Question:
Twelve months ago you opened the Australian Centre for Global Finance and I wondered over the last months just how much business had come into Australia?
Answer:
Australia has brought in a range of new businesses and attracted a range of new businesses. I emphasise at this point we're not talking about deliberately taking business from Singapore, Hong Kong or Tokyo for that matter. We are talking about how we can create an environment to grow the region. The fact that players such as Deutsche Bank have relocated their Asian funds management to Sydney, or that Citigroup has relocated its Asian Research for funds management to Sydney, or that the Royal Bank of Canada has moved its foreign exchange to Sydney, or Vanguard is using Melbourne as a base to launch it's operations in Asia, or that JP Morgan is setting up its private equity regional headquarters in Melbourne, or Citibank is moving call centres to Brisbane, or a range of others which I won't remind you of. The fact is that we are delivering on what we are talking about. It's not good enough in this world to come and talk about something. You have to deliver it with action. And the development of Australia as a global financial centre - and we have been talking about a global financial centre for 18 months - recognises that we are trading in a global environment. It is no longer a regional environment we live in. It is a global environment. So we see opportunities for business to grow to service Asia from Sydney or Australia, and that business can come not just from within the Asian region but perhaps more importantly from Europe and America. Europe and America are particularly expensive places to run global operations at the moment. So there are wonderful opportunities for us in Asia to be able to grasp those sort of businesses from Europe and America.
Question:
Given that Australia's is so much further south than central Asia as opposed to a place like Hong Kong or Singapore, does that pose a problem for Australia to become a regional financial centre?
Answer:
That's a good question, and I would have said to you 5 or 10 years ago that, yes, the tyranny of distance is there. In fact, unless we grab a whole lot of ships out of Singapore Harbour and tie them to Darwin and pull the whole continent north, there's not a lot we can do about that, other than hope the Boeing or Airbus can create a faster jet. But what we can do is use our technology to make us a smarter and closer part of the Asian financial centre.
Technology delivers for us, as I said, the opportunity that we as a nation have never had. And it's a very big nation. It's virtually 4,000 km from one end of the continent to the other, and just as the tyranny of distance between Australia and perhaps northern Asia has been significant in the past, so has been the tyranny of distance in Australia. Yet we find that companies such as Mick's Whips, which makes whips based near Alice Springs in the Northern Territory, is able to start up an internet site and begin exporting whips around the world because of the opportunity provided by the internet. Or a piston factory in Adelaide which previously might have been fighting the tyranny of distance, can manufacture specialised pistons for 1950's cars, open up an internet site and start exporting to the world. And those sort of opportunities exist for Australia that we have never previously had, and it's the IT opportunities that are significant.
And when some misinformed analysts run around and say 1 per cent of the Australian stock exchange is IT stock, what they fail to understand is that the old economy stocks in Australia are preparing for the internet age.
On-line banking is a part of everyday life for many Australians. As is internet trading and shares. All the major Australian banks have now set up stock-broker services, where you have players such as Commonwealth Securities advertising for $A14.95 share trade. The interesting part about internet trading with Australia, is that Australia has just become the largest share owning nation in the world. More than 53 per cent of most Australians directly or indirectly own shares, and we have created a class of equities traders who never previously thought about equity trading.
We've got wonderful opportunities to participate. The new Hong Kong and Shanghai Bank/Merrill Lynch partnership announced that one of the first centres that they're opening up their operations outside the US is Australia. TD Waterhouse has one of their most significant markets for internet trading in Australia.
And the great thing about it is that in Australia farmers are coming off the land at 11:00am after tending the sheep or milking the cows, trading on the internet, buying and selling shares and going back out at 3:00pm in the afternoon. And you know, we never knew it until internet trading started. We never knew that that had happened. And that's a great story about how the tyranny of distance is being overcome by new technology.
Australia is at the forefront of some of the developments of M commerce. Mobile commerce is going to provide us with opportunities we never knew previously existed.
So they're the sorts of opportunities that exist for us, but as a nation we have to take advantage of them, particularly to help to export them into other countries in the Asia region.