Jonathan Greenacre and George Gilligan

The first opinion piece in this series summarised the contents of chapters 1-4 of the Australia in the Asian Century White Paper. This opinion piece discusses the national objectives and pathways contained in chapters 5-9. The key issue going forward is whether, and if so how, the Government develops what are largely broad, aspirational goals into policies.

Chapter 5 deals with building a strong, resilient, diverse, productive and sustainable economy so that Australia can take advantage of commercial opportunities that are arising from the Asian Century. This will be achieved by existing and ongoing investment in five pillars of productivity: skills and education, innovation, infrastructure, tax reform and regulatory reform (p.134).

National objective 1 (p.136) states that all Australians will have the opportunity to acquire the skills and education they need to participate fully in a strong economy and a fairer society. The pathways towards this goal tend to be aspirational statements, such as to develop a workforce culture in which employees, employers and unions collaborate for continuous improvement and productivity growth (p.136).

National objective 2 (p.137) states that Australia will have an innovation system, in the top 10 globally, that enhances Australia’s evolving areas of strength and attracts top researchers, companies and global partnerships. Pathways towards this goal are still to be defined (to be outlined in the Government’s forthcoming “Industry and Innovation Statement” (p.138)) or relate to existing programs such as the $1.2 billion Clean Technology Program, $10 billion Clean Energy Finance Corporation, Infrastructure Australia  and Nation Building Program (p.140-1).

National objective 3 (p.143) pledges that Australia will implement a systematic national infrastructure framework that will assist governments and the private sector to plan and prioritise infrastructure needs at least 20 years ahead. Pathways include an infrastructure audit from Infrastructure Australia and the Council of Australian Governments to focus upon nationally agreed infrastructure priorities (p.144). Furthermore, the Government aims to increase private sector investment in infrastructure through tax reform such as indexing losses; facilitating infrastructure investment by superannuation funds; simplifying Public Private Partnerships processes (p.145); and responding to land use changes (p.146).

National objective 4 (p.147) is to make Australia’s communications and infrastructure markets world-leading and supporting the rapid exchange of ideas and commerce in the Asia region. Pathways are the National Broadband Network, and the structural separation of Telstra into wholesale and retail operations. 

National objective 5 (p.148) aims for Australia’s tax and transfer system to be efficient and fair, encouraging continued investment in the capital base and greater participation in the workforce, whilst delivering sustainable revenues to support economic growth by meeting public and social needs. Pathways focus on existing and completed tax reforms such as: instant asset write-off, loss carry-back scheme; raising tax-free thresholds; increasing the Superannuation Guarantee from 9% to 12%; removing barriers to work for older Australians; and the Minerals Resource Rent Tax (p.148-9). Forward-looking work focuses upon the need for States and Territories to phase out inefficient taxes such as stamp duty and insurance taxes, and the establishment of the Tax Studies Institute (p.150).

National objective 6 (p.152) states that Australia will be among the top 5 globally most efficiently regulated places in the world. Pathways are largely  measures already taken, such as a national trade measurement scheme; Australian Consumer Law; Consumer Credit reforms; the National Occupational Licensing System; and national occupational health and safety laws (p.151). An additional pathway is the introduction of a new National Productivity Compact on competition and regulation, currently being developed between the Commonwealth, States and Territories, and businesses (p.152).

National objective 7 (p.153) commits that the Australian economy and its environmental assets will be managed sustainably to ensure the wellbeing of future generations of Australians. Pathways again focus on previous work, such as the Clean Energy Future legislation; carbon pricing (linked from 1 July 2015 to the European Union Emission Trading System); investing billions of dollars in renewable energy; carbon storage; reducing emissions to 5% below 2000 levels by 2025 and 80% below 2000 levels by 2050; managing water sources sustainably (through, for example, Water Future Package including Murray-Darling Basin plan); and continuing to work through programs such as Caring for our Country program to protect soil resources and the Australia’s Biodiversity Conservation Strategy 2010-2030 (p.153-5).

National objective 8 (p.156) pledges that Australia’s macroeconomic and financial frameworks will remain among the world’s best. Pathways revolve around actions already being taken by Government such as promoting fiscal sustainability through budget surpluses on average through the medium term (p.157). In addition, the Government plans to remove impediments to the emergence of a deep and liquid corporate bond market and allowing Commonwealth Government Securities to be listed on a security exchange (p.159). 

Chapter 6 – Australia in Asia

Chapter 6 outlines ways in which Australians should build adaptive capabilities, particularly ‘Asia-relevant’ knowledge and skills to compete in the Asia century. Education and skills training are crucial to this and national objective 9 (p.165) aims to build Australia’s school system to the top five in the world in reading, science and mathematics literacy by 2025  achieved through a variety of means such as a National Plan for School Improvement.

