Thank you for that kind introduction.
I want to thank the Japan-Australian business Cooperation Committee for hosting this dinner tonight.
I also want to thank the Japan Chamber of Commerce and Industry, the Nippon Keidanren and the Japan Foreign Trade Council for extending their support to tonight's function.
It is an honour to have the chance to speak to the representatives of the major businesses that help tie together our two countries.
And can I also say a special thanks to Chairman Imai.
It was over forty years ago that you made your first visit to Australia on a fact finding mission with what was then the Fuji Steel Corporation.
Two years later, in 1963, Fuji Steel signed a contract with Western Mining for the supply of iron ore.
Those first shipments of iron ore were small by today's standard but that was the beginning of a relationship between Nippon Steel and the Australian resources sector that has served both Australia's economy and Japanese industry so well.
It is no exaggeration to call you a pioneer.
Your strong leadership of Nippon Steel has ensured that it today remains Japan's largest buyer of Australian steel-making materials.
And you have contributed to the Australia-Japan relationship more broadly through your role as Chair of the Japan-Australia Business Cooperation Committee since 1997.
In this role, your advocacy of an Australia-Japan FTA has been critical in building the necessary will in Japan to proceed with these negotiations.
I wish to thank you most sincerely for your contribution to the relationship, both through your leadership of Nippon Steel and the JABCC.
I am pleased that Australia was able to honour this contribution by making you an (Honorary) Companion of the Order of Australia in 2003.
Australia has many good friends in Japan - but you are one of our closest friends.
Ladies and gentlemen, it is a great pleasure to be back in Tokyo.
I arrived in Japan on Monday and I have been working my way here - riding the shinkansen and seeing some of Japan's stunning sights on the way.
Because this is my first visit to Japan as Prime Minister, I want to spend a few minutes introducing the new Australian Government and outlining our domestic agenda before I move on the main topic for today, the friendship and partnership between Australia and Japan.
The new Australian Government is committed to renewing the Australian economic reform project.
Our vision is to make sure that Australia remains competitive in the global economy.
We are already expecting the economy to grow 2.75 per cent over the next year - it will be our 17th consecutive year of growth.
But we are committed to strengthening our economic base.
We are committed to building a modern, Australia capable of meeting the challenges of the 21st century - to secure the nation's future.
The comprehensive long-term economic agenda of the new Government has two critical elements.
We are committed to disciplined macroeconomic management to ensure that the economy has a stable foundation.
And we are committed to activist microeconomic policies to boost Australia's lagging productivity performance by investing in human and physical capital.
We are committed to creating incentives that encourage work and enterprise.
We are determined to reform the tax system, boost workforce participation and tackle welfare to work barriers.
The Government's first budget delivered last month was the first step in our program to transform the competitiveness of the Australian economy.
Our overarching priority was responsible macroeconomic management.
And for the longer term, the budget set down plans to deal with the chronic investment deficits in the capacity side of the economy - in skills and infrastructure.
Budget surpluses are essential for economic stability.
But you don't change the structure of the economy with budget surpluses per se.
Real fundamental change to the underlying structure of the economy requires deep and pervasive microeconomic reform.
Productivity growth is not something you achieve with a single broad sweeping policy.
It is the aggregation of efficiency gains industry by industry, market by market, sector by sector.
We put in place a microeconomic reform agenda to lift Australia's productivity performance.
This means:
* having the best possible regulatory environment;
* developing an environment that supports risk taking and innovation;
* investing in human and physical capital; and
* investing in Australia's future and addressing our nation's long-term infrastructure bottlenecks.
We know this is a big task but we are committed to it.
For instance, we have unveiled substantial initiatives in education, including:
* providing high-speed broadband to schools; and
* developing a new national curriculum in maths, science, English and history.
Australia must make these investments to lift our competitiveness.
Another key part of our economic strategy is engaging with global economy.
We recognise that we can get the best for the people of Australia if we participate actively in the global economy.
And we need to engage politically and strategically with our friends and partners around the region and the world.
The new Australian Government has three pillars to our international engagement:
* our alliance with the United States;
* our membership of the United Nations; and
* comprehensive engagement with the Asia-Pacific region.
For Australia, Japan is a partner in these three pillars.
Ours is a relationship that really began in earnest in 1957 with the Commerce Treaty.
In fact, 1957 was the year I was born so I identify very personally with that treaty.
Throughout the next decades, our relationship developed and broadened very quickly.
Through the Nara Treaty in 1976 and to the formalisation of our security ties in the Joint Declaration last year.
The relationship between Australia and Japan is one of comprehensive strategic, security and economic partners.
It is a relationship of enduring friendship.
We are true friends and true partners.
And it is a relationship that the Australian Government is committed to developing.
That is why in the past six months, six of my ministers have visited Japan (for a total of eight visits).
