Address to the OECD Council - Paris, France

Speech
16 Jun 2021
Prime Minister
E&OE

PRIME MINISTER: Well, thank you very much, Secretary-General. Wonderful to be reunited with you here today in what I would describe as the boardroom of market-based, business-led economies around the world. This is an incredibly important organisation. So important that Australia was very determined to ensure that in our 50th year, we sought to make an even more significant contribution than the ones that we've been making over these many years. 

Your Excellencies, distinguished guests, I want to thank you for welcoming me all so warmly this morning and by your attendance here today, I know it is an ambition of the new Secretary-General that the many leaders will continue to come and share their thoughts with you. This should be a place where leaders of market based, business led economies come to set out their views and their commitments to how we continue to ensure we have business led growth and how the market based economic model delivers for our citizens, delivers for our region and indeed delivers for the global economy. 

I also want to acknowledge Australia's ambassador to the OECD, Dr Alex Robson, we've known each other for many years. And I want to thank him for his contribution here as our Ambassador and for his engagement and his leadership within this esteemed organisation. I also want to acknowledge the many Australians who work here at the OECD and its many partner bodies. Australia is very active in such organisations and we send our best and our brightest and our most passionate and committed to the principles of market based economies of liberal democracies to engage in these important institutions. So I thank them for the work that they do here on Australia's behalf, but also I think more broadly in the service of the great values of this organisation. 

It's been a privilege to join you here at the headquarters, especially this month, because Australia is celebrating two significant milestones in our relationship with the OECD. The first, of course, is that we became an OECD member 50 years ago. And today I'm honoured to be gifting this piece of art, which is behind us here, to the OECD in honour of that anniversary, recognising the relationship that we have with the OECD and its many members. It's a beautiful painting. It's called Seven Sisters by an indigenous Australian artist, Michelle Butler Nakamarra. And it reflects who we are as Australians and where we come from and what connects us to the world. And I hope it is a reminder of the enduring relationship not only that Australia has with the OECD, but each and every member of the OECD. 

The second milestone though, is a fairly obvious one. And, because it is the start of Mathias Cormann's term as Secretary-General. We are very proud of Mathias' achievements in Australia. As Mathias said, Australia is a highly successful, multicultural society. And Mathias' own personal story is a reflection of that national story in Australia. And for him to have been given the great honour to serve as Secretary-General of this organisation and having won the confidence and support of the many members of the OECD, this is truly a significant time. It's the first time ever that the OECD has been led in this role by an Australian and the first time the OECD has been led by an individual from the Asia Pacific and to my Asia Pacific members who are sitting around the table, I'm sure that is equally welcome. Because the OECD spans not just one part of the world, but all the world, whether it's for the Americas or the Indo-Pacific across Europe and the United Kingdom. And so it is important that it continues to maintain that global focus on the challenges confronting market economies all around the world. 

Mathias will do an outstanding job. I know that for a fact, because I've worked with him closely over many years. He's a person of great vision, conviction, but importantly, dedication. He is an extremely hard worker. When given the task of leadership and service, then he never rests. He ensures that he follows through on the commitments that he makes to each of you. You will enjoy a strong bond of trust with your Secretary-General. That is my experience and I know it is the experience of all those who have worked with him. It is also a reflection of his skills and experience, as I have said. It's fitting recognition, I think, of Australia's standing amongst fellow democracies and the unique and valued perspective, and agency that Australia brings to the challenges the world faces. And we all know there are many of those right now battling the global pandemic and the recession that pandemic has caused. Ensuring a strong business led, underline, underscore, business led economic recovery. A global trading system and rules based order that is under serious strain and threat. Driving ambitious and effective action on climate change, getting results on climate change. Performance on climate change matters at least as much as ambition on climate change. And these two should be kept strongly in balance. Above all though, the defining issue, I believe, for the global economy and regional stability, is the security and prosperity environment that is created by ensuring we address the great powers strategic competition that is occurring within the Indo Pacific region. Rapid military modernisation, tension over territorial claims, heightened economic coercion, undermining of international law, including the law of the sea, through to enhanced disinformation, the foreign interference, cyber threats enabled by new and emerging technologies. At this moment in history, international institutions like the OECD, institutions founded, I stress, on liberal democratic market based economic models and values. They are more important than ever for stability in our world and in the various reasons from which we come. Mathias said in his first speech as Secretary-General, 'the OECD is a force for good in the world. We have the opportunity and the collective responsibility to use it to its full potential.' And I concur with his remarks. The OECD is a pillar of the multilateral system. It makes positive differences in the lives and livelihoods of billions of people. Our citizens in our nations that we are here representing. 

