NEW REPORT OUT NOW
26/06/2024
It's so important in the life of our nation to have these forums - to come together and grapple with the big questions that we must answer in advancing our economic progress.
Assuring our prosperity isn't solely about assuring our standard of living – though it is certainly about that.
It is also about assuring something even more fundamental.
That is our ability to live together in a unified and resilient community; secure in a peaceful region; able to withstand the shocks that are inevitable in an uncertain world.
Recognising the connection between securing our economy and securing our home has always been central to how Labor governs.
That connection is only becoming more pronounced, as economic resilience is increasingly fundamental to national power in a multipolar world, where strategic contest is played out using all arms of statecraft.
The post-war economic order enabled and accelerated development and growth through openness.
And today, as then, economic integration provides a critical incentive for peace, as regional economies share the benefits of prosperity.
But economic interdependence can, as we know, also be misused for strategic and political ends, including through deliberate coercion.
Our great trading nation has to grapple with a world where trade is a vulnerability as well as an opportunity.
As my colleague Jim Chalmers has noted, the global economy is framed by a number of serious challenges…
Heightened geostrategic competition…
An international system under continuous pressure whether from war, pandemic or disaster, or from the undermining of rules and institutions.
Demographic change…
Greater risk of major shocks to supply chains…
A vast increase in industrial subsidies in major economies; and a restructuring of global trade from the net zero transformation.
Being resilient in the face of these challenges – and others I will come to - means we have to apply far more ambition across all arms of Australia's national power.
First let me talk about our economic power.
Australia can't match the scale of subsidies we have seen elsewhere.
But we can step up our investment in our comparative advantages and assure our national interests.
And we can work proactively with our trading partners to get the most efficient and secure supply to market.
The world is committed to net zero by 2050.
As the Prime Minister has said, if you could have designed a global opportunity for Australia, you could not have chosen a better starting point than this.
Because achieving this transformation will need much more clean energy – and more of the resources and technology that go into it.
The metals and minerals, rare earths and resources Australia has in abundance.
Last month's Budget invests in our renewable energy superpower ambitions…
Including production tax incentives for green hydrogen and processed critical minerals, so industries are rewarded for scale and success.
The Future Made in Australia Innovation Fund will help develop new industries like green metals and low carbon fuels.
And we're also allocating $566 million to map the geological potential of our entire country – so for the first time in Australia's history we will know the complete picture of our critical minerals and groundwater.
This is part of how our Future Made in Australia package will help make us an indispensable part of the global economy.
To realise the opportunities of a Future Made in Australia we're changing the way we attract and deploy investment.
We will create a front door for investors to accelerate and coordinate transformational projects...
Establish a domestic National Interest Account, that adds discipline to investments in the national interest…
And strengthen and streamline approvals.
The Future Made in Australia Act and the National Interest Framework will make clear that value for money, discipline, analysis and rigour will underpin our approach.
We are also reforming and renewing our foreign investment framework - including balancing economic benefits and security risks.
Through our Future Made in Australia policy and our changes to foreign investment settings, we will make Australia a more attractive place to invest and boost economic prosperity and productivity – at the same time as we strengthen our ability to protect the national interest in an increasingly complex geoeconomic and geostrategic environment.
This focus on our economic resilience is part of how this Government is applying unprecedent coordination and ambition in our statecraft, harnessing all elements of our national power to face a more contested and uncertain world.
In addition to the challenges I laid out, allow me to give the briefest summary of some of the challenges to international peace and security.
Climate change is leading to more disasters. Extreme weather threatens food and water security, with grave implications for global stability.
More people displaced. More conflict costing more lives.
We see that cost every day in Gaza.
This conflict must end. Aid must flow. Hostages must be released. The ceasefire must be agreed, and we cannot tolerate any regional spillover. We must move towards the only hope to end the cycle of violence, with a two-state solution.
Meanwhile, Russia partners with North Korea and continues its full-scale invasion of Ukraine.
It is the most fundamental breach of international law, and the tearing up of the UN Charter by a permanent member of the UN Security Council that's charged with its protection.
There are many more challenges that fall short of war.
Disinformation, including from states, is being used to undermine the cohesion and institutions of democracies.
We have seen Chinese vessels, including maritime militia and coastguards, engage in deeply worrying behaviour in the Second Thomas Shoal, the Taiwan Strait and elsewhere.
I have spoken many times of the risk of accident and escalation, and recent events have only reinforced the gravity of the challenges that we face.
China is the world's second largest economy, representing 17% of the world's GDP.
As a great power, China is going to keep trying to shape the world according to its own interests.
China is trying to do that in many places, including in our region.
