Prime Minister
Prime Minister: Well, thank you very much, Borge, it’s very good to be joining you, and thank you for that very kind introduction. So, g’day from Australia.
It is a pleasure to join this forum as you continue what has been a half century conversation about the state of the world.
As your 2022 Global Risks Report notes: ‘The economic fallout from the pandemic is compounding with labour market imbalances, protectionism, and widening digital, education and skills gaps that risk splitting the world into divergent trajectories.’
Now like the rest of the world, Australia has not been immune to the disruption and devastating impacts of this global pandemic.
We all have a responsibility to address these challenges, with practical solutions to ensure - both within countries and between them - we grow together, not apart.
We are now facing the immediate challenges of Omicron, a rapidly evolving variant and the need for vaccinations and boosters, as we go around now in Australia for our third round of of doses.
Omicron underscores this simple fact that there is no guidebook to this pandemic. There’s no magic GPS system for avoiding the enormous stresses and strains it continues to place on all nations - be they governments, businesses, communities, families, and indeed individuals, wherever they are.
Yet amidst this fog of radical uncertainty, Australia, well, we’ve charted a very clear path, and it’s been our own unique path through this pandemic - what we call the Australian way.
And in the process, we’ve achieved amongst the lowest death rates in the world, the highest vaccination rates and one of the strongest performing advanced economies in the world to come through those pandemic. We’ve always been prepared to save lives and save livelihoods. And we’ve seen those as important dual tasks through this pandemic.
We have been realists in our approach. We’ve been prepared to take action early, closing our borders, initiating our national pandemic plans, calling it the pandemic some fortnight before even the WHO named COVID-19 as a pandemic.
We’ve been highly pragmatic and consultative. We’ve been prepared to listen to the expert medical advice, and act on it - the best available medical advice - but also the best available economic advice.
As I’ve said many times in Australia, a pandemic is no place for ideology. You’ve got to do what works. At the same time, we’ve been principled and very clear-eyed in our response.
At all times, our goal, as I said, has been to save lives and livelihoods. Our approach has reflected Australia’s unique circumstances and our institutional structures, our federation first and foremost, such as our mixed also public and private health system, which continues to perform well.
Our unprecedented economic supports, delivered in a form that kept employees attached to their workplaces as businesses went into an unspecified period of hibernation back in 2020. It gave businesses the confidence that they could get through tomorrow each and every day.
And we were clear that our measures were never designed to be open-ended, but they were to be temporary and targeted, respecting that there were taxpayers’ money that that was being spent.
And at all times, we put our faith and trust in the common sense and public spiritedness of the Australian people. And that trust was well-founded.
No country, Australia included, we don’t pretend that every every response has been perfect. No country could claim that. No government could claim that. But what I am very proud of is Australia has been able to stay focused on these key, these key goals.
We have the second lowest death rate from COVID in the OECD. We have the eighth highest full vaccination rate in the OECD. And fully 93 per cent of Australians aged over 16 are now double dose vaccinated, and around a third have had a booster dose. And over 60 per cent who are eligible for that booster dose have now had it.
Our latest economic growth figures for the third quarter of 2021 showed we were just 0.2 per cent below where we were going into the pandemic, whereas most advanced countries, economies nations were remain one to two per cent down on pre-pandemic levels.
And we finished 2021 very strongly in the fourth quarter. Our unemployment rate fell to 4.2 per cent. Now that’s the lowest rate we’ve seen since 2008. At the height of the pandemic, we had an effective rate of unemployment of almost 15 per cent. And that effective rate now is equated with the actual rate of 4.2 per cent.
And our participation rate remained at near record highs, so nothing points to any great resignation by Australians. That is not what’s been occurring here. Our economy has been coming through strongly. We’ve retained our AAA credit rating - only one of a handful of countries who’ve been able to do so.
And let me make another point to this audience. From the outset, our Government always say, saw the way through this as backing a business-led recovery. We did not see a Government-centred recovery sustaining into the future. There was certainly a role for Government, but for the role for the Government was to ensure that we would have a sustainable business-led recovery.
