4 years ago
ADDRESS TO THE WA LABOR BUSINESS ENGAGEMENT PROGRAM
MADELEINE KING MP
Thank you. I’d firstly like to acknowledge the Traditional Owners of the land on which we meet, the Whadjuk-Noongar people, and pay my respects to their elders Past, Present and Emerging.
Western Australia was built on trade. The nation was built on trade.
Our First Nations peoples traded valuable ochre over thousands of years, extracted from mines such as Wilgie Mia in the Mid West, and traded between different groups across Australia along trade routes equivalent to the Silk Road.
And we should recall our earliest known regional supply chain which, from at least 1700 until 1901, hundreds of fishermen would sail every year in December from Makassar on the island of Sulawesi (now Indonesia) to the northern Australian coast. They called the area ‘Marege’ (meaning wild country). We call it Arnhem Land. And on the coast, the Makassan fishermen would catch, boil and dry ‘trepang’ – the sea cucumber. A product in high demand in China. The fisherman lived in temporary bamboo huts, trading and working with the Aboriginal people, as they prepared the trepang delicacy for the market to the north. When the monsoons arrived in April, the Makassans left Arnhem Land for home, and for the market of China.
And it was the 17th century decision of the Dutch East India Trading Company to change course to a more efficient route to Indonesia - taking advantage of the Westerly winds on the Indian Ocean - which led to European navigators catching their first glimpses of the west coast of this country.
Unlike the other penal colonies of the 19th century, the Swan River colony was built on the back of a campaign for business opportunities – seeking investors rather than convicts to build the state.
The trade in wool was the mainstay, and increasingly trade in sandalwood, whaling products, timber exports and what was to become a mammoth wheat trade, all supported our fledgling Western Australian economy. But it was the discovery of gold in the North in 1886 and Kalgoorlie in 1893 that laid the foundation of our powerhouse Western Australian economy; built on resource wealth, mining expertise and strong links to global trade.
This rapid growth in trade and massive economic expansion provided the funds and the impetus to develop new port facilities at Fremantle, leading to C.Y. O’Connor’s iconic development of the Fremantle Inner Harbour; opened in 1897 and operational to this day.
Critical infrastructure such as the Wheatbelt railway expansion fostered and grew WA’s wheat export industry, which carried the economy through until the early decades of the 20th century.
The creation of the Kwinana Industrial Area through the Oil Refinery Act of 1952 was integral in building our state to be the exporting powerhouse and refinery hub it is today.
The heavy and supporting industries of the Kwinana Industrial Area have added enormous value to the resources of the state and have provided direct and indirect employment opportunities for tens of thousands of Australians in its time. Currently, the Kwinana Industrial Area generates over $15 billion per year, and employs nearly 5000 people in direct jobs – 64% of whom live in my electorate – and an additional 26,000 indirectly employed people.
The Western Australian Government’s foresight in rezoning this area in Kwinana has precipitated global trade connections, economic stimulus, world-class refineries and high-end manufacturing skills for this State. And it effectively built the suburbs and communities in my electorate of Brand. Indeed, it is the Kwinana BP Refinery that brought my mother and father to build our family home in Shoalwater Bay.
The resources boom of 1963, stimulated by the Commonwealth Government’s lifting of the iron ore export embargo and demand from Japan marked a fundamental shift in Western Australia’s trade dynamic, paving the way for the development of Asia as the State’s most important trading region. And unlike the gold rush, the resources boom contained a diversity of commodities being mined: nickel, petroleum, bauxite and alumina all developed into significant industries alongside iron ore.
1963 too saw the opening of the Alcoa Aluminium Refinery in Kwinana, an integral contributor of export wealth to this State. Recent figures have estimated the refinery to have contributed $130 million (in 2017 alone) into the local community through salaries, wages and benefits, as well as more than $321 million in the same year in Western Australian supply contracts.
Trade to Asian markets of such Western Australian resources has helped millions out of poverty and contributed to the growing middle class in our region. And later development of natural gas reserves, including the world-leading infrastructure of the North West Shelf in the 1980s, has further underpinned growth, in a more diversified Western Australian economy.
The Hawke Government’s deregulation of the Australian financial sector in the 1980s, particularly floating the dollar, made WA’s commodities globally competitive.
The China-fuelled resources investment boom that began in the mid-2000s produced a massive increase in exports from Western Australia and transformed the state’s export sector into the genuine powerhouse we know today. The success of iron ore miners BHP, Rio Tinto and Fortescue Metals Group have become synonymous with national prosperity.Western Australia now accounts for nearly 32% of the country’s total trade, and the State’s exports alone account for 48% of Australia’s total exports.
On any given day, 3% of this country’s GDP passes through our own Port Hedland.
