Speech to Australia-New Zealand Leadership Forum

Rt Hon Prime Minister Jacinda Ardern

Address to the Australia-New Zealand Leadership Forum Luncheon
Sydney – 2 March 2018

Prime Minister Turnbull, Ministerial colleagues, Australia New Zealand Leadership Forum co-chairs, business leaders.

Thank you for the warm welcome, your time here today, and your commitment to the success of the trans-Tasman relationship.

Can I start by thanking Prime Minister Turnbull for your hospitality. We look forward to reciprocating in New Zealand, where I know you already have a connection. You know someone has a true appreciation of our home when they speak so fondly of humble experiences like climbing Mount Pirongia.

I want to also acknowledge the New Zealand delegation who have joined me - Ministers, but primarily business leaders.

What we will be reflecting on today is a legacy of work in our trans-Tasman relationship that has been driven by politics and pragmatism – and by the energy of those working in a business environment who saw ways we could and should work together.

My hope is we’ll see even more of this work, going forward.

I want to touch a bit more on that idea of ‘legacy’, though, for a number of reasons.

First, because at times of change it can be a good way to remind ourselves where we’ve got to and some of the things that remain enduring and constant.
We are clearly going through a bit of change at the moment.

At the most immediate and obvious level, one of us has seen a change of government.

That in itself should not prompt any concern for this audience. But around the world we’re also seeing some rather more ominous changes, and with them a sense that some of the reference points we’ve relied on for decades are coming under a bit of pressure.

These are some of the things you will have heard about during today’s panel sessions from our Foreign and Trade Ministers.

They are also things that Prime Minister Turnbull and I have been speaking about this morning.

But make no mistake. The strength and success of the trans-Tasman bond is one of the things that will remain constant and enduring.

For anyone under the age of 50, the modern economic relationship between New Zealand and Australia has been in place our entire working lives. The idea of trading, travelling, living or working freely on either side of the Tasman is now so natural as to be instinctive.

That’s true whether you’re “Shayne”, the kiwi dive instructor in Queensland; “Elliott”, the Aussie snowboard instructor in Queenstown, or even just someone called “Shayne Elliott” who works at a bank...

A 2015 McKinsey study described us both as the two most “connected” countries on the planet.[1] But having been that way for so long, it can be easy to forget that it hasn’t happened by accident.

This is the second reason I wanted to focus on the trans-Tasman legacy. Because it forces us to remember the very deliberate efforts and investments that have been made over the years to get us to where we are.

From the CER trade agreement of 1983 all the way through to the science and innovation treaty signed only last year, this has been the product of many hearts and hands: from the business community; academia; sportspeople; Māori and indigenous communities, and of course governments.

…from both sides of politics, I might add.

Yesterday, I attended Bill English’s valedictory speech in Parliament. Bill and I may have disagreed on many political and policy issues, but one thing we instinctively agreed on was the fundamental importance of the trans-Tasman relationship.

The evidence is overwhelming. Our two-way trade exceeded $24 billion last year. Australia takes around 20% of our exports and provides 13% of our imports. It’s our largest source of tourists and capital. It’s our only formal military ally and home to our largest diaspora. More than 600,000 Kiwis call Australia home.
By almost any measure, Australia is New Zealand’s indispensable international partner.

My government absolutely gets that. And previous governments got it too.
But we also know that we’re absolutely building on the legacy of others. That would include, for example, Sir Michael Cullen, who launched the Single Economic Market agenda nearly fifteen years ago, alongside an Australian Coalition Treasurer, Peter Costello.

Cullen and Costello served in the governments of John Howard and Helen Clark: a male Liberal PM from Sydney and a female Labour PM from Auckland. They too forged an excellent working relationship, which included the start of annual Prime Ministers’ meetings.

I mention that not only to emphasise that the trans-Tasman project is not a Labour party legacy. Nor is it a Coalition or National Party legacy. It is an Australian and a New Zealand legacy. Something I am keen to strengthen.
My government and I absolutely get that.

We also understand that, for all the asymmetries, and our tendancy to undersell ourselves, New Zealand also matters quite a bit to Australia. We’re your seventh largest trading partner and fifth largest market for services exports. We’re one of Australia’s largest investment destinations and a significant source of capital in our own right. Two-way investment totalled over $150 billion in 2017.

And headline trade stats only tell part of the story. We’re also disproportionately important to Australian exporters - particularly small and medium-sized businesses. More than 18,000 Australian firms export to New Zealand; nearly double the number that export to the US, and triple those that export to China.

