Australia Vanuatu Business Forum

Thank you Prime Minister Salwai and distinguished guests.

It’s great to be here at the sixth Australia Vanuatu Business Forum.

There’s terrific momentum in relations between our two countries.

As Prime Minister Morrison said here in Port Vila last month, Australia and Vanuatu are both friends and family.

This is true.  

Looking out here today, I can see Australia and Vanuatu are also great business partners.

Mr Morrison also made the point that friends and family help each other in time of need.  

I have closely watched Cyclone Oma’s path from Vanuatu to Australia.  

I was sorry to see reports of flooding and damage here in Vanuatu.  

As a member of the Pacific family, Australia is always ready to assist, including in response to the damage Oma has done in the islands to our north.

Unfortunately, both our nations experience frequent natural disasters.

In Australia, we’ve seen extraordinary flooding in north and north-west Queensland, drought in New South Wales, including in my own electorate, and fires in Tasmania.

Aussies and ni-Vanuatu are no strangers to adversity, but both our nations bounce back, and we’re stronger together.

Last year marked 40 years of Australia’s diplomatic presence in Vanuatu. 

Business relationships are similarly longstanding and are continuing to strengthen. 

This Forum is a great opportunity to consider practical steps that can strengthen trade and investment links between Australia and Vanuatu.

Australia is Vanuatu’s largest trade and investment partner.

Two-thirds of long stay tourists to Vanuatu and almost all cruise ship passengers are Australian.

So it’s good news for Vanuatu, and for this Forum, that Australia is committed to taking our partnership with Vanuatu and with the Pacific region to a new level. 

We want to work with our Pacific partners to build a region that is secure strategically, stable economically and sovereign politically.

The Prime Minister's visit in January built on the new initiatives he announced last November to step up Australia's engagement in the Pacific.

We’re going to continue building our shared heritage including through our churches, sports and media. 

We will be lifting security cooperation across defence, policing and cyber security.

In Vanuatu, this will include new training and leadership opportunities for the Vanuatu Police Force, and infrastructure upgrades for the Police Maritime Wing and Vanuatu Mobile Force.

Australia is rolling out enhanced partnerships in each of these areas.

We are also increasing our focus on economic development. This morning I will give some more detail on two major economic components of the step-up: labour mobility and infrastructure.

Taken together, these initiatives comprise a substantial step up that will, over time, bring Australians and ni-Vanuatu even closer together.

Again, that’s good news for this Forum and for business.

As we all know, governments have a responsibility to create an environment where business can flourish and the economy can grow. 

These measures provide the foundation for the private sector to do what it does best — create jobs and build the wealth of both of our countries.

Trade settings and PACER Plus

Looking first at trade settings, I congratulate the Government of Vanuatu on an ambitious policy agenda, particularly on trade reform.

The Trade Ministry is currently updating its Trade Policy Framework and I encourage you all to engage with this process.

I also commend Air Vanuatu, Airports Vanuatu Limited and the Vanuatu Tourism Office on their plans to expand over the next ten years.

Combined with the completion of the runway works at Bauerfield airport, and the recommencement of flights between Port Vila and Melbourne, this will be a huge boost for the tourism sector.

Vanuatu signing the PACER Plus trade agreement in September 2017 was a significant step forward. But the job’s not done yet.

Australia has now ratified PACER Plus and I hope that Vanuatu will be soon ratify the agreement, enabling full access to its benefits.  

PACER Plus offers opportunities for Vanuatu to deepen its trading relationships across the Pacific region, including with Australia and New Zealand.

It will reduce red tape and the cost of trading goods and services, making it cheaper to do business and making Vanuatu more attractive to investors.

Once the Agreement enters into force, Australia and New Zealand will provide a joint funding package of $25 million to support PACER Plus signatories to benefit fully from trade opportunities.  

Ladies and gentlemen, Australia and Vanuatu continue working together to improve the business environment.

I had the great pleasure yesterday of launching the Electronic Single Window with the Acting Deputy Prime Minister.

It’s a ‘one-stop-shop’ for importers and exporters, providing applications, certificates, licenses and permits. 

Thanks to the Single Window, the regulatory requirements for trading goods will be more transparent and easier to satisfy. 

It will also reduce border clearance time.

Another really practical improvement is the Pacific-Australia Card, which will make travel to Australia easier for Pacific leaders in government, business and sport.

All travellers to Australia will still require a visa, but from mid-2019, card holders will receive priority attention.

Kava

Speaking of priority attention, it’s great to see Vanuatu’s kava exports booming.

As you would know, in January the Prime Minister announced, here in Vanuatu, that the Australian Government was working to ease some of the limitations on importation of kava into Australia for personal use.

Like the Australian Prime Minister in January, I had the opportunity to sample some kava yesterday.

Australia recognises the cultural importance of kava to family and social life in Pacific Islander communities, including in Australia.

It is also a source of income for about a third of rural Ni-Vanuatu.

As kava exports grow, Vanuatu will have important decisions to make on regulating a product that is not well known globally. 

There will also be challenges in increasing productivity to meet growing international and domestic demand.

Australia and Vanuatu’s development cooperation can help tackle these challenges through the Pacific Horticulture and Market Access program, or “PHAMA”, which New Zealand also funds.

