More than one million Australians were born in the United Kingdom.
Six million Australians have British ancestry.
And if you add together those with Irish ancestry you account for 8 million Australians.
I am one of them.
My father's forebears came from the United Kingdom.
Two of them were lucky enough have their passage to Australia paid for by His Majesty's Government - they were transported to Australia on the Second Fleet that arrived in Botany Bay in 1790.
In fact, one of them liked Australia so much that having completed his first tour of the colony and returned to London, he proceeded to re-offend and received seven further years transportation again.
It is a rare, if not unique, distinction to have been transported to New South Wales twice before deciding to go straight!
But the relationship between Australia and the United Kingdom goes beyond our ancestral interests, however colourful.
We have an evolving relationship based on shared values that continues to strengthen over time.
Over the years, Australians and Britons have fought side by side to protect and defend those shared values.
Earlier today, just before coming to this function I visited the Australian War memorial at Hyde Park Corner and laid a wreath.
The memorial commemorates the theatres in which Australians and Britons have fought together.
It is a powerful reminder of who and what we are.
So it is a great pleasure to be here today to talk to British industry and to members of the Australian business community here in London.
The commercial partnerships between our two nations are a crucial component of our modern relationship and important to our future prosperity.
I know that the Confederation of British Industry - representing as it does 200,000 businesses - calls itself the "voice of business".
Today, however, I would ask you, first, to lend me your ears.
I would like to outline for you the new Australian Government's vision for the future - the future of Australia and the future of our relationship with Great Britain.
My central point is simple - in a globalised world there are great economic synergies between Australia and Britain.
Great economic synergies that we can exploit to make our countries more prosperous and deliver a better standard of living for our citizens.
A Vision for Modern Australia
The new Australian Government is committed to building an Australia capable of meeting the challenges of the 21st century.
That means having a modern, competitive economy.
It also means a modern Australia where everybody gets a fair go.
And that includes Indigenous Australians.
On 13 February I presented an apology in parliament to those Indigenous Australians who had been taken from their families in the past.
On behalf of the Government and the parliament I said "sorry".
The apology was part of a new beginning.
I believe that old approaches are not working and we need to close the gap between Indigenous and non-Indigenous Australians.
I thought the apology was an important step to take - a step towards healing the hurt and a step towards a better future for Indigenous Australians.
In a modern and prosperous Australia, there should be no reason for these gaps to exist.
In a prosperous Australia all people should have the opportunity to build a better life for themselves.
The Government's first White Paper will be on homelessness, because we believe it is unacceptable that people in modern Australia cannot put a roof over their heads.
A Vision for Australia's Economy
We also want to build a modern Australian economy capable of meeting the challenges of the 21st century.
The Australian Government is unapologetically pro-business and pro-market.
To build a modern economy, we need to lift productivity.
Building a modern, competitive Australia capable of meeting the challenges of the 21st century will require us developing policy frameworks to maximise Australia's global economic competitiveness in an increasingly competitive - and now, increasingly unpredictable world.
We will still exploit our comparative advantages in exporting energy, resources and raw materials.
But we also need new industries that can develop on the foundation of a strong skills base, the right infrastructure and the right policy environment.
We see a role for government as an enabler of business, not as a director.
The economic program of the new Government involves three building blocks.
Stability and Responsible Economic Management
The first is stability in macroeconomic management. This is achieved through a prudent fiscal policy and a central bank with independent carriage of monetary policy.
That is why we have increased the independence of the Reserve Bank of Australia.
That it is why we will deliver a sound budget surplus in May.
That is why we are deploying all the tools of economic policy to keep downwards pressure on inflation.
Providing Critical Inputs: Education and Infrastructure
Second, beyond stability, the Government's role is to ensure the provision of critical inputs for a modern economy.
The government must ensure the provision of high quality education, training, and infrastructure.
That is why we have a plan to build the productive capacity of the Australian economy.
This plan starts with education.
People are the greatest economic resource of our nation.
Australia needs nothing less than a revolution in education - a substantial and sustained increase in the quantity of our investment, and the quality of our education.
