Senator the Hon Helen Coonan
Minister for Communications, Information Technology and the Arts
Australia and Israel - Embracing Innovation
Speech for Australia-Israel Chamber of Commerce Luncheon
Hilton Sydney
Thursday, 29 June 2006
Thank you to Philip [Argy] for those kind words of introduction. I would like to acknowledge the presence of His Excellency, Nati Tamir, the Israeli Ambassador to Australia.
This is the second time that I have addressed the Australia Israel Chamber of Commerce in my current capacity, albeit in Melbourne, and I am delighted to again join you today.
As many of us in this room well know - Australia and Israel have much in common.
We are both vibrant democracies with small populations, we both seek to expand our presence globally, and we both place a great importance on education and business innovation.
Australia has had a strong involvement in Israel since its inception. It was actually an Australian, Dr H.V. Evatt (when President of the General Assembly of the United Nations), who proclaimed Israel as a state in May 1948. Because of obvious trading restrictions with its neighbours, Australia also took a large proportion of imports from Israel in its early years.
Both our nations have moved ahead in leaps and bounds since those early days. Sadly, Israel faces serious ongoing threats to its security and its right to exist.
Collectively, we hope and pray for the safe return of kidnapped Israeli soldier Corporal Shalit and that diplomatic efforts to secure his release are successful.
Half a world away, Australia, on the periphery of Asia, faces a different set of challenges. Although threats to our own security are relatively low, being an open and dynamic society also brings with the need to be ever vigilant against the risk of terrorist attacks.
Australia and Israel are both middle sized nations, seeking to build a prosperous future in regions away from Europe and the Americas.
And both nations have, from their very beginnings, embraced innovation as a driver of economic growth.
Israel has a thriving and sophisticated industrial base and is one of the world’s leading centres of information and communications technology.
The development of high-tech industries in Israel has been an impressive success story.
From computer processors to firewall anti-virus technologies, Israel presents a unique blend of a strong research base, academic excellence, scientific innovation and entrepreneurial experience.
The success of Israel’s high tech sector was recognised recently by Bill Gates when he said:
“There is a greater concentration of talented hi-tech manpower here in comparison to other countries – almost to the extent of Silicon Valley.”
This statement is further reinforced by the fact that Israel has the second highest number of high tech companies listed on NASDAQ.
As a key enabler, ICT is also transforming traditional industries and leading to new opportunities, products and services across the Australian economy.
Importantly, ICT is increasing Australia’s capacity to innovate, to undertake new kinds of research that will underpin the development of new technologies and industries, and to achieve ongoing productivity growth.
Indeed, ICT is at the forefront of the charge in solving major national problems that challenge both our countries, such as security, defence and water.
In these areas and others I think there is enormous potential for Australia and Israel to collaborate and partner together and to tackle the bigger players in the world market.
And for both nations, we should not be focused on ICT for ICT’s sake.
Recent productivity growth across the Australian economy appears to have been driven, in large part, by the take-up of ICT by Australian business, government and the wider community, stimulated in part by micro-economic reform.
Research conducted by my department has suggested that technology has contributed between 56 and 80 per cent of productivity growth in manufacturing over the past two decades.
Similar growth has been achieved in the services sector.
The Australian Government has maintained a strategic focus on encouraging innovation as a core platform to develop sustainable competitive advantage, stimulate the development of new firms, foster the widespread use of ICT to achieve productivity benefits and to grasp global opportunities for our ICT firms.
In many ways, Israel has been on a similar path, with very impressive results which I think we are all aware of.
With our similar attitudes and strategies, /our strong cultural links, / and the all important people to people ties, / business opportunities between our two countries abound.
It is clear that both our countries have harnessed technology and innovation as bulwarks against the shifting tides of the global economy.
Israel has been successful in establishing global companies through venture capital and business ‘incubator’ programs. Israeli companies have secured important niche ICT markets around the world, particularly in Europe, and Australian firms can learn from Israel’s success.
