Strong ties, growing stronger: The Australia and United Kingdom investment relationship
It's a great pleasure to be in London again to launch a new report that captures the spirit and potential of the Australia-UK investment relationship.
Our shared history, common values and strong people-to-people links have made us natural trade and investment partners for centuries, to our great mutual benefit.
Some of that investment - like BAE Systems' work on pivotal Australian defence projects such as the ANZAC frigates upgrade – is well known to us all.
Others, less so. If you were to flag down a Heritage Routemaster, the iconic red double decker bus, on the Strand today, your bus driver would be employed by Tower Transit, an Australian-owned firm that invested in London in 2013. The company now operates 450 buses and employs more than 1,700 staff in Greater London.
Not only are Australian investment dollars driving one of London's most iconic forms of transport; they are driving investment in cutting-edge electric buses. The company's London investment has positioned it for further international expansion, into Singapore, and soon into South America.
As we all know, the value of investment is not just about a dollar – or pound – figure. Investment creates real benefits for communities, and contributes to scientific and technological advancements.
This new report underscores the value of our existing investment relationship, and the many opportunities that lie ahead for us to work together.
Total two-way investment between Australia and the UK has been strong in recent years, growing 22 per cent in the seven years to 2017 to $A815 billion. Over the same period, foreign direct investment from Australia into the UK grew by 19 per cent to $A84 billion.
The report profiles 18 Australian and British firms, from small start-ups to international multinationals, who have been successful in expanding to either country. These firms operate across industries as diverse as defence, food, infrastructure, technology, and training.
Among them are:
- Liberty House Group, which has secured more than 6,000 local jobs in the small South Australian town of Whyalla with its acquisition of its steelworks;
- BT Group, which established an Australian Centre of Excellence in North Sydney – the first BT cybersecurity R&D facility outside the UK;
- Foresight Group, which has invested in largescale solar energy projects and runs the Australian Bio-Energy Fund, investing in projects producing clean energy from a variety of waste streams;
- Babcock International, which is now the Australian Submarine Corporation's biggest supplier;
- Transferwise, which has brought competition into the currency exchange industry for Australian consumers; and
- Hilton Food Group's joint venture with one of Australia's major supermarket chains, Woolworths, including the development of its $115 million purpose-built meat processing and distribution facility just south of Brisbane, which will create more than 500 new jobs.
We recognise the myriad benefits of foreign investment – UK businesses operating in Australia employ nearly 95,000 people; they pay taxes, partner with local business via their supply chain, export high-quality, Australian-made goods and services to international markets, they bring research and innovation, and support local communities.
Similarly, Australian businesses, which invest in the UK, bring positive change to communities.
In Liverpool, Seqirus, a subsidiary of Australia's CSL Limited, operates one of Europe's biggest biotechnology sites to produce and supply influenza vaccine and support government with pandemic preparedness.
Lendlease's community-based training and employment program has helped 2,000 ex-offenders to return to employment.
And earlier this year, Australia's successful startup, Airtasker, chose the UK as its first offshore market – now you, too, can pay a stranger to restring your squash racquet or build a snowman in Finsbury Park (these were two of the first requests on the jobs platform after its launch in March).
Australia's superannuation funds, with some $3.4 trillion under management, see enormous opportunity here. In the UK. AustralianSuper has already taken a majority stake in the $2 billion King's Cross redevelopment, one of Europe's biggest urban regeneration projects.
These stories represent a fraction of the opportunity that exists in the Australia-UK relationship - there are close to 520 Australian businesses operating in Australia and 1,200 UK businesses operating in Australia. And we'd welcome more!
For UK businesses Australia is the gateway to Asia and its growing middle class.
The trifecta of FTAs the Coalition concluded with China, Japan and Korea has locked in best-ever treatment in a range of services, as well as delivering tariff reductions that give Aussie exporters a competitive edge in these huge, dynamic markets.
And the TPP-11, that Australia helped secure, will eliminate more than 98 per cent of tariffs in a trade zone with a GDP of $13.7 trillion that spans the Americas and Asia.
As the UK leaves the European Union and resets its trade and investment relationships globally, I am delighted it is looking to close friends like Australia.
Australia offers Britain an attractive destination to do business – an economy with 27 years of consecutive growth, a stable government, a growing population, a multi-lingual and a well-educated workforce and proximity to the vast markets of Asia, leveraging Australia's numerous free trade agreements.
A strong flow of two-way trade - $26.6 billion in 2017 – is another part of the UK-Australia story. The UK is Australia's 7th largest two-way partner and our 3rd largest two-way services trading partner.
A free trade agreement between Australia and the UK would establish even greater alignment between our governments, legal frameworks and business norms to make doing business easier.
Everyone here today can be a champion for growing investment and encouraging free trade between our two nations. I hope you will find ways to share this considered and well-researched report with your partners, customers and the public. The report is also available online.
Finally, I'd like to extend my personal thanks to Austrade and its partners for producing this report: the UK Department for International Trade and the British High Commission in Australia; the Australia-British Chamber of Commerce; and the Australia-UK Chamber of Commerce.