We knew we were dealing with a public health crisis, albeit one with profound economic and social consequences. We never saw it as cover for some sort of funky experiment to transform our economic system. We haven’t seen this as some long-term invitation for the return of a, or the establishment of some state-centred economy. And there's good reason for that.
It’s worth remembering that prior to the COVID recession Australia had been recession-free for 28 and a half years - and by some accounts, that is a world record amongst advanced economies. Now this achievement was based on a track record of strong economic management and market-oriented economic reform over many, many decades. Yet we also know that our economy was going to face challenges, and that’s our outlook now.
COVID is helping accelerate big political, economic and technological changes that have been happening for some time. And forces that have been shaping a post-pandemic world is what I really want to focus on this evening, Australian time - these larger forces and the approach that we’re taking in Australia to support our economic recovery and our resilience into the next decade.
And the five I want to touch on tonight are as follows:
Firstly, the acceleration of the digital economy - the need to align the digital and physical worlds, and the centrality of digital to economic growth in the modern economy.
Secondly, heightening demand for skills and research talent in our economy - the need for world-class skills and training, more adaptable workplaces and closer collaboration between business and our research and science community.
Thirdly, a sharper geo-political competition has emerged, and this is playing out in multiple realms and regions, but with an epi-centre being in our region here in the Indo Pacific, as we see it.
Fourthly, there are new pressures on global supply chains and open trade, and we’ve seen that coming for some time now, with governments and companies having to reassess their rules, their assumptions from what some have called the era of ‘hyper-globalisation’.
And fifthly, the drive towards decarbonisation in the global economy, but for continued need to access affordable, reliable energy to drive our economies - with technological innovation and the push for a deep transition in the global energy system, alongside the need to maintain, as I said, that affordable and reliable energy for customers and businesses.
So we face these challenges in tandem with navigating a strong and sustainable recovery. The experience of past recessions suggests it’s less the depth of the recession that matters as the need and speed of the recovery. The world needs a fast recovery - reminiscent of those in the 80s and the 90s - not the prolonged sluggish recovery that followed the GFC in the 2010s.
This is vital because we know COVID has accentuated new divides between those bearing the brunt of the pandemic and those able to insulate, between countries that have strong health and vaccination infrastructure and those who sadly don’t, between the sectors that are growing - such as logistics, and health and IT, and the sectors that have truly suffered - in tourism and travel, and business events and the like.
A fast recovery must be our shared economic mission. A recovery that’s about creating jobs, building wealth and prosperity, and that narrows the divides in our communities - because shared prosperity is always the foundation for a strong and stable democracy and global security.
So let’s talk about some of those in turn. The acceleration of the digital economy. So, when COVID hit, the digital economy went gangbusters. Adaptation and innovation was almost immediate. Australia jumped five years ahead in digital adoption in almost the blink of an eye. Around nine in 10 Australian firms have adopted new technologies.
Our investments across digital capabilities meant essential government services remained operational and available. In 2020-21, there were 1.4 billion online interactions with government, an increase of 126 million on the previous financial year.
And just as we were stepping up as governments, the private sector was doing exactly the same thing. Solving problems. Unleashing change. And understanding that in a pandemic profound change was necessary to be able to push through.
In Australia, we estimate that increased digitalisation could add some $90 billion to our economy, as well as create some 250,000 jobs in the near future. Under our Digital Strategy, Australia aims to be a top 10 digital economy by 2030, and we’re well on the way to that.
And the key question is, how do we navigate this shift sustainably? We do it in a way that serves our economy but also our values as a liberal democratic society. We must encourage investment in jobs and opportunities that digital technologies generate. And at the same time, we need to ensure the digital world - and this is very important - is safe, it is secure and is trusted.
Now as leaders, we’re walking a tightrope - trying to get that balance and those settings right. Some of those settings are about clearing the way for business, getting out of the way. And in Australia, that has meant driving world-leading reforms in open banking, e-invoicing and digital identity, which means frankly people get paid more quickly, boosting cash flows, particularly in the small and medium enterprise sector. And unlocking the transformational opportunity of critical technologies - most recently with a new Quantum Commercialisation Hub, to commercialise the world-class quantum research we do here in Australia.