Education has also evolved into a crucial export sector for the economy.
Last year over 450,000 international students were studying in Australia.
Education is our largest services export. It was worth more than 11 billion dollars last year.
Alongside education, the Government's other key priority for expanding Australia's productive capacity is infrastructure.
Inadequate infrastructure is a handbrake on growth.
That is why the new Government has already appointed a Minister for Infrastructure and created an advisory body, Infrastructure Australia, led by former airline chief and infrastructure specialist, Sir Rod Eddington.
They will look at Australia's current infrastructure bottlenecks, as well as our needs for the future and develop an infrastructure priority list for the nation.
We will work together with Australian state governments to build on world's best practice instruments, including public-private partnerships, to enable private companies to finance, design, construct, operate and maintain innovative infrastructure to deliver public goods.
Creating a Favourable Business Climate: Deregulation, Competition, Federalism
The third building block for a modern economy is a favourable business climate.
We must assist enterprise through a regulatory system that encourages competition and innovation.
We must reward work and success.
That is why the government has an agenda for reform of the federation, including a plan for business deregulation.
In partnership with state governments we have identified 27 areas for deregulation and red tape reduction to improve efficiency and reduce the regulatory burden on the economy.
The new Australian Government is embarking on an ambitious reform agenda because we are determined to build a secure future for Australia.
We need to prepare Australia for the challenges and opportunities of the 21st Century.
The greatest moral and economic challenge we will face in the 21st century is climate change.
Australia's ratification of the Kyoto Protocol underlines the fact that we are ready to take the actions required to address climate change globally.
We also need the right domestic policies - such as emissions trading schemes and policies to promote energy efficiency.
Implementing an emissions trading scheme is at the heart of our domestic policy agenda.
Australia and the United Kingdom have a lot to gain from more frequent dialogue, information sharing and exchange of expertise on carbon markets.
And the business sector is an important part of this.
Properly functioning carbon markets will require companies that develop expertise in trading carbon.
It will be a new business opportunity, as the growth of the carbon market here in London has shown.
It makes the point that our responses to climate change can also generate commercial opportunities.
A Vision for Australia's Place in the World
The Australian Government is committed to engaging with the world because many of the challenges we will face this century will require global responses - like climate change.
There are three pillars to Australia's foreign policy:
* our alliance with the United States - the bedrock of our strategic policy;
* our membership of the United Nations - where we cooperate with partners around the world to meet common challenges; and
* our policy of comprehensive engagement with the Asia-Pacific region.
We will pursue our interests and make a contribution to the community of nations through what I call "creative middle power diplomacy".
For too long, Australia's voice has been too quiet in the councils of the world.
It is time for that to change.
Australia in the 21st Century Global Economy
The Australian Government is proud of the achievements of Australian businesses abroad.
The great American politician and jurist, Earl Warren, said that when he opened the newspaper he preferred to read the sports page first, because those pages record people's achievements.
Whereas the front pages record nothing but people's failures.
Earl Warren did not make mention of the business pages - but if you open an international newspaper today, you are as likely to find a successful Australian corporation on the world's business pages, as you are an Australian swimming champion on the sports pages.
Australian businesses have found themselves well positioned to take advantage of the opportunities afforded by the economy of the 21st Century.
The internationalisation of our economy in the 1980s and early 1990s opened Australia up to global markets, just as the economies in the Asia Pacific region began to grow rapidly.
In the last decade, the rise of China and India combined with the continuing strength of Japan and Korea has brought the broader Asian regional economy more sharply into focus.
Australia is well placed to benefit from the success of this region.
The liberalisation and internationalisation of the Chinese and Indian economies is in the process of adding two billion new people to the global market economy.
That is also two billion consumers who, as their incomes grow, demand increasing quantities of protein rich foods, energy, telecommunications, entertainment, and other services.
That is also two billion savers whose high saving rates have contributed to the growth in global savings and, at least until recently, widely available credit.
