f. t'i wi-SPEECH BY THE PRIME MINISTER
ECONOMIC ASSOCIATIONS LUNCH
TOKYO 16 MAY 1986
MR CHAIRMAN, DISTINGUISHED GUESTS, LADIES AND GENTLEMEN,
I AM DELIGHTED ONCE AGAIN TO BE YOUR GUEST AND TO HAVE THIS
OPPORTUNITY TO REVIEW THE VERY SIGNIFICANT PROGRESS MADE BY
BOTH OUR COUNTRIES SINCE MY LAST MEETING WITH YOU.
SUCCESSIVE GOVERNMENTS HAVE BEEN DEEPLY COMMITTED TO
PROVIDING AND SUSTAINING THE CLOSEST POSSIBLE CO-OPERATION
BETWEEN JAPAN AND AUSTRALIA. -INDEED THOSE EFFORTS HAVE BEEN
SO SUCCESSFUL I BELIEVE WE HAVE NOW REACHED A POINT WHERE WE
CAN TALK NOT ONLY IN TERMS OF CONSOLIDATING THE TRADITIONAL
TRADE AND INVESTMENT LINKS BETWEEN US. WE CAN ALSO TALK IN
TERMS OF DELIBERATELY MOVING TO DIVERSIFY THE RELATIONSHIP
INTO THE NEW GROWTH AREAS BEING THROWN UP BY THE RAPIDLY
CHANGING CHARACTER OF OUR RESPECTIVE ECONOMIC STRUCTURES,
WHEN I SPOKE TO YOU TWO YEARS AGO I REPORTED ON THE
OPTIMISTIC OUTLOOK FOR THE AUSTRALIAN ECONOMY. I SUGGESTED
THAT THIS OUTLOOK, COMBINED WITH THE PROSPECT OF BETTER
ECONOMIC TIES WITH" JAPAN, PROVIDED AN ENVIRONMENT WITHIN
WHICH EACH OF US COULD ADDRESS THE OPPORTUNITIES PRESENTED
BY STRUCTURAL CHANGE IN OUR TWO ECONOMIES FOR DEVELOPING A
MORE BROADLY-BASED AND COMPLEMENTARY TRADING RELATIONSHIP,
I BELIEVE MY CONFIDENCE AT THAT TIME WAS NOT MISPLACED,
PERHAPS MORE IMPORTANTLY, IBELIEVE BOTH OUR COUNTRIES HAVE
SUCCESSFULLY EMBARKED ON THE PROGRAMS OF STRUCTURAL
TRANSFORMATION WHICH ARE SO NECESSARY IF WE ARE TO SUSTAIN
AND FURTHER ENHANCE THE LIVING STANDARDS OF OUR PEOPLES,
THE AUSTRALIAN GOVERNMENT HAS VIGOROUSLY PURSUED POLICIES TO
IMPROVE OUR COMPETITIVENESS IN THE WORLD ECONOMY. WE RECOGNISE
THE FUNDAMENTAL IMPORTANCE OF PROVIDING A STABLE DOMESTIC
MACRO-ECONOMIC ENVIRONMENT TO ENABLE THE DYNAMISM AND
CREATIVENESS OF OUR INDUSTRIAL SECTOR CAPABLE TO RESPOND TO
CHANGING TRADE PRESSURES AND TO THE OPPORTUNITIES ASSOCIATED
WITH CHANGING WORLD DEMAND PATTERNS AND TECHNOLOGICAL DEVELOPMENT,
WHEN I SPOKE TO YOU TWO YEARS AGO I SET OUT AN ECONOMIC
STRATEGY BASED ON ACHIEVING A GREATER DEGREE OF CONSENSUS
BETWEEN AUSTRALIANS ABOUT. BOTH THE NEED TO ACHIEVE FASTER
SUSTAINED ECONOMIC GROWTH AND OF THE BEST MEANS TO ACHIE VE
IT. THE APPROACH WAS NOVEL IN AUSTRALIA, THOUGH, WITH DUE
ALLOWANCE FOR OUR DIFFERENT INSTITUTIONAL STRUCTURES, WAS
LESS SO IN JAPAN.
I AM PLEASED TO REPORT THAT AUSTRALIA IS NOW A VERY
DIFFERENT ECONOMY BECAUSE OF THAT STRATEGY. THE MOST
OBVIOUS MANIFESTATION IS THAT AUSTRALIA IS ABOUT TO COMPLETE
ITS THIRD YEAR IN WHICH ECONOMIC GROWTH HAS AVERAGED 5 PER
CENT. MOREOVER EMPLOYMENT HAS GROWN BY MORE IN THE PAST
THREE YEARS THAN IT HAD IN ALL OF THE SEV/ EN YEARS WHICH
PRECEDED IT.
