CEKAGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER OF AUSTRALIA
HON. R. J. L. HAWKE M. P.
ALL JAPAN CHAMBERS OF COMMCE
TOKYO 20 SEPTEMBER 1990
With every return visit to Tokyo and Japan and this is now
my fourth visit as Prime Minister of Australia this city
and this country impress me anew with their sense of
heightened energy and self-confidence.
Japan is truly at the leading edge of technology and
industry, and to visit Japan is to recognise how those human
skills created what has become one of the most dynamic,
productive and powerful economies of the world.
So let me at the outset thank the All Japan Chambers of
Commerce for its generous invitation to address this
gathering and to talk with you about the future of the
Australia-Japan economic relationship.
It is now some decades since Australia and Japan recognised
the close complementarity of our economies and embarked on
the development of what has become for both of us an
extraordinarily important and lucrative trading
relationship.
The statistics of this trade speak for themselves: the
two-way exchange of goods between us last year was worth
trillion yen more than A$ 23 billion.
Through good years and bad, Australia has been a stable and
reliable supplier of essential commodities that fuel Japan's
industry to name the most important, coal, iron ore,
aluminium and, recently, LNG. And we are increasingly a
provider of quality foodstuffs to help feed Japan's people.
In exchange, Japanese manufacturers have supplied an
extraordinary diversity of sophisticated goods to Australian
consumers and industries: motor vehicles, manufacturing and
telecommunications equipment, electrical goods, computers.
What started out as a straightforward exchange of
commodities for manufactures has progressively diversified
to embrace a broader range of goods, services, technologies,
investments and people.
Every day, for example, an increasing number of Japanese
tourists enjoy Australia's unique landscape and way of life.
I take this opportunity to emphasise how welcome these
visitors are to Australia; tourism is not just an
increasingly important export industry for us but a valued
means of building personal contacts and international
understanding. Further diversification is essential if we are to build a
broader, richer, deeper relationship between our two
countries. We must look for new activities, new opportunities to work
together, new forms of participation in each other's
economies. We must look beyond the simple 19th Century
economics of comparative advantage. And we are.
Only yesterday I visited the premises in Yokohama of MEMTEC,
an Australian high technology firm that is turning the
traditional Japan-Australia relationship on its head by
breaking into the competitive Japanese market and doing
very well.
So for Australia's part, there is no doubt that we can play
our part.
Indeed I want to tell you direct that we can engage we are
already engaging Japan, the region, and the world, on new
and more competitive terms.
Over the last seven years we have undertaken a fundamental
and in many ways a radical reshaping both of the
institutions of our economy and of the attitudes we bring to
our involvement in our dynamic region and in our
interdependent world.
We still have some way to go down the path of domestic
reform to ensure that we enter the next century as a truly
competitive and capable player.
But the pace of change so far has been such as to render
completely out of date the stereotypes that portrayed the
Australian economy in previous decades, with considerable
accuracy as frequently unreliable, usually complacent and
essentially inward looking.
So part of my message to this audience today is an urgent
call for you to re-examine your attitudes towards us and
recognise the contemporary realities of your re-equipped and
vigorous Australian trading partners.
Let me give you a sketch portrait of this restructured
Australia by outlining the principal economic reforms we
have achieved since 1983 reforms which fit together into a
consistent, comprehensive and continuing strategy to
internationalise the Australian economy.
We have abolished exchange controls; and we have floated the
Australian dollar. we have deregulated the financial
markets, removed most restrictions on foreign investment,
and reduced by a third the level of tariff protection
afforded to Australian manufacturers. We have opened up the
Australian economy to competition from overseas to an extent
that is without precedent in modern Australian history.
We are building the basis of a ' clever country', to open up
new possibilities for what traditionally has been just the
' lucky country'. We are improving our education systems and
we are dramatically expanding our research and development
skills. You may be interested to know that Australia has a
higher per capita number of students learning Japanese, at
primary, secondary and tertiary levels, than any other
country outside Japan itself.
We are restructuring Australia's telecommunications, our
civil aviation, our land transport and our waterfront to
make them more competitive and responsive to contemporary
market and social needs.
For our trading partners, these changes are very good news.
To give an example, shipping reforms will progressively put
the operating costs and manning levels of Australian-flagged
shipping on a par with those of our major trading partners.
Let me make special mention of industrial relations.
Not so long ago, some of our trading partners, including
Japan, used to express concern over Australia's industrial
relations record and questioned our reliability as a trading
partner. Today such concerns are out of date; the attitudes of our
trading partners need to catch up with contemporary reality.
