2022 Pacific Update

Thank you for that introduction.

I would like to acknowledge Vice-Chancellor Pal Ahluwalia and the organisers and participants in this event.

I am speaking to you from Awabakal country – I acknowledge the traditional owners of the many lands on which we meet – including the First Nations peoples of the countries of the Pacific.

I pay my respects to their elders, past, present and emerging.

I’m honoured to be joining you today for this Pacific Update, as Australia’s Minister for International Development and the Pacific, and as a member of the new Australian Government.

I want to acknowledge the collaboration between the University of the South Pacific and the Australian National University in hosting this impressive event.

This conference is an important part of the Pacific Research Program, which aims to deepen Australia-Pacific research and education partnerships to inform policy making.

This support builds upon a range of existing partnerships between Australian and Pacific universities – and it complements Australia’s long-standing and deep engagement in education in the Pacific.

That is why I am pleased to announce today a further four years of support to the Pacific Research Program, delivered by the Australian National University and Lowy Institute.

This recognises the importance the Australian Government places on the next generation of Pacific researchers and policy makers; and on stronger educational and research partnerships between Australia and the Pacific.

Introduction

Friends from across the Pacific – as your conference program highlights, we meet at a time when the complexity of issues we face is growing.

In particular, the triple challenges of climate, COVID and strategic contest will test us in new ways.

I will touch on some of those challenges today.

But my central message is this:

• Australia is here to listen.
• We are here to work together with our Pacific family.
• And we are here to make a difference.

All the nations of the world face significant global challenges – but we don’t have to face them alone.

And while there are challenges, it is also true that the Pacific is a region of tremendous opportunity.

The long-standing bonds of family are seen through our cultural, social and economic connections across the Pacific.

The Australian Government wants to see these ties grow stronger as we work together, to forge a true partnership based in deep respect and genuine friendship.

Climate change

The most pressing issue we face is climate change.

As Australia’s Minister for Foreign Affairs, Penny Wong, has made clear, we understand that climate change is not an abstract threat, but an existential one.

In February ANU’s Institute for Climate, Energy and Disaster Solutions produced a useful summary of the Intergovernmental Panel on Climate Change’s sixth assessment report, focusing on the Pacific.

This summary showed that the five key threats arising from climate change for the Pacific are:

• Increasing air temperatures.
• Changes in rainfall patterns.
• Increasing ocean temperatures
• Rising sea levels.
• And ocean acidification.

As a result, we will see more extreme weather events.

These extreme weather events will pose risks to water and food supplies.

They will damage infrastructure, and have negative impacts on economic and social well-being.

We are all living the reality of these changes right now. 

Almost half of the people of the Pacific were affected by major disasters between 2011 and 2020.

In Australia, we are seeing bushfire seasons out of all proportion with the historical records – and floods that keep reaching higher and higher ground.

In Papua New Guinea, two and a half million people were affected by drought in 2015.

540,000 Fijians were affected by Tropical Cyclone Winston in 2016.

And 188,000 in Vanuatu were affected by Cyclone Pam in 2015.

Storm surges in the Pacific are projected to increase in frequency a thousand-fold by 2100 – an extraordinary statistic.

Sea levels in the Pacific are expected to rise four times faster than the global average – by 2100, sea-level rise may be more than 1 metre.

I know the Pacific family was frustrated by the former Australian Government’s approach to climate change in recent years.

A new Government has been elected, and we are absolutely committed to acting on climate change.

A true family respects each member, listens to the concerns of family members, and acts upon those concerns.

Unfortunately, the former Australian Government disrespected the Pacific family by not taking adequate action on climate change.

The federal election in Australia last month showed the Australian people understand the imperative for action on climate. 

So I want to assure you today that the new Australian Government will join with our Pacific family in constructive ways to deal with this challenge.

This will include establishing a new Pacific Climate Infrastructure Financing Partnership to support climate and clean energy infrastructure projects in Pacific countries.

Many Pacific island countries will need to upgrade infrastructure to improve their resilience to extreme weather and other climate impacts.

Our new Pacific Climate Infrastructure Financing Partnership will support climate-related infrastructure projects by providing grants and loans for projects developed and agreed with Pacific governments.

We will also seek to ensure that Australia’s infrastructure finance is sustainable and transparent, and supports Pacific economies and communities through local employment and suppliers, including in construction and maintenance.

As the world continues to look for action on climate, Australia will be a leader, not a laggard.

We are committed to reducing our own carbon emissions to 43 per cent below 2005 levels by 2030 and we are committed to reaching net zero emissions by 2050.

I am proud to say the Australian Government has officially updated our Nationally Determined Commitment under the Paris Agreement to reflect these more ambitious emissions reduction targets.

Economic challenges

We also know that the Pacific faces significant economic challenges in the years ahead.

The Pacific entered the pandemic with significant challenges due to the distance to export markets, small domestic markets, and vulnerability to natural disasters.

But the pandemic has raised the stakes.

Disruptions caused by the pandemic have resulted in Pacific island countries experiencing some of the largest economic shocks in the world.

