Thank you Mr Kiroyan for that introduction, and I also acknowledge your work as President of the Indonesia Australia Business Council in hosting this Conference.

Of course I acknowledge Mr Oke Nurwan, Director General of Foreign Trade and my colleagues from across the aisle Jason Clare MP the Shadow Minister for Trade, and the Hon Chris Bowen MP, the Shadow Treasurer for the Opposition.

But it is good to be here in Surabaya, this is my first visit to this city in Indonesia, it is of course the second largest city, and the major commercial hub in East Java.

As many of you will know that in September Australia opened its newest business-focussed Consulate-General right here in Surabaya.

This is an important addition to our already significant diplomatic footprint in Indonesia.

Our Embassy in Jakarta is the largest in the Australian Government's global network, and we also have Consulates-General in Bali and Makassar.

Now the addition of Surabaya to this network demonstrates the importance of this region to Australia.

We have extensive people-to-people and commercial links with this area, including the sister-state relationship between East Java and Western Australia.

And East Java is the second-largest source of Indonesian students studying in Australia, behind the greater Jakarta area.

So I am very pleased to have the opportunity to visit one of Indonesia's most dynamic cities, and we have certainly heard this morning about your long history and involvement with trade.

Our leaders of course have met several times; and they are very, very passionate about doing a deal and making it happen, because we are democratic countries that are not just close geographically, but have shared interests in advancing prosperity, peace and security in the region and beyond.

So, security cooperation remains high on the agenda, particularly as we seek to counter the shared threats of violent extremism and terrorism.

We are also looking to expand our maritime cooperation (both security and economic), as Australia and Indonesia are natural partners in this area.

We see Indonesia as having a growing weight across Asia and the Pacific, and expect this to underpin even closer relationships between our two countries.

So this is the context in which we are expanding our already significant diplomatic footprint in Indonesia.

And this is the context in which we are looking to expand our economic relationship under the Indonesia-Australia Comprehensive Economic Partnership Agreement, better known as IA-CEPA.

And there is an opportunity for greater two-way trade and investment.

We share a similar economic story from our recent pasts.

As major exporters of natural resources, we both benefited hugely from the commodity super-cycle, hugely, it was a very large part of both our economies.

But there is more room for improvement, there is more room for improvement.

So IA-CEPA, for Indonesia, well Indonesia is an important market for Australia, particularly for agricultural goods, education and tourism.

Indonesian visitors to Australia in the first half of 2017 numbered 94,100. Up 25 per cent from last year, 25 per cent.

And 1.2 million Australians last year visited Indonesia adding $3.4 billion to the Indonesian economy.

Now while this is positive, few would disagree that the current economic relationship is undercooked, it is undercooked.

We are two close neighbours with combined economies valued at more than two trillion dollars.

And there is little doubt that, together, Australia and Indonesia should be doing more – more on trade, more on investment and more on all forms of economic interaction and cooperation.

In 2016, Indonesia was Australia's 13th largest trading partner: and our trade in each other's countries represents only a small fraction of our total international trade.

Both Australia and Indonesia currently have larger trading relationships with other regional countries such as Malaysia and Thailand that have much smaller economies.

IA-CEPA therefore represents a unique opportunity to transform the bilateral economic relationship.

A high-quality IA-CEPA will allow both countries to build on the gains made under AANZFTA, boost cooperation between business in key sectors, and demonstrate how two major regional economies can work together to attract investment and enhance growth and trade, including into third markets.

So, Australia sees many, many areas where both countries would benefit from closer economic cooperation – and I will just name a few.

But the first is vocational education and training.

And can I just say that I am a recipient from the VET sector in Australia. I'm an electrician by trade, it was the first thing I did when I left high school.

President Widodo has declared strengthening Indonesia's education and training system, particularly those vocational skills training, to be a core priority.

Now private sector representatives from both Indonesia and Australia have also urged us to focus on improved skills development through education, training and professional development.

Australian providers are consistently ranked amongst the world's best.

They would be well placed to support the President's training agenda if the current regulatory hurdles were relaxed.

Australia's world-class higher education institutions also have the capacity to contribute to Indonesia's aims to improve the skills of its workforce.

Australia is already Indonesia's destination of choice for studying overseas.

Now more Indonesians could obtain qualifications from Australia, from their institutions, if it were easier for those institutions to operate in Indonesia.

And this would provide high quality education at a lower cost to a much larger number of Indonesian students.

IA-CEPA can contribute to the President's aim of improving the quality of private health services in Indonesia, increasing employment, income and tax revenue for Indonesia.

And it is estimated that, every year, at least 600,000 Indonesians travel outside Indonesia to access private health services, spending at least 12 trillion Indonesian rupiah on these services.

So IA-CEPA can also contribute to lifting nursing and other health care standards in Indonesia, improving the level of care in Indonesia as well as making Indonesian nurses and other care-givers more globally competitive.