NATURALLY li AND my GOVERNMENT, ARE PROUD OF THAT
ACHIEVEMENT, BUT WE ARE EVEN MORE PROUD OF THE QUITE
REMARKABLE CHANGE IN ECONOMIC FUNDAMENTALS WHICH HAS ALSO
BEEN PUT IN. PLACE.
THESE INCLUDE REAL UNIT LABOUR COSTS, THE SHARE OF PROFITS
IN GDP AND THE. LEVEL OF AUSTRALIA'S INTERNATIONAL
COMPETITIVENESS EACH BEING AT THE MOST FAVOURABLE LEVEL FOR
INVESTMENT IN 15 YEARS. THEY INCLUDE A FIRM APPROACH TO
FISCAL RESTRAINT WHICH HAS ENABLED THE FED* ERAL GOVERNMENT TO
HALVE ITS INHERITED DEFICIT AS A PROPORTION OF GDP IN JUST
THREE B. UDGETS, AN ACHIEVEMENT WE INTEND TO PRESERVE.
THEY ALSO INCLUDE A NUMBER OF INITIATIVES TO ENCOURAGE MORE
OPEN ECONOMIC STRUCTURES IN AUSTRALIA, ABOUT WHICH I WILL
SAY MORE LATER, AND MEASURES TO BEGIN TO ELIMINATE
UNNECESSARY REGULATION OF THE AUSTRALIAN ECONOMY. THESE
MEASURES HAVE BEEN MOST NOTABLE IN A RADICALLY TRANSFORMED
FINANCIAL SECTOR. BUT THEY ALSO APPLY MORE GENERALLY, AND
INCLUDE THE LIBERALISATION OF SOME EXPORT CONTROLS AND THE
INITIATION OF A PROGRAM TO SCRUTINISE NEW REGULATIONS AND
TO REVIEW EXISTING BUSINESS REGULATION SO A-S TO ELIMINATE
THOSE WHICH CAN NO LONGER BE JUSTIFIED.
AUSTRALIA'S APPARENT INFLATION RATE HAS STEPPED UP RECENTLY,
PARTICULARLY UNDER THE LAGGED IMPACT OF THE 1985 FALL IN THE
$ A ON THE PRICE OF IMPORTED GOODS AND THEIR CLOSE
SUBSTITUTES. HOWEVER MECHANISMS ARE IN PLACEj IN THE
CONTEXT OF OUR PRICES AND INCOMES POLICY, TO MINIMIZE THE
EXTENT TO WHICH THESE INCREASES PASS THROUGH INTO WAGES AND
THUS OUR DOMESTIC COST STRUCTURE, AGAINST THE BACKGROUND
ALSO OF LOWER CRUDE OIL PRICES THIS IS EXPECTED TO PRODUCE A
SHARP DECLINE IN OUR INFLATION RATE IN COMING QUARTERS,
BEGINNING WITH THE CURRENT JUNE QUARTER.
ONE UNWANTED BY-PRODUCT OF AN UNSUSTAINABLY FAST PACE OF
DOMESTIC DEMAND IN AUSTRALIA IN THE SECOND HALF OF 1985 WAS
A SOLID RISE IN OUR CURRENT ACCOUNT DEFICIT, THE UPWARD
PRESSURE FROM THAT SOURCE WAS COMPOUNDED BY A VERY SHARP
DETERIORATION IN OUR TERMS OF TRADE A DETERIORATION WHICH
IT HAS BEEN ESTIMATED IS ADDING, IN ANNUAL TERMS, ABOUT 1 3/ 4
PER CENT OF GDP TO OUR CURRENT ACCOUNT DEFICIT.
PARTLY REFLECTING THE NEED TO SECURE AN ADJUSTMENT OF OUR
EXTERNAL ACCOUNT, ECONOMIC POLICY HAS. BEEN DIRECTED FOR SOME
TIME TO SLOWING THE PACE OF DOMESTIC DEMAND ANDACTIVITY,
AS A CONSEQUENCE ECONOMIC GROWTH IS EXPECTED TO MODERATE TO
AROUND 3,5' PERCENT IN THE YEAR BEGINNING JULY 1986. GROWTH
OF THIS MAGNITUDE WILL ENABLE FURTHER EMPLOYMENT GAINS WHILE
UNDERPINNING AN -IMPROVEMENT IN BOTH OUR CURRENT ACCOUNT AND
INFLATION RATE.
