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PRIME MINISTER
STATEMENT BY THE PRIME MINISTER, THE HON P J KEATING, MP
THE AUSTRALIA SINCAPORE BUSINESS SEMINAR
Let me begin at a point, say twenty five ycars ago, and
at one divorced from the world of busines; and the
economy. Twenty five year& 8ajo Australia was not known in the
world for its openness. In fact, two thirds of the way
into the twentieth century, for all our considerable
achievementt, Australia remained insular, inward-looking,
not a little xenophobic.
In so far as we looked out at all, we looked past Asia.
As your Prime Minister said last night, we " leap-frogged
over Asia" to keep the ties almost exclusively with
Britain, Europe and America.
It was a symptom of our lack of cultural developmcnt, our
unworldliness, It is a measure of Australians' capacity tor change that
the barriers are now down, and that Australia it a
complex, spirited, immensely varied multicultural
society. And it is a measure of how differently we see ourselves
that we now actively pursue our future in Asia and the
Pacific. Those who doubt that we can change should consider how
aiuQh wo Diay changed.
In a sense these two great changes we are undergoing are
one and the same.
As a nation we have opened up culturally and
economically. Economically speaking, we realisea a littLle less than a
decade ago, that our future way of life depended on
making ourselves relevant to the rest of the world and
especially relevant to the most dynamic region in the
world which lay at our œ ront door.
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Xn the past few years we have confronted this reality.
We have become, as a conseqluence, -more independent.
When I use the word " independent", I mean a sense of
responsibility as much as a sense of pride.
I nean taking responsibility for our own destiny; having
the will and the imagination, as Singapore had them, to
make the leap into the world of the future.
W~ ide in what we have done, in fact, is following only
slowly. In any event, there is a long way to go.
Yet the effect of realising that we are on our own, and
that to deny necessity would be an act of national selfdestruction,
has been remnorX-able.
More remarkablo, I suspect, than even most Australian&
appreciate. M~ ore remarkable, I'm sue than many people in Asia
Uppreviate. That Is one part of my purpose today to explain to you
the changes.
The other is to convey the message that we are very much
open for business.
We believe Australia and Asia have much to gain from
thinking in terms of strategic alliances; that, once we
learn to enjoy commercial success together, the bonds
between us will reach a new level of mutual awareness and
respect# Now, I think it is a reasonable suppotition that most of
you are still inclined to think of Australia in terms of
empty space randomly populated with sheep. And cattle.
And mines.
I think it is reasonable to suppose that you nay still
think Of Australians as living on the cheap; riding on
the back of the country's natural wealth. And riding for
a fall.
You maight. also be continuing to think of us as a country
with heavily protected manufacturing industries, an
industrial relations culture of conflict and
inefficiency, inefficient management, inefficient
wharves, an inefficient transport and communications
system, high taxes and high inflation.
The truth about all these things is quite different.
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Our inflation rate is the second lowest in the OECD.
Our proportion of tax to GDP is virtually the same as
Japan's the lowest in the OECD.
Our transport system is undergoing a radical overhaul.
We have deregulated aviation, bringing substantial
reductions in fares for both freight and passengers
We have invesLed heavily in a new National Rail
Highway and major road developments
We have brought competition to our
te] ecommunicationa,
And we've doubled productivity on our wharves
We are introducing competition into previously controlled
industries, selling off government businesses, and, of
course, we have deregulated banking and foreign
investmcnt.
Last year, in a continuation of a dramatic trend,
Australia experienced the lowest number of strikes in
thirty years.
We have cut tariffs.
but nothing has been so crucial in our quest for
competitiveness as our reforms to industrial relations.
In the 1990s, Australians discovered that conflict was
not a creative condition.
In a radical break with what had become a chronic
national disease, the Government reached an Accord with
_ Jheunions which not only dramatically lowered the level
of industrial disputes, but restrained the growth of
wages so effectively that our competitiveness improved
per cent over the decade.
More recently, we have begun another radical reform. we
are moving away from centralised wage fixing and we are
moving at an extremely rapid rate.