The portfolios they represent demonstrate the depth of our relationship - foreign affairs; trade; industry and innovation; resources, energy and tourism; climate change; and agriculture.
The ministers have visited to make sure that the momentum in all areas of our relationship is maintained.
Because even with a solid base, relationships have to be worked on - and our relationship does have a very solid base.
We are both democracies.
We are both US allies.
And we have an economic relationship that it is of vital importance to both our countries.
Japan continues to be Australia's largest export market - a position it has occupied for over 40 years.
And Japan is a major investor and employer in Australia.
We both gain a lot from this economic relationship.
We are both supporters and drivers of globalisation.
Because of these shared characteristics, we have many shared interests - interests that are regional and global.
Australia and Japan both want to see a stable, prosperous and open region.
We have the history of working together to establish APEC - and I hope to work closely with Japan as we move towards the next stage of our region's architecture.
We are also partners in the big global questions that we face - questions like climate change and nuclear disarmament.
The places I have visited so far in Japan show the breadth and depth of our relationship.
I have visited Hiroshima and Kyoto and had the chance to give a lecture at Kyoto University on the two great global challenges symbolised by those two cities - nuclear disarmament and climate change.
I visited Nagoya on Tuesday and met with the President of Toyota.
Yesterday I also visited a Jusco supermarket where President Okada of AEON Stores announced a major new campaign to promote produce from Australia.
I also had the honour of an audience with the Emperor and Empress this morning.
And I am looking forward to talking with Prime Minister Fukuda tomorrow about how we can further develop the friendship and partnership between our two countries.
I am looking forward to working with the Prime Minister on taking our relationship to a new level.
When you look at the ties between our countries, you have to acknowledge the importance of the economic relationship.
And one of the foundations of our economic relationship is, of course, the resources trade.
Last year, not long after he became Prime Minister - and before I became Prime Minister in Australia - Mr Fukuda gave a speech at a joint meeting of the Australia-Japan and Japan-Australia business cooperation committees.
He noted then the importance of the resources trade saying that Japan depends on Australia for over half of its imports of coal and iron-ore.
It is a fact that symbolises the depth of our relationship - a trading relationship that started decades ago because of pioneers like Mr Imai and has brought great benefits to both sides.
By sourcing materials from Australia, Japanese companies helped drive the development of the resources sector in Australia.
By being a reliable supplier for Japanese companies, Australia helped underwrite the development of key industry sectors in Japan.
And in the 21st century, that resources relationship is as strong as ever.
We both continue to gain a lot from the relationship - Australia has a long-term market, Japan has a stable supply source.
Australia understands the importance to Japan of the question of security of supply.
The Australian Government is committed to supporting the development of long-term commercial relationships between our two countries.
I think it is important that we also continue to look to the future in the resources trade.
Japanese investors continue to play an important role in providing capital and long-term purchasing contracts to help the development of Australia resource projects.
I want to say that the Australian Government is committed to encouraging foreign investment in Australia.
Foreign investment has always played an important role in development in Australia - we recognise that and expect it to continue.
We welcome foreign investment.
We particularly welcome investment in new sectors, including the renewable energy sector.
Like the 30 billion yen that Mitsui is putting into a wind farm in Victoria - helping us address the challenges of climate change.
You can find Japanese investment in many areas in Australia - not just resources.
Yesterday I had the pleasure of visiting Nagoya and meeting the President of Toyota Motor Corporation, Mr Watanabe.
Toyota is a major investor in Australia.
It employs around 4000 people and last year exported over 80,000 vehicles from Australia.
And yesterday we announced that Toyota will begin producing hybrid cars in Australia from 2010.
Toyota is a great example of the economic relationship between Australia and Japan - we already have deep connections, but we have to be looking for ways to take it forward.
Toyota's investment in Victoria is a vote of confidence in the Australian economy - and it is a symbol of the type of investment we want to attract and the sort of sectors we want to see develop - new, high-tech investment.
Japan's manufacturing investments in Australia go far beyond the automotive sector, as important as that is.
Japanese companies have major investments in the processed foods sector in Australia.
Snowbrand produces high quality cheese and infant formula for export to Japan and other countries,
Japan's Kirin now owns Australian National Foods, Australia's largest dairy producer.
Kirin also produces malt for brewing beer at a large facility in Perth - most of this comes back to Japan as a key ingredient in what I understand is a rather popular amber coloured beverage in Japan.
And then there is Hakubaku Australia, which produces dried noodles in a factory in Ballarat in country Victoria.
Why am I highlighting Japanese investment?
Because these investments highlight the growing sophistication of our bilateral economic relationship.
And it is these complex interactions that we need to bear in mind as we negotiate our bilateral FTA.
