Thank you Mr Moderator, Mr Sugita, ladies and gentlemen. It is for me a special privilege to have the opportunity of participating in this symposium which is dedicated to the ongoing partnership and friendship between Australia and Japan. It was that social commentator of an earlier century, Dr Johnson, who encouraged us to keep our friendships in good repair and the exhortations of the two speakers that have gone before me echo that sentiment. And it is very important that a relationship such as that between Australia and Japan which has been so strong, has been so multi-faceted, and has continued to confound some of the cynics and the sceptics of all those years ago back in the 1950s, it is important at a time like this that we reflect on it and take whatever steps we can to ensure that it is not only kept in good repair but it is also strengthened and diversified in different ways years into the future.
I last visited Japan as Prime Minister just on two years ago in August 2001. I didn';t know then and I daresay few people knew then that the world was about to change very dramatically. And over the past two years Australia and Japan, like all other Western societies have had to cope with a new menace, the menace of terrorism. Our lives have been affected, our economies have been affected and the way in which we view each other and the way in which we relate to other nations in the world has also been affected.
As I prepare to talk to the Japanese Prime Minister later this afternoon, I will be conscious that the subject that will dominate our discussions more than anything else is the challenge of North Korea – a country whose political system is very different, not only from ours, but from just about any other political system in the world. The threat of North Korea is real, but like all threats it has to be dealt with in a careful and sober fashion through a combination of steady diplomacy, and those nations that can most influence the behaviour of North Korea – namely Japan, the United States, China, South Korea, and arguably also Russia – are speaking with a common voice, expressing a common view and a common exhortation to North Korea that her best interests lie in returning to the world community and to an acceptable mode of behaviour so far as nuclear weaponry is concerned.
I want to take the opportunity of expressing my respect for the very active leadership role of the Prime Minister of Japan, Mr Koizumi, in relation to North Korea. I can well understand the sense of outrage and affront felt by so many people in Japan in relation to the abduction of your citizens in North Korea and the barefaced way in which that occurred and the lack of any serious remorse over such a long period of time. It is an occasion right now for those countries such as Japan and Australia and the United States working as closely as we can with China, a nation that still ultimately can exert more influence over North Korea than any other nation, it is an occasion for all of us to work together in close partnership because the stability and the security of our region, not just the countries of North Asia, such as Japan, but also of the entire region of which we are together a part, the security of that region is involved in how the North Korean issue plays out.
I want to take this opportunity of getting recommitting the Australian government and the Australian people to an ongoing and very close relationship with the government and the people of Japan. Japan remains our best customer. The partnership at an economic level between Japan and Australia which has flourished since the days in the middle 1950s when the then Deputy Prime Minister of Australia, Mr John McEwen, argued very strongly and very successfully for the negotiation of a trade agreement between, or a commercial agreement, between Australia and Japan, which laid the foundation of a relationship which continues to bulk very large in our own economic performance, and this is an occasion to pay tribute to people like McEwen and also to the many significant businessmen in Japan that have laid the foundation for decades of ongoing investment in our country and have seen the growth of an economic partnership of which Australians have ever reason to be very proud that the people of Japan must share equally in that pride.
Japan';s economic size and economic strength remains a very significant component in the world economy. It is too easy to forget the size and the strength of Japan';s economy compared with any others in the region. Only China has the capacity and time to challenge it and the story economically of Japan will be very much the story economically of our region for the foreseeable future. Japan will remain a very crucial economic partner for Australia. Not only as an export destination, but also as second only to New Zealand as a participant in the tourist industry in our country. Some 700,000 people from Japan come to our country each year. The people to people links which are so important in nurturing relationships between two societies are very strong and importantly and encouragingly there is no section of the Australian population keener to learn about Japan than the younger component of our community. And the extent to which Japanese as a language finds favour amongst young Australians is a testament to that.
