The 2019 Lowy Lecture: Prime Minister Scott Morrison

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“In our interest”

Acknowledgment of Gadigal, service men and women and veterans.

Your Excellency the Hon Margaret Beazley AO QC, Governor of NSW and Mr Dennis Wilson

Our 25th Prime Minister, the Hon John Howard OM AC

Sir Frank Lowy - Chairman of the Lowy Institute

Michael Fullilove - Executive Director of the Lowy Institute

Colleagues, friends, ladies and gentlemen

Introduction

It’s an honour to be giving this lecture which bears the name of a great Australian – Sir Frank Lowy.

When we see your name we’re reminded of what is possible in Australia.

You had nothing, yet you built an Australian empire that reached far beyond our shores.

Above all, your name and life reminds us that our most valuable inheritance is always found within, in our character.

And we should acknowledge on a night like this, it’s a character that owes so much to your own father.

A man who suffered to death at Birkenau because he would not be parted from his tallit (prayer shawl) and tefillin (small leather boxes containing parchment with verses from the Torah).

What character, what faith. Because of that example, his son became a blessing to our nation.

While your childhood was darkened by the Holocaust, your eyes have always remained defiantly bright with hope for the future.

In your speech last year for this Lecture you said “the list of our blessings is long” … and that you believe Australia has never been in a better position to influence international events, and to benefit from them.

I believe that too.

Tonight, it is a great privilege as Prime Minister to deliver this lecture, named in your honour.

The new era

As a politician, my instincts and passions have always been domestic.

Despite my activity of the past year, I am not one who naturally seeks out summits and international platforms. But as Prime Minister you must always be directed by the national interest.

As has been the case for Prime Ministers past, so much of Australia’s future right now is being shaped by events and relationships beyond our borders.

Australia cannot be an indifferent bystander to these events that impact our livelihoods, our safety and our sovereignty.

We must, as we have done previously, cultivate, marshall and bring our influence to bear to protect and promote our national interests.

Tonight I would like to talk about the new and challenging world that Australia faces. And how my government is responding to these challenges.

A world in transition

Ladies and gentlemen, we are living in a world in transition that former US Treasury Secretary, Hank Paulson, has described as “an unusually delicate moment in time.”

A new economic and political order is still taking shape.

We have entered a new era of strategic competition - a not unnatural result of shifting power dynamics, in our modern, more multi-polar world and globalised economy.

It is a time of technological disruption, some of which is welcomed, some resented and feared.

A time when global supply chains have become integrated to an unprecedented degree, and more of our economies are dependent on global trade than at any other time, including the major economic powers of the United States, China, Japan and Europe.

There is both the promise and the threat of automation and artificial intelligence.

There are fears, overstated in my opinion, of technological bifurcation – a sort of economic ‘Iron Curtain’ coming down.

It is also an era of continuing security threats from terrorism, extremist Islam, anti-semitism, white supremacism, and evil on a local and global level.

An era where pragmatic international engagement, based on the cooperation of sovereign nation states, is being challenged by a new variant of globalism that seeks to elevate global institutions above the authority of nation states to direct national policies.

Of polarisation within and between societies.

An era in which elite opinion and attitudes have often become disconnected from the mainstream of their societies, and a sense of resentment and disappointment has emerged.

An era of insiders and outsiders, threatening social cohesion, provoking discontent and distrust.

Whether directly or indirectly, these changes impact Australians.

On our jobs, what we earn, our living standards and the essential services we rely on, that depend on a strong budget and strong economy.

On our environment, our oceans, our coasts, our grazing and pasture lands, our water resources, our soil, that depend upon our practical conservation.

On our safety, that depends on our national security, afforded by our alliances, our defence, diplomatic and intelligence capabilities, our adherence to the rule of law and our ability to enforce the law.

On our freedom, that depends on our dedication to national sovereignty, the resilience of our institutions, and our protections from foreign interference.

