Event: Top Exporters Dinner
Date: 6/9/99

Speaker: MARK VAILE, DEPUTY LEADER NATIONAL PARTY, FEDERAL MINISTER FOR TRADE

MARK VAILE: Thank you very much for that very kind introduction, Arkum [?]. And he's not a bad salesman himself, is he? I was just counting up the number of times he mentioned Columbus Line there. [Laughter]

But to Arkum, thank you very much for that. To the guests here tonight -- Mark Patterson, Mr Victor Smorgon, Charles Jamieson, distinguished guests, ladies and gentlemen ... I also appreciated in that introduction that a lot of my German colleagues, I suppose, on a couple of times I visited Germany they normally don't pronounce the V as V, it's normally V as a W.

And so, of course, on a visit to Germany in 1996, as the Chair of the House Transport Committee, with a number of our transport colleagues from the states, I became known as Herr Waile rather than Vaile.

So I appreciate that you've pronounced it Vaile. And I keep bumping into Ron Christie who runs the RTA in New South Wales, and he always greets me, 'Ah, Herr Waile, how are you?'

But thank you for the kind introduction, Arkum. It is an interesting background, I suppose, to moving into this portfolio.

Not just the previous two portfolios I had but also, you know, my background in the private sector before coming into this ... into parliament and then into the ministry.

And I often say that, you know, with my background I'm sort of made for this portfolio. And just underlining that, the ... talking about all the media articles you read at the time of Tim Fischer's resignation, there was no reluctance on my behalf in taking on this portfolio.

I just didn't think I'd get the opportunity so early in my parliamentary career. Because those of us with deep roots in regional Australia and the National Party covet this particular portfolio greatly, along with the Agriculture portfolio.

And so to have had the three key portfolios, as far as our party and regional Australia is concerned, has been a great honour over the last couple of years.

And of course they're all very closely linked together in terms of the ... what we're doing as far as exports out of Australia is concerned, with transport, agriculture, fisheries and forestry. And then the all important Trade portfolio.

But, ladies and gentlemen, the most delightful thing about representing this portfolio and working with the people that you work with, all you people -- Australia's manufacturers, primary producers, and exporters -- is that we're dealing with a whole group within Australian society that are doers, that are can do people, that come to government for facilitation, not for a hand out.

And it is always great in travelling around Australia and dealing with people who are achieving so much for our country. Because at the end of the day, given the relative size of our economy, our population compared to a lot of our trading partners, international trade and exports for Australia are absolutely a matter of survival for our economy.

If we expect to see the continued growth that we'd want to see in Australia in our economy, then we've got to continue to increase our percentage of the marketshare in terms of exports.

And our Australian exporters are a very entrepreneurial bunch of people. Previous speakers this evening have spoken about how we've managed our way through the Asian economic crisis -- or the fire storm as Tim Fischer once called it.

And what it's done, not only have we managed it economically within Australia and come out at the other end of it much stronger, but we've also managed to find new markets.

We've refocussed our energies in lots of different parts of the world. And I was only visiting one of them last week, in Latin America, and it was my first visit to South America and certainly was a great experience, and an eye opening experience.

We don't really appreciate, or enough Australians don't really appreciate the size of that marketplace over there. And when you talk about Argentina and Brazil and Chile ... I mean, in Brazil alone ... I mean 161 million people, a country bigger than the Australian continent, with enormous potential, enormous potential.

And we're just starting to get into that marketplace. And there are some fantastic challenges there for Australian businesses and Australian exporters. Along with the other great export earners as far as Australia's economy is concerned, the mining industry.

Who are and have developed very strong links over there. And I think, to give one example, MIM with the enormous investment they've made in the Umbrero Mine in Argentina.

And last week I signed the double taxation agreement with Argentina which is going to make a significant difference to the operations of MIM and other Australian companies in the area there.

P&O Ports, operating the port in Buenos Aires, and doing a fantastic job in terms of its productivity and capacity.

