PRIME MINISTER

24 February 2014

TRANSCRIPT OF THE PRIME MINISTER THE HON. TONY ABBOTT MP ADDRESS TO THE AUSTRALIA-CANADA ECONOMIC LEADERSHIP FORUM, MELBOURNE
E&OE. Thanks very much indeed, Heather. Its great to be here. It really is very good to be here and it is good to be amongst so many very distinguished Australians and amongst so many distinguished Canadians. I thank you for making the long trip across the Pacific and I thank all of my Australian colleagues for travelling from all parts of our country to be here in Melbourne this evening. I want to stress that Australia is taking this dialogue extremely seriously. I am here. The Treasurer, Joe Hockey, is here. Julie Bishop will be an integral part of this dialogue in the next day or so. The Secretary of the Department of Prime Minister and Cabinet is here. The Secretary of the Treasury is here. Various ambassadors and high commissioners are here and captains of industry are here. We should be here because obviously Canada is taking this extremely seriously as well, because to have the Foreign Minister, the Finance Minister and to have the largest delegation of officials that has ever travelled from Canada to Australia accompanied by so many senior business leaders shows that people on both sides of the Pacific want this relationship to be taken very, very seriously indeed. I want particularly to acknowledge the Conservative Party of Canadas President John Walsh and I probably should observe in passing how much we in this country have learnt from you, sir, and how much distinguished leaders in my own Party have appreciated your advice, your council and your friendship over the years. Given that this is the G20 year for us I want to particularly acknowledge Canadas Sherpa, Simon Kennedy, and to assure you, Simon, that Heather Smith, our Sherpa, is looking forward to your discussions tomorrow. So, this is an important gathering. We are taking it very, very seriously indeed. On a wall in my offices, hangs a painting of a World War One battlefield near Vimy Ridge where Canadian and Australian soldiers had been comrades-in-arms.

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In those days, it would have been taken for granted that Canadians and Australians should have gone into action together, as part of the British Empires armies in France. These days, despite a language in common, a shared Westminster parliamentary tradition, and a Queen of Canada who is also the Queen of Australia, we are not so often in each others thoughts. That should change. With two way investment at over $70 billion and with Australian companies such as BHP playing an active role in Canada the commercial relationship is in reasonable shape; but there should be more to our friendship than money. Although John Howard perceptively described Australians and Canadians as kindred spirits, we havent talked to each other as often as we should. The relationship is strong but under-developed even though we are as like-minded as any two countries can be. So, I want to make more of this friendship: for our own good and for the good of the wider world. As the worlds tenth and twelfth largest economies, our two countries carry considerable clout but normally prefer, in Teddy Roosevelts words, to talk softly rather than carry a big stick. Thats why, as nations, we tend to have more friends than critics. But despite inhabiting a very similar intellectual and cultural space, we are rarely as conscious as we should be of each others presence. In part, this is because Australia and Canada are amongst the happiest and the most tranquil societies on earth. We have our issues, of course many of them issues in common: how do we ensure that our first peoples are not second class citizens in their own country; how do we best promote sophisticated manufacturing in economies dominated by resources and agriculture; how much stress, as immigrant societies, should we place on diversity and how much on unity; how in federation, do you ensure that particular problems can be sheeted properly home to particular levels of government; and how do we best manage vast wilderness areas consistent with creating jobs and prosperity?

Canada and Australia dont often figure in each others news bulletins because, to give due credit, none of these issues have been disastrously mismanaged. Our comparative success at managing comparable problems means that we have more to learn from each other, not less. Australians and Canadians should be more conscious not only of all that we have in common but of all the good that we might do together. So, my intention is to broaden and deepen the relationship between our two kindred countries.

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Just as my office rescued the Vimy Ridge painting from a public service storeroom where it had been languishing until just a couple of months ago! Later this year, I hope to visit Canada as prime minister. Scarcely less than Washington or London, Ottawa should be a destination for Australian officials because there are few big issues where we dont have a similar outlook. And there are few economic issues here in Australia that Canada hasnt grappled with too. Like its distinguished counterparts in the United Kingdom and New Zealand, the Harper Government has cut taxes, fought against cheque-book government, de-regulated the economy and brought a robust common sense to the consideration of international problems. Like New Zealand, Canada is on track to balance the budget in the coming financial year. Like the UK, Canadas economic growth is strengthening. Unlike those governments, though, but like Australias, the Canadian government won an election campaigning against a carbon tax that would kill jobs without helping the environment. So Australia has much to learn from Canada, especially as this new government prepares its first Budget and begins its year chairing the worlds most important international economic forum. In Canada, its worth noting, the deficit has been all-but-eliminated as much through restraining the growth of spending programmes and through cutting government itself than through big cuts to existing government programmes. New Zealand has followed an almost identical path back to surplus. Like our counterparts in these comparable countries, the Australian government is determined to get the economic fundamentals right. Because you cant give what you havent got; no country has ever taxed or subsidised its way to prosperity; you dont solve a problem of debt and deficit with yet more debt and deficit; and profit is not a dirty word because profitable private businesses create jobs and prosperity. In the marrow of our bones, we understand that you cant have strong communities without a strong economy to sustain them; and you cant have a strong economy without profitable private businesses. Lower taxes, less red tape and higher productivity mean higher economic growth, more jobs, more prosperity and, ultimately, more ability to pay for government services. But you cant spend money until youve earned it or until youve created the means to pay it back. Governments, no less than families and businesses, have to live within their means. So, repairing the budget, is an essential element to building a stronger economy. It is in fact part of keeping faith with the public. As this Government said pre-election, within three years, Australia will be on track for a sustainable surplus.

