Launch of the Blueprint for Trade and Investment with Indonesia

  • Speech
09 November 2021

Thank you Phillip and can I can thank Asia Society Australia for the wonderful work that you do in making sure that our bilateral and regional relationships continue to be strong, and especially keep the focus on the commercial side, which is obviously incredibly important, and that is greatly appreciated by me and the Australian government.

So, can I just thank you for the leadership that you and your organisation show in keeping us engaged right across the spectrum. From my own view and from the Government's view, the role that you play in our soft power diplomacy is something that we cannot undervalue, so thank you very much for that.

Can I also acknowledge, like you have, the traditional owners and pay my respect to their leaders past, present and future.

And can I also say that giving this address today on Indonesia is one which I think is very timely but also one where I think the importance of it will just continue to grow.

I was on an APEC call last night with Minister Lutfi, and I had the great pleasure of being able to join Minister Lutfi in Indonesia about four or five weeks ago. We struck a real rapport virtually, but to be able to meet with him in person, and his hospitality when I visited Indonesia, was second to none. And I must say it was wonderful because then we caught up in Paris at the OECD, at the G20 in Rome, and then to see him last night, he's a real personality, and we hit it off incredibly well. And he started his presentation last night by having a slight joke at me because I wasn't wearing a tie so the banter continues between the two of us.

And I've got to say it makes it special when you can build a rapport like that with one of your counterpart ministers, so it's great to be able to talk about a relationship which I value immensely, not only for the personal relationship I've been able to strike up with Minister Lutfi but also because of its importance to our nation.

Indonesia is on track to be one of the world's 10 largest economies by mid-2030s.

Indonesia's economy is now increasingly service oriented with a large and steadily growing middle class. There are now at least 52 million economically secure Indonesians, or one in five. A further 115 million are considered aspiring middle class.

Consider that Indonesia's population will grow by about as much as Australia's entire population over the next 10 years — so you have a growing population and a growing population which is becoming more middle class in its nature every single year.

It's got a steady annual growth of 5 per cent, outside of the pandemic of course, and Indonesia is on track to become a high-income economy by the middle of this century.

Australia is heavily invested in the Indonesian project, as we should be. When our friends succeed then Australia succeeds, and Indonesia is a great friend of Australia's. Indonesia's success is also important for the geostrategic security of the Indo-Pacific. And achieving success creates jobs and opportunities for both Australia and Indonesia.

It is profoundly in Australia's national interests to engage much more deeply with Indonesia as it emerges as a major economy. That means government and business but also communities and individuals all across Australia.

The report that I launched when I was in Indonesia and launching today here in Australia – A Blueprint for Trade Investment in Indonesia – sets out the opportunities for greater engagement between our two nations while building on the Indonesia-Australia Comprehensive Economic Partnership Agreement. It points clearly to the huge opportunities on our doorstep, for example, as Indonesia expands access to basic universal health care there are opportunities for Australian businesses in aged care, training for carers, digital health, medtech and so on.

Indonesia is seeking to add 57 million skilled workers to the country's economy by 2030. Achieving Indonesia's objective will require more international education and technical training partnerships, which Australia is well placed to provide. And in agriculture, food, resources and energy we have great work that we can do together as the global economy starts to shift to greener energy and agriculture production.

Indonesia's growing middle class population and urbanisation is driving demand for premium, healthy and safe food products. As one of the world's foremost producers of safe, high-quality and nutritional foods, Australia has a well-established reputation in Indonesia.

Likewise, moving beyond basic mining and securing Indonesia's resources and energy future is critical due to population and policy changes. Australia's world-leading resources sector, critical minerals and our expertise in mining equipment, technology and services sit alongside our ever-deepening experience in the renewables and energy efficiencies sector.

Just over a week ago Prime Minister Morrison and President Widodo issued a joint statement on cooperation on the green economy and energy transition, setting out our goal of working together to meet the challenge of climate change.

The good news is that we already have a strong framework for collaboration. We have three fantastic agreements in place that frame our economic relationship, all of which contribute to opportunities and make trade and investment easier between our two nations.

In many ways the existing ASEAN-Australia-New Zealand Free Trade Agreement – AANZFTA – which entered into force in 2010, forms the base of that collaboration. But during the past 18 months, as the blueprint knows, we've built two new pieces of the bilateral trading relationship into place which provide fantastic opportunities.

In July it was a year since the Indonesia-Australia Comprehensive Economic Partnership Agreement entered into force. This landmark trade agreement is helping create new opportunities for Indonesia and Australians alike.

IACEPA is more than a normal trade deal. It completes a three-tiered framework for business between the two countries which removes barriers to two-way trade, increases bilateral movement of workers and drives closer collaboration through the economic powerhouse model whereby Australia provides inputs into Indonesia which are then value-added and exported around the world.

We know achieving IACEPA economic powerhouse objectives will require strengthening business-to-business ties. We are doing this through the new $40 million IACEPA Economic Cooperation program, Catalyst. Through Catalyst, the Australian and Indonesian governments are working together to help businesses identify and kick start new investments to create jobs, enhance inclusion and increase prosperity in Indonesia and Australia.

Catalyst is currently supporting collaboration on electronic vehicles in line with Indonesia's priorities as well as technical and vocational education and training which will connect Australian providers with Indonesian businesses. And Catalyst is exploring opportunities for deeper partnerships between Australia and Indonesia in agriculture.

Australia has ratified the Regional Comprehensive Economic Partnership Agreement – RCEP – enabling Australia to be a regional party to RCEP once it entries into force. And we were very pleased to do this jointly with New Zealand.

RCEP will be the world's largest free trade agreement. It will deliver a range of improvements over our existing FTAs with RCEP partners, especially in areas where our partners' economies, such as Indonesia's, have the greatest potential, such as services investment and digital trade.

I was pleased to host the inaugural Indonesia-Australia CEO roundtable in September and encouraged by the commitment of business leaders on both sides to deepen engagement.

And this, I think, is a really positive move because when I suggested to Minister Lutfi that we set up this CEO roundtable he could not wait to get it up and running, and the level of engagement from the Indonesian side was particularly strong and really matched the interests on our side, which was very pleasing.

I'd like to see even more businesses in our two countries take advantage of these free trade agreements to develop and supply a range of goods and services into regional and global markets drawing on their respective strengths.

Businesses that are willing to invest the time and resources will reap rewards in the long term. Building our relationship and engagement with Indonesia is essential to prepare us for the future that lies ahead.

On a final note, as Minister for Trade I am proud to see work like this come out of the department.

I also must acknowledge the significant contribution from across government and the private sector to developing the blueprint, including Andrew Parker. Andrew, it's terrific that you're with us today, and thank you for your contribution, which was significant, to the blueprint.

And can I also thank all the blueprint business reference group members who also put in a great amount of time and effort.

I think that we now have the framework in place to really take the Australia-Indonesia relationship to a new level when it comes to our economic engagement.

I think it's now upon all of us to make sure that we bed the framework out to make sure that we reap the rewards that we want it to, and sessions like this this afternoon, I think, present us with the opportunities to explore how we can do that.

I know on the Indonesian side Minister Lutfi wants us to succeed. I want us to succeed, so thank you again to the Asia Society for putting this event on. And I'm looking forward to the conversation that we'll have now. So, thank you very much.


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