By the middle of next year we expect more than half the
Australian wor) force will be covered by enterprise
bargains. At the same time, there has been very considerable
improvement in workplace and management practices,
including a very successful " world best practices"
program international bencbmarking.
The concrete manifestation of these developments is to be
seen in, for example:
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Du Pont's decision to re-locate production
-facilities to Australia to supply East Asia;
or ToyOta Australia winning export contracts
throughout South-Eaat Asia. Already Australia
exports more than $ 1 billion a year in cars and auto
parts; or Bremar-Woll-ammerei investing in a wool
processing p a'n-i eelong, Victoria under a single
union coverage and enterprise agreement.
We are also aware that successful competition in the
international marketplace ultimately requ-i-res a highly
skilled and flexible labour force, and for this reason we
have created the equivalent of twelve universities in six
years, doubled our vocational education and training
budget, and established a National Training Authority to
give Australia a system of high quality, high status
polytechnics. I could detail any number of other reforms we have made
in recent times.
Yet it is perhaps more important to make the point that
it is open cometition which is driving the essential
changes. In recent years we have learned that change breeds
change.
Recognition of what has to be done has changed our
perception of what an be done.
We do not believe for a moment that the process of
labour-management reform io complete.
plainly, we are not yet totally competitive.
But we are moving at a considerable rate.
We continue to produce and sell commodities in fact
more than ever before.
As a nation we now export more than twice as much product
as we did a decade ago and today our exports account for
over 23 per cent of total output.
That is gratifying enough.
But the really big change is this we now sell more
jg nufaqurj products overseas than metal oren and
minerals. In fact, Australian manufactured exports showed the
fastest growth in the OECD in 1990 and 1991.
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Our exports of manufactured products are as great as the
value of our exports of rural products.
The fastest growing export category is Elaborately
Transformed Manufactures ( ETMs); in recent years we have
had Chni9i Wif of ovei 50 pe cent.
In this same last decadt, Australia has also tripled
services exports.
My point is simple enough: there has been an economic
sea-change in Australia.
We still sell the minerals, the beef and tho wool, and
the liquefied natural gas and the coal.
But we arp also selling processed foods, motor vehicles,
computer software, ocean-going ferries, bionic ears and
education. And, what ig more, we increasingly sell them in Asia and
the Pacific.
The APEC region is the destination for almost 75 per cent
of Australian exports.
East Asia tokes almost 60 per cent.
Exports of ETMs to North-East Asia increased eight-fold
between 1981 and 1991.
Last year we sold more ETMs in North-East Asio than wool.
Seven out of the top ten Australian manufacturing markets
are in East Asia.
I trust you see what I mean by a sea-change.
To give you another example last year our oervice
exports to Japan alone were worth as much as our total
wool and iron ore exports.
Ten years ago we scarcely had a tourist industry worth
the name. in the eighties it was our fastest growing
industry, and the majority of tourists came from Asia.
This year, over 600,000 Japanese tourists will visit
Australia. More than I million are expected to arrive in
the year 2000.
There is no more striking example of Australia's new
economy and its new relationchip to Asia than in its
emerging trade relationship with ASEAN.
For the last five years, our exports to ASEAN have been
growing at an annual average of 30 per cent, to well over
$ 6 billion.
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Last year ASEAN became our second largest regional
market, ahead of both the EC and N~ orth " 2~ erica: and
Australian exports to Singapore have grown by an average
of 31 per cent per annum over recent yars.
And while we continue to export food and minerals, 23 per
cent of our exports to Singapore are now -matnufactures.
Just as Singapore has trAnsformed itself, so is Australia
b~ eing transformed.
And our changing relationship with Singapore reflects the
speed of change and the kind of change which Australians
now agree is both necessary and right.
We have had similar objectives and we have changed in
similar whys.
And today this seminar of distinguished Australian and
Singaporean busineas people will be talking about the
opportunitie* for businesses in both countries to join
forces in roaching into the growing markets of Asia.
For oUr part, we have raw material resources, a depth and
variety of wor~ corce skills, a large base of
sophisticated services, o broad and well-developed
research industry, and a relatively affluent population
supporting a sophisticated construction, servicees and
distribution sector.