The OECD's convention, agreed back in 1960, declares that economic strength and prosperity are essential to the preservation of individual liberty and the increase of general well-being. I want to pause on this point. For democracies around the world to demonstrate their effectiveness, they must demonstrate their effectiveness at home, in their own societies, in their own economies. Our economies are strong, but that only gives us the opportunities to ensure that our societies are strong. A strong society supported by social systems, on health services, education services, tolerance, respect for diversity, all of the things that go to making a successful, functional, liberal based democracy. All of this is enabled, made possible, only if it's built on a platform of a strong economy. Our economic model as market based economies, business led economies, is what enables social cohesion to be most successful. For social policy and supports to be most successful, for services that whether it's those who live with a disability or perhaps those who are in marginalised communities seeking access to services, particularly the elderly. In one of many ageing economies that sit around this table, our ability to be effective in improving the well-being and lives of all of our citizens depends first and foremost on our ability to ensure that our economies are strong. The dividend of a strong economy is a strong society, and that is the purpose for ensuring that we get our economic settings so right. So we need all nations, not only the 38 member countries of the OECD, to continue to strive to achieve these goals of stronger economies and our market based systems and to participate in a global system in ways that foster development cooperation, which the OECD provides the opportunity for. We bring our own distinctive perspective as Australians to these challenges, as we always do. But they are also based on principles and values that are shared with so many around this table. We share so many aspects of our national character with the character of those nations represented around this table. Our interests are inextricably linked to an open, inclusive and resilient Indo-Pacific region. That is our interest and a strategic balance in the region that favours freedom and allows us to be who we are. To make our Australian way as the many other nations of the Indo-Pacific seek to make their way, the Japanese way, the Indonesian way, the Malaysia way. All of these countries seeking to pursue their own objectives and national interests for the betterment of their own societies and to do so in a free and open Indo-Pacific consistent with respecting the national sovereignty of all nations. As the world grapples with a challenging set of circumstances, these values must be our guide. 

So the OECD has a big agenda and a lot of work ahead of it. Whether it's helping chart a course for business led economic recovery in the wake of the pandemic, or delivering cleaner, more sustainable and more inclusive growth, or supporting a free and fair trading system, or achieving a more equitable international taxation system, or seizing the opportunities of managing the risks of digital transformation, which both enables our economies, but also can present very serious risks at the same time. On all of these and more, the OECD's advocacy, expertise and evidence based analysis is absolutely critical. A source of truth in the room, a source of real facts in the room to guide the discussions and the decisions of leaders, which ever table we gather around. Whether it's the OECD table, the G20 table, the G7 table, whichever table it is, the work that the OECD does, puts the facts on the table to guide those discussions. The analysis that is done, incredibly important to ensure that evidence based decisions are what is guiding global economic policy. 

So this year marks the 60th anniversary of the OECD's founding and of course the world has changed considerably over that time, as Mathias has said, we also need to remember what makes us strong and resilient. So as to navigate the challenges of our time we should turn to what served us so well in the past, open and competitive markets. Trade, investment and innovation and of course liberal democratic norms and values. An international order where countries agree rules and stick to them, and abide by them. As I told Australians before I left, making the case for business led growth. Now, this has worked extremely well for Australia. Our recovery is like few others around the world, particularly as we come through this pandemic. Australia was only one of two countries who gathered together in Cornwall at the G7 Plus, together with the Republic of Korea that could point to an economy that is larger today than it was before the pandemic. Australia has more people employed today than there were before the pandemic hit. A v-shaped recovery, we have seen to be a reality in Australia. That is not something that we take for granted as we move forward. And that's why we will always be an advocate for the free and fair rules-based systems for international trade founded on open markets. Because we understand that Australia's prosperity rests squarely on maintaining our position as an outward looking, trading economy. To quote the former New Zealand Prime Minister, Bill English, we understand in our part of the world with economies of our size, that no one gets rich selling things to themselves. We have to engage with the rest of the world and economies like ours have always done that successfully. But it requires an integrated, fair rules-based system to engage in that trade and to be free from coercion that can occur. 

We will never overcome our present challenges by relinquishing these hard won lessons of the past. I'm pleased too, that the OECD is committed to strengthen its outreach in the Asia-Pacific. This region is at the centre of significant economic and geopolitical change, and it's in all of our interests that it recovers quickly from the pandemic and [inaudible] downturn. That it remains open, inclusive, secure and resilient. I had the pleasure of meeting with Singapore's Prime Minister Lee on my travels here last week. Singapore shares a commitment to open rules based international trade, and together we've been breaking new ground with the digital economy. This is one great example of the potential of the region. Last week I attended the G7 summit in Cornwall in the United Kingdom, and I again want to pass on my congratulations to the United Kingdom and Prime Minister Johnson for his excellent leadership of that forum. In fact, Australia was only one of four guest countries to attend the extension programme, together with India, South Africa and the Republic of Korea. And I took the opportunity to share there my perspective on those challenges, especially as they relate to the Indo-Pacific region. And we discussed how like minded countries can cooperate. And there were really four areas, and I'll finish on these. 

