**Check against delivery
Ladies and gentlemen,
Thank you for the opportunity to address the Australia Papua New Guinea Business Forum and Trade Expo.
This is an important event in the business calendar and I’m very pleased to be with you today.
Townsville and Port Moresby are Sister Cities, a symbol of our closeness.
I thank the Business Council for playing such a valuable role in strengthening the ties between our two countries.
This relationship is unique, and this forum reflects the positive nature of our mutual friendship and interests.
The Australian Government has made a sincere and long-term commitment to Papua New Guinea.
My portfolios give me a great platform to appreciate how trade and tourism, strengthen that bond.
Trade relationship
Australia is by far PNG’s largest source of imports, and is also PNG’s number one export market.
Total two-way trade was worth $4.6 billion last financial year, with Australian foreign direct investment in PNG worth an additional $2 billion.
Foreign direct investment, if managed correctly, can bring huge benefits to the PNG economy, and I encourage Australian suppliers to put their best foot forward.
These are strong trade and investment figures, but there’s room for growth.
ExxonMobil LNG project
Australian investment in PNG has traditionally focussed on resources.
I was pleased to see the ExxonMobil gas project receive a final investment decision in December last year.
The consortium plans to commercialise around nine trillion cubic feet of proven gas reserves in the southern Highlands and western provinces.
The plant will have a production capacity of more than six million tonnes of LNG a year over 30 years.
Customers in China, Japan and Taiwan have been found.
The Australian Government supports Australian participation in the project with a US$500 million loan via the Export Finance and Insurance Corporation.
This is a landmark project for PNG:
- It’s the largest single investment in PNG’s history
- It represents a once-in-a-generation opportunity to place PNG’s economy on the path to sustainable growth
- And it will galvanise the skill base as well as indigenous business opportunities.
The US$15 billion project will need a workforce of up to 12,000 during the construction phase, and the consortium’s two trade training centres will provide skilled labour.
I see parallels with the Kimberley LNG hub proposal –
- Unique environmental and governance challenges
- Fantastic opportunities for training, education and business development among indigenous communities.
I hope this LNG project will not be the last for Papua New Guinea.
PNG is rich in energy and mineral resources including gas.
InterOil has made significant oil and gas discoveries and is also working to develop an LNG project.
I welcome the leadership by PNG’s Government in looking at sovereign wealth funds to ensure economic gains from these projects are shared with future generations.
If this project goes well, it will showcase PNG as a nation that’s open for business and able to attract and manage world‑class projects.
The Australian Government strongly supports the growth of Papua New Guinea’s LNG export market.
By working together, we can address capacity constraints through training and skills development and other targeted assistance.
A good example is the Strongim Gavman Program, under which more than 40 Australian officials are placed in key PNG government agencies.
Mutual benefit through closer co-operation is the guiding principle behind these initiatives.
In turn, they will help the PNG Government address the challenges linked with gas developments, such as ExxonMobil’s project.
Resources and taxation
For Governments, balancing the need to make industry competitive with the need to share the value of our natural resources with the community is a delicate one.
Australia’s natural resources belong to all Australians, and extracting them requires expertise and investment.
Earlier this month, the Australian Government unveiled changes to the taxation system for the resources sector.
The Resource Super Profits Tax is a more efficient mechanism for collecting a share of the returns.
We are also establishing a Resource Exploration Rebate to ensure we remain leaders in the discovery of new fields.
Bigger exports and lower imports hinge on it.
The rebate will benefit small, pre-profit exploration companies who don’t get a tax benefit from their deductible expenses until they become profitable.
These are sensible, balanced measures.
Of course we need the private sector to invest, to realise the full potential of our resources.
After all, Australia will not fulfil its potential as the region’s premier supplier of energy resources without strong incentives for investors.
At the same time, the role of government is to provide a framework for that investment, and to move our economy forward in the national interest.
Consultation is vital, and we are working hard to inform industry of the changes and listen to industry’s concerns.
Tourism
Alongside resources, tourism is another potential growth area for trade between Australia and PNG.
Growing consumer confidence across the region gives more people the option to travel.
I will continue working with my PNG colleague, Minister Charles Abel, on the Framework for Bilateral Cooperation on Tourism.
Under the framework, my Department is helping PNG turn more of its tourism potential into reality. Tourism in the Kokoda region is one such opportunity.
Outcomes from last year’s Australia-PNG Forum included $1 million for the Kokoda Development Program for local communities and $250,000 for trekking infrastructure.
At the same time, both governments are sharing expertise to make the Kokoda Track a world-class experience.
The Track symbolises our shared historical and environmental heritage, and this opportunity for closer cooperation must not go to waste.
Here at home, the Australian Government has a comprehensive plan to make the Australian tourism industry more competitive and resilient.
After all, tourism is our biggest export services earner.
41 wide-ranging measures are being guided by the National Long-Term Tourism Strategy.
These include measures to make the tourism workforce more professional and mobile, such as:
- Seeking inclusion of highly skilled, highly trained chefs on the skilled occupations migration list
- Improving labour mobility through national uniformity of "responsible service of alcohol" qualifications
- And enhancing indigenous employment through identifying tourism program gaps and scoping out opportunities for inclusion of tourism in existing programs across governments.
Meanwhile, the Government remains committed to marketing, as Tourism Australia implements the $150 million There's Nothing Like Australia campaign.
25,000 campaign entries were uploaded to the website.
Conclusion
Ladies and gentlemen, Australia has a strong interest in Papua New Guinea’s sustainable development.
I congratulate the forum for playing its part in consolidating the relationship, guided by mutual benefit and friendship.
And as we all know, friendship can achieve as much for trade as the most brilliant business plan.