Thank you very much Mr President, my parliamentary colleagues, your Excellencies, ladies and gentlemen. It is for me a great pleasure to again be at this Council dinner to take the opportunity it affords me to express the respect and support of the Government, and I believe of the entire Australian community, for the contribution made by your industry to Australia's overall natural wealth, and in particular to remark upon the willingness, as Barry said, of your industry to adjust and change with the changed circumstances of our contemporary society.
We no longer live in a world where the only thing that matters is sheer economic efficiency. We live in a world where economic efficiency is imperative, but we also live in a world in which environmental outcomes, in which fairness and decency to all of the citizens of this country and a regard for the longer term place of Australia in the world, are also very important considerations.
This dinner takes place at a time when the economic prospects of Australia remain very strong, and also at a time where for an accumulation of reasons, not only our economic performance, but other elements as well, that the reputation and the regard for Australia around the world has rarely been higher than it is at the present time. On any comparison, Australia's economic performance over the past few years has been very strong and the Australian economy remains one of the stand out economies of the developed world. Our GDP grew by 3.5 per cent in 2002, compared with 2.5 per cent in the United States and an average of 1.8 per cent across the OECD. This is a product of many years of reform and I have never been reluctant to say at gatherings such as this, that Governments of both sides of Australian politics have made a contribution to that reform process. Over the past few years, the contributions made by the Government that I'm privileged to lead, particularly in areas of industrial relations - so important to the mining industry - that those reforms have greatly increased the productivity of the Australian economy and as a consequence the competitiveness of your industry.
Over the past year there have been two very significant developments so far as our external interface with the economies of other nations are concerned, which represent in a sense a metaphor for Australia's economic future. The first of those is the decision and the determination of the Government to negotiate if possible a free trade agreement with the United States. We are committed to this enterprise because we believe that the United States will become more, rather than less important to Australia as the years go by. The sheer size of the United States economy, the fact that it will grow at a more rapid rate than the accumulated economies of the European Union over the next 50 years, by dint of a more efficient economy and a higher birth rate, inevitably leads me to the very strong belief that it is in Australia's long-term national interest to negotiate such an agreement if that proves to be possible. I wouldn't pretend for a moment that the challenges are going to be very great, and perhaps in the end too great. But I'm an optimist. I think it can be done and I'm heartened by the very strong commitment from the very highest level in the American administration to the negotiation of that agreement.
The other significant development, not only in real economic terms, but also symbolically, was the signing of the huge natural gas contract with the Guangdong province, which represents an income stream for the Australian industry of something like $25 billion over a period of 25 years. Australia won that contract because it was regarded as a reliable and competitive supplier. And it represents an important long-term economic linkage with a nation that will grow increasingly more important to Australia as the years go by.
And those two commitments, those two in the case of the free trade agreement, a commitment in the case of the natural gas contract, a very solid achievement. They illustrate the capacity of this country in the kind of world in which we live, to negotiate long-term mutually beneficial arrangements with other parts of the world, which in turn may not share a common view of the future with each other. And the capacity of Australia to do that will very importantly underwrite our economic success in the years ahead.
Your industry continues to increase its contribution to Australia's national wealth, and despite uncertain global economic conditions, Australia remains at the forefront of global minerals extraction. In the past year, Australia's share of global project investment increased from 14 to 17 per cent, and minerals extraction continues to make a strong contribution to Australia's export earnings and economy. In 2002 the minerals industry contributed 5.5 per cent of Australia's GDP and $43.7 billion in exports, which was 29 per cent of all exports - by any measure, a very impressive and growing contribution.
There are two remaining specific things that I would like to canvass. The first of those is to pick up Barry Cusack's exhortation about further economic reform. The world in which we now live requires the process of economic reform to go on, otherwise nations are condemned to fall behind in the world competitive environment. If you look at the comparison between the performance of some of the European economies and the performance of a number of other economies including our own, the explanation can very readily be found in the unwillingness of some of those economies to undertake significant internal structural reform. We, as a Government, remain very strongly committed to the processes of economic reform. They are never easy, they are sometimes unpopular, but in the long term they produce very significant dividends. And in a number of areas, and not least in the area of industrial relations, further reform is needed and is essential to Australia's economic development.
The other issue I want to say something about is that of the greenhouse gas issue. We remain very strongly committed to achieving the greenhouse gas emission target set for Australia under the Kyoto Protocol. But having said that, can I say that we remain unwilling to adhere to the Kyoto Protocol in its present form because we do not believe that that would be in Australia's long-term interests. We are opposed to signing it in its present form because it would impose obligations on Australia which would not be imposed on countries against which we must directly compete. Australia is in an unusual position. It is a highly developed country which is a net exporter of energy. We do not, like countries such as Norway, have the benefit of the European Union bubble. We do not have the benefit of less developed countries in terms of the obligations under the Kyoto Protocol. And for us to sign the Protocol in its present form would, in the Government's continuing judgement, place unfair fetters on many industries, not least industries in your own sector.
It remains possible, as the Government is doing, to achieve the emission targets set out under Kyoto and we are very full on in our commitment to achieve that. We've already committed nearly a billion dollars to provide incentives for industry and communities to reduce their greenhouse emissions and to encourage the development of low emission technologies. We are developing a climate change forward strategy, and details of that will be announced later this year. But we must, all of us, be realistic in this area. Fossil fuels will continue to underpin Australia's economy for many years into the future. Cheaper energy will continue to underpin our competitiveness. There is great scope to reduce greenhouse gases in the years ahead without undermining our competitiveness. For example, options such as coal gasification and ? can make a big impact, and at the same time protect our competitiveness. High energy industries will continue to improve their energy efficiency over time, and vehicles and households will become more efficient. And the Government should continue to work with industry to support these advances.
There are many options to reduce greenhouse gases. Renewables will have a role and my Government has done more than most to promote them, and we will continue to support them as one part - but one part only - of the equation for reducing greenhouse gases. We are making greater progress than we are sometimes given credit for. We're reducing our greenhouse gas emissions by an average of 60 million tonnes a year for the first commitment period under Kyoto of 2008 to 2012. This good effort can and should go on. We have shown we can have less greenhouse gas and maintain economic growth by adopting sensible and balanced measures. But as it is presently cast, that does not in the Government's considered assessment, include adherence to the Kyoto Protocol. But it does involve adherence and aspiration towards the emission target set under the Protocol, and it remains the strong policy objective of this Government to meet those targets.
Finally ladies and gentlemen, can I say how much again the Government has appreciated its cooperation and the cooperation it has received from your industry. We represent a Government that believes in capitalism, believes in free enterprise, believes in private sector incentives, believes in proper rewards through profits for risk taking and investment. That doesn't mean to say that we will agree with the business community or indeed with any sector of the business community, on every issue. But we will always endeavour to take proper account of the views put to us by business.
And I want to say on a personal note how much I am sorry that Ian Macfarlane is not with us tonight, the Minister who interacts most with your industry. As you may know, he is recovering from some surgery and will be out of action for some six to eight weeks, and I know you will all wish him a speedy recovery.
I finish by thanking all of you for the contribution that your industry has made over the years to the growth and the strength of the Australian economy. It is a tremendous experience to be part of one of the most vibrant, expansive and exciting times in Australian economic development. We've had many years now of economic growth and there is no reason, if we continue the processes of reform, if we continue to run budget surpluses, if we continue to have an open economy, and continue to believe in competitive forces, there is no reason why the economic growth and expansion that Australia has enjoyed over the past decade, will not continue. You industry plays a major role in that and with sensible policies and continued cooperation between the Government and your industry, there is every reason to believe that that process will go on.
Thank you.
[ends]