And hundreds of millions of new workers who can supply - at remarkably low cost - a significant proportion of the world's demand for textiles, electronics and other manufactured goods.
The extraordinary growth of the emerging economies in the Asia Pacific region underpins the new Government's commitment to comprehensive engagement with our region as a key element of Australia's foreign and economic policy.
For Australia, closer engagement with Asia does not mean less engagement with Europe or less attention to our European relationships.
It actually means a modern and different relationship with Europe.
This is born out by the statistics on trade and investment.
Japan has been Australia's largest export market for 40 years.
China is now our largest trading partner.
But at the same time Europe, taken as a whole, remains by far the largest investor in Australia, contributing more than 30 per cent of our stock of foreign investment.
As Australia forges ever more successfully into Asian markets, so European companies become more interested in investing in Australia as a platform for their operations in the Asian region.
Rather than having to make some arbitrary and unnecessary choice between economic relationships with Europe or Asia; we are finding that these relationships are inherently important and mutually reinforcing.
Australia has a unique opportunity to capitalise on our position as an advanced industrial economy located amid the rapidly developing economies of Asia.
To maximise that opportunity for Australia, we must work hard to enhance our natural comparative advantages.
Our goal in this regard is simple: it is to make Australia the best place to do business in the East Asian hemisphere.
We want to ensure that we have the right policy-settings in place so that Australian businesses thrive.
So that we can export more.
And continue to attract investment from abroad.
That is why, for example, we made an election commitment to cut in half the 30 per cent withholding tax on distributions from Australian managed funds to non-resident investors.
This was a pledge I first made back in 2006.
And it is a commitment we will be honouring.
Reducing the withholding tax to 15 per cent helps Australian fund managers can compete on the world stage in managing the global pool of funds by more closely aligning Australia's withholding tax rate with those in other countries.
And, once we implement this reform, I want to signal today that we want to remain more than competitive with the rest of the world.
These reforms build on the existing strengths of the industry in Australia.
Australia's financial sector has one of the soundest regulatory frameworks in the world.
It also has the advantage of lying in the same time zone as the East Asian hemisphere.
Australia has strong institutional (and, increasingly, linguistic) linkages to financial markets across our region.
More and more Australian professionals are capable of operating in the principal languages of Asia.
Our industry is substantial.
It is the fourth-largest in the world with $1.3 trillion under management - a result of the superannuation policy reforms of the 1990s by the previous Labor Government.
And it is one we are determined to grow into a major export industry for Australia.
Australian Financial Markets
Reforming the withholding tax regime is a key part of the Australian Government's plan to ensure that our finance sector continues to grow and flourish.
A globally competitive tax regime turbo-charges investors' interest.
This objective has become even more important in the context of recent turmoil on global financial markets.
In the news in recent months we have seen, over and over again, the pain being felt by financial institutions.
What we don't see as much is the impact that this has on families. For example, let me tell you a little about Australia.
Australians have a higher proportion of direct share ownership than other industrialised countries.
Approximately 7.3 million people or 46 per cent of the Australian adult population owns shares either directly or indirectly via a managed fund or self managed superannuation fund.
Of this, approximately 6 million or 38 per cent of the Australian adult population hold direct investments.
And nearly all working families have exposure to the share market through their superannuation.
The high level of participation in Australia is underpinned by a high level of public confidence in Australia's financial authorities.
This confidence also underpins the high level of foreign participation in Australia's equity markets.
As a capital importing nation, Australia's future economic prosperity depends upon our ability to attract stable, long term investment from abroad into domestic equity markets.
I am determined to ensure that the Australian regulatory framework remains at the cutting edge of financial developments to ensure an efficient, competitive and informed market.
We need to be constantly vigilant to ensure that our regulation keeps pace with the most recent financial market developments.
One of the recent developments in financial markets relates to the recent growth of financial instruments - including equity derivatives such as Contracts for Difference and Swaps.
I note that in the UK, the Contract for Difference market has grown significantly in recent years and that estimates by the Financial Services Authority suggest that 30 per cent of equity trades are in some way driven by Contract for Difference transactions.
