Kevin Rudd (Griffith, Australian Labor Party, Shadow Minister for Foreign Affairs and Trade and International Security) Share this | Link to this | Hansard source

I rise today to speak on the Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006. When we talk about Australia’s relationship with Japan, we are talking about a relationship with our largest trading partner, and that is why it is important that we participate in a debate such as this. Whether we are dealing with cultural, economic or political institutions which affect the Australia-Japan relationship, we are talking about a relationship which deeply shapes our future, as in fact it has shaped so much of our economic past. The current two-way trade is somewhere in the vicinity of $50 billion.

Much has been said recently about the impact of the resources boom on Australia. Japan is an integral part of that story. Australia exported $9 billion worth of coal to Japan last year. The revenue gained from the resources boom for Australia has been exceptional. However, this growth has been driven by prices, as the Reserve Bank’s quarterly Statement on monetary policy pointed out last week. The revenue growth has been largely accounted for by higher prices, with volumes increasing only modestly. Growth in the value of resource exports has been strong over the past two years, averaging growth of 26 per cent per year. However, as the RBA points out, this has been almost entirely due to rising international commodity prices. The volume of resource exports has not performed so well. The ABS measurement of export volumes extrapolates from the price impacts to estimate how much the export capacity changes over time. The volume of Australia’s resource exports has averaged growth of just 1.3 per cent over the last five years. In fact, national accounts data shows that the mining industry has actually contracted over the past 12 months by 2.4 per cent. The resources boom is looming, therefore, as a missed opportunity for Australia.

Australia has not made enough of the boom itself, with the failure of government to provide the skills and infrastructure to ensure that resource export volumes were able to grow as rapidly as they might have in response to the rise in world demand. A lack of vision has seen this opportunity—possibly a once in a lifetime opportunity—to invest in our productive future, and in the drivers of economic growth, squandered. The general slowing in export growth, the decline in services, the narrowing of our export base and the failure of resource export volumes to respond rapidly to demand all add up to a pretty poor performance on exports during the most recent period. It is no wonder that the Reserve Bank of Australia in its quarterly statement issued on Friday said:

Despite the strong conditions prevailing internationally, Australia’s export performance has been disappointing.

This statement goes to the essence of the problem, and one which Labor has pointed to for a long, long time: Australia has been very fortunate that international commodity prices have been as strong as they are, but we need to be more than the lucky country. The resources boom, if Australia’s history is any guide, cannot last forever. When it ends—and it will end, hopefully not with a thud—at a certain point in our economic cycle, the impact on the general economy looms as being significant. That is why Australia continues to need to broaden its economic base into manufacturing as well as into the important services export sector.

There has been much discussion in the public debate about China as the external driver of the Australian economy. The impact of China, of course, has been significant. However, Japan, as I noted in my earlier remarks, is still Australia’s largest merchandise export destination and the largest bilateral trading partner. Our large resource base and abundance of land make Australia the perfect supplier of inputs to the Japanese industrial economy, with its strong industrial base. In 2005, Australia’s exports to Japan were valued at about $31 billion, comprising $28.4 billion in goods exports and $3.1 billion in services exports. On the flip side, Australia has imported $19 billion of goods and services from Japan. I am pleased to say that Japan is a country with which we have a trade surplus of $12 billion. That is why this economy is of such significance to Australia. This trade has grown considerably over time. Australia’s goods exports to Japan, for which we have a long-time series, have close to tripled since 1988, when they were valued at just $11.5 billion. The relationship between the two countries is a classic example of how two economies endowed with different resources can benefit from trade. The complementarity is clear in this sector when we look at the trade flows between Australia and Japan.

Australia’s top five exports to Japan are: coal, $9 billion; iron ore, $3.3 billion; beef $2.4 billion; and aluminium, $1.5 billion. Compare these to our four top merchandise imports: passenger vehicles, $6.7 billion; other vehicles, $1.2 billion; civil engineering equipment, $600 million; and vehicle parts, $500 million. Australia’s trade with Japan is not just in goods; services are also an important part of our trade. Australian services exports to Japan were valued at $3.1 billion in 2005 and I am pleased to say Australia actually has a services trade surplus with Japan of $1.3 billion.

However, as with total exports, Australia’s exports to Japan have slowed considerably over the past five years. Goods exports to Japan averaged growth of 7.2 per cent a year during the period of the Labor government. These have slowed to average just 5.2 per cent over the past five years. The same is also true of our services exports to Japan. Between 1991 and 1996 under Labor, exports of services to Japan grew at an annual average rate of 10.5 per cent per annum. Between 1996 and 2000, services exports to Japan declined by 20.2 per cent per annum and over the past five years declined by 0.4 per cent per annum.

Since tourism is our largest services export to Japan, the decline may in part reflect the slowing in the Japanese economy over this period. But on the question of the sale of tourism services to Japan, I think the Australian government needs to look far more deeply than that. There are significant problems emerging in terms of Australia as a preferred Japanese tourist destination. These problems have existed for a considerable period of time. We begin to encounter more and more debate about, for example, the adequacy of Sydney airport in dealing with incoming tourist traffic. This is not so much a question of runway capability as it is a question of the adequacy of the on-ground infrastructure of the airport. Satisfaction surveys by customers using Sydney airport and certain other airports in the country begin to reflect a basis for concern on the part of those who have a long-term interest in the sale of Australian tourism services to such an important historical market as Japan.

A division having been called in the House of Representatives—

Before the suspension, I was talking about the importance of the Japanese market. I have yet to see evidence of a focused and effective strategy on the part of the government of Australia to restore our previous status in that market. If we fail to do so, I am concerned about the overall impact on Australian tourism over time. It has almost been one of the inbuilt assumptions for the health of the Australian tourism industry that there would continue to be a robust inflow of visitors from Japan. If that cannot be sustained, as some of this data suggests, we have a serious problem on our hands when it comes to the future of the industry in Australia.

That is what is at stake when it comes to tourism exports. Looking elsewhere within the services sector, the number of Japanese students studying in Australia has never been great but, regrettably, there has also been some decline. In 1992-93 there were 773 Japanese born students studying in Australia, but by 2003-04 this had fallen to 520. These numbers are quite small compared with other major student inflows from elsewhere in the region, be it Malaysia, Singapore, Indonesia or China. Historically, large numbers do not come from Japan, but I am concerned when they start to trend even more negatively. If we look at the numbers from Malaysia alone, we have seen Malaysian student figures—for those taking courses in Australia—rise from 2,160 to 4,800. At the same time, the figures for those coming from Japan have gone in a reverse direction.