We’ve seen significant strides in our local tech sector, with global success stories like Atlassian and Canva and Afterpay. And we’ve seen enhanced engagement from international tech giants. For example, Google recently investing $1 billion to expand its presence here in Australia, including with a new Google Research Hub right here in Sydney, one of only a handful of cities where Google has decided that that’s where they need to be to drive that innovation and their investment.
Now as we encourage that investment, we are putting an equal amount of effort into ensuring the online world has the same rules as the physical world. You can’t be the wild west where just anything goes, because while the online world presents many great opportunities, it also presents very real risks to people’s safety, particularly women and children.
And Australia is taking world-leading action on this front, both at home as well as through international fora, like the G20. With the appointment of a dedicated eSafety Commissioner - we understand the world’s first, preparing legislation to unmask trolls who defame others by making platforms responsible for what is published on their platforms, strengthening online privacy protections, working with the social media companies, to make sure they combat misinformation and disinformation on their platforms. And of course, ensuring they take action in relation to terrorist-related content.
Secondly, it’s about heightening demand for skills and talent in our economy. And the pandemic has put up in lights the absolute importance of a healthy, skilled, productive and flexible workforce as the foundation for prosperity and security.
It has brought to the fore the argument that the World Economic Forum has been making for some time about human capital. To put it bluntly, a sense that too many businesses have undervalued and underappreciated the people on which the economic value of their firm and their nation rests.
Just how important can be seen in the context of the pandemic. Suddenly, how we work was completely upended. This led to the reconfiguring of workforces, challenging assumptions about how and where we could work. And as I mentioned earlier, Australia’s unemployment is just down to just over four per cent. Now that’s one of the lowest since records began here in Australia over 40 years ago.
And with that, efficiently matching the skills of our workforce with the needs of a modern and transforming economy, that’s a challenge and it’s incredibly important to meet the challenge. So how we anticipate those needs and plug workforce shortages must now happen in real time.
As a Government we actually doubled our investment in skills training through the pandemic, and one of the first invention initiatives we took in the economy was to keep our apprentices in jobs through wage subsidies for those businesses to ensure we did not suffer a generation of lost skills. Those apprentices, particularly the younger ones, would have been the first off, and they would never have got back on, and they would have been lost from our economy and the important skills training they would have been undertaking during this pandemic period. Well we kept them in there, and today we have more apprentices in trade training in Australia than at any time since we’ve been collecting records since 1963.
And we’re also planning ahead. On Australia’s horizon, there are huge opportunities - in the new energy economy, in the services sector, in modern, high-tech manufacturing - as well as in our traditional sense, strengths like resources, minerals and agriculture.
A few months ago, I met with some workers who have transitioned from car manufacturing to portable brain-scanner technology down in Adelaide. They were making cars before. Now they're making some of the world’s most advanced medical equipment in the world. And we’re going to see much more of that. Our Modern Manufacturing Initiative is investing in businesses right across the country to see them make that leap and do the transition.
So more jobs are requiring higher skills levels. STEM jobs are set to grow twice as fast as non-STEM jobs.
And the National Skills Commission, which was established by our Government, talks about the four C’s - areas that capture the pressing skills needs in the coming years. They are care, computing, cognitive and communication skills. And that’s where we’re headed.
In Australia, we’re working closely with business to design a better skills system - one that’s more integrated with industry, that promotes lifelong learning, and ensures future workforce needs are met. To put it another way, if people get trained to do the jobs that businesses need them to do, and that they need in order to get a job, and have a living in this country into the future with confidence.
Our Government is enhancing incentives for also ‘trailblazer universities’. We’re challenging business to get closer to our research institutes and partnering with business as we look to create a new generation of ‘researcher entrepreneurs’ here in Australia to help fire future growth. This is the, this is the land that brought WiFi, this is the land that brought the cochlear implant.
We have also implemented bold initiatives such as the Global Business and Talent Attraction Taskforce, which has been established to attract exceptional talent and marquee enterprises here to Australia.
The third deep trend I want to touch on is sharper geopolitical competition. Now the global strategic environment has changed rapidly, even over the last few years and before the pandemic, and it has deteriorated in many respects, in our view.
