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Monday, November 10, 2014

PM Transcript: Address to the APEC CEO Summit National

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Thank you very, very much Mr Price for those words of introduction. I would also like to acknowledge Dr Vu Tien Loc the Chairman of the APEC CEO Summit, ladies and gentlemen.

First may I say that it's a great pleasure for me and for all the other Australians here, either as delegates to the CEO Summit or as part of my travelling party to be in Hanoi. I want to congratulate the Vietnamese Government, I want to congratulate the business community of Vietnam for the preparations that have been made for this the largest gathering of this kind by far ever staged in Vietnam. It does have historic significance for this country and it is an important further milestone along the path of bringing the people of this country and the people of the region, not least my own country, where there are almost 200,000 Australians of Vietnamese descent bringing our two societies together. I hope that all of the members of the various delegations will go away from Hanoi with warm and very affectionate views of both this lovely city and also the friendship of the Vietnamese people.

We gather at this APEC Summit, of course, all of us, I think, very conscious of two historic and permanent shifts in the world's economic order that are under way. The first of those is that the centre of gravity of the world's middle class is shifting permanently to Asia. Not since the industrial revolution has the centre of gravity of the world's middle class inexorably shifted in such a direction. By the year 2010 or 2015 at the latest there will be between 400-800 million middle class citizens in the nations of Asia and for the first time since the industrial revolution it will be possible to say to that the centre of gravity of the world's middle class has shifted from Europe and North America to Asia.

The second inexorable and permanent, in my view, economic shift that is occurring is that the most dynamic region in the world is, and will remain, the Asia Pacific region. The region that is so far as economic leaders are concerned represented by the APEC gathering. And that is the reason why Australia has from the very beginning put an enormous investment of time and effort politically and diplomatically and economically in APEC and why I take this opportunity of reaffirming my country's very strong commitment to APEC as the principal vehicle for regional cooperation at an economic level.

These meetings provide not only a remarkable opportunity to share experiences and test policies economically but also a remarkable opportunity for bilateral political exchange and dealing with some of the world and the region's particular political challenges.

I put it to you that, and I would hope this is an incontestable proposition, but I always think it's a good idea to repeat incontestable propositions unless they lose that particular character. I put it to you that the great success of this region has been its investment in openness and innovation. That it's a good idea to do a little stocktake at a meeting like this and to trace the experience of those countries that have embraced innovation and have embraced openness and globalisation and compare that experience with those countries that have set their face against it. And also trace the experience of countries that went down the path of globalisation and innovation earlier compared with those countries that took rather longer to realise that innovation and globalisation and economic openness remain the unavoidable glide paths to economic growth and the lifting of living standards.

It's popular of course to be in receipt of admonitions from leaders of pop culture, if I can put it that way, and others to do more to lift the world's poor out of their current state. Some of those commentators are not so ready to acknowledge the extraordinarily large number, the millions of people in this region and in other parts of the Asian region that have been lifted from poverty over the last 25 years as a result of the application of the principles of innovation and globalisation.

The success story of countries such as China in particular, but increasingly of course India and other member countries of the Asia-Pacific region. The success story of those countries in lifting their populations out of poverty through economic growth is often lost sight of. Understandably the world still, and rightly so, agonises about the apparent inability of the countries of Africa to seize the tools of better governance and economic optimism to bring about the same changes within their nations but it cannot be denied that the success of so many nations in this region in lifting their populations out of poverty has been truly remarkable and is more deserving of comment and praise than is often the case.

I think it is therefore important that a meeting like this to reaffirm our belief that we should stick to the winning formula, we should therefore do two things in the area of international trade. As a group the APEC countries should reassert their belief and confidence in the importance of the current Doha Round being conducted under the auspices of the World Trade Organisation. It doesn't look very optimistic at the present time because there remains a gulf despite what I regard as relatively generous offer from the United States, there still remains a significant gap between the position of the United States, the European Union and some other major participants in the international trade negotiations but we should take the opportunity at this APEC gathering to reassert the importance of the Doha Round and reassert our belief that achieving progress on the multilateral front is a goal that all of us should maintain and should strive to achieve.

The other thing I believe we should do is to recommit ourselves to the Bogor goals of free trade within the developed countries by 2010 and within the developing countries by 2020.Now we haven't got there. You would have to be a supreme optimist to say that we would absolutely achieve the first of those objectives by 2010 but we have made a lot of progress and I think it is always important in these things to preserve a sense of balance and a sense of perspective and we ought to note the progress that has been made, the sharply lower trade barriers that exist between the member countries of APEC and recommit ourselves to achieving an even closer outcome in relation to those goals.