We also work together to support another major export, cattle.

As a grazier and farmer of 30 years I’m really pleased that the Australian Centre for International Agricultural Research is partnering with business — such as small holder cattle farmers in Santo — to increase productivity and profitability through the “Bisnis Blong Buluk” [pron. Business blong bullock] project.

Labour mobility

Small businesses in Vanuatu are also realising new opportunities through Australia’s Pacific labour mobility schemes.

In 2017, around 85 per cent of workers from Vanuatu participating in the seasonal workers program said they wanted to use the Australian wages to help start a business.¹

98 per cent of participants said they learnt new skills that would improve their employment prospects on return to Vanuatu.

There was a great example of this featured in Vanuatu’s Daily Post in January.²

In 2016, Mr Alfred Sam from Tanna was a farm supervisor under the Seasonal Worker Program on Milai Farm in New South Wales.

He used income and skills from his work to start growing and selling watermelons in Vanuatu.

The Daily Post captured his success with the headline, ‘Melon Man Makes Millions’.

A man after my own heart, Mr Sam now intends to use his melon millions to move into a cattle project on Tanna, according to the Post.

Ladies and gentlemen, labour mobility is a huge success story for Vanuatu.

Ni-Vanuatu participation in the Seasonal Worker Program has been growing each year — last year there was a 56 per cent increase. 

More than 3,300 workers undertook placements last financial year and this year participation is expected to be higher again.

Australia wants to see this growth continue.

Last November Prime Minister Morrison announced changes to the Pacific Labour Scheme that give more Pacific workers access to job opportunities in rural and regional Australia for up to three years.

The first group of ni-Vanuatu workers under this longer-stay scheme arrived in Australia last December, with more ni-Vanuatu expected to start work in Australia soon.

Through the Pacific Labour Scheme, there are jobs in sectors such as aged-care, tourism and non-seasonal agriculture, to ensure skills gained in Australia can contribute to Vanuatu’s economic growth.  

This is part of a broader partnership in skills development.

Our Economic Skills Partnership has established a network of provincial ‘Skills Centres’.

Participants in the Skills Centres are boosting entrepreneurship and self-employment. 

For example, Torba province — which prior to the Partnership had no official registered tourism businesses — now has a flourishing tourism industry. 

The Skills Centres complement the work of the Australia Pacific Training Coalition, which has been present in Vanuatu for over 10 years, and from which over 1,800 ni-Vanuatu nationals have graduated.

Infrastructure

Australia also has big plans to strengthen our partnership in infrastructure.

Infrastructure creates jobs and opportunities for businesses to expand and reach new markets.

Later today I will visit the Lapetasi wharf, which has been transformed in recent years with help from Japan and Australia.

Over the past decade, Australia has provided around $130 million in grant funding to support the Vanuatu Government to improve its urban and rural roads, and rebuild critical infrastructure facilities damaged by natural disasters.

During his recent visit to Vanuatu, Prime Minister Morrison joined Prime Minister Salwai to officially open the Lini Highway.

Together, we built this new road to last — able to withstand heavy rainfall and reduce flooding.

Most of the labour force were ni-Vanuatu who gained valuable new skills and experience, as well as income to support their families.

We are setting in train measures that could usher in a very significant boost to Australian infrastructure investment right across the Pacific.

The Australian Infrastructure Financing Facility for the Pacific will give Vanuatu a new option to finance its essential infrastructure works, such as telecommunications, energy, transport, and water. 

Furthermore, last week on behalf of the Government, I introduced legislation into the Australian Parliament to give Efic, Australia’s export financing agency, important new powers for investment in the Pacific.

The Australian Infrastructure Financing Facility will work closely with Pacific Island governments to ensure investments are fit for purpose and contribute to Vanuatu’s long term economic growth.

The new legislation will give Efic an extra $1 billion in callable capital and a new, more flexible infrastructure financing power to support investments in the region that have a broad national benefit for Australia.

These infrastructure investments provides opportunities for both Australian and ni-Vanuatu businesses. 

Both these infrastructure-financing measures have bipartisan support in Australia.

They are a major part of our Pacific step-up.

They will fund better economic infrastructure and stronger growth in Vanuatu and other Pacific countries, and across the region, including in Australia.

Conclusion

Like labour mobility programs, our infrastructure funds are firm proof that we have entered an era of economic partnership in the Pacific.

We will continue to focus on Vanuatu’s priorities, through our development cooperation program, building on longstanding investments in areas like education, health, disaster response and transport infrastructure.

At the same time, we will pursue a mature economic partnership.

Growth in trade, foreign investment and the private sector is the path to economically sustainable development for both Vanuatu and the region.

I encourage you to consider how you can contribute to these very significant developments, in trade policy, labour mobility and infrastructure.

It is a great time for businesses invested in Australia-Vanuatu relations.

I look forward to an enjoyable and productive Forum.

¹ World Bank, 2017

² ‘Melon Man Makes Millions’, Daily Post, 11 January 2019, http://dailypost.vu/news/melon-man-makes-millions/article_b3acb80b-2590-5459-9e58-b6d793348183.html, downloaded 20 February 2019