Minerals and petroleum accounted for 91% of merchandise exports in 2018, with investment likely to increase in coming years, as major mining companies continue to make commitments to new projects – such as Stage 2 of the Gorgon LNG project, or Tianqi’s lithium processing facility at Kwinana in my electorate.
Further, local Western Australian powerhouse Mineral Resources is continuing to grow, acquiring a vast portfolio of iron ore projects and with a pipeline of lithium development projects and exploration targets across the State to come. I commend the former Member for Brand, the Honourable Gary Gray AO, for his role in the success story of MinRes and wish them all the best.
Such investment in Western Australia by these businesses, many of whom are represented here today, is imperative to our State’s economy, now and into the future.
These businesses are dynamic and constantly evolving. It is stunning to see the strides BHP is making down at Nickel West in Kwinana, again in my electorate, in terms of refining techniques for nickel sulphate to meet growing international demand for battery technologies. This ‘battery boom’ has halted the much talk of closure of this iconic asset that - like me - thousands of residents of Rockingham have driven past thousands of times!
Of course, though it dominates our economy and much of our culture as Western Australians, our vast resources wealth and mining and development expertise is not the only star in our export story.
The educational services of our great WA universities are an incredibly important export for this state. Not only helping to educate thousands of young people in the region, our universities foster the critical cultural exchange and people to people links that political leaders so often talk about yet fail to recognise just precisely who is undertaking this important role.
I want to acknowledge that it is Australian universities that are at the forefront, building these international human relationships that will serve as the bedrock of our international diplomatic efforts in increasingly uncertain times. Many of you know I worked in the higher education sector of WA for the 10 years before I was elected to Parliament and I know the vast efforts our universities have made in unlocking the growing service trade potential of international student enrolments in terms of investment and cultural exchange, and which facilitate our world class research capabilities.
I also want to recognise and commend the efforts of industry in the room today for all the work you do in partnering with our universities to support Western Australian innovation and science.
Henderson is another brilliant example of a Western Australian purpose-built, strategic industrial area; host to high level manufacturing operations and fostering world-class shipbuilding expertise. Austal, for example, has utilised this base to become a global shipbuilder, and world leader in designing and constructing both commercial and defence vessels for our Royal Australian Navy, and the demanding US navy.
And I would be remiss not to mention as well, the incredible grain export industry we foster in this State to this day which helps provide valuable food stocks to our region. In particular CBH in my electorate, operational since 1933, whose wheat, barley and other grains fetch $2 to 3 billion each year on international markets, and employs 1,100 permanent employees, and up to 1,800 casual employees during harvest.
However, as I’m sure you are all acutely aware, Western Australia, as an export-driven economy, is dependent on a strong, rules-based trading order. Yet at the same time global growth is sluggish, our liberal economic order, which has guided trade since the Second World War, is under threat.
The US-China Trade War - as much as we can lament its existence, and though Labor will continue pressing for negotiation between our trading partners - has rightly exposed weaknesses in the World Trade Organisation. And President Trump’s America-First approach, albeit frustrating, is merely a symptom of a wider scare campaign against the free and open trading system which we have, until now, taken for granted. Some in the business community, and in the political sphere too, can lose patience with the politicisation of issues which affect the functioning of business, be it trade, or other issues such as climate change.
However, unlike our country, free and fair trade has reached a point of cross-party opposition in the US, with both the current President, and many Democrat hopefuls, can be easily seen as protectionists. While economies like the US have the capacity to utilise its wealth to triumph in bilateral deals in a chaotic trading order, Western Australia depends on the rules-based order and the arbitration capacity of the WTO to survive.
Most alarming is the deadlock in the WTO Appellate body, the panel of which now stands at three members out of seven, and will be down to a singular member in December. With the US refusing to appoint any new members, the Appellate body of 1 will be entirely unable to adjudicate international trade disputes, which Australian exporting sectors, such as our already vulnerable agriculture sector, rely on to function and grow.
So what does the future look like for Western Australia?
WA’s largest trading partner, China, will see a slowing of the construction boom which has driven iron ore exports. While there will be other developing countries in the region that could benefit from the trade, Western Australian policymakers will have to get on the front foot to foster this transition. Balancing trade relationships and diversifying trading partnerships will be integral to this, as such supporting upcoming Free Trade Agreements and regional economic partnerships – such as the Indonesia-Australia Comprehensive Partnership – will be of paramount importance to the state.
Additionally, the Australian Government will need to work with trading partners and allies on WTO reform, to ensure the continuation and viability of the institution - we are not the only State and country that will be adversely affected by a breakdown of the WTO.
Western Australia, in conjunction with the rest of the country, should seek new economic opportunities outside of our immediate region, looking to the developing Indian Ocean Rim and beyond. It will be our challenge as policymakers to ensure the skills we will need for the future are being assessed today; to ensure we have the workforce to continue to grow; and to ensure our Australian workers have every opportunity to succeed in a transitioning economy.