We know that Japan is one of the wealthiest economies in the world, and therefore the requirement for sending Japanese students abroad is less than for many developing countries of Asia—that is taken as a given. But I am concerned about the trend that is apparent, particularly given that Australia has become a positive and popular student destination for many countries in Europe. If you look across south-east Queensland today, you will see, for example, large and growing numbers of students from Scandinavia and from elsewhere in Europe studying in Australia. We do not see the same when it comes to Japan, despite the fact that the teaching of English is a priority within the Japanese professional development system and despite the fact that we have, uniquely, as an English-speaking country a virtually identical time zone to Japan, as well. These are important factors.

The challenge for us is how do we go about developing our services exports to this economy. In the transformation of global trade from commodities to services, from goods to services, the ability of economies to participate effectively in the global services trade will be one of the future critical drivers of economic growth. Australia’s aggregate data on participation in global services trade growth is very thin and declining in relative terms. With Japan, a major developed economy here in our own region, the challenge that lies at our doorstep is how we go about lifting our relatively modest services export numbers to Japan against the base which currently pertains.

I have referred to tourism and to education services. I would also like to refer to the potential for growth in the financial services industry. Australia’s financial services exports to Japan were valued at just $38 million in 2005, and Japan was the fifth largest destination for financial services exports from Australia behind the United States, the United Kingdom, Singapore and Hong Kong. These are very modest numbers indeed. Export financial services, within the explosion of global services growth, are one of the key drivers of economic and export growth for many developing economies today. That is why the global trade liberalisation round, which has recently come to a grinding halt, has been critical about not just what happens in agriculture and manufacturing but also the liberalisation of global services trade. Our ability to access this increasing global market, and particularly the services market within our region and particularly in sectors like financial services, is important for our future.

Recently I spoke at the annual conference of IFSA on the Gold Coast and, with the representatives of the Australian funds management industry, spoke at length on how we go about lifting Australia’s current significant domestic industry—the Australian funds management industry is a $1 trillion industry—into an export industry for the region. This is critical for us. Uniquely, we face, with the funds management industry, a massive base on the back of the Keating government’s superannuation reforms of the early 1990s. Because of that $1 trillion base which exists within the Australian economy, we have a unique opportunity to leverage from that into the sale of financial services, and particularly fund management services, in significant regional markets. Obviously Japan is one such market.

The challenge we face is how to properly access the Japanese market. On that question, we need to see direct government action. Australia has a number of significant comparative advantages. I have referred to one already—the relative size of the Australian funds management industry. Our industry, from the most recent data I have seen, is the single largest funds management industry in the region, minus Japan. Take Japan out of the equation and our $1 trillion funds management industry is the largest business of its type anywhere in Asia. According to the global data, it is the fourth or fifth largest funds management industry in the world. This is a significant by-product of important national reforms brought in by the previous Labor government. We now have an opportunity to take that and translate it into a new export business for Australia.

So many comparative advantages already exist. Firstly, we have critical mass. Secondly, we have a depth and breadth of industry expertise. The funds management industry in this country employs hundreds of thousands of people. The aggregation of technical and financial services and information technology services associated with the funds management industry is no easy thing to obtain, but we have developed it effectively over the last 15 years. It provides the personnel basis from which to platform into the region, with the object of making Australia the funds management hub for Asia, just as Dublin is becoming the hub for Europe. To a certain extent, Luxembourg has as well.

Along with critical mass and depth of expertise, the third thing Australia has going for it in this respect is the regulatory environment. We have a positive record of probity in this industry. If there is one industry, apart from the banking sector, where probity is at an absolute premium, it is the funds management industry. Obviously there are exceptions to this rule, but Australia’s regulatory environment, including the operation of APRA and the other regulatory agencies, is a sophisticated regulatory environment relative to what exists in many other jurisdictions. Added to that, in Australia we have an independent judiciary. Where matters of dispute involve large quantities of money and the efficacy and probity of fund managers, recourse to an independent judicial system is essential to external investors having confidence in using Australia as a financial services hub.

Finally, Australia has the relative advantage of its time zone. Japan’s time zone is similar to Australia’s east coast time zone. Other funds management markets or potential funds management markets across Asia, be it on the Korean peninsula, in China or in the rest of South-East Asia, are broadly within the Australian time zone. Relative to other funds management centres across the world, be they in North America or Western Europe, this presents Australia with a remarkably opportune set of advantages, which we should be promulgating.

Across East Asia the population is ageing. This is now critical for Japan and, prospectively, for China. With the ageing of populations, retirement incomes policy pushes policy makers in particular directions. Retirement incomes policy in Japan is critical and prospectively will be for policy decision makers in Beijing. In Beijing the debate today is about retirement incomes policy and the adequacy of aged care services, given the ageing of the population. In China, a product of the one-child family is that the traditional family base as a means of providing support for older people is falling apart at the seams. The fundamental demographic shifts across the region, particularly in the largest economies in North-East Asia, China and Japan, present huge future opportunities for our economy, which has a mature funds management industry which can provide critical financial services to the neighbourhood.

Of course, the existence of a market is one thing; whether or not there are barriers to entry is another, and we would be deluding ourselves if we believed at this stage that there was untrammelled entry into the Japanese financial services market—or, for that matter, that of China. That is why, as I noted before in my remarks, it is absolutely critical that we obtain global trade liberalisation of the services sector in order to make sure that it is possible for mature sectors such as exist in Australia to make the most of their trade opportunities around the region and around the world.

Japan’s domestic financial services regulations and institutions have so far made it difficult for foreign financial services companies to compete in the local market. However, driven by domestic impulses within Japan, some regulatory change is slowly under way. Japan Post, of course, is the best most recent example of the kind of non-tariff barriers Australian financial services businesses have faced. But, when it comes to Japan Post, or Kampo, this one also is currently the subject of recent regulatory change within Japan itself. Japan Post, Kampo—probably more accurately called a bank—operates a very large insurance business. It is by far the largest player in the Japanese insurance market and is larger than the other four biggest providers in Japan put together.