National objectives 10 and 11 (p.170) encourage Asian languages capabilities through supporting schools to teach Asian languages, particularly the priority Asian language of Chinese (Mandarin), Hindi, Indonesian and Japanese. Pathways specified are limited, aside from implementation of the Australian curriculum and encouraging Asia Literacy Business Ambassadors to encourage secondary school students to take up Asian languages.

National objective 12 (p.171) targets 10 of Australia’s universities to be in the world’s top 100 by 2025, a larger number of Australian universities students to be studying overseas especially  in Asia,  and Asia-relevant programs in university, such as languages and cultural studies (p.173).

National objective 13 (p.175) advocates that Australia will have vocational education and training systems that are among the world’s best, building capability in the region and supporting a highly skilled Australian workforce able to continuously develop its capabilities. As subsets of these goals, by 2020, more than three-quarters of working-age Australians will have an entry-level qualification (at Certificate III level or higher), up from just under half in 2009. Australia’s vocational education and training institutions will have substantially expanded services in more nations in the region, building the productive capacity of the workforce of these nations and supporting Australian businesses and workers to have a greater presence in Asian markets. Pathways towards this goal include the $1.75 billion Council of Australian Government’s National Partnership Agreement on Skill Reform and long-term workforce planning and development through the new Australian Workforce and Productivity Agency (p.175).

National objective 14 (p.179) advocates for more Asia-capable workplaces: one-third of board members of Australia’s top 200 publicly listed companies and Commonwealth bodies, including one third of senior leadership of the Australian Public Service, will have deep experience in and knowledge of Asia.  New Government-led programs are not proposed, but institutions are encouraged to innovate, for example, a pathway proposes that the Australian Institute of Company Directors integrate Asian cultural competency training into its company directors’ training course (p.182).

Another key theme of Chapter 6 is adaptability and national objective 15 (p.183) stresses that Australian communities and regions can benefit from structural changes in the economy and seize the new opportunities emerging in the Asian century. There are only vague pathways stated towards this goal, such as encouraging the growth of Darwin into a “gateway to Asia” (p.183).

Social foundations are also important and national objective 16 (p.184) aims to preserve  and build Australia’s social foundations so that ultimately all Australians can benefit from, and participate in, the country’s growing prosperity and engagement in Asia. Pathways are stated in broad terms and include implementing the first stage of the National Disability Insurance Scheme and long term migration planning (particularly through the “Long-Term Migration Planning Framework”) (p.185). 

Chapter 7: Operating in and Connecting to Growing Asian Markets

Chapter 7 focuses on encouraging and assisting Australian businesses to operate in Asian markets. National objective 17 (p.189) is that Australia’s businesses will be globally recognised for their excellence and ability to operate successfully in Asian markets by linking with regional and global value chains. The Government will support efforts of Australian businesses to join value chains, particularly small and medium-sized enterprises, through capacity-building, reducing the costs of doing business in Australia, welcoming foreign investment, and working to open regional markets to trade and investment (p.190).

National objective 18a (p.195) commits the Government to improve domestic arrangements, so enabling a greater flow of goods service, capital and ideas and people, with a particular focus that Australia’s trade links with Asia will be at least one-third of GDP by 2025, up from one-quarter in 2011.  Stated pathways focus on high level objectives such as continuing to lower tariffs, removing unnecessary regulatory impediments to doing business (p.196); improving the movement of goods across Australian borders (p.197); supporting the cross border movement of people (p.198); and encouraging foreign investment (p.199). The Government will also collaborate increasingly with businesses, but there are little new initiatives aside from better co-ordination between the Department of Foreign Affairs and Trade, Austrade, Enterprise Connect, and the Export Finance and Insurance Corporation (p.203).

National objective 18b (p.205) commits the Australian economy to be more open and integrated with Asia through comprehensive regional agreements, better aligned economic regulations, greater infrastructure connectivity and enhanced understanding of each country’s arrangements. Identified pathways include: designing effective and stable regional financial and economic institutions; supporting ASEAN’s plan to formally establish an economic community by 2015; further integrating Australia’s equity and bond markets with emerging markets in Asia (p.206); bilateral trade deals particularly those with major powers such as China and India; supporting the Regional Comprehensive Economic Partnership (p.208); and providing practical advice and technical assistance directly to regional countries to build market resilience and improve access for Australian businesses (p.209). Again, the White Paper tends to rely upon existing programs to achieve these ends, such as the East Asia Summit, the Australian-initiated Services Trade Access Requirements, and the Government Partnerships for Development program (p.211).

