Australian Minister for Trade, Mark Vaile
Business Club Australia, Sydney, 15 September 2000
Australia as a Trading Nation
Speech at the Trade Minister's Luncheon
(Check Against Delivery)
Thank you Charles, distinguished guests, ladies and gentlemen.
I'd like to extend a warm welcome to all of you. It's a tremendous pleasure for me to be able to host this luncheon on the opening day of the Sydney 2000 Olympic Games. It's great day of celebration for us all and, of course, a great day for the City of Sydney and for Australia.
And what a great venue we have for our gathering here at Darling Harbour, close to the splendid business centre of Business Club Australia, about which I shall have more to say a bit later on.
What makes a trading nation?
But let me begin by inviting you to consider for a few moments what really makes a trading nation in the 21st Century. It's a good question to ask when we have such a wide range of international business visitors with us here today.
To begin with, you must have a country that is internationally competitive and therefore able to sell its surplus goods and services overseas. The institutions, policies and business culture of the country must contribute to strong economic growth and high levels of productivity. There must be sound economic policy settings, a commitment to necessary reforms, a good business infrastructure and a high quality regulatory and legal framework.
The country will essentially be "open" to the outside world. Its tariffs will be relatively low. Its people will be well educated and able to operate effectively in a multi-lingual, multi-cultural world. They will also have high levels of computer literacy, skill and use.
Obviously, the country concerned must be able to get access for its goods and services in overseas markets. A trading nation is, therefore, likely to be diligent in its pursuit of free trade and market access opportunities at the multilateral, regional and bilateral levels.
Australia's success as a trading nation
Australia is scoring well in all these areas. You are in one of the world's great trading nations.
Recent figures have confirmed this. Growth in exports has continued apace, with exports of goods and services from Australia jumping by some 23 per cent in the year to July. Exports rose by 2 per cent to a record $11.9 billion during July itself. Rural exports are particularly strong, rising 12 per cent in July to the highest figure ever.
Our overall trade balance has also been improving, with the deficit narrowing to A$537 million during July, from a revised figure of A$1.43 billion in June. In annual terms, company profits were up 30.6 per cent in June, continuing an almost uninterrupted cycle of increasing profitability since early 1997.
The recently released World Economic Forum's Global Competitiveness Report for 2000 ranked Australia as 12th in the Growth Competitiveness Index and 10th in the Current Competitiveness Index. These results consolidate Australia's improved performance over recent years, as our country ranked only 17th in the overall Competitiveness Index in 1997.
These excellent results will come as less of a surprise to those who have been watching us closely over the past few years. In particular, the strong performance of the Australian economy in the face of the Asian economic crisis was a convincing demonstration of its underlying strengths.
On the trade front, Australian exporters at that time showed a remarkable capacity to adapt quickly to changing circumstances, to seek out new markets, and to diversify in the face of a crisis. This entrepreneurial flair is one of the hallmarks of the new Australia that is being fashioned in the twenty-first century.
Therefore it is clear that Australia has passed the test as a true, trading nation.
Australia's comparative advantages
What sets Australia apart as a country to do business with in the Asia-Pacific region?
Firstly, it is a good strategic location for doing business in the region.
Australia is a large and advanced economy, the fourth largest in the Asia-Pacific, and the fourteenth largest in the world. In East Asia, only Japan, the Republic of Korea, and China have larger economies. Our economy is nearly the size of the combined economies of Indonesia, Malaysia, the Philippines and Singapore.
This economy is growing strongly, with our Government having achieved twelve consecutive quarters of through-the-year growth at or above 4 per cent - a set of economic figures without parallel over the past three decades. The OECD has recognised Australia as one of the six fast-growth economies over the last decade.
Australia is located in Asia Pacific time zones, making it easy for businesses to service Asian markets quickly. Also, Australia's business day spans the close of markets in North America and the opening of markets in Europe.
Australia is well connected with the Asia-Pacific region. One in twenty Australians was born in Asia. One in five has an Asian background.
Australia is one of the oldest, most stable democracies in the world. It is a safe haven for international investors where business decisions can be made in a climate of political and economic certainty.
Secondly, Australia provides the right business environment.
Australia is a low inflation economy, with an average rate during the 1990s of just over 2 per cent.