Important context and perspective

Dealing with uncertainty is not new.

This is not the first time our children have grown up in a time of global tension and disruption. This is a context and perspective I fear is too often missing in our contemporary discussion of global issues.

My generation grew up under the threat of nuclear Armageddon, hoping as Sting put it, that “the Russians loved their children too”.

My parents’ generation grew up during the greatest global conflict in world history, including the Holocaust, the invasion of what was then Australian soil in New Guinea, the bombing of Darwin and Japanese subs in Sydney Harbour sinking ferries.

My grandparents grew up during the war to end all wars, where every neighbourhood knew the cost as 60,000 Australians were killed out of a population of not even five million; who then went on to endure the Great Depression, before backing up to fight to defend our freedom in the Middle East and the Pacific.

Those generations recognised the challenges of their time, and responded with a practical resilience, optimism and resolve, rather than the anxiety inducing moral panic and sense of crisis evident in some circles today.

And at every stage Australia has played its part as a force for good, in partnership with those who shared our outlook and our values.

The key to progress was individual, like-minded sovereign nations acting together with enlightened self-interest.

The Marshall Plan.

The rebuilding of Japan.

The Colombo Plan.

A co-operative and respectful internationalism.

On occasion these efforts were forged through international institutions established to serve the states that formed them.

On other occasions, the work was done by looser coalitions of partners.

But in all cases, it was the principled actions of nation states, most often led by the United States, binding together the liberal democracies of the western world.

And in all cases these actions were underpinned by common values that anchor these societies.

As I recently reminded the United Nations General Assembly, these shared values filled the vacuum to win peace, provide stability, achieve prosperity and extend liberty essential for the human spirit to thrive.

We can never be complacent or take comfort that such achievements are permanent. They require eternal vigilance.

To preserve this legacy in the face of the uncertainties of our modern world, we must approach the future with the same optimism, confidence and resolve, of previous generations, and through our commitment to the values and beliefs that have always guided our way.

A strategy in our interests

The approach my Government is taking to these challenges is straightforward.

Know who we are and what we stand for, and allow this to guide our constructive engagement in and expectations of our international cooperation, including global institutions, and ensure that our national interests remain paramount.

Build a strong open economy at home, connected to global prosperity, enabling our capacity to protect and pursue our national interests.

Know where we live and work to promote stability, prosperity and engagement in our region by championing the common interest of sovereignty and independence as the natural antidote to any possible threat of regional hegemony.

And maintain our unique relationships with the United States - our most important ally - and China - our comprehensive strategic partner - in good order, by rejecting the binary narrative of their strategic competition and instead valuing and nurturing the unconflicted benefit of our close association.

Security through knowing what we stand for

Knowing who we are and what we stand for is as true today as it ever was.

We will continue to bring clear objectives and enduring values to our international engagement.

Freedom of thought and expression … of spirit and faith … of our humanity, including inalienable human rights.

Freedom of exchange, free and open markets, free flow of capital and ideas.

Freedom from oppression and coercion, freedom of choice,

These have never been more important.

And they are under threat, not just from the direct challenge of competing worldviews, but the complacency of western liberal democratic societies that owe their liberty and prosperity to these values.

Australia does and must always seek to have a responsible and participative international agency in addressing global issues. This is positive and practical globalism. Our interests are not served by isolationism and protectionism.

But it also does not serve our national interests when international institutions demand conformity rather than independent cooperation on global issues.

The world works best when the character and distinctiveness of independent nations is preserved within a framework of mutual respect. This includes respecting electoral mandates of their constituencies.

We should avoid any reflex towards a negative globalism that coercively seeks to impose a mandate from an often ill defined borderless global community. And worse still, an unaccountable internationalist bureaucracy.

Globalism must facilitate, align and engage, rather than direct and centralise. As such an approach can corrode support for joint international action.

Only a national government, especially one accountable through the ballot box and the rule of law, can define its national interests. We can never answer to a higher authority than the people of Australia.

