Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Hansard source

by leave—I rise to make a ministerial statement to the House on a significant trans-Tasman meeting which took place in Wellington, New Zealand on 13 and 14 June—the Australia-New Zealand Leadership Forum. I also acknowledge the presence in the gallery of the New Zealand High Commissioner, Dr John Larkindale. It is a pleasure to have him with us today, as it was to have him at this forum.

The Rudd Labor government recognise the special significance and importance of our relationship with New Zealand. We recognise that Australia and New Zealand have uniquely close and multifaceted ties across government, business, and broader people-to-people links. We have much shared history and many common interests and perspectives, notably common fundamental values such as securing a fair go for all.

Our relationship extends in a wide range of other fields of endeavour. The ANZAC spirit, forged at Gallipoli, helped shape the soul and character of both of our nations and remains a defining moment in our respective histories. These ties have been reinforced in subsequent conflicts—other World War I campaigns, the Second World War, the Korean conflict, in Malaya and Vietnam, during the first Gulf War, and more recently Afghanistan. Our two nations have also worked together in bringing order and stability to East Timor. New Zealand is also making a significant and multifaceted contribution to RAMSI in the Solomon Islands. We greatly value the support of New Zealand in these important theatres.

Australia and New Zealand also have enviable international records for social and economic reform and innovation. Our two countries were pioneers in the early 20th century in introducing universal suffrage, pensions and other measures to promote social justice. Since that time Australians and New Zealanders have led innovation in a variety of policy and other fields.

It is appropriate for the new government in Australia, given our ambitious reform agenda, to intensify our policy dialogue with our counterparts on the other side of the Tasman on a range of priority issues, including the single economic market concept. Australians and New Zealanders understand the demands of a globalised economy. This has spurred economic reforms on both sides of the Tasman, which must continue if we are to maintain our standard of living and prosperity.

As Minister for Trade, I am naturally focused on the economic and trade dimensions of Australia-New Zealand relations. As a result of the closer economic relations framework, and the related single economic market initiative, our trade and investment destinies are inextricably linked.

It is a priority of the Rudd government to reinvigorate Australia’s trans-Tasman links given their fundamental importance. As an unequivocal affirmation of this commitment, Australia sent its largest ever ministerial delegation to the Leadership Forum. Our team comprised the Deputy Prime Minister, Julia Gillard; the Attorney-General, Robert McClelland; the Minister for Infrastructure, Transport, Regional Development and Local Government, Anthony Albanese; the Minister for Superannuation and Corporate Law, Nick Sherry; the Minister for Finance and Deregulation, Lindsay Tanner; the Parliamentary Secretary for Pacific Island Affairs, Duncan Kerr and me. The Australian opposition was represented by the Hon. Peter Dutton MP, the shadow minister for finance, competition policy and deregulation.

The forum is led by business from both sides of the Tasman. My ministerial colleagues and I were joined by a high-powered group of 40 Australian business and other leaders, led by forum co-chairs Rod McGeoch and his New Zealand counterpart John Allen. There was also very high level of commitment to the forum on the New Zealand side across government, business and the wider community—with prominent chief executives from Air New Zealand, Telecom New Zealand and PricewaterhouseCoopers in attendance.

Prime Minister Clark led the New Zealand ministerial team, addressing the official dinner and holding bilateral meetings with both the Deputy Prime Minister and me. New Zealand Deputy Prime Minister and Finance Minister Dr Michael Cullen; Trade and Defence Minister Phil Goff; Foreign Minister Winston Peters; Commerce Minister Lianne Dalziel; and Energy and Climate Change Minister David Parker all participated in the forum proceedings. The New Zealand opposition was represented by the Leader of the Opposition, John Key. The New Zealand side extended us every courtesy and warm hospitality throughout our stay in Wellington, sparing no effort to ensure this event was a success.

The forum dates from 2004. Its purpose is to advance understanding and cooperation across the spectrum of trans-Tasman links and aims to tackle a range of broader strategic issues of domestic and international significance. It provides an invaluable opportunity to look beyond day-to-day preoccupations and take a longer term view of the future course of the relationship. It is appropriate that the forum is driven by the business communities on both sides of the Tasman. Speakers at the forum acknowledged that, whilst development and passage of reformist legislation is the responsibility of governments, it is the forward-looking interaction between business and governments which will shape and help drive the future reform agenda.

