Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes the mutually beneficial and strengthening cooperation between Australia and Japan with particular emphasis on our:

(a) strong trade relationship;

(b) significant strategic partnership; and

(c) developing defence equipment and technology relationship;

(2) acknowledges the:

(a) Australian Government's success in concluding the Japan Australia Economic Partnership Agreement;

(b) scope to further enhance our relationship in areas such as investment and education;

(c) Australian Government's plans to combat sovereign risk for foreign investment in Australia by repealing both the carbon and mining taxes;

(d) importance of elevating the bilateral security and defence relationship to a new level, based on our shared strategic interests in regional and international peace, stability and prosperity; and

(e) importance of the forthcoming visit to Australia of Prime Minister, His Excellency Mr Shinzo Abe, in further building our strategic partnership with Japan into a new special relationship; and

(3) commends the Australian Government for enhancing the relationship between Australia and Japan, which will be mutually beneficial for the economies and people of Australia and Japan.

Next month the Prime Minister of Japan, the Honourable Shinzo Abe, will visit Australia. That visit will take place at a time when the relationship, the partnership, is mature and at its closest. It is right that, at a time when the relationship is rising to its greatest levels, Prime Minister Abe addresses this parliament in a joint sitting. We all welcome him and look forward to hearing his views on regional and global issues. The relationship between our nations is strong on many levels. On one point, our trade relationship in 2013 amounted to $70.8 billion. Already it is a big number, and it will get bigger because of the economic partnership agreement. On 7 April this year, Prime Minister Abbott and Prime Minister Abe announced the conclusion of successful negotiations for an agreement that shows our shared commitment to open trade and will enhance two-way trade in investment. The good news that comes from this shared commitment is that, when fully implemented, 97 per cent of our exports to Japan will receive preferential treatment.

It is important for us to comprehend that, when we speak of trade with Japan, the Japanese market is not just confined to Japan itself. Japan, in an economic sense, is a huge international market consisting of Japanese business and investments operating not only in Japan but also throughout Asia via production and materiel networks. In many ways, this is an example of the global economy. We, too, are part of that economy. Japan's success has been achieved by the economic cooperation programs they have initiated throughout the developing world. Those who travel through Asia and the Pacific region can easily notice these programs. In Australia, Japanese businesses play an increasingly important role from an Australian base in manufacturing, agriculture, services and mining.

Beyond the trade relationship, our strategic partnership is very strong because of our shared values. We are democracies, we believe in the rule of law and we are committed to strong human rights. Already we achieved a base to build upon, when our bilateral cooperation was enshrined by the 2007 Japan-Australia Joint Declaration on Security Cooperation. It is also little wonder that, when the new Colombo Plan was being developed, Japan became part of the pilot scheme, assisting undergraduates to study and work in Japan. The personal links in the networks then become the building blocks of an even better relationship between our nations created by that plan. The strategic relationship has also been more recently defined through our cooperation with Japan in response to Typhoon Haiyan in the Philippines and, very recently, in the search for Malaysian Airlines flight MH370. These are examples of friends working together in a very practical sense to address common regional challenges.

Another example of our strategic partnership which is strong and getting stronger was the meeting of our foreign and defence ministers in Tokyo on 11 June 2014. I understand that this was the first such meeting. Given the challenges of territorial disputes in the seas of the region, it was a practical discussion to find ways to enhance our defence and security relationship. This helped to build on the Prime Minister's visit to Japan in April. I should also note that at that meeting in Tokyo, the Minister for Defence was able to announce that we had concluded negotiations on an agreement to share Defence science technology and equipment. This is another great step forward to make our security relationship that much stronger and more effective.

Next month, this parliament should be able to unload the economy by getting rid of the carbon and mining taxes. The cessation of those taxes means that we will take those handbrakes off the economy. When investors from places like Japan look at Australia, they will no longer be negatively influenced by seeing those tariffs put on our industries. It will be better for foreign investment, the economy and the Australian people by way of jobs and opportunities.

