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Transcript 40730

Remarks at the Launch of Menzies Research Centre Book Fit for Service: Meeting the demand of the Asian middle class by author Mr Andrew Bragg

Photo of Turnbull, Malcolm

Turnbull, Malcolm

Period of Service: 15/09/2015 to 24/08/2018

More information about Turnbull, Malcolm on The National Archive website.

Release Date: 08/02/2017

Release Type: Media Release

Transcript ID: 40730

Thank you Tom, you are too kind. And Nick, thank you and Andrew, congratulations. It is wonderful to be here with the directors of the MRC. So many of my ministerial parliamentary colleagues. So many other great Australians. Andrew Bragg’s parents – a very proud day for them to have their son having this very important monograph launched here today.

It could not be more timely, as around the world people question the benefits of free trade and open markets.

It is one thing to debate how these benefits are distributed and what we can do, and we are keenly focused on this to ensure that all Australians share in the resulting prosperity.

We are determined to ensure that growth is inclusive so that every part of Australia benefits from the economic growth that more trade delivers.

But it is quite another thing to play on people’s fears and hardship by offering them the false promise of protectionism, as Bill Shorten’s Labor Party is doing.

The fact is, liberal trade and open markets over the last four decades have been at the heart of our extraordinary 25 years of economic growth.

Australia’s trading tradition of course, is ancient. It goes back many centuries when exchanges between our First Australians and the Makassan traders saw Australian sea cucumbers make their way onto Chinese dining tables.

And that I suppose was a very early demonstration of the gains from trade - they didn’t need an Adam Smith to convince the participants of that.

Yet, from Federation, through the Depression and right up until the 1970s, Australia’s trade policy was heavily coloured and influenced by protectionism. 

Sheer luck - thanks to the relative success of our commodity and agricultural exports - meant that we could, without major mishap remain on this path for many decades.

But more recently, successive Australian governments have embraced open trade because they recognised its vital role in lifting living standards.

The Coalition Government’s, our Government’s big export deals have dramatically expanded the horizon for Australian businesses - large and small, in the regions and in our cities.

These deals are putting beef from the Darling Downs on restaurant menus in Guangzhou and Shenzhen, wine from the Barossa Valley in the bars of Tokyo and macadamias from the Northern Rivers on the supermarket shelves of Seoul.

And Australians, in communities across our nation, are benefiting. Right around the nation, the benefits from those big export trade deals are delivering more investment, more employment, more and better jobs because they are opening up bigger markets to things that we do well, whether it is agricultural produce, whether it is services, whether it is education, whether it is tourism.

Only yesterday, I was meeting with the Foreign Minister from China, Mr Wang Yi. And he talked about the ambition to have more and more Chinese tourism coming to Australia. A bigger share of the enormous market. And that of course is underpinned by our commitment to open markets and trade.

So it is quite clear that trade means jobs. Trade means opportunities. That has been the key to our transition from a very high level of economic growth driven by massive investment in mining and construction. A level of investment which obviously couldn’t continue every year into the future because once the capacity is built then you go from the big heavy investment of the construction boom, to the long net profits and benefits that come from production and that is vital investment. But this is a big transition.

We know, economists around the world says we were going to fall down. They said Australia would not be able to avoid a really hard landing.

Why have we not had that hard landing? It is because of the way our diverse economy has been able to transition and the clear key to that is trade.

Now, the truth is, as the G20 confirmed in Hangzhou last year, and as I have often said, the truth is that protectionism is not a ladder to get you out of the low growth trap – it is a great big shovel to dig us deeper and deeper and deeper. And those who offer protectionism as some kind of salvation in these times are luring, potentially, luring us into a dead end. A dead end of poverty.

And you know as I said in Andrew’s monogram, we’ve seen this movie before.

The infamous US ‘Smoot-Hawley Tariff’ introduced in the United States in 1930, for example, was partly responsible of the Great Depression. It lifted average duties to nearly 50 per cent and it encouraged retaliation, and it prolonged and worsened the severity of the Depression.

That is very well known and very well understood.

Repeating mistakes like that is a risk that has been recognized by leaders.