Likewise, Australian firms also have much to offer Israeli firms, particularly with our knowledge of, and access to, Asia-Pacific markets.
The level of Australian investment in Israel is also continuing to expand.
With the growth of export industries and the strengthening links between education institutions and the commercial sector, the trade relationship between Australia and Israel will become increasingly important in the future.
The total bilateral merchandise trade between Australia and Israel was about AUD$742 million in 2005, with exports from Australia to Israel worth AUD$157 million, and exports from Israel to Australia worth AUD$584 million[1].
Clearly the trade relationship between Australia and Israel is not a new one, but there is still plenty of scope for the relationship to grow.
In recent years, the Australia-Israel Chamber of Commerce (AICC) has organized many high profile trade missions between the two countries to develop awareness of markets and business opportunities in both hemispheres.
To the many business players here today, the benefits of these trade missions are obvious, with bilateral trade between Australia and Israel escalating from $10m in 1970 to over $700 million today as well as the spin-off benefits a trade mission can deliver to both government and commercial entities alike.
Therefore, it gives me great pleasure to announce today that I will be leading a trade delegation to Israel in November.
Whilst not my first visit to Israel, I look forward to visiting a country in which politics is best described as a national pastime and where even former Prime Minister, Golda Meir, once remarked is a nation of “3 million Prime Ministers.”
I confess I sometimes feel that there are 3 million Ministers for media reform when things are on the go but I guess I am thankful to be in a portfolio when plenty is happening and where if you are not careful you will suffer the fate of the boiling frog.
I also look forward to gaining firsthand a more strategic understanding of the volatile political climate in which Israel operates. As well holding the Communications Portfolio, I also represent the Foreign Affairs Minister (Alexander Downer) and the Deputy PM (Mark Vaile) in the Senate, so these issues are of significant interest to me.
I recognize and welcome the engagement of the Australia Israel Chamber of Commerce on the planning of this important trade mission. Due to their significant experience in developing and facilitating business trade and investment between the two countries, the AICC will be playing a key role in the planning of this forthcoming Trade Mission.
I want to particularly note today that in circles of Government and the Private Sector the work of the AICC is highly regarded.
As leader of the Australian trade delegation to Israel, I will be following in auspicious footsteps. The first trade delegation to Israel was lead by Mr Tony Berg AM in 1989 and since that time a long list of notable Australians from both the private and government sectors have participated.
I note that my friend and predecessor, former Senator Richard Alston, led a trade delegation on two occasions in his capacity as Minister for Communications, IT and the Arts.
Australia’s Building Information Technology Strengths (BITS) Incubator program was extensively modelled on Israel’s Technology Incubators program following one of Richard Alston’s trade missions.
Having already led successful trade delegations to India and South Korea, I can appreciate the value of examining another country’s commercial successes and what might be adapted or improved in the implementation of policies at home.
However, Government can only go so far and so it is imperative that these trade delegations also act as facilitator to enhance business relationships between Australian and overseas companies.
I am confident the trade delegation to Israel will accomplish these important objectives and I urge all here today to consider joining me to explore and expand these business opportunities.
Considering the presence of Israeli companies in Australia, it is clear that there already exists a strong business tradition between Australia and Israel.
These strong business links build on the close cultural ties between this country and Israel which are strongly supported by Australia’s active Jewish community.
Today, there are over 50 Israeli companies with local offices in Australia. Many of these are from the communications industry such as Amdocs, Converse, Rad Data Communications and Gilat Satellite – just to mention a few.
From an individual perspective a recent Israeli export to Australia also has made quite an impact. As we all know, Ori Allon, while studying for a PhD at University of New South Wales, developed a search engine tool that will greatly enhance internet use.
Ori is now working for Google in California, but considering that he holds dual citizenship with Australia, in true Phar Lap, Neil Finn and Russell Crowe tradition, we will claim him also!
While Australia and Israel share similarly arid terrain, the large and sparsely populated nature of our country is something that is not shared with Israel.