I want to share with you understandably a few thoughts about Australia';s economic performance. Over the past few years I am happy to report that Australia';s economy has grown more strongly than just about any other economy in the OECD area. Since 1990, that';s thirteen years ago, we have had an annual economic growth rate of 3.3 per cent, and indeed over the last five or six years it has run at an even stronger rate than that. And that of course has been in excess of most OECD countries including in particular the United States, the United Kingdom, Canada and Germany. It is important also to see the Australian story over that period of time of not just being a story of economic growth, it is also a story of a rounded economic and human performance. I was reminded of this when some figures produced by the United Nations Development Programme under the title of its Annual Human Development Report drew attention to the fact, and this report measures not only GDP per capita but life expectancy and knowledge measured in turn by the adult literacy rate and educational enrolment. On 1996 data Australia was ranked 15th in the world. By the 1999 report we had moved to 7th position. And this year';s report, which is based on the data for 2001, had Australia placed 4th of 175 countries behind only Norway, Iceland and Sweden. That is but one measure but a very important measure that tells story that goes beyond straight economic performance.
I would put Australia';s strong economic performance of the last few years down to a number of very significant factors. Overall the most important has been the embracing of economic reforms, and let me say very readily by governments of both political persuasions in Australia. The decisions taken by the former government to float the Australian dollar and implement the recommendations of the Campbell Enquiry to deregulate Australia';s financial system were very important reforms and they enjoyed the support of my party then in opposition. Likewise the decision of the former government to lower Australia';s tariff structure through the then Prime Minister';s statement of 1991 was likewise a very important element in opening up the Australian economy and that particular decision also enjoyed the support of my party in opposition.
Since 1996 we have added to those reforms by significant changes to our industrial relations system. I am certain that a number of the more mature people in this audience will remember that there was a time when Australia was in some industries sometimes known as a country that had a lot of industrial disputes. I am happy to say that that is something which by and large, with very few exceptions, has now been put years behind Australia. In fact the most recent figures measuring industrial disputes in Australia will tell anybody who bothers to look at them that the level of industrial disputation is now at some of the lowest levels since figures began to be compiled before World War I. We have seen a very significant change, especially in sections of the mining industry, in the burgeoning service sector, and even in those sectors of the Australian economy where the level of unionization is higher, there is a greater understanding between the workforce and management about the need for common cause to be made in the interests of the ongoing productivity and profitability of companies.
One of the conspicuous features of the Australian economic performance of the last few years has been the extent to which we have been able to lift our levels of productivity. I was asked at lunch why it was that consumer spending in Australia remains so strong. I said that I thought that it was a combination of lower interest rates and higher real wages made possible through a combination of higher productivity and increases in the nominal level of wage payments. Australian workers are better off in actual terms now than for some time and that of course is in turn feeding into a more benign industrial climate but is also in part a product of a more benign industrial climate brought about by very significant reforms in our industrial relations system. That doesn';t mean to say that there aren';t pockets of resistance to the new dispensation but I think that it is very much the case that the old worries that used to follow some Australian companies around the world have long since been put behind them.
We have also embarked upon a very committed programme of balancing our budgets, and in the time that the government has been in office we have recorded six successive budget surpluses. And that represents a very significant achievement and something that I believe has fed into international expectations about the strengths of the Australian economy. We have reduced our federal government debt to about 5 per cent of Gross Domestic Product. That has had a valuable effect on interest rate expectations and it is also further underwritten positive perceptions of the Australian economy around the world. I retain what might be regarded in some quarters as the rather old-fashioned view that it is both good economically and good from the point of view of expectations for governments to run balanced budgets and it is a view that is strongly endorsed at senior levels of the government that I lead. I have to say that I, along with others, remain concerned at the growth in size of the budget deficit in the United States because of the impact of that that will have not only on the economy of that country but also upon expectations about future economic growth and future economic development.
The other great reforms that we have undertaken of course have included taxation reform. The introduction of a goods and services tax fixed at the level of 10 per cent. We went to the 1998 election on the strength of that commitment and with some changes imposed upon us by a hostile upper house, it came into effect on 1 July 2000. And much of the doomsday talk about the impact of the new taxation system failed to materialize. By and large the cost impact appeared to be either about as predicted by our Treasury or indeed a little less and the economic system appears to have absorbed the change with apparently little disruption. It has provided a valuable stimulus because of the removal of a lot of embedded of costs for the Australian manufacturing industry. I think it is fair to say that the motor manufacturing industry is a good example of an industry that particularly benefited from the introduction of a 10 per cent goods and services tax replacing a very outdated 22 per cent wholesale sales tax. Overall tax reform has come and gone leaving behind its benefits and not the trail of wreckage and misery and pestilence that was predicted by those who imposed its introduction.
