Speech to the 8th Annual Tourism and Transport Forum Australia Leaders' Summit
Parliament House, Canberra, 16 September 2008
Thank you, Christopher Brown,
for that introduction.
And thank you to the Tourism and
Transport Forum, and Infrastructure Partnerships Australia, for giving
me this opportunity to outline the Government's plans to boost services
exports.
The first point I want to make
is that trade has always mattered to Australia's prosperity.
Trade has historically grown at three times the rate of world output.
The lesson is that for an economy to grow, it has to engage in trade.
Last year, trade added more than
$200 billion to our income. And tourism accounted for $22.4 billion
of our exports and contributed almost $39 billion dollars in Gross Domestic
Product in 2006-07.
Tourism provides more jobs in
Australia than agriculture, forestry and fishing combined, around 4.7 per cent
of total employment--or over 480,000 jobs.
These are impressive numbers but
I think we can do more to broaden our services exports.
That's because the nature of
trade is changing. Trade has moved beyond the ‘produce and ship'
paradigm of the past.
And because of that shift in the
way we look at trade, we have to reframe the way we look at trade policy.
We need all arms of government policy working together to improve our
competitiveness and our trade performance.
The resources boom remains important
to our economic and trade performance. But our long term prosperity
will rely not just on lifting resource export volumes but on a re-balancing
of our exports. This is where the services sector comes in.
Our economy is 80 per cent services-based
but services accounted for only 22 per cent of our exports in 2007.
These include education, consulting,
financial services, and construction and design services of the kind
I was privileged to see for myself recently at the Beijing Olympic facilities.
And of course, our services exports
include the tourism sector.
The twin pillar approach
Our view is that the fundamental
purpose of trade policy is to improve trade competitiveness.
To achieve that, we're pursuing
a trade policy that rests on the twin pillars of liberalising international
trade, so that our exporters get better market access, and by implementing
a program of domestic reforms that places our companies in the best
possible position to compete.
Because there's no point in
winning concessions in overseas markets if you can't take advantage
of them.
The Government believes that multilateral
trade liberalisation still offers the best means of securing across-the-board
gains for trade.
Despite the disappointing breakdown
of the World Trade Organization's Doha negotiations in Geneva, we
came close. A great deal was
achieved, and we're determined to hold on to the 80 per cent of the
negotiating agenda that was effectively settled.
Since the talks broke down, the
Prime Minister and I have talked to WTO Director-General Pascal Lamy
and to world leaders and trade ministers, emphasising Australia's
commitment to concluding the Doha Round.
We've been getting some strong
support in our efforts to get back to the table, and we'll do all
we can to lock in the gains.
Behind the border: domestic reforms
Getting our domestic policy settings
right complements our international work. They're two sides
of the same coin.
The Government is working to ensure
that we lift Australia's exports, which have underperformed in recent
years. And we're looking to create the conditions that will
help us ‘future proof' our export industries.
This means better co-ordination
in government; between government and industry-to-government.
I know you've made similar points
with your idea to create ‘Brand Australia”. I agree we've
all got to push for better co-ordination between all arms of government.
That's why I regard Tourism
Australia as an arm of our trade policy—it is in its own way a body
like Austrade, Australia's trade promotion agency.
Austrade and Tourism Australia
are working well but it's important to aim for better co-ordination
by all arms of government aimed to improve supply-side constraints.
What does that mean for you?
As I said earlier, we start from
the standpoint that the nature of trade has changed.
The flow of investment into Australia
and from Australia to the world is now a critical component of international
trade.
Companies from around the world
are repositioning themselves in global supply chains, and also investing
overseas to gain market share.
Their capital contributes to our
growth. You can see this trend at work in many sectors, including
the infrastructure that supports our tourism industry.
This recognises that investments and infrastructure improvements, for example, involve the States as well as Canberra.
That's why we've initiated
the Ministerial Council on International Trade.
The Government is committed to
trade policy reform at both the macroeconomic level – involving much
needed improvements to our national infrastructure and skills and innovation
policy – as well as microeconomic settings like enhanced trade facilitation
and an expanded Export Market Development Grant scheme.
Austrade, advises that in the
2006-07 grant year, our tourism industry received 421 Export Market
Development grants valued at $12.4m. These recipients, in
turn, generated $612m in tourism exports. It's a great rate
of return on investment.
That's why I'm pleased to
say that the scheme has been expanded, which will benefit tourism operators.
For example, we've increased
the maximum grant to $200,000; and we've made regional approved tourism
bodies eligible for Export Market Development Grants.