We’re also (still) each other’s largest source of foreign tourists, with an estimated 47,000 flights carrying nearly 7 million passengers each year back and forth across the Tasman.

Put simply, this means we each underpin a lot of jobs.

But those flight movements also reflect that we’re coming together in population terms. The 600,000 kiwis and 80,000 Aussies who’ve made the jump across the ditch now represent a trans-Tasman family of nearly three quarters of a million people.

And they make a real difference.

At one level this could be seen in the fact that Kiwis living in Australia are more likely to be in full time work, have a higher weekly wage, and pay more in taxes than their Australian citizen neighbours. You may hear me mention that a lot, as one of those lesser told stories.

But at another level it’s in the things you can’t measure that really count: whether it’s teaching our kids; coach our sports teams; growing our food; looking after our sick; or even running our banks. Kiwis and Aussies are doing that, for each other, in both countries, every day.

These are the people who are building the trans-Tasman legacy which we inherit.
And whatever the media tendency to focus on the odd point of difference, I think the overall sentiment has been clear for some time.

In the ten years that Sydney’s Lowy Institute has conducted its annual “thermometer” poll of Australian attitudes towards other countries, New Zealand has consistently ranked as the country most warmly regarded by Australians. As we are already at 85%, I imagine the only way we could hit 100% would be to concede on the pavlova, and allow you to claim Crowded House.

This brings me to the final point I wanted to make about our legacy. Having acknowledged where we’ve got to, and who’s got us there, the only thing next is to look to the future.

I know that Australia will remain a central focus of my government’s agenda. This is as much about being an engine for productive growth that delivers jobs as it is about being a source of valuable policy ideas.

For in addition to Australia’s enviable record of uninterrupted economic growth, your model of competitive federalism provides us with access to an excellent policy incubator.

The New Zealand business representatives here will know that my government has an ambitious agenda to improve the wellbeing and living standards of New Zealanders through sustainable, productive and inclusive growth. And we are in the market for good ideas and opportunities on how to best deliver that.

By sustainability, we mean budget sustainability - running sustainable surpluses and reducing net debt as a proportion of GDP. And we also mean environmental sustainability. This is essentially about walking the talk of a clean, green, carbon-neutral New Zealand. This will be language you’ll hear us use a lot, as we look to do our part but also support our Pacific neighbours on the climate change challenge.

It also means future-proofing our economy, preparing our people for the fact that 40 percent of today’s jobs will not exist in a few decades.

This in turn ties into our second objective of delivering productive growth. The eventual goal is for everyone to be earning, learning, caring or volunteering, so that everyone in our communities has a role that is both valued as well as dealing with social isolation.

For now, our focus has been on the “earning and learning” piece.
Our “fees free” tertiary education policy will be key to addressing skills shortages, helping those at risk of displacement by economic change to retrain, as well as addressing New Zealand’s longstanding productivity challenge.

The other part is lifting our game in R&D, to two percent of GDP in ten years. This will involve increases in both public investment as well as incentives for business. And we’ll be studying closely the approaches that Australia has taken.
Of course we’ll also remain committed to generating prosperity through trade.
You will know the early challenges we faced on assuming office with the imminent conclusion of the CPTPP. But you will also hopefully know how successful we’ve been in resolving those, in some cases drawing on helpful Australian policy examples.

This brings me to the third part of our agenda, which of course is about ensuring that all New Zealanders have an opportunity to share in the economy’s success. It’s a major part of the agenda, drawing in our targets around health, housing, reducing child poverty and introducing a living standards framework for measuring our progress.

Here too, Australia provides a huge array of examples that we’ll be looking at closely, from tax to fair pay agreements; regional development to city design, education to innovation and R&D.

My government is also ambitious about building on our connections WITH Australia – including through our world-leading Single Economic Market agenda.

In our discussions today, Prime Minister Turnbull and I reflected on the great progress that’s been made over the last 18 months, and indeed over the last 14 years.

But we also discussed some emerging areas that could be ripe for focus over the year ahead.

In the science and innovation space, you’ll have heard Prime Minister Turnbull talk about the concept of a “trans-Tasman science and innovation ecosystem”.

And I know Ministers are actively exploring new opportunities under the science and innovation treaty. Prime Minister Turnbull and I agreed today to establish a new trans-Tasman cyber security research initiative, which will be co-designed by the Ministry of Business Innovation and Employment and Australia’s C.S.I.R.O..