The relationship between Japan and Australia is excellent. It is getting even better because of the economic partnership agreement, the New Colombo Plan, our security relationship, and our determination to offload the carbon and mining taxes. And all this is based upon our fundamental beliefs in democracy, the rule of law and human rights. It is an excellent relationship that will only get better and I very much look forward to our joint future between Japan and Australia.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I second the motion. I rise today to speak on the private member's motion on Australia's relationship with Japan, the context of which is the planned visit by Prime Minister Abe next month. The Japan-Australia relationship is absolutely crucial for our nation. Japan is our second-largest export market and our second-largest trading partner. It accounts for almost 17 per cent of our exports. It is worth almost $48 billion, comprised mostly of LNG, coal and beef. But Australia's relationship with Japan goes much deeper than trade, as important as that is. Our cultural ties are as close as with any other in the region. Given history over the middle of the last century, it is remarkable how strong our friendship has become based on democracy, human rights and the rule of law.

In the aftermath of the earthquake and tsunami in 2011, Australia provided extensive support to our Japanese friends. Former Prime Minister Julia Gillard was the first head of government to officially visit the region after the disaster. Among other things, she, on behalf of the government at the time, offered Japanese university students, academics and professionals from the most affected areas funding to spend time in Australia.

We want to see this friendship strengthened even further in trade as well, with the best possible economic partnership agreement with Japan. We come to these negotiations with an open mind, but the overview released in April of this year did leave us with some questions. So the opposition will reserve judgement about the merits of the agreement until full details have been released publicly. But this process will be made a bit more difficult due to the revelation at Senate estimates earlier this month that the government has not modelled the impacts of the proposed deal—in contrast with the precedents from the Korean FTA and from past trade negotiations.

The opposition would be keen to support a high-quality deal with Japan. We would be firmly in support of a deal that creates jobs and other benefits for Australian consumers, workers and businesses. But we need to be sure that the government, in a short time frame since coming to office, has not sacrificed quality for speed in finalising this deal with Japan. Achieving real progress on deeper integration with Japan and other neighbours can be the key to developing a stronger and more resilient regional economy into the future.

The McKinsey Global Institute has done us a great service quantifying the benefits of international connectedness in their recent report on global flows in a digital age. Around the world, flows of goods, services and finance in 2012 reached $26 trillion or 36 per cent of global GDP—one and a half times larger than they were in 1990. Their report also determined the dollar value of the contribution of global flows to GDP growth, adding somewhere between $250 billion and $450 billion to global GDP each year or 15 per cent to 25 per cent of growth. This gives evidence to what we know intuitively; that trade liberalisation can create opportunities when it is done right.

There is one disappointing part of this motion and that is the member for Cowan's predictable partisan references to the minerals resources rent tax and the carbon price. It just goes to show that the members on that side of the chamber often cannot help themselves. Even on issues of great international importance like a trade relationship that has been supported by both parties for many years and advanced by my fantastic predecessor Dr Emerson, the member for Cowan cannot help but include some domestic political pointscoring.

There is form in his party for this of course, with the Prime Minister regularly using the international stage to play domestic politics. What is particularly stupid about the member for Cowan's claims about sovereign risk in this motion is that they are founded on a fallacy. Before it was politicised in this way—and the member for Fraser will know this—sovereign risk referred to the likelihood of a government defaulting on bond payments. Given that under the last government Australia had stable AAA ratings from all three of the major credit ratings agencies, a feat never achieved under Peter Costello or any other Liberal Treasurer, it is clear that Australia's sovereign risk was and remains an insignificant factor for countries intending to invest here.

I sincerely hope that the members on that side of the chamber are able to maintain their dignity when we are honoured, absolutely honoured, with a visit from Prime Minister Abe next month. He will be the first Japanese leader, as the member mentioned, to address a joint sitting of the parliament and one of a very select few of international leaders to be given that privilege and that opportunity. I look forward to his visit. All members on this side of the chamber look forward to his visit and to Australia enjoying the benefits of the closer relationship, economic and cultural, in the years ahead.

John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

I commend my colleague the member for Cowan for this motion on Australia-Japanese relations. As a good friend of Japan and as Chair of the East Asia Parliamentary Network, I give my full support to this private member's motion. Our nation's relations with Japan are a modern miracle. Over the space of just two generations we have gone from opponents in a major conflict to the very best of trusted friends. The level of cooperation between our two governments, between businesses, through trade, and between people through tourism and sporting connections continues to grow. As midsize powers, we have much in common. We are both democracies committed to the rule of law and human rights.

