Ladies and gentlemen, it's a pleasure to be speaking to you here today at a lunch accompanied by quality Australian wine, now one of Australia's key exports to Britain.
Last financial year, we shipped $600 million worth of wine to the UK, almost half of all our wine exports.
For the past 90 years, the Australian British Chamber of Commerce has played a facilitating role in the promotion of both trade and investment between the two countries.
I'm delighted to see that the Chamber has recently appointed Tim Fischer as its National Patron.
Tim is one of the most committed advocates for Australian industry, ingenuity and flair and his knowledge and enthusiasm will be an asset to the Chamber's efforts.
Britain remains one of Australia's major trading partners and our key European market, accounting for more than three-quarters of the EU's foreign investment in Australia.
In fact, Britain is the second largest source of foreign investment into this country, just behind the US.
Australia is looking increasingly attractive as an investment location these days, thanks in part to the hard work of the Howard Government.
Later this year I will be promoting Australia to funds managers and financial services companies in Britain, Germany and Spain. The story I will have to tell is of a country heartily embracing the new technology, the new economy, and the new ways of doing business in the 21st Century.
This Government's changes to our regulatory and tax systems plus the quality of our human resources are being noticed in corporate boardrooms, attracting companies such as Oracle to Australia.
Oracle has chosen Sydney over Singapore and Auckland as the base for a 150-person Asia Pacific business services centre. A key factor in this choice was the ready availability of multilingual people skilled in finance and accounting.
Similarly, IBM chose Sydney over Singapore last month to site a $30 million e-business innovation centre that will employ 300 IT specialists and enable Australia to play a major role in the development of e-business throughout the Asia Pacific. IBM cited the depth of Australia's IT skills as a key factor.
Other companies have also set up regional operations here the the world's second largest mutual fund manager, Vanguard, has set up a regional operation in Melbourne and has even established a joint venture with MLC called Plum.
After little more than a year US power company Enron now employs over 100 people in Australia and has recently unveiled some sophisticated risk management weather hedging products. And what was one of the reasons Enron cited for expanding downunder? The answer is our well-educated and well trained workforce.
I could name a dozen more operations. The point is that all these companies are taking advantage of a productive work environment and a location that, until recently, isolated Australia from the rest of the world.
A generation ago, Australia was a long way from anywhere, except New Zealand. Now, because of the Internet, distance no longer matters.
What matters is the quality of the person punching the keyboard or clicing the mouse.
Australia has always been an early adaptor of new technology and was recently named by Professor Jeffrey Sachs of Harvard University as one of the Asia Pacific's technological innovators, along with Japan, South Korea and Taiwan.
These countries, along with Western Europe and North America, are driving the development of the world's new technologies.
Australia is among the global leaders in terms of access to the internet. More than six million adult Australians now use the internet on a regular basis, a figure that has doubled in the past two years.
We have more computers per capita than any other country in the Asia Pacific and e-commerce revenue is expected to grow from $253 million in 1998 to almost $11 billion by 2002.
Australia is in the midst of its longest economic expansion since the Beatles told us to 'Let it Be' in 1970, with 12 consecutive quarters of more than 4 per cent annualised growth.
This strong growth has placed us in the top half-dozen of the OECD's performers in the past decade.
Our high productivity growth through the 1990s has also been singled out in a recent OECD report, Is There a New Economy.
The growth of capital and labour productivity, known collectively as multifactor productivity, has averaged 2.1 per cent over the past four years, more than double the long-term national average.
Labour productivity growth averaged 3.8 per cent over the past four years and 2.8 per cent over the 1990s as a whole, compared with just 1.4 per cent during the 1980s.
This productivity payoff has been the result, at least in part, of a number of structural reforms that successive Australian governments have undertaken in the past decade.
The financial sector reforms we undertook in 1997, adopting the recommendations of the Wallis Inquiry, resulted in twin regulators of financial institutions and markets, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
This is now being used as a model for regulatory reform by other countries in the Asia Pacific.
Earlier corporate law reforms have already put into place significant improvements in the areas of accounting standard setting, fundraising, directors' duties, corporate governance and takeovers.
