Monday, 18 February 2019
Private Members' Business
That this House:
(1) strongly endorses An India Economic Strategy To 2035, the independent report by Mr Peter Varghese AO, and its goals of:
(a) lifting India into Australia's top three export markets by 2035;
(b) making India the third largest destination in Asia for Australian outward investment; and
(c) bringing India into the inner circle of Australia's strategic partnerships, and with people to people ties as close as any in Asia;
(2) recognises the unprecedented opportunity for Australia to cement India as a priority economic partner; and
(3) acknowledges the importance of building a broad and deep bilateral relationship based on:
(a) a sustainable long term economic strategy;
(b) our shared strategic interests in the Indo-Pacific, including the importance of the rules based international order; and
(c) the strength of the Indian community in Australia, the fastest growing diaspora in our nation.
I congratulate the government on commissioning and implementing the Australia-India economic strategy. The Australia-India economic relationship has plenty of potential. The challenge is to take a relationship that has been made stronger by Prime Minister Modi's very outward looking engagement and our government's enthusiasm for India to the next level.
India is our 10th-largest trading partner overall, with $22 billion in two-way trade. Our major exports to India are coal, vegetables, gold, copper and education. Our major imports are refined petroleum, medicines, pearls and gems, and railway vehicles. Australia is India's ninth-largest source of imports and its 22nd-largest destination for exports. With global economic uncertainty, Australia needs to diversify the market for our goods and services. Greater access to the Indian market is an obvious benefit to Australia. Australia is well placed to meet the demands of India's large young population with its rapidly growing and industrialising economy and its aspirational consumptive middle class, which will require more education, food production, resources, energy, environmental management, health care and tourism.
India's the fastest growing economy in the world, with a GDP of over seven per cent, and Australia needs to become a key economic partner for India. Recognising this, our government commissioned the India economic strategy, developed by the former Secretary of DFAT and former High Commissioner to India Peter Varghese. The report acts as a blue print to unlock business opportunities that will help our nations grow together. Australia has also encouraged the government of India to produce a similar report from the Indian perspective. The mere fact that we have commissioned a report on our economic relationship with one country demonstrates how seriously we take the India relationship and how much he want that relationship to succeed.
The strategy rests on three pillars—economic relations, geopolitical convergence and people-to-people links. The Varghese report indicates the extraordinary opportunity presented by the rise of India. According to Varghese:
By 2025, one-fifth of the world's working age population will be Indian. By 2030 there will be over 850 million internet users in India. By 2035 India's five largest cities will have economies of comparable size to middle income countries today.
The Modi government's economic reforms have helped open up the economy. In his speech at Davos last year, Prime Minister Modi said that India was 'replacing red tape with red carpet'. India's growth is now faster than China's. India's GDP grew by 8.2 per cent in the June quarter, while China's grew 6.7 per cent in the same period—and China is a much larger economy.
While the economic growth figures are very impressive, India has a complicated business environment. While steps have been taken to streamline business and open the economy, India is still grappling with the challenge of lifting millions of people out of poverty and dealing with corruption. Australia and India share an ocean and a similar strategic outlook as rule-of-law based English-speaking democracies and supporters of the rules based international order. As partners in the Indo-Pacific, both countries have a mutual interest in the region's stability. Australia's foreign and defence white papers identified India as one of four key regional democracies with which Australia should seek to build greater engagement, emphasising our shared interests in maritime security, regional stability and countering violent extremism. On that note, it's important to pause to condemn the murder of 44 Indians by terrorists in Pulwama last Thursday.
The Australia-India defence relationship has significantly expanded in recent years through the annual foreign and defence secretaries' dialogue and through the participation of Indian forces in Australian-led multilateral air and sea exercises.
Strengthening people-to-people ties, though, is perhaps the most important strategic opportunity. India has the second largest population in the world, with more than 1.3 billion people. India's our largest source of skilled migrants and our second largest source of international students. The people-to-people links will be burnished by putting the Indian diaspora at the centre of our strategy. In Australia, nearly 700,000 people, or 2.8 per cent of our population, claim Indian ancestry. The Indian community is the fourth largest migrant community in Australia and the Indian-born population is expected to overtake the Chinese-born population by 2031, reaching 1.4 million. The Indian diaspora are setting up businesses and joining our workforce. The diaspora can help promote Australia as an innovative, safe and prosperous society. They can also help Australians navigate the complex Indian environment.
