Speech by the Australian Deputy Prime Minister and Minister for Trade, The Hon Tim Fischer to the Minerals Council of Australia Annual Dinner, Canberra, 27 May 1998

Nick Stump, President of the Minerals Council of Australia, fellow parliamentarians and distinguished members of the minerals industry.

I want to begin tonight by acknowledging the substantial contribution your industry makes to national economic growth, employment, regional development and to improving standards of living.

Particularly since the resources sector makes its contribution to the national economy primarily through exports - some 80 per cent of its product is destined to leave these shores. That makes the resources sector not only Australia's most export-oriented sector but also the largest export sector in absolute terms.

Australia is the world's largest exporter of coal, alumina, diamonds, rutile and zirconium and a leading exporter in many other minerals because the minerals sector has established its credentials as an internationally competitive industry.

I'd like to speak to you tonight about what the Government is doing to ensure the minerals industry remains competitive in an increasingly fierce global marketplace.

And I'd also like to say a few words about my participation in the recent WTO Ministerial Conference in Geneva.

But before doing that I would just like to make a few short remarks about Kyoto.

There is a perception I think that we have been environmentally irresponsible because of the line we took on the Kyoto Protocol. Having just returned from Europe, let me put the record straight on that issue.

In my view, we fought for a good agreement, one which delivered an environmental outcome in a responsible and equitable way. The outcome reflected our concerns not to compromise Australia's competitive mining industries.

It is also pleasing that the logic and fairness of Australia's Kyoto stance is now recognised internationally, even if those NGO's and others, including the Opposition, are still unable to admit they were wrong

What the Government is Doing to Enhance Competitiveness

Over the past two years, the Government has undertaken major reform of the Australian economy.

That reform has enabled Australia to withstand the full impact of the storms which have ravaged several economies in East Asia. And next year's surplus, announced by the Treasurer earlier this month, will continue to shelter Australia against the crisis.

Our economic management over the past two years has led to the lowest interest rates in Australia since the 1960s and continuing good economic growth.

We have also pushed aside inflexible and inefficient work and business practices, reformed the labour market, reduced the burden of regulation and paperwork for business, and improved efficiency in infrastructure services. We are continuing to press for waterfront reform.

We are also committed to reforming Australia's increasingly outmoded and ramshackle taxation system.

Collectively, these measures will deliver benefits throughout the economy, including the minerals industry, create a positive environment for business, and ensure that our exports remain competitive.

Government Policy on the Minerals Sector

For the minerals sector specifically, the Government has taken some important decisions.

On 2 February, Senator Parer, Minister for Resources and Energy, released a blueprint for the resources sector into the next century - the Minerals and Petroleum Resources Policy Statement. This is a whole-of-government statement endorsed by the Prime Minister and all other relevant Ministers. It is the first such comprehensive strategy released by a Commonwealth Government.

The Government is committed to ensuring that the minerals industry can operate within a legislative and policy framework which meets five core objectives.

First, the Government has committed itself to offering high levels of certainty to existing and potential investors in the sector. Commonwealth decision-making will provide certainty of process and reasonable predictability of outcomes for investors.

Second, the Government is creating a highly competitive operating environment and I have already outlined some of the key across-the-board economic reforms we are putting in place.

The third objective of the Government's framework is sustained wealth generation through growth, innovation and enhancement of the value of industry output before export.

The Government's December Industry Policy Statement outlined a number of important investment initiatives. These include the establishment of Invest Australia to help promote Australia's advantages as an investment destination and measures to encourage stronger research and development by Australian business.

Our fourth objective is to protect the environment and the interests of the workforce and broader community.

Our current review of Commonwealth/State roles and responsibilities for environmental management aims to improve certainty and timeliness of processes on land access and project approvals.

The fifth objective of our policy framework is to allow our industries to respond confidently to international challenges and seize international trade and investment opportunities.

I'm sure you'll agree that these measures will contribute significantly to making Australia's resources sector even more competitive in the global marketplace.

And I would now like to tell you a little about my participation in an event which has set the scene for substantial improvements in global trade practices. I am, of course, talking about the WTO Ministerial meeting held in Geneva earlier this month.

The WTO Ministerial

In Geneva WTO Ministers acknowledged their commitment to continue the agriculture reform process agreed to in the Uruguay Round and this is a very welcome development for Australia.

Most importantly for the minerals council, however, WTO Ministers also agreed in Geneva to begin a preparatory process which will allow them to decide next year to launch "broad-based" trade negotiations. In effect, this almost certainly means a new trade round, or something close to it, which will cover agriculture, services and industrial tariffs.

I am pleased to say there was a significant shift of opinion in Geneva in favour of a comprehensive approach to negotiations this time. That is something I have been working towards for the past two years.

The benefits to Australia are clear. We support comprehensive approaches because the trade-offs and balances they comprise open the way for huge results.

The Uruguay Round, for example, is estimated to have added an extra $3.7 billion to Australia's national income.

We want to see further global reductions in protection which could mean major reductions in industrial tariff peaks, including in some of our regional markets. This would doubtless benefit the minerals industry significantly.

I can therefore promise you that we will be tackling the preparatory process aggressively with this aim in mind. While there is major work ahead of us, and we will have to sustain the pressure to ensure WTO Ministers, in fact, commit to a round next year, we now have an excellent basis on which to move forward on further international trade reform.

Conclusion

Let me conclude with the thought that although the minerals sector, like all many Australian exporters, may be facing some challenges as a result of East Asian economic developments, the Government is doing all it can to help you tackle those challenges with confidence.

The Government is creating an economic climate which is better for business and which will assist exporters across the board.

It is targeting the resources sector to establish a transparent operating environment which will attract investment.

And finally, as Minister for Trade, I can vouch for the fact that the Government will continue to seek to open markets for our minerals exporters, a group which contributes so much to the Australian economy.

We will do that not only in the bilateral context but also, as I have said, as we continue to work towards a new "broad-based" round of global trade negotiations.