So we have a massive vested interest in maintaining open markets.

The protectionist approach, which extraordinarily Labor under Shorten has now adopted would rather restrict our markets to 24 million Australians whereas we want to open them up to 7.4 billion people around the world.

Open markets attract new capital, improve business conditions and deliver lower input prices for businesses.  They lower the cost of living and increase choice for Australian households. 

The reality is that in the long term, protectionism hurts workers, drives up prices and weakens the incentives for industry to innovate.

Now by 2030, 3.2 billion or 66 per cent of the world’s middle class are expected to live in Asia.

The size of this market is unparalleled, as are the export opportunities it represents. But as Andrew points out, meeting this demand will not just come from those things that we have a natural advantage in, but in those for which we must compete aggressively for. Exports of services, such as health, education, architecture, engineering and finance. And we’re well placed to meet this challenge.

Our servicers sector employ four out of five Australians and account for 70 per cent of our economy.

Our service exporters are becoming very adept at exploiting niches in overseas markets. So we must ensure that Australian industries use the digital economy to their advantage, for the services they provide are at the cutting edge.

Our job as the Government is to hold open the door for Australian businesses to access these lucrative overseas markets.

So it means continuing to pursue opportunities for our businesses to benefit from trade and investment in our region and beyond and that’s why we’re disappointed at the United States’ decision to withdraw from the Trans Pacific Partnership.

That is a regional agreement, a potential regional agreement, of unprecedented scope, ambition and opportunity. It had and of course it provided particular opportunities to those services exports and addressed so many of those behind the border non-tariff barriers to trade, now one of the principal objectives as we look at the opportunities to increase access to those big markets.

So, we will continue to talk to the other TPP signatories on how we can use the work that has been done to capture the enormous economic and strategic benefits that would have flowed from the TPP. Of course, we will continue to engage the United Sates in our shared interests in a strong and open international trading system.

Who knows, in due course, perhaps in the future, the US will rejoin the conversation at a later stage.

In the meantime, we are fostering the strong trading relationships we have within the Asia Pacific, helping Australian businesses to keep making the most of the valuable agreements we already have in place including the Free Trade Agreements with China, Korea, Japan, the United States, Singapore and other ASEAN neighbors and partners.

We’re pursuing new bilateral free trade agreements with Indonesia and India and a regional free trade agreement, the Regional Comprehensive Economic Partnership or RCEP, which involves 16 countries including China.

We also have plans to broaden and deepen our trade and investment relationships with the European Union and in due course, the United Kingdom. We’ve had very good preliminary discussions with the United Kingdom. In fact, I think we were the first after Brexit, the first nation to offer our assistance in terms of free trade to the government there.

So this is a very busy and ambitious agenda and believe me, this is building the foundation for our future prosperity.

Just over 61 years ago – Nick, in this time of anniversaries – Sir Robert Menzies announced the creation of the new Department of Trade. Soon after that, thanks to Sir Robert’s leadership, Australia and Japan signed the historic trade agreement, helping to secure our future as coal and iron ore export partners.

So I want to congratulate Andrew, the authors, the Menzies Research Centre, for giving us this publication. It’s an important contribution to our trade policy landscape.

I am very proud to be here as a former chairman of the Menzies Research Centre. Congratulations Tom for the leadership you have provided.

This monograph is a very useful reminder of where we have come from and how we have come to be one of the most successful, resilient economies in the world.

And it was not by closing our doors.

It was by opening our doors and making sure that our best and brightest, whether it is physical goods and services, or intellectual capital, whatever we can deliver to the big market, we should do so.

That’s our job, to give Australians greater opportunities - greater opportunities to trade, driving investment, driving employment, driving a better economic future. A better future in every respect, for Australia and of course this region of which we are a very, very important part. We are in a time of great opportunity.

I know there is plenty of uncertainty in the world today. In some respects, more than there was a year ago, though economists have differing views on that as they always do. But the reality is that through our history, we have learned that trade means jobs. Because we know, Australians can do anything. We are the best, we believe in ourselves, we want the biggest, most open playing fields to run onto, because when we do that, we win.

Thank you very much and congratulations.


Transcript 40730