In November, the government endorsed the Varghese report and supported its 20 priority recommendations, with a focus on targeting 10 Indian states and 10 sectors while providing practical support for Australian businesses entering or expanding operations in India. Over the next 12 months, the government has committed to a range of options. The adoption and implementation of the Varghese report will take a relationship with enormous potential— (Time expired)
The report by Mr Peter Varghese AO, An India economic strategy to 2035, is indeed something that Australia should be very mindful of as we consider not only our place in the region but the place of our people in the world. Certainly it is vital to acknowledge the importance of building broad and deep bilateral relationships based on long-term economic strategy, our strategic interests in the Indo-Pacific and the strength of our diaspora here in Australia. To do otherwise is really not an option.
In considering the importance of this report, I went back nearly four years to some remarks I made at the Australia India Business Council. I talked about the Australia-India relationship being spoken about as being 'on the cusp of something great'. I said:
I feel that we have been on this cusp for a very long time. Too long.
… … …
It soon became clear to me that there was something missing in the Australia-India relationship. At its core, it is an economic relationship and there is recognition of our important historical and cultural links. But, beyond that, there is something that has been holding us back from going beyond this cusp.
I think it's been a matter of our one-on-one relationship needing much more than niceties and introductions. It needs to be something deeper.
One thing I also looked at in this context was whether there was something lacking in the collaboration space. I noted some observations made by an Indian innovative company:
"The future will belong to those countries and companies that can unleash the power of cross-border collaborations, invest in innovation and embrace entrepreneurship as an economic model of growth".
India and Australia have so much in common in that innovation space. By collaboration, we can do so much more as two economies in making these ideas happen and exporting them to one another. I don't have a sense that we have been doing this in a methodical or policy-driven way. This needs to change.
Much is said about the strength of the Australia-India relationship being the growth of people-to-people links. This is certainly true, because, as the report notes:
India is currently our largest source of skilled migrants, our second largest source of international students and a substantial proportion of those who come to Australia under temporary visas to fill skilled positions that Australians cannot.
It also notes that the diaspora will have an enormous role to play in the partnership of the future.
Mr Varghese also summarises in his report something very notable in terms of that innovation concept that I alluded to:
He also notes, amongst other things, the need to improve Indian literacy of Australia's corporate sector. I think it's worth saying that that needs to work the other way as well. I'm proud, in the electorate of Greenway, to have 11.6 per cent of all ancestry being Indian, compared to 2.1 per cent in New South Wales and two per cent across Australia. That's the third-largest in Greenway, behind those choosing Australian and English as their heritage.
The Varghese report was embraced by the shadow Treasurer, the shadow minister for foreign affairs and the shadow minister for trade and investment, because it ties in very closely with Labor's policy on future Asia developing deeper ties with India. As those shadow ministers noted, over the next two decades, India will become the world's third-largest economy with a population of almost 1.7 billion people. As they noted, we want to sell more of what we make in Australia to India to create more local jobs.
In order to capitalise on this opportunity, we must improve the way we engage with India to better understand how its economy operates and what it needs. To that end, I note the sentiments of the mover of this motion. But I do note with some disappointment that it took quite a while for the government to accept these recommendations. Now that that's been done, I think the recognition is there across the economy and across the parliament of the need to progress reform in this relationship.
Lastly, I want to note and express my deepest sympathy for the over 40 Indian paramilitary police who were killed late last week in a bomb attack by militants on their convoy in Kashmir. I note it has been reported as the deadliest militant attack on Indian forces in Kashmir since the insurgency against Indian rule began in 1989. I'm sure all in this parliament, certainly myself in representing a large Indian diaspora, stand in solidarity with the people of India in countering terrorism in all its forms.
Firstly, I'd like to congratulate the member for Berowra on moving this motion. I note his very strong ties to and involvement with the Indian community in his electorate, and I congratulate him on that.
The Indian economic miracle that we have witnessed over the last decade has lifted hundreds of millions of people out of poverty. The world is so much better when a democratic India is strong. If we look at what is behind that strength, we have to look at the way that they have increased energy and electricity generation to their people. Between 2006 and July 2018, India has added 156,969 megawatts of coal-fired electricity generation capacity. To put that in some context, that is the equivalent of 100 Hazelwood power stations. So, between 2006 and July last year, India has added 100 equivalent coal-fired power stations. On top of that, it has an additional 39,368 megawatts of coal-fired capacity currently under construction. Again to put that in some context, Australia's total coal-fired generation capacity is around 23,000 megawatts.
