented to us.
I wish you well in your deliberations today.
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