And so there is a great story to tell -- and I was just talking to Arkum during dinner -- that we, as an exporting nation, are starting to refocus on different parts of the world.

We've had this northern exposure, this northern focus into Northern Asia and South-East Asia, and with the downturn it's forced us to look elsewhere. And we've done that very very enthusiastically.

And we are certainly starting to open up different operations in different parts of the world. And we're getting access into those marketplaces.

But I just want to say a few thing tonight, about a couple of issues revolving around Australia's export performance.

And tonight is important because we do need to continue to encourage Australian exporting industries. We need to encourage Australian industries that want to take the next step and get out of the domestic marketplace and onto the world stage.

And that's where AusTrade comes in, and I should think tonight's sponsor -- I'll mention them again, Arkum and the Columbus Line are sponsoring this function tonight -- but also all the sponsors that were listed out earlier on, who sponsored the actual awards.

Because it is important that you get recognised by your peers and the achievements that you ... and the goals that you undertake, because it is not an easy task.

It's very difficult for a business to break out of the domestic scene and onto the international scene, into that marketplace.

So I just want to mention a few things tonight, about Australia's recent export performance. The Government strategy for defending and expanding Australia's overseas markets, and the 1999 Export Awards Program.

Over the past year or so, Australian exporters have been confronted by a somewhat subdued international environment -- with sluggish growth and reduced demand in a number of leading economies.

Nevertheless, the latest export statistics for '98-99 tell an interesting and very encouraging story. As expected, we saw some contraction in East Asia, with overall merchandise exports down seven per cent.

But this contraction is not uniform across the region. And exports to China, the Philippines and Taiwan actually increased over the year.

It's also important to bear in mind that at $44 billion, East Asia continues to account for just over half of our merchandise exports, and is likely to remain our key regional export destination for some time to come.

At the same time, the other major trend to come out of the recent figures is Australia's continuing and very successful efforts to diversify the markets outside of East Asia.

Exports to non-East Asian countries in '98-99 rose there per cent. And there were noteworthy increases in specific regions and markets.

For example, exports to South America increased by over 20 per cent. Sales to the Middle East rose by over 11 per cent. Western Europe was up 5.6 per cent. And South Asia was up 4.5 per cent.

So off the back of some indifferent figures, I suppose it would be fair enough to say, in June, improving in July, they are some interesting statistics were individual marketplaces have increased their performance.

And some of the individual stand-out markets were Saudi Arabia, which increased by 86 per cent; the UK by 45 per cent; and Germany 14 per cent.

One of the other encouraging trends is the growing importance of manufactured exports. As has been rightly pointed out, many many times, traditionally our export industries have been commodity based.

But increasingly, our exports of manufactured goods and services are on the increase.

And while primary products still account for a majority of our merchandise exports, the share of manufacturers has increased from 22 to 28 per cent over the past decade.

Last year, for example, we saw exports of Australian cars exceed $1 billion, for the second year in a row. And annual wine exports broke through the $1 billion mark.

And I mean, it is an outstanding story to tell, when you consider with what we are confronted in terms of the competition in the international marketplace as far as wines are concerned.

It really is a brilliant story. It's a story about an industry that has done it itself. There's been a limited level of facilitation by government. But it's because of the marketing strategy and the internal management of the industry by the industry, Australia's wine industry has become one of the great success stories of export, right across the world.

And it never ceases to amaze a lot of our competitors as well. And they will continue to set new record levels of exports as far as that industry is concerned.

And that, ladies and gentlemen, is in the face of a lot of very difficult reforms that we've had to undertake in terms of the [indistinct] Wine Agreement, which we're just concluding the discussion about and the agreement on.

And that really revolves around Australia doing away with the use of a lot of the original geographic names. So you won't see things like Port on Australian wines, and some of the other traditional European names.

But the industry has been prepared to deal those out to get better market access. Because the greatest challenge facing our Government and facing you as exporters is market access and getting into those markets around the world.