We live in what is an increasingly fragmented and contested world, particularly here in the Indo-Pacific, which has become the world’s strategic centre of gravity. The challenges we face are many. There are tensions over territorial claims, there is rapid military modernisation, there is foreign interference occurring in nations right across the Indo-Pacific and here in Australia, there’s malicious cyber threats and attacks that are taking place, disinformation, economic coercion. This is a highly contested space where we’re seeing much [inaudible] tactics being employed throughout the region intended to seek to coerce and intimidate.
Meeting these challenges demands cooperation and common purpose amongst those who believe in a, in a world order that favours freedom and the rule of law. That has been the basis for the world’s prosperity since the Second World war.
Australia’s interests are inextricably linked to an open, inclusive, resilient and prosperous Indo-Pacific. One where the rights of all states are protected, along with their aspirations as sovereign nations. We are working constructively towards this, building and strengthening a web of alignment to support these goals. Now that includes our Pacific family, through the Pacific Islands Forum, the nations in the Pacific. Our ASEAN friends, who are central to our vision for the region. Australia is the first nation to have been able to conclude a Comprehensive Strategic Partnership Agreement with ASEAN. And through the Quad, with our Quad partners India, Japan and the United States. This is not just about strategic and security issues. It’s about making a positive contribution in our region, from everything from energy supply chains and critical minerals, critical technologies, through to our response collectively to support countries throughout the region through the pandemic. With our growing number of comprehensive strategic partners, and our partners with, across Europe, like multilateral fora including the G20 and APEC and the OECD, and with our longstanding friends and allies, we are forming these alignments that are effective in securing peace and promoting peace in the Indo-Pacific.
I want to particularly draw attention to our new enhanced trilateral security partnership with the United States and the United Kingdom - AUKUS. This will also contribute to peace, stability and security in the Indo-Pacific region, benefitting all who live here.
We want to maintain an open, rules-based international system that allows all nations to flourish - free from coercion. Rules that foster international trade, create wealth, bring nations together, and enable them to cooperate and collaborate in trade. This will be vital not only for our recovery from the pandemic but for nations all around the world, but particularly in this region.
Now allied to heightened strategic competition is the new pressures on global supply chains and open trade. For decades, sophisticated and efficient supply chains have been integral to global growth and rising living standards. During the early stages of the pandemic, our normally well-functioning supply chains experienced incredible strain. To the credit of governments, in partnership with transport, freight and logistics companies, there was no wholesale collapse. But still, it was quite a shock. Many critical supply chains are yet to fully recover. And we need them to.
The recovery of global air and sea freight is still too slow. We are witnessing increasing costs and inflationary pressures, as well as reduced consumer supply. We need a greater collective focus on easing the constraints on international shipping and the recovery of passenger flights. The lesson of these times is that supply chain resilience requires a new partnership between countries, governments and business.
We have learned we must build in resilience, because in the future there will inevitably be times of turbulence and disruption. We have learned that just-in-time supply chains aren’t enough anymore. And we can’t take access to critical inputs for granted.
Australia, we’re known as a dependable supplier of goods and services. And we’re open to working together to create secure supply chains with trusted partners that make our countries collectively stronger. Trust is as important, if not even more important, than cost in modern supply chains.
More attention needs to be given to driving open international trade, which is a fundamental enabler of well-functioning supply chains and economic development. In recent times, Australia has experienced the effects of economic protectionism and coercive interests targeted towards Australia. As a trading nation, we have simply sought to held firm to our values. But this has not been without cost. I believe it has also come at a significant cost to the countries which implement such measures. It’s hard to see how anyone wins from those types of tactics. The world cannot afford to march in that direction, and more than ever there is a need to support the multilateral system and promote trade liberalisation.
Over the last decade, Australia has concluded multilateral trade agreements such as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership Agreement. We have also increased the coverage of our free trade agreements to 15, including the most recently and the first with the United Kingdom since they left the European Union. These arrangements now cover over two billion dollar, two billion new consumers, which represents 75 per cent of our trade, 75 per cent of our trade covered by formal trade agreements.