Prime Minister Turnbull and I are committed to further improving the trans-Tasman travel experience. I acknowledge that the Australia-New Zealand Leadership Forum is calling for New Zealand to follow Australia’s lead and remove departure cards this year. I will be talking to my Ministers of Statistics and Customs with a view to advancing this. In fact, I have already started that conversation on this bug bear.

I am also really excited about the new collaboration between our Maori and indigenous businesses. In this I acknowledge Traci Houpapa and Warren Mundine, who’ve been appointed co-chairs of the Maori/Indigingeous working group within this forum.

Last month my Minister for Maori Development warmly welcomed a delegation of Australian indigenous business people to New Zealand. Prime Minister Turnbull and I discussed the possibility of building on the success of that initiative by committing to support a joint Maori/indigenous business mission to ASEAN before the end of the year.

Prime Minister Turnbull and I have also agreed to collaborate on implementation of electronic-invoicing. This will improve efficiencies for business and deliver significant savings for both countries. It’s been estimated that even a 15% adoption of e-invoicing could deliver annual savings of around $500m in New Zealand and $3 billion in Australia. Building on Australia’s recently introduced e-invoicing standard, we’re confident that this work will address a major cost for SMEs from incompatible accounting systems.

New Initiatives

I talked earlier about how, for most Australia and New Zealand SMEs, their first experience of exporting is across the Tasman. Our economic integration creates a space in which SMEs on both sides of the Tasman can dip their toes in international waters. That generates real jobs for Australians and for Kiwis. I want to understand the experience of SMEs in the trans-Tasman market. What works for them and what doesn’t? How can we make it even easier for our SMEs to make that leap into exporting? And what is it about the trans-Tasman market we could use to help our SMEs succeed in the wider world?

Prime Minister Turnbull shares those same questions on the future of SMEs, and today we agreed to commission work that will give us some of the answers.

We want to set up a work programme to investigate ways to boost the flow of business and experts from SMEs across the Tasman. Given 75% of New Zealand SMEs export to Australia and more Australian firms export to New Zealnd than to any another country, there is huge potential for both our countries in making it easier and speedier for SMEs to do business across the border.

I see this as the next step in CER.

Small and medium sized businesses play a crucial role in driving the growth my country relies on, so it makes sense to me to make it easier for those firms to do business with our closest neighbour.

Prime Minister Turnbull and I want to that ensure our trans-Tasman economic architecture remains fit for purpose in the 21st century.

We know that the digital economy will be a key driver of innovation and growth, with immense potential to boost productivity and competitiveness and connect people who would otherwise be excluded. It’s why both our countries are working on digital economy strategies. I want to ensure our digital policy is of the highest standard, representing the commercial reality in which our businesses operate. Just as conventional businesses can operate in a single trans-Tasman market place, it is imperative that digital businesses can do likewise.

That’s why Prime Minister Turnbull and I have have also, today, agreed to jointly commission a review of our policy and regulatory frameworks to ensure that they are creating an environment in which trans-Tasman digital trade is as open and facilitative as they are for conventional trade.

Both Prime Minister Turnbull and I believe that we can learn from one another’s work on smart cities, including in the areas of infrastructure, cities policy, and driving the take-up of smart technology.

The Australia-New Zealand Leadership Forum too is an essential part of it all of this. This model, of business and government from both sides of the ditch coming together to share ideas on how we can maintain our place as the world’s most connected and successful economic relationship is exactly the model we want to emulate.

We know you share our ambitions, because you care deeply about our people. Before the election, many of the concerns underpinning our agenda were heard as often in the boardroom as in the smoko room.

We also know that you have great ideas about how we can achieve our goals, for the benefit of New Zealand, Australia and the trans-Tasman economy.

It’s no accident that you are joined here today by a significant number of senior ministers. We are here to discuss our present and future collaboration.
If you’ll indulge me in a small rugby analogy – and because I was diplomatic enough not to mention the word “Bledisloe” during my speech, I know that you will – it’s like we are locked in a great rolling maul: furiously energetic; sometimes fast, sometimes slow; a bit messy, with different players coming and going, and completely incomprehensible to outsiders.

But those in the mix know exactly what they’re doing – and we’re moving steadily forward toward a distant try line.

New Zealand and Australia. Business and government. We are each bound together.

And the more we work together, the more likely we are to succeed.
Kia ora koutou katoa.

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