It's ... Tim used to always talk about an unlevel playing field, there is no such thing as a level playing field. I've got to resist the temptation of talking about that because that's an historic Tim-ism.

And so I talk about Australia having to continually fight above its weight. And we are, and it will never be any different, because we are a smaller -- in relative terms -- a smaller economy, a smaller population.

We're in the Southern Hemisphere. We face the tyranny of distance to a lot of our markets. We are always going to have to fight above our weight.

And so it's always going to be a great challenge. And the challenge to me as the Minister, while I'm in this portfolio, and to our Government is to ensure that we continue to provide the best working environment, the best economic environment that we can for Australia's exporting industries.

And we've done that with Australia's wine industry. We've done that with Australia's motor car industry.

And I mean, we went through this process a couple of years ago, in the review of the tariff on Australian motor vehicles, and we locked ourselves into a process of reform, a process of reducing those tariffs whilst maintaining our commitment as far as the Bogur[?] goals of reduction of tariffs are concerned on the way to 2010 ... you know, we've got your sovereign independence as to how we achieve that.

And that decision underpinned a certain level of investment in Australia's motor vehicle manufacturing industry that has resulted in these sorts of sales.

Now $30 million worth of Commodores, which are badged Omegas, going into Latin America -- I mean, it is just quite amazing. The place is ... you hear about the diversification and the decentralisation of the motor vehicle industry across the world.

And a lot of it is in South America. A lot of it is in major cities like Sao Paulo where there's 18 million people. I mean, it's just an unbelievable place to visit. But there's as many people in one city as what there is in Australia.

And a lot of the world's major motor vehicle manufacturers are there. But we're exporting motor cars into that marketplace and competing with that.

And that's what can be done when the government and industry and the private sector work together and resolve a lot of the issues that we haven't been able to resolve in the past. And we are doing that well, in partnership.

So I'm certainly very proud of these achievements, as all Australians should be. The sheer hard work that went into bringing them about is certainly an outstanding effort.

And perhaps more importantly, I feel quite confident about our trade prospects for the foreseeable future.

Ladies and gentlemen, we've probably been through, in the last couple of years, one of the most difficult periods that we will as far as our economy is concerned, as far as we are concerned as an exporting nation.

And we've got through that. We are now getting ourselves onto the springboard for the next century, where there are going to be some fantastic opportunities for us as an exporting nation.

As I say, at home the Government has ensured the fundamentals are right, to give exporters like yourselves the best platform to grow and expand your export businesses.

The domestic economy is buoyant with low inflation and low interest rates. And economic growth is strong, 4.1 per cent in the year to June. The forecast is that that will slow a little bit coming into this next financial year ... but certainly very strong compared to all our major trading partners in terms of the level of growth that we've achieved.

But one of the greatest things that our Government has achieved, that I will always remember -- and it was probably one of the motivating factors for me going into politics in the first place -- was to provide Australian business people with a stable interest rate regime in this country.

To ensure that business could plan its future strategies based on sound economic principles and sound monetary policy in Australia.

We have achieved that. We've achieved consistently low interest rates, the lowest interest rates we've seen in this country for 30 years, and we aim to keep them there.

You know, the fundamental focus of our economic management of the Australian economy is to maintain those interest rates. Because where they were, where we inherited them, we could never ever compete.

Our industries, as I say, we are continually ... going to have to continually fight above our weight, carrying that extra burden, the extra monkey of business of high interest rates, just made us uncompetitive.

In my business career in the private sector I saw so many small business people, so many primary producers, go out of business -- lose their businesses, lose their family farms -- through no fault of their own.

No reason of poor management -- just because of the high interest rate burden that they had to suffer, as well as in different trading conditions. And so the best legacy that we can leave this country if we can maintain that low interest rate regime.

People get sick of us ... get sick of hearing us talk about it. But, as Malcolm Fraser one said, when you get sick of saying something the punters out there are only just starting to hear.

