Clare O'Neil (Hotham, Australian Labor Party) Share this | Hansard source

I really appreciate the opportunity to speak on the Asian Infrastructure Investment Bank Bill 2015, and I want to thank the member for Banks for his contribution. He made some good points, some of which I am in furious agreement with but others I am not. Before I turn to the specifics of this bill, I will just note that we heard some assertions about economic maxims, and one of the first economic maxims you learn in trade economics is that trade agreements create winners and losers. What I find disappointing about some of the tenor of the discussion that has been had about the China-Australia Free Trade Agreement is the idea that we cannot have a really frank national discussion that looks beneath the surface of what is in the China-Australia Free Trade Agreement and a really frank conversation about who is winning and who is losing under this agreement. There are significant, legitimate concerns about the impact on the labour market in Australia—and I say that as someone with a lot of economics training and someone who considers herself to be very strongly supportive of free trade. But, as anyone who is well-versed in discussions about free trade knows, these agreements are not just about free trade, and we need to be very careful that we make good trade-offs that are in the interests of everyday Australians when we make these agreements. Otherwise, we lose the argument with the Australian people. If we do not make good free trade agreements then free trade itself gets called into question, and I do not think that is something that either side of the House wants to see.

We have heard from members on both sides of the House about what a great opportunity the Asian Infrastructure Investment Bank is for Australia, and I will add some remarks on that basis. Many other speakers have talked about the very large infrastructure gap across Asia. Some have estimated this lack of expenditure to be somewhere around $8 trillion over the next decade. When Asia does not have the infrastructure it needs for development, it costs everyone in the world; it certainly costs people living in Asia as they struggle to develop in the way we want to see. But it also costs Australians, because the frank reality is that for Asian nations to export to Australia they need to travel on roads and use rail and use ports and all these other facilities, and that adds costs to us as Australians, particularly to Australian consumers.

One of the really fantastic stories of the past 30 or 40 years, looking at the globe as a whole, is the increase in the standard of living that we have seen across many countries in Asia. It is through investment in infrastructure that we see people's standard of living grow. As an internationalist, as someone who is supportive of development right across the world, I am very excited about what is occurring and Australia's involvement in it.

We know that the bank will help catalyse private sector investment. So this is not just about foreign governments and foreign countries looking to invest in infrastructure; it is about bringing in all of the parties to co-finance projects. The member for Banks talked at great length about the importance of multilateralism. Again, that is something we want to see more and more of in our region. This is a great opportunity for Australia to deepen the links and deepen the relationship that we have with our Asian neighbours. It is good to see that we are getting in on the ground floor—though I think we could probably have done it a little more seamlessly, which I will talk about in a moment. It is also a symbol of our shared commitment as Australians to development in Asia. This is something that we really want to get across to people living right across this region. As Australians we want to do everything we can to build living standards in Asia, to help bring Asians up to the standard of living that Australians enjoy. Being part of this bank and being an enthusiastic member is definitely a part of that.

We welcome the commitment to the principle of the Asian Infrastructure Investment Bank. We welcome the financial commitment that has been put forward. One thing other speakers have talked about is their frustration that this decision was not come to earlier, and more enthusiastically, on the part of the government. Frankly, it is been quite confusing to watch the debate that has occurred on the other side of the House about how to manage the proposal for Australia to be a foundation member of the Asian Infrastructure Investment Bank. We have heard flourishing speeches from both sides of the House about all the benefits. Why then did it take months for the government to decide that it actually wanted to be involved? It was actually Labor that came out of the blocks very early to point out what huge benefits there were in participating in such an institution and that the earlier and more enthusiastically we engage with these institutions the more benefits we will get.

I raise these points not just to be political but because I think it reflects something that underlies a lot of our discussion and Australia's engagement with Asian economies that I think is a real barrier to us getting the most out of growth in that region. So I want to talk about these attitudes and a little bit about what Australian governments can do about them. The ambivalence of attitude that we saw when this proposal was initially put to the Australian government reflects within the psyche of Australians the lack of comfort that we feel about really participating fully in being engaged within our own region.

I think it also demonstrates something equally terrifying, which is the sense that it is a fait accompli that just because we are somewhere in the Asian region we are innately going to benefit and grow as Asia grows around us. On both counts, those are false assumptions. When we look at the things that are going to drive prosperity in Australia in the long term, being a part of Asia, committing to being a part of Asia and feeling ourselves to be a part of Asia are absolutely central to making sure we continue to another generation of prosperity in this country. One of the really terrifying implications of these attitudes is the sense that policy does not matter when we think of making the most of the Asian opportunity. And the sense we got from those on the other side was: 'Here is the suggestion; maybe we will consider it. There seem to be downsides and there seem to be upsides.' I think that is completely the wrong approach to take. Policy is going to be essential. If we do not get the policy settings right then we are going to be living in the midst of this incredibly fast growing and eventually incredibly prosperous region but we are not going to get the benefits because we have decided that we are going to step back; we do not think we need to do anything to capture this opportunity and we believe it will just be delivered to us on a platter. It will not.