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As we said pre-election, within a decade hopefully well within a decade Australia will again enjoy sustainable surpluses in the order of one per cent of GDP. That way, debt will be falling and interest repayments can instead be directed to lower taxes, better services and stronger infrastructure. But we have to get there and this years budget will put us back on the right track. It will start the process needed to avoid the $123 billion of prospective deficits and the $667 billion of gross debt that this Government inherited. We will abolish the carbon tax and the mining tax and make the sustainable savings that we committed to before the election. We will build the infrastructure that we committed to before the election and invest the proceeds of further privatisations in more economic infrastructure that passes cost-benefit tests. The public sector will be trimmed and new bureaucracies abolished because more government doesnt create more wealth. The growth of overseas aid will be substantially reduced because largesse with borrowed money loads up our children with debts they dont need. We will keep our pre-election commitments to maintain health spending and school spending but we must reduce the rate of spending growth in the longer term if debt is to be paid off and good schools and hospitals are to be sustainable. Across every area of government, our duty is to reduce less productive spending in favour of more productive spending so that taxpayers are always receiving the best possible value for their money. After all, government does not spend a single dollar that it doesnt take from you in taxes or borrowings. Governments duty to you is to spend your money as responsibly as you would. Governments duty is to do all we reasonably can to help all our people to be their best selves; and to maximise everyones potential to be economic as well as social and cultural contributors to the life of our country. Thats why all new spending in this budget will be fully funded, invariably from savings, and will be directed to making our economy more productive and our people more fulfilled through more engagement in the economy. Lets face it, the best form of welfare is a job; and keeping people on welfare who could otherwise be active is no lasting favour. This year, as most of you would know, the world is especially watching Australia because of our role with the G20. Our objective is to do what we can to promote higher growth, freer trade, better infrastructure, resilient-butnot-entirely-risk-averse financial institutions and less leaky tax systems. I want to thank Joe Hockey for the magnificent way in which he chaired the Finance Ministers meeting in Sydney. Australia has made a good start to its G20 presidency.
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Joe has made crystal clear our focus on a few key areas where each country can make change for the better for its own people and for the wider world. Soon, each G20 member will submit its national plan for higher economic growth. We all know that each country is entirely free to choose the plan that suits it best. But this does amount to a kind of peer-review process for each governments economic policies. Im confident that Australia and Canada will bring a shared perspective to the G20s talks and well both do what we can to persuade other governments to get taxes down, regulation down and productivity and participation up. If the G20 is to be more than a talk-fest, at least some countries will need to show that their actions match their words. As G20 chair, Australia will lead by example. By the time of the G20 leaders meeting in November in Brisbane, the carbon and mining taxes should be gone, the company tax cut should be legislated, the parliament will have dedicated time to repeal and deregulate, and the annual infrastructure statement will have been made. Its likely that at least two of the three major free trade agreements that are Australias priority would be concluded and that some of the $400 billion in projects that have received environmental approval since the election will be underway. Australia will be well and truly open for business because the new management team will have well and truly taken charge. At home and abroad, the Australian Government will say what we mean and do what we say. We mean to put in place the lower taxes and the smaller government that makes our citizens strong and selfreliant and makes our country more prosperous. Without over-stating our importance, or exaggerating our success, our aim is to show the world that there is a better way: a clear alternative to the government-knows-best mentality thats persisted right around the world since the Global Financial Crisis. In all this, Canada has been a reassuring exemplar of how to improve an economy while also strengthening a society. Canada and Australia have a history of supporting each other in times of need. So, we look forward to the support and the solidarity of our Canadian friends as we face the challenges of these times. My friends it is very good to be here. It was great to be welcomed to these magnificent premises by the Premier of Victoria, my friend Denis Napthine. Its good that so many of you are here to deliberate on the problems we have in common, on the opportunities we have in common, on the challenges facing the wider world that would be so better met if we faced them together as comrades.
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