And will continue and continue and continue to remind Australians how important that is. Because during the '80s and early '90s, we were competing with the rest of the world who were benefiting from lower interest rates, a lot lower interest rates than what we suffered from in this country -- and suffered from unnecessarily.

So it's been very important that we the ... over the last three to four years, we've established that very sound economic operating environment for Australian businesses, as a springboard for what we can do in the next century.

And we will continue to maintain that focus as we work towards greater market access, less distortion -- particularly as far as our agricultural commodities are concerned.

In the upcoming round of the WTO we want to see agricultural commodities treated the same as goods and services in terms of market access, in terms of export subsidies, in terms of domestic support.

That's what our core focus is on, coming out of groups like the Cairns Group, which is just chaired in Buenos Aires. Out of APEC this week, in Auckland and New Zealand, we got the message loud and clear from the APEC Business Advisory Council in terms of what they perceive as being a slow down in that liberalisation process.

We take that message on board. Our Government welcomed that message that's come from APAC and we hope to take that strong message into the forum when we have the Ministerial meeting starting on Wednesday and Thursday of this week, and then the Leaders meeting on the weekend.

It is a very very important forum, as far as Australia's concerned, APEC. There's been criticism of it. There was criticism because there was a sense that there wasn't much achievement came out of the meeting in Kuala Lumpur last year.

But let's not forget the significance of the APEC economies to Australia's export industries -- 70 per cent of Australia's exports go into those APEC economies, 70 per cent.

A million jobs in Australia that rely on Australia's export industries, rely on exports to those APEC economies. We desperately need to see this forum survive, and it will.

You'll see some very positive messages come out of the meeting this week in Auckland as we move out of that forum and towards the launch of the new round of the WTO towards the end of the year.

Ladies and gentlemen, just in terms of the regional and global outlook, things are looking up. Most economies in East Asia are expected to record positive growth in 1999 -- albeit at a much lower rate than our own -- that is the forecast.

This improved regional scene is complementing the more positive outlook for the global economy. The IMF forecast global growth will fall slightly in 1999, but will rise to 3.4 per cent in the following year.

Although on the surface things are looking positive for Australia, we remain ever vigilant about threats to Australia's relative export position. And we are committed to continuing our multi level trade strategy -- that is at a bilateral, regional and multilateral level.

At the bilateral level, we're expanding our trade and diplomatic network around the world. Indeed, just last week I had -- that was one of the reasons I was in South America -- I had the honour of opening the new AusTrade post and Consul General in Lima, in Peru.

I also had the opportunity to open an office of IDP Education Australia, in Sao Paulo Brazil. And you'll note on your dinner card tonight, that IDP is one of the sponsors of these awards. And we congratulate them for that.

And just while on that subject of selling Australia's educational services around the world, it's very very important, as far as an export earner for Australia is concerned, to get foreign students particularly into our universities.

But there's a much more strategic long term objective in our trade relationships with our trading partners around the world, there is a much more fundamental reason that we encourage organisations like IDP to get out into the world market and sell our educational facilities.

It's because that fundamental network that we establish by educating tomorrow's politicians and tomorrow's CEOs in the countries that we are trading with, is absolutely vital to strengthening our network around the world.

Just remember, just as the business network ... as much as people hate the adage or the cliche that revolves around the old boy's act and the old mate's act, so does the global trading network, so does the global political network.

And one thing we have really benefited from in Asia, that has strengthened our network in Asia, is the number of people in the Asian economies that are in key positions now, key decision making positions, that have been educated at Australia's Universities.

And they feel absolutely comfortable with doing business with Australia, because they understand what Australia s about because they were educated here.

So the more we can do to drive into that marketplace, and this was basically the message that I left with our people in Sao Paulo in Brazil -- that's that city with 18 million people -- is that now that we've got a good linkage, a good transport linkage with South America, we want to try and get more people from there being educated in our universities.

Because, in 10 and 15 years time we'll have a much stronger network of connections in both the political arena and the business arena in those countries. Just as we've seen happen in South-East Asia, or in Asia generally.

