Deputy Prime Minister Minister For Trade Leader of the National Party
The Hon. Tim Fischer, MP

at the

Australian Canned Food Industry Conference

KEYNOTE ADDRESS

16 September 1996
Introduction

Thank you for inviting me to address you. It is a pleasure to have this opportunity to talk to you for two reasons.

First, because the Coalition believes strongly in consulting fully with the business community.

And secondly, because the Coalition is now in a position to start creating an environment that encourages real business opportunities and economic growth.

I am pleased to say that the canned foods industry is a major contributor to Australia's economic growth. The industry's annual output is worth about 1.5 billion dollars.

Australia's exports of canned and bottled products to Asia have grown by over 13 per cent since 1991 and now amount to almost $A400 million. Exports of products such as fruit juices and pet food have been particularly strong.

One of the canned foods industry's greatest strengths is its diversity, which in turn reflects Australia's strength as a reliable supplier of quality agricultural products and value-added foods. The industry is now processing everything from meat products and seafood, to tomato puree, fruits, vegetables, juices, soups and milk.

Australia's processed foods industry is now amongst the most advanced in the world: so advanced that I understand it is now exporting to the world new technologies developed here in Australia.

The future of Australia's economy depends on industries such as yours. Australia relies on you to continue to develop exports of both products and technology that strengthen Australia's image as a reliable supplier of clean, higher quality produce and innovative design.

Today I want to talk to you about the Government's commitment to the processed foods sector and to outline our domestic economic agenda and trade policy strategy.

Australia as the Supermarket To Asia

As you will be aware, last week the Prime Minister announced the establishment of the "Supermarket to Asia" Council.

I don't want to go over the detail of this initiative again, except to emphasise that the Council's aim is to help the food industry increase its exports and, in particular, to help it improve Australia's market share in Asia.

Asian countries are likely to be importing more than $83 billion in food products by the end of the decade. The emergence of a large Asian middle class is underpinning the burgeoning Asian demand for sophisticated and varied food products.

Australia's food producers are uniquely placed to benefit from these developments.

One of the Council's first concerns will be to reduce inefficiencies in the sectors between the farm gate and the end consumer. Excessive costs in the processing and transport sectors and an antiquated industrial relations system have held back the full potential of Australia's processed foods and canned foods industries.

The Government's Domestic Reform Program

Let me assure you that this Government is committed to achieving substantial, real reforms to our domestic economy.

At the microeconomic level, the Government is determined to improve Australia's productivity over the long term, through improved efficiencies in key infrastructure sectors, like the waterfront and transport and communications.

It is no secret that productivity on the Australian waterfront remains far below international best practice. It is in fact slipping behind even further.

Despite the $430 million that has been spent by taxpayers and the industry on reforming the waterfront, Australian container cranes struggle to handle 20 TEUs (or Twenty foot Equivalent Units) per hour. Performance is no better than it was four years ago.

Meanwhile our competitors in New Zealand achieve around 25 TEUs per hour, and in some other countries, port crews can handle 40 or 50 TEUs per hour.

The bottom line is that Australia's best performing ports are the equivalent to New Zealand's worst performing ports.

The key to improved waterfront performance is industrial relations reform, so that membership of all organisations becomes voluntary and the "closed shop" approach of waterfront unions becomes a thing of the past.

The Government will also be encouraging states to privatise the non-core functions of their port authorities, because overseas experience shows that privatising port services leads to greater efficiencies and lower costs.

The aim of the game is to give waterfront operators the ability to manage their enterprises on a sound commercial basis. Changes such as these will be fundamental to bringing Australian ports into line with internationally competitive practice.

Improving Market Access: Central to the Government's Trade Policy

So we must drive the microeconomic reform agenda, and get the right macroeconomic settings. These things are necessary to our capacity to trade in the world.

And then we must face the barriers which prevent Australian products from competing on a fair basis in international markets.

Apart from high tariffs, there are a number of non-tariff barriers seriously affecting the capacity of Australian food products to compete.

For example, in Thailand and Indonesia, products need to be registered with local authorities before they can be imported, and the registration number must be shown on the label. This cumbersome and lengthy procedure adds significantly to cost of exporting and often scares smaller firms away from the market.

Other labelling problems are also causing problems for Australian producers.

Some markets require detailed listing of ingredients. Others want the importer's name on the label and a separate label needs to be produced each time.

The three Chinese speaking markets: China, Hong Kong and Taiwan, which naturally expect labelling to be in Chinese language, all require different labels.

And even labels for the English speaking countries have differing requirements.

No doubt many of you are well aware of these and other trading difficulties, such as those connected with product classification.

For its part, the Government in cooperation with industry is working hard to eliminate these barriers.

Already we have achieved some success on this front.

For example, the Malaysian Government recently acceded to Australian requests to reclassify fruit juice mixtures as 100 per cent fruit juices. Previously, juice mixtures had been classified as less than 100 per cent fruit juices and as a result attracted a higher tariff.

Improvements to trade facilitation are being achieved through APEC processes and through AFTA-CER linkages. APEC is working towards the mutual recognition of food standards by all member economies.

Under the AFTA-CER processes further efforts to harmonise regulations and achieve mutual recognition of food standards are also being undertaken. Late last week I signed the first agreement between CER countries and the seven ASEAN countries, providing an framework for cooperation on standards and conformance matters.

And it is important that we continue aggressively to pursue multilateral trade liberalisation through the WTO.

One major reason for this is that key barriers to free trade, like export and production subsidies, which are still being used in important markets, such as the European Union, can best be tackled through multilateral mechanisms.

In this context let me say that Australia has agreed to make joint representations with the US to the European Commission to get them to reduce their subsidies to inefficient pear and peach producers, primarily in Greece, Spain and Italy

Conclusion

In conclusion, I began today by saying that the Coalition Government believes strongly in consulting fully with business.

This is because for all the efforts being undertaken by the Government, the entrepreneurial engine of better trade performance rests with you - the business community.

Governments can negotiate market access and remove impediments to competitiveness.

But it is our entrepreneurs who must take our products and the talents of our people to the world. That is what will ultimately determine the success of our trade performance.

So with your support, the Government will continue to reform Australia's economy in a way that will help business to fulfil its potential as a great trading nation.