The Hon Anthony Byrne MP, Australian Parliamentary Secretary for Trade
Australian Commonwealth Coat of Arms

The Hon Anthony Byrne MP mp

Australian Parliamentary Secretary for Trade

Speech

10 August 2009

Australia-India Address to Australia Indian Business Council

Introduction

One great thing India and Australia have in common, apart from our mutual love of cricket and our democratic values, is that our economies have done better than most during the global financial crisis.

India is still growing strongly, with the IMF forecasting growth of 4.5 per cent in 2009 and 5.6 per cent in 2010.

The Indian Government's Central Statistical Organisation has announced an even higher figure for 2007-08 of 7.1 per cent, a remarkable achievement in the current climate.

Australia did have a negative quarter of growth in the last three months of 2008, but in the first quarter of this year our economy showed positive signs of growth.

It's bounced back a little like our Australian Cricketers in their recent splendid fourth test victory.

The good news is that Australia's central bank, the Reserve Bank, has forecast a positive growth rate for 2009 of half a per cent, with higher growth next year.

Overall, our economy remains the strongest in the OECD.

I think these positive outcomes in the midst of the greatest financial crisis since the Great Depression say a lot about the capabilities of our two nations and our future as trading partners.

In the long-term, our economies are heading in the same upward direction and our nations are beginning to share a similar strategic outlook on global developments.

India, of course, is already the world's largest democracy.

Australia also understands that India is on its way to becoming one of the world's largest economies and a major and significant player in the region and the globe.

Australia and India are both nations of the Indian Ocean and our strategic interests increasingly intersect, especially in the Asia Pacific.

Overall, it is fair to say that both our nations are looking to the future with an optimism based on an understanding that sensible, ongoing reforms and international cooperation are required to keep economic growth on track.

In fact, our nations have taken decisive steps to reform and liberalise our economies over the last generation.

Beginning in the 1980s under the Hawke Labor government, and continuing in the 1990s, Australia embarked on a wide-ranging program of liberalisation that transformed our economy.

Similarly, in 1991, India embarked on a major reform program which opened up its economy to foreign investment and trade and increased domestic competition.

The economies of Australia and India have benefited from these reforms, which have brought higher growth rates and a greater resilience to external shocks. They have laid the basis for an era of economic cooperation.

Australia-India Trading Ties

Just as India and Australia share a common recent history of economic reform, so we share a similar interest in opening up the world economy to freer trade and investment flows.

Australia strongly supports the finalisation of the Doha Round of the World Trade Organization. We see that step delivering a positive stimulus to the global economy and a blow to the protectionist cause.

In fact, Australia's Trade Minister, Simon Crean, will put the case for finalising Doha again when he visits India next month for a trade ministers meeting in New Delhi.

On the eve of the important G20 meeting in Pittsburgh, we hope this renewed dialogue on trade in New Delhi will deliver greater momentum to finalise the Doha Round.

Australia and India are also considering a Free Trade Agreement which we believe will seal a strategic economic and investment partnership, one based on our complementary economies.

Indeed, India is already one of Australia's leading trading partners, with two-way trade in goods and services between our nations reaching about A$19 billion in 2008.

Australia is supplying India with the essential raw materials required for industrialisation, commodities such as coal and copper and gold.

We believe, however, that there are still many positive steps which could be taken to improve our two-way trade, especially in the area of tariffs and non-tariff barriers.

I might add that Australia welcomed India's decision in February to re-open its dairy market to Australia's products.

India's restoration of that A$6 million market at a time of global recession and rising protectionism was well received.

Overall, we exported almost A$3 billion in services to India last year, and we are also keen to develop this sector.

About half of this was in providing education services to nearly 100,000 Indian students who are currently studying here.

I deplore the recent attacks on Indian students here and I share a sense of outrage at the stories of unscrupulous educational providers preying on foreign students.

As the message from our Prime Minister made clear, the Australian Government will do everything it can to prevent this happening in the future.

In this regard I should point out that Education Minister Julia Gillard has just announced a major review of the laws regulating the education of international students in Australia.

The Baird Review, as it is known, will aim at finding ways to improve the safety and care of students while they are in Australia, but also the quality of the education they receive here.

Australia-India Investment Ties

The Australian Government believes that trade and investment are closely related, which is one reason why we joined out investment promotion arm, Invest Australia, to the Australian Trade Commission in July last year.

The outstanding success of India's reform program since 1991 has dazzled the world, and has attracted some of Australia's biggest companies to India.

These include, for example:

BHP-Billiton, Rio Tinto, Leighton's, Thiess, Qantas, and Macquarie Bank, which has set up an office in Mumbai and has already employed 50 local specialists.

Rio Tinto is now the largest importer of steaming coal into India, while Leighton's has built plants for Nokia and Flexitronics, and is currently building one for Motorola.

BHP-Billiton is also seeking to invest in India's oil and gas sectors.

Likewise, some of India's biggest firms in IT and services, resources and fertilizers have invested in Australia.

Australia welcomes foreign investment, especially foreign direct investment, for a variety of reasons.

Foreign investment promotes jobs and income growth, expands an economy's technological base, improves managerial skills and has a beneficial effect on exports.

The Australian Government looks forward to stronger investment ties with India, which we hope will grow in tandem with our healthy trading relationship.

Conclusion

In conclusion, the relationship between Australia and India is growing stronger as our economic engagement intensifies.

That's a welcome and positive development which we want to see continued.

Over the past 18 months, several Australian ministers, including the Prime Minister and Deputy Prime Minister, have visited India or stopped over to talk to their counterparts there.

Moreover, Australia and India have a formal dialogue process, known as the annual Australia-India Joint Ministerial Commission.

As well, the Australian Government announced last week that it would provide $8 million in funding for the Australia India Institute at the University of Melbourne.

The new funding symbolises Australia's commitment to building a bridge between our two nations by increasing our understanding of India's culture and history.

The Australia India Institute will be a wonderful cultural resource for generations of scholars. It also reflects the importance we place on the contribution to our national life by the estimated 240,000 Indians living in Australia.

Events like tonight's Australia-India Address will also help to further the ties between our great nations.

So I'd like thank the Australia-India Business Council again, as well as Austrade, for their efforts in organising tonight's dinner.

Thank you.

ENDS