Economic and Social Outlook Conference
Thursday, 2 November 2023
Crowne Palladium, Melbourne VIC

Well, thanks very much, Cameron, for that fabulously gloomy introduction. And here we stand between all of you and cocktail hour, as it was just billed, with the very depressing topics to discuss.

So, let me start by saying I’m an optimist. Let’s remember, and previous panels just touched on it, that we live in an era where almost wherever you live in the world, people are living longer, healthier, and more prosperous lives than they were at the end of World War II or at the commencement of the 20th century. Technology, human innovation, and a period of greater global cooperation have brought us a long, long way as a people.

Here we are in Australia, the 13th largest economy in the world, with one of the highest living standards in the world, despite being only the 55th most populous country in the world. We have a lot to offer, and we should remember when it comes to our engagement with the world that we are a country of scale, not one of the global superpowers by any means. But a country of scale, a country of reputation, and a country of influence. And we should seek to use that agency and influence. But we absolutely stand at a period in time where the global order is challenged, where multilateral institutions that we have come to rely upon are under greater threat and dysfunction than at any time in recent years, where the rules based order is being ignored, defied and overruled, with concerning attempts to rewrite it in different ways.

So these are creating real threats to what we’ve been used to. We can see it in the conflicts you have just heard listed. The United Nations has been completely ineffective in its ability to respond to many of those conflicts. The World Trade Organisation is in a state of dysfunction in terms of its ability to actually enforce adherence to the trade rules it was meant to drive forward.

This, of course, is all happening in a world where we’ve got the rise of strategic competition between the two powers of the US and China, plus a period where, frankly, the world has allowed – and empowered through its allowance, to too great an extent – the rise in power and influence of bad faith actors. Something we’ve learned very clearly in recent times is that bad faith actors don’t appear to get better with time. We can see that with Russia. We can see that with Iran. We can see that with North Korea. That with every opportunity they’ve taken the time to build further capability, to go on, to create greater dysfunction or mayhem in our world. And of course the challenge that, despite the rise in living standards, continued global economic inequality is being driven, informed and shaped in terms of the way different countries are reacting by perceptions of climate change, by perceptions of how Covid was handled, by perceptions of post-colonial policies and attitudes, a range of different factors driving that.

So all of that presents risks, risks that we’re seeing to globalisation as we know it and what it has helped us to achieve. As I said at the outset, it has helped us to achieve much. Risks to market economics as we know it and how that frames systems like ours and their effective engagement with the world, particularly in trade policy settings, and to the liberal democracies who largely helped shape and drive and inform the post World War II consensus in the writing of the rules based order and system that we have come to rely upon. So we’ve gone from the post World War II era, from Cold War era to a period of time where there was a sense of some degree of international consensus or common ambition for many nations to now one where, as President Biden put it in the China context, very diplomatically the other day “trust but verify”. Real emphasis on the verify, and the way in which it is challenged and whether it can be trusted. So what does that mean for Australia? Well, we must work for the best, but plan for the worst. We shouldn’t give up on multilateralism. We shouldn’t give up on diplomacy. But we do need to make sure that our diverse partnerships are established and grown across the different spheres of engagement, and that we use different means and opportunities to give us pillars of defence in a whole range of different ways.

In the security partnerships and investment settings. We absolutely must work with partners to create effective deterrence. Deterrence from conflict. We wish to see major conflict and conflict in our region avoided. We don’t plan and invest for conflict. We plan and invest ideally to deter conflict from taking place. That’s where we cooperate with the Quad and the building of that out with Japan and India, as well as the United States. It’s where engagement of the Indo-Pacific four of Japan, South Korea, New Zealand and ourselves with the NATO partnership matters. These types of partnerships in the security sphere are essential for us to build out.

In economic partnerships. We need to ensure that we have pressure to keep the best of what free trade and global economic engagement has given us, but that we have effective protections within that against the weaponisation of trade that Australia has just experienced, that we’re far from a lone ranger in that regard. Against state control, influence of markets, and what that can mean in terms of the distortion of those markets and the risk of the undermining of what would otherwise be economically viable industries, jobs and settings in countries like ours. And that we make sure we don’t see or enable new ways of protectionism, possibly built for the best of intentions, such as tackling climate change and dealing with carbon leakage around the world, but with the real risks that they could create new ways that undo decades of breaking down trade barriers.

We need to ensure that we have the broadest possible range of diplomatic partnerships, particularly using our position as a mid-sized country to work and engage with other small and mid-sized nations in our areas of common interest, common interests and common values.

Whatever the diverse systems of government we face with diverse countries and economies, it is essential that within that sphere, we look at common interests in sovereignty. Our common interests in tackling global challenges and problems that we share. Our common interest in some of the principles enshrined in the UN charter, as difficult or ineffective as that institution may be. That is where our partnerships with our ASEAN nations, our partnerships with our Pacific Island Forum partners. These are crucial partnerships where, regardless of the differences, we can find the common ground for cooperation and to build the consensus that can hope to shape and influence against those security and economic threats that we face.

So there are huge challenges. I’m sure we’ll talk about some of the immediate conflicts, which I didn’t want to repeat in opening remarks, but to take that bigger picture and the framing around how we tackle a growing global disorder, but with an optimistic lens that if we can invest in those security partnerships and our own defences, if we can be innovative in terms of our economic partnerships and be broad in our diplomatic partnerships, we can navigate in this challenging world. Thanks.