E&OE...........
Thank you very much Mr Vansteenkiste, ladies and gentlemen, I thank you for your very warm words of introduction and this is the final opportunity I have before returning to Australia tonight to address a few words to a European audience - it's really a mixture of European and Australian audience - about the goals of this 12 day visit to Europe, which has taken me to Germany, Italy, Greece, the Vatican and finally here in Brussels, the capital of Belgium, and of course the centre of the European Union.
I come as the Prime Minister of a country that has very deep economic links with three parts of the world. Japan is our best export market, the United States is the largest foreign investor in Australia, and European Union in aggregate terms is our largest trading partner. It means that we must as a country have a balanced trading and economic approach to those three constellations of economic power and influence. We cannot put all of our eggs in the one basket. We demonstrated in 1997 the folly of imagining the only economic future Australia has is in the Asian Pacific region because if it hadn't been for our capacity to better interact and shift markets to both Europe and North America, the Asian economic downturn would have overwhelmed us.
Equally however, the potential for growth in Asia, especially with growing potential markets such as China and the continued strength of the Japanese and Korean markets to Australian exporters is a daily reminder of how important our primary region geographically of interaction economically and otherwise, how important it is.
In coming here to Europe on this occasion, I have sought as well as the proper courtesy that the Prime Minister of Australia owes to nations that have contributed so much to our history, I've also sought to put some direct views to individual Governments and also collectively to the European Union. We do have concerns about some aspects of European economic policy, to which I will come in a moment. But ours is a broad relationship. I don't see it in one dimensional terms. It is not only about the concerns we have with individual trading barriers. It is about building a stronger relationship with Europe as a whole and also building relationships on a bilateral basis with the individual countries that I visited. And I can speak with some degree of satisfaction, and I hope over time more success, in relation to a number of those bilateral relationships.
As the Chairman was kind enough to say in his introduction, the Australian economy at present and indeed for the past number of years, has been performing strongly. It is possible that in the current year the Australian economy will grow faster than any developed country. We've had an average growth rate of in the order of 4% over a period of four or five years. And that has been overwhelmingly the result of 15 years of steady, comprehensive economic reform.
If I were asked why is it that the Australian economy has done so well over the last few years, I would unhesitatingly say it is because over a period of 15 years, we have deregulated our financial system, we have cut almost to the point of disappearance except in two areas, tariff protection, we have reformed our industrial relation system as far as the obstructionist behaviour of Opposition parties in the Upper House will allow us to do. That is the one domestic salvo I will give you. We have reformed our taxation system and we have put our Federal Budget into balance and repaid a very large amount of Government debt so that the national debt of Australia is only 4.6% of GDP - the national Government debt, which by OECD standards is remarkably low.
Now that is the reason why we have, I believe, been able to record those rates of growth. The message out of that is that you do get a dividend from reform, but you should never be complacent about it. Reform is never over. We have more reform tasks ahead of us.
We have further need of industrial relations reform. Australia has an unemployment rate of in the order of 6.5%. That is still too high and Australia's unemployment rate would come down much further if we were able to get further industrial relations reform, including in particular the abolition of burdensome unfair dismissal laws that particularly restrict the capacity of small business to take on more people. But we have come a long way with industrial relations reform. Our labour market is a lot more open than it used to be. Productivity levels as a result are much higher. We have, because of our deregulated financial system, our flexible exchange rate has played a very important part in the process of economic adjustment when that has been needed to accommodate changing external circumstances. And that was particularly true in relation to Australia responding to the Asian economic downturn in 1997.
We need to reform further and so does the world. I have argued in every capital I've been to in Europe and I argue again here this morning that the world does need further trade reform. We must ensure that the current WTO trade round, the Doha round, is successful. If it is not successful, there will be a major collapse of confidence around the world in the multilateral trading mechanisms of the world. For it to be successful, we need an active commitment to its success from the European Union, from the United States and from the Cairns group of countries led by Australia.
The message I took to the Commission yesterday was that we are prepared to engage directly, actively and positively with Europe in working towards greater trade reform. We are not frightened to have any of our trading practices thrown open for examination. We believe they can withstand proper examination. We believe that we run, in relative terms, an extremely open economy and our trade barriers now are miniscule compared with those of most other countries.
You would expect, and you will not be disappointed, to hear the current Australian Prime Minister say that we remain profoundly unhappy with the agricultural policies of the European Union. I welcome the announcement made yesterday by the Agricultural Commissioner. I'll be seeing Mr Fischler this morning, indeed immediately after this breakfast. And I will look forward to getting some more details of his proposals.
If they result, if they are accepted, and if over time they result in smaller surpluses and therefore a lower expectation of export subsidies, then that could in time prove beneficial to Australia. But there are a lot of ifs, buts and maybes along that path. But it does represent to us and I believe to Europe, a positive step. And I welcome it and I certainly hope that it gathers the necessary domestic political support. But I'll say no more of that through fear perhaps of compromising its prospects of gathering that support.
But ladies and gentlemen, there is also to this visit of mine, those individual bilateral dimensions. I understand the politics of Europe reasonably well for an Australian. I've been a student of European history all of my life. I understand the interaction between the Commission and the member states. There is a sharing of sovereignty in Europe. I understand that. But there are also fiercely independent and national points of view being pursued, and the job of an Australian Prime Minister is to interact with both.
And in doing that I have made it very plain to all of the Governments that I have seen, and I'll be seeing the Belgian Prime Minister just before I leave to go to Paris this afternoon, and I'll convey the same message to him that Australia remains intensely interested in providing a benign, encouraging economic climate for investment in our country. And I know that a number of major Belgian companies represented here by their managing directors have substantial investments in Australia and understand the Australian economic scene well.
And we'll continue to provide that economic environment of which the Chairman spoke. We'll continue to provide low inflation and low interest rates. We are examining the international aspects of the operation of our taxation system to see if there aren't further ways in which that can be reformed. We are also internally examining our competition laws to make certain they don't work against the balance of large and small business that is needed in an economy such as Australia.
So the message Mr Chairman and to all of you, is that yes the Australian economy is performing very well. I don't mind the description that you gave to it at the beginning of your remarks. But we're performing well because we worked hard on reform over a long period of time and I've said in every capital that some of the contribution made to that reform process came from the other side of politics in Australia. And when it did, they received our support in Opposition. But over the last six and a half years, our labour market reform, our major taxation reforms and our fiscal consolidation together, have provided us with a degree of strength that many would not have thought possible about ten years ago.
So it is a good message but it's not a complacent message. And we are very much committed to the idea of a partnership both individually and collectively with the nations of Europe. We relate, as I said at the beginning of my short remarks, we relate to those three economic constellations around the world. None is more important than the other. Each of them need careful attention and each of them have special contributions to make to the further growth of the Australian economy.
And it is in that context that I thank you very warmly for having me here. I say to all of those who represent Belgian business interests here this morning, if you have the inclination to further invest in our country, you are very welcome. I know that there is a trade mission coming to Australia from Belgium later this year. I spoke to the Minister who will be leading it last night and I assured her and all the members of that mission of a very warm and accommodating welcome from the Australian Government at the highest level. And I do hope that this short interlude between us this morning makes a contribution to better economic interaction between our two societies.
[ends]