Good morning delegates, and thank you Katie for that introduction and I acknowledge your role as Chair of the TTF, the former Chair my good buddy and former colleague Bruce Baird, ladies and gentlemen.
I am absolutely delighted to attend this important forum again this year. The Tourism and Transport Forum Leadership Summit brings together government and two of the most important sectors of the Australian economy, and it’s an important day for discussion, engagement and friendship.
Recently Australia broke a world record — 26 consecutive years of uninterrupted economic growth — a world record. Now this doesn’t happen by accident. It has come about because of a continuous program of economic reform by successive governments. It has come about because we have opened our economy to the world and found new markets across the globe, and it has come about because of the innovation, productivity and preparedness to take risks of our private sector. Of course, the growth of Asia has been very much to our benefit.
Our economic engagement in contemporary terms with Asia began sixty years ago, when the Menzies Government signed the Commerce Agreement with Japan that, over time, made Japan our largest trading partner and still today, Japan is one of our most significant trading partners.
And then of course about 40 years ago, with the rise of China when it opened its economy to the world, joined the WTO and Australia took the opportunity to sell goods and services to China and today it is our number one trading partner.
There is an enormous opportunity for us as global economic power shifts from West to East, and Australia will take advantage of that transformation.
However, as much as Asia has risen, there is still enormous potential for it to rise further, if you take GDP per capita as the best measure of economic growth and living standards and prosperity.
Of the top 10 global economies on a GDP per capita basis, only three are in Asia, and only a handful of Asian economies could be described as fully industrialised.
So while the pace and scale of the reduction in poverty and the growth of economies in Asia has been enormous, there are still significant challenges ahead.
One obvious contemporary challenge is the instability on the Korean Peninsula, and it is overwhelmingly in Australia’s interests for there to be a political, diplomatic, economic solution to the tensions on the Korean Peninsula, given that three of our four largest trading partners are in North Asia.
There are other challenges.
They say demography is destiny. Much of Asia is ageing rapidly. It is estimated that those aged over 70 in East Asia alone, that number will triple by 2040. While economies such as India, the Philippines, Malaysia, Indonesia will still have a demographic dividend — that is a very healthy ratio of working age people relative to dependents — that demographic dividend has passed many Asian economies by.
So the big challenges for Asian economies are to get rich before they get old, to avoid the middle income trap, and to harness the power of the consumer class which is growing dramatically.
It is estimated that at the beginning of this century, the 21st century, probably about a fifth of the world’s consumers were in Asia. It is estimated that by 2040 that could well be two thirds, and consumer preferences and a consumer class has the ability to transform economic models.
So here is the opportunity for Australia. While Asia has become the manufacturing hub for the globe and has the capacity to manufacture goods more cheaply, it is now transforming to be a global source of consumers, a massive consumer class that is looking for quality goods, quality services. We are exquisitely placed to provide both.
That’s why we have pursued free trade agreements with three of the North Asian giants – China, Japan and South Korea – and the opportunities to expand our goods and services exports into those markets is phenomenal.
Likewise, as I know my colleague Steve Ciobo will tell you shortly — hi Steve — he’s pursuing further free trade agreements with Indonesia, with Hong Kong, and into some South American and Latin American economies.
So the quest for new markets or enhancing established markets goes on.
One of the challenges that we face in terms of the supply of quality goods and services is ensuring that we have an Asia-capable workforce, or an Asia-literate workforce. If these are our customers, then we have to understand what they are looking for, what experience that they will appreciate, and how we can gain a comparative advantage over others.
Australia is not the only country that sees the rise of the consumer class in Asia as a once in a lifetime opportunity. It is a very competitive world out there and we must ensure that we, as government, put in place the kind of policies that make Australia internationally competitive in every respect.
There’s one thing the Government is doing is ensuring in the longer term that you all have potential employees, indeed leaders, who are Asia-literate and Asia-capable.
I’ve spoken before about our New Colombo Plan. This is of course a reverse of the original Colombo Plan that brought so many students from Southeast Asia in particular to Australia in the 1950s and 60s and gave them the opportunity to get a qualification from an Australian university and then go back to their country to engage in the nation building that was so necessary after the Second World War.
The Coalition Government reversed that and in 2014 we introduced the New Colombo Plan which provides an opportunity for undergraduates in Australian universities to live and study and most importantly work in one of 40 countries in our region.
From Mongolia to the Marshall Islands and everywhere in between, Australia has set up partnerships with these nations so that they will accept into their universities Australia students. The courses that they undertake and the work that they do will be recognised as part of their degree work in Australia. Unique amongst student exchange programs, they have the opportunity to undertake an internship, a work experience, a practicum, and this has been a phenomenal success.
By the end next year, because we have announced the scholarship and grant winners for 2018, by the end of next year over 30,000 Australian undergraduates will have lived and studied and worked in one of 40 nations in the Indian Ocean-Asia Pacific region in the first five years of this program.
We have set up an alumni program to keep track of the New Colombo Plan students and to keep engaged with them, for they will for sure be the ambassadors for our country for the future. Some of their stories are truly inspiring, and it also relates to the tourism sector. What tourism operator wouldn’t want to have in their workforce somebody who had actually worked in the tourism industry in one of the nations to our north?
One student wrote to me recently, she went to Japan on the New Colombo Plan, she studied Japanese language and culture, she’s fluent in Japanese. Her internship was two months in a town in southern Japan where she worked for their tourism organisation, she designed their website, she worked on their marketing campaign and she said she learnt more about Japanese thinking, culture, lifestyle, way of life than she could have ever dreamed. She was from Griffith University, she’s now back concluding her studies, and what a fabulous potential employee she will be.
So we have an alumni of young people who will be Asia-literate and that is what we must seek to do in all our sectors that are facing the challenges of competing with others to ensure that our goods and services are prized and valued amongst the economies to the north.
We are delighted to work closely with the tourism and transport sector. I know that we’re delighted particularly to have the opportunity to meet with the leaders of these most vital sectors for the Australian economy. I know that my colleagues look forward to engaging with you throughout the day and over the gourmet delights this evening.
We are committed to ensuring that you have the best opportunity to compete in a globalised world, the best opportunity to attract to Australia the consumers, particularly from our region, who will help drive our economic growth, drive job opportunities and ensure that the very best days of the tourism and transport industry sectors lie ahead of us. Thanks for being here and have a great day.
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