Such reforms are what the Australia-New Zealand Leadership Forum is all about—bringing together senior politicians and the captains of industry and commerce to forge ahead in the areas of our common goals. In this regard, therefore, it is important to develop government-to-government links in advancing our economic interests and the government partnership must be informed by a close and strategic relationship at the business-to-government level. The Australia-New Zealand Leadership Forum provides this trans-Tasman link and that is why the Australian government is so strongly committed to reinvigorating it. Given our interconnected economic futures, we also need to redouble our collaborative efforts in support of shared trade policy goals—bilaterally, regionally and multilaterally.

It is my firm conviction that the evolution of our trade and investment ties will remain a central element of the Australia-New Zealand relationship. It is therefore well worth noting that this year marks the 25th anniversary of the Australia New Zealand Closer Economic Relations Trade Agreement—commonly referred to as ANZCERTA—which was signed in 1983 by the Hawke Labor government. This important anniversary gives us the opportunity not just to reflect on the past success of the agreement but to look ahead and develop an agenda for the future—remembering that at the time of the ANZCERTA negotiations New Zealand was seriously concerned about the possibility of being swallowed up by a nation five times its size. I think, with the significant benefits of trade liberalisation to both nations now clear, we can unequivocally say that the agreement has been incredibly beneficial to both countries.

Indeed, the Australia-New Zealand trade and economic relationship has prospered under the comprehensive lowering of border barriers provided by ANZCERTA and other supporting bilateral agreements under the CER umbrella. I have spoken in this chamber before about the importance of world trade growing three times faster than world output in the last 50 years. In the case of our relationship—the trans-Tasman relationship—trade has grown at an annual rate of 8.4 per cent over the 25-year life of ANZCERTA. This highlights the tangible benefits to business and the wider community of a truly liberalising and comprehensive agreement.

In 2007, trans-Tasman trade amounted to $21.5 billion, including $5.8 billion in services. New Zealand is now Australia’s fifth largest market, taking six per cent of our exports, and our eighth largest source of imports. Australia is New Zealand’s principal trading partner with 22 per cent of its total exports and 21 per cent of imports sourced from Australia.

The closer economic relationship has been particularly useful to small to medium enterprise exporters, providing an open trading environment that has encouraged companies to find business opportunities across the Tasman. This has elevated and sustained the economic growth of both countries and created significant employment growth. ANZCERTA has served Australia and New Zealand well by being a free trade agreement of the highest quality. Indeed, the World Trade Organisation has spoken of it as ‘the world’s most comprehensive, effective and mutually compatible free trade agreement’. There is no question that this is one of the most successful examples of economic integration in the world. It covers substantially all trans-Tasman trade in goods. Services were brought into the agreement from 1989 with the addition of the services protocol. The introduction of the services protocol itself broke new ground by demonstrating that services trade reform could be tackled when there was some uncertainty as to whether it was possible.

The negative list approach used in the services protocol, whereby everything was included except those limited sectors specifically excluded, was particularly significant and innovative. It is a fact that the list of excluded items has been progressively diminished over time with only a very limited number of exclusions now remaining.

ANZCERTA is also supported by a web of bilateral arrangements, including on the movement of people, mutual recognition of standards, taxation, government procurement and aviation. With most of the early trade liberalisation goals met, the broader CER work program has now reached a more mature phase, focusing on third generation behind-the-border trade and economic facilitation issues. This work tends to be more incremental but is nonetheless important in advancing the integration of the two economies and the benefits that accrue from this.

I should also note that much of this focus of effort to achieve seamless trans-Tasman commerce now comes under the single economic market agenda. I acknowledge that the breadth of these behind-the-border reforms to progress the deregulation and cooperation agenda now involves much more a whole-of-government approach. My colleagues the Treasurer, the Minister for Finance and Deregulation, the Minister for Superannuation and Corporate Law, the Attorney-General and the Minister for Competition Policy and Consumer Affairs all continue to play an important role in ongoing discussions with their New Zealand counterparts to progress the single economic market agenda. The efforts of these discussions will build towards a stronger integration of our two economies making them more resilient for the competitive challenges we face as we move further into the 21st century. A good example of this work is the agreement on mutual recognition of securities offerings, which was announced by the Minister for Superannuation and Corporate Law, Senator Nick Sherry, and his counterpart, the New Zealand Minister of Commerce, Lianne Dalziel, when they were in Wellington for the leadership forum.