Similarly in Australia we have witnessed substantial growth in equity derivative products.
Because the owners of these instruments only have indirect economic ownership over the underlying securities, these equity derivatives have enabled market participants, including speculators and hedge funds, to avoid the disclosure requirements associated with direct stakes.
As the UK Financial Services Authority has recently noted, the growing use of these instruments has raised concerns in the business community in the UK, and these concerns are mirrored in the investment community in Australia.
In particular, the lack of an appropriate disclosure framework covering equity derivatives has:
* reduced transparency of ownership changes and takeover moves;
* reduced the ability of companies to know who their effective owners are;
* enabled hedge funds to outflank traditional institutional investors by using economic interests to influence companies.
Today I can announce that Australia intends to take a lead in increasing the transparency of its financial markets in this important area.
We want to ensure that Australia's regulatory regime does not impose an undue burden on market participants or inappropriate barriers to foreign equity investment in the Australian market.
Consequently, I have asked the Australian Treasury to review appropriate disclosure requirements for equity derivatives.
I know that the Financial Services Authority here in the UK has recently been working on this area.
We have been following their work with interest and we are keen to ensure that the lines of communication between our agencies are open.
Second, the government has been working to improve the disclosure regulations covering short selling.
The recent volatility in stock markets has been exacerbated by the lack of transparency surrounding the increasingly prevalent practice of short selling.
It is in the interests of all investors to have greater transparency around these issues.
That is why the Government has also announced it will pursue legislative change to address the ambiguity around covered short selling and disclosure.
In addition the Reserve Bank of Australia (RBA) is conducting a review of settlement risks in relation to short selling and stock lending.
The third area of reform I want to discuss tonight involves Australia's participation in multilateral efforts to improve financial market stability.
The British Government has highlighted the need for:
* strengthened cooperation and coordination of the Financial Stability Forum and the International Monetary Fund - the key bodies for monitoring international financial and economic stability issues;
* The right structures to be in place for identifying weaknesses and vulnerabilities in the global financial system; and
* National authorities to take action when warnings are given.
As financial markets become more global and assets are traded more quickly between nations, so too must regulation and supervision become more global.
The Australian Treasurer will be taking the Australian Government's program for addressing the global financial turbulence to the IMF Spring Meetings in Washington next week.
We will work with other economies to improve international risk management systems by examining initiatives to:
* Strengthen the coordinating mechanisms for providing international surveillance of all countries' financial systems and for identifying systemic risks to the global financial markets, including more systematic cross border supervisory cooperation in the oversight of large global financial institutions;
* Improve coordination of the international work being undertaken by the key bodies responsible for global financial stability issues - including the IMF and the FSF; and
* Strengthen global standards on transparency, disclosure and valuation practices.
Our purpose in pursuing these domestic and international initiatives is to ensure that Australia continues to have one of the most advanced financial services regulatory frameworks in the world.
We intend to work closely with our friends in Britain's regulatory authorities to cooperate where appropriate and learn from each others experiences.
And we intend to work internationally on these areas through:
* the IMF;
* the G20 Study Group on Global Credit Market Disruptions, which Australia chairs; and
* the Financial Stability Forum, which met last week in Rome and said it would soon make recommendations to the G7 on a range of concrete policy responses relating to: prudential oversight of capital, liquidity and risk management; transparency, disclosure and valuation practices; the role and uses of credit ratings; authorities' responsiveness to risks, and arrangements to deal with stress in the financial system.
We have a big task ahead of us - we want to build an Australian economy that will be increasingly globally competitive in the highly globalised 21st century.
We will do that by making sure that we create the right environment for business by building a highly-skilled work force, developing world-leading infrastructure and pushing ahead with deregulation.
If we want to be able to make the most of economic opportunities, we have to be outward looking.
The opening line of Rudyard Kipling's poem, the Ballad of East and West reads "Oh East is east, and West is west, and never the twain shall meet."
Well, in the world today, the old divisions of East and West are becoming blurred.
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