So what India has under construction today, on top of the equivalent of 100 Hazelwoods that it has built over the last decade, is almost 75 per cent more than Australia's total coal-fired generation. And it doesn't stop there. Additional to that, it has a further 15,750 megawatts of coal-fired power announced, another 24,466 pre-permitted and another 23,115 permitted. If you add all those up, you can see the way that India has required more coal.
So it comes as no surprise that it was announced in The Times of India only last week that the Modi government has opened 52 new coalmines since it came to power in May 2014. We have had one Indian company here trying to open one coalmine for over a decade, held up in red tape. In the meantime, over in India they have opened 52 new coalmines. These 52 new coalmines represent an 86 per cent growth over the number of mines added in the previous five-year period, between 2009 and 2014. These new mines have added 164 million tonnes to India's annual coal production capacity, marking a 113 per cent increase over the capacity added in the previous five-year period.
You would think that, with these 52 new coalmines that India has added, it may not need to invest in new coal production facilities here in Australia. But the thing is that the coalmines that India is adding are mainly lignite and brown coal, which burn much more dirtily, with greater emissions, than does the black coal that would be available from the Adani Carmichael mine in Queensland. So the activists who are stopping that mine going ahead in Queensland are not going to stop India progressing. They're not going to stop India lifting millions of people out of poverty. All they are doing is going to result in more dirty brown coal being burnt with higher emissions than the black coal from Australian mines.
That also brings me to an article we saw in the paper only today saying that the CFMEU will demand of Labor candidates in Queensland to pledge support for the coalmining industry, including Adani's Carmichael mine. But here's the thing: it says 'Labor candidates in Queensland'. What about the Labor candidates around the rest of the nation? The concern that every Queenslander should have is that Labor will tell one thing to the state of Queensland, and they will say another thing in the states of Victoria, New South Wales, South Australia and Tasmania. Double-faced, I think that's called—or speaking with a forked tongue. If they're going to make this pledge, make it nationwide. (Time expired)
We Western Australians find ourselves an extra hour behind our east coast neighbours for half the year, but we also find ourselves in around the same time zone as some of the most dynamic regions and areas of the world—China, Hong Kong, Singapore, Malaysia and many of our neighbours to the north. Among the unique advantages presented by our global orientation is that we share our Indian Ocean beaches with perhaps the most dynamic and one of the most populous nations in our region and indeed the world: India. India is the world's third largest economy. It boasts the largest democracy in the world, with Hindus, Muslims, Sikhs and Christians all represented, a societal framework that serves as an example of democracy to be both emulated and supported. Both of these factors make a strong Australia-India partnership attractive in a changing global environment.
But Australia's traditional international networking strategy—commodity trade—won't gain us any credit with India. India is actually largely self-sufficient in natural resources and energy, needing little assistance from Australia in that regard. But Australia needn't despair. We have another more valuable export—education. In 2017 over 113,000 million Indians sought tertiary education but were unable to access it. This is because India is short in around 20 million university and vocational education lecturers, teachers and trainers. That's nearly the entire population of Australia. With 40 per cent of Indians living comfortably above the poverty line, accounting for only 600 million people in a population of over one billion, a good tertiary education in India is arguably just as valuable as coal or iron ore. Indian students travel in their thousands to study in Australia each year. In 2016-17 alone, nearly 34,500 student visas were granted to Indian students, accounting for over 10 per cent of student visas granted. The 2016 census data reveals that the Indian population in Australia has grown to over 450,000, which is up from just under 300,000 in the 2011 census. Of Australia's 25 million people, today's Indians comprise just under two per cent of the total population. In WA alone, our Indian population is sitting at just under 50,000. With a population of 2.5 million, it means that our Indian population is around two per cent and should be taken much more seriously.
Labor announced its Future Asia Policy late last year, which includes a government-wide program to ensure that we are fully engaging with and leveraging the benefits of Asian diasporas in Australia. Labor's shadow Treasurer, Chris Bowen, noted at the launch of this policy that Asian countries were growing even hungrier for Australian education, and the challenge for the future would be capitalising on this massive demand. Outside of political and government-led initiatives, towards closer ties with India, we have the Australia India Institute, an organisation which has been holding the Australia India Leadership Dialogue over the last 10 years. In January last year, Labor's shadow Treasurer, Chris Bowen, and shadow foreign affairs minister, Senator Penny Wong, attended one of these leadership dialogues. Indeed, both the member for Gellibrand and I attended the Youth Leadership Dialogue in Delhi this time last year. The 2019 conference will be kicking off later this week, in Sydney.