Japan is part of our pilot scheme for the New Colombo Plan. This scheme will see Australian undergraduates studying and working in Japan, giving them unique experiences and establishing valuable friendships and networks that will have an enduring impact on relations between our two countries. This is a true testament of the maturity, practicality and professionalism with which our diplomatic relations have been conducted. No-one is a better example than our Minister for Trade who has led negotiations for the signing of a free trade agreement between our two countries. Minister Robb deserves the plaudits from every member of this chamber for his efforts. Similarly, the 2+2 Foreign and Defence Ministers Meeting in Tokyo earlier this month was an unprecedented opportunity to discuss practical ways to enhance our defence and security relationships and augment bilateral cooperation established under the 2007 Joint Declaration on Security Cooperation.

Whilst in Tokyo, the defence minister announced the conclusion of negotiations on an agreement to share defence science technologies and equipment. This will deepen even further the strong security ties between our two nations. These great diplomatic achievements have built on outcomes from Prime Minister Abbott's visit to Japan earlier this year, and looks forward toward Prime Minister Abe's upcoming visit to Australia.

Next week I will be travelling to Japan on a personal visit. Whilst there I hope to meet with some members of the Japanese parliament and also to further my understanding about the Japanese high-speed rail system. The shinkansen celebrated its 50-year anniversary last year. Over this time this incredible rail infrastructure has not been responsible for one safety-related fatality. Japan has much they can teach us about the way that high-speed rail can open regional areas to development, thereby reducing levels of urban congestion. Japan Central Rail is currently trialling a maglev rail line, which uses magnetic levitation instead of traditional wheels on tracks. These trains can travel up to 550 kmh. I hope to meet with the Chairman of Japan Central Rail, Mr Kasai, next week to discuss their experiences and the opportunities for Australia to work cooperatively with Japan towards our own productive development.

As Chair of the East Asia Parliamentary Network and as a good friend to Ambassador Akimoto and Minister Imamura in the Japanese Embassy, I look forward to welcoming Prime Minister Abe to Australia next month. This visit will further enhance our important bilateral strategic and economic partnership, as well as our unique strong friendship.

I also look forward to welcoming back the Japanese table tennis team to compete in this year's Bennelong Cup competition in the Great Hall on 23 October. It is the highlight of our sporting calendar! The players and coaches were a real credit to the competition last year, competing with great heart and in the true spirit of the game. I hope this will become an enduring annual visit. Again, I applaud the member for Cowan for this timely motion, and also the members for Robertson and Canning, who are both longstanding and vocal advocates of Australia's strong relations with Japan. I commend this motion to the House.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Australia was still a collection of British colonies when it first exported coal to Japan in 1865, before the Meiji restoration. In 1888, we were shipping Australian wool to Japan. The first Australian trade mission went to Japan in the 1930s. There must have been some consternation when our two countries signed a commerce agreement in 1957, so soon after the end of World War II. Today, Australia and Japan work closely together on security challenges such as counter-terrorism in South-East Asia and the proliferation of weapons of mass destruction, not least in the DPRK. It would probably be ironic to my grandfather's generation that the greatest Australian concern over Japan's security role in the region is its historical reluctance to assume a higher global and regional profile.

After the tsunami struck Japan, Australian Prime Minister Julia Gillard was the first national leader to visit the disaster affected region in April 2011. Australia sent a 76-member search and rescue team, donated $10 million to the Japanese Red Cross Society and deployed three C17 transport aircraft. Australian school children immediately began making paper cranes, not because the government told them to but because they felt it was the right thing to do. Soon the entry foyer of the Australian Embassy in Tokyo was filled with tens of thousands of paper cranes.

As Julia Gillard commented, Japan is also a friend, a country and a people for whom Australians today feel genuine affection and warmth. We have 100 sister city relationships and six sister state relationships. We admire the transformation of the Japanese economy from a wartime ruin with developing country status to a nation which is one of the world's largest economies with living standards higher than those of most nations on earth. That is an extraordinary economic achievement.

It was my pleasure to represent the government when I visited in 2013 to attend a major economic conference. There I met with politicians on both sides of the Japanese aisle, with business leaders and with the central bank governor Haruhiko Kuroda. I was impressed by the strategy of Abenomics, aiming to reinvigorate the Japanese economy back to the trajectory we so hoped it would follow in the 1980s, when airport bookshelves were filled with tomes about the virtues of the Japanese economic model. The first arrow of Abenomics is monetary policy, a two per cent inflation target. The second is fiscal policy, focused particularly on reconstruction efforts after the Tohoku earthquake and tsunami.