And under my leadership Australia’s international engagement will be squarely driven by Australia’s national interests.

To paraphrase former Prime Minister John Howard, as Australians, ‘we will decide our interests and the circumstances in which we seek to pursue them.’

This will not only include our international efforts to support global peace and stability and to promote open markets based on fair and transparent rules, but also other global standards that underpin commerce, investment and exchange.

When it comes to setting global standards, we’ve not been as involved as we could be.

We cannot afford to leave it to others to set the standards that will shape our global economy.

I’m determined for Australia will play a more active role in standards setting.

I have tasked the Department of Foreign Affairs and Trade to come back to me with a comprehensive audit of global institutions and rule-making processes where we have the greatest stake.

And I want to send a message here tonight that we will be looking to tap Australian expertise as part of our efforts.

Security through economic strength

Ladies and gentlemen, the foundation for robust and credible Australian engagement abroad is a strong economy at home.

Without a strong economy, we cannot protect the living standards of our people.

Without a strong economy we cannot keep our people safe, protect and preserve our environment, guarantee the essential services Australians rely on and invest in national defence and global order.

That’s why bringing the budget back into balance and keeping that way is so important.

A strong budget is a cornerstone of Australian sovereignty in an uncertain world.

We are one of only ten nations with a AAA credit rating from all key rating agencies.

At the same time, we are pursuing the most ambitious trade strategy in Australia’s history. One in five Australian jobs is now dependent on trade.

We have concluded, or are negotiating, trade deals with 17 out of our top 20 trading partners.

We are working towards an agreement with the EU.

And we stand ready to swiftly secure a trade agreement with the United Kingdom as soon as they are in a position to do so. Post Brexit, the UK will become an important partner and voice in the advocacy for our rules based trading system and the benefits of open and fair trade.

In the last six years we have secured duty-free or preferential access for our exporters to an extra 1.7 billion consumers.

70 per cent of Australia’s two-way trade is now covered by our trade agreements, up from 26 per cent when the Coalition was elected in 2013.

Today’s trade data confirmed once again the longest run in consecutive monthly trade balances in 45 years. And for the first time since 1975, our current account is in surplus.

We are working to revitalise and modernise the global trading system. To ensure it matches the speed of change in E-commerce and embraces the opportunities of the digital economy.

At home we are lowering taxes, removing the burden of over-regulation, embarking on overdue structural reform of our vocational training sector to ensure we are meeting the dynamic skills needs of our growing economy. And we are building the transport, energy and water infrastructure our economy needs to grow.

This is all part of the comprehensive national economic plan we are implementing to keep our economy strong.

Security through partnerships and alliances

Ladies and gentlemen, of course our approach to the world is shaped by where we live.

We are an Indo-Pacific nation.

We are playing our part to build a secure, prosperous and inclusive Indo-Pacific of independent, sovereign and resilient states.

We have started with our Pacific Step-Up.

Australia’s national security and that of our Pacific family are intertwined.

This is a practical partnership supporting economic stability and prosperity, and strengthening security and resilience.

Our relationships with other nations in our region are flourishing.

We have concluded a landmark economic partnership agreement with Indonesia and aim to introduce implementing legislation next week.

And I look forward to attending the inauguration of re-elected President Widodo later this month.

In August we further strengthened our relationship with Vietnam, a nation of real consequence in our region.

Last year we elevated our relationship to a strategic partnership, reflecting our shared strategic interests and determination to expand cooperation even further.

ASEAN is at the core of our conception of the Indo-Pacific.

Next month we, our ASEAN partners and other nations in the region hope to conclude the Regional Comprehensive Economic Partnership, embracing 16 economies with a combined population of 3.5 billion and combined GDP of US$25.7 billion.

The special importance of this agreement is that it will draw India more substantially into the Indo-Pacific economy.

India is a great success story of our region. A land of durable institutions and shared values.

A natural partner for Australia.

