State of the Pacific Conference

I am absolutely delighted to open the 2014 State of the Pacific conference here at ANU – the site of so many years of dedicated scholarship on the Pacific. What I find compelling about this conference is its perspective, in no small way due to the contribution of the keynote speakers in this session, Virisila Buadromo and Amanda Donigi, and respected economist Brij Lal – whose deep expertise in the Pacific is unquestioned. And I acknowledge the sheer mass of accumulated Pacific expertise in the room today. We have our Australian Ambassadors and High Commissioners without their Bula shirts, in suits, posted in the Pacific in Canberra today – and what better start for their mid-term consultations than this conference.

The Pacific is our neighbourhood. I consider the people of the Pacific nations not only our neighbours, but also our family. For me, the Pacific is central to Australia's foreign policy.

Ours is a region of great opportunity – a region where our success will be determined by the quality of our partnerships, by our ability to get on with each other, understand each other's perspectives and build mutual trust and respect.

Relationships are important and that's why since the election in September last year I have twice been to PNG I've also visited Solomon Islands, Vanuatu, Nauru and Fiji. As Shadow Minister, I visited PNG many times, Samoa on two occasions, as well as the Federated States of Micronesia and Tuvalu. Senator Brett Mason, our Parliamentary Secretary for Foreign Affairs, has traversed the Pacific. Natasha Stott Despoja, our Ambassador for Women and Girls, has focussed particularly on this region.

Australia's over-riding national interest – and that of Pacific nations - is for the Pacific to be stable and secure, peaceful and prosperous. Because it is our neighbourhood, I believe Australia has a primary responsibility to help drive economic development, reduce poverty and lift standards of living in the Pacific.

In the last two decades, the world in which Australia and our Pacific neighbours operate has changed dramatically. Asian giants like China have become global players. Neighbours like Indonesia have democratised, and are becoming major global economies. Middle classes are emerging in North, South and South East Asia – the members of which will come to dwarf the middle classes of the 20^th Century. Papua New Guinea's growing population and resource wealth, and its increasing regional leadership, is changing the economic landscape in our immediate region.

These changes provide opportunities for the resource-rich Pacific region. At the same time, the Pacific faces challenges. I believe we need fresh thinking and different approaches to the Pacific. The geography alone is uniquely challenging. The population of the Pacific is expected to increase from 10 to 15 million over the next 20 years and double by 2050. Urban populations will double by 2020, exacerbating social pressures, service delivery, the number of unemployed youth.

We must work together in the region to overcome the challenges of distance, scale, and economic and political participation so that the Pacific avoids economic and social stagnation and achieves sustainable economic growth. We must harness the private sector and regional organisations to create economies of scale. We must meet the challenges of good governance and sustainable resource management and stamp out corruption. We must ensure security and stability so the Pacific attracts both public and private investment. Investment will create new jobs, offer new sources of income, alleviate poverty, and increase Pacific engagement with the global economy. We must improve gender equality so that women are given the opportunity to contribute to society, to the economy, to politics and governance – to the future.

At lunchtime today, I will give a speech at the National Press Club, where I will launch Australia's new aid policy. Economic growth, as the key driver of development, will be central to Australia's new aid policy as will our region. I have championed what I call 'economic diplomacy' as a pillar of our foreign policy – just as traditional diplomacy promotes peace - economic diplomacy promotes prosperity. In that context today I mean that our international engagement efforts are based on a belief that the best path to peace and stability, and to poverty reduction, is through economic growth and thus greater prosperity.

For the Coalition Government, the vital ingredients for prosperity are growth, investment, a thriving business sector and strong trade opportunities – underpinned by sound governance. That's true for Australia, that's true for the Pacific. We need to work with partner governments to ensure security and stability, we need to support economic growth, support employment opportunities, and help create a much more attractive environment for a vibrant private sector to thrive.

Let me give you some examples of some of opportunities I see for our region, to achieve strong economic growth. Tourism must be central to the future of many Pacific island economies. Despite having some of the most spectacular islands and beaches and sunsets and some of the most beautiful people on Earth and a magnificent cultural heritage, the Pacific is home to 7 out of the 20 least visited countries in the world.

Palau, population 20,000, and the Federated States of Micronesia, population 103,000; two very beautiful countries – but with two very different growth paths. Palau has worked hard to support tourism – so this small country of 20,000 people now has six international airlines servicing the islands and over 100,000 visitors a year. The tourism industry in Micronesia is one-fifth the size in visitor numbers. Why?

More complex foreign investment rules and a single monopoly air carrier are a big part of the reason.

There is huge tourism potential in small states across the Pacific: Tuvalu, Kiribati, the Republic of Marshall Islands. Imagine the jobs on offer if the Memorandum of Understanding signed with Carnival Cruises in Vanuatu - which is delivering on its pledge to involve more local Vanuatu business and people in the burgeoning cruise industry - is successfully replicated in other parts of the Pacific. I know Carnival is already seeking to do this in PNG's Milne Bay and Trobiand Islands.

Then there's resources - three weeks ago, the Spirit of Hela left PNG with its first shipment of gas to Japan from the $20 billion PNG LNG project.

Australia has supported this project since its inception – because we knew how important it was to develop a more sustainable revenue base for PNG. This is a project that will deliver export revenue to PNG for generations to come. It should create lasting jobs, benefitting whole communities as well as individuals. There is enormous potential for greater resource development throughout the Pacific.

In fisheries, Australian support has helped underpin the sustainable development of major regional fisheries industries in the Pacific.

This week, I announced with Defence Minister David Johnston a new phase in our Pacific Patrol Boat program, with $2 billion in new Australian-built boats, with maintenance and personnel costs to support Pacific nations in their maritime surveillance, including fisheries protection.