We have also embarked upon a programme of continuing privatization of government assets that ought no longer remain in government hands. This process was started with our support by the former government whereby it sold the government';s interest in the Commonwealth Bank and its interest in the national air carrier, Qantas. We have sold the government';s interest in just under 50 per cent of the national communications carrier, Telstra, and we have announced that we are satisfied with the adequacy of services to be provided in rural Australia where setting about the process of winning legislative approval, and that won';t be easy let me acknowledge given the state of the Senate, the upper house, legislative approval to sell our remaining interest in Telstra.
Overall it is a story of strong economic change and strong economic reform. I do think the most profound observation I could make on the process of economic reform that has been undertaken in Australia is that it has carried in its train, or produced in its wake, a very big cultural change in the attitude of the Australian workforce and also very particularly the attitude of business leaders. The old notion that Australians that either workers or businessmen or women sought protection behind tariff barriers and a rather cloistered economy, those days are decades behind us. I think the outward looking, innovative approach taken by business leaders in Australia, in so many fields, has played a very major part in the economic transformation of our country. And I also believe that the flexibility and the adaptability of Australian workers both at home and around the world is increasingly and properly seen as one of the major components of economic strengths and the economic stability of Australia. And nobody who has observed the social and economic experience of any country takes continued economic success for granted.
And I recognize that in Australia, as is the case in Japan, the process of economic change and economic reform, is an ongoing process. We are part of a globalised world economy and that is not going to change. I am a great believer in globalization, I have seen it bring enormous benefits to those countries that have practiced an open approach to the management of their economies. I have seen those countries who have tried to resist globablisation by closing down their economies or maintaining them as closed economies fall behind, I have seen the benefits of globalisation fee through into Australia';s economic performance and I would hope particularly against the background of the still rather disappointing progress being made in achieving outcomes in the context of the Doha Trade Round, I would hope that the developed world in particular renews its commitment to making gains on a multilateral front so far as more open trade is concerned.
There is no country in the world that practices pure free trade but it is the case that there are some rather conspicuous peaks in the levels of protection to be found around the world and most of them of course are to be found in areas that touch upon areas that touch upon agricultural output and agricultural product. I mention that not only because I am the Prime Minister of a very lowly subsidized and highly efficient farm economy, but I also mention it because I am conscious of the gains to be won for developing countries if they can get access to the markets of more developed countries for their agricultural exports. And it remains the case that the levels of protection particularly but not only in the European Union but also of course the levels of protection here in Japan and in the United States, but on a straight statistical comparison none are higher and more objectionable because of that than those of the European Union, that they do represent very significant barriers to the efforts of developing countries to sell their product and if gains can be won on that front then the world will be the richer for it and the benefits of globalization will be as apparent to those developing countries as they have become to countries such as Australia and Japan.
Could I finish a note that I commenced my remarks with, and that is the changed character or the changed emphasis of the relationship between our two countries over the past two years. I want to pay tribute to the great support that the Prime Minister of Japan gave to the coalition of the willing in the recent military operation in Iraq. I am conscious because like any other democratically elected Prime Minister I keep an eye on public opinion. I am conscious that the support extended by Mr Koizumi to the coalition of the willing was not universally popular in this country and it is precisely because of that that I believe it is all the more deserving of praise and deserving of support. His government gave forthright leadership on that issue. It continues to retain a commitment, a very strong commitment and a valuable commitment to the reconstruction of Iraq and his Prime Ministership has been conspicuous in leading Japan to a more confident and I believe properly assertive role in the affairs of this region and of the broader world community and I think he';s, if I may say so, achieved an admirable balance between his responsibilities domestically and I think the leadership role that Japan properly has and ought to have in the world.
Can I again thank all of you for supporting this symposium and to take the opportunity of saying again how valuable the relationship is to me personally. I know it is valuable to all shades of political opinion in Australia and in saying what I have today I know I speak for all Australians in expressing our gratitude for what the relationship has meant to us since the late 1950s, what it continues to mean and what potential I know it has for years into the future.
QUESTION & ANSWER SESSION
QUESTION:
You talked about the success of reform, which is necessary for all countries in the ever-changing global conditions. But when it comes to reform, we often are faced with protestors and it is often said that the devils live in details. We have the problem. We understand the conception, the necessity of reform, but it is very difficult to implement and enforce it. What was your biggest challenge during your administration in achieving reform? How did you overcome? Could you give us a message for Japan.
