17 March 2018

Address to the ASEAN-Australia Business Summit, Sydney

Note

Thank you, it's an honour for the Australian Government to host this Summit. Not only is this event unparalleled in Australia, it's yet another sign that our commitment to trade is central to our national economic plan to drive jobs and growth in Australia - backing in businesses to create jobs, invest and expand their operations at home and abroad.

ASEAN operates under the motto of one vision, one identity, one community — principles that have served ASEAN well, creating many opportunities across a myriad of fields, over many decades. In fact, some 50 years after ASEAN was established, economic opportunity is one of the driving forces bringing us here today.

It's an unprecedented opportunity for our region's most senior and influential business leaders to put forward recommendations to drive the ASEAN-Australia economic relationship forward.

We see ASEAN carrying real weight, equivalent to the world's fifth largest economy with the region's annual growth outpacing the global average. At the same time, Australia's economy continues to strengthen, bolstered by a year of record jobs growth and a buoyant sense of optimism from businesses and consumers.

It's a combination that bodes well.

The opportunities on both sides of the ledger are profound; opportunities for South East Asian businesses to invest in a strengthening Australian economy that continues to broaden its base and champion innovation and digitisation.

And equally, for Australian businesses to set their sights abroad and invest in a dynamic and burgeoning South East Asian economy, and continue to strengthen the already close ties between our nations and business communities.

Australia's strong economic management, a policy focus on innovation and an overall ease in doing business present many opportunities for ASEAN businesses.

The Australian economy has entered its 27th year of uninterrupted economic growth.

This impressive growth story has been maintained through the Asian Investment Crisis, through the bust of the Dot Com Bubble, through the Global Financial Crisis and, by far more significant for Australia, through the significant downturn from our own mining investment boom.

Growth has been our constant.

Through the unwinding of the mining investment boom, our economy has not only proven resilient, it has diversified.

Non-mining business investment has surged an estimated 12.4 per cent over the last year, as businesses - who are enjoying some of the best trading conditions in decades - grab a hold of new opportunities to grow and innovate.

This surge in business optimism and investment led to record jobs growth across Australia in 2017 - with over 400,000 new jobs created in the calendar year, including 300,000 full-time jobs.

And the trend is continuing in 2018 - jobs and growth.

This optimism in our economy is also widely shared by Australian households. In our national economic accounts for the December quarter, consumption rose strongly, recording the best fourth quarter result in seven years.

Momentum is certainly building within the Australian economy, which gives us great confidence for the year ahead.

Our delivery on jobs and growth, together with our fiscal discipline, has resulted in Australia maintaining its AAA credit rating with all three major ratings agencies - one of only 10 countries to achieve such.

As a nation, we boast a skilled workforce and world-class education and research institutions, as we continue to establish Australia as a regional hub for ASEAN students with more than 100,000 studying here in 2017.

Our economy also offers regulatory and policy certainty. In fact, we are ranked 14th overall on the ease of doing business. This is underpinned by strong institutional frameworks — a hallmark of our system.

On the policy front, the Turnbull Government is pursuing and encouraging growth and investment.

We have legislated small and medium business tax cuts for businesses with a turnover less than $50 million and we continue to pursue tax cuts for the remainder of our businesses - to ensure they are competitive in a world embracing lower corporate tax rates.

Like ASEAN, our economic policies are unashamedly pro growth as we seek to encourage businesses to invest, innovate and create jobs.

We welcome foreign investment and appreciate the role it plays in spring boarding us to higher rates of economic growth, employment and a higher standard of living.

By the same token, Australia has realised enormous benefits from pursuing economic openness and advocating for free and open markets.

We will continue down that path. We will pursue policies that benefit our country, and resist calls to implement policies that would close access to our economy.

ASEAN is collectively one of Australia's largest export markets, worth around $42 billion (or 11 per cent of Australia's total exports) in 2016-17. Over the last ten years, the value of two-way trade with ASEAN has grown by more than 40 per cent.