WE DO NOT UNDERESTIMATE THE MAGNITUDE OF THE CHALLENGE FACING
US AS. A COMMUNITY TO ACHIEVE THE RIGHT BALANCE BETWEEN OTHER
REQUIREMENTS FOR GROWTH AND THE DISCIPLINE OF TH EXTERNAL
ACCOUNT. BUT AS, TOGETHER, AFTER 1983 WE BROUGHT OURSELVES
OUT OF THE WORST RECESSION IN FIFTY YEARS I BELIEVE THE
GOVERNMENT AND PEOPLE OF AUSTRALIA HAVE THE CAPACITY TO MEET
AND OVERCOME THIS CHALLENGE,
THE STABLE MACRO-ECONOMIC POLICY WE HAVE PROVIDED AND ITS
RESULTANT ECONOMIC GROWTH ARE ALLOWING US TO PURSUE POLICIES
DESIGNED TO DEVELOP A MORE DYNAMIC AND INTERNATIONALLY
COMPETITIVE INDUSTRIAL BASE. THIS. IS REFLECTED IN OUR
APPROACH TO ENCOURAGING MORE EFFICIENT USE OF NEW TECHNOLOGIES
IN INDUSTRY, AND IN SECTORAL PLANS WHICH FACILITATE
RESTRUCTURING AND A GRADUAL REDUCTION IN INDUSTRY PROTECTION.
ONE EXAMPLE IS T'HE GOVERNMENT'I S RESTRUCTURING PLAN FOR OUR
MOTOR VEHIC LE INDUSTRY. AN OFTEN OVERLOOKED FACT IS THAT
AUSTRALIA IS JAPAN'S THIRD LARGEST MARKET FOR MOTOR VEHICLES
AND A LARGE PROPORTION OF DOMESTICALLY PRODUCED VEHICLES ARE
PRODUCED BY JAPANESE COMPAN IES. THIS IS AN AREA IN WHICH
THERE IS SUBSTANTIAL JAPANESE INVESTMENT IN OUR COUNTRY.
UNDER THE PRESENT ARRANGEMENTS QUOTA RESTRICTIONS ON IMPORTED.
VEHICLES ARE BEING RELAXED GRADUALLY. IT IS EXPECTED THAT
THERE WILL BE A REDUCTION IN THE NUMBER OF MANUFACTURING
GROUPS AND LOCALLY PRODUCED MODELS. THIS SHOULD PROVIDE FOR
IMPROVED EFFICIENCY AND COMPETITIVENESS OF THE LOCAL INDUSTRY,
AND AT THE SAME TIME PROVIDE OVERSEAS SUPPLIERS WITH IMPROVED
MARKET ACCESS.
THE* RATIONALISATION NOW UNDERWAY WITHIN THE INDUSTRY, COMBINED
WITH EXCHANGE RATE MOVEMENTS, HAS ALREADY HAD BENEFICIAL
EFFECTS, AUSTRALIA IS EXPORTING INCREASING QUANTITIES OF
AUTOMOTIVE PARTS AND CARS, INCLUDING TO THE UNITED STATES AND
JAPAN. FOR EXAMPLE, MITSUBISHI MOTORS AUSTRALIA LTD RECENTLY
ANNOUNCED EXPANSION* PLANS IN ORDER TO. MEET A VERY SUBSTANTIAL
EXPORT ORDER FOR AUTOMOTIVE PARTS TO ITS PARENT COMPANY HERE
IN JAPAN, MITSUBISHI AUSTRALIA EXPECTS TO INCREASE EXPORTS
OF CYLINDER HEADS FROM 6,000 UNITS To 26,000 UNITS PER MONTH...
IN THE HIGHLY COMPETITIVE AUTOMOTIVE FIELD T'HESE SUCCESSES
REFLECT BOTH THE PRICE COMPETITIVENESS AND THE QUALITY OF
OUR PRODUCTS.
THE STEEL PLAN IS ANOTHER EXAMPLE OF OUR APPROACH TO INDUSTRY
POLICY. THE AIM OF THE PLAN IS'TO RESTORE THE VIABILITY
AND COMPETITIVENESS OF THE AUSTRALIAN STEEL INDUSTRY. THE
PLAN COMMITS THE INDUSTRY AND ITS WORKFORC E. TO WORK TOGETHER
TO REDUCE PRODUCTION COSTS AND TO IMPROVE EFFICIENCY AND
PRODUCT QUALITY. OUR STEEL INDUSTRY HAS NOW RETURNED TO
SOUND PROFITABILITY.
THE SUCCESS OF THIS PLAN IS NOW THERE FOR ALL TO SEE, 1985
WAS A YEAR OF CONTINUED IMPROVEMENT IN PRODUCTION, EXPORTS,
PRODUCTIVITY AND MARKET SHARE OF THE AUSTRALIAN STEEL
INDUSTRY, THE WEIGHTED AVERAGE PRICE INCREASE ACROSS THE
INDUSTRY'S PRODUCT-RANGE WAS'HELD To 3,36 PE RCENT IN 1985
WHILE EXPORT SALES OVER 19814 INCREASED By 71 PERCENT. A
PARTICULARLY PLEASING FEATURE OF THE INDUSTRY'S RECENT
PERFORMANCE HAS BEEN THE LOW LEVEL OF MAN HOURS LOST DUE TO
INDUSTRIAL DISPUTATION. LOSSES IN THE DECEMBER QUARTER WERE
THE LOWEST SINCE OUR STEEL INDUSTRY PLAN COMMENCED, AT THE
SAME TIME PRODUCTIV'ITY IS BEING MAINTAINED AT VERY HIGH
LEVELS.