And China is going to keep being China.
The China relationship will always be challenging.
There's no great mystery to that, there's no surprise.
There's only the question of what we do about it: how we navigate this relationship – what we do in pursuit our own national interest.
Cooperate where we can, in areas like trade, like tourism…
And disagree where we must, whether on regional security, interference, human rights or Australians detained in China.
We have important differences to manage. Mature, calm and consistent engagement helps us manage those differences.
Engagement is not concession. On the contrary, it creates opportunities for dialogue at the highest levels on issues that matter to Australians.
This was the case just last week, when the Prime Minister hosted China's Premier Li Qiang in Australia, the first visit by a Chinese leader in seven years.
And I want to be really clear about something else.
We should never look at the Australia-China relationship in isolation.
Stabilising relations with China is about navigating differences wisely.
But it is also contributing to regional balance. We have more weight in the region when we manage our challenging relationships with maturity.
So we are doing the work that should have been done a decade ago to again make Australia a partner of choice in the Pacific.
We are increasing our collaboration with new partners and traditional partners; with Southeast Asia, with Japan, with India, with the Quad and through AUKUS…
Working with those partners to uphold the rules and reform the institutions that we helped establish…
Playing to our strengths, and using all arms of our national power, economic, cultural, diplomatic, defence…
This is how we contribute to the strategic balance of power in the region.
How we optimise our position, how we advance our sovereignty and security in an ever more competitive and uncertain world.
That's how we help shape the region according to Australia's interests, rather than just let the region be reshaped around us.
So we can't just talk tough without doing the rest of the work.
We can't just brush off international law when it doesn't suit us.
And we can't go back to picking fights and blowing up relationships.
As I said, we can never maximise our position purely through bilateral engagement.
We need to invest in our credibility as a partner to the region.
Australia lost a decade that we're not getting back.
We can no longer be the only partner of choice.
Abandoning the field left space for others to come into the Pacific.
Since then, those efforts from outside the region have surged.
It is by our actions that we have been able to rebuild relationships and restore trust among the Pacific family – so that we can again be a partner of choice.
But the change in the regional landscape is permanent, and the regional contest we are in is permanent.
Things may not go Australia's way every time, but we're going to keep pressing our national interest in the contest every day.
Since coming to office, the Albanese Government has made record investments in the Pacific.
We're making the most of Australia's advantages, whether through the cultural bonds of sport, or by creating more opportunities for Pacific and Timorese nationals to live, work and study in Australia.
We've helped partners restore critical services in the wake of massive cyber-attacks and we've responded to natural disasters.
We're again part of the solution on climate change, with our targets to reduce emissions by 43 percent by 2030 and increase renewables to 82 percent of our energy supply by the same time.
We've enhanced our maritime security cooperation, signed a status of forces agreement with Fiji, and signed landmark bilateral security agreements with Vanuatu and Papua New Guinea.
Indeed just last week, a delegation of seven Australian ministers visited PNG where we announced a new package of initiatives to strengthen PNG's internal security and advance its law and justice priorities - all part of that Bilateral Security Agreement.
These are all major inroads into re-establishing partnership and trust.
And this week we've been hosting the newly elected Prime Minister of Solomon Islands.
Within eighteen months of taking office, we took Australia's biggest step with a Pacific country since the independence of Papua New Guinea, through our Falepili Union with Tuvalu.
This agreement supports the people of Tuvalu to live and thrive in their home through land reclamation and continued investments in infrastructure, education and health.
At the same time, it will provide Tuvaluans the choice to live, study and work in Australia.
This is the first agreement of its kind anywhere in the world, providing a pathway for mobility with dignity as climate impacts worsen.
And it provides a mutually beneficial security guarantee.
The Falepili Union is a powerful message to the region of the kind of partner Australia strives to be. A partner that listens, a partner that acts, and a partner that is committed to ensuring that the Pacific remains peaceful, safe and prosperous.
Just as in the Pacific, in Southeast Asia we are increasing the extent to which our neighbours see Australia as an integral part of our region.
Trading and investing more in the region means more opportunities for Australian businesses to grow, creating more Australian jobs and boosting our economic prosperity.
Moreover, growing our economic security in this way is also a key element of our statecraft and central to our national interest.
We know that Southeast Asia needs more investment, goods and services to boost its economic development, support the transition to clean energy, and for the people of the region to reach their full potential.
It's in Australia's economic and strategic interests to respond to these priorities.
It demonstrates to the region that there are interests we are nurturing beyond strategic interests.
It builds alignment.
It offers the assurance that comes with knowing that our success is their success; to create the shared value that fosters peace and stability in a time of heightened geostrategic contest.
