Acknowledgements Omitted
Thank you Ross.
Good morning, Governors of Central Banks and representatives of Government Financial Departments of Pacific Island nations, ladies and gentlemen.
It is my great pleasure to address you today.
Australia attaches a great deal of importance to our relationship with Pacific Island nations. Our Prime Minister, Julia Gillard, was an active participant at the 42nd Pacific Islands Forum in the Cook Islands late last month and the appointment of my colleague, Richard Marles, as Parliamentary Secretary for Pacific Island Affairs and Parliamentary Secretary for Foreign Affairs, to attend specifically to affairs within the Pacific region is another clear demonstration of this commitment.
There is a good reason why most of us are envious of his responsibilities, as I believe Richard has been to every Pacific Island nation except the Pitcairn Islands in the course of his duties.
On a personal note I have a large Pacific island community in my electorate and they recently held the Pasifika Festival, which is a great day to celebrate the dance, culture and food of Pacific communities. This year it was fantastic to see so many members of the wider community there as well.
I have been pretty lucky myself to visit The Solomon Islands, Tuvalu, Samoa and the Federated States of Micronesia in 2011 and I think I recognise a few familiar faces here today from my visit to Kiribati earlier this year to attend the Forum Economic Ministers Meeting.
Today, I have been asked to address you on Australia's relationship with Pacific Island nations, with particular focus on the financial relationship.
Let us begin with some basic facts.
- We are all situated in the same geographical region.
- We are neighbours.
- We have strong ties.
Australia is a developed country located in a region of developing countries. Of the 25 countries immediately surrounding Australia, 22 are developing nations. As such, we believe deeply that we have responsibilities in the Pacific.
We have and will continue to assist each nation in its own development objectives.
This assistance may be in the form of infrastructure development, law and order, defence, health, sanitation, emergency management or providing education or economic opportunities for Pacific Islanders in Australia.
Australia's Official Development Assistance budget is $5.2 billion, and of this, $1.17 billion or 25% of Australia's total ODA budget goes to Pacific Island countries. This aid is directly focussed on:
- Education and skills development
- Health and HIV
- Law and Justice
- Humanitarian and disaster response
- Transport and infrastructure
- Climate Change
- Effective Governance
We also partner with the World Bank, the Asian Development Bank, United Nations and other multilateral organisations to help accelerate progress towards the Pacific region's Millennium Development Goals.
Since 2008, Australia has signed eleven partnerships for development agreements, starting with Papua New Guinea and Samoa. In 2009, we signed the Cairns Compact on Strengthening Development Coordination to ensure that Pacific Island nations are in the driver's seat and able to deliver their own development programs with help from donors such as Australia.
Our aid to the Pacific is delivering results, for example: Australian aid supported an extra 120,500 school enrolments in PNG, Solomon Islands and Vanuatu in 2010.
In PNG this has led to an increase in basic education net enrolment rates from 52.9 per cent in 2007 to 74.9 per cent in 2010
I recently hosted a delegation of young women school leavers from PNG. They want to be lawyers, or doctors or get involved in Government. Their achievements so far have been stunning
Our support for malaria programs has helped reduce the incidence of malaria in the Solomon Islands from 199 per 1000 in 2003 to less than 50 cases per 1000 today and in Vanuatu from 74 cases per 1000 people in 2003 to less than 26 cases per 1000 today.
However, I am pleased to say that our relationship is also multi-faceted.
One of the Australian Government's strategic priorities is the security, stability and cohesion of our immediate neighbourhood - Indonesia, Papua New Guinea, East Timor, New Zealand and South Pacific island states.
This was a strategic priority in Australia's 2009 Defence White Paper.
Moving on to the global financial situation.
It would be fair to say that no nation in the world is safe from the financial winds that are blowing on the planet.
We are all affected by global financial instability at different levels and to varying degrees of intensity.
Analyses differ regarding the impact of the global financial crisis on Pacific Island nations. The economies vary widely in population size, geography, economic structure, environmental conditions and developmental status.
A few very fortunate Island nations largely escaped the worst shocks transmitted through the most "direct" channel, which was financial-market linkages, because of their limited integration into those markets.
Most economies have largely recovered or at least have improved from the depths reached during the Global Financial Crisis in 2008-09.
However, one lesson is clear: we all need to have robust infrastructure, good governance and policy options that will enable us to respond to any future global crisis.
For most nations, that means we need to:
- improve our competitive edge
- attract foreign investment
- improve national payments systems and institutions
- improve regulatory frameworks and strike a balance between efficiency and security
- institute robust risk management systems
- forge close cross-border cooperation.
- promote the reinvestment of domestic savings in the domestic economy
- try to synchronize monetary policy actions among monetary authorities in the region.
It is fair to say that most Pacific Island countries are struggling to meet their Millennium Development Goals (MDGs).
It is imperative that each nation improves the quality of its infrastructure and institutional frameworks to attract foreign investment that would grow the private sector.
There are many things that can be done. I will focus on just one – your currency system and in particular the focus of this seminar, your coinage system.
I will focus on coinage issues because coins impact on people at the most basic level. People need coins for every day transactions in the shops and markets, whether they are in cities or rural areas.
They routinely use coins for small transactions and coins have many advantages over banknotes.
Among other things, coins last about thirty years compared to two to six months for paper banknotes and about two years for plastic banknotes.
The common coinage issues seem to be as follows:
- Negative seigniorage – which means it costs more to purchase your coins than the coins are worth at face value and the Government loses money every time it orders coins.
- Inflation – which render the lower coin denominations next to useless.
- Coin shortages – which means the people gets small items of goods as change, whether or not they want the items.
But it is difficult to know what to do about coin shortages or negative seigniorage.
How do you improve the coinage system?
What are the steps you should take along the way?
The Royal Australian Mint is internationally renowned and the closest both geographically and culturally to the Pacific Islands.
This Seminar is aimed to build the capacity of every nation represented here today, and will assist you to examine the effectiveness and relevance of your own coinage systems.
It is entirely your prerogative whether you choose to take further actions or what actions you take. The important thing is that you are equipped to take action.
These actions can be anything from simple modifications to an existing system or coinage reform to replace the existing system.
I understand that representatives from Samoa and the Solomon Islands are here, they have recently carried out coinage reforms and will have valuable experiences to share.
I acknowledge the good work of the Royal Australian Mint and encourage all of you to use this seminar to your full advantage.
This seminar is in the best tradition of Australia's core beliefs regarding our close relationship with our Pacific neighbours and friends.
We will do all that we possibly can to assist you to make a difference.
And we will do that in partnership to bring further economic benefits to the Pacific region.
Because our relationship in the Pacific is more than economic or trade, it is personal relationship built on friendship.
I wish you well in your discussions over the next few days.