The FTA will benefit Japanese companies whether as importers of raw ingredients, or as processors of food in Australia which is ultimately for consumption in Japan.
There are many opportunities for mutually beneficial cooperation.
Yesterday, the first thing I did when I came to Tokyo was visit the AEON supermarket in Shinagawa.
President Okada showed me around and announced that his Jusco range of stores would be undertaking an Australia Fair in July.
The Fair will highlight the range of Australian produce available in the Jusco stores - from fruit and vegetables to great quality Australian beef.
It is an example of the depth of our economic relationship.
It shows the investment and trade links and the benefits that flow in the end to Japanese consumers.
That is why, for Australia, it is important that we deal with agriculture in our free trade agreement.
For us, it is a key exporting sector.
And we believe that Australia, with its record as a stable supplier and a friend of Japan, is well-placed to expand its role as a supplier of food to Japan.
Australia is pleased to play a role in supplying Japan's food needs through exports.
Our products make up some 10 per cent of Japan's agriculture imports.
Like in manufactures and processed food, investment plays a key role in our agricultural relationship.
I was very interested to see that AEON operates a large feedlot and cattle finishing centre in Tasmania, and that the “Aussie Beef” brand is so popular with Japanese consumers.
And production from Japanese and Australian-owned facilities produces key inputs for Japanese agriculture - such as stockfeed, agricultural chemicals and fertilisers.
These investment and trade links have provided enormous benefits to Japanese consumers.
And addressing current restrictions on this trade through an FTA would provide still further benefits to consumers.
An FTA could also make a significant contribution to Japan's food security.
It could help secure for Japan supplies of high-quality, safe foods at a time when global prices are rising and predicted to keep rising, and for the first time in many years, Japanese consumers have seen certain food products in short supply.
An FTA could help strengthen Australian food supplies to Japan, and encourage Japan's own agriculture sector to become more competitive.
Australia has a strong record as a stable and safe supplier and a friend of Japan, and is well-placed to continue playing this role into the future.
So far I have spoken about what are really the traditional areas of our economic relationship - resources, agriculture and cars.
These are all important elements of the relationship, and make up the bulk of the trade.
But I think we should also look at the future of other sectors.
Sectors like clean green technology, bio-technology, food technology, education exports and financial services.
Australia has real skills in these areas and they provide a base for greater cooperation between us.
Tourism has long been an important part of our relationship.
My home state of Queensland was at the forefront of helping to develop the Australia-Japan tourism relationship.
In the past ten years nearly six million Japanese have visited Australia.
But even with tourism taken into account, our services trade accounts for only around eight per cent of our exports to Japan, despite the fact that more than three-quarters of our total GDP comes from services.
There is enormous scope for growth here.
I recognise that for some service Australian service providers Japan may be a challenging market.
But I also believe that Australia has some natural strengths we should draw on to further develop this trade.
Take the financial services sector as an example.
In the 1980s, Australia completely overhauled our retirement funding system system.
We made it compulsory for all Australians to save for their retirement.
That has led in the past 20 years to the amassing of a large amount of funds in Australia.
And those funds of around 1 trillion dollars form the basis of our funds management industry.
Our industry is now the fourth-largest in the world.
It is dynamic and innovative.
And it is well-regulated.
Japan, too, has huge amounts of funds in its pension funds - estimated to be around 2 trillion US dollars.
I think we could both gain a lot from building bridges between our two sectors - particularly because they have a combined net worth of around 3 trillion US dollars.
Our financial sectors have both amassed a lot of experience.
Our professionals have skills that they can use in both markets.
We should look at how we can create more opportunities for our financial sector professionals and institutions to access each other's markets.
Australia's financial services sector is globally competitive and it brings with it some natural attributes that should allow it to make the most of opportunities in Japan.
We are in the same time zone as Japan.
We have a highly skilled workforce.
And we have an increasing number of professionals who know their way around Asia, and specifically who know their way around Japan.
I had lunch today with financial service sector representatives from Australia and Japan and it showed me just how much potential there is in the sector - and how much enthusiasm there is in the business community.
I look forward to discussing with Prime Minister Fukuda tomorrow how we can further develop this relationship by expanding the dialogue between our regulators and companies.
And, of course, by creating service sector opportunities through our free trade agreement negotiations.
If we are to secure the benefits from our economic relationship into the future, we need to think about how we move forward.
There are specific sectors - such as the five sectors I mentioned earlier: green technology, bio-technology, food technology, education exports and financial services - where we can develop our contacts.
And cooperation in these new sectors can be building blocks to a new relationship.
We should be ambitious.
The Australian Government is committed to concluding a comprehensive, high-quality FTA with Japan.
It is not just about increasing the trade in goods.
We should be looking at our FTA to remove barriers to investment, to spur growth in the services trade, and to develop other new areas of economic cooperation.