However, the most important arrow of Abenomics is structural reform. Productivity growth is what underpins growth in living standards. I commend Prime Minister Abe for his commitment to free trade. Naturally, the best way of pursuing free trade is through a multilateral trade deal. Compared to that, everything is second best. But Japan's commitment to a trans-Pacific partnership and to a free trade arrangement with Australia is welcome news, so long as those arrangements lead to greater trade flows. A study by the Productivity Commission's Dean Parham estimated that half of Australia's productivity growth in the 1990s was due to trade liberalisation, and Japan could potentially reap a similar reward. The Labor government's Australia in the Asian Century white paper noted that Japan is Australia's second-largest trading partner and our third-largest source of foreign direct investment. We provide Japan with minerals, agriculture and energy. They provide us with manufactured products and foreign investment. Our economies are remarkably complementary.

I am pleased to see the 1.5 per cent quarter-on-quarter growth in the first quarter of 2014. While we can expect some slowing of the Japanese economy as result of the consumption tax increase from five per cent to eight per cent in April, I trust the government's stimulus measures will partially offset that. Looking forward, Japan's overall population and workforce are forecast to contract, but the 2020 Olympics will hopefully act to boost consumer and business confidence in the years to come.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to speak on this motion today. Australia's relationship with Japan is one of the closest and most mature in our region. It is built on a foundation of mutual respect and trust, closely aligned economics and strategic interests and a shared commitment to democracy, human rights and the rule of law. It is a relationship I care deeply about, both as chair of the Australia-Japan Parliamentary Friendship Group and as a local member from Western Australia who knows the importance Japan plays economically, stimulating jobs growth through trade and investment.

It is important for Australia to remember that a lot has changed in 69 years. Whilst we have to acknowledge the past, we must not let it rob us of the future—a future that Japan will play a key role in. We are seen by the Japanese as their second most important strategic partner in the East Asia Summit to achieve common goals and our troops have served side-by-side in Iraq, assisting in the development of the Al Muthanna province. Our new defence technology agreement with Japan is the natural evolution of our relationship and will see Australian and Japanese scientists work together on the design of our next submarine to ensure the Royal Australian Navy's next boats are the world's quietest and stealthiest.

Australia's strategic relationship does not just extend to defence and foreign affairs. Japan and Australia have demonstrated consistently the ability to work together to respond effectively to a number of civil and natural disasters. Two Japanese P-3 Orion aircraft and 50 disaster response personnel were deployed to RAAF Base Pearce in WA to support the international search for MH370 after the aircraft went missing and the search zone was identified off the Western Australian coast. Australia supported Japan in the aftermath of the March 2011 tsunami and earthquake by sending a 72-person urban search and rescue team, a team of Defence operations-response officers, C17 aircraft for use in relief operations, and a donation of $10 million to the Australian Red Cross in Japan and the Pacific Disaster Appeal. This was followed by an outpour of support from the Australian community.

As I have previously stated, our relationship with Japan is not just limited to disaster relief and defence. Japan is Australia's second-largest export market, with Australia's stable political, business and investment environment making us a critical supplier to Japan of clean and safe food products, as well as minerals and energy. Japan is Australia's third-largest source of foreign investment, with an investment stock of $126.4 billion as at the end of 2012. Over $52 billion of Japan's total investment in Australia is in direct investment. Japanese direct investment has been essential in the development of many of the export industries that have driven Australia's growth, including large-scale projects to meet Japanese demand for resources such as iron ore, coal and motor vehicles. An example of this in my home state of WA was the investment by Japanese bank Mitsubishi UFJ Financial Group of $325 million into rare earth mining at Mt Weld, creating jobs at the mine and supporting local industry and suppliers. Further to this, on 7 April this year Prime Minister Tony Abbott announced the conclusion of negotiations on the Japan-Australia Economic Partnership Agreement. This agreement will provide valuable preferential access for Australia's exports, better than any of Japan's agreements with other partners. Australia and Japan are natural partners with highly complementary economies. The agreement will bring our economies and societies even closer and underpin a strong relationship for many years to come.

A conservative estimate of the net benefit of the EPA to the Australian economy would be an increase of 0.66 per cent of GDP by 2020, while the net benefit to Japan would be an addition of 0.03 per cent of Japan's GDP. This amounts to a net gain in the present value terms over 20 years of $39 billion for Australia and $27 billion for Japan.