Since coming to office in 1983, my Government has fostered a
new, cooperative approach to industrial relations, the
cornerstone of which has been the Prices and Incomes Accord
between the Government and the trade union movement.
The results of this approach have been nothing short of
dramatic.
Under the Accord, non-farm real unit labour costs have
fallen by more than 10 per cent since 1983, helping to
reduce our inflation rate, increase investment and restore
profitability to Australian companies.
Again, the Accord period has seen Australia enjoy sustained
economic growth, averaging around 4 per cent over the past
seven years, and outstanding employment growth, with the
creation of over 1.6 million jobs since 1983 a rate of
employment growth nearly double the OECD average.
At the same time, we have cut by nearly 60 per cent the
average number of days lost due to industrial disputes;
Australia's strike record now compares very favourably with
that of other OECD nations.
The Accord mechanism is also facilitating the most
fundamental reforms of labour markets Australia has ever
witnessed: comprehensive restructuring of industrial awards
and extensive rationalisation of trade unions and trade
union coverage are truly seeing the development and
maintenance of internationally competitive Australian
industries.
So after more than seven years of radical improvement in
Australia's industrial relations, the truth now is that
Australia's trade union movement is a positive factor, not a
negative, encouraging economic growth and competitiveness in
Australia, not holding it back.
When that truth is better realised by our trading partners
we shall see further real improvement in the state of our
economic relationship.
I can assure you, from my own informed knowledge of the
trade union movement, that potential investors who discuss
their plans in advance with trade unions will find them
prepared to enter into specific understandings and
commitments to ensure the success of their projects.
My friends
As proud as we are of this record of change over the last
seven years, we are not resting on our laurels. Continuing
international developments Europe 1992, the return of
Eastern Europe to market systems, the ending of the Cold War
mean the management of economic change must be a primary
objective for us all.
Immediately on my return to Australia I will be engaging in
a series of policy initiatives that demonstrate our
continuing commitment to change and reform.
Within a few weeks my Government will be making a major
statement on reform of telecommunications and aviation.
Next month I will be chairing the first in a series of
special conferences of State Premiers to examine ways of
improving the processes of government itself. Over nine
decades our Federal Constitution has given rise to a range
of inefficiencies; existing institutions have not proven
able to handle effectively the issues currently coming
before Government. So the State Premiers and I have
commenced a major work program that will be given direction
and impetus by this first conference.
And next year I will receive the first reports from nine
working groups developing a strategy for ecologically
sustainable development working groups we established
because we believe that we must have further resource
development but that without environmentally responsible
policies we will be failing in our responsibilities to
future generations of Australians.
These reforms proof of our commitment to, and our capacity
for, far-reaching economic and social change in Australia
carry clear implications for this audience, and for Japanese
business leaders generally.
Australia is progressively becoming a more capable, vigorous
and competitive economy. It follows that Australia's
relationship with Japan needs to reflect that progress.
We certainly have a broader and more diverse relationship
now than we did even a few years ago. But the process has
still not gone far enough; we still have much to do to make
sure the opportunities that await us are fully taken up.
It may have been appropriate, in the days when Australians
hid behind high tariff barriers and indulged ourselves with
poor industrial relations, for Japanese investors to steer
clear of major commitments in the Australian manufacturing
sector. It is no longer so.
It may have been appropriate in the days of Australia's weak
research and development commitment f or Japanese businesses
to neglect Australia as a potential partner in science and
technology based ventures.
Tourism, including from Japan, is a major growth industry
for us. But we do not see ourselves solely as a purveyor of
leisure services. In the same way, the vast preponderance
of Japanese investment in Australia is in real estate. But
we do not see particular economic advantage in selling real
estate as an end in itself.
Of the $ 9 billion currently invested by Japan in Australia,
some 92 per cent is invested in tourism and real estate.
It is time for you to be more creative in your approach to
investment in Australia and to joint ventures with us.
Together we could become productive partners in increasing
the value-added component of Australian exports and
expanding our export-oriented manufactures and services. We
want to see more successes like MEMTEC here in Japan and
elsewhere because that's what we can do well now.
I don't say that you should do us a favour; I say it is in
your interests too, to diversify your relationship with us.
Of course I know I am speaking in a nation that has shown an
extraordinary ability to adjust to changed circumstances.
You truly know what it takes to build and to maintain a
dynamic economy.