Japan Post has significant regulatory tax and supervisory advantages over private companies. In 2005, Japan’s Diet established a framework to reform Japan Post, which, if achieved, would see significant progress in an opening of restrictions to global insurance providers. We will be waiting keenly to see what outcome is achieved as a result of these reforms to Japan Post and more broadly across the Japanese insurance and financial services industry. This remains a critical priority for Australia’s export future. Unless we boost our export activity across the board but in particular in the services sector, which is such a large engine of global economic growth, we will continue to lag behind.

It is for these reasons that last month I announced that a Labor government will create an Australian funds management export task force to look at all the current regulatory impediments and other impediments which exist to transforming our domestic funds management industry into a key export business for the region, with the object of turning Australia in time into the hub of the funds management business in Asia. The comparative advantages are significant. They are substantial. They now need to be realised. This will require active cooperation between both government and the industry in order to bring it about. That is why we need a specific task force to ensure this work happens; otherwise, I fear it will not.

Missing from my remarks so far has been the question of the underpinnings of an economic relationship, which is of course cultural relations. The Australia-Japan Foundation has existed for a long time with that purpose, which is to provide a formal framework to govern the cultural relationship between the two countries. It has done many good things over the years. It needs to do many more. There is a fear on the part of many of those associated with the Australia-Japan relationship that it has become not just a mature relationship but an old relationship, to the extent that cultural assumptions between the two communities, between the two countries, between the two cultures, are beginning to be taken for granted. Formal cultural exchanges still have their role because Japan is a rapidly changing and evolving society and our time capsule view of Japan of the 1960s and 1970s does not reflect the Japan of the last decade and the decade which we are embarking upon. Therefore it is important not just that we see institutional change when it comes to the future relationship of the Australia-Japan Foundation and the Department of Foreign Affairs and Trade resolved with the legislation before the House but that the Australia-Japan Foundation be given a fresh operational mandate to take our cultural relationship to a new platform.

I conclude on this: when it comes to Japan, the Australian Labor Party, when it was in government and through bold national reforms under the Keating government, took seriously the whole question of what underpins a cultural relationship. The key to culture is language. When it comes to Japan, it is still surprising, visiting that country, how thinly English is spoken across the Japanese business and political elite. We in this country have prided ourselves for a long time on leading many other Western countries in the teaching of Asian languages, including Japanese. That is why the Keating government brought in in 1995 the National Asian Languages and Studies in Australian Schools Strategy. That strategy set as its object to have four priority Asian languages taught across the Australian education system through the schools: Japanese, Chinese Mandarin, Korean and Indonesian.

The program was implemented in 1995 and, until 2002-03, had complete bipartisan support. It was a visionary program which we had, for a season, complete bipartisan support on. It was visionary because it considered this: how do we create for the future an Asia literate generation of Australians and, in the case of Japan, a Japan literate generation of Australians capable of taking up the new business opportunities of the future with our principal markets in the region? This does not happen automatically. You need to inculcate the teaching of these difficult languages in the education system from an early age. That is why we did it that way.

The great tragedy for our nation is that, despite the fact that by 2003 we had three-quarters of a million Australian schoolkids studying one or other of these priority Asian languages, the Howard government, in 2002-03, abolished all federal funding for the program. If you are serious about the long-term underpinnings of a cultural and economic relationship with Japan and any other of the principal economies and societies of our region, language remains the key. You cannot have an outfit like the Australia-Japan Foundation acting out there in isolation from the rest of our cultural and educational policy. The two must come together.

Why don’t we have a vision for ourselves as a country to create here the most Asia literate country and society in the collective West? What an enormous badging and branding opportunity for the country in terms of how we market ourselves to those who wish to market into the region from Europe and from North America to be able to say: ‘We know most about this country and most about this region compared with any other Western culture and Western economy. We have the largest number of Japanese speakers, we have the largest number of Chinese speakers, and we have these deeply inculcated programs in our education and schools system.’ That was the vision which was established. Regrettably, that is the vision which was dispensed with and jettisoned by the reckless decision in 2003 by the then education minister to junk federal funding for the program. We support the bill but, when it comes to the cultural underpinnings of what is a critical economic relationship for Australia, I call on the government once again to recommit itself to the proper national funding of the National Asian Languages and Studies in Australian Schools Strategy.

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

I rise in this place to speak on the Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006. It is a bill of fairly modest breadth, but I think the relationship between Australia and Japan is a vital one which has been a very strong relationship for many decades now. As a country of only 20 million people we vitally need to export. We must export if we are to prosper. Japan is one of our vital trading partners. Exports provide one in five jobs in Australia and one in four jobs in regional and rural Australia. It is trade that very much underpins our strong economic growth, and trade with Japan is absolutely huge.

Our two-way trade topped $50 billion recently and our resources exports to Japan are in the order of $15½ billion. It is clear that Japan is vital to our economic prosperity. That is why our Prime Minister and his Japanese counterpart, Mr Koizumi, agreed in April 2005 to undertake a feasibility study into the establishment of a free trade agreement between the two countries. This feasibility study is in its final stages and, if a free trade agreement is finally enacted, it could unlock huge economic potential for both countries—not only in the export of goods but also in the export of services.

I know that agricultural producers around the country would welcome the possibility or the prospect of a free trade agreement with Japan. It would take what is already a very strong relationship to a new level. As I said, two-way trade between the countries is at over $50 billion. To further enhance that would be of great benefit indeed. But, when you look at our relationship with Japan, it is not just done on a nation-to-nation basis. There have been great strides made in achieving a strong relationship at all levels within this country. With regard to my home city of Coffs Harbour, we have a strong sister city relationship with Sasebo, which is near Nagasaki. We signed an agreement in our bicentennial year which created closer links between our countries.

In 1990 the Australia-Japan Society of Coffs Harbour was formed, with the aim of making Coffs Harbour the most welcoming city in Australia for Japanese tourists. I would like to compliment Pat Degens and her dedicated group on their work. They have been fostering that strong relationship at a local level, with many visits both from Japan and to Japan. Last year Toormina High School hosted three students and a teacher from Sasebo. In April this year two students and two teachers made a return visit. At the start of last month, John Paul College hosted three students and one teacher from the Atago middle school. So throughout our community there is a strong association with Japan. We receive and welcome tourists, and we focus on that sister city relationship. That city-to-city relationship is providing a strong bond at more than a national level, at a local level, and that is all too vital.