The mutual recognition of securities offerings agreement aims to advance towards a fully integrated trans-Tasman regulatory regime, supporting trade and other areas of business activity. It will enhance opportunities for investors across both countries by reducing compliance costs and streamlining legal obligations for the issuing of securities across the Tasman boundary. Other work under the single economic market agenda continues, including an updating of the bilateral double taxation agreement, as well as the portability of retirement savings to allow the transfer of private retirement funds across the Tasman. Work has also been progressing on a trans-Tasman treaty on court proceedings and regulatory enforcement, aimed at providing a coherent framework for the conduct of civil proceedings and to enhance the effectiveness of regulatory regimes in the two countries. I understand from my colleague the Attorney-General that this work is well advanced.

The closer economic relationship, including the services component, has also significantly assisted investment flows. But there is unfinished business when it comes to investment, and the Australian government is enthusiastic about the opportunity to continue building on that initial CER agreement with the addition of investment to our model agreement. I have spoken in this chamber about the change in the nature of trade, away from just the ‘produce and ship’ circumstance to the involvement of direct investment into countries to take advantage of domestic markets and global supply chains. This trend is significantly reflected in the trans-Tasman relationship. Two-way investment has increased by an average of over 17 per cent per annum during the life of ANZCERTA, representing a 19.5 per cent increase for Australian investment into New Zealand and a 14 per cent increase for NZ investment into Australia. While there are healthy levels of investment between the two countries, the lack of specific provisions in ANZCERTA enshrining a liberal regime for trans-Tasman investment flows offers prospects for improving what is already recognised as a model agreement—improving the model, so to speak.

It is a model that we would like to place before other trading partners as representing the comprehensiveness that the FTA partners would aspire to in their agreements—exporting our model agreement to the region as a benchmark. But ANZCERTA in its current form does not extend to substantive commitments in investment liberalisation—and that, I believe, is the next frontier we need to approach together. I am encouraged by signs that New Zealand might now be much closer to responding to the market access offer Australia tabled on investment in November 2006. Total two-way investment stands at around $98 billion. New Zealand is the sixth largest source of overall foreign investment in Australia, valued at $33 billion. At $65 billion, Australia is the largest investor in New Zealand. Our CER and the evolving single market agenda cement our economic relationship. We need to sustain efforts on both sides of the Tasman to make our business dealings as efficient and seamless as possible. On the occasion of its 25th anniversary, I look forward to hosting the annual review of the closer economic relationship ministerial meeting in Sydney at the end of July where, with my New Zealand counterpart, Phil Goff, and other ministerial colleagues, we will further discuss ways to advance it.

Beyond our bilateral trade and economic interests, Australia and New Zealand have much in common in addressing priority global issues such as climate change, arms control and disarmament, along with regional developments, including the growing importance of China and India on the world stage. It is important that Australia and New Zealand seek each other’s input, support and engagement on such issues. It is true that we can achieve so much more by working together. In this context, let me pay tribute to my New Zealand counterpart, Phil Goff, a figure of major international stature with whom I collaborate very closely and productively on a range of international, regional and bilateral trade issues.

The Rudd government’s top trade policy objective is to secure a strong result in the WTO’s Doha Round. Australia and New Zealand share common cause as fellow members of the Cairns Group, and both Mr Goff and I strongly underscored at the Australia New Zealand Leadership Forum the priority we place on bringing the Doha Round to a successful conclusion this year. Over the past 50 years, world trade has grown at three times the rate of world output growth. I have made that point before. But over the last five years, despite the longest period of economic prosperity in a long, long time, that dynamic has changed—world trade has only grown twice as fast as world output. Trade should be growing more strongly. Part of the reason that it has not is that we have not been able to conclude the Doha Round on trade negotiations. Each successful round of liberalisation has fuelled world growth, and in times of economic uncertainty like those that we now face, a successful Doha Round would be a tremendous boost to the confidence of the world economy. That is why trade matters.

In addition to our focus on multilateralism, the Rudd government is continuing to pursue comprehensive, liberalising free trade agreements which seek to reinforce and support the multilateral trade regime. In that regard we have been working very closely with New Zealand to take our model of trade integration to the region. With the Association of South-East Asian Nations (ASEAN) we are negotiating a plurilateral free trade agreement that, if successful, will lay down an important building block for regional trade and economic integration. These talks are now at a critical stage. Negotiating with a regional bloc whose members are at different levels of economic development has added to the complexity of the deal. But my New Zealand counterpart, Phil Goff, and I look forward to engaging ASEAN on a trade agenda that will contribute to our collective prosperity.