My takeaway from my trip was that Australia could be doing so much more to improve and strengthen our relationship with India by understanding our common interests. This idea was reflected by the Perth USAsia Centre, who, alongside our foreign minister and our Defence Force chief, attended India's flagship global security conference, the Raisina Dialogue—an annual dialogue that has been held over the past four years. They reflected there the importance of cooperation between our two nations, particularly in defence.
Western Australia has a long history of capturing economic opportunities in North-East Asia, namely with Japan, Korea and China. Now we must further diversify the economy, which is something we can take advantage of through the opportunities coming out of the north-west of Asia—opportunities like education. The Indian government has a well-founded fear that their young people will leave their home country, only to upskill but never return, meaning that the benefits of education are lost. By pursuing a better relationship with India, we need to come to a mutual understanding about how we can benefit them by exporting education from Australia and responding to India's demand for education, but it does involve helping them in the development of this and building a stronger relationship.
While the federal government is yet to conclude a free trade agreement with India, as it said it would do so two years ago, we shouldn't be deterred. This motion asks us to endorse an India economic strategy by 2035, and we should. As the report so eloquently notes:
Making the most of India’s demographic advantages will require labour market reforms, measures to improve education and skills and significantly improving women’s participation in the economy.
There is a long way ahead. There is no market over the next 20 years which offers more growth opportunities for Australian businesses than India. Australia and Perth in particular are uniquely positioned to forge a deeper relationship with our north-west neighbours in other ways.
I thank the member for Berowra for moving this motion. I would also like to thank Peter Varghese for the two years that he spent putting this very comprehensive report together. In October last year, Labor announced that we would support the priority recommendations contained in the report and, if we're elected at the next election, we'll implement those forthwith. But it must be said that Labor announced our response to this report one month before the government, and there's still mystery that surrounds why the government tried to bury this report. It was released at 8.42 pm via Twitter, despite much fanfare when it was commissioned by the former Prime Minister, Malcolm Turnbull, two years earlier. The Minister for Trade put out a press release at 4.00 pm the next day after the announcement was made on Twitter, and it was actually the Indian government and Indian government representatives that made this report public prior to anyone from the Australian government. Nonetheless, the report's been released and it is quite a detailed bit of work that Labor appreciates Mr Varghese undertaking and it will be important for Australia's future relationships within the Indo-Pacific region.
The report really sums up Australia's relationship with India in the early paragraphs where Mr Varghese says that in the past India has been in the 'too-hard basket' for Australia. I thought that really summoned up the government-to-government, people-to-people and business relationships between Australia and India in the past. Australia does need an ambitious India agenda, and this report aims to lift that relationship with India: to lift India to the top three export markets for Australia; to make India the third-largest destination for outward investment; and to bring Australia and India closer strategically.
We have a great opportunity in India into the future. By 2025, one-fifth of the world's population will be Indian. By 2030, there will be 850 million internet users in India. Unlike the Asian population, which is tending to age into the future, the Indian population is a very young one and India will overtake China as the world's most populous nation by 2035. India, of course, has a different growth model to much of Asia that Australia has relied upon in the past through our export markets, and India's growth model is very much not based on exports but on consumption and services. The recommendations that Mr Varghese has made really do try and capitalise on that opportunity for Australia into the future around consumption and service delivery, particularly in the education space.
Australia has an increasing expertise in delivering education services. It's reflected in the fact that education is the No.2 export earner for our country. But Mr Varghese also points to the opportunities that exist for greater collaboration between Australian universities and Indian universities, between Australian research and development institutions and those in India—that's something that Labor will prioritise, if we are elected.
In infrastructure, there exist boundless opportunities for collaboration, particularly around the financing and planning of infrastructure projects in India, but also Mr Varghese recommends a boosted role for the Australia-India Council. He's talking about greater business collaboration; greater direct air services between our nations; in agriculture, using the expertise of the Bureau of Meteorology to help India with forecasting, particularly around monsoons which can be devastating for crops and agriculture in that country; of course, the scale-up of the Australia-India Strategic Research Fund; and advocacy to bring India into APEC.