THIS IMPROVEMENT IN INDUSTRIAL RELATIONS IN THE AUSTRALIAN
STEEL INDUSTRY IS NOT UNIQUE TO THAT INDUSTRY, FIGURES
RELEASED IN AUSTRALIA EARLIER THIS WEEK SHOWED THAT THE
LEVEL OF WORKING DAYS LOST THROUGH INDUSTRIAL DISPUTES
DURING JANUARY THIS YEAR WAS THE LOWEST FOR ANY MONTH FOR
ALMOST 19 YEARS SINCE DECEMBER 1967.
THIS ' CONTINUES A PATTERN NOW WELL ESTABLI SHED-UNDER MY
GOVERNMENT, SINCE 1983. WE HAVE SECURED'A DRAMATIC LESSENING
OF INDUSTRIAL CONFLICT IN AUSTRALIA. INDEED THE AVERAGE
ANNUAL NUMBER OF MAN DAYS LOST IN INDUSTRIAL DISPUTES IN
AUSTRALIA IN THE 3 YEARS SINCE MY GOVERNMENT'S ELECTION IS
WELL UNDER HALF-THE AVERAGE OF THE PRECEDING 7 YEARS.
THIS IMPRESSIVE RECORD STARKLY ILLUSTRATES THE SUCCESS OF.
OUR GOVERNMENT'. S PRICES AND INCOMES ACCORD AND OUR
INDUSTRIAL RELATIONS POLICIES.
WHEN THE SITUATION WAS LESS SATISFACTORY WE WERE,
UNDERSTANDABLY,, OFTEN MADE AWARE OF THE PROBLEM BY PEOPLE
INVOLVED IN TRADE BETWEEN OUR TWO COUNTRIES. INDEED IT WAS
OFTEN ADVANCED AS A REASON FOR DIVERSIFICATION OF SUPPLY
AWAY FROM AUSTRALIA, IF SUCH A PROPOSITION EVER HAD ANY
SU. BSTANCE,, THEN WE BELIEVE FULL AND EFFECT-IVE RECOGNITION
SHOULD IN TURN BE GIVEN TO THE QUITE DRAMATIC IMPROVEMENT IN
OUR INDUSTRIAL RELATIONS RECORD,
I KNOW THAT JAPAN TOO, HAS BEEN ACTIVE IN PURSUING POLICIES
TO BETTER INTEGRATE ITS ECONOMY INTO THE INTERNATIONAL
TRADING SYSTEM. WE RECOGNISE YOUR MOVES TO IMPROVE ACCESS
FOR FOREIGN MANUFACTURED GOODS INTO YOUR MARKET THROUGH
JAPAN'S MARKET OPENING MEASURES, AND YOUR COMMITMENT TO
STRENGTHEN THE OPEN INTERNATIONAL TRADING FRAMEWORK, OUR
JAPAN MARKET STRATEGY IS DESIGNED TO EXPLOIT THE OPPORTUNITIES
OPENED TO US BY THESE MEASURES, IAM SURE YOU WILL UNDERSTAND
THAT FROM AUSTRALIA'S POINT OF VIEW, HOWEVERi WE REMAIN
CONCERNED THAT THE AGRICULTURAL SECTOR HAS BEEN LARGELY EXCLUDED
FROM YOUR MEASURES TO DATE.
AUSTRALIA HAS A PARTICULAR CONCERN ABOUT-THE GROWING TENSIONS
IN THE INTERNATIONAL TRADING ENVIRONMENT WHICH HAVE ARISEN
LARGELY AS A RESULT OF INCREASING PROTECTIONISM AND DISTORTIONS
CAUSED BY UNFAIR TRADING PRACTICES. WE ARE PARTICULARLY
CONCERNED WHEN SUCH TENSIONS LEAD TO BILATERAL SOLUTIONS THATHAVE
LITTLE REGARD TO THE INTERESTS OF THIRD COUNTRIES.
PERHAPS NOWHERE ARE THE DISTORTIONS IN INTERNATIONAL TRADE MORE
EVIDENT THAN IN THE AG RICULTURAL SECTOR, TRADE IN-THAT SECTOR
IS CHARACTERISED BY INCREASING RESORT TO QUANTITATIVE ! IMPORT
RESTRI6CTIONS* AND EXTE. NS lYE SUBSIDY PRACTICES. YOU WILL
UNDERSTAND, I AM SURE, THAT FOR A COUNTRY SUCH As AUSTRALIA,
WHICH EXPORTS AROUND 80 PERCENT OF ITS PRINCIPAL AGRICULTURAL
PRODUCTS, THE CORRUPTION OF INTERNATIONAL AGRICULTURAL MARKETS
IS CAUSING SERIOUS INJURY TO OUR NATIONAL INTERESTS.