On the regional front, Australia also has a strong commitment, shared by New Zealand, to APEC as our pre-eminent regional fora. APEC remains the principal high-level regional group in the Asia-Pacific and has been central to building regional prosperity and security for nearly 20 years. At the recent APEC trade ministers meeting in Peru, which both Phil Goff and I attended, we agreed to the importance of an early conclusion of the Doha Round, supported an APEC Investment Facilitation Action Plan, which was drafted by Australia, and developed a work program on trade and environment measures. Australia-New Zealand collaboration in APEC and also in the East Asia Summit is both vital and appreciated.

The Rudd government is proposing that regional cooperation be enhanced further by a long-term strategy for our region—an Asia-Pacific Community—as foreshadowed by Prime Minister Rudd. I am pleased to note that again there is a sharing of views between Australia and New Zealand on taking forward regional architecture. When addressing the leadership forum, Prime Minister Clark gave a strong endorsement of the Asia-Pacific Community concept. Among the top global priorities is, of course, climate change. It is fitting, therefore, that this was a key focus for the leadership forum. Australia and New Zealand both recognise the need for strong domestic action and for an effective international regime. We have a long history of cooperation on climate change matters and both nations are working hard to develop ambitious domestic emission reduction frameworks, including emissions trading schemes.

Engagement in the Pacific

Both Australia and New Zealand also have an important stake in the security and development of our neighbouring Pacific island countries. The Pacific is a particular priority for both the Rudd and the Clark governments. The Rudd government is committed to a new era of revitalised engagement and cooperation with Pacific island countries based on principles of mutual respect and responsibility. Prime Minister Rudd has identified as a key element of this strategy close collaboration with New Zealand. Australia and New Zealand have been consulting Pacific island countries on ways to encourage trade and investment in the region, as well as closer economic integration. The main vehicle to advance this agenda is the Pacific Closer Economic Relationship (PACER) Plus initiative. We see the success of the closer economic relationship with New Zealand as offering a model for strengthened trade and economic links in the Pacific. With Phil Goff, I will attend a meeting of Pacific forum trade ministers in the Cook Islands in late July, where I will be actively encouraging further rounds of deepening consultations with our neighbours in the Pacific to take forward this initiative. An important part of this economic integration agenda is labour mobility. The government is currently considering a seasonal worker scheme for the Pacific. In this regard, we have had useful exchanges with New Zealand on their experience with their Recognised Seasonal Employer (RSE) scheme and remain grateful for their forthcoming approach in sharing their assessment of the scheme to date.

Conclusion

Initiatives taken by the forum co-chairs at this year’s meeting to forge institutional arrangements for driving forward the agenda underscore the desire there is to continue to build the Australia-New Zealand relationship. In what I have outlined to the House you can see that that can be a very busy agenda indeed. The Australian government greatly values the business community’s engagement in this and will continue to look to the forum as a source of ideas and energy.

I thank the co-chairs, Rod McGeoch and John Allen, for their skilful and energetic efforts, not just organisationally but also in the chairing of the conference, to ensure a productive and forward-looking leadership forum, which focused on some of the many common interests, challenges, opportunities and perspectives Australia and New Zealand share. Both countries will continue to prosper from closer engagement and working together, not just by strengthening the bilateral relationship for a two-way benefit but to work together to strengthen the basis for better regional and multilateral outcomes. We share many social trends and values. We share a love of sport. Our commitment to our region and the contributions we make to the global community remain as important as ever. Certainly demographic factors, as outlined by one of the speakers at the forum, will have a profound effect on both societies, presenting challenges that impact across many portfolios, tax and migration. Both Australia and New Zealand are alive to the many challenges we face—and our strong cooperation on the bilateral, regional and multilateral fronts will hold us in good stead as we go forward. I believe we can respond to these challenges with great optimism. The success of the Australia-New Zealand Leadership Forum reinforces this assessment. I look forward to our relationship with New Zealand continuing to evolve under the Rudd government.

I ask leave of the House to move a motion to enable the member for Groom to speak for 27 minutes.

Leave granted.

I move:

That so much of the standing orders be suspended as would prevent Mr Macfarlane speaking for a period not exceeding 27 minutes.

Question agreed to.

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