The Australia-Japan Foundation bill, as I said, has a fairly modest intent. The Australia-Japan Foundation is in a unique position, however, to cement relationships between the two countries. This is the 30th year of the Australia-Japan Foundation, and it continues to promote better understanding and communications between the two countries. It has a range of functions which require a certain amount of cultural sensitivity, and it has a track record of fostering a closer relationship between Australia and Japan as it carries out those functions.

What does the Australia-Japan Foundation do? It does a range of things. It disseminates information for Japanese schools, it operates the Australian Resource Centre at the Australian Embassy in Tokyo, it manages the Australia-Japan Foundation website, it manages scholarships and assists with visits to both countries, it manages tertiary education exchange students through the Sir Neil Currie awards and it develops the Australia-Japan debaters exchange and the Australia-Japan Foundation awards. It has a list of achievements. It has developed the Experience Australia and Discovering Eco Australia education resource kits and the Australian government website in Japanese, and it has established an extensive network of grassroots contacts. I just mentioned the importance of the relationship that has been established at a grassroots level between Coffs Harbour and Sasebo. The wider we can get that strong grassroots contact, the better. Also, it has developed Australia’s interest and expertise in Japanese language and other studies.

Why is the bill necessary? It is the belief of the government that the Australia-Japan Foundation would function better if it were a non-statutory body within the Department of Foreign Affairs and Trade. This requires the repeal of the enabling legislation, the Australia-Japan Foundation Act 1976. There are many bodies within the Department of Foreign Affairs and Trade which function along bilateral lines, and we believe the Australia-Japan Foundation should join them. We do not believe the day-to-day work or objectives of the foundation will be altered by this legislation, but the foundation will operate by orders and counsel. The foundation will continue to strengthen the links between Australia and the Japanese people at a range of levels, and this can only work to enhance the very strong relationship we have.

When we look at exports—and Japan brings into very clear focus the importance of exports in our economy—we cannot underestimate the role that exports have played in generating prosperity with regard to unemployment. We are seeing now unemployment at 30-year lows, and this is due in no small part to the contribution of exporters. Companies which export tend to be more dynamic and to enjoy greater export growth. We have seen substantial reductions in long-term unemployment and general unemployment as a result of the policies of this government and as a result of the hard work that has been conducted by our exporters. It is essential, if we are going to continue to have economic growth in this country, that we continue to strive to export. A strong and continuing relationship with Japan is important to that, and the Australia-Japan Foundation has a role to play in continuing those links.

Like any relationship, we need to work together to continue to ensure that that relationship remains vital. The signing of a free trade agreement with Japan, if that were to occur, would be a major step in further enhancing what is already a very strong relationship. Such a document would substantially improve wealth for Australians and the Japanese people, particularly those in regional and rural areas. I have a range of companies in my electorate which export to Japan, such as Blueberry Farms on the larger scale and at the smaller level Dahlberg Surfboards, which sells a large proportion of its production into the Japanese market. It is a small, local company operating out of Yamba that is able, with the help of Austrade, to get its product into the Japanese market.

It is important that we impress upon many of our small firms the wide horizons that are available in the export markets. Austrade does a great job in encouraging firms to be export ready and to facilitate what is an important source of growth for Australia, the export market. I commend the bill to the House. It will assist us in developing a stronger relationship with Japan. I look forward to the prospect of a free trade agreement with Japan and to continuing growth in exports of both physical goods and services in the years to come.

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Link to this | Hansard source

The fact that the Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006 is before the Main Committee does not reflect in any way on its importance; it merely reflects the fact that it is a non-controversial bill in terms of the proceedings of the House. The bill is important because our relationship with Japan, both culturally and economically, is exceptionally important. We should never forget, given the focus on China and India as the new engine rooms of world economic growth, that in recent historical terms Japan has been central to repositioning Australia in the 20th and 21st centuries for the purposes of where we go economically.

The bill abolishes the Australia-Japan Foundation as a statutory authority, but this in no way reflects any diminution of the very special relationship between Australia and Japan. I want to underline the importance of that relationship, not just as a member of the Australian parliament but also as the Labor Party shadow minister with responsibility for resources, energy, forestry and tourism. Just think about those economic sectors and the strategic economic relationship that we as a nation have forged with Japan since the Second World War. Our relationship with Japan is equally as important as our relationship with any other nation in the world. Both sides of the House have worked hard to forge that relationship. Japan has worked equally as hard to forge its relationship with Australia.

In historical terms I note the work of Black Jack McEwen. In the face of hostility from many, he led the decision to forge the Australia-Japan Commerce Agreement of 1957. Since that time Japan has become, without doubt, our most important trading partner. I therefore note that this year we celebrate the 30th anniversary of the Basic Treaty of Friendship and Cooperation between Australia and Japan, which was signed in Tokyo on 16 June, 1976 and came into force just one year later, on 21 August 1977. I have a notice of motion in today’s Notice Papernotice of motion No. 43, seconded by the member for Rankin, Dr Emerson—which we would love to have debated during this sitting fortnight, but unfortunately the Selection Committee has decided that there are other more important and pressing issues, such as interest rates and petrol, to be debated at this point of the parliamentary cycle.

The bill’s key provisions express the mutual interest of Japan and Australia in being a stable and reliable supplier to, and market for, the other. Japan and Australia have a mutual interest in wide-ranging areas—political, human rights, legal, scientific, technological and environmental. Whilst there are some 18 specific agreements advancing bilateral relations between the two countries, I believe the basic treaty remains the pre-eminent formal agreement in the bilateral political relationship. Just think of the leadership involved in putting that agreement in place. It might only be 30 years ago, but just think of the tension that existed in both countries because of the Second World War, which surrounded the development of the original treaty.

It is interesting to note that the original proposal was initiated by former Prime Minister Whitlam in 1973. In initiating it, he sought to alleviate lingering suspicions in, and a lack of confidence by, Australia with respect to the Australia-Japan relationship. The negotiations were completed by the Fraser government in 1976, clearly reflecting the bipartisan nature of support for the relationship between Australia and Japan across the political spectrum in Australia. The commitment to the basic treaty remains bipartisan today, as reflected by the contributions to this debate to date.