AGAINST THIS BACKGROUND, AUSTRALIA WELCOMED THE TOKYO SUMMIT' S
RECOGNITION OF THE CONTEMPORARY CRISIS IN AGRICULTURE, AUSTRALI. A
PARTICULARLY APPRECIATED THE SUMMIT'S AGREEMENT THA T WHERE
GLOBAL STRUCTURAL AGRICULTURAL SURPLUSES EXIST, ACTION SHOULD
BE TAKEN TO RE-DIRECT POLICIES AND TO ADJUST THE STRUCTURE OF
AGRICULTURE IN THE LIGHT OF WORLD DEMANDS
AUSTRALIA ALSO SUPPORTS THE TOKYO SUMMIT'S CALL FOR THE EARLY
LAUNCHING OF THE NEW ROUND OF MULTILATERAL TRADE NEGOTIATIONS.
INDEED WE WOULD WANT AND WILL CONTINUE WORKING HARD TO SEE
THAT THE ROUND IS LAUNCHED IN SEPTEMBER AN OBJECTIVE I BELIEV/ E
JAPAN STRONGLY SHARES WITH AUSTRALIA.
IT IS IN THE INTERESTS OF ALL COUNTRIES TO SEE THAT
EFFECTIVE NEGOTIATIONS COMMENCE AS SOON AS POSSIBLE TO HALT
THE INCREASING SPREAD OF PROTECTIONISM, IT IS EQUALLY
IMPORTANT THAT WE AVOID PROTRACTED NEGOTIATIONS ON THE
MECHANICS OF HOW THE ROUND.-SHOULD PROCEED, WE MU ST ALL GET
DOWN TO THE TASK OF WINDING BACK THE CONSTRAINTS NOW
CRIPPLING WORLD TRADE&
FOR THE NEW ROUND TO SUCCEED IT WILL BE IMPORTANT THAT THERE
BE BROAD BASED SUPPORT FROM AS MANY COUNTRIES AS POSSIBLE.
IN TURN THIS WILL REQUIRE THAT THE NEW ROUND ADDRESS
PROPERLY THE WIDE RANGE OF INTERESTS THAT CAN BE EXPECTED TO
BE HELD BY COUNTRIES AT DIFFERENT STAGES OF ECONOMIC DEVELOPMENT.
IN THIS REGARD, THE MANNER IN WHICH AUSTRALIA AND JAPAN HAVE
WORKED TOGETHER WITH OTHER COUNTRIES IN THE REGION IN
PREPARATION FOR THE NEW ROUND HAS BEEN TO THE SIGNIFICANT
ADVANTAGE OF ALL THE COUNTRIES CONCERNED. THIS EXERCISE OF
DEVELOPING SHARED PERSPECTIVES AND IDEAS HAS BEEN AN IMPORTANT
PART OF SECURING EFFECTIVE ATTENTION TO THE ISSUES OF
IMPORTANCE TO THE COUNTRIES OF THIS REGION. THE FORTHCOMING
MEETING IN MANILA, TO BE HELD AT EITHER SENIOR OFFICIAL OR
MINISTERIAL LEVEL, ASSUMES A PARTICULAR IMPORTA" NNCE BECAUSE
IT WILL COME ON THE EVE OF THE GATT MINISTERIAL MEETING IN
GENEVA IN SEPTEMBER.
LET ME SAY THAT AUSTRALIA WELCOMES THE THRUST OF THE RECENTLY
RELEASED MAEKAWA REPORT AS A POSITIVE STE? WITHIN THE
BROADER DEVELOPMENT OF POLIC IY DIRECTIONS IN JAPAN. THE REPORT
HIGHLIGHTS THE IMPORTANCE OF STRUCTURAL ADJUSTMENT OVER THE
LONG-TERM AND FOR POLICIES WITH A GREATER EMPHASIS ON, MARKET*
PRINCIPLES AND LOWER PROTECTION LEVELS,. I LOOK FORWARD TO
HEARING OF THE PROGRESS BEING MADE IN DEVELOPING SPECIFIC
POLICIES FOR IMPLEMENTING THE REPORT'S RECOMMENDATIONS.
THE PROCESS OF STRUCTURAL ADJUSTMENT ALREADY TAKING PLACE IN
OUR TWO COUNTRIES. AND THE POLICY DIRECTION ARTICULATED BY
MY GOVERNMENT AND SUGGESTED IN THE MAEKAWA REPORT, OFFER THE
PROSPECT OF BROADENING THE AUSTRALIA/ JAPAN RELATIONSHIP,
BASED ON THE CHANGING COMPLEMENTARITY OF OUR TWO ECONOMIES.
