22 August 2022

Address, Raffles Hotel, Jakarta


Engaging with Indonesia

Temen-temen, senang berada di sini.

I acknowledge our host this evening, Ambassador Penny Williams, and thank her and her team for organising an excellent program for our delegation to Jakarta.

We have in the room the key investment officers from Australia’s largest superannuation funds, together with the Future Fund, the QIC and Macquarie Bank.

We have been joined by many of the leaders of Indonesia’s largest businesses.

I acknowledge Bapuk Ridha from the Indonesian Investment Authority and Ibu Shinta, Chair of the B20.

No-one in this room should be in any doubt about the significance the Albanese Government attaches to our relationship with Indonesia.

Since the Prime Minister came to Jakarta in the third week after his election victory to meet President Widodo, there have been a steady stream of high ranking Ministers: the Treasurer Jim Chalmers, the Foreign Minister Penny Wong, Industry Minister Ed Husic, Assistant Minister Watts and there has been a strong dialogue with Minister Murray Watt on our shared challenge with FMD.

I can’t promise I’ll be riding a bamboo bike around Jakarta while I’m here.

But I am here making good on Prime Minister Albanese’s promise to engage our super funds with the enormous opportunities emerging from President Widodo’s economic plan for the future.

I am proud to be leading this delegation and will be reporting back to Prime Minister Albanese, who’s taken a personal interest in these conversations.

Our government sees growing business with Indonesia as central to Australia’s trade diversification plan.

And we see a deeper economic relationship as key in fostering closer people-to-people relationships.

There is a role for our super funds to be partners in the next chapter of Indonesia’s economic story and that is the purpose of this week’s delegation.

Indonesia’s next chapter

President Jokowi’s Independence Day speech last week laid out his vision for that next chapter.

I believe the priorities he spoke about for Indonesia’s sustainable development over the next two decades are the right priorities.

They also happen to be areas in which Australia’s biggest superannuation funds have significant investment expertise.

Infrastructure and logistics, Green energy, Digitisation and digital infrastructure, Healthcare, Property and Tourism, Financial Services, and Agriculture.

Increasingly that investment expertise is being deployed outside of Australia.

Diversification is going to be a key driver for our super funds in the years ahead.

Let me explain why.

The future of super

Right now, Australia’s super savings pool stands at around $3.4 trillion.

That’s expected to roughly double over the next decade.

As the pool grows, so too will the demand from funds for safe, well-performing investment opportunities.

That means exploring opportunities in markets in which our funds do not currently invest.

Markets such as Indonesia.

The delegation I am leading this week marks the beginning of that process.

Any investment decisions are, of course, a matter for the super funds and their potential partners here in Indonesia.

But the Albanese Government is committed to helping develop relationships that can help our funds diversify their investment strategies.

And we are enormously encouraged by what we see from Indonesia as funds scout the globe for opportunities.

The potential for growth

President Widodo’s creation of the Indonesia Investment Authority is a crucial step.

The focus on risk within its mandate, and strong governance, are important pillars on which to build mutual trust.

Indonesia’s track record of consistent 5 per cent GDP growth, a relatively low 44.2 per cent debt to GDP ratio and stable credit rating are cause for further confidence.

I see the active involvement of Canadian and Dutch pension funds in partnerships with the INA another vote of confidence and a challenge to the Australian funds.

Australia needs to be in the game.

Our super funds have a great story to tell.

They have investment expertise and experience with large infrastructure projects.

They are long-term partners.

We need to do a better job of telling that story on the international stage, which is why this delegation is so important.

Super fund objectives

I will let the funds speak for themselves about how they see the potential for any such partnerships here in Indonesia.

However, as they assess the opportunities here, they will be mindful of meeting the regulatory obligations required of them at home.

The recent Your Future, Your Super changes introduced a performance benchmark against which funds will be measured.

This means funds will need to factor in how any proposed investment will impact on meeting that benchmark.

Funds are also required to meet a best financial interests duty to their members.

This means they will need to demonstrate that any international investment is consistent with their members’ interests.

The Government wants to work with industry to find areas of alignment between the best interest of funds and their members and good business investments here in Indonesia.

The path ahead

The discussions the delegation is having this week are occurring on a strong foundation of growing economic cooperation between our two countries.

The Indonesia-Australia Comprehensive Economic Partnership has been operating since July 2020, though the pandemic has disrupted full implementation.

That number should continue to grow, with forecasts suggesting Indonesia will become a top-five economy in coming years.


I want to close by thanking the Indonesia Government for their hospitality.

We have found nothing but genuine warmth and enthusiastic engagement in all of our interactions with ministers and business leaders.

I do not see this trip as a one-off but the beginning of what I hope will be ongoing discussions.

Both governments owe it to the people they serve to explore the exciting opportunities ahead of us.

We are off to an encouraging start, but there is much work ahead of us.