In more recent times it is also important to note that the two countries were founding members of the Asia-Pacific Economic Cooperation group initiated by the Hawke-Keating government in 1989. As we all appreciate, APEC is now the most important focus for dialogue in the region on economic, political and security issues. Australia and Japan were also founding members of the ASEAN regional forum in 1994, which I believe is the leading multilateral cooperative grouping which aims to develop dialogue and confidence-building measures to advance security in East Asia. Each one of these initiatives has been exceptionally important to the security of our region and its economic prosperity.

The relationship was further advanced by former Prime Minister Keating in 1995 with the joint declaration of the Australia-Japan partnership, which committed the two countries to advance prosperity, reduce tensions and advance political stability in the region. Under the Howard government, the relationship has expanded to include closer bilateral discussions involving the United States—a further step forward. I also believe it is wonderfully symbolic that Japanese and Australian soldiers have served side by side in Iraq in the endeavour, however flawed in its implementation, to build democracy in that country.

The foundation will be re-established, as we appreciate and as is reflected in the bill, as a non-statutory body within the Department of Foreign Affairs and Trade, reflecting the same administrative arrangements as are in place for similar bilateral agreements. That effectively means there is no diminishing of its importance; merely, it is a streamlining of administrative arrangements for the purposes of making sure that this foundation operates in the most efficient and constructive way.

Obviously the focus of the foundation’s work to date has been on increasing mutual understanding through the building of cultural and educational links. Those links, as we all appreciate, are exceptionally important in also strengthening our economic ties. I therefore contend that, at this point, it is also important to reflect on the importance of this work, particularly as we remember the horrendous loss of life and massive destruction caused by the use of nuclear weapons against the cities of Hiroshima and Nagasaki 61 years ago last Sunday. I am one who has been fortunate enough to visit the peace park in Hiroshima, and a photo of the dome has been in my office, as president of the ACTU and as the member for Batman and as a shadow minister, for many, many years. Having also visited Auschwitz in recent times, I understand the importance of trying to make sure that we do everything we can in this world to remove international tensions, to establish a sense of peace and goodwill and to live in a harmonious way with the various nations of the world.

I think it is timely to remember these events as we face today the greatest threats to international security since that time, with continuing war in Iraq and Lebanon, with the threat of nuclear weapons proliferations in rogue nations such as Iran and North Korea and with the threat of terrorism made all the worse by recent events in the Middle East. I think we should remember, in debating the importance of this bill, that there is nothing glorious about war. No-one would understand that more right now than the Lebanese Australians grieving for their country and their countrymen, many of whom—both Christian and Muslim—live in my electorate in the northern suburbs of Melbourne. I understand from speaking to them and their extended families their feelings of anguish and upset at the moment as they worry about what is happening in their country of Lebanon.

Having said that, I note that, whilst those who fought for Australia in previous wars understand this experience well, my generation and those that have followed are very fortunate in having been relatively sheltered from the impacts of war. But that was not the unfortunate experience of our fathers and our grandfathers. I am sure it is very difficult for those soldiers returning from Iraq to convey their experience to family and friends who, by and large, have known nothing but 61 years of relative peace and safety in our country. Whilst convention has it that the dropping of the bomb on Hiroshima and Nagasaki brought peace to the world, let us not forget that it came at a very great price to the people of Japan—a price, I argue today, that should be avoided at all costs, through diplomacy and a global commitment to nuclear non-proliferation now and in the future. It is a current debate; it is not a debate of the 20th century.

I note that my brother and colleague, the member for Reid, reminded the House of that price in his commemoration contribution on VP day last year. He said:

By August 1946, it was estimated that 118,000 people had already died as a consequence of the bomb, 30,000 had been severely injured and another 48,000 were missing. In the interim, of course, the number of deaths has increased greatly, to almost a quarter of a million people now, of whom 5,000 last year were regarded as victims. Their deaths were consequent upon the destruction at Hiroshima. Just to give one description of it all, it is said:

‘The blast of furnace heat flattened forty-two square miles of Hiroshima, and set what was left on fire. About 78,000 people died immediately, over 40,000 were horribly burned and some 14,000 were missing. Of 76,327 buildings, about 48,000 were completely destroyed and more than 22,000 severely damaged. Some 180,000 survivors were homeless, many of them soon to develop a deadly new illness they called atomic disease.’

I raise these issues because we should always remind ourselves of what occurred and how the foundation upon which we had to work so hard to establish the very sound cultural and economic relationship that now exists between Australia and Japan and Australian allies was set up. Of course, part of the diplomatic effort I referred to earlier includes initiatives like the Australia-Japan Foundation.

I am sure that many in the Australian community would believe that Australia is now a mature country and that the building of mutual understanding is really a thing of the past, as it is something that we have already achieved. I remind members of this place that, sadly, this is a long way from the truth. I believe there is much more work to be done not only between Australia and Japan but among and between many other countries and peoples of the world, including the challenges that exist in our own region. The recent Dean Jones incident comes quickly to mind. No-one in public life can afford to take racial vilification lightly. We need to remember that not everyone who wears a hijab is a terrorist or an extreme Muslim, just as not everyone who wears a cross is an extremist Christian.

This is a time when Australia needs more than ever to promote a culture of tolerance and inclusion. It is our job in public life to do more to denounce fearmongering and vilification of Muslims and any other minority groups in our communities. It is our job to rebuild a more tolerant society and to break down the barriers of mistrust and division that this government has built in the community over the last nine long years. It is our job to reconnect the nation and its people, to foster acceptance and inclusion, and to ease the fear that today divides people of different faiths and backgrounds. That is why the Australia-Japan Foundation and others like it are so important to Australia and the world at large.

I said earlier that, along with diplomacy, never has nuclear nonproliferation been more important. We never want another Hiroshima or Nagasaki. Australia therefore has no greater international obligations and no greater international opportunities than those granted by our position as a nuclear supplier. We are at the centre of a nuclear cycle. We are the second biggest supplier of uranium in the world and, potentially, we are the biggest supplier of uranium in the world with the biggest mine—Olympic Dam in South Australia. It is therefore our responsibility, with likeminded nations such as Japan, to lead the world on non-proliferation efforts, just as we led on APEC and other regional and international initiatives. It is a challenge of today, not a challenge of the future.