As INDUSTRIES IN BOTH OUR COUNTRIES RATIONALISE THEIR
ACTIVITIES NEW TRADING OPPORTUNITIES WILL BE OPENED UP, FOR
EXAMPLE, WE IN AUSTRALIA ARE SEEKING TO TRANSFORM OUR
INDUSTRIAL STRUCTURE TO GIVE GREATEST EMPHASIS TO AREAS IN
WHICH WE ARE MOST COMPETITIVE. UNDER YOUR BROAD APPROACH TO
INDUSTRY POLICY, I EXPECT A SIMILAR PROCESS WILL OCCUR IN
JAPAN.
WITH THE DIFFERENCES IN* RESOURCE ENDOWMENTS, THE TECHNOLOGICAL
BASE AND TECHNICAL SKILLS IN OUR TWO COUNTRIES, IT IS EXPECTED
THAT THIS PROCESS WILL PROVIDE OPPORTUNITIES FOR INCREASED
TRADE IN A DIVERSE RANGE OF PRODUCTS. THIS CHANGING
COMPLEMENTARITY, ASSOCIATED WITH THE STRUCTURAL ADJUSTMENT
PROCESS, WILL PROVIDE SCOPE FOR A BROADENING OF OUR TRADE
PATTERNS, WITH THE PEOPLE OF BOTH COUNTRIES BENEFITING
THROUGH ACCESS TO MORE COMPETITIVELY PRICED PRODUCTS,
THERE WILL ALSO BE SCOPE FOR INCREASED INDUSTRIAL CO-OPERATION
IN THE FORM OF THE EXCHANGE OF TECHNOLOGY AND INVESTMENT
FLOWS. ONE EXAMPLE OF HOW THIS COULD BE ACHIEVED IS THE WORK
OF YOUR ORGANISATION, THE JAPAN EXTERNAL TRADE ORGANISATION
( JETRO) IN PROMOTING CO-OPERATION THROUGH JOINT VENTURES,
TECHNOLOGY AGREEMENTS AND JOINT MARKETING OPERATIONS. OTHER
INITIATIVES ARE ALSO BEING DEVELOPED IN THIS AREA,
As THE PROCESS OF STRUCTURAL ADJUSTMENT PROCEEDS, I EXPECT
THERE WILL BE INCREASING PROSPECTS FOR BENEFICIAL INVESTMENT
BY JAPANESE COMPANIES IN AUSTRALIA OVER A BROAD RANGE OF
AUSTRALIAN MANUFACTURING AND SERVICE INDUSTRIES.
JAPAN FOR A LONG TIME HAS UNDERTAKEN CONSIDERABLE INVESTMENT
IN AUSTRALIA. WE WELCOME FOREIGN INVESTMENT THAT PROVIDES
WORTHWHILE BENEFITS TO OUR ECONOMY, AND RECENT CHANGES TO
OUR FOREIGN INVESTMENT POLICY GUIDELINES HAVE SIMPLIFIED AND
RATIONALISED THE PROCEDURES FOR MOST FOREIGN. INVESTORS.
WISHING TO PARTICIPATE IN OUR DEVELOPMENT.
WE HOPE THAT THESE CHANGES, COMBINED WITH OUR VERY ISOUND
ECONOMIC PERFORMANCE OVER RECENT YEARS AND OUR APPROACH TO
INDUSTRY POLICYj WILL PROVIDE A BASIS FOR AN INCREASE IN THE
HIGH LEVEL OF COMMERCIAL JAPANESE INVESTMENT ALREADY BEING
ATTRACTED To AUSTRALIA. I AM ALSO SURE THAT THERE MUST BE
SIMILAR POSSIBILITIES FOR AUSTRALIAN COMMERCIAL INVESTMENT
IN JAPAN.
IN ORDER THAT BOTH OUR COUNTRIES MIGHT EXPLORE THE
POSSIBILITIES OF FURTHER INDUSTRIAL CO-OPERATION AND, IN
PARTICULAR, THE OPPORTUNITIES THAT EXIST FOR INVESTMENT IN
EACH COUNTRY, MR NAKASONE AND I HAVE AGREED IN PRINCIPLE THAT
IT WOULD BE DESIRABLE TO HAVE AN EXCHANGE OF INVESTMENT
MISSIONS: DETAILS AND TIMING WILL BE DISCUSSED BETWEEN
GOVERNMENT OFFICIALS AND REPRESENTATIVES OF THE PRIVATE
SECTOR. THE OBJECTIVE OF THIS INITIATIVE IS TO'LINK MORE
CLOSELY THE STRUCTURAL ADJUSTMENT. PROCESSES WHICH ARE TAKING
PLACE IN BOTH OUR COUNTRIES. THE MISSIONS WOULD SEEK TO
IDENTIFY SPECIFIC INVESTMENT PROPOSALS WHICH WOULD FURTHER
ENHANCE THE PROSPE CTS FOR INDUSTRIAL CO-OPERATION BETWEEN
AUSTRALIA AND JAPAN.