The Australian workforce is highly skilled, with some forty-five per cent having university, trade or diploma qualifications. Our multicultural society includes citizens from over 160 countries. Australia has around 800,000 Asian language speakers, which means that companies can employ skilled native Asian speakers.
Australia is a sophisticated information economy, with the second largest information technology and telecommunications market in the Asia-Pacific region after Japan, and one of the world's top ten markets in terms of expenditure in this area. Our people are technologically literate, with high market penetration rates for the Internet, personal computers, mobile phones and fax machines.
Australia has a high quality business infrastructure, with privatisation programs in key areas like electricity, gas and water leading to increased competition and reduced costs. There is a large pool of professionals in the business services area. Our financial services are excellent, with no foreign exchange controls and a fully internationalised currency. We have the thirteenth largest stock market in the world, and the second largest in the Asia-Pacific. The Sydney Futures Exchange is the largest financial futures exchange in the Asia-Pacific region.
The open and efficient regulatory environment enables overseas investors to set up and operate business in Australia easily. Our Government is committed to the continuing microeconomic reforms necessary to keep Australia's place as one of the great trading nations.
We have strong political, legal and corporate institutions, and can be proud, for example, of our high standards of corporate governance and prudential management, and of our incorruptible judiciary.
Thirdly, Australia is a cost competitive location.
There are workforce cost advantages in Australia. For example, wages remain competitive for most types of skilled labour. Property and construction costs are relatively low. Transport and utility costs are competitive. And the cost of maintaining a research and development facility in Australia is less than in most countries of Asia, Europe of North America.
And last but certainly not least, Australia has an excellent quality of life.
Lack of congestion, high quality housing and urban environments, access to sporting, leisure and cultural facilities, and a clean natural environment ensure that Australia rates highly with both travellers and expatriates.
All this means that Australia is now the safe, secure and adaptable economy in which to launch trade and investment in the Asia-Pacific region. And many overseas businesses seeking market opportunities in the region have already realised this, and made the move here. In fact, over 430 multinational companies use Australia as a location for their Asia-Pacific management and/or service functions.
Let me give you some examples. Lufthansa has established a call centre here comprising a global 24 hour airline reservations service, which is part of a strategy to consolidate 211 centres into 9. The centre here in Australia provides Asia-Pacific multilingual support and linkages to the European and US centres. It opened in Melbourne in October 1998, involving a $5 million investment and 100 new jobs.
Other services examples include the Asia-Pacific and Japan Shared Service Centre for accounting and administrative functions set up by NCR, and the Asian Pacific business services centre established by Oracle.
In the manufacturing sector, Lincoln Electric Asia Pacific regional headquarters located in Sydney for the manufacture of welding and cutting equipment. And another example I'm very pleased about - it's in my own electorate in regional Australia - is the Britax international regional headquarters at Taree, focussing on electronic products for the automotive and whitegoods industry.
Marketing Australia and its advantages - Business Club Australia
International business visitors like those here today quite reasonably expect to be well looked after when you travel. And, if you're looking for good business opportunities, then you will be looking to get all the information you need for making decisions with the minimum amount of difficulty.
As Australia's Trade Minister, I have a particular interest in ensuring that we in Australia make the most of our opportunities, as host nation of the 2000 Olympics, to highlight to our overseas visitors the impressive business opportunities that exist in our nation. And I'm pleased to say that these Olympics visitors are able to take advantage of Business Club Australia, which provides a networking link to business across Australia.
The Club's business centre, here at Darling Harbour, provides members with excellent office and other facilities, including multi-lingual trade assistance.
By the end of the Games, it is expected that the Business Club will have 20,000 members. I hope you will all consider joining, if you have not done so already!
Ladies and gentlemen, Australia has been preparing for the Sydney 2000 Olympics for quite a few years now. The next couple of weeks will be a high point in the sporting history of our country.
But they can also be more than that. The Games represent an excellent opportunity for us to showcase the numerous attributes of Australian life. Not the least of these is our achievement in creating a great trading nation that is well prepared to face the business challenges of the 21st century.
Again, I would like to warmly welcome all of our international visitors today, and I hope you all enjoy your time in Australia. And, for many of you, may it also be the time when you decided that Australia is a good place to do business in the future.