The next stage of the process to create a world class financial services industry in Australia is corporate law reform.
The Corporate Law Economic Reform Program or CLERP will allow the financial services sector to develop in response to new technology, globalisation and changing consumer needs.
The third tranche of reforms was released for public consultation in the form of the Financial Services Reform Bill in February this year.
This Government is also undertaking the most extensive reform of taxation in Australia's history.
Although there is a perception that Australia is a high-taxing country, we are, in fact, one of the lowest taxing nations in the OECD.
The introduction of the GST in July 2000 has been accompanied by substantial tax cuts that mean 80 per cent of Australians now pay no more than 30c in the dollar in income tax.
The company tax rate is being reduced from 36 to 30 per cent, a rate that will ensure Australia remains one of the lowest taxing developed nations in the world. We have halved capital gains tax so that 80 per cent of Australians now pay no more than 15 per cent in CGT.
This will benefit the growth of the online economy with around 500,000 Australians using the internet to conduct share trading or gather information on their share portfolios.
Australia is now the largest per capita share-owning nation in the world with 54 per cent of us involved in the sharemarket, either directly or indirectly.
There are 70 Australian stockbrokers competing for business online with aggressive competition resulting in some rates dropping to just $9.90 a trade.
Already close to 15 per cent of the trades on the ASX are done online, a figure likely to increase as low prices lead to greater trading frequency.
This Government is already recognised internationally as among the most web-advanced in the world.
We are encouraging the use of the internet to do business and the Government's Online Strategy aims to bring all appropriate services online by 2001.
As part of this strategy, the Commonwealth's Electronic Procurement Implementation Strategy, release in April this year, sets two major goals:
- to pay all suppliers to Government electronically by the end of this year; and
- to conduct 90 per cent of purchase-related, simple transactions through the internet by the end of 2001.
We have also signed Memorandums of Understanding with Hong Kong and Singapore to further progress trade through electronic commerce and to work together to develop similar operating systems.
As businesses stride into the new economy, they are faced by a number of challenges, not the least of which is good corporate governance.
Good corporate governance is critical in a world of unprecedented capital mobility.
It can mean the difference between long-term investment, speculative investment or no investment at all.
Good corporate governance aims to achieve the best outcome for the business, which will ultimately benefit all shareholders.
It makes sense that investors (and those who represent them) will get a better return on their investment if they take an active interest in the corporate governance of companies they have invested in.
An emerging practice among funds managers in the UK is to use a corporate governance officer who is dedicated to monitoring corporate governance issues in companies in which they hold shares.
I'm sure this practice would also work well in Australia.
The fiduciary duties of company directors remain the same in the new economy as they did in the old. Although directors of dot.com companies might need new skills, the fundamentals of disclosure and accountability remain unchanged.
Good corporate governance means new economy companies not repeating the mistakes of some of their old economy predecessors.
As we prepare to do business on 21st Century terms, this Government wants to see Australia play a role on the world stage, as a manufacturer of world-class shiraz, as a regulatory template for the financial sector industry, as a role model for good corporate governance and as a financial centre capable of servicing the global economy.
Axiss Australia, established by the Federal Government to enhance Australia's position as a global financial centre, is working hard to attract more European finance sector firms to Australia.
Last month, it organised a private dinner with the Prime Minister in London for 50 of Europe's top bankers.
An accompanying conference promoting Australia as a financial gateway to the Asia-Pacific was supported by the State premiers of NSW and Victoria as well as by senior members of Australia's financial industry.
The message they had was that Australia is a world-class location from which to run global financial services.
We offer businesses from the US and Europe the advantage of low fixed costs, skilled labour, a new economy outlook and access to a region of three billion people.
We are seeking to work in partnership with other jurisdictions in Asia, and are already talking to Singapore and Hong Kong, in order to grow the size of the Asian market and ensure it does not lose out in a quick-moving, global environment.
Australia is no longer at the edge of the world. Increasingly, it is being seen as the place to be by the world's financial sector.
And our skills also extend to the production of some pretty spectacular bottles of wine as well.