PRIME MINISTER:
Well I wouldn';t presume to tell another country how it should tackle the process of reform. I';ve learned enough over the years to be very wary of doing that, so I have a disclaimer right at the beginning – this is not a piece of gratuitous advice to any other country. My own experience has been that you can normally take the Australian people with you on a fundamental reform if that reform satisfies two essential tests. The first test is that you have to persuade people that it';s going to be good for Australia. That';s the first thing. Most people, despite what is cynically said by some, most people in my country are interested in the future of Australia. They do care about our standing in the world and they do care about what people think of us, and they do worry about the kind of society they';re going to leave for future generations. So if you can persuade them that it';s good for Australia, then they will go along with it, provided you can persuade them of something else – and that is that it';s got to pass the fundamental test of fairness.
If you can';t persuade them that it';s fundamentally fair, as well as persuading them that it';s going to make Australia a stronger and better country, then I think you';re really struggling. And I have found that they are the two tests. And I';ve watched some other countries – I won';t name them – grappling with reform, and well I';ll name one of them. I think most of the reforms that were carried out by the Thatcher Government in the United Kingdom, for which I have great admiration, worked because they passed both of those tests. There was one towards the end of her term in office that didn';t seem to me to pass the second limb of those tests – namely the poll tax – and I think that was… didn';t seem to be fair, and therefore whatever may have been its other intrinsic merit, it sort of came apart. I have tried to apply those two tests to our reforms. There are a lot of people who felt they mightn';t be better off as a result of tax reform, but somehow or other they felt that it was probably good for the country that the old system outlived its usefulness, and we ought to have a go at a new system. Now that';s my experience in the Australian culture. I have no idea whether that is appropriate for other countries and I wouldn';t presume to say whether or not it is.
QUESTION:
I would like to ask a question with regard to North Korea – something you referred to in your speech as well. Before coming here I believe in the Philippines you received a proposal from President Macapagal-Arroyo for a summit meeting of the countries concerned. What is your response to that and what do you believe is the most appropriate framework for consultations in order to deal with this North Korean issue?
PRIME MINISTER:
Well the proposal that was mentioned to me was one that was in a speech of the Philippines President, President Arroyo, a little while ago in which she proposed the possibility of the hosting of a regional meeting perhaps by Australia and the Philippines in relation to North Korea. I said that I had no objection to that in principle and in general terms was positive, but I did not want to see it cut across the initiative now underway and I do believe very strongly that we should keep a steady emphasis on the notion of trying to get a five power discussion – the two Koreas, Japan, the United States and China – and we shouldn';t at the moment, because I think that is a framework that will offer the best prospect of success, we shouldn';t at the moment get diverted by a focus on some other initiative, which although worthy in its own right, is one that we should perhaps come to if other proposals don';t work. I think very strongly we need an emphasis on that five country, five power approach, and I think that will be the best way given the current attitudes of different countries, that we can deal with the issue.
QUESTION:
As you mentioned in your remarks, we have very close economic relations between Japan and Australia. Especially for Japan – 59% of coal and 50% of iron ore and 43% of alumina and 51% of cotton and a large percentage of many resources that Japan imports come from Australia. And once these supplies stop, Japan will fail. So Australia is to such an extent a very important country for Japan. But I feel infuriated, well sorry to say this because this is a program organized by Nikkei, but Japanese television and newspapers do not really report about Australia at all. When some female students are killed, then that makes the headlines, but otherwise there are no reports about Australia, and I hope Nikkei will take the lead in reporting more about Australia. My question for you Mr Prime Minister – I wonder if there are many news reports in Australia about Japan. If the two countries fall into self complacency, that';s no good in the interests of our bilateral relations. We have got to do something about it, and I hope Nikkei will engage in some soul searching in this respect. Thank you.