I recognise that Japan has sensitivities in some sectors.
But at this stage of the negotiations we should be aiming for the best, most comprehensive agreement we can develop.
One reason we need to aim for an ambitious agreement is that we need to develop agreements that support the global trade system - the World Trade Organisation.
Australia and Japan have been key beneficiaries of the rules-based open trading system.
Japan has had access to global markets for its products.
Australia has been able to trade freely around the world.
So we have to ensure that our trading relationships help support, maintain and build that system rather than undermine it.
We also need to think about how we can support businesses not just bilaterally but also in the Asia Pacific region.
APEC has done a lot of great work in the past 20 years.
It has built a strong consensus behind the idea that open markets and economic reform are the best way to drive economic development.
I am a strong supporter of APEC - not just because it is a symbol of Australia-Japan cooperation in the region - but because it makes a difference.
But I also think that we need to begin discussing where we want our regional organisations to be in the year 2020.
The APEC goal is for free and open trade and investment in the Asia Pacific no later than the year 2020.
It is a goal we should continue to pursue.
With Japan hosting APEC in 2010, the next few years presents an excellent opportunity for us to continue working together on the big challenges facing our region.
And Australia and Japan work closely together in all other existing regional organisations, such as the East Asia Summit.
We were pleased to support Japan's initiative for a second-track study on an ASEAN plus 6 FTA.
We are also working together to advance regional financial cooperation through this initiative.
I hope that we can work closely together, too, as we look to the next phase of regional architecture and move towards developing an Asia Pacific Community for 2020 and beyond.
In a speech last week I announced that Australia would be appointing a high-level envoy to travel around the region and hold discussions on how we bring our region even closer together - how we develop an Asia Pacific Community.
The envoy is going to be Dick Woolcott, the distinguished former Australian diplomat who played such an important role in developing APEC.
He will be coming to Japan as part of his travels and I would be keen for you - the Japanese business community to meet with him and share your ideas about what an Asia Pacific Community should be.
I realise it is going to take some time to develop these ideas.
But we have to start now and move towards our goal over time.
And the goal is simple - a regional body that can deal with all of the important challenges we face - political, economic and security-related.
Part of our goal with the Asia-Pacific Community is to build our ties with the region.
To do that Australia needs a pool of people that know about Asia.
We need a pool of people that understand the languages and the cultures of the region.
We need a pool of people as comfortable doing business in Tokyo as they are doing business in Tasmania.
That is why the Australian Government is committed to making Australia the most Asia-literate country in the collective West.
We already have a strong base to build on.
There are between two and three hundred thousand kids at Australian schools studying the Japanese language.
It is the most studied foreign language in Australia.
And in the recent Budget, we committed $62 million to building on this base.
That money will go to boosting our teaching of Japanese, Chinese, Korean and Indonesian.
Our hope is that we will be able to double the number of students studying one of these four target languages in the final years of high school by 2020.
I am also pleased that we have many community programs that help boost this understanding - particularly exchange student programs run by individual schools and community organisations.
Beyond our high schools, we have a strong base of university level education and research about the region, and Japan.
Australia has invested with some success over the years in becoming an Asia-literate country.
Japanese studies has led the field.
This is a national priority for Australia.
The strength and richness of Japanese studies in Australia is reflected in the fact that 33 of Australia's 40 universities and its leading technical colleges include Japanese studies in their curricula.
There were over 15,000 student enrolments in Japanese language or Japan-related courses at Australian universities at the time of the last Japan Foundation sponsored survey of Japanese studies in 2003.
That number has risen slightly over the last 5 years.
The Australian National University, my old university, is recognised as having one of world's leading research programs on many facets of Japan's society, history, culture, economy, politics and law.
And it has some really interesting programs.
For instance, ANU hooks up its law students with students in Tokyo for legal negotiating practice sessions in real-time.
The ANU students in some groups conduct their entire negotiations in Japanese.
It is a great example of innovative teaching and training that builds our skills base - and it does it in the professional services sector that is one of our strengths.
Just over 50 years ago the Australia-Japan economic relationship began its remarkable growth.
That growth has continued through to today and it has provided the basis for the comprehensive relationship we have today - a relationship that covers security cooperation, working together in the region, and a commitment to trade and development.
This Australian Government is committed to making that relationship even stronger.
The first 50 years was about industrial development and leveraging off complementarities, to build Japan's world class manufacturing and consumer product industries and to build Australia's world class agricultural and resources industries.
The next 50 years has to be about combining these complementarities with our well educated workforces and our innovative natural entrepreneurs to create a continuing economic partnership based upon services and value adding as well as our traditional strengths in the energy and resource fields.
I want to acknowledge the crucial role in our relationship that has been played by our business communities.
And I want to assure you that we see the business sector as partners with government in building this relationship and taking it forward.