The world is threatened by the collapse of the existing non-proliferation regime, and we must do everything in our power to prevent that. A Labor government would forge a new diplomatic initiative against nuclear proliferation, led by Australia, including a review to strengthen the nuclear non-proliferation treaty. We believe that Japan would be a trusted ally in those objectives.

Under the nuclear non-proliferation regime, there is nothing illegal about any country having processing or reprocessing technology. Yet the acquisition of highly enriched uranium or separated plutonium is one of the most difficult and important steps towards making a nuclear weapon. If a country with a full nuclear fuel cycle decided to break away from its non-proliferation commitments, a nuclear weapon capability would be within its reach within a very short time. That is why the world is frightened of what is going on in Iran at the moment. And, as the UN struggles to hold Iran to account under the nuclear non-proliferation treaty and the International Atomic Energy Agency safeguards regime, it has never been clearer that the nuclear non-proliferation treaty must be reviewed to make it more relevant to today’s issues and more effective in a modern world.

None of us wants rogue nations possessing uranium and enrichment capacity. It is therefore disappointing to note that so few nations supported the head of the International Atomic Energy Agency’s proposal for a five-year moratorium on the enrichment of uranium and production of plutonium at the last nuclear non-proliferation review conference in May 2005. Unfortunately, Australia was one of the many and not one of the few. That is the difference between John Howard’s Australia and Kim Beazley’s Australia. John Howard’s approach to the nuclear cycle is no holds barred. I think there should actually be some caution. But the Labor Party will stop to think about national security, global security, the safety of workers and the protection of the environment. Our position is clear: there should be no new uranium processing or reprocessing facilities anywhere in the world unless there is a review of the nuclear non-proliferation treaty in our proper international regulatory framework—and that includes Australia. I commend the bill to the House. It is important that we maintain the strength in our relationship with Japan. It has served both countries well in the past, and there is no doubt it will serve us both culturally and economically well in the future.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

As the deputy chair of the Australia-Japan Parliamentary Friendship Group, it is a privilege for me to be able to take the opportunity, in debating this legislation, to pay tribute to the relationship between Australia and Japan—a relationship that is very rich both economically and culturally, but one which I believe could well do with some revitalisation in the future. I will elaborate upon that in the remarks I make today.

The Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006 abolishes the Australia-Japan Foundation as a statutory authority, but that in no way diminishes the importance of the government’s attitude towards the relationship or the Labor Party’s attitude towards the relationship. Instead, the foundation will be brought under the wing of the Department of Foreign Affairs and Trade. That puts it on an equal footing with other foundations or relationships, namely the Australia-China Council, the Australia-India Council, the Australia-Indonesia Institute, the Australia-Korea Foundation, the Australia-Malaysia Institute and the Australia-Thailand Institute. It is very important to acknowledge that this repeal arrangement has no implications for the relationship at all. The relationship is very strong, although I do say it could be revitalised to further build on the good work of both sides of politics since the Second World War.

The first formal milestone in cementing that relationship was the establishment of the Australia-Japan Commerce Agreement of 1957. That was done by Mr McEwen, and Labor certainly acknowledges that. This year we celebrate the 30th anniversary of the Basic Treaty of Friendship and Cooperation between Australia and Japan. That treaty was signed in Tokyo on 16 June 1976 by the coalition government. It was initiated by the Whitlam government in 1973. The key provisions of that treaty expressed the mutual interest of each country in being a stable and reliable supplier to and market for the other and mutual interest in wide-ranging areas, including political, human rights, legal, scientific, technological and environmental issues.

There have been further developments in the relationship since 1976. The two countries, Australia and Japan, led the charge in establishing APEC. The institution was established under the Hawke-Keating government in 1989 and this government has carried it on. APEC has become one of the paramount institutions for economic and political cooperation in the world, and we are all very proud of it. In 1994, Australia and Japan were founding members of the ASEAN Regional Forum. That is the leading multilateral cooperative grouping that aims to develop dialogue and confidence-building measures to advance security in East Asia. A third development was the advancing of the relationship by Prime Minister Keating in 1995 with the Joint Declaration on the Australia-Japan Partnership, which committed the two countries to advance prosperity, to reduce tensions and to advance political stability in the region.

I also take the opportunity to acknowledge the wonderful work that has been going on at the Australian National University over all these years, following its foundation after the Second World War. I would not have time to acknowledge all of those who have contributed to that relationship, but I will mention Sir John Crawford, Professor Heinz Arndt, Professor Peter Drysdale and Professor Ross Garnaut. There are many others who have worked very hard to ensure that we have great cooperation across all fronts between Australia and Japan. It is also true that, although Labor opposed and continues to oppose the Australian engagement in Iraq, the Japanese and Australian soldiers have served side by side in an attempt at least to build democracy in that country. So our relationship is very much a rich one both economically and culturally.

I want in that context to spend a little bit of time talking about our economic interests and particularly about oil security. When Iran started behaving in what was really an unacceptable way on its nuclear aspirations, I am sure that Japan was concerned. You do not know what could happen to oil supplies from the Middle East. Indeed, Iran is a major supplier of oil to Japan. Japan would be very concerned, given the experience of the 1970s, when there was an embargo by the Middle East on oil supplies to Japan. That is one reason why Japan has been so interested in buying natural gas from Australia. It is also very much the reason that the North West Shelf has been established.

That oil price surge following the behaviour of Iran reminds us that there is a terror premium on the world price of oil. Of course, the increased oil price is partly due to very strong growth in China and in the rest of the world, but there is no doubt that there is a terror premium. Australia’s folly in being one of the members of the coalition of the willing and attacking Iraq in the first place has, far from reducing oil prices, dramatically escalated them. Australian motorists are paying the price for that today—just as the Iraqi people have paid a very heavy price in lives lost, which is running into the order of about 1,000 a month, as Iraq descends ever closer to civil war. All this instability has not helped Japan, has not helped Australia and has not helped the people of Iraq who have lost their lives in the process.

Notwithstanding that, I am pleased to be able to report that the Japanese economy is growing again. That is terrific for the people of Japan. It is also good for Australia, given the very close trading relationship that has been forged over the years. Japan’s real gross domestic product increased by 3½ per cent over the year to the end of March. That is really quite strong growth, given that for a very long period of time there was virtually no growth in the Japanese economy. The business sector is far more confident. Investment intentions are up and, indeed, are reported to be at their highest level since the early 1990s. So there is good news on the investment front.