Australia’s geographic diversity, as beautiful as it is, brings with it the challenge of delivering services where it is unlikely that any commercial operators will go.
So the Government makes targeted investments to stimulate service delivery where there is market failure - most notably in rural, regional and remote Australia – to provide essential telecommunications services to consumers.
This investment ensures we do not have a two-tiered telecommunications system where people living in metropolitan areas enjoy the benefits of competition while rural and regional Australia is left behind.
We have already spent more than $1 billion on telecommunications services since 1997 in rural and regional Australia alone and this investment has quite simply, transformed the way in which Australians can live, work, get an education and have a ‘quality of life’ in rural Australia.
A further $3.1 billion has been committed to maintain and extend these improvements into the future.
A key part of this funding is the Government's $878 million Broadband Connect program which supports equitable access to high quality, sustainable broadband services across regional and rural Australia.
As a result of this program and other Australian Government initiatives, almost 1,000 additional exchanges have been enabled by Telstra for ADSL, large numbers of new satellite and wireless providers are offering competitive services, and more than 700,000 additional premises have gained access to terrestrial broadband.
However, Broadband Connect represents an opportunity to test a new approach and to respond strategically to the challenges of providing enhanced communications services to regional Australia.
Therefore, the Government is considering an alternative approach. On 8 June this year, I released a Call for Expression of Interest from industry for larger scale infrastructure projects under the Broadband Connect program.
This is a unique opportunity to use a substantial allocation of taxpayers money to leverage private investment in Australia’s regional broadband networks and to improve access to broadband services across the country.
We want this significant investment by the Australian Government to be leveraged by major private sector investment and include the support and involvement of State and Local Governments.
This is about building on our investment in rural, regional and remote Australia to roll out sustainable and scalable networks to connect the country.
In recent times, there has been unprecedented change in the telecommunications sector, and with your indulgence, I would like to read a quote taken from a Government Communications website.
“We have removed the exclusivity of the nation’s incumbent telecom operator and have opened the sector to competition and to the influence of market forces. This change in policy has been successful; it has facilitated the development of a wide variety of high-quality telecommunications services and has proved to be beneficial to consumers.”
It might surprise you to learn that the quote I have just read was not taken from one of my recent speeches or from a recent media release. It was in fact taken from Israel’s Ministry of Communications website.
So it’s reassuring to know that we are reading from the same siddur and the competitive policy approach that we have successfully adopted in this country is similar to that experienced in Israel.
The success of this competitive policy approach is demonstrated by the experience in Australia and Israel with rapidly growing broadband uptake.
Figures released by the Australian Competition and Consumer Commission last week show that more Australians than ever before are now taking advantage of broadband Internet access.
In fact, during the twelve months to March 2006 the number of broadband subscribers increased 78 per cent to 3.1 million.
Australia was already in the OECD top five for broadband take-up growth, and the latest figures show that this is actually accelerating with the growth of broadband services connected increasing to 13.5% for the March quarter.
This demonstrates the success of the Australian Government’s telecommunications policy of promoting a competitive telecommunications market.
The Government has supported this competitive market with strong regulation to prohibit anti-competitive conduct and facilitate access to bottleneck facilities where this is necessary to promote competition.
In comparison, the take-up rate in Israel is marginally better with 16.3% of people connected to the web via broadband. During the forthcoming trade mission, I will be interested in comparing notes with my Israeli counterpart to see the techniques they employed to facilitate the uptake of broadband amongst consumers.
The rollout and effective use of broadband technologies is crucial to Australia’s future prosperity and will provide significant economic and social benefits to the Australian community.
That is why I have under development a Broadband Blueprint – a national framework for the rollout of next generation infrastructure for Australia both by Governments and by the private sector.
The blueprint will ensure that the roll out of next generation broadband is coordinated across jurisdictions with clearly delineated roles for State, Territory and Local governments that meet the needs of end users.
