Article – Foreign investment built Australia: Robb31 March 2014
29 March 2014
This is an edited version of Minister for Trade and Investment ANDREW ROBB’s speech to the Credit Suisse Asian Investment Conference in Hong Kong on Friday.
SINCE the First Fleet, Australia has been a country unashamedly reliant on foreign investment. It has helped build our infrastructure, grow our businesses and provide the quality of life and enviable standards of living Australians enjoy.
As a big and vastly populated continent with a thin domestic capital market, but great investment opportunities in front of us, our reliance continues today. It is integral to the development of our capital intensive resources and energy projects.
It will help us realise the enormous unfulfilled potential in agriculture in this the century of food and water security, and to develop Northern Australia which has so much to offer in support of our continued economic growth.
As a new government in Australia, we have a clear message to global investors – we unambiguously welcome investment from abroad. We are open for business.
Our objective is to create the most stable and conducive environment possible for investment.
There is a new appetite in many countries to pursue trade and investment as the drivers of growth and job creation. In Australia our central objective is to displace big government from the centre of economic policy and replace it with robust growth driven by the private sector.
We have also taken a series of difficult decisions to end government hand-outs to struggling enterprises, because it is not the role of government to indefinitely prop up uncompetitive business practices and delay inevitable adjustments. Rather, as a government, we are committed to playing to our strengths. And there, the stars are aligning for Australia.
A significant report was recently released by Deloitte: Positioning for prosperity – Catching the next wave. The key insight in this report is that Australia’s major strengths – our areas of comparative advantage – align with the major areas of projected global demand and growth in the years ahead, including gas, tourism and agribusiness.
The focus on export and investment has now shifted to the domestic consumption of an exploding middle class. In recent decades China has lifted some 500 million people out of poverty – this is something unprecedented in human history. The Chinese middle class is hurtling towards one billion within 20 years. This growth will drive extraordinary consumer demand and open up new opportunities for Australia.
This will be the century of food and water security and Australian agriculture has enormous prospects.
We have a world-class agriculture sector and an enviable reputation for ‘clean and green’ produce. Currently we help feed 60 million people per year and our exports of agricultural technology and services help feed a further 400 million.
We should be striving to double those numbers.
In 2012, we exported 90,000 tonnes of red meat to China. In 2013 we exported 265,000 tonnes. Consider the emerging demand for Western milk powder to feed the 18 million plus babies born in China alone, let alone the broader middle class Asian demand.
Our neighbours in New Zealand secured a free trade agreement (FTA) with China in 2007 – since then their dairy exports to China have grown by $2.2 billion. Meanwhile, Australia’s, in the absence of a China FTA, have grown by less than $70 million.
But now, an FTA with China seems within our grasp and anticipating this we are already seeing substantial Asian investment into the Australian dairy sector.
There is enormous scope for new investment in Australian agriculture, including joint ventures. We are seeing significant new Chinese investment to expand the iconic Ord River irrigation project in Australia’s north. There is an estimated 152,000GL in total surface water run-off in the North. Currently we only capture around 2 per cent – if we could capture and use even 6 per cent, we could feed millions more as a food bowl for Asia.
As a country we are determined to compete at the quality end in what we do, whether it is six star tourism experiences or premium quality produce.
The key message is that Australia is very much open for business. We have a range of strengths and investment opportunities that mesh well with the exploding demand of the Asia Pacific.
We are working hard to open new markets to trade through FTAs, and as a government we are committed to providing the best environment possible to invest.
Courtesy of The Land