Besides Austrade's co-operation
with Tourism Australia, Austrade also works with the Australian Tourism
Export Council to promote the industry and provides support for events
such as overseas trade missions.
And for individual tourism businesses,
Austrade offers services such as in-market assistance and overseas market
intelligence.
Earlier this month, I received
the Mortimer Review of Export Policies and Programs I commissioned earlier
in the year.
I want to thank the Tourism and
Transport Forum for your submission to the Review. I am now considering
the Review's recommendations and expect to release it for public scrutiny
soon.
Later this year, I will present
the Government's response to Mr Mortimer's recommendations.
I expect that the Review's findings
will feed into other trade-related reforms that have been implemented
or are being examined.
This Government is determined
to take a strategic approach to reforming Australia's economy and
better positioning its various sectors to compete. That's why
the Government's Long-Term Tourism Strategy, announced by my
colleague the Minister for Tourism, Martin Ferguson, will focus on issues
such as tourism investment, infrastructure, skills and labour, productivity,
climate change and domestic tourism.
To assist the tourism industry
and other industries facing a skills shortage in Australia, the Government
has fast-tracked the establishment of Skills Australia.
As part of our “Skilling Australia
for the Future” initiative, we have allocated 630,000 training places
over five years to ensure that Australians develop the skills that industry
needs.
The training places will be delivered
in an industry-driven system, ensuring that training is responsive to
the needs of enterprises and individuals.
In that context, I'd also like
to mention the vitally important work we've begun on improving Australia's
infrastructure.
The Government proposes to invest $22.7 billion in road and rail projects to 2014.
In addition, earlier this year,
the Government established Infrastructure Australia to provide advice
about infrastructure gaps and bottlenecks that hinder national economic
growth and prosperity.
Infrastructure Australia will
provide advice to all levels of government and to owners of infrastructure.
That advice will relate, for example,
to Australia's current and future needs and priorities relating to
nationally significant infrastructure. It will identify and options
and reforms, including regulatory reforms, to make the utilisation of
national infrastructure networks more efficient.
Among Infrastructure Australia's
main tasks will be providing an infrastructure priority list to the
Council of Australian Governments by March 2009.
Building up our infrastructure
will represent a significant investment challenge. That's why
the Government announced the establishment of the ‘Building Australia
Fund' in this year's Budget.
The Fund will help finance critical
national transport and communications infrastructure such as road, rail,
and port facilities and broadband. It will receive an initial
allocation of $20 billion and will be established by 1 January next
year.
Conclusion: realising our potential
These are the kinds of domestic
reforms that I'm confident will pave the way for our services industry
to make a stronger contribution to our exports. It's part of
the plan to re-balance our trade performance.
I've spoken today of ways in
which Government is working with business to better position Australia
to take advantage of growing export markets.
And how we're going about changing
Australia's approach to trade policy.
The tourism sector is one important example of an industry that stands to benefit from the enormous changes we're now witnessing in the global economy.
Industry research shows that, by 2016, China is expected to be our biggest tourism market.
That's not that far away and
it will require effort to realise this, but the potential is there.
At the same time, we're seeing strong growth in India, which is now
our second-fastest growing tourism market.
The World Bank has forecast that in our time-zone there are now about 200 million 'middle class' in East Asia and Pacific.
By 2030, there could be about 700 million 'middle class' in East Asia and Pacific.
That is a huge opportunity in terms of millions of people with more disposable income and money to spend on travel.
To capture the tourism dollar of the world's expanding middle class, staff in our overseas network of posts will have to work more closely with Tourism Australia.
As they work to promote our advantages as a tourism destination, they should think not only in traditional markets but in emerging ones, like the Gulf States.
There's no doubt that the tourism sector also faces significant challenges. These include a weakening global economic outlook that has a negative effect on discretionary spending. It includes competition from other destinations.
I know that the industries represented here tonight, like so many others in Australia, are adaptable and resourceful, and make the most of the natural advantages we have.
But I want to stress that the Government can and must play a role in equipping you to handle the realities of competition and economic change, so that you can continue to contribute strongly to the Australian economy.
The Government's fundamental aim is to ensure that all Australian exporters remain as competitive as possible.
That means not only securing access to overseas markets. It means building up the skills of our labour force, and strengthening the transport and communications infrastructure upon which we all critically depend.
It means looking beyond portfolio interests, and recognising that trade policy involves a Whole of Government approach at the Federal level, and between Canberra and the States.
It means thinking strategically.
That is the course we've embarked on and I look forward to your engagement
as we move ahead.
Thank you.