Now finally, let me just touch on what is arguably one of the greatest shared challenges, and that is the decarbonisation of the global economy. Australia has made a clear commitment to net zero emissions by 2050, and we have a credible pathway to get there. And it’s a very Australian pathway, it’s a very practical one. It’s about technology and letting technology lead that approach. We want to drive down the cost of technology. If you do not get the cost of technology for low emissions, zero and sub zero emissions, down to scale, affordable levels, then we will not see their take-up in developing countries around the world that who are responsible for the largest share of the growth in emissions in the world today. That is how you change it. We must make that technology affordable and scalable and able to be adopted in developing countries. If that does not happen, then all the talk will end in nothing, and emissions will continue to rise. And this is why Australia is so focused on wanting to be at the centre of the solutions that actually deliver low cost, credible, affordable, sustainable, scalable technologies for our new energy economy.
So we’re providing $21 billion here in Australia, working with business to develop the next generation of low emission technologies. These investments will, in turn, unlock more than $84 billion in private and public sector investment. Now this is technologies like hydrogen - and Australia is incredibly well-placed to be a hydrogen power trader of the future, ultra-low-cost solar is another area, carbon capture and storage. Then we want to export these technologies, working with partners in our region and around the world, to support that global energy transition.
We have now established low-emissions technology partnerships with Singapore, with Japan, with Germany, with Korea, with the United Kingdom, and we are close to concluding a partnership with our dear friends in India. And we’re also positioned to be a world-leading producer and exporter of hydrogen. Investing in Clean Hydrogen Industrial Hubs, working towards a Green Economy Agreement with Singapore, working with partners - including Indonesia and Vietnam - to put the Indo-Pacific at the forefront of the global energy transition. And developing clean hydrogen supply chains, and our first focus is with Japan.
The technologies required to transition to low-emissions technologies require inputs from all over the world. So our clean energy supply chains, they must be diverse, they must be reliable and they must be competitive. And we are very conscious of this in all of our efforts.
We’re hosting the Indo-Pacific Clean Energy Supply Chain Forum in mid next, mid this year, and we’ll bring together regional and global leaders from a number of sectors and industries - in science and technology, in manufacturing, mining, finance - harnessing their expertise and identifying the practical actions that we need to enable large-scale deployment of secure, reliable and affordable clean energy across the Indo-Pacific. Achieving net zero is now about the how, not the if, not the when, or the why. It’s about the how, and countries, companies, scientists, researchers, technologists, financiers, entrepreneurs, are the ones that need to drive this technological change. If we can achieve that, then we can solve the climate challenge. If we don’t do that, then we will not. And on this, I particularly want to acknowledge the leadership of my dear friend, President Widodo in Indonesia, in guiding global efforts on sustainable energy transitions through the G20, and I look forward to those discussions taking place over the course of their presidency.
So in conclusion, friends, the world faces many challenges. That’s not new. Australia faces these challenges with our trademark optimism. We’re a very optimistic people. We back ourselves to deal with whatever comes, and push through and overcome. We’re ambitious, we’ve got a gritty determination. And I think in a good human way. We’re a strong, stable and reliable partner. We’re culturally diverse - the most successful multicultural and multi-faith nation anywhere on the planet. With the most liveable cities, trusted institutions, world-class education and research institutions, and an economy that is strong and diverse and a workforce that is highly-skilled, we believe we are very well-placed. Yes, like any democracy, we have our arguments, and as we’ve seen over these past few years, when the chips are down, we do back each other in. We’re not perfect but we’re making our way strongly. Australia is and will play its part in the world recovery that the world needs. And I look forward now to taking your questions, and I thank you for your kind attention.
Q&A
Host: Thank you so much, Mr Prime Minister, for that very optimistic and powerful speech. We learnt a lot about the transition, being the green transition, but also the digital transition and how that has also impacted your vision for Australia in the post-COVID world. We have huge interest from the business community. Australia is an interesting country to invest and do business with. So without further ado, I would then turn to some of the CEOs. We're running a little bit over time. So if you're okay, Prime Minister, I'll bundle the questions. So we'll take two questions and then we'll see how how we fare. Let me then start with Henadi Al-Saleh. She's the Chair of the Board of Agility. In the middle of everything that you also addressed - food supply chains, but also inclusive growth. So Henadi, over to you.