So I am honoured to accept the invitation of my friend Prime Minister Modi to visit India in January, including to deliver the inaugural address at the Raisina Dialogue.

The visit will be accompanied by a business delegation that I have invited Ashok Jacob, Chair of the Australia-India Council Board, to lead. This will bring Government and business together to pursue our India Economic Strategy that has captured the attention of our Indian partners and must now be realised.

My visit will be another step in cementing India in the top tier of Australia’s partnerships.

Last week we took another step, when Foreign Ministers of the Quad countries - the USA, Australia, India and Japan - met in New York.

This is the first time the Quad has met at foreign minister level.

Our Government has worked patiently to restore trust and confidence following the Rudd Government’s policy to disconnect from the Quad.

I am pleased we have been able to restore this important forum for Australia and the region.

It is a key forum for exchanging views on challenges facing the region, including taking forward practical cooperation on maritime, terrorism and cyber issues.

It also complements the role of ASEAN and ASEAN-led architecture.

This has been achieved with Australia’s steadfast friendship and support from Japan, which is broader and deeper than ever before.

Japan is our Special Strategic Partner, our second-largest trading partner and a fellow ally of the United States.

Prime Minister Abe is not only a great friend of Australia, but also one of the region’s elder and most eminent statesmen.

That’s why I am also pleased to accept Prime Minister Abe’s invitation to visit Japan early next year.

And I also intend to put more effort into our relationship with the Republic of Korea - building on our significant trade, energy and infrastructure ties.

I met again recently with President Moon. We agree that our relationship has significant further potential, including in hydrogen, critical minerals and security.

I would add that the Indo-Pacific would be even stronger if Japan and the ROK can overcome their recent tensions.

Security in the great power era.

Ladies and Gentlemen, I can report from my most recent visit to the US at the kind invitation of President and Mrs Trump, that the state of our relationship is strong.

Our alliance with the United States is our past, our present and our future.

It is the bedrock of our security.

And it’s one that we contribute to as we undertake the greatest peacetime recapitalisation of our Defence Force ever and increase spending on Defence to two per cent of our GDP.

Deep US engagement in the Indo-Pacific is essential for maintaining stability and prosperity.

But even during an era of great power competition, Australia does not have to choose between the United States and China.

China is our Comprehensive Strategic Partner.

The strategic importance of our relationship is clear.

China is a global power making significant investments in military capability as a result of its extraordinary economic success.

It is the major buyer of resources globally.

It is having a profound impact on the regional balance of power.

It’s now the world’s second largest economy accounting for 16 percent of world GDP in 2018

The world’s largest goods exporter since 2009 and the world’s largest trading nation since 2013.

The world’s largest manufacturer.

The world’s largest banking sector, the world’s second largest stock market and the world’s third largest bond market.

And the world’s largest holder of foreign reserves.

We have benefited from China’s economic rise, just as China has benefited from Australia’s reliable supply of high quality energy, resources, agricultural goods, and increasingly services.

China has in many ways changed the world, so we would expect the terms of its engagement to change too.

That’s why when we look at negotiating rules of the future of the global economy, for example, we would expect China’s obligations to reflect its greater power status.

This is a compliment, not a criticism.

And that is what I mean when describing China as a newly developed economy.

The rules and institutions that support global cooperation must reflect the modern world. It can’t be set and forget.

Conclusion

In conclusion let me simply say that we will continue to stand up for Australia. Will defend our reputation. Will defend our interests, our jobs, our living standards, our environment, our cohesive and tolerant society, our kid’s opportunities for the future.

We will strive to protect the promise of Australia to every Australian.

A promise that was made to a young Frank Lowy to enable him to become everything that he could be.

That promise is now being kept to millions more Australians who have come to Australia to make a contribution and not take one, to respect our laws, our unique lifestyle and freedoms. And who along with our resident population continue to make our nation the envy of the world.

How good is Australia Sir Frank, and may it ever be so.

Thank you for your attention.