AT THE TIME OF MY LAST-ADDRESS TO YOU, IN 198' 4, WE HAD-JUST-
* BEGUN THE PROCESS OF FINANCIAL DEREGULATION IN AUSTRALIA
WITH THE REMOVAL OF MOST EXCHANGE CONTROLS AND THE FLOATING
OF THE AUSTRALIAN DOLLAR. I AM PLEASED TO REPORT THAT WE
HAVE TAKEN SUBSTANTIAL ADDITIONAL MEASURES SINCE WHICH HAVE
RADICALLY TRANSFORMED THE AUSTRALIAN FINANCIAL SYSTEM. IN
DOING SO WE HAVE ALLOWED SUBSTANTIALLY GREATER PARTICIPATION BY
FOREIGN COMPANIES IN OUR FINANCE SECTOR. JAPAN HAS FIGURED
PROMINENTLY IN THIS DEVELOPMENT,
APPROVAL WAS GIVEN rI1N9 85 FOR 23 JAPANESE BANKS, TRUST
BANKS AND SECURITIES COMPANIES TO EITHER MOVE TO 100 PERCENT
OWNERSHIP OF EXISTING MERCHANT BANKS IN AUSTRALIA ' OR TO
ESTABLISH IN AUSTRALIA NEW WHOLLY-OWNED MERCHANT BANKING
OPERATIONS. IN ADDITION 3 OF THE 16 NEW BANKS WHICH HAVE
BEEN ADMITTED OVER THESE 2 YEARS INVOLVE JAPANESE INTERESTS
AND ENJOY FULL B ANKING STATUS IN THE AUSTRALIAN FINANCIAL
COMMUNITY, THIS-IS A CLEAR EARNEST NOT ONLY OF OUR
COMMITMENT TO DEREGULATE WHERE IT IS BENEFICIAL TO DO SO
BUT ALSO OF THE IMPORTANCE WHICH WE ATTACH TO OUR RELATIONSHIP
WITH JAPANI
IHOPE THAT THE ACCOMMODATING POLICY ON THE AUSTRALIAN SIDE
WILL BE REFLECTED IN CONTINUED LIBERALISATION OF THE
JAPANESE BANKING SYSTEM AND ENHANCED OPPORTUNITIES FOR
AUSTRALIAN BANKS IN JAPAN. THE PRESENCE OF THESE
INSTITUTIONS PROVIDE A VALUABLE LINK IN FACILITATING THE
FLOW OF TWO-WAY TRADE AND INVESTMENT BETWEEN OUR ECONOMIES.
TOURISM IS ANOTHER AREA OF CONSIDERABLE POTENTIAL IN THE
DEV/ ELOPMENT IN OUR RELATIONSHIP. THERE ARE NOW MORE THAN
100,000 JAPANESE VISITING AUSTRALIA EACH YEAR. THIS.
PROVIDES AN IMPORTANT LINK THROUGH WHICH THE PEOPLES OF OUR
COUNTRIES CAN DEVELOP A BETTER UNDERSTANDING OF EACH OTHERS'
SOCIETIES AND. CULTURES. THE GROWTH OF TOURISM IN AUSTRALIA
WILL PROVIDE A FURTHER OPPORTUNITY FOR-JAPANESE INTERESTS
TO SEEK OUT INVESTMENTS IN REAL ES$ TATE, HOTELS AND OTHER
ASPECTS OF OUR HOSPITALITY INDUSTRY.
THESE ARE. BUT A FEW EXAMPLES OF THE MORE GENERAL OPPORTUNI TIES
NOW AVAILABLE TO JAPAN IN THE AUSTRALIAN MARKET.
OF COURSE, EVEN WHILE WE EACH PURSUE THE OPPORTUNITIES FOR
DEVELOPING NEW LINKS BETWEEN OUR TWO COUNTRIESi THE
TRADITIONAL BASE OF OUR RELATIONSHIP WILL CONTINUE TO
PROVIDE THE SOLID FOUNDATION OF OUR ECONOMIC ASSOCIATION IN
THE FORESEEABLE FUTURE, TRUE, THE GROWTH IN-MINERALS TRADE
IS NOT LIKELY TO CONTINUE TO BE AS RAPID AS IT HAS BEEN IN
THE PAST. THI'S IN PART REFLECTS THE FACT THAT YOUR INDUSTRY
IS GRADUALLY MOVING OUT OF SOME OF THE MORE ENERGY INTENSIVE
PRODUCTION PROCESSES. HOWEVER TRADE IN MINERALS WILL
CONTINUE TO BE IMPORTANT FOR BOTH OUR COUNTRIES.
JAPAN WILL CONTINUE TO BE A MAJOR MARKET FOR AUSTRALIAN
PRODUCTS, INCLUDING IRON ORE AND COAL. AT THE SAME TIME
G-IVEN THE PRESSURES ON JAPANESE INDUSTRY TO MAINTAIN THEIR
COMPETITIVENESS IN THE LIGHT OF THE APPRECIATION OF THE YEN,
IT WILL BE INCREASINGLY IMPORTANT THAT YOU HAVE CONTINUED
ACCESS TO THE WORLD'IS MOST COMPETITIVELY PRICED MINERAL
INPUTS. I WOULD LIKE TO SUGGEST THAT AUSTRALIA IS THE
MOST RELIABLE AND COMPETITIVE SUPPLIER OF MANY OF THESE
PRODUCTS.