Also, consumers are getting a lot more confident. Breaking the habit of a lifetime of saving most of their extra income, they are actually spending it. So we have had pretty strong consumer spending growth, and consumer sentiment is way above its long-term average—all of which reminds us of the importance of revitalising the relationship.

There are proposals for an Australia-Japan free trade agreement. I have to say, with all candour, that I do not think that is necessarily a good idea—only for this reason: that what would be proposed would not be a bilateral open trading arrangement but a preferential trade deal, a discriminatory trade deal, building on the proliferation of discriminatory trade deals that really began in earnest at the beginning of the 1990s and continues through to this day.

Coalition ministers have argued that these discriminatory or preferential trade deals are building blocks for global trade liberalisation rather than stumbling blocks. The Doha Round appears to have collapsed; it has been suspended. I do not recall Australia or the United States saying: ‘We’ve got all these preferential trading deals, so these are the building blocks for Doha. Let’s go ahead with Doha.’ In fact, the United States was really quite intransigent in terms of trade liberalisation as one of the countries that contributed to the suspension of those negotiations. So the folly of preferential trading deals is there for all objectively to see.

Australia and Japan have negotiated bilateral trading arrangements in the past. The previous Labor government did that, but it did it on a non-preferential basis. All Australia sought was the opening up of Japanese markets and an opportunity to compete. Australia did not say to Japan that it wanted preferential access to the beef market or to other markets, only that Japan should open up its markets, as Australia was opening up its markets, and give us an opportunity to compete. That, rather than these preferential trade deals, is the correct basis for bilateral trading arrangements.

Indeed, during the 1930s, a lot of the tension that contributed to the Second World War was created out of the negotiation of preferential discriminatory trading arrangements, including the establishment of discriminatory trading blocs—discriminating against the country of Japan. A country such as Japan, which is so heavily dependent on resources from other countries, is always going to feel vulnerable when countries get together and come up with trading arrangements that discriminate against it. That is what happened during the 1930s, and that was one of the contributing factors to the Second World War. We do not want anything like a repeat of the Second World War. My colleague the member for Batman has described the horror of the bombing of Japan. Combine that with the horror of so many Australian, American, Chinese and other lives lost during that Second World War—so many lives lost. The folly of preferential trading arrangements is just one of the contributors to the sorts of tensions that can lead to that sort of horror scenario.

I will finish on the idea of a preferential trading arrangement with Japan. Australia of course will want access to the Japanese rice market. I find it passing strange that Australia should want to export rice to Japan. I think the chances of the Japanese saying to Australia, ‘Here’s an open market for Australian rice,’ are absolutely stone, motherless, cold zero. So you would not want, if you were a government negotiator, to make a requirement for the negotiation of a preferential trading arrangement with Japan the opening up of Japan’s rice market. Therefore, it would not be a free trade agreement. There would be restrictions. We found in relation to the US-Australia free trade agreement that in many areas it was trade restricting, not trade creating. So let us get on and put all our efforts into revitalising and restarting the Doha Round of multilateral trade negotiations and move away from this folly of preferential trade deals.

There is enormous extra potential in the relationship between Australia and Japan, not only in commodity exports but very much in cultural exchange and services exports between the two countries. Today has been an opportunity to traverse some of that ground, to congratulate Japan on the relationship that it enjoys with Australia and to look at the options for revitalising the relationship so that we can enjoy further growth and prosperity between our two great countries. As deputy chair of the Australia-Japan friendship association, it gives me great pleasure in congratulating Japan on the 30th anniversary of the treaty.

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I want to thank members who participated in this debate on the Australia-Japan Foundation (Repeal and Transitional Provisions) Bill 2006. This is a very technical bill. It really boils down to bringing the Australia-Japan Foundation in line with much more modern practice, as was recommended by the Uhrig report. I appreciate the support there has been for this amendment. It means the Australia-Japan Foundation will be able to work more effectively in a way which is consistent with the government’s foreign policy and trade objectives. I appreciate that a debate like this is going to be somewhat broad ranging. I have heard members talking about Iran and the NPT and the issue of preferential trade agreements, which the member for Rankin spoke about. It has been interesting sitting here listening to those speeches, and I appreciate what honourable members have said.

The Australia-Japan relationship is without any doubt one of our most important but also one of our most successful relationships. To go back to the member for Rankin, he referred to the Australia-Japan Commerce Agreement of 1957. He may be interested to know that the Labor Party opposed that agreement in 1957 in an act of populist expediency, which appears to be one of the Labor Party’s constant companions.

But it was the beginning of a modern relationship between Australia and Japan. That relationship has really come to fruition in very recent times. The member for Rankin referred to the Australian troops working with the Japanese troops in Samawah in Al Muthanna province in Iraq. I was in Tokyo last week and held discussions with the Prime Minister, with the Chief Cabinet Secretary, Shinzo Abe, who is expected to become the next Prime Minister—I am not expressing a view about that; it is just that that is likely to happen without it being a certainty—and with the foreign minister, Taro Aso, as well as with other ministers, not least the defence minister. The Japanese expressed enormous appreciation for what Australia had done to provide a secure environment for their engineers and others to operate in in southern Iraq.

I would not want honourable members to underestimate the importance of that single act to our relationship with Japan. Japan was in Iraq to support the democracy project, the liberalisation of Iraq, as we have been. Japan was also there because it is a great ally of the United States of America. Yes, we are too. The fact that we were able to work together successfully without the loss of a single Japanese life, which is a very important consideration for them—obviously—and hand Al Muthanna province’s security back to the Iraqis with the withdrawal of foreign forces from that province has been a great achievement and it is recognised in Japan.

This has had a cathartic effect on the bilateral relationship with Japan. If we had run the sort of New Zealand-French-German style policy on Iraq, which the Labor Party wanted us to do, this element of our relationship, which has become so symbolic, never would have happened and I do not think we would have ever quite got to the point we are at now in our security relationship with Japan. We are talking about upgrading exercises and joint training in order to prepare to work together in emergency situations, such as we had in Aceh, and perhaps to work together again in a peacekeeping environment. We do not know where at this stage, but perhaps that will occur some time somewhere else in the world, as it has happened in East Timor as well as Iraq.

