PRIME MINISTER
ADDRZSB BY THR PRIM MINSTIR, TER HON P J MATING NP
BUSNUSS ASIA CONVZTION, ADLAIDI, 8-9 NOVMWEDR 1993
Ladies and gentlemen
I am delighted to have this opportunity to address this
very well-timed Business Asia Conference.
It comes at the end of the Grand Prix, which has been an
opportunity for South Australia to demonrstrate its
capacity to successfully organise world class events and
its ability to provide world class products.
I am sure that no business visitor could be left with any
doubt that South Australia is a State which intends to
succeed. South Australia's commnitment to success in the export
market and particularly to markets in our regioh is
exemplified here today.
Today, half of South Australia's exports go to the Asia
Pacific region. I know the South Australian Government
is determined-to double its exports to Asia in the next
five years.
Of South Australia's ten most important export markets,
nine are in the Asia Pacific region.
The reasons for Australia's success in Asia go beyond the
simple fact that the Asian economies are growing.
Australia is uniquely positioned to benefit from economic
growth in Asia. And we have strong complementarities
with the dynamic Asian economies.
Australia's exports to East Asia now account for almost
per cent of our merchandise exports.
Last year, South East Asia was the fastest growing
regional market for our exports. Exports grew by 19 per
cent during the past year. And our manufactures exports
to South East Asia have grown annually at an average of
over 27 per cent in recent years. 290.9
Over the lastA five years, Australian manuf actures exports
to the rapidly growing economnies of Singapore, Taiwan,
Hong Kong and Korea accounted for over 60 per cent of
Australia's growth in manufactured exports.
And demand will further increase as the economies of
Indonesia, Thailand and Malaysia continue to grow and
diversify their imports.
The Asia Pacific region is forecast to continue to grow
by 7 per cent over the next two years.
As Asian economies are maturing their consumers are
growing in affluence. In Indonesia alone there is a
mniddle class of 15 million which represents a huge
potential market for Australia.
In 1990 there were 6 million people in South East Asia
with annual incomes above $ 5,000. In 2010 there will be
some 45 million.
So the opportunities are there and my Government has done
much to get the right macro-and micro-economic settings
for business in this country to capitalise on them.
There are now stronger signs of economic recovery and of
an improvement in business conditions and the" economic
outlook. There are also signs that improvements in business
conditions are being reflected in employment.
Economic growth was 3.3 per cent to the June quarter, the
seventh consecutive quarter of growth.
Last week's balance of payments numbers showed a
strengthening trend to higher exports.
Conditions are right for further strengthening in
business investment growth. Interest rates are at an
historically low level.,
The world economy is picking up and this will further
strengthen our own recovery.
Australian industry is beginning to turn the corner.
orders are picking up.
An important factor behind the recovery in manufacturing
productionl has been the growth in manufactured exports
over the past year.
I commnend the South Australian Government for actively
supporting its exporters with the establishment of the
Strategic Trade Development Scheme and the New Exporters
Challenge Scheme.
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To further assist South Australian companies in their
export endeavours my government this week announced an $ 8
million expansion to the Export Access program.
I am also pleased to note that Mike Rann, the South
Australian Minister for Business and Regional Development
is working with Shane Stone of the Northern Territory to
pursue business opportunities in ASEAN, and particularly
in Indonesia. As you know the Northern Territory has
important business connections with Eastern Indonesia.
This partnership sends an important signal that our
States are not always competing with each other in trade,
but can collaborate in the national interest. Any
assistance that States can offer to each other can only
assist the overall future development of Australia.
We all know of the strong manufacturing base in South
Australia. South Australian exports of manufactures products have
been a notable highlight in the South Australian economy
in recent years.
And for every million of extra manufactures exports,
it is estimated that around 10 to 12 new manufacturing
jobs are created and this does not include flow-on
benefits to jobs in other sectors.
The world's major car manufacturers have gained
confidence in Australia's ability to produce world class
and competitive vehicles and components.
In South Australia General Motors Holden's Automtive Ltd
invested some $ 150 million in the construction of a state
of the art paint facility over the last year. It is
expected that further investments of over $ 500 million
will be made over the next four years.
Mitsubishi Motors Australia Ltd has also made significant
investments in recent years with $ 168 million being
invested in plant upgrade and a further $ 400 million
being invested in the development of new Magna/ Verada
cars due for release in 1997.
South Australia accounts for some 30 per cent of
Australia's automotive component exports.
There are some 20 automotive component manufacturing
companies in South Australia producing world class
products. Exports of automotive components totalled $ 150
million in 1992.
One example is Air international's South Australian
producti-on of automotive air conditioning systems, which
has gone from employing 20 people and annual sales of $ 1
million in 1991 to employing 160 people and sales in
excess of $ 100 million today. 2911
4
But there is also an important agricultural base in South
Australia. South Australia has made a serious commiitment
to develop and exploit its reputation as a producer of
aclean foodo.
A major focus for the Conurnwealth and States is to
maintain the momentum of micro-economic reform. It is
these reforms which directly influence business costs and
the capacity of individual enterprises to compete
successfully.
We have already made a lot of progress. we have opened
up the economy, floated the exchange rate, implemented
reforms on the waterfront, in the rail, road transport,
aviation and telecoimmunications industries. we have
established an orderly program for reducing protection
for our industries, and improving the capacity of the
economy to respond to the challenges of the international
marketplace. There is much more to do and governments are currently
considering reforms to the structure of our electricity,
water and gas industries.
