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Australian Embassy, Lisbon
Australian Embassy, Lisbon
Press Release - 26 January 2007
Op-ed for January 26, 2006 of Diário Económico by Australian Ambassador Luke Williams
Australia Day 2007
Today, 26 January, is Australia Day. It is a time to reflect on Australia’s achievements and what the future holds. For the readers of “Diario Economico”, I want to focus on some key economic themes; most notably Australia’s current economic situation and the challenges facing future economic growth.
Australia began 2007 economically strong, prosperous and stable. This was not always the case. In the four decades from 1950, Australia’s relative performance among the member states of the OECD deteriorated. But in the past decade and a half Australia’s performance has improved dramatically. GDP per person has grown faster, on average, than the OECD, raising Australia’s GDP per person from the bottom third of OECD countries in the early 1990s to the top third today. Australia is a small country by population (20 million) with less than 0.3% of the world’s population. But we are the 16th largest economy in the world. And Australia has now recorded its 15th consecutive year of economic growth, the longest in its history. This reversal of Australia’s fortunes resulted from deliberate policy decisions that opened up Australia’s economy to the world and introduced more flexible work practices to the domestic economy. As a result, the Australia of today is very different to the Australia of a decade or two ago. After dismantling tariff walls we are more outward looking and international in our perspective.
Australia Day 2007 therefore sees Australia in strong financial shape. Net debt has been eliminated and unemployment is at historically low levels (below 5%). Challenges remain, however. Domestically, there are implications to be faced concerning an aging population. The Government has begun making provision for such liabilities, including through the establishment of a Future Fund aimed at investing wisely now in order to fund future liabilities which will otherwise have to paid of future tax revenue. Australia is also in the grip of the most severe drought in over 100 years. Infrastructure and water conservation measures are part of the solution, but they are not the complete story. A key step to sustainable water supplies and achieving an appropriate balance between the needs of the community, industry and the environment is establishing an effective, fully functioning national market for water.
Internationally, there are challenges too. Negotiations over finalisation of the World Trade Organisation (WTO) Doha Round are at a critical juncture. Australia will be putting a lot of effort over the next few months to ensure the Round has the very best possible chance of success. And, as Australia prepares to host the Asia-Pacific Cooperation (APEC) forum this year, a series of meetings from January to September 2007 is set to focus on areas of interest to the 21 member economies of APEC, including economic growth and prosperity issues, as well as cooperation, trade and investment in the Asia-Pacific region. The APEC year will culminate in Sydney on 8-9 September with the APEC Economic Leaders Meeting, bringing together the leaders of all major regional economies for key discussions on how to further trade liberalisation.
Finally, Australia is taking a lead in dealing with the twin challenges of energy security and climate change. Energy security – how to get it and how to guarantee it has become a critical international issue. We do not want a race between competing powers to lock-up resources. We want to establish open, transparent and liquid global markets that will faciliate investment and cross-border trade. Securing a reliable and affordable supply of resources is essential to promoting strong and sustainable global economic growth and development. Likewise, Australia is committed to helping find ways to lower greenhouse gas emissions. Australia remains firmly committed to limiting greenhouse gas emissions to 108% of 1990 levels by 2008-12 and continues to work internationally for more effective global action on climate change, including through the United Nation’s Framework Convention on Climate Change (UNFCCC) and the Asia-Pacific Partnership on Clean Development and Climate (AP6).