In conclusion, Australia and Japan have had a close relationship—one which has been developing over the last six decades. Our relationship with Japan is only getting stronger and I, for one, believe that it is a good thing. While Australia must always be a friend to all nations in our region, Japan will hold a special place as one of our key partners in developing an economy which is sustainable and working towards maintaining peace in our region. Before I commend this motion to the House, I would like to congratulate His Excellency Mr Yoshitaka Akimoto, Ambassador of Japan, his staff and the embassy for their proactivity in Australia. It has been a magnificent job and the way they connect with our parliament is something to be congratulated. I would also like to thank the Consul-General in Perth, Mr Funayama, his wife and staff for the hospitality they gave to the Minister for Defence and me last Friday night—this shows our relationship right across Australia is one that is continually growing.

I commend this motion to the House and look forward to working with the Japanese in the future to build a stronger and better future for both countries.

Alan Griffin (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak in support, for the most part, of the motion moved by the member for Cowan. I join in expressing the importance of the strong relationship between Australia and Japan on a number of different levels, including trade and investment. I also commend successive governments for the work they have done in building the Japan Australia Economic Partnership Agreement.

There have been three major phases in the development of the post-war Australia-Japan relationship. These are: the establishment of a major trading relationship with Japan shortly after World War II, formalised by the 1957 Japan-Australia Agreement on Commerce; a process of broadening the relationship, particularly at the cultural level, reflected in the 1976 Basic Treaty of Friendship and Co-operation between Australia and Japan, also known as the NARA treaty; and over the last decade, the emergence of a more fully-rounded and diverse partnership, including important political and security objectives, highlighted by the 2007 Joint Declaration on Security Cooperation and the conclusion of negotiations on the Japan Australia Economic Partnership Agreement.

Australia and Japan have a strong partnership and work together closely to tackle both regional and global issues of concern. The 2007 Joint Declaration on Security Cooperation serves as a platform for cooperation on a number of security issues between Australia and Japan, such as counter-terrorism, law enforcement, disarmament and maritime and aviation security. At a summit held in April, Prime Minister Tony Abbott and his Japanese counterpart decided to start negotiations towards a framework of agreement in the field of defence science, technology and equipment cooperation, as well as a cyber-policy dialogue to discuss cyber threats. Although Japanese whaling has been a very contentious issue, both Australia and Japan have an agreement not to let it get in the way of our nations' strong partnership. The strong trade relationship between the two nations has been beneficial. Having Japan as a strong and reliable customer of Australian produce has helped build the Australian economy, following the agreement in 1957.

Japan was Australia's second-largest trading partner in 2012-13. Japan is Australia's second-largest export market and will remain so for the foreseeable future. Two-way goods and services trade between Australia and Japan was valued at $69.2 billion. Goods exports to Japan in 2012-13 represented approximately 18.8 per cent of Australia's total exports. Total bilateral trade and services in 2012-13 was valued at about $4.4 billion. Japan is Australia's third-largest investor with an investment stock of $126.4 billion as at the end of 2012. Over 40 per cent, about $52 billion of Japan's total investment in Australia is direct investment. Japanese direct investment has been essential in the development of many of the export industries that have driven Australia's growth, including large-scale projects to meet Japanese demand for resources, such as in iron ore and in coal. Australian companies and individuals also target Japanese businesses for investment and Japan is Australia's sixth-largest destination for foreign investment. At the end of 2012, Australia's stock of investment in Japan was about $39 billion.

On 7 April 2014, Prime Minister Tony Abbott announced the conclusion of negotiations on the Japan Australia Economic Partnership Agreement that had been in the making by efforts from successive Australian governments. The agreement will provide valuable preferential access for Australian exports, better than any of Japan's agreements with other partners. Australian and Japan commenced negotiating a bilateral economic partnership agreement in April 2007.

According to the Department of Foreign Affairs and Trade, the EPA will address tariff and non-tariff barriers facing Australian companies; create commercial opportunities across all industries; expand export opportunities in Japan's agricultural markets; promote investment; promote our mineral and energy relationship; address any discrimination resulting from Japan's EPAs with other countries; and provide a fundamental commercial framework for increased trade and investment.

A conservative estimate of a net benefit of the EPA to the Australian economy would be an increase of 0.66 per cent of GDP by 2020. The joint study equated these amounts to a net gain in present value terms over 20 years of $39 billion for Australia and some $27 billion for Japan.

I note that earlier speakers made mention of the visit of Prime Minister Abe in the near future. This will be an opportunity for both nations to continue the dialogue and continue to develop the relationship between our two nations, which has been such a profitable and successful one for both our nations in the post war period.

Debate adjourned.