In introducing me Mr Price was kind enough to talk about Australia's own economic experience. My country is now in its sixteenth year of unbroken economic growth and it's probably the longest period of continuous economic expansion that Australia has had in her history. We did have quite strong levels of economic growth in the 1960s but in those days we were a far more protected economy. We had a controlled exchange rate, we had high tariffs, we had a centralised wage fixing system that said that you should be paid the same irrespective of output which was a nice idea in theory but in practice it did have a stultifying effect on Australia's capacity to grow and to compete.

In 2006 we are a vastly different country [emphasis added]. We have very few tariffs to speak of. We of course have a floating exchange rate, we have a much freer labour market, we have a very strong budget surplus and we have engaged a number of very important innovations in economic policy. And one of those which is not very often remarked about, either in Australia or elsewhere, is that I think we are the first and perhaps only developed country in the world to have totally privatised our labour exchange system. Something that we did not long after the Government came to office in 1996 [emphasis added].

So we have had a great deal of success and I would say undeniably that this is the product of policies of openness and policies of innovation and Australia's continued economic growth will rest very heavily on a maintenance of those policies.

We have, of course, been blessed by providence with remarkable energy resources and I want to say before I conclude something about a contemporary issue and a contemporary challenge for all of our countries and that is in the interlocking areas of climate change and energy security. And these two issues do have to be talked about together because they are really the flipsides of the same coin. No country that is seeking to expand and lift its living standards is going to forsake the availability of cheap resources and cheap supplies of energy. And equally no country is going to imperil its energy security as part of the process of reducing the negative effects of climate change [emphasis added].

Like many people I am not necessarily convinced that everything that is said about climate change is right. I retain some degree of scepticism about some of the things that are said in a frenetic manner about climate change. I am nonetheless of the view that the accumulation of sensible scientific opinion suggests that the level of greenhouse gas emissions is potentially dangerous and even if at a minimum we adopt the insurance principle it's important that the world do something about it.

One of the great advantages of APEC is that it brings together five of the six member countries of AP6 which is some five countries, the United States, Australia, Korea, China and Japan, with India being the only other member of AP6 which is not a member of APEC. And this particular grouping of countries which coincidentally comprises about 50 per cent of the world's GDP, about 50 per cent of the world's greenhouse gas emissions and about 50 per cent of the world's population also coincidentally brings together some energy-hungry countries such as China and India and also some energy-rich countries such as Australia and Canada.

In order to move our own country's policies forward on issues of climate change and energy security, I have recently announced a task group comprising both the Government and the Australian business community to examine in broad detail the size and structure, or the nature rather and structure of what a world emissions trading system might look like.

Australia has not signed the or ratified the Kyoto Protocol and we won't be ratifying the Kyoto Protocol [emphasis added] for the reasons we have stated for a number of years. Not only is that Protocol not comprehensive enough in its application to the world's major emitters but potentially carried with it penalties and disadvantages for Australia, particularly in relation to our unique endowment of energy. We as a matter of principle would support involvement on a global basis in a emissions trading system and one of the purposes of this task group in Australia is to examine the structure and the nature of what a global emissions trading system might take and also in the meantime the additional steps our own country will take consistent with the development of a global emissions trading system.

I might mention that although Australia has not and will not ratify the Kyoto Protocol the emissions target set by Kyoto for Australia will either be met or as we say 'near as damn it' be met and that target of 108 between the designated years of 2008 and 2012 and whilst we for good national interest reasons have not embraced ratification, we have nonetheless committed ourselves to achieve the target which has been set and I am very optimistic that we will in fact do that.

Part of our process in relation to climate change is to have an open-minded approach to nuclear power. I believe that public opinion in Australia has shifted very markedly on nuclear power and I see the response of our country and indeed the response of the world in relation to the challenge of climate change as involving not one single response but a response that acknowledges the importance of such developments and innovations as clean coal technology and Australia has invested very heavily in that and will invest even more in that and I hope in partnership with other countries in the region. But also in acknowledging that renewables, although they can never take the place of fossil fuels and potentially nuclear power in relation to base load power generation, that they can play a part. So we see all aspects of generation. Fossil fuels, which we see the world still being very heavily dependent on decades into the future, nuclear power and renewables all playing a very significant role.

So ladies and gentlemen let me finish by saying again that we are part of both geographically and economically part of a permanent and historic shift in two areas. The way in which the centre of gravity of the world's middle class has shifted to Asia, the extraordinary contribution being made to that process by China and now increasingly India and of course our own region which brings together what is still the most powerful economy in the world and in my view likely to remain for the foreseeable future, the United States, and the other great economies of this region.

This is the most dynamic, fastest growing, vital economic region of the world and I hope that the opportunity of this meeting taking place here in Hanoi is of lasting value to the people of this country that I wish well on behalf of my Government and all of the Australian people.

Thank you.