And the opportunities are clear.
In 2022, Southeast Asia's combined nominal GDP was around A$5.2 trillion—larger than the economies of the United Kingdom, France or Canada.
Indonesia alone is projected to be the world's fifth-largest economy by 2040.
But the reality is that Australia's trade and investment with the region has not kept pace with the growth of Southeast Asian economies.
While Southeast Asia has grown rapidly, when we came to government, Australian direct investment in Southeast Asia was lower than it was in 2014.
We need to turn this around. That's why we appointed Nicholas Moore AO as Australia's Special Envoy to Southeast Asia, and charged him with developing a Southeast Asia Economic Strategy to 2040.
The Albanese Government has delivered a number of measures in response to the Strategy, including a $2 billion investment financing facility to boost Australian investment in Southeast Asia - particularly in clean energy transition and infrastructure development.
Specialist deal teams are being established in Jakarta, Singapore and Ho Chi Minh City to work with investors; ten senior Australian Business Champions have been appointed to ensure Government and the private sector work in tandem; and we're coordinating with local Southeast Asian diaspora through a new Southeast Asia Business Exchange.
We are also improving visa access for businesspeople from Southeast Asia.
We do all this because we live in the most competitive region in the world. This offers us enormous opportunity – and equally large exposure if we fail to seize it.
Australian business knows the threat to our resilience of having too many eggs in one market.
Our Government's initiatives are designed to make it easier for Australian business to get established in new markets.
And now we are asking you to do just that. To create new value for your companies, and for your country.
As I said, the economic and security partnerships across Southeast Asia and the Pacific help build alignment – and they also build a dynamic that reassures the region of our intentions for peace and prosperity.
That dynamic also raises the cost for any potential aggressor.
But there's still more we need to ensure the pursuit of conflict is never worth the risk.
Domestic resilience is central to deterring any would-be aggressor.
So in addition to investing in our economic power in the ways I've outlined, we are also ensuring that we are capable of defending and sustaining our political institutions, critical infrastructure and social cohesion against measures short of war.
Deterrence also requires us to make multi-generational investments in military capability to underwrite our diplomatic, economic and strategic efforts.
It requires us to play our part in upholding international law, including the Law of the Sea.
Not only is Australia continuing to operate in international waters and airspace, but for the first time in Australia's history, we are undertaking new regional partnerships and joint exercises, such as new maritime cooperative activities with the Philippines, Japan and the United States.
As Kevin Rudd has said, deterrence reduces the risk of war by design.
And deterrence should be accompanied by a range of measures to reduce the risk of war by accident.
Since before I became Foreign Minister, I have been calling for dialogue between great powers, between militaries, and the introduction of conflict prevention measures.
We welcome the resumption of military-to-military talks and political dialogue between the US and China. Australia has also announced a maritime dialogue with China, bringing together military and foreign affairs officials.
This underlines my earlier point: engagement is not concession.
It is necessary to have avenues to advance your interests and prosecute your differences – more so when it comes to unsafe behaviour in the air and at sea.
That's what diplomacy is for. It creates opportunities to reduce tensions, negotiate agreements and resolve disputes.
Diplomacy frames the calculus that each country faces.
It signals intent and red lines. It builds coalitions, and this is especially important for small and medium sized countries, including Australia.
That's why it was in Australia's interests to help build international institutions like the UN, and why we can't dismiss them now.
These organisations are where nations come together to decide the rules and defend the peace.
Small and medium countries need them to maintain their sovereign choices.
This is central to how we enable a region and world where no country dominates and no country is dominated.
In all these ways – by applying all tools of national power – we make Australia resilient to the shocks and challenges we will inevitably face.
And we prime ourselves for the opportunities the future will present.
In closing I want to reflect on perhaps the most elemental aspect of our national power: our people.
We are 26 million people, from more than 300 ancestries, and home to the oldest continuing civilisation on the planet.
There is vast power in that.
The ability to see and understand every part of the world.
To reach into every part of the world and find common ground.
Yet it's also something we need to nurture. With a society as diverse as ours, bad actors will try to exploit differences for their own advantage.
If we allow the sundering of our community, if we allow conflicts overseas to be reproduced here; if we shout each other down and insist on respective absolutes; the bedrock of our stability, our security and our prosperity is shaken.
Nothing is more important for our future than ensuring that Australia remains a pluralist nation, welcoming different races, religions and views, united by respect for each other's humanity and for each other's right to live in peace.
So I close by asking each of you – as leaders in your enterprises – to join us not just in building our economic resilience, but also to join us in working to protect our unified community.