16 November 2018
Speech - #2018005, 2018

Address to the Sohn Hearts and Minds Investment Leaders Conference, Melbourne

Congratulations to the organisers of this outstanding Sohn Hearts and Minds event in Melbourne, it’s a real pleasure to be here with you for the opening.

Now in its third year, it’s great to see fund managers and the not-for-profit sector coming together for mutual benefit – and supporting important causes including MS Research, Victor Chang Cardiac Research, Black Dog Institute and Murdoch Children’s Research.

Two weeks ago The Economist magazine lauded our economy on their front cover “Aussie rules: What Australia can teach the world”.

With the Australian economy growing for 27 consecutive years without a recession you can understand their enthusiasm!

But Australia’s success is no accident.  As a capital importing, trade exposed nation, with the world’s fifth most traded currency, our development has been underpinned by investors like you who have been prepared to back Australian companies, their people and their ideas.

We want this to continue.

Let me give you three reasons why Australia is such an attractive place to invest.

To start with, Australia sits on the doorstep of the engine room of the global economy.

As you’re aware, over the past twenty years the Asian region has grown from 18 per cent of the global economy to 40 per cent today.  Over the next twenty years it is expected to account for two thirds of global growth.

Australia can provide you with access to these growing markets not only because of our proximity, but also because of the free trade agreements we have secured with many countries in the region.

This includes agreements the Coalition has concluded since its election in 2013 with China, South Korea and Japan, as well as the eleven nation Trans-Pacific Partnership. 

It’s worth mentioning that shipping times to Shanghai from mainland Australia can be as little as 12 days compared with more than 50 days from the heart of Europe to the same destination.

Another reason we are so focused on opportunities in the region is because by 2030 two thirds of the world’s middle class will live in Asia – some 3.3 billion people.

You will all no doubt appreciate Australia’s global leadership in mining and agriculture, but may be surprised to learn that these sectors account for just 9 and 3 per cent of our GDP respectively.

Increasingly, the size, sophistication and growth potential of our services sector - accounting for more than 70 per cent of the economy - is being recognised. 

This includes tourism, education, health and business services – all of which will benefit directly from rising affluence in the region – and which today earn Australia more than $80 billion in export revenue. 

The second point I’d make is that when you come to Australia you can be confident you’ll get good governance, access to a skilled workforce and enjoy sound policy settings.

Our central bank has well-earned credibility and respect, while our Charter of Budget Honesty, which underpins our approach to fiscal policy, is a global benchmark for transparency and accountability. 

Our investment regime is likewise transparent, consultative and robust.  Australia continues to welcome foreign investment, but like most nations, we take account of national interest considerations, including security.

Our workforce is highly skilled. 40 per cent of workers have a tertiary qualification, and we continue to build on strong educational foundations to prepare our young people for an increasingly technical and globalised world.

We have a great track record in discovering and developing technologies including the bionic ear, wi-fi technology, the black box flight recorder and, more recently, a vaccine for cervical cancer. 

And a final point I’d like to leave you with is that the Australian economy has strong momentum.

Our most recent National Accounts showed the economy growing by 3.4 per cent through the year, faster than any G7 economy, well above the OECD average of 2.5 per cent, and its fastest rate of growth since the height of Australia’s mining boom in 2012.

Our labour market is strong with over 1.1 million new jobs created since we came to office and Australia’s unemployment rate at a six year low.  Female workforce participation and senior Australians in the workforce are around record levels.  Last financial year the number of young people who got jobs was the highest on record.

We are on track to deliver a budget surplus a year earlier than expected in 2019-20 and our government net debt level is less than 20 per cent of GDP, against an average for the advanced economies of the world of 75 per cent.

Recently we’ve had Standard and Poor’s reaffirm Australia’s AAA credit rating.  We are one of just ten countries in the world to hold a AAA credit rating from all three leading ratings agencies.

Our growth momentum is also being enhanced by the roll-out of an extensive $75 billion infrastructure program that will support our growing population.

In short, the Australian economy has a great record, a strong management team and outstanding fundamentals – all of which positon us to outperform in the years ahead.

I hope you have a great day in listening to the experts share some of their thoughts on opportunities and thank you again for your support of such worthy causes.

Thank you for coming along this morning.