Question: Hello. I represent Agility, a global supply chain services investment and innovation company. The issue of SME empowerment via technology is an issue I feel very passionately about. And in Australia, small businesses account for around 60 per cent of all exporters by absolute numbers, but export less than around one per cent of all merchandise value. We have seen the world over that e-commerce is creating new opportunities for SMEs to trade across borders. Can you talk about what you see as key opportunities and challenges for Australian SMEs to engage more actively in the global trade? And can you please also tell us more broadly about your Government's JobMaker business plan to digitally skill SMEs and increase their economic potential in general?
Prime Minister: Sure. Well, thank you for that, and I'll touch again on some of the points that I made. Small and medium-sized enterprises is exactly, as you say, in Australia. They are this, they are the backbone of our economy. Many of our very large companies, particularly our resources companies, can account for the bulk of by value and even volume of a lot of trade. But one of the areas we know there are great opportunities for our SMEs in a digital economy is through digital commerce, and that's why we've been seeking, working with other countries, starting with Singapore, to get new digital trade agreements and the standards that need to apply to those to make them very effective and accessible and easy to use for small and medium-sized businesses. One of the few upsides of the pandemic has been that, by necessity, transformation of small and medium-sized enterprises into embracing the digitisation of their business, and whether that's from their basic accounting systems and information management and their e-invoicing. That's been heavily backed by our approach as a Government to increase how people interface with government for government services, administration of taxation, all of these issues. So that means they upskill and change their systems to engage with government, and it’s more efficient, it costs them less, and that they can start to see the other advantages of of going down that path. The most important one is they get paid on time. That's the most important one. I mean, we've got now our 24, have so for a number of years, our new payments platform, one of the, one of the most fastest in the world, 24-7 instantaneous digital commerce and payment systems, which means that businesses can rapidly cut down the times for payments, which can transform their cash flow, which, for small businesses, it's all about cash flow.
Cyber security, I would argue, is one, if not the most, important thing for seeing a successful digital economy. People have to be confident that they can operate. And we are seeing malevolent actors in the cyber world, both state-based actors, criminal-based actors, others through industrial espionage. All of these sorts of things. And that is why cyber safety and security and the skills that support that, and awareness of that, supported by government institutions is a big part of our plan.
Then, of course, there's the infrastructure. And the National Broadband Network, which has been rolled out right across Australia, with the ability to further upgrade and improve those speeds and times. That's been a massive project here and and our technology, telecommunications experts and companies here in Australia have driven that together with the Government. So getting all of those pieces in place, lifting the skills, though, ultimately, both in quite specific technical areas, as well as a general awareness level, I think is also important. So I see the future of small and medium-sized enterprise in Australia tightly linked to their adoption and integration of digital technologies and how they run their businesses. And that's what the policies designed to support.
Host: Thank you so much, Prime Minister. We have around 10 more minutes and we have three more questions. Do you want me to bundle them or are-
Prime Minister: Sure.
Host: Ok. So then we take the two questions and you can then handle all the three of them. You’re used to Question Time in Parliament, so that's that's a tougher thing than this thing. So let's then move to a Mr Shunichi Miyanaga. He's the Chairman of Mitsubishi Heavy Industries, and Japan, being also one of your key collaborators as a country. So Mr Miyanaga.
Question: Thank you. I thank you very much for your encouraging address, Your Excellency Prime Minister Morrison. I understand that under your leadership Australia is making aggressive efforts towards carbon neutrality and is earnestly promoting production of carbon free fuels like ammonia and hydrogen by utilising renewable energy like solar, not only for your country, but for other countries. In the meantime, Japan is developing a variety of technologies that will contribute to realise carbon neutrality. For example, our Mitsubishi Industries Group is developing 100 per cent hydrogen-fired gas turbines by 2025 and also brushing up our carbon dioxide capture technology, which we have 70 per cent global market share now. I strongly believe that Australia and Japan will help accelerate very much the smooth energy transition of the world through mutual, technological and industrial collaboration, and also future engagement in international law-making for such transition. May I ask Your Excellency about your view on this?
Host: Thank you, arigato. Let's then go to John Holland-Kaye, the CEO of Heathrow Airport.
Question: Thank you, Mr Prime Minister, and I warmly welcome your comments on the importance of passenger travel. But I wanted to ask you about …
Prime Minister: I promise not to mention the Ashes. Oh oops, I did.