These opportunities all sit well with Labor's Future Asia policy, which was announced last year, through which we'll hold annual Australia Week in India trade missions; boost Australia and Indo-Pacific capability, particularly on boards; commence a diaspora program—as we all know there are 700,000 in the Indian diaspora living in Australia—as well as focusing on a greater uptake of Indo-Pacific languages in our schools and universities. One of those areas that we will concentrate on, if we're elected, is Hindi. There are many opportunities for us to grow the relationship with India, and I commend this report to the Chamber. (Time expired)
Scholar Robin Jeffrey once wrote:
If the road to hell is paved with good intentions, Australia's path to Asia is a jungle track paved with reports.
More than a dozen major reports over the past 50 years have called for a greater engagement with Asia. Peter Varghese's An India Economic Strategy to 2035 is the latest, but I must say it is an outstanding one. Each report has edged us closer, true, but the path to transforming this jungle track into a highway lies in changing the way that we think about ourselves as Australians, not the way that we think about Asia.
During the last two decades, our nation has been transformed by immigration. According to the 2016 census, over a quarter of Australians are born overseas and nearly 50 per cent have a parent born overseas. Although four million Australians, or somewhere between 14 and 17 per cent of our population, identify as Asian or as having Asian heritage, our national identity has not evolved to reflect that demographic change. We are no longer an Anglo outpost of empire in the Indo-Pacific fixated on keeping Asians out, but our national symbols and our institutions continue to reflect an outdated representation of Australia. A truly representative national identity would equally recognise the talents and experiences of members of the Asian-Australian diaspora communities and open our eyes to new ways of engaging with Asia.
No relationship illustrates our national identity challenge more clearly than the one with India. Australia is now home to almost 700,000 Australians who claim Indian ancestry, almost 500,000 of whom were born on the subcontinent. The Varghese report sees people-to-people links enabled by these diaspora communities as one of the three pillars for our engagement with India. Indeed, the Varghese report correctly called people-to-people links 'the most significant asset of all in Australia-India relations'. The Varghese report explains the soft value of people-to-people links as going:
… into the nooks and crannies of a relationship where governments cannot. They can shape perceptions in a way governments cannot.
In this realisation, we have come an extraordinarily long way since two men from northern India became the first people to be denied entry into Australia for failing the Immigration Restriction Act's infamous dictation test, yet the knowledge, expertise and connections of our Indian-Australian diaspora remain underutilised. They are not sufficiently represented in our institutions, on our boards, in our C-suites, in our industry bodies, in our business associations, in state and federal politics, in policymaking and in our higher education sector. There are no Indian-Australians in this chamber.
Although Hindi is the third-most spoken language in the world, after English and Mandarin, and the most common Indian language spoken at home in Australia, it is taught in only two schools in Victoria. In 2017, only 252 secondary school students studied Hindi in Victoria, significantly fewer than the 20,000 students who studied French, 18,000 students who studied Italian and 11,000 students who studied German. Given our limited language capabilities and subpar diaspora engagement, it's not surprising that on almost every measure our relationship with India is underdeveloped. India is the second-most populous country in the world, and soon to be the world's third-largest economy, but only 0.4 per cent of Australian foreign direct investment goes to India, a fraction compared to the 21.6 per cent to the United States and 10.8 per cent to New Zealand. Direct Indian investment into Australia only represents 0.1 per cent of total Australian stocks. Australia's two-way trade with India is only 3.5 per cent of total trade.
Labor's FutureAsia policy attempts to address these shortcomings in our relationship with Asia. FutureAsia will designate Hindi as a priority Asian language and seek to increase the number of schools that teach it. FutureAsia will establish an Asian-Australian diaspora program to harness the knowledge and connections of our Indian diaspora to help grow our economic relationship with India. Diaspora programs have been successful overseas, particularly the diaspora programs operated by the United States Department of State, and have been shown to drive economic investment and growth. The Indian diaspora in the Silicon Valley are recognised globally for their contribution to the growth of the IT industry both in the United States and in India. Home to a good proportion of Australia's Indian diaspora, such a program has the potential to transform the economy of Melbourne's west in the area that I represent.
To fully benefit from the opportunities that the demographic changes reflected in the modern Australia now afford us, we have to update our mindset and embrace a new national identity that fully encompasses the modern, diverse migrant nation that Australia has become.