I know the Fijian economy suffered deeply from the loss of your strong international tourism market.

We saw the same impact in other parts of the region with significant tourism sectors.

As the global economy enters a new challenging phase – with inflation now a significant issue, along with the supply chain and labour issues that have been such a burden for the past two years – global economic pressures will weigh heavily on Pacific economies.

In its April Development Outlook, the Asian Development Bank estimated the region contracted by 0.6 per cent last year, while all other subregions expanded, including Southeast Asia and South Asia.

Thankfully, some green shoots of recovery can be seen, with the ADB forecasting 3.9 per cent growth in the region in 2022.

Border restrictions are gradually being removed, allowing the return of tourism, and the continued growth of labour mobility programs.

Some Pacific island countries still have a journey ahead in vaccinating their populations.

Recent natural disasters, such as the volcanic eruption and tsunami in Tonga, and the civil unrest in Solomon Islands, have also magnified existing fiscal and economic challenges.

Likewise, it is important to acknowledge the effort that will be required to repair the economic damage the pandemic has caused.

For many Pacific island countries, it will take several years of growth before economic output, and government revenues, return to pre-pandemic levels.

Fiji, Palau, Samoa and Solomon Islands are not expected to return to their pre-COVID GDP levels until 2025.

Continued fiscal support will be important as countries balance budget repair and debt sustainability with nascent economic recoveries.

And while economic recovery may be on the horizon, the fiscal recovery challenge facing the region will persist.

Like many countries in the world, including Australia, debt in the Pacific has increased as governments have borrowed to finance fiscal shortfalls.

Public debt across the Pacific has increased from $20 billion in 2019 to $28 billion in 2022 – and it is expected to reach $36 billion by 2025.

The good news is that most of the new debt has been highly concessional and from trusted partners, including the key multilateral institutions.

Australia has contributed to this support, including $1.8 billion in loans to the region.

Cooperating to meet challenges

I am confident we can meet the economic challenges by working together, including in regional and global forums.

For example, the Australian Government was delighted with the historic new treaty on fisheries subsidies that was agreed at the World Trade Organisation’s Ministerial Conference earlier this month.

The new treaty will establish prohibitions on subsidies contributing to illegal, unreported and unregulated fishing and on subsidies which encourage unsustainable over-fishing.

This will be good news for the Pacific Ocean environmentally – and it will be good news for Pacific countries economically.

This breakthrough in the multilateral trade negotiations was the result of a great Pacific partnership between Australia, Fiji, all Pacific island WTO Members and the Pacific Islands Forum Secretariat representative in Geneva.

I pay special tribute to the creative and courageous negotiating role played by Fiji’s Minister for Commerce, Trade, Tourism and Transport, Faiyaz Koya – he played a critical part in securing this agreement when it was facing collapse at the WTO Ministerial Conference.

Minister Koya worked with other Pacific island WTO Members – including Samoa, Solomon Islands, Papua New Guinea, Tonga and Vanuatu – and with Australia’s Trade Minister Senator Don Farrell and Assistant Trade Minister Senator Tim Ayres.

Together they secured an historic win for sustainable fishing and healthy oceans.

This shows the impact we can have when we work together in global forums.

On regional trade initiatives, PACER Plus, the Pacific’s largest and most comprehensive free trade agreement, achieved entry-into-force during the pandemic in December 2020.

PACER Plus will support the role of the private sector in regional economic recovery.

We expect this trade agreement will open doors for Pacific businesses and traders from PACER member countries – for example by improving market access to Australia for kava and other agricultural goods.

We’ve also been encouraged by the increase in flight frequencies in recent weeks across the Pacific.

Through the Pacific Flights Program, Australia has underpinned air links across the region to support regional connectivity throughout the pandemic.

We know how important the viability of regional airlines is to countries and communities right across the region, and will continue to engage on this.

Pacific development

Australia’s response to the issues of Pacific development is multi-faceted.

Prime Minister Albanese and Foreign Minister Wong have made it clear that our goal is for Australia to be the partner of choice for Pacific countries.

Our approach to development is clear –

We believe in transparent, sustainable development, led by the needs identified by development partner governments and agencies themselves, and funded in sustainable ways.

This is the sort of development our Pacific region needs as we recover from COVID.

The new Australian Government will boost Australian official development assistance for Pacific countries and Timor-Leste by $525 million over the next four years.

This commitment demonstrates that as our Pacific partners struggle with the continuing economic and human fallout from the pandemic, they will be able to rely on Australia.

The new funding will boost Australia’s existing bilateral and regional

development programs in the Pacific – and it will support new aid projects.

Our development programs will have a strong focus on supporting climate change adaptation and resilience; economic growth; health; education; water, sanitation and hygiene needs; and the inclusion of people with disabilities.



And we will reintroduce a target that 80 per cent of our aid investments will promote gender equality.

Building Pacific security

We want to build a stable and resilient region.

A region founded in secure sovereignty, in peace, in prosperity and in accordance with the international rules-based order that has supported growth for 70 years.

I recognise, as does Foreign Minister Wong, that we are operating in a time of increased geostrategic uncertainty.