Question: I wanted to ask you about net zero. And Qantas and other global airlines have committed to net zero aviation, one of the hardest to [inaudible] sectors, by 2050. But it will take government policy support to get us all there, primarily from switching from fossil fuels to sustainable aviation fuels made with things like capture carbon and hydrogen. I wanted to ask, will Australia join the UK and other governments in supporting a global agreement on net zero aviation at ICAO later this year? Thank you.
Host: Thank you so much. We'll have one more question, Prime Minister. This is from Japan too, from Mr Toshiaki Higashihara. He is the Chairman and CEO of the famous Hitachi. So, Mr Higashihara.
Question: Thank you, Brende. It's my great honour to meet with Prime Minister. I’m Toshiaki Higashihara, Executive Chairman and CEO of Hitachi, and our company Hitachi has had a long history of doing business in Australia over the 55 years and we have always been impressed with the continued stable economic flows and the Australian Government's, you know, approach to infrastructure expansion to various programs. And my question then, in particular, could you please elaborate or explain to us in more detail the asset recycling program and what impact it has had on economic growth in Australia, as well as the future going forward? Please.
Host: Thank you so much. I'll add one question from my side Prime Minister before you go ahead. You also mentioned in your powerful speech the the increasing global fractiousness reality that we’re faced with, and we have the G2 competition, of course, but we're also seeing challenges in Europe these days. How do you see this going forward? Are you expecting like a decoupling in the global economy, or do you think the big powers are going to find ways also to collaborate moving forward? And you have been in the middle of some of these challenges yourself. So thank you so much to the CEOs and the Chairs, and over to you in Canberra, Prime Minister.
Prime Minister: Well, thank you and look, thank you for those those questions. I might start with our my friends in Japan. I very recently had the opportunity to have our dialogue with the Prime Minister Kishida, and he's doing a terrific job in picking up the reins of that relationship with Australia. We were able to complete our reciprocal access agreement through our Defence Forces and Self-Defense Defense Forces, and that has been, that is the first such reciprocal agreement, status of forces agreement, that Japan has had with any other country in the world and and really welcome that and the partnership we have with Fumio, with Prime Minister Kishida. And looking forward where we, to where we can actually meet again in person. We had the opportunity to meet when I was in Glasgow for COP26.
So picking up those issues, you're absolutely right about Australia's commitment on hydrogen. And what this is all, I mean, Australia has natural advantages - large large areas, lots of sunlight. And that obviously makes Australia an obvious place for being a hydrogen producer. And that is factoring heavily. But it has to be done at the right cost. So this is about the cost of electrolysers. So what we've done in our hydrogen sector is we have invested heavily in projects, in particular with Japan. They were one of the first countries we started working with on hydrogen. But it's about getting the cost of that production down to $2 Australian per kilo, because we know if we can get it to that, then it takes off. And all of our research, all of our science, all of our collaboration, working with our partners, is about getting those costs into those competitive levels where hydrogen then becomes a real alternative to many of the other fuel options that are out there. There is, I'm not aware of any country that is more committed to the transfer to hydrogen than Japan. And that's why I think the partnership between Australia and Japan when it comes to hydrogen is going to be one of the big game changers for the transition to new energy economy.
Now, one of the things which, why hydrogen’s so important is that many of the other fuel sources - solar and wind and so on - they're intermittent and they impact on the variability, particularly of electricity grids. And that is not necessarily a good thing, and that's why you need firming firming power sources that actually enable the renewable technologies to be effective. And that's why we see gas, traditional gas, as a transition fuel over many years, and we’re we're building gas-fired power stations here in Australia, to firm up our intermittent supplies of of renewable energy. Now we are also building the largest pumped hydro project anywhere in the southern hemisphere, what's called Snowy Hydro 2.0. This is one of the world's biggest batteries using our hydropower and the pump hydro technology in one of our largest hydro systems, which is a massive firming system within our own grid.
So it is all about solving those challenges and getting these these costs and the reliability down to a commercial scale. So we're really looking forward to continuing to take that partnership forward with Japan.
