Doorstop following tea ceremony with Prime Minister Abe
I’ve just come from a tea ceremony with Prime Minister Abe. He graciously invited me to tea at the tea house where we were served tea and the tea ceremony shown how to make tea by Master Sen, the 16th in his line of tea masters. As a lover of tea, particularly green tea, I was very touched by Prime Minister Abe inviting me to that tea house and very impressed with the hospitality, with the wisdom and with the grace of Master Sen. It was a combination of warmth and wisdom that was, I know Prime Minister Abe said to me, that this was, this is a, very Japanese. It was a very warm Japanese way of welcoming me to Tokyo.
Well we have a competitive evaluation process underway and we know there are proposals that are being received from Japan, from Germany and from France. We are evaluating them. Because that process is underway there really isn’t much more that I can say, other than to say that we greatly appreciate Japan making its proposal as we do the French and German proponents - for their contribution to the competitive evaluation process.
On the economy, the US just raised its rate, how does it affect Australia’s economy?
Well our dollar is down a little bit, but not by much. Certainly by one and a half according to the number on my watch, but the, you have to keep an eye on these things. But it’s come off a little bit. I think the impact of the rate rise, you know, there has never been a movement in monetary policy that has longer telegraphed than this one. So I think the market responded predictably because they saw markets like this, no great surprises but you know, my days of forecasting currency movements are long behind me.
But we have a floated exchange rate and its one of the very important automatic stabilisers, you know, as I said at the lunch, you’ve got to, Australians are not very good at blowing their own trumpet, we are probably better at, we sometimes should be more positive about our economic performance.
Let me just make this observation, we have had a massive change in our terms of trade. We have seen prices for our big commodity exports dramatically fall as they always were going to. This was inevitable. You could have predicted this. Perhaps not the rate or the price but the trend was highly predictable.
What we have seen none-the-less is strong growth in jobs. We’ve had strong growth in jobs this year 340,000 added, and we have seen in the last few months, unemployment actually coming down. Now how long that trend will be sustained, time will tell, but at this stage as the Governor of our Reserve Bank, Glenn Stevens, has said, our economy is adjusting well.
It just underlines the value of having a flexible economy, of having a floating exchange rate being one of those points of flexibility, and obviously having a high level of business confidence, consumer confidence, because ultimately economic decisions are made on strict rational grounds, financial analysis and mathematical calculations.
An enormous part of it is confidence – it is psychology and confidence. If Australians are confident about the future, they can see the big opportunities that are here and in the Western Pacific particularly, half the world’s middle class living here in this part of the world, of course that percentage will only grow, the opportunities for Australians have never been greater and they’re responding to that. That’s one of the reasons why I think despite this enormous adjustment in our terms of trade we are none-the-less seeing good jobs growth.
Prime Minister, just quickly please, now you’ve had a brief meeting with Prime Minister Abe and you’ll meet him formally shortly, can you just tell us the things you’ll directly discuss with him please?
Well we will, the big issues for us, the overwhelming big ones are economic and strategic. So we’ll talk about free trade, the progress of the Japan Australia Free Trade Agreement, the progress of the TPP - the Trans Pacific Partnership. We’ll talk about collaboration on innovation and technology.
As I as I said earlier today, Prime Minister Abe and I, although we didn’t put our heads together, actually gave quite similar speeches in Paris, because we talked about the importance of technology and innovation in enabling an effective response to climate change.
We’re talking about all of those levels of economic cooperation.
At the same time Japan and Australia have a special strategic partnership and we’ll be talking about our commitment to the rule of law, our commitment to the maintenance of the international order. We both recognise that our prosperity, Japan’s prosperity, the whole region’s prosperity has been based on the maintenance of international order in this region and a long period of relative tranquillity. That has to be maintained, and that’s in everybody’s interests to do that. So we’ll be talking about that.
We’ll talk as we have, as we did in fact before in Antalya, we’ll talk about counterterrorism and our ability to cooperate in that regard. And of course we will, as I have said earlier, I will obviously raise as I have done in the past, the issue of whaling.
As I have noted we are disappointed by Japan’s decision to resume whaling in Southern Ocean. That is a point of disagreement, there is no doubt about that. But it’s, it is something, it’s a sign of the maturity of the relationship that good friends can talk about these things honestly and openly. It’s important that we understand how the Japanese Government and people feel about the issue, but equally they should understand how we feel too.
But there’s so many, we are about to be talking about food and cooking and all of the amazing Australian foods and produce that are coming here to Japan, especially given the Free Trade Agreement. Of course the access to this market by Australian farmers will be even greater with the TPP.
So it is, it’s a very exciting time to be an Australian and it’s a very exciting time to be an Australian doing business with Japan.