Singapore has a well-educated and flexible workforce, a
high savings rate and a current account surplus, a strong
outward orientation, and a geographical and political
positioh at the centre of one of the world't fast growing
regional suraomies.
Already we have the eXamele of the strategic alliance
between Australian and Singaporean buainess in Unilac, a
joint venture which processes Australian dairy products
for export through the rogion.
We have another example in Kinhill Tan, which undertaken
engineering projects in Singapore, M~ alaysia, Indonesia
and Thailand.
Other alliances are exploring projects for third country
market ventures in construction, engineering, energy,
teleom~ zmunications, refining, entertainment, and food
processing. in the future we may well find profitable cooperation in
areas in which AuStralla bas developed considerable
technioal expertise including infroetructure
development, environhment anid waste management
technologies, biotechnology, aerospace industries,
pharmaceuticals and various consulting services.
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So there are plenty of opportunities there for joint
ventures, and lots of things are happening.
but while joint ventures are fino, let me be quite clear
that we would not in any way wish to restrict our
partnership to joint ventures.
Singaporean businesses acting independently are welcome
in Australia, as I know Australian businessge acting
alone are welcome here.
Partnership can take many forms, and the Australian
Government's commitment is to the result, not the form.
It is not just Australian and Singaporean businesses
forming partnerships; in a sense, it is Australia and
Sihgapore which increasingly are partners.
Singapore will now be home to the first cuncrete
embodiment of the APEC process, which our two governments
contributed to oreating only a few years ago.
The Singapore location for the secretariat of APEC
modest though it is intended to be will put this
country at the very centre of what I believe will be
important trade policy choices in the years ahead.
we share with Singapore a commitment to the APEC process,
and to the overriding importance of securing a successful
outcome to the Uruguay Round of the GATT. We know that
the interests of open trading economies like ours are
best served by a strong and widely observed set of
International trading rules.
But With Singapore, we also recognise that there iv much
to be done on a regional basis which can build on the
benchmarks or GATT.
There is AFTA, which we believe can work to markedly
enhance trade between ASEAN countries; and, by increasing
their prosperity, increase their trade with non-ASEAN
countries.
And there is APEC, which has the potential to develop
into an open regional arrangement which enhances trade
between members without hindering trade with other
regions. Like Australia, Singapore shares a deep interest in the
continued involvement of the United States in the region,
both as the world's largest economy, and as its only
superpower.
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There is no nod for Australia, which shares a long
standing security treaty with the United states, to
re-emphasise its belief that the continued involvement of
US forces in the Pacifio region is a powerful stabilising
influence and a significant contribution to the
remarkable stability and growth we have witnessed in
recent decades.
But I do want to reassert Australia's belief that US
ecg-n imc Anvolvement in the region is also vital -both
for our prospeity; and for its own.
For this reason we supported the APEC concept which
includes both the western Pacific and the United States,
and have queried other regional concepts which omit the
US. And of course it is for this very reason to secure
American economic involvement with Asia that we have
expressed reservations: DoWh about the extension of
NAFTA to Central and South America, and the recent
proposal for the Us to create a set of bilateral trade
agreements in the region on the hub-and-spokes model of
its security relationships.
The extension of NAFTA might well lead the US into
thinking it could sustain its economic weight merely
through involvement in its own hemisphere to the negloct
of this region a notion which would I think be a grave
error. And the hub-and-spokes model in trade maximises some
bilateral advantages for the Us, but minimises the
multilateral advantages for its partners in the region.
On the face of things, our countries could not be more
different I need not go into the obvious
dissimilarities between an island continent and an island
city state.
But In 1992, I believe it is the commonalities which are
more striking. The complementarities. The potential for
cooperation for mutual advantage.
All this is only becoming apparent now, as Australia
makes the leap for change.
The potential can only grow.
Your deliberations today are both a manifestation of this
faCt, and an agent of the process.
Thank you all very much for your commitment to the cause
of our two countries. Thank you for coming.
SINGAPORE September 1992