AUSTRALIA WELCO* MES REPORTS THAT JAPAN IS DETERMINED TO
PROMOTE POLICIES AIMED AT REDUCING ITS DEPENDENCE ON HIGH
COST LOCAL SUPPLIES OF COAL, AND WE WILL BE LOOKING FOR
THIS TO BE REFLECTED IN THE EIGHTH COAL PLAN. I DO NOT THINK
WE CAN OVER-EMPHASISE THE IMPORTANCE TO BOTH OUR COUNTRIES
OF AUSTRALIA BEING GIVEN THE OPPORTUNITY OF COMPETING ON A
COMMERCIAL BASIS FOR ADDITIONAL IMPORT TONNAGE ASSOCIATED
WITH THESE POLICIES.
JAPAN WILL ALSO CONTINUE TO BE AN IMPORTANT MARKET FOR OUR
AGRICULTURAL PRODUCTS ESPECIALLY FOR WOOL AND BEEF. THE
tIAEKAWA REPORT NOTES THE DESIRABILITY OF JAPAN DEVELOPING
AGRICULTURAL POLICIES " MORE BEFITTING TO AN AGE OF
INTERNATIONALISM 11.
12.
ON OCCASIONS IN THE PAST SPOKESMEN FOR JAPAN HAVE, RIGHTLY,
EXERCISED THE PREROGATIVE OF FRIENDS TO POINT OUT A DIVERGENCE
BETWEEN RHETORIC AND FACT IN RELEVANT ASPECTS OF THE
AUSTRALIAN SCENE INDUSTRIAL RELATIONS COMES READILY TO MIND.
My GOVERNMENT HAS, AS I HAVE INDICATED, DEL IVERED HANDSOMELY
IN THIS . AREA.
EXERCISING THE SAME PREROGATIVE OF A FRIEND MAY I EXPRESS
THE FIRM HOPE THAT THESE IMPECCABLE PRINCIPLES OF THE
MAEKAWA REPORT WILL BE TRANSLATED INTO DECISIVE ACTION.
IN MY VIEW, THE REPORT CORRECTLY RECOGNISES THE BENEFITS
THAT WILL FLOW TO BOTH THE JAPANESE CONSUMER AND TO YOUR
TRADING PARTNERS FROM THE DEVELOPMENT OF MORE OPEN
AGRICULTURAL MARKETS. As You PURSUE SUCH POLICIES, FURTHER
OPPORTUNITIES WILL BE PROVIDED FOR AUSTRALIA TO INCREASE OUR
COMMERCIAL SUPPLIES OF AGRICULTURAL PRODUCTS TO YOUR MARKET.
LADIES AND GENTLEMEN, I THANK YOU FOR THE OPPORTUNITY TO
ADDRESS YOU TODAY. CHANGES OCCURRING IN THE INTERNATIONAL
ECONOMIC SYSTEM PROVIDE INCREASING CHALLENGES AND
OPPORTUNITIES FOR BOTH OUR COUNTRIES. I LOOK FORWARD TO US
WORKING TOGETHER WITH OTHER COUNTRIES IN THE REGION, TO
ENSURE A REVERSAL OF THE CORRUPTION WE HAVE SEEN IN THE
INTERNATIONAL TRADING SYSTEM. AT THE SAME TIME, THE
APP ROACHES OF BOTH OUR GOVERNMENTS TO THE FURTHER OPENING
UP OF OUR MARKETS PRESENTS INCREASING OPPORT UNITIES TO
CONSOLIDATE AND TO BROADEN THE AUSTRALIA/ JAPAN RELATIONSHIP.
TRADE IN TRADITIONAL PRODUCTS WILL CONTINUE TO BE IMPORTANT,
BUT THERE WILL BE NEW OPPORTUNITIES ARISING FROM OURECONOMIC
COMPLEME NTARITY, FROM INDUSTRIAL CO-OPERATION THROUGH
MORE BROADLY BASED TRADE AND INVESTMENT IN MANUFACTURES AND
IN AREAS SUCH AS BANKING AND TOURISM, WHILE OUR GOVERNMENTS
WILL WORK TO ENSURE AN APPROPRIATE FRAMEWORK IS PROVIDED, IT
IS ULTIMATELY UP TO THE PRIVATE SECTOR TO TAKE UP THOSE
OPPORTUNITIES TO THE BENEFIT OF BOTH OUR COUNTRIES. I WISH
YOU EVERY SUCCESS. I I I I, a I I a I I I I I I 1 1S 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1