I mentioned Snowy 2.0, that's part of our big infrastructure investment. We've got about $110 billion federally of projects going on. Now that includes, of course, the Western Sydney Airport, Sydney's second airport. It's been a long time coming. It's about a quarter of the way built now, and the Government has been directly involved in that. There's the Inland Rail which is connecting Melbourne all the way up to Brisbane through the inland of the east coast, and then potentially we are considering how that could be taken all the way up to one of our major industrial ports in the north of Queensland, right up the top of Australia, in Gladstone, which is becoming an absolute hub for so many projects, including things like hydrogen and renewable fuels and fuel conversion technologies, with university support and great industry involvement.
So whether it's transport infrastructure, and much of that transport infrastructure by our provincial governments, particularly in my home state here in New South Wales, has been funded by the privatisation of energy assets, which is then, in turn, fuelled major investment in roadways, in bridges and other key infrastructure. Our ports are being reinvested in, and this is incredibly important to provide the engines of our economy.
Talking, moving to our friends in London and the the forthcoming ICAO discussion. We are one of over 100 countries who’s committed to the Carbon Offsetting and Reduction Scheme for International Aviation - CORSIA. That was adopted back in 2016 and our major international airlines, Qantas and Virgin, we’re participants in that. Australia doesn't make commitments without fully considering what the impacts are, and when we make commitments, we keep them. Our emissions have fallen by over 20 per cent. Now only the UK, France and Germany and one other of the G20 nations have a, have a bigger reduction than we have across the G20. So we're actually getting it done. Australia cops a bit of a flak on this issue, but it doesn't bear out with the facts. We have cut our emissions by over 20 per cent on 2005 levels. Now, no disrespect to others and they’re dear friends, but that is about four times greater than what's occurred in Canada. It's it's more than 10 times greater what's occurred in New Zealand. And we are a an exporting commodities country. And so our transition to the new energy economy is different to the UK’s and many other countries. And so we will make decisions about how we get to net zero by 2050 in a way that enables to keep the momentum in the economy, but not losing sight of that ultimate objective. And the way we will get there is by ensuring that those technologies and their adoption, Australia can meet those goals.
So, you know, we look at all of these things carefully. But when we make a commitment, we keep it. We beat it. We we beat our Kyoto one, we beat our Kyoto two, we're going to, we're going to run past our Paris Agreement commitment in an absolute canter, and we will exceed it. And at the moment we’re we're projecting that we will have a 35 per cent reduction by 2030. It may well be more than that. Our commitment is a 26 to 28 per cent, but that now is overwhelmed by where we believe we'll get to. So we'll make sensible commitments, we'll keep them, and and we're very serious when we do make them.
Finally on the issues that you’ve raised about what is an increasingly fractious world, and that is very, very true. And we're seeing that play out in Europe at the moment, in the Ukraine, which is a long way from Australia. But we certainly see it in the Indo-Pacific, the comp competition between, as you say, the G2. And and we're seeing that, and all countries in the region are being impacted by that. Now our hope is that common sense prevails. I mean, for many, many years, we have celebrated the growth in the Chinese economy and we've been a key participant in it, just as we did in the growth of the Japanese economy, and as we are now seeing growth of economies like Indonesia, India and Vietnam - who are tremendous partners in Australia - Malaysia and many of the countries of ASEAN. And common sense says that we can respect each other's countries' differences and we can have different political systems. But at the end of the day, we have to respect the sovereignty of each nation, and the idea that we we would be in some sort of a hemisphere of influence by any one power in the region is not something that I think is consistent with global stability and indeed regional stability, and and for good economics and good trade and the prosperity of people in the region. So it means that aligning aligning the policies and the actions of like-minded countries, I think, is an important stabilising influence in our region. And that's why Australia has been so active in setting out where we stand, where we don't cause surprises. We we’re very clear about what we're about and we seek to work with as many like-mindeds and align our interests wherever possible.
Host: Thank you so much, Prime Minister. This has been a very interesting [inaudible]. Also for us to learn more about your vision for Australia and also the positioning of Australia in the global economy. So on behalf of the CEOs, the business community at the World Economic Forum, I really, really thank you for doing this, and it has been a great session.
Prime Minister: Thank you very much. I very much appreciate the invitation.
Host: Thank you. See you soon.