And so there's a dual role as far as our educational services are concerned. Not only as an export industry, but providing that strong network for the future. And so it's something that as an exporting nation we shouldn't lose sight of.

Another major focus of our country-to-country effort is the Market Development Taskforce, which you may or may not know about. Which is chalking up some major market access successes. And that's its focus, market access.

Among a range of wins over the past year, the taskforce has helped deliver $182 million worth of railway contracts in Hong Kong. Sales of automotive components to Thailand valued of $18 million. New sugar exports to the Philippines, worth $30 million.

At the regional level, we're looking at what APEC can do to further improve market access and cut costs for business in the Asia Pacific region.

This week's meeting of the APEC Trade ministers in Auckland, will be an important step in building on what has already been achieved.

Now we've got to progress that agenda further. We've got to continue to move towards that goal in 2010, for developed countries; and 2020 for developing countries.

And if you just remember what Thailand has been through recently -- Australia was one of the few nations that participated in the IMF package in Thailand and Indonesia and in Korea.

But Thailand, as part of its economic reform process coming out of that IMF package, we've seen recently a reduction in a number of tariffs. And one in particularly will be worth tens of millions of dollars to Australia's cotton industry.

Now you'd think, 'Well here's a developing economy that's been in a lot of strife, had an IMF package put into place. Has focussed on maintaining the reform process, opening up its market -- because it can see that it's in its best interests to do that.

And it is a two-way deal. And it's going to provide a lot of our export industries with better access. So, again, that's come out of that APEC forum.

At the multilateral level, we're playing a leading role in building support for a new millennium round of the World Trade Negotiations.

My department and I aim to work very closely with other like-minded countries to achieve a positive outcome in Seattle later on this year. The rest of my year basically is going to be spent building those coalitions of support with like-minded nations around the world, to ensure that we get out of this round of multilateral discussions what we didn't get to of the Uruguay round.

That is well recognised. My visit to Argentina last week to Chair the annual Cairns Group Meeting of Agricultural Fair Traders was a very constructive one and a very positive one.

The event itself was a crucial milestone on the road to the WTO Ministerial Meeting in Seattle.

Given the importance of the new round of trade talks, our Government will this month commence a series of public hearing across Australia, a consultative process to enable people to contribute to the formulation of Australia's negotiation strategy for the new round to be launched in Seattle.

Finally, I'd like to say a few words about the Australian Export Awards. These awards are a vital component of the Government's efforts to acknowledge, reward, and further encourage excellence in exporting.

The awards are particularly important in providing national recognition for Australian innovation and ingenuity; the achievements of small to medium firms, including those in rural and regional Australia; and the major contribution exporters make to the creation of jobs and wealth in our country.

I look forward to announcing the 1999 finalists at a special breakfast in Canberra in November and this program will then culminate in a major dinner in Melbourne on December the 1st when the Prime Minister will announce the national winners.

I should take this opportunity to acknowledge the very generous assistance of the sponsors of this year's export awards. And we've heard about the individual categories, but I'll run through them quickly again:

The AusIndustry Emerging Exporter Award, the Columbus Line Agribusiness Award, the Commonwealth Bank's Small to Medium Manufacturer Award; the Hewlett Packard Information Systems Award; the Christmas Island Phosphates Minerals Award; the AusTrade Arts and Entertainment Award; the IDP Australia Education Award; the Foster's Special Achievement Award; and, of course, the most prestigious of all -- the DHL Australian Exporter of the Year Award.

Among a range of new initiative this year, AusTrade is also sponsoring a new category -- the international award -- to recognise an organisation or individual based outside Australia, who has contributed significantly to our national export effort.

Ladies and gentlemen, this evening I've sought to outline our national export achievements, and to touch on the larger context in which our companies and the government are operating.

I'm very positive about our economic prospects at home and abroad -- especially when I look at the level of commitment and the quality of work on display again, this year, through the Export Awards.