And finally, it will be up to those of us who understand the needs for the prosperity of this state, and the importance of global trade, to continue telling the story of our open-facing state and country, and what trade means for the prosperity of our state.
ENDS
Our First Nations peoples traded valuable ochre over thousands of years, extracted from mines such as Wilgie Mia in the Mid West, and traded between different groups across Australia along trade routes equivalent to the Silk Road.
And we should recall our earliest known regional supply chain which, from at least 1700 until 1901, hundreds of fishermen would sail every year in December from Makassar on the island of Sulawesi (now Indonesia) to the northern Australian coast. They called the area ‘Marege’ (meaning wild country). We call it Arnhem Land. And on the coast, the Makassan fishermen would catch, boil and dry ‘trepang’ – the sea cucumber. A product in high demand in China. The fisherman lived in temporary bamboo huts, trading and working with the Aboriginal people, as they prepared the trepang delicacy for the market to the north. When the monsoons arrived in April, the Makassans left Arnhem Land for home, and for the market of China.
And it was the 17th century decision of the Dutch East India Trading Company to change course to a more efficient route to Indonesia - taking advantage of the Westerly winds on the Indian Ocean - which led to European navigators catching their first glimpses of the west coast of this country.
Unlike the other penal colonies of the 19th century, the Swan River colony was built on the back of a campaign for business opportunities – seeking investors rather than convicts to build the state.
The trade in wool was the mainstay, and increasingly trade in sandalwood, whaling products, timber exports and what was to become a mammoth wheat trade, all supported our fledgling Western Australian economy. But it was the discovery of gold in the North in 1886 and Kalgoorlie in 1893 that laid the foundation of our powerhouse Western Australian economy; built on resource wealth, mining expertise and strong links to global trade.
This rapid growth in trade and massive economic expansion provided the funds and the impetus to develop new port facilities at Fremantle, leading to C.Y. O’Connor’s iconic development of the Fremantle Inner Harbour; opened in 1897 and operational to this day.
Critical infrastructure such as the Wheatbelt railway expansion fostered and grew WA’s wheat export industry, which carried the economy through until the early decades of the 20th century.
The creation of the Kwinana Industrial Area through the Oil Refinery Act of 1952 was integral in building our state to be the exporting powerhouse and refinery hub it is today.
The heavy and supporting industries of the Kwinana Industrial Area have added enormous value to the resources of the state and have provided direct and indirect employment opportunities for tens of thousands of Australians in its time. Currently, the Kwinana Industrial Area generates over $15 billion per year, and employs nearly 5000 people in direct jobs – 64% of whom live in my electorate – and an additional 26,000 indirectly employed people.
The Western Australian Government’s foresight in rezoning this area in Kwinana has precipitated global trade connections, economic stimulus, world-class refineries and high-end manufacturing skills for this State. And it effectively built the suburbs and communities in my electorate of Brand. Indeed, it is the Kwinana BP Refinery that brought my mother and father to build our family home in Shoalwater Bay.
The resources boom of 1963, stimulated by the Commonwealth Government’s lifting of the iron ore export embargo and demand from Japan marked a fundamental shift in Western Australia’s trade dynamic, paving the way for the development of Asia as the State’s most important trading region. And unlike the gold rush, the resources boom contained a diversity of commodities being mined: nickel, petroleum, bauxite and alumina all developed into significant industries alongside iron ore.
1963 too saw the opening of the Alcoa Aluminium Refinery in Kwinana, an integral contributor of export wealth to this State. Recent figures have estimated the refinery to have contributed $130 million (in 2017 alone) into the local community through salaries, wages and benefits, as well as more than $321 million in the same year in Western Australian supply contracts.
Trade to Asian markets of such Western Australian resources has helped millions out of poverty and contributed to the growing middle class in our region. And later development of natural gas reserves, including the world-leading infrastructure of the North West Shelf in the 1980s, has further underpinned growth, in a more diversified Western Australian economy.
The Hawke Government’s deregulation of the Australian financial sector in the 1980s, particularly floating the dollar, made WA’s commodities globally competitive.
The China-fuelled resources investment boom that began in the mid-2000s produced a massive increase in exports from Western Australia and transformed the state’s export sector into the genuine powerhouse we know today. The success of iron ore miners BHP, Rio Tinto and Fortescue Metals Group have become synonymous with national prosperity.Western Australia now accounts for nearly 32% of the country’s total trade, and the State’s exports alone account for 48% of Australia’s total exports.
On any given day, 3% of this country’s GDP passes through our own Port Hedland.
Minerals and petroleum accounted for 91% of merchandise exports in 2018, with investment likely to increase in coming years, as major mining companies continue to make commitments to new projects – such as Stage 2 of the Gorgon LNG project, or Tianqi’s lithium processing facility at Kwinana in my electorate.