In the years ahead, Australia will stand shoulder to shoulder with our Pacific family as we face old and new challenges together.

We deeply value being part of the Pacific family.

And we deeply respect our regional institutions.

That is why, on her fourth day as Foreign Minister, Senator Wong went to Suva, to speak from the Pacific Islands Forum, from the heart of Pacific regionalism.

As the Foreign Minister said, the Forum has brought us together in the Pacific way for over 50 years.

We take very seriously our commitments under the Forum’s 2000 Biketawa Declaration and its 2018 Boe Declaration to support each other in times of need.

I mentioned climate change first, because the Australian Government knows that the issue of security is inseparable from the issue of climate change.

The Boe Declaration made this clear in its opening paragraph which says: “climate change remains the single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific.”

Beyond the threat posed by climate change, the new Australian Government will address other regional security needs.

We will increase support for Pacific maritime security to help tackle illegal fishing and other transnational criminal activities.

We will double Australia’s funding for the aerial surveillance component of the Pacific Maritime Security Program, which provides aerial surveillance of Pacific island countries’ enormous exclusive economic zones.

This enhanced surveillance will help Pacific governments to recoup some of the US$150 million a year in revenues estimated to be lost due to illegal, unreported and unregulated fishing.

We will also establish a new Australia Pacific Defence School to provide training for members of Pacific island country defence and security forces, particularly in non-commissioned officer ranks.

This new School will build on existing Australian Defence Force Pacific training activities, including the Defence Cooperation Program, the Pacific Support and Mobile Training Teams and the Defence International Training School.

We know we need to better coordinate Australia’s defence engagement with Pacific countries.

We want to ensure our defence engagement delivers practical support, responds to the priorities of Pacific countries, and builds deeper institutional links between the region’s security forces.

Australia is also committed to supporting the efforts of the Pacific family to advance our mutual interests in multilateral forums, especially around the implications of climate change.

That was why I was proud to intervene at the CHOGM meetings last week, in the Commonwealth Ministerial Meeting on Small States and also in the Foreign Ministers’ Meeting.

These interventions were to strongly support Tuvalu’s efforts to include language in the CHOGM communique to recognise the work undertaken in the region, including through the Pacific Islands Forum, to ensure that countries’ maritime zones are not negatively impacted by the effects of sea level rise.

Personal ties

The Australian Government also wants to deepen personal ties with the Pacific.

We know we have a lot in common, from meeting each other on the sporting fields, to sharing our history, and our church-based and cultural ties.

Australia has been the beneficiary of amazing Pacific immigration over many decades – your nations have given a vibrant Pacific dimension to our multicultural nation.

Only New Zealand has such an amazing Pacific diaspora.

Australia will enhance our connection to the Pacific by encouraging more permanent migration through a new Pacific Engagement Visa, broadly modelled on New Zealand’s Pacific Category Access Resident visa.

Up to 3,000 Pacific Engagement Visas will be allocated annually to nationals of the Pacific Islands and Timor-Leste, as part of Australia’s permanent migration intake.

We are in the early stages of the design of this policy and will work closely with Pacific countries to understand their needs and priorities.

And we are committed to developing the Pacific Australia Labour Mobility scheme to provide further opportunities for Pacific islanders and Pacific nations to develop skills and income by working in Australia.

We have an ambitious reform agenda for the PALM scheme and are deeply committed to improving conditions for workers.

Among other things, we will expand opportunities under the scheme by reducing upfront travel costs for employers – this is designed to make it more attractive for Australian employers to recruit workers under the PALM scheme.

And we will move to allow long term Pacific workers to bring family members to Australia, subject to the agreement of sponsoring employers.

But we are also conscious of the potential downsides of labour mobility for our Pacific family, so we will deepen our focus on skills development.

Our goal is for the PALM scheme to deliver a ‘‘brain gain”, ensuring that when workers return home they bring not only remittances, but new skills so they can make a positive contribution to the development of their nations.

We will also boost links to the Pacific through our Indo-Pacific Broadcasting Strategy.

This strategy will ensure greater understanding and connection between Australia and Pacific countries – through increased training for Pacific journalists, and enhanced partnerships with broadcasters across the region.

Conclusion

In concluding, I’d like to thank you again for inviting me to address this conference.

As I said earlier, we meet at a time when the Pacific faces major challenges.

We cannot address these challenges without investing in understanding the science, the economics, and the social and human impacts.

That is why we need a vigorous Pacific research community.

Your work helps policymakers to identify the issues, define the challenges and design the solutions.

It helps us to understand implications of decisions and, most importantly, to understand how changes affect people’s lives. 

So I am not here just to tell you what the new Australian Government plans to do to build a stronger and more resilient Pacific family.

I also want to hear directly from the Pacific on how we can work together.

I have been meeting Pacific leaders and look forward to visiting your countries soon to continue listening and learning with you, including at next month’s Pacific Islands Forum.

This enhanced understanding and mutual respect will help Australia to truly deepen its ties and its commitment to the Pacific family in the years ahead.

Thank you very much.