Australia's future lies very much within Asia. There would be no argument from anyone in this House about that. All of the data and evidence that we can look to makes that very clear. China is already Australia's largest export partner. Six of Australia's top 10 export partners are Asian countries, and Singapore, Malaysia and Korea are on that list. It is very exciting for Australia that we have already got these thriving trade relationships because we all know that an incredible growth story is unfolding right before our eyes. Some economists think that, by 2040, two of every three dollars of wealth created will come from our region and half of every dollar of wealth created will come from China and India alone. This is an absolutely staggering change in the centre of economic power in the world and it is something from which Australia can of course benefit significantly.

Disturbingly, when you look at the actual evidence of how we are embracing this opportunity and engaging with it across different sectors of our economy, you do see some real causes for concern. PwC produced a very interesting report last year called Passing Us By. They did a very large survey of Australian businesses and came up with some really terrifying statistics. One of those statistics was that today only nine per cent of Australian businesses are doing business in a significant way in Asia. For all the talk in this parliament and the various forums that we participate in, it is shocking to think that fewer than one in 10 Australian businesses are engaging with Asia. The report found not only that but also that this does not reflect a general reluctance on the part of Australian businesses to engage overseas. In fact, the report found that Australian companies are investing seven times as much in New Zealand as they are in China. That is a wild fact when you think about the incredible growth—not just the current size of China compared to New Zealand but what we will see over coming years. PwC also found in that report that not only are we engaging more with New Zealand than we are with some other partners but that the Americas and the European nations are very enthusiastically investing in and engaging with Asia. So we are really getting left behind in all of this, and other countries around the world are trying to pick up this opportunity.

My colleague the member for Gellibrand and I have just done a pretty big piece of work about some of these issues. In doing that, we talked to a lot of exporters about why it is that some of them are struggling so much to push into this region. They talked to us about some very practical problems. Probably the first thing people raise with you is the language barrier. So, you would think we would have a thriving and exciting push within Australian schools to be learning Asian languages. But what we find, again, is a very disappointing outcome: today only six per cent of Australian students are learning an Asian language at school, and we are actually going backwards on this. As a share of the school population there were more students learning Asian languages in the year 2000 than there are today, in 2015. Again, the point here is that policy really matters. We need to address this. We need to do something about it.

Something else we heard a lot from exporters is that it takes a lot of time to cement trusting relationships with people in Asia. Learning about the different economics in different Asian markets takes time. PwC found that it was taking around 15 years for an Australian company going into Asia to start to really make serious money. Fifteen years is a really long commitment, and when you see that CEO tenures in Australia are something like 4.2 years on average you can understand why we are not seeing that real push into Asia. It probably does not help that when big Australian companies, listed companies, try to go into Asia they are often pummelled by business analysts who say that it is a wild, crazy and outlandish thing to do. Again, this reflects this basic attitude. People are talking the talk about the big opportunity that lies ahead, but when we look at the actual activities of Australian businesses we are just not seeing what we want to see.

There are issues around government, too. The Department of Foreign Affairs and Trade probably needs to do some thinking and some work about its Asian expertise and Asian language capabilities within the department.

While I am speaking very positively about the opportunity we see today with the Asian Infrastructure Investment Bank, I just want to make sure that when we have these debates in the parliament we have them in a measured and fact-based way. As much as it might feel good for us to all come into this chamber and speak very excitedly about all of the opportunities that lie ahead, I want us to be really cognisant of the facts. The facts are that when we look at the education system and at different aspects of the machinery of government, and especially when we look at business, we are not seeing the kind of enthusiasm, engagement and upskilling in the Asian competencies that we are going to need to make the most out of this incredible growth.

What do we need to do about all of these things? I think the first thing is to have a national discussion about how we are going to make the most of this opportunity. It is not going to be through machinery of government or bills that we put through this parliament. It will be about everyday Australians understanding the realities of living in the Asian region and thinking about how they as individuals are going to better engage with our neighbours.

It is fascinating to talk to businesses. You would think they would raise issues about practical and legal barriers to taking advantage of these export opportunities, but when it really comes down to it the main barriers are about people—people-to-people links and having trusting relationships across national boundaries. This is the sort of thing that governments are inherently capable of assisting with. Some of the things are around really pushing education transfers, so we make sure that the brightest and best young people in China and other Asian countries are coming here to Australia not only to study but also to learn about our culture, to make friends and develop trusting relationships with Australians—and we would like to see a lot more of that going in the other direction too.

I will finish by coming back to where I began, which is to talk about the China-Australia Free Trade Agreement. I say again that we need to be a lot more nuanced in the discussion we are having today in this parliament about all of these issues. It is not only the bank over which there was this seemingly petty, silly political tussle but it is also happening for things like the free trade agreement and the set of government policies that are going to need to support Australia getting the most out of this region. The opportunity is there, but we need to embrace it enthusiastically and get the policy right, and that is the discussion we need to be having.

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