Keynote Address at the Hotel Investment World Conference
29 July 2015
Sofitel Sydney Wentworth, Phillip Street, Sydney
Thank you Pauline, and thank you all for being here on day three as I understand of the conference, which is always a bit of a challenge to get out of bed for that third day of a conference. Particularly when you look at the schedule and you're being lectured to by a politician, so I apologise for that. But I hope you've had an enjoyable conference so far.
Can I firstly apologise on behalf of Andrew Robb, the Australian Minister for Investment and Trade, who's I think in the difficult outpost of Hawaii as we speak trying to negotiate the final stages of the TPP. He's trying to put the icing on the cake of what has been an incredible two years for Andrew Robb as a minister in our government. Signing three free trade agreements so far, with Korea, Japan, and of course China, and hopefully, shortly, the TPP, which will be an incredible achievement. Then he's got the small task of finalising a free trade agreement with India as well. So not much on Robby's to-do list, and therefore he's asked me to step into his very large shoes today to address you on what is an incredibly important subject for our Government, and that is increasing the amount of investment in Australia in one of our key industries.
Tourism is an absolutely vital industry for Australia. We haven't just signed free trade agreements because they're nice pieces of paper and they're good announcements, we've signed free trade agreements because they have real genuine benefit for our country. Andrew Robb has spent this time working on behalf of our Government to ensure that we've got the economic foundations for future prosperity; and we see these agreements as absolutely vital parts of that future prosperity. Tourism is an essential element, and investment in tourism is an essential.
If you go to the base of what we see as the growth opportunity in our region, Australia perfectly placed in our region for that, you'll remember that as we speak there are some 600 million people in the middle class in Asia. By 2030, the OECD predicts that will be 3.2 billion people who'll move to the middle class in Asia. That is two-thirds of the middle class across the globe. People wanting the same opportunities as we enjoy here in Australia as people who have developed quicker. And that means that not just the resources, mining resources, not just the hard resources that we produce in agriculture, but it means services; 70 per cent of our economy of course is services based. A large part of that is tourism.
In my own electorate, in the Adelaide Hills, in McLaren Vale, Kangaroo Island, Fleurieu Peninsula in South Australia, tourism is a vital element to what we do. But we will only service that growth through the free trade agreements through quality products, through high-quality well-invested products. And we can only do that if we've got the combination that people seek to use and want to enjoy. We will be a niche always in Australia servicing such massive growth, we will never achieve obviously such high numbers as bigger countries in Europe and so forth. So, we need in Australia much more investment in our tourism industry, and we need to attract much more international investment in our tourism industry.
During the 1980s there was a huge investment in our tourism industry, massive international investment in our tourism industry, particularly in Queensland where there was a lot of development through investment, particularly out of Japan, in the Gold Coast and through Cairns. But in recent times we haven't had such investment throughout our tourism industry, and we need more. We absolutely need more. We need high-quality products, we need to offer the world the best—not just high numbers, we need high yield. That is ultimately where Australia will fit into the marketplace. And this conference is a vital element to that, encouraging investment, making people see what opportunities we have here with such a terrific product, and encouraging people to invest more in Australia.
If I've got one simple message for your today, for those of you who are international investors: please invest, we are open for business. We want you to invest in Australia. We want to do what we need to do to encourage you to invest in Australia. That's why Andrew Robb is spending his time in Hawaii this week, not just to soak up the sun outside of the Australian winter, but to sign free trade agreements which ensure that we have got the capacity for you to invest in Australia. That's exactly what we are looking to do. And for those of you who are in Australia already, invest more. Invest more. Take a chance and put more money into your business. Invest in that capital because you need to compete.
The free trade agreements are a bit like opening a door. We've opened a door into Japan, Korea and China. We opened the door a decade ago to the United States. These are massive markets. Never forget, big economies don't need free trade agreements; it's small economies who want free trade agreements. As the New Zealand Prime Minister says, John Key says, we will never get rich in New Zealand—or Australia for that matter—by selling to ourselves. We need the world to invest; we need the world to buy our product. So, these agreements open doors, but it doesn't guarantee success. It doesn't guarantee success. What guarantees success is the quality of the product, the opportunity for people to take advantage of what we've got, the unique offering that Australia provides as far as then quality of what we've got here in Australia.
I say to you, as a Government, we've put in place the settings, and we continue to work on those settings, but we need the private sector, we need international investment, we need domestic investment to ensure we've got the product that people want to buy and we've done quite a bit in that respect. The Government has been focused very much since we were elected in creating the conditions for that investment—not just the free trade agreements, but we've been reducing red tape, we are making it easier for you build in Australia, to ensure that you've got the certainty you need. There's been over a trillion dollars worth of projects approved by our Environment Minister since we were elected. We need decent standards but we also need investment. We don't want to put people off from investing by overly onerous standards. And we've done much work in that respect to ensure that we've got the conditions for investment.
In the last Budget, we focused very much on small business. We encouraged small business to invest by offering an accelerated depreciation system which ensured people got money back for investment. We're looking to invest in infrastructure importantly, in my portfolio, so that people can move our country more efficiently, move around our cities more efficiently to get to where they need to be. Investing in airports, investing in roads and rail across our country, so we've got the modern infrastructure we need for a modern economy. We are a government that after 50 years of debate has decided here in Sydney that we shouldn't just keep talking about a second airport; we should ensure that the second airport is built, and work will start on the Western Sydney Airport next year. Because we made the decision, the infrastructure Prime Minister made the decision that it was important, it was vital for our economy that we unlocked the productivity constraints in Sydney, with issues around the Kingsford Smith Airport, with the new airport in Western Sydney. We will deliver that infrastructure but not just the airport infrastructure but the roads supporting it so it won't just be a white elephant out there in Western Sydney.
We know that running a business in Australia can be expensive at times, and increasingly expensive compared to our international competitors. That's why we've asked the Productivity Commission—in essence the Australian Government's economic think tank—to look at the industrial relations system to see if we can make improvements in the future so you can run your businesses more efficiently and compete more efficiently with the globe. That's why we're making sure that the framework is right. And we think there are some issues in the industrial relations system that we can correct and improve, and make sure are better for you to run your businesses, to employ more staff, to invest more in our country. Because that's ultimately what it is all about.
In the race for global capital, it is a never-ending finishing line. We have massive opportunities today, as I talked about in the beginning, but we've got massive competitors as well. Never have we seen so much competition in the globe as we do today. To ensure that we're winning that race we need to get the settings right. And that is what the Abbott Government is very focused on doing; making sure we've got the settings right, whether it be through the infrastructure investment, whether it through the trade arrangements, whether it be through ensuring our workplace relation system is the modern and flexible system that you need to employ more people. That's what we are very much focused on.
It is a great privilege being here today representing my great friend and colleague Andrew Robb talking to a very esteemed group. I have the privilege after this chat to talk to a massive global empire in hotels the Trump Group, quite well known obviously and I'm worried that I'm going to be told that I'm fired after this speech. But it is a great indication about the importance of these sorts of conferences that we encourage people not just in our domestic market because Australia needs international investment but we encourage people from all over the globe, whether it be America, Europe, Asia to be here, here in Sydney talking about what we can do better in the future to encourage more investment in our market to ensure that we are taking advantage of that growth in our region for the future prosperity of our people.
Thank you so much for listening to me. I hope you've had a great three days. I look forward to discussions after this with many of you who want to invest in Australia as part of this very important sector. The tourism industry will do so much to make us more prosperous in the future.
Thank you so much.