14 September 2006, Canberra

Introduction

• The Honourable Michael Ahern, Minister for Trade from Ireland
• Anthony Wong, Commissioner for Technology and Innovation in Hong Kong
• Members of Parliament
• Ladies and Gentlemen

The National Capital Authority recently published a survey on what Australians think about when they think about Canberra.

As you’d expect, 71 per cent of the respondents mentioned Parliament. Almost all of them agreed that Canberra was dominated by politics.

There were a significant number of people, however, who saw beyond the images of Parliament House on the six o’clock news to Canberra’s business and export activities.

Almost 60 per cent of the people surveyed recognised Canberra’s importance in Australian science and technology. 51 per cent agreed that Canberra had first class educational facilities.

These strengths are at the heart of Canberra’s export success.

Companies that provide services to the Australian Government, such as Tower Software, are using Canberra as a launching pad to develop export markets for their products.

Canberra is also becoming a centre for defence industries in addition to its traditional areas of science, education, and business and professional services.

Canberra has other export advantages as well. As the centre of the wider Australian capital region, the city’s catchment area includes important export industries such as cheese from the Bega Valley and meat products from Young.

The importance of strong economic management

Canberra’s exporters are benefiting from the Government’s strong economic management. Our policies have created an extra 1.9 million jobs across Australia in the last decade; real wages have increased by 16.8 per cent.

In the ACT, our policies have created an extra 35,100 jobs over the last ten years. The unemployment rate in the city is now 3.0 per cent.

Back in the 1980s, economics students were taught that this sort of unemployment rate simply could not be achieved in Australia any more.

We have helped create jobs and reduce unemployment by reforming workplace relations.Since WorkChoices came into effect, Australian employers have created 175,000 new jobs.

• One of the reasons is that WorkChoices exempts small businesses from the unfair dismissals law that was brought in by the Keating Government.
• This law used to discourage small businesses from hiring new staff, because they knew they couldn’t afford to defend an unfair dismissal case if he or she didn’t work out.

Labor would abolish our workplace reforms, which would make it harder for you to run your business. You could forget about those new jobs and the buoyant domestic economy that they have created.

WTO Negotiations

The Government is working to increase market access for our exporters through the Doha Round of multilateral trade negotiations.

We want to free up the trade in industrial goods, services and most importantly in agriculture, the most distorted sector of world trade.

• On average, agricultural tariffs are more than three times higher than tariffs on non-agricultural goods.
• In the European Union, tariffs can be as high as 146 per cent for beef or 264 per cent for dairy products. In Japan, the tariff on rice is equivalent to more than 770 per cent.
• The prices our exporters receive are depressed by the farm support programmes run by many developed countries. Primary producers in the United States receive 16 per cent of their income from government support. In the European Union, they receive 33 per cent.

An ambitious outcome to the Round could increase the value of our major agricultural exports by 15 per cent in 2011, compared to their value if the existing trade barriers continue.

It would lift 32 million people in the developing world out of poverty.

It would reduce the price of food for consumers in the developed world, and especially in Europe.

The negotiations on the Round are suspended at the moment because the discussions on agriculture broke down.

My goal over the coming months will be to encourage the major players to get back to the negotiating table.

Next week, I’ll be chairing a meeting of the Cairns Group – 18 agricultural exporting countries that account for more than a quarter of the world’s agricultural trade. It will be an important early opportunity to discuss how to revive the negotiations with the head of the WTO, Pascal Lamy, the US Trade Representative, Susan Schwab, and the US Agriculture Secretary, Mike Johanns.

Free Trade Agreements

In parallel with out efforts in the WTO, we have a very active agenda of free trade agreement negotiations. 

Our agreements with the United States, Singapore and Thailand are showing solid early results.

Australia’s exports of goods to Thailand increased 30 per cent in 2005-06; our exports to Singapore were increased by 20 per cent.

The United States is a particularly promising for Canberra exporters, and I want to highlight some firms from the region that have made good progress. 

• Bega Cheese has been able to enter the US market, with a shipment of 150 metric tonnes of cheese in 2005. The company’s aim is to increase its cheese exports by 5 per cent every year.
• Tower Software’s enterprise content management system, Trim, is used by the FBI and the US Department of Education.
• Electro-Optic Systems has installed a 71 inch telescope in Hawaii to detect rogue asteroids. The telescope is equipped with the world’s largest digital camera; it was partly built in Queanbeyan.

The Government is now negotiating three further FTAs, with China, Malaysia and ASEAN in conjunction with New Zealand. We are looking closely at possible FTAs with Japan and the Gulf Cooperation Council.

We are pursuing these agreements because they are an opportunity to open markets faster than is possible under the WTO.  FTAs can also address barriers that can’t be dealt with under the WTO – such as behind the border regulations, government procurement and technical and professional standards. 

For example, under our free trade agreement with Singapore, professional bodies have started the process of mutual recognition for architects, engineers, accountants and pharmacists. 

A Canberra firm, Yellow Edge, is now doing change management consulting in Singapore and Malaysia. 

We hope to see more service providers breaking into the Southeast Asian market over the coming years. We hope to make substantial gains for our services sector under the China FTA negotiations. 

Promoting and Facilitating Exports

The Government is directly supporting our exporters through Austrade.

Austrade has offices around the world, in 140 locations in all corners of the globe – from Mendoza in western Argentina to Vladivostok in eastern Russia, as well as all the major financial and trading centres of the world. 

In Canberra and the Australian capital region, Austrade has is helping an increasing number of companies to break into overseas markets.

One example is Corkhill Engineering at Boorowa, on the way to Young, which has developed a new scrum machine for rugby training. 

Austrade has helped Corkhill market its rugby and gym equipment in Asia, North America, Africa and Europe, including Ireland. 

The Government has two programmes for new exporters, Trade Start and the New Exporter Development Program, which are helping small and medium enterprises to break into international markets. The programmes give businesses advice and information about getting into export, export coaching and assistance on the ground in foreign markets. 

We have 52 TradeStart offices around Australia, including in Canberra, where we work in partnership with Australian Business Limited, the Canberra Business Council and the ACT Government.

Conclusion

So in conclusion, we are working to lock in Australia’s prosperity with our reforms to workplace relations. We are providing businesses with more access to overseas markets; we are providing you with direct support to get into exporting through Austrade.

Thank you.