But you must be in no doubt of your continued need f or
further adaptation, further internationalising of your
economy and further flexibility in more areas of your
economy and society.
The policies of greater internationalism that you have
pursued and which we urge you to continue will of
themselves lead to further pressures for openness and
transparency within Japanese markets and distribution
systems, and for greater political and social interaction
with the rest of the world.
As a global economi c superpower, your newly acquired
leadership role entails a vital responsibility: the
responsibility for continued flexibility and further
openness in your domestic economic arrangements.
Nowhere is this more true than in the area of agricultural
protection. We appreciate the extent to which Japan recently
part-liberalised its market in beef.
But it is high time Japan started taking reasonable steps to
liberalise your rice market. I say that out of no direct
self-interest; Australia is not a major rice grower. I say
it because as we approach the critical final negotiating
stages of the Uruguay Round, a commitment to agricultural
reform will be essential to a successful outcome. That
includes, of course, a commitment by the European community
as well as Japan.
Let me say bluntly that the self-sufficiency argument made
by Japan in defence of its agricultural protection stands
very awkwardly indeed with its tremendous successes as an
international trader in non-food goods.
I realise of course the considerable domestic difficulties
that stand in the way of early reform.
Hay I suggest that in overcoming these problems the lesson
of the Australian experience may be valuable.
For I do not pretend for a moment that the changes achieved
by my Government radical changes in the life of any
society have been achieved simply or without pain.
Our reforms cut deep into habits and institutions that had
become entrenched elements of an increasingly uncompetitive
society. Industries that had become lazy because they were protected
by tariff walls, trade unions that indulged in petty
industrial disputes, ideologues and traditionalists who were
committed to old-fashioned ways of doing things such
groups have at times been critics of change at times,
strident critics.
But we are succeeding in our reforms ordinary working
Australians have made sacrifices including real wage cuts
because we have demonstrated that they are essential
elements of a broad, logical and essential strategy of
building national competitiveness in a global economic
environment of interdependence.
In the same way, reform within Japan of domestic
agricultural protection to name but one very important
area will prompt vocal criticism. But as I said yesterday
in a speech to members of the Japanese Diet, your capacity
to achieve reform in this area will be a true, and
appropriate, test of Japanese leadership credentials
generally. My friends
I know I have spoken directly about Australian achievements
and Japanese requirements; I always believe that the
opportunity presented to address an audience such as this
should not be wasted on platitudes.
And I do not ignore the burden that lies on Australian
shoulders to continue the process of adapting our economy
and ourselves to the challenges of the world.
The truth is, if Australia wants the benefits promised by
closer economic integration with Japan and other dynamic
economies in the Asia-Pacific region, we have to accept that
those benefits can be achieved only by making our economy
more competitive, our society more open, and our minds more
free of prejudice and stereotype.
Yet there is in some quarters of our society, as in many
societies, a streak of xenophobia. Some Australians,
contemplating Japanese investment in our country, have
failed to overcome the trauma of wartime memories. Others
misinterpret any foreign investment as an abrogation of
Australian sovereignty or dispute the economic gains of such
investment.
But I emphasise that these attitudes are minority ones in a
society that is at ease with a multicultural future and,
overall, quite comfortable about the Australia-Japan
relationship. We welcome productive foreign investment on
its merits and regardless of its source.
That is why we welcome the Japanese proposal for the
Multifunction Polis to encourage the transfer of new
technology from Japan into Australia. An excellent site has
been chosen in Adelaide and the MFP has the backing of my
Government, the State Government of South Australia and of
private enterprise.
0'
8.
Unfortunately, the proposal was at one point needlessly put
at risk by the kinds of prejudices I have described. Let me
say without qualification: such prejudices have no
legitimate place in Australian society; I will never resile
from that view.
Australians will continue to adapt and will continue to
create a tolerant, cosmopolitan and multicultural society
whose door is open to international contacts free of any
discrimination on the grounds of race. To do otherwise
would be both morally repugnant and economically insane.
My friends
Japan and Australia stand on the threshold of a new phase in
our relationship that can be even closer, more complex, more
mature and more diverse than it already is.
The challenge that now faces both of us in developing a more
diverse and intimate relationship is really a test-case for
each of us in developing our wider international roles.
If we get it right if we can develop a mature and
broad-minded approach which works effectively and is
sustainable simply because it takes account of both sides'
interests we can look forward to a greatly expanded and
even more harmonious process of building prosperity
prosperity that embraces our two countries, and
that extends through our region and to the wider
world.
I am confident we will succeed in that task.