Australian British Chamber of Commerce
It's a pleasure to be here with you here in Sydney, one of the great financial centres of the Indo Pacific.
The opportunity to speak with you today comes a few short weeks since the Turnbull Government delivered a budget crafted to ensure Australia's unparalleled growth story continues.
Australia is in its 26th year of uninterrupted annual growth. This is a remarkable fact in itself given the economic shocks of the Asian financial crisis in the late 1990s, and the more recent Global Financial Crisis.
We are also navigating new challenges as our economy transitions from the mining investment boom to a broader-based economy.
Critical to our nation's success story has been the Australian Government's commitment to open markets and a rules-based international trading system.
The approach is tried and tested – and is delivering dividends, not just in individual sectors but for our economy as whole.
In 2016, goods and services exports rose 7.6 per cent in real terms, and net exports contributed 1.4 percentage points to our 2.4 per cent annual growth in real GDP.
The star performer is Australia's services sector: it is already proving itself to be the next reliable economic driver, after hitting an all-time record in March, it is forecast to grow at least four per cent year on year over the next two financial years.
And we are determined to see that growth story continue. That's why we remain uncompromising in our commitment to an ambitious trade agenda: in the last two weeks I have launched two new trade negotiations: one with Hong Kong and another with Peru.
This is in addition to our full agenda of regional, plurilateral, bilateral and multilateral initiatives including negotiations to conclude the Regional Comprehensive Economic Partnership, the TPP -11, the Trade in Services Agreement and, of course, the Australia – Indonesia Comprehensive Economic Partnership.
With a population of over 250 million people sitting on our doorstep, the Comprehensive Economic Partnership agreement with Indonesia promises to open a new era in our economic relationship with Indonesia.
Australian businesses will benefit not only from increased access to Indonesia's growing market, but also new opportunities to partner with Indonesian businesses to access markets to our north.
Each of these negotiations are undertaken not for the sake of giving our trade negotiators something to do but because they deliver.
They deliver for our farmers, for our manufacturers, and for our professionals – crucial sectors of the Australian economy that together account for millions of Australian jobs.
And they deliver for our education sector and for our tourism sector – a booming industry that employs almost half a million Aussies.
Australia has long recognised that with a small population, we must look to external markets to fuel growth at home and maintain the high standards of living we have come to enjoy and indeed expect.
In fact, Australia is the 2nd wealthiest nation in terms of wealth per adult after Switzerland – (Global Wealth Report, Credit Suisse). And we have the10th highest GDP per capita (in US dollar terms) – (2016) (International Monetary Fund).
Australia is the number one global exporter of coal, iron ore, aluminium ores and the largest global exporter of beef and chickpeas, and the 10th largest global exporter of vegetables and dairy products (by value)
Exporting is clearly important to our economy and we are good at it. The diversity of our export markets, among other sound liberal economic policies, has helped us weather global shocks.
The resilience of our economy has been tested by these external forces but more recently, it has also come under attack internally by those seeking a retreat from the very policies that have underpinned our growth.
This is a story not unique to Australia – we have heard the voice of protectionism strengthen in recent political debates around the world.
Many have identified it to be a driving force in the Brexit vote.
However, the British Government, under the leadership of Prime Minister Theresa May, has declared itself to be a steadfast adherent to the principles underpinning open economies, choosing to continue with the economic policies that have proven, time and again, to promote growth, create jobs and alleviate poverty.
As Secretary Fox has put it, this is an opportunity for Britain to be "a beacon for open trade".
We are very pleased to have old friends by our side in this debate.
The remaining eleven Trans Pacific Partnership countries have reaffirmed the value they see in the benefits of open markets for their communities and have committed to exploring how to bring the TPP into force without the United States.
France elected Emanuel Macron to be their next President, sending a strong signal that France is open for business and will remain part of the collective European Union.
And of course, trading partners are lining up to negotiate with the UK when the time comes.
As everyone in this room knows well, the UK's aim to establish new trade arrangements will be a significant undertaking.
The UK will need to reconsider and reconceive all of the international agreements that underpin its trade and investment with the world.
This will require a huge effort, but also presents a huge opportunity for Britain to stake out its leadership, alongside Australia and others, as a global champion for open markets.
Put simply, for both Australia and the UK, trade and investment matters.
Australia's international trade is worth 40 per cent of our GDP, while Britain's international trade is currently worth 60 per cent of its GDP.
It's for good reason, then, that Australia and the UK both oppose protectionism and advocate for a strong global trading system.
We both want a rules-based system that addresses trade-distorting measures.
So, one of my central objectives in working with the United Kingdom is to defend and strengthen the international rules and standards that support genuinely open international trade and investment.
Together, over time, we can strengthen the contemporary case that free flows of trade and investment benefit consumers everywhere by stimulating competition and productivity, lowering costs and increasing choice.
We can remind citizens, businesses and governments that free trade cuts through the regressive and corrupting politics of patronage and protection.
Members of this Chamber know these principles well, but we all need to do more to defend and modernise the institutions where we practise them.
Too often today, international trade and trade agreements are blamed as the source of many of the changes and adjustments that come with economic progress, changes in technology and automation.
The fact is open markets have proven to be the path to sustainable prosperity.
This message – this argument – is deeply important, and one we must continue to prosecute.
Government does have a role to play in this: sometimes that role is as an advocate, both here and abroad, in Australia's economic interests, and sometimes that role is simply to get out of the way while the market does what markets are supposed to do.