PRIME MINISTER:
Well I would never want to stand between the media of the world and the inner self, and I am invite any introspection that anybody thinks should occur to take place. Does the Australian media report on Japan? Yes it does, I would say as a fairly voracious consumer of the Australian media, sometimes indigestibly, but I think Japan is quite widely covered, not only politically, not only in the context of our bilateral relationship, but given that our cultures are very different in many ways – our language and predominant religious affiliations and the like – I think Japan is quite well covered and it';s not just by Japanese-based Australian correspondents, but also more generally. And I think that';s a good thing. I think Japan is seen as an interesting country, if I can use that word in a very positive way, and you can';t always rely on these things but I saw some data about attitudes towards countries in the world and Japan was by and large very positively regarded amongst the Australians polled. So I think in that sense the man and woman in the street in Australia does know, does hear quite a bit about Japan and I think most of it is pretty positive.
QUESTION:
Don Woolford from AAP, part of the indigestible Australian press. As you said Prime Minister, Japan is Australia';s biggest customer of Australian goods and I don';t think anyone imagines that the full potential has been reached. But as you also referred to this fairly briefly, agriculture remains a great sore point, beef tariffs, our charges that Japan is hiding behind the European farm lobby and the Doha round and so on. So with that background, my question is can agriculture be permanently quarantined, put to one side in the wider trade interest, or could Australia ultimately, and it has already made this sort of threat in the Doha context, say right enough is enough, we don';t go further without significant movement on agriculture?
PRIME MINISTER:
Well I';m not here to make threats to anybody. I';m here to argue the reasons for change and reform. As far as the Doha round is concerned, if it falls over through want of further progress on the agricultural front, and that is its greatest danger because that is where the high peaks of protection remain, industrial tariffs have seen enormous reductions. By and large, industrial tariffs have, while they haven';t totally disappeared, they have certainly come down quite dramatically over the last 20 years. But there are still quite high levels of protection in agriculture and we do need to make progress on that front. And my views on that are quite well known. I will continue to put them, but I';m ever an optimist. The bilateral relationship between our two countries has meant an enormous amount for Australia. That doesn';t mean that each of us can';t argue for change and reform that we regard as meritorious in its own right and also beneficial to our economies in the future. But if you';re looking at the aggregate context of the world trading environment, the greatest benefit of a big breakthrough on agriculture would be the benefits that would flow to the really low per capita income developing countries that have precious little other than agriculture to sell. And there have been plenty of measurements of this, but one of them I saw roughly said – and don';t hold me to the precise mathematics of this – roughly said that the elimination of developed country barriers against agricultural trade would be the equivalent of four or five times the value of official development assistance from the developed world to those developing countries. That';s the order of magnitude that you';re dealing with and that is what really is at stake.
QUESTION:
Over the years I have been aware that Australia has been working on this very difficult challenge of multicultural society and I pay full respect to your country for that. As Prime Minister you mentioned more recently there has been terrorism, the international tension, and 80 or so Australians lost their lives in the bombing attack in Bali for example. Now you did not refer to the future of multicultural society in your speech today. In this tense international situation Mr Prime Minister, is there any change in your government policy to seek multicultural society, or would you stick to that policy?
PRIME MINISTER:
Well we maintain a constancy of policy as far as immigration is concerned. We';re running a larger immigration program now than we did in the early years of being in office. It continues to be completely non-discriminatory as far as race or religion or country of origin is concerned, and that will be the case I';m sure into the foreseeable future. I can';t see any likelihood of that being changed. We';re a nation that asks of people who come to Australia that they give their overriding commitment to Australia and its values and its institutions, but we don';t ask them to lose a place in their heart for the country in which they were born, wherever that might be. And people observing the cultures of the country of their birth, consistent with that overriding commitment that I mentioned earlier, is regarded as not only something that is acceptable but something to be encouraged. I think we';re a harmonious country. That doesn';t mean to say there aren';t bigots and prejudiced people in Australia like every other nation, but by and large Australia has been more successful than many in blending people together and I think as time goes by people feel a very comfortable identification with the distinctive Australian values and distinctive Australian attitudes which in turn have been influenced over the years and tempered by successive waves of migrants from different parts of the world. To give you an idea of the face of modern Australia, it may surprise many of you for me to tell you that the foreign language which is most widely spoken in Australia are the various dialects of Chinese. And there are far more people who speak the various dialects of Chinese in Australia now than speak Italian or Greek, simply because of the impact in more recent years of immigration. And at the last Federal election some 13 to 15 per cent of my own electorate in Sydney was of ethnic Chinese origin, and it gives you just some indication of the face of modern Australia, and particularly in that case, the face of modern Sydney.
[ends]