I'm looking forward to hearing more about the achievements of Australia's vibrant exporting community, and the announcement of the award winners later in the year.

I certainly wish you all the best, as far as your businesses are concerned this year, as you are at the heart of generating wealth in our economy, growth in our economy, and about 1.7 million jobs in our economy.

And as you generate more wealth and more growth in your businesses, you'll generate more jobs. Because the bottom lien is not just an economic one, it's an employment one as far as Australia is concerned.

And I'll finish on this point, and it's another advertisement, I suppose, for our Government's objectives. And it's a message that I left across a number of countries in South America, last week.

Not just about what we've done with Australia's economy, but in terms of what we've done with unemployment in Australia. We were roundly criticised when we came into office in 1996, when we changed the focus of how we addressed ... we were going to address unemployment in Australia.

Where we had a fundamental philosophical believe that it was never ever going to be the public sector or the government that was going to fix or start to remedy the chronic unemployment problem that Australia had, it was ever only going to be the private sector.

What government had to do was to provide the right working environment, the right economic environment, for the private sector to get on and do it. We've done that in large part, there's more to come.

We've achieved a lot of reform in the workplace, there's more to come. We've got to achieve more. We've achieved a lot in the economic arena, and there's more to come. We've established those low interest rates that all Australians are benefiting from.

The last leg, I suppose, in the trifecta is going to be Australia's new taxation system -- and not that which has already been legislated in terms of the ANTS[?] system which will be introduced on the 1st of July next year.

The last leg in the trifecta of reform that is really going to put Australia on the springboard to be, as it is now, one of the leading performing economies in the new century, is going to be reform of Australia's business taxation system.

We're in the process, at the moment, and we've basically spent all day today in Cabinet going through the final stages of the review of the Ralph Report.

As far as reform and restructure of Australia's corporate taxation system, I think you've all read enough about the fundamental strategies it involved in terms of what we're targeting.

We will achieve a lot of those. We will see Australia's corporate taxation system far more competitive. It will give you the absolute best working environment that you can in terms of the competitive nature of Australia.

But it will certainly, along with the reforms that we are going to make as far as the ANTS system is concerned, as far as exporters are concerned, as far as getting rid of four and a half billion dollars worth of unnecessary burden off Australia's exports ... adding to that, a better business taxation regime in Australia.

And you will be well and truly far more competitive than a lot of Australian businesses ever dreamed they could be.

That is the role of government, that is the role of government in helping to facilitate you do what you do best -- and that is to get into the marketplace to sell your products to expand your markets, and ultimately provide more jobs in Australia.

We thank you for the work that you do. We certainly salute the effort that you've put in this far. I look forward to being involved in the rest of this process of these export awards this year, because it is important to recognise the work you do.

And just remember, that our Government is there not just to hold your hand in those international marketplaces, through Charles [Indistinct] and AusTrade, but also to continue to help facilitate a much stronger worker environment in Australia.

We will achieve those goals, because at the end of the day it is the best and greatest legacy that we can leave for future generations of Australia.

Thank you very much. [Applause] UNIDENTIFIED: Ladies and gentlemen, your unashamed self-promoting host of this evening has asked me to pass a vote of thanks to the Minister.

I think it's important -- and the Minister has picked up on this point in his presentation -- that Australia has played above its weight, it's traditionally played above its weight in all markets.

It's played above its weight in its export markets. It's played above it's weight in sporting competition and in any other field of endeavour that Australian's have pursued in the world environment.

The Minister has taken on the challenge of going out there and playing above his weight in being a self-promoting advocate for Australia, a self-promoting advocate for Australian exporters.

He's well supported by those within AusTrade who are out there in the marketplace promoting Australian exporters, promoting our goods and services in a world market.

I'm sure you'll agree with me that the only lead in the saddlebags that we still have to remove is that lead that stands in there from our taxation system.

So we will continue to play above our weight as long as we're not handicapped.

Minister, on behalf of everybody here, thanks very much for your contribution tonight. [Applause]