I think the Japanese see Australia now as a truly valued security partner. An illustration of that is the way over the last year we have elevated the trilateral security dialogue from officials level to ministerial level. On 18 March, Condoleezza Rice, Taro Aso and I met in Sydney for the first-ever meeting of the ministerial level trilateral security dialogue. We are planning at this stage to have a second meeting at the end of this year in the margins of the APEC meeting in Vietnam. I think this is very important and not just of practical value. We are three countries that share values, and values are very important in foreign policy. We share the values of democracy and freedom, liberal economics and liberal economies, and we are, if you like, linked to each other through our respective US alliances. So this has been also a very big step forward in our relationship with Japan.

When some members from the opposition side say we should be doing more with Japan, they show they are not even reading the newspapers—and that is just the newspapers. A lot more has been happening than would ever appear in a newspaper. This relationship has been catapulted forward over the last few years. The member for Rankin says that preferential trading arrangements cause world wars. I do not think the Pacific war was started because of preferential trading arrangements. We have a preferential trading arrangement with New Zealand, which was negotiated by the Fraser government. But it was one of those things that transcended party politics. The Hawke government finalised the details and signed off on it when they came to power. I do not think the preferential trading agreement between Australia and New Zealand has caused a war. It makes you think, doesn’t it? I think it has had the reverse effect. It has really brought our two countries much closer together. There has been an impressive integration of the Australian and New Zealand economies. It has been great for our GDP and it has probably been even greater for theirs. It has been great for both of us.

We have negotiated free trade agreements with a number of countries in Asia. We would see it as a logical extension of our broader diplomacy, a logical extension of our security policy and a logical extension of our long-running campaign for greater trade liberalisation and better market access for Australian businesses, including farmers. We would see it as logical that we should negotiate an FTA with Japan. I think we are reaching a point at which the Japanese will agree. We are doing a feasibility study at the moment and hope it will be completed in October. Once it is complete and, assuming it is positive, I think the Japanese may very well agree next year—which will be the 50th anniversary of that historic commerce agreement—to get into a negotiation over an FTA. There is a lot of support for that in many elements of the Japanese bureaucracy. I spoke last week to the ministers and the Prime Minister, and they are all very well disposed towards that, so I am pretty optimistic about that.

I am sorry to hear that the Labor Party are going to oppose that. They opposed the free trade agreement with the United States but they supported the one with Thailand and the one with Singapore. I would have thought that Labor would support free trade agreements with Asia as long as they have nothing to do with America. Of course, America for the Labor Party—

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

We actually voted for it!

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

The honourable member for Melbourne Ports is something of a peculiarity in the Labor Party. I would not accuse him of this, by the way. But I think most members of the Labor Party are of the Left, and for the Left the United States is the great Satan. You can imagine what is said about the United States at Labor Party branch meetings—things such as, ‘Anybody associated with the United States is bad,’ or, on noticing that the Japanese have a security treaty with the United States: ‘Whoops! The Japanese are a bit suss. Maybe we will not support a free trade agreement with Japan.’ I do not know.

The member for Rankin indicated that he thought that preferential trading agreements started world wars and that it was not a good idea to have a free trade agreement with Japan. I do not agree with that. I think it is a good idea, and we are making good progress in getting that to happen. If Australia took the view that we would not negotiate free trade agreements in Asia, that would lead to a very substantial disengagement of Australia from Asia. The Labor Party have this kind of fetish about saying, ‘We are the party most committed to engagement with Asia,’ but they do not want to negotiate trade agreements.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek to intervene. I have a question for the minister.

Alex Somlyay (Fairfax, Liberal Party) Share this | Link to this | Hansard source

Is the member for Mayo willing to give way?

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Fire away.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

Did the Labor Party vote for the free trade agreement with the United States after certain amendments were passed?

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

The short answer is that, ultimately, they did, knowing that voting against it would have been catastrophic. But, when that agreement was first signed, the then leader of the Labor Party said that Labor would not support it. Eventually they realised, as the then Leader of the Opposition got himself into a maelstrom of difficulty and controversy, that they had better go along with it, and they put up some kind of phoney amendment. But, no, I do not think the Labor Party ever really did support it; I do not think they did.

Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

We only voted for it.

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I think the member for Melbourne Ports did support it. The interesting thing about the member for Melbourne Ports—and this is very relevant to the Australia-Japan Foundation—is that he is not anti-American. But I am afraid the Left dialogue—and not just in Australia, of course—is a rant against America and anything to do with America. It is one of the reasons I never felt attracted to the idea of joining the Left. There are other reasons as well, like I believe in freedom and the Liberal economic model, not socialism. Anyway, that is a far cry from our relations with Japan.

The last point I want to make is about cultural relations and people-to-people relations between Australia and Japan. It is very important that we continue the task of building those up. I had a very nice moment at the Australian National Gallery on Monday, when I joined the Japanese ambassador and the Chairman of the Australian National Gallery and the chairman of the gallery’s foundation in ‘launching’—I suppose that is the right word—the acquisition by the gallery of two absolutely superb 16th century Japanese screens. To the very small number of members here, I encourage them and the parliamentary secretary to go and have a look at these screens. They are absolutely superb.

I made the point in my speech there that we have got over the pathetic argument that Australia had about whether we should engage with Asia, who engaged with Asia best and all that sort of stuff, which we had to weather through the early to mid-1990s. We have grown out of that as a country. Our engagement with Asia, with our neighbourhood, is the most natural thing in the world, as it should be. We are doing extraordinarily well through free trade agreements, through broader trade and economic relations, through our membership of the East Asia Summit, APEC and the ASEAN Regional Forum, and through all manner of different links between Australia and Asia. But I do not think in Australia we have a strong enough understanding of or feeling for Asian cultures, which are diverse. There is no such thing as an Asian culture. I think it is enormously important for us to develop an understanding of Japanese history and Japanese culture.

I commend the Australian National Gallery on building up its Asian collection. It is good to see this acquisition that has been made with the financial support of a very generous Adelaide businessman, Andrew Gwinnett, a very good man. This is relevant—and it is a good point to finish on—to the Australia-Japan Foundation because it promotes cultural and people-to-people links, which supplement and enhance the more traditional diplomatic links that we have with Japan. I hope that, as a result of the passage of this bill, we will be able to continue to use the Australia-Japan Foundation to enhance that aspect of our relationship. I thank members for their support of the bill and for the very interesting contributions that they have made to the debate.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.