First of all, there is the necessity if we are to preserve a world order that favours freedom. I've often paraphrased Benjamin Franklin when speaking to the Republic of the United States, when asked what was achieved, a republic, if we can keep it. The same charge is there for liberal democracies and market based economies all around the world, a world that favours freedom, a world where business led growth is the driving model for economic prosperity, which enables liberty and improvement in social standards around the world. All of this is what the international system, supported by nations like Australia and all of those represented around this room today. Those values that underpin those institutions are so critical so that we have a world order that favours freedom, if we can keep it. And it is for us to do the work to ensure that we do, working together. So working together on strategic and defence issues is a natural association to that end. Working together in multilateral fora such as this to address very significant issues. Obviously the economy, the border and other forums to address COVID, to address climate change, to reinforce our economies, supply chains, critical supply chains that can be relied upon in good seasons and difficult seasons, and demonstrating in our own economies, in our own regions and more broadly the effectiveness of liberal, market-based democracies and economies to be able to deliver what our citizens are seeking.

On the issue of economic growth and business led economic growth, one of the most significant challenges we face in addition to the digital transformation and the many issues that come around that, is the new energy economy that the world will be moving to, and indeed already is moving to, over the next few years. A carbon neutral economy, a net zero economy when it comes to carbon emissions. This is the future. That is the reality. The issue of if and when, these are matters that have been determined around the world. So we must focus our attention on the how. The how is where Australia's mind is focused. How do we achieve that. But at the same time ensure that the jobs of those who work in our heavy industries who make things, making things that are necessary for the well-being of our peoples. Their material standards and their way of life. These things we have to be able to achieve and not sacrifice when it comes to moving towards a carbon neutral economy. We have the wits. We have the capabilities. We have the technological advances that enable us to solve this problem. As I said at the G7, to address COVID, we had to find a vaccine. It was obvious we had to find a vaccine. So the world set about finding not just one, but many vaccines and a vaccine that a year ago, no country, no scientist had ever found before. But it was done because there was a great global need to find that vaccine to ensure that we could take on this dreadful virus. I see climate change very similarly, it requires a technological solution. We all know what happens when technology intervenes in world energy markets. We've seen it with shale gas. We've seen it with many other transformational changes in the energy economy that have occurred on the basis of technology. It completely reorientates economic and political systems, the reliance of nations and their engagement with each other. To achieve a carbon neutral economy globally, regionally, domestically requires an unprecedented effort in focusing on the technological solves. Australians are very practical people, we tend to focus more on how to do it rather than talking about it. And that's what we need to address climate change. We need to focus on how to do it. Not just the need to do it. The need to do it, I think, is something that has got the level of acceptance necessary to go to that next stage. So it is the how that our economies need to focus on and invest our wealth in finding those solutions. In Australia, we are focusing heavily on a range of technologies, hydrogen in particular, and to make that work. But we've got to be specific about it. We need to get the cost of producing hydrogen down to $2 Australian or around about $1.50 US for this to have the transformational impact that is needed. And the reason I put that price on it, friends, is this. It's not good enough to reduce emissions in advanced economies. The Special Envoy from from the United States, former Secretary Kerry, I thought, put this incredibly well and I commend him for it, when he said at the outset of his mission; that the United States could reduce their emissions to zero, but if that is not achieved in the developing world, and he specifically mentioned China, then the goal of addressing climate change will not be achieved. Now, that is not a criticism of any developing economy. I want to stress this, because what it is a call to do is ensure that the solve that is in place for advanced economies on addressing climate change has to be the same in developing economies. Carbon emissions don't have national accents. They don't speak with that wonderful Irish lilt or an Australian twang. They're emissions. They don't understand borders. They don't have favourite cultural dishes, they are just emissions. And so it has to work everywhere if it's going to work anywhere. And that's why the technology has to perform at a cost that is real and competitive with the alternatives that the world is seeking to move away from. It has to work in India. It has to work in Vietnam. It has to work in Indonesia, as well as Australia, the United Kingdom, France or anywhere else. And that means we have to apply all of our effort to get the cost and scale of delivering those technologies on the ground in all of those places. Otherwise, we will fail. 

Australia has reduced our carbon emissions by 20 per cent since 2005. There are a lot of countries that sit around this table that cannot claim that. Australia has not only met our 2020 commitments, we beat them. We have set our Paris commitments and we will beat them as well. And we will invest all of our effort in ensuring that we get the technologies in place that will ensure that we can move to this new economy, that will not see regions forsaken, that will not see industry shut down, that will not see the cost of living for families in suburbs and towns and rural areas and cities across the world become unreachable because of the costs that have been imposed on them through going through this change. There is a better way and the better way is finding the technological solutions, and that is what we are committed to. Partnerships already agreed with Germany, Japan and Singapore. Shortly, the United Kingdom. I believe, also here in France as well, with a very good discussion I had with President Macron last night. Technology is the way through this. That's how it's done in market based economies. That's how we get it done in market based companies. And we allow our business sector, our innovators, our scientists, our researchers to be enabled and find those solutions, and then we scale them up and we solve the problem. So with those comments, Mathias, passionate perhaps, but that's the Australian way, isn't it?