President Widodo has also identified infrastructure as a priority sector in which to attract foreign investment, to help drive Indonesia's economic growth.

Australia announced a new 300 million dollar program for infrastructure in 2015. Now this represents an investment in our economic partnership.

IA-CEPA can support increased private sector investment in infrastructure where there is an Indonesian will to open up market access.

This can make real contributions to employment, to incomes and economic growth in Indonesia.

And there is also huge scope to expand the 'Powerhouse' concept to increase Indonesian exports to third markets.

A large part of our bilateral trade relationship is characterised by Indonesia's imports of Australian products that are transformed here in Indonesia, for export or domestic consumption.

Skim milk powder is not produced in Indonesia, but is used by the food processing industry to produce condensed milk for export.

Reducing tariffs for Australian skim milk imports to zero would make Indonesia's industry more competitive, boost Indonesia's exports and create jobs in both our countries.

Other examples include live cattle into beef, wheat into noodles, raw sugar into a range of food products, and rolled steel into high-end manufactured products and infrastructure projects.

These Australian imports do not present significant threats to Indonesia's own productive capacity.

But rather, they are complementary to Indonesia's own needs.

They increase the security of supply for Indonesian processors and manufacturers, and they provide cheaper inputs.

Now by removing the barriers that raise the price of Australian inputs and reduce the competitiveness of Indonesian exports, IA-CEPA can help to make Powerhouse a reality.

There is, however, still a lot more work to be done before we can realise the opportunities posed by IA-CEPA.

Next week our negotiators will meet in Jakarta for the tenth round of negotiations.

To conclude IA-CEPA, the interests of both sides will need to be reflected.

For Australia, that means commercially meaningful market access outcomes across all areas of the negotiations – goods, services and investment.

We are not there yet, but I am optimistic. I am optimistic.

The political will on both sides to conclude IA-CEPA is very strong and we all recognise why reaching a successful deal is so important.

And the private sector is helping to "make it happen".

So making IA-CEPA happen is not just a task for us as a government – we do need your help to make this absolutely important and essential negotiation to come to a conclusion.

I want to acknowledge the significant contribution made to the negotiations provided by the private sector, in particular by Indonesian and Australian businesses, through the Indonesia Australia Business Partnership Group (IABPG), who have made a series of ambitious recommendations on what they think will constitute a successful IA-CEPA in the landmark report – Two Neighbours Partners in Prosperity.

Now it was truly unique to have a joint report, from businesses in both countries, recommending high ambition.

So we value that input to the process.

It reminded us of the high expectations in our business communities for a comprehensive agreement that makes trade easier.

And one that looks to the future by including chapters on e-commerce and competition. The IABPG want us to accelerate tariff reductions – faster than AANZFTA; facilitate collaboration to access global value chains; and lower tariffs to lower prices for goods.

And there are opportunities for this.

Officials from both governments have since been in regular contact with those representatives throughout the negotiations – and they are an invaluable source of information and ideas for the negotiators.

So whilst those negotiations are not yet complete, I do want to remark about the importance of business continuing this work once the negotiations conclude.

During the ratification stage, it will be essential that the private sector – individuals, enterprises and business groups – work with their elected representatives to explain the benefits of the agreement.

And once IA-CEPA has entered into force, both governments will need to work in partnership with the private sector to explain the benefits of the deal, and how business can make the most of those benefits.

This outreach effort must be extensive and thorough and it is important that we work together to get that message out.

Ladies and gentleman in conclusion, Indonesia's economic growth trajectory will have significant implications for the people of Indonesia who are forecast to number more than 300 million by 2035.

It will mean a larger middle class, with different aspirations, tastes, purchasing habits and travel preferences.

It will see growing demand in areas such as healthcare, education and financial services in the context of a digitally transformed economy.

And in turn this will create new opportunities for Indonesian enterprises in both the domestic and foreign markets, and to foreign enterprises that service Indonesian markets.

But, as the Australian experience shows, these opportunities won't be fully realised without a commitment to openness to trade and investment and economic reform.

So President Widodo's economic agenda is already bearing fruit – just last week, the World Bank recognised Indonesia's impressive gains made on 'ease of doing business' rankings.

In the last few years, Indonesia has moved from 106th place on the list, up to 91st last year and 72nd heading into 2018.

A win-win IA-CEPA will further support President Widodo's economic agenda, providing market and economic cooperation at each step to support long-term growth objectives.

And I am all for making it easier for firms to do business, as someone that comes from business, I get it, I absolutely get it.

So I am optimistic that our negotiators can strike an agreement.

We must continue to work together so the economic partnership between Indonesia and Australia meets its potential.

Ladies and gentlemen, let's make it happen.

Good morning, God bless and safe travels.

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