Further, local Western Australian powerhouse Mineral Resources is continuing to grow, acquiring a vast portfolio of iron ore projects and with a pipeline of lithium development projects and exploration targets across the State to come. I commend the former Member for Brand, the Honourable Gary Gray AO, for his role in the success story of MinRes and wish them all the best.
Such investment in Western Australia by these businesses, many of whom are represented here today, is imperative to our State’s economy, now and into the future.
These businesses are dynamic and constantly evolving. It is stunning to see the strides BHP is making down at Nickel West in Kwinana, again in my electorate, in terms of refining techniques for nickel sulphate to meet growing international demand for battery technologies. This ‘battery boom’ has halted the much talk of closure of this iconic asset that - like me - thousands of residents of Rockingham have driven past thousands of times!
Of course, though it dominates our economy and much of our culture as Western Australians, our vast resources wealth and mining and development expertise is not the only star in our export story.
The educational services of our great WA universities are an incredibly important export for this state. Not only helping to educate thousands of young people in the region, our universities foster the critical cultural exchange and people to people links that political leaders so often talk about yet fail to recognise just precisely who is undertaking this important role.
I want to acknowledge that it is Australian universities that are at the forefront, building these international human relationships that will serve as the bedrock of our international diplomatic efforts in increasingly uncertain times. Many of you know I worked in the higher education sector of WA for the 10 years before I was elected to Parliament and I know the vast efforts our universities have made in unlocking the growing service trade potential of international student enrolments in terms of investment and cultural exchange, and which facilitate our world class research capabilities.
I also want to recognise and commend the efforts of industry in the room today for all the work you do in partnering with our universities to support Western Australian innovation and science.
Henderson is another brilliant example of a Western Australian purpose-built, strategic industrial area; host to high level manufacturing operations and fostering world-class shipbuilding expertise. Austal, for example, has utilised this base to become a global shipbuilder, and world leader in designing and constructing both commercial and defence vessels for our Royal Australian Navy, and the demanding US navy.
And I would be remiss not to mention as well, the incredible grain export industry we foster in this State to this day which helps provide valuable food stocks to our region. In particular CBH in my electorate, operational since 1933, whose wheat, barley and other grains fetch $2 to 3 billion each year on international markets, and employs 1,100 permanent employees, and up to 1,800 casual employees during harvest.
However, as I’m sure you are all acutely aware, Western Australia, as an export-driven economy, is dependent on a strong, rules-based trading order. Yet at the same time global growth is sluggish, our liberal economic order, which has guided trade since the Second World War, is under threat.
The US-China Trade War - as much as we can lament its existence, and though Labor will continue pressing for negotiation between our trading partners - has rightly exposed weaknesses in the World Trade Organisation. And President Trump’s America-First approach, albeit frustrating, is merely a symptom of a wider scare campaign against the free and open trading system which we have, until now, taken for granted. Some in the business community, and in the political sphere too, can lose patience with the politicisation of issues which affect the functioning of business, be it trade, or other issues such as climate change.
However, unlike our country, free and fair trade has reached a point of cross-party opposition in the US, with both the current President, and many Democrat hopefuls, can be easily seen as protectionists. While economies like the US have the capacity to utilise its wealth to triumph in bilateral deals in a chaotic trading order, Western Australia depends on the rules-based order and the arbitration capacity of the WTO to survive.
Most alarming is the deadlock in the WTO Appellate body, the panel of which now stands at three members out of seven, and will be down to a singular member in December. With the US refusing to appoint any new members, the Appellate body of 1 will be entirely unable to adjudicate international trade disputes, which Australian exporting sectors, such as our already vulnerable agriculture sector, rely on to function and grow.
So what does the future look like for Western Australia?
WA’s largest trading partner, China, will see a slowing of the construction boom which has driven iron ore exports. While there will be other developing countries in the region that could benefit from the trade, Western Australian policymakers will have to get on the front foot to foster this transition. Balancing trade relationships and diversifying trading partnerships will be integral to this, as such supporting upcoming Free Trade Agreements and regional economic partnerships – such as the Indonesia-Australia Comprehensive Partnership – will be of paramount importance to the state.
Additionally, the Australian Government will need to work with trading partners and allies on WTO reform, to ensure the continuation and viability of the institution - we are not the only State and country that will be adversely affected by a breakdown of the WTO.
Western Australia, in conjunction with the rest of the country, should seek new economic opportunities outside of our immediate region, looking to the developing Indian Ocean Rim and beyond. It will be our challenge as policymakers to ensure the skills we will need for the future are being assessed today; to ensure we have the workforce to continue to grow; and to ensure our Australian workers have every opportunity to succeed in a transitioning economy.
And finally, it will be up to those of us who understand the needs for the prosperity of this state, and the importance of global trade, to continue telling the story of our open-facing state and country, and what trade means for the prosperity of our state.
ENDS