19 November 2019

It’s a pleasure to be here in Cairns.

It’s a very long way from Perth but for me it doesn’t feel quite that far because of my personal connection to this city.

My older sister Rebecca has lived here for the past 20 years and during that time I’ve been a regular visitor here.

I want to talk to you today about Australia’s strategic interests in the Pacific and how we can use trade to contribute to the growth and development of the region.

Trade with the Pacific will benefit businesses in Cairns, the rest of Far North Queensland and the whole nation.

But trade with these countries is not primarily about boosting Australia’s economy.

We can actually use trade to lift people out of poverty in the Pacific.

Trade can work alongside the Australian government’s development assistance, the government’s new Pacific infrastructure financing facility as well as Pacific labour schemes which allow Pacific islanders to work here and remit their earnings home.

Labor has long advocated stronger and deeper Australian engagement with the Pacific.

A recent World Bank report concluded that Pacific Island countries are well positioned to capitalise on a number of opportunities that have emerged on the horizon.

These include the shift in economic power to East Asian nations, new technologies, and demographic change occurring in the Pacific Rim countries.

These developments may help offset the severe challenges Pacific nations are facing, including:
• Their small size and remoteness from major markets;
• A lack of economic opportunity;
• Poor health and education outcomes;
• The grave risk posed by climate change and other environmental pressures;
• Rising strategic competition;
• And security threats from illegal fishing to drug smuggling.

Many Pacific countries have seen only very limited increases in per capita incomes over the past 25 years.

But there is some good news.

According to the Asian Development Bank, the number of people living in extreme poverty in the Pacific fell from 45.6 per cent of the population in 2002 to 25 per cent in 2015.

By country, the proportion living in extreme poverty ranges from 1 per cent in Tonga to 38 per cent in Papua New Guinea.

It is firmly in Australia’s national interest to help our Pacific neighbours to meet their challenges.

Their challenges are our challenges.

It is our collective responsibility as a neighbour and a regional leader and as friends to assist with vigour and determination in the Pacific.

That’s why we welcome the Coalition’s government’s recent focus on the Pacific after neglecting it for years.

But as my federal Labor colleague Pat Conroy has repeatedly pointed out, we are concerned that the Government’s “Pacific Step Up” is being undermined by its inaction on climate change, its $11 billion in cuts to Australia’s aid budget and its poor implementation of policies and programs.

These issues affect the way Pacific countries view Australia.

Our lack of action on climate change is viewed very poorly in countries facing the very real threat of being underwater if sea levels continue to rise.

But these are political arguments, perhaps best left for another forum.

I’m sure I don’t need to tell you that Cairns is ideally located to serve as Australia’s gateway to the Pacific.

Any conversation about the Pacific Step Up must therefore involve Cairns.

I am aware, however, that concerns have been raised locally that Cairns is being bypassed on this.

So I call on the Government to engage with the community here, and to ensure that Cairns is front and centre in its efforts at closer engagement.

Cairns is a city with existing people-to-people links with the Pacific.

The Cairns Base Hospital provides urgent health care to many who come here from Pacific island nations for our help.

Tens of thousands of Papua New Guineans live in the Cairns area.

PNG will be at the centre of the Pacific step-up. Of the 10 million people in the Pacific, 8m of them live in PNG – and that population is forecast to double by 2050.

So that in itself is a huge economic opportunity for Australia.

Australia is PNG's largest trading and commercial partner, with bilateral trade worth A$6.7 billion in 2018.

Our major exports to PNG include crude petroleum, meat, civil engineering equipment and parts, specialised machinery and wheat.

Major imports to Australia from PNG are gold, crude petroleum, silver and platinum.

Australian investment in PNG is worth A$17 billion .

The potential for two-way tourism growth between Australia and PNG is strong. Aged care and hospitality are also avenues for economic development.

For the Pacific as a whole, tourism is a potentially large source of income.

There are estimates of an additional 1 million tourist arrivals to the region by 2040.

This would generate additional spending of more than US$1.6 billion and create more than 110,000 additional jobs.

Vanuatu, Samoa, Fiji, Tonga and Palau are particularly well positioned to be major beneficiaries of this projected increase in arrivals.

These countries will need infrastructure and expertise that Australia is well placed to provide.

Finally, I’d like to mention the stalled international agreement called the Pacific Agreement on Closer Economic Relations – or PACER Plus - which has been under negotiation since 2009.

This agreement has the potential to reduce tariffs on Australian goods exports and provide greater certainty about market access and treatment of services and investment for Australian businesses.

But much more important than addressing tariffs, the agreement commits all parties to economic cooperation and development.

A key objective is to support Pacific island countries to become more active partners in regional and global trade, by delivering targeted and responsive technical assistance.

This in turn will create opportunities for growth, jobs and increasing living standards.

Australia was the second country to ratify PACER Plus, after New Zealand.

However, several Pacific country signatories have not yet ratified the agreement, citing concerns that the potential benefits to them may have been oversold.

Regardless of whether this agreement comes into force, it is to be hoped that Pacific countries strive for closer economic integration with larger economies such as Australia.

In turn, we must gain the trust of our neighbours and we must act in good faith.

The Pacific is our home, and we share the responsibility of supporting its prosperity.

Thank you.