Australia Business Week in India
13 January 2015
I would like to thank you so much for that very kind introduction and for all of you who have been part of the session and taken the time this week to be part of the Australian delegation in what is a very important week for the Australian Government.
Trade Minister Robb has driven a very proactive trade agenda since we were elected last year, which has been well celebrated this week. He managed to sign off three major trade agreements with several governments: with China, of course, and with Japan and Korea. These agreements will lead to extensive economic benefits over many years for our country and we hope this year that the strong relationship that's been built already between our two prime ministers will see further advancements with this free trade agreement with India as well, which of course will benefit both of our countries for many generations to come.
When we were elected to government in September 2013, the Australian Government outlined very clearly that we wanted Australia to be open for business, and what we meant by that was Australia has always been a country that's looked upon as a very safe investment, a very safe place to invest capital in, particularly resource projects. We have massive resource investments in Western Australia and Queensland particularly: Northern New South Wales, with its coal deposits…and we wanted to get back to that place that we had been where we were looked upon as a destination for global capital to help build our country, because we have known, since white settlement in 1788, Australia has always needed foreign capital to help build our country.
Unfortunately, for a period of time, there was I think several policies which made it more unattractive to invest in Australia than what we wanted to see, and so one of the key elements of our agenda in being elected in 2013 was to very much remove barriers to investment. We campaigned vigorously about removing what we described as unnecessary taxes, particularly relating to the mining sector. And last year, one of our successes through the Parliament was to remove both a carbon tax and mining tax. We argued very strongly that it held back investment.
We also had a clear agenda about removing unnecessary red tape, which was also making it more difficult to invest in Australia. I think the clearest example of where the environment had become more difficult to invest in Australia was in my home state of South Australia, where BHP had a massive deposit of copper and uranium to the north in a place called Olympic Dam. It was planned to be expanded by BHP, but those plans were put on hold just a couple of years ago and in part, we believe that was because government policy made it more difficult for BHP to make that decision when they had competing priorities across the globe. The Australian investment climate was not as strong as what we wanted it to be.
So in coming to government, what we focused on building was trying to remove barriers for investment decisions and so far, since we've been elected, we've approved nearly a trillion dollars' worth of new projects across the country. New private sector investments, in addition to a very ambitious infrastructure investment programme that I'm part of delivering, along with state governments in Australia.
We announced $50 billion worth of public government expenditure on public infrastructure last year, mainly focused on roads and freight rail. We have an asset recycling initiative, as we describe it, where we're encouraging states to use their balance sheet more effectively to take existing assets—take them to market and use proceeds of those sales to build new infrastructure for the community and for our economy.
So we have a very clear plan about making Australia accessible for investors. We want the private sector capital, which is a wash across the globe at the moment, to be focused on building our resource opportunities in Australia, infrastructure opportunities in Australia. We have obviously a very large pool of savings in Australia through our superannuation system, but we need and we want very much for foreign investors to look at Australia as a place to invest their money, to invest in projects, to work collaboratively with Australian companies to build what is still one of the great assets of the globe, and that is the resource endowment that we have in our country.
As I said, one of the clear policies we took to the election was to reduce the red tape burden on companies and on investment decisions and we've done that in I think a very clear way with state governments by removing one level of approval mechanism for environmental processes. So there is what we now describe as a one-stop shop approval process in all states across Australia for resource projects. Rather than having to go through both a state and federal approval for environmental approvals, there is now just a one-stop shop run by the state which clears all environmental approvals, which should offer a much more certain environment for people and for businesses when considering their investment decisions. And as I say that has led to quite an uplift in the amount of projects which has been approved. Many of them were sitting waiting approval processes under the former government; we've got those moving.
But we do realise that there is more to do. We realise that in our global community, it is, as the former Prime Minister John Howard once described, like that never-ending money [indistinct]. Keeping up with the globe means you have to constantly perform. You have to constantly be ahead of your competitors, and that's what as a government we very ambitiously intend to do.
We've just announced in recent times a review of our federation to make sure that the federation is working more appropriately and more effectively. We've announced a review of our taxation system, again, working in hand and glove with the states about what is the best taxation system to encourage investment to ensure that we're collecting the amount of tax we need to provide the services our people expect and no more and we've also got a Productivity Commission review into the workplace relation system. Clearly high labour costs and uncertainty when it comes to our labour laws is this factor which impacts on investment decisions for international companies.
There is no question that this is something that as a country, we need to be considering and we're going to consider that through the Productivity Commission which is the Australian Government's think tank, if you like, or research agency, which will provide a report to the Government about what measures we should take to improve the operation of our open market to make us more competitive in a very competitive international environment.
We know that just because we have a people-to-people friendship with countries around us, like India, that that doesn't necessarily mean that we will be the first place you choose to invest your money. We need to be a country which is competitive. We cannot rest on our laurels and we don't intend to as a government. We need to ensure that we've got the most modern tax system, the most modern labour laws, and the most appropriate investment environment we can create to attract investors from across the globe. It is a very competitive world and that means that we get great outcomes for our people, but for us to get great outcomes for our people, for us to create more jobs and to have the standards we've had for the last 30 years in Australia, we must be thinking ambitiously about what we need to do to ensure we've got a competitive landscape for new investors in our country.
So it is terrific to be here, to see so many people part of this forum. We want you to be part of the Australian economy. We want as many investors who are here as part of this week to see us as a safe, growing part of this world, something that you want to be part of. This is the very reason that there are 450 Australian Government businesses and ministers here today and here this week, to encourage you to look upon us favourably and to know that we are working very hard as a government to ensure that we can create the best operating environment in our country for you to see us as a place to do business.
So thank you so much for listening. I'm very happy to take any questions if there are any, but please enjoy the session. I look forward to discussion from some very high calibre people in this room. Thanks so much.