I am pleased to say that South Australia is one of two
states which has made definite moves toward this goal.
Because of the efforts of Premiers Arnold and Goss the
construction of a second Moomba-Sydney gas pipeline to
supply South Australian ethiie to the ICI petrochemical
plant at Botany, NSW, is likely to go -ahead.
One of Australia's great export success stories is wine.
It has been going on f or some years now, but none has
been more impressive than the past year. The record
export performance for the month of September of 16
million litres exceeded the level of exports for the
whole of 1985-86.
South Australian wine exporters, as the premium wine
producers in Australia, have been at the forefront of
that export drive. They have proved that with the right
product and the right marketing there's enormous
potential for Australian agriculture and horticulture.
Asia represents enormous potential for wine exports.
South Korea alone is now importing over a million litres
of Australian wine per annum.
This willingness to seek out overseas markets for quality
products, in many cases to markets in our own region, is
a model for all.
The submarine project is an example of government and
industry working together. When I spoke at the launching
ceremony of the Collins submarine in August I
congratulated the South Australian government for its
foresight in backing the project.
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My Government recognises that it has a role to Play in
assisting Australian business change its approach and
move into the global marketplace.
Without that support and the support of South Australian
industry the project would never have achieved the
current high standards.
over 1000 new jobs have been created at the Australian
Submarine Corporation.
And several thousand other Australians have gained work
through sub-contracts. Here is an example of a
commi~ tment by a state government helping the growth not
only of their own state's industry, but also the growth
of Australia as a whole.
A project of the scope of the submarine project has
brought to Australia valuable technology transfer. In
addition, many Australian companies have refined
previously available technology.
The project is a catalyst for research and development,
design initiatives, improved production techniques, new
ways of testing and proving equipment, and so on.
The development of computer software to be used on board
the submnarine, the development of special tiles and the
successful reduction of noise in the pumps represent fine
examples of the development of previously available
technology. A number of those companies are South
Australian companies and represent potential exports for
Australia. On the broader front, my government's trade. policy
priorities are the successful conclusion to the Uruguay
Round and further development of APEC.
We strongly believe in maintaining and strengthening an
open, non-discriminatory multilateral trading system
based on the General Agreement of Tariffs and Trade
-( GATT). This interest is shared by our Asian trading
partniers because they depend on access to international
markets. We are concerned that some countries : Are taking a
particularly parochial and defensive approach in the
negotiations on the Uruguay Round. X comprehensive,
balanced agreement covering all sectors would benefit not
only Australia, but all nations.
Such an agreement is the most important achievement that
nations can make to stimulate world . growth and
confidence. 2913
My visit to Seattle to attend the APEC leaders meeting
next week will further underline the importance Australia
attaches to developments in our-region.
The Asia-Pacific region has emerged as the world's preeminent
economic region.
It has led the world in growth over the past two decades.
It now accounts for half the world's GDP and over half
the world's manufacturing production.
And the region's growth has been outward-looking. The
Asia-Pacific region is the fastest growing and most
integrated trading conriunity in the world.
The Asia-Pacific region accounts for some 40 per cent of
world trade. in 1992, 66 per cent of Asia-Pacific
exports stayed in the region. Trade within the region
now exceeds that of the European Commnunity.
And regional investment is growing even faster than
trade. In the period to 1997, 40 per cent of new global
investment demand will come from Asia.
The key challenge is to unlock the full economic
potential of the Asia-Pacific region. I believe Asia
Pacific Economic Co-operation APEC can play a
decisive role in meeting this challenge.
APEC shows great promise as a forum for promoting
reiional economic co-operation on a basis of open
regionalism. APEC is about removing impediments to doing
business in the Asia-Pacific region and increasing the
velocity of trade and investment for example by
harmonising standards.
I have made clear that the Government does not see APEC
as an alter-native to GATT but as a OGATT-plus' structure
which builds on GA!' outcomes. We do not have in mind
anything like the European Commiunity, which is a much
more formal, highly-structured and inward-looking
grouping. The informal Seattle meeting of APEC leaders in November
is a historic opportunity for the region. It will build
on the increasing economic integration of the APEC
economies and give expression to the growing sense of
commnunity in our region. And it will focus the world's
attention on the dynamism of Asia.
As I said recently in Jakarta, that meeting will be
supremely imporzant for the region. It will give APEC
leaders a chance to clear our collective minds about the
development of what is going to be a very significant
open regional grouping of countries.
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The active participation of the private sectors of the
APEC economues including Australian business is
integral to the success of APEC's further development.
Governments can set in place structures such as APEC to
help create the right environment for trade and
investment. But ultimately it is for business to trade
and invest.
To assist me in preparing for the Seattle leaders meeting
: have established an APEC Business Consultative Panel.
wdhich met t3r the first timne last week. in the meeting I
heard first hand the views of a group of senior
Australian business people on their ideas for the way
ahead for APEC.
As I said to the panel members. there is no road-map for
APEC. Alt is imp~ ortant to get the business coummunity
involved. Through APEC Australia, as a well-regarded
member of the Asia-Pacific region, can help put in place
structures which encourage economic co-operation and
integration. APEC will have done its job if it achieves
this.