Between chapters 7 and 8 is a case study on how Australia’s agriculture and food sector can flourish in the Asian Century. National objective 19 (p.213) commits that Australia’s agriculture and food production system will be globally competitive, and Australian food producers and processors will produce more and higher-quality food and agricultural products, services and technology for Asia.

Chapter 8: Building Sustainable Security in the Region

Chapter 8 focuses on the ways in which Australia can contribute towards security in Asia. The basic position is that Australia will maintain its pre-existing policy of “active middle-power diplomacy” into the Asian Century (p.227). National objective 20 (p.227) commits Australia to contribute to Asia’s development as a region of sustainable security in which habits of co-operation are the norm.  Strong relationships with the pre-eminent powers in the region – China, India, Indonesia, Japan and the United States – will be key to this process (p.228). In particular, Australia will maintain its strong alliance with the United States and deepen diplomatic relationships with China (pgs.228-229). 

Australia’s plans towards sustainable security have three components. The first is a national emphasis on security, delivered primarily through Australia’s Defence Force (p.230). The second aspect is Australia’s contribution to collective security in the region which will be achieved through a wide range of agendas, such as supporting India’s growing global and wider engagements (p.236); enhancing the effectiveness of relevant export controls (p.237); encouraging countries to ratify the Comprehensive Test Ban Treaty (p.237); and implementing global standards on the trade in conventional arms (p.238).

The third aspect of security is strengthening “human” security through sustainable and resilient markets. Pathways include: working towards a more water-secure region (p.241); working collaboratively on food security (pgs.242-243); addressing climate change (pgs.243 and 244); improving energy security and dealing with energy uncertainty (p.246); improving resilience to natural hazards, and maintaining and protecting international agreements (p.248); and aid and broader institutional connections (p.248).

Chapter 9: Deeper and Broader Relationship

Chapter 9 deals with encouraging the growth of relationships between Australians and people from the Asian region. The chapter starts with government-to-government capabilities and relationships. National objective 22 (p.252) states that Australia will have the necessary capability to promote and maintain its influence and interests, particularly through a “larger footprint” for its diplomatic network. Pathways include opening a full embassy in Ulaanbaatar (Mongolia) and consulates in Shenyang (China), Phuket (Thailand) and eastern Indonesia. The Government will also review its diplomatic representation in Asia to reflect new priorities (p.254).

National objective 23 (p.257) pledges that Australia will have stronger and more comprehensive relationships with countries across the region, particularly key regional nations – China, India, Indonesia, Japan and South Korea. There are few pathways towards this objective, aside from a broad intention to better co-ordinate the Government’s Asia-focused programs (p.257).

National objective 24 (p.262) deals with people-to-people relationships, and commits Australia to develop deeper and broader people-to-people links with Asian nations, across the entire community. Some substantive pathways on this objective are more definitive than most other areas of the White Paper: the Government aims to stimulate travel, study, migration and work links through, for example, committing to 12,000 Australia Awards (Asian Century) over five years nations in Asia. The awards will be for Australians to study in the region and students from regional countries to undertake study or professional development in Australia (p.265). Other pathways include stimulating academic, scientific and professional links (pgs.266-268) and encouraging sporting connections (pgs.268-269).

National objective 25 (p.269) pledges that Australia will have stronger, deeper and broader cultural links with Asian nations through training and capacity building.  In relation to the media, the White Paper argues that the content of coverage of the region in Australia’s media needs to improve given the growing use of media in Asian countries (p.271). Pathways include convening third-party expert panels to discuss the scope and quality of coverage of Asian countries and developments in the region of importance to Australia (pgs. 271-272); ensuring that Australians receive more day-to-day news about major events and issues from across the region; and encouraging two-way media exchange programs with the region to build knowledge (p.272). The Government will request the boards of the ABC and SBS to examine how to promote more extensive coverage of the Asia region (p.272).

So, the 25 national objectives are meant to provide something of a national roadmap as to how Australia should develop its ongoing interaction with the vast diverse region that is Asia.  Many of the national objectives are laudable, but there is a lack of specificity regarding many of the suggested pathways relative to those objectives.  Also, some of the very significant concerns that are prevalent across many Asian jurisdictions are not afforded much scrutiny, for example,  territorial disputes, abuse of human rights and corruption.  Similarly in the domestic context potential negative issues do not receive much attention, for example, the parlous state of teaching of many Asian languages in Australia’s schools and universities. Nevertheless, the White Paper does propel the subject of Australia: Asia relations more prominently into the national discourse, which is a positive development given the growing range and scale of opportunities in this region.