Most of the time, however, that role is to create the necessary regulatory environment for new opportunities to flourish, for jobs to be created and for hard work and entrepreneurial spirit to be rewarded. In so many ways, this is the spirit of Australia's success.
This is not a task the Governments can shoulder alone. Indeed, without the voice of our productive and industrious private sector, the Government's messages ring hollow.
The stories you have to share are worth telling – they are stories of entrepreneurship, of job creation, of better wages, and better products for Australian consumers at lower prices.
We are now seeing countries whose own experience has spurred them on to take up the cause for further global economic liberalisation.
China, for example, is participating in negotiations for a Regional Comprehensive Economic Partnership covering almost a third of global GDP, and promising that its Belt and Road Initiative will help, in President Xi's words, "build an open platform of co-operation, and uphold and grow an open world economy".
Australia welcomes China's willingness to invest in Asia's expansive infrastructure needs, and we look forward to being part of this very big story.
I see great potential for Australia to take our work with Britain to a new level, after the UK departs the European Union.
As flexible, independent operators with highly capable civil services, accustomed to working closely with one another, we can achieve a great deal.
The foundation for this ongoing work must be the quality of our own bilateral trade and investment arrangements.
Trade relations between Australia and the UK are mature and dynamic, with enormous potential.
They have progressed from a trade relationship of basic commodities exchange to a highly sophisticated one that reflects two confident economies with trust in each other.
This is well demonstrated in the financial sector.
ANZ has been in the UK since 1835, and HSBC was one of the first overseas banks in Australia.
Today, all the major financial institutions from each country are represented in the other's market.
And since 2016, we have had a unique bilateral commitment: the key Australian fintech regulator, the Australian Securities and Investment Commission, has partnered with its UK counterpart, the Financial Conduct Authority, to assist growth of fintechs in each market.
These regulators have agreed to confer when a business start-up from one country is looking to enter the other's market, providing a framework for cooperation and referrals and share information on how the fintech market is tracking.
On the Australian side, we have put in place arrangements between the Government and the banking sector to push on with fintech collaboration between our countries.
In March this year, I visited the Commonwealth Bank's new London Innovation Lab, which is supporting companies working on solutions to the most prospective fintech challenges.
I signed a collaboration agreement in London between Austrade and the Commonwealth Bank providing a framework to support the flow of fintech innovation between Australia and the UK.
We will use this to attract fintech investment into Australia, and help Australian companies looking to access the UK market.
There are plenty of other opportunities for Australian services firms as well.
During a visit last year, for example, I took a ride on a double-decker London bus operated by Tower Transit, an Australian company that operates 650 buses in the UK and employs over 2,000 staff.
In healthcare, Australian success stories in the UK include Genesis Health and Ramsay Healthcare, and in education there are big opportunities post-Brexit for greater research collaboration and student flows.
I believe Australia has much to offer the UK in the post-Brexit period and vice versa.
Australia's agricultural industry is a great example of where we can win together.
Positioned at opposite ends of the world we can both take advantage of counter-cyclical trade exploiting the complementarity of our markets.
Moreover, we have after years of reform and investment, much to offer - not only in terms of being able to supply high quality agricultural products but also in services incidental to agriculture, new technologies and innovation.
We also have much we can share in the development of domestic policy settings and regulation that can better support an efficient and sustainable agriculture sector from farm support to accreditation, testing processes and traceability.
We are in short, ideal partners.
Two-way tourism flows are also significant, and growing.
The 2018 Commonwealth Games in my home town, the Gold Coast, will be a big attraction – we anticipate a $2 billion surge in tourism revenues.
Direct flights between Perth and London on the new Boeing 787 Dreamliner fleet would be another boost to tourism between our two countries.
As always, the investment relationship is also hugely important.
The stock of two-way investment was worth $866 billion in 2016, making it Australia's second largest investment partnership, behind the United States.
UK direct investment into Australia rose by more than 26 per cent since 2010.
So, on a range of fronts, the economic relationship is of major importance, and it is growing.
The future FTA offers a significant opportunity to cut a deal that appropriately reflects each other's strengths, our complementarities, and our close relationship.
Secretary Fox knows I am determined to see Australian business retain and improve their competitive position in the UK market following Brexit.
I have established, with Secretary Fox, a bilateral Trade Working Group to set the scene for an eventual FTA.
Of course, the UK cannot legally negotiate trade agreements until after exiting the European Union.
From Australia's perspective, we want to move as quickly as possible to negotiation of a high quality FTA when that happens.
The working group has so far met twice to scope out the parameters of a future ambitious and comprehensive agreement, and to prepare the ground for it, as a priority.
Initial discussions have been positive and productive, as you would expect from close partners with strongly aligned policies.
And of course, we have successfully concluded a joint scoping exercise with the EU and we are now moving towards launching our negotiations.
So, Australia is looking at successive waves of trade liberalisation in Europe and the UK.
We have a deep long-term interest in these two important partners reaching a productive settlement, and championing free trade and investment across a rapidly changing global economy.
Ladies and gentlemen, we need to think and work hard now to ensure that our freedom of operation, and our real wealth, continue to grow.
We need to invest in close collaboration between Australia and the UK, based on principles that have guided us for generations, which can influence thinking across the globe, and across the decades.
The Turnbull Government is committed to doing its part.
I am sure this Chamber will be a driving force in this endeavour.