Over the next 12 months, the offshore tuna industry will deliver around $300 million to the Pacific in direct revenues from license fees - chipping in something like $255 million in regional GDP, and accounting for more than 15,000 jobs. Outside the formal fisheries sector, another 3 million people in the Pacific rely heavily on coastal fisheries for their food and livelihoods.

Work supported through ACIAR (our fabulous Australian Centre for International Agricultural Research) is building on traditional approaches to managing marine resources in the Pacific islands. This work includes not just fish, but also sea cucumbers and marine algae. These resources need to be managed in a way that provides income to community members – often remote coastal communities with few other options for generating a cash income. It's got to be in a sustainable way that does not deplete or damage the underlying natural resource base.

Similarly, on land, ACIAR research is supporting agribusiness development - helping ensure traditional crops like taro and Canarium nuts, familiar in the society and domestic economy of the Pacific islands, can become commercial products, competitive in international markets, while providing income to rural communities.

Again, an important part of Australia's R&D effort is to boost production without destroying the forests and soils of the islands – the fragile natural resource base that is so much a part of the unspoiled character of the region.

Greater labour mobility will also be a key issue for the Pacific in the years ahead, particularly for those countries with challenging domestic economic prospects. Which is why Australia is keen to expand our Seasonal Worker Program; and why we continue to build up vocational skills to allow greater remittance earnings.

Some seasonal workers have earned up to $12,000 in Australia, and have been able to remit about $6,000 over a six month placement. Tonga, in particular, has embraced our program. We know that that scheme is having flow-on benefits. Some workers have used their income to pay for school fees for their children, to purchase tractors, to invest in a small business, and the like.

Greater flexibility with financial flows will also be important in the years ahead. Our Government wants to open up partnerships with Australian businesses in the Pacific. Recognising that remittances are playing a greater role in driving economic growth, we are working with Westpac and ANZ to find new ways to make it easier for Pacific workers to send their money back home. This will be a key theme when Australia hosts the G20 Conference in Brisbane later this year.

To underpin economic growth in the Pacific, we need strong political and community leadership, with sound institutions and respect for the rule of law. It is vital for there to be transparency and accountability, strong anti-corruption regimes and robust police and defence forces. The Pacific, with its unique challenges, opportunities and constraints needs vision and leadership from within.

It may be that the innovative thinking behind the Pacific Island Forums Framework for Pacific Regionalism will consider economic and political integration while respecting sovereignty to protect the region's economic future as well as its unique cultural character.

The Coalition has adopted a fresh foreign policy in relation to Fiji, and we are supporting Fiji's election preparations and its return to democracy.

In 2013, the IMF suggested economic growth in Fiji could not be fully realised until "political uncertainty" was resolved. We have provided over $2.6 million to support preparations for the September elections; working with Fiji's Elections Office and planning to co-lead a multi-national Elections Observation Mission to reassure the international community that Fiji is stable and it is a place to do business.

We also need to raise the status of women in the Pacific. Women's empowerment is critical to the economic and political success of the Pacific. Some Pacific countries are showing great leadership in driving the empowerment of women. In Samoa last year, the Parliament reserved five seats – ten per cent of the Legislative Assembly – for women. Back in 2004, New Caledonia elected its first female President. Today, women hold 23 out of 54 seats in the congress. In September last year, Tonga passed the Family Protection Act – a bill that criminalises domestic violence.

The Business Coalition for Women in Papua New Guinea is a group of companies sharing resources and knowledge to get more women into leadership positions and on boards, and to help tackle the issue of domestic violence. Empowering women is not just the right thing to do, it makes economic sense.

Supporting economic growth is also about strengthening the vital enablers of growth: education and health, infrastructure and security. Education is a driver of economic growth. Since 2007, Australia has directly supported 5,800 people from Pacific nations to access Australian-level qualifications through the Australian Pacific Technical College. I remember that well - it was an initiative of the Howard Government.

The Government is committed to ensuring this program is effective and efficient in building a cohort of quality Pacific graduates with relevant job-ready skills. At the post-graduate level too, Australia is investing $500,000 per year, via ACIAR, to provide scholarships for research-based Masters and Doctoral degrees at the University of the South Pacific.

The young women and men who receive these scholarships gain hands-on experience of conducting research in Australian-funded agricultural and fisheries projects in the region. They also form enduring relationships that will bring innovation and support the development of the economically and environmentally sustainable industries of the future.

Many of you would have heard me talk about our New Colombo Plan which provides opportunities for Australian undergraduates, including from this university, to take opportunities to live and study and undertake internships in countries in our region - a reverse of the original Colombo Plan from 1950. Already we will have 1300 students this year studying in our four pilot locations of Singapore, Indonesia, Hong Kong and Japan. But from 2015 the pilot program will be scaled up and we'll be offering opportunities to other nations and other universities in our region to accept New Colombo Plan scholars. And I want to see universities in Papua New Guinea, in Fiji – the University of the South Pacific, receiving Australian undergraduates.

Delegates, as you embark on the 2014 State of the Pacific conference, let me assure you that Australia is deeply committed to its growth and prosperity and stability. We know the economic growth prospects for some parts of the Pacific are more constrained than others. We know that economic growth can't be achieved without security and stability, which are central to prosperity in any country.

And I don't assume we have all the answers but this Government will listen to Pacific perspectives, we will listen to ideas on how we can tackle the challenges the Pacific faces. We are committed to working with our Pacific partners on building a stronger future for us all. Research and analysis are vital for developing sound policies, and I applaud the great academic work of the Australian National University, our university.

It is only fitting that our national university hosts the School of State, Society and Governance in Melanesia. As Foreign Minister, my role is to manage relationships, and with the Pacific it is for me a labour of love.