I believe the Blueprint should usher in a new era of co‑operation and co-ordination between Federal, State, Territory and local government.
I have written to my State and Territory colleagues seeking their input into the development of the Blueprint over the coming months, prior to its launch at the Online and Communications Council meeting in September 2006.
The communications game is all about speed – how quickly complex information can be distributed over a variety of platforms. Emerging digital platforms have the potential to tap into mass audiences as never before.
As always changing technology is the big winner and the regulation that tries to hang on to old business models will lose.
In a converging world, the lines between the telecommunication and media world are continuing to blur.
Australian television companies are now using the internet to provide downloads of programs that have previously aired on free-to-air.
In this converged environment, it is appropriate that the policy settings for telecommunications, broadcasting and information technology are all considered holistically.
It won’t be long before it will be possible to get the same quality content streaming over the Internet, on a 3G phone or through traditional television services.
Despite the obvious synergies, each of these areas has their own individual set of regulatory challenges.
There can be no doubt that traditional media services are being challenged by new digital technologies which foreshadow the emergence of new players, content, services and delivery platforms.
This provides new sources of information and entertainment for consumers and new challenges and opportunities for industry.
From the Government’s perspective, the impact of digital technologies means that the current regulatory settings based on regulating scarce spectrum, which are largely designed for an analogue world, will inevitably become obsolete.
In order to get input from the industry and the community, the Government released a discussion paper on media reform options in March 2006.
The paper draws together options for potential policy responses relating to the media industry and proposes a comprehensive framework for media reform in Australia.
The discussion paper also proposes a range of measures aimed at introducing new and innovative services in the near future such as DVB - H mobile television, on the small amount of spectrum now available, and gradually relaxing regulatory restraints on the industry with the switchover to digital.
As I said recently, ensuring a digital future for Australia is the centrepiece of the package as the closing down of the old analogue signal will vastly broaden the amount and nature of services currently available to consumers. It is the main focus of the media package because further deregulation of the broadcasting sector will depend on significantly more digital spectrum becoming available. This will occur when the analogue signal is turned off.
The discussion paper therefore contains a roadmap for analogue switch off, called the Digital Action Plan.
It is intended that the Digital Action Plan will be developed and released in 2006, with a strong focus on driving uptake and conversion to digital and transitioning from the current industry settings.
The Plan will also consider options for fostering cooperation amongst stakeholder groups, to help achieve a sense of common purpose and direction.
The media package will enhance the benefits for consumers in a digital environment and at the same time provide industry with opportunities to grow and attract investment.
I have always said that the interests of consumers are paramount in these reforms and I am particularly mindful of ensuring consumers continue to have access to locally relevant news and information programming, regardless of any changes that may take place.
Over 200 submissions were made in response to the discussion paper and I have welcomed the contribution of parties who made submissions to in response to the discussion paper.
While the submissions have recently been made available on my Department’s website, I have been considering them for some time and taking into account the views put forward in developing a framework for media reform in Australia.
Obviously, a range of views have been expressed in the submissions; I expected this to be the case and in fact, note it is entirely appropriate given that the discussion paper is an important part of the ongoing consultation process on media reform.
What I can say is the old expression “You can always back self-interest because at least you know it is trying” holds as true for media reform, as it does for reform of any other sector. The Government for its part, whilst considering a range of views, must act in the public interest. It must deal with the practicalities and constraints of how to position Australia to take advantage of the new digital future.
So after this cook’s tour of the diverse and challenging areas that make up my portfolio, what I hope to convey is the theme that runs through all of these complex areas, and a theme that is clearly as relevant in Israel as it is in Australia.
That is, for nations such as ours, the key to our ongoing prosperity in a world of constant change is to embrace that change rather than resist it.
With this shared philosophy, and our complementary skills and abilities, I believe we should work together. Through working together, we will achieve change that will benefit both of our countries. I am committed to extending these opportunities to Australian business wanting to innovate. I sincerely hope that you can join me on this great exchange with Israel.