There are also opportunities for Australian businesses in ASEAN — real possibilities stemming from four factors dramatically transforming the region's place in the world.

First, there is ASEAN's rapidly expanding cities bringing demand for infrastructure, utilities and services.

Second, there's a growing consumer class with greater purchasing power and a changing appetite.

Third, like the rest of the world, digital disruption is changing how ASEAN businesses operate and engage with consumers.

And, finally, there are stronger connections with trade agreements helping businesses overcome barriers.

Today, I'd like to focus on digital transformation because it's an area where I see some major developments occurring especially in the financial sector.

South East Asia is the fastest-growing internet market in the world, with projections suggesting there will be around 480 million internet users by 2020.

This, of course, means incredible demand for mobile banking and payments, online purchases and other mobile-enabled transactions and services.

We live in a time where the pace of change is nothing short of extraordinary.

A Department of Foreign Affairs and Trade report says in some of ASEAN's developing economies, where many have never had a bank account, people are now catapulting straight into using mobile money transfers and other modern banking solutions.

That's why we're looking to unlock potential and create an environment where Australian FinTechs can compete internationally - because the possibilities are extraordinary.

Embracing financial disruption through innovation is a fundamental part of our national economic plan.

And we are building off a solid platform. Australia ranks fifth in the world in the 2017 EY FinTech Adoption Index. But this is only the beginning.

In 2016, I set up a FinTech Advisory Group to advise me on the reforms to keep us ahead of the pack. And we've been working methodically through implementing these actions.

We have a regulatory sandbox to support testing of FinTech developments, and have introduced legislation to enhance the scope of products and services that can be tested. This will put in place the world's most forward leaning regulatory sandbox.

We've just welcomed a New Payments Platform — making payments faster and simpler for consumers and businesses.

We've introduced an equity crowdfunding framework — knocking down regulatory barriers to enable Australian entrepreneurs to raise the capital they need to turn ideas into successes.

We're implementing Open Banking, which will not only give consumers the right to safely share their data but could also lift the lid on competition.

As well as putting the FinTech building blocks in place, the Government also committed to making it easier for Australian investment funds to do business in Asia.

Australia is one of five signatories to the Asia Region Funds Passport which will allow funds managers to offer their products in each member economy without having to go through duplicative approval processes.

Thailand is also a participant in the Passport and ASEAN has its own initiative — the ASEAN CIS framework.

Together these initiatives are welcome efforts to expand opportunities for investment and export of financial services in the region.

So to finish, I'm pleased to announce a few practical measures to make sure Australia and ASEAN are ready to seize opportunities for growth and respond to challenges that may come our way.

The new ASEAN-Australia Infrastructure Cooperation initiative will develop a rolling priority pipeline of infrastructure projects.

The initiative will support ASEAN infrastructure projects that are well-designed, offer significant value to the region, and are open and transparent.

The ultimate aim is attract private and public investment and improve regional connectivity because ASEAN needs $4.3 trillion in infrastructure investment by 2040 to maintain economic growth.

To complement this initiative, all ASEAN member countries will now be able to link into the Global Infrastructure Hub Project Pipeline.

In other words, it's a foot in the global infrastructure investment door.

It means ASEAN countries will be able to access the hub putting their infrastructure projects in front of a larger field of international investors.

Today, I also announce my department — the Australian Treasury — will lead a new series of workshops where Australian experts will exchange knowledge and share experiences on matters that are most relevant to ASEAN countries.

These are not one-size-fit-all workshops. Treasury will tailor the workshops to suit the priorities of members with topics likely to include taxation, regulatory reform and budget policy.

The workshops will continue a proud tradition of collaboration, further entrenching the links between our people and institutions.

Given the possibilities and optimism on show during this Summit there is no doubt ASEAN will be part of Australia's economic future and vice versa.

There's many opportunities to discuss today and long after the Summit draws to a close, I'm sure ASEAN and Australian businesses will continue to drive prosperity in our region.

Thank you for your contribution to this Summit.