This speech, titled ‘Addressing Today’s Challenges and Building for the Long Term’ was delivered by Prime Minister Kevin Rudd to the BCA 25th Anniversary Dinner on 30 October 2008.
Today the world confronts the most profound financial and economic challenges in our lifetimes.
My purpose tonight is simple:
To define the government’s strategy to see Australia through this financial crisis.
To articulate our strategy to support the real economy in the face of a looming global recession.
To reaffirm the government’s long-term reform agenda beyond the crisis.
And to invite you, the leaders of Australia’s business community, to join with the government in sustaining that most important asset of all during a crisis such as this – and that is confidence.
The global economy today faces unprecedented challenges.
We are in the midst of the worst financial crisis since the Great Depression.
And that financial crisis is beginning to spill over into the real economy where it threatens to precipitate a deep and protracted global recession.
A recession that will threaten growth and jobs in Australia and around the world.
And on this it is important to level with the Australian people.
Consider just a few statistics defining the impact of the crisis on property and equity markets:
Shares on the New York Stock Exchange have lost more than a third of their value since this crisis began – falling 36.5 per cent.
Property values in the United States have fallen at a record rate, with the S&P/Case-Shiller index showing house prices down 16.6 per cent per cent from a year earlier.
The financial crisis has spread beyond the United States to affect Europe as well as emerging markets in Asia and around the world.
- In the last 12 months, the wealth held on major stock markets has fallen by a third.
- In the last month global markets have lost US$11 trillion – equivalent to around 18 per cent of world GDP.
- Japan’s sharemarket is down more than 60 per cent – with the Nikkei Index at a 26 year low on Monday.
- London’s bourse has lost 36 per cent of its value.
- The Shanghai index is down around 70 per cent.
The turmoil on equity markets reflects the turmoil on credit markets.
- Liquidity has become scarce with the LIBOR-OIS spread reaching around 300 basis points this month – more than 30 times its average level in early 2007.
- According to the Bank of England’s latest Financial Stability Report, the global financial system is digesting mark-to-market losses on debt instruments of around US$2.8 trillion.
- And the combined impact of a lack of liquidity and falling asset values has caused more than 25 banks around the world to collapse or be bailed out.
And turmoil on credit, equity and property markets impacts, of course, on the real economy.
Some economists are now estimating that the falls in stock markets and property markets alone will wipe $15 trillion dollars off the wealth of US households – equivalent to an incredible 105 per cent of nominal US GDP.
And that means lower growth and higher unemployment.
Extraordinary times have called for extraordinary action.
Governments around the world have taken unprecedented action to prevent catastrophe.
Within the three weeks between September 7 and 25, the US Government took decisive action to shore up many parts of the financial system:
It launched a US$100 billion bail-out for each of the two US mortgage giants Fannie Mae and Freddie Mac.
It loaned US$85 billion to American International Group (AIG) to avoid bankruptcy.
It launched a US$700 billion financial rescue plan for troubled assets.
The Federal Deposit Insurance Corporation seized Washington Mutual.
The Federal Reserve agreed to provide US$900 billion in short-term cash loans to banks. In the same period, governments around the world have acted as well.
In an unprecedented move, central banks in the US, the UK, China, Canada, Sweden, Switzerland and the European Central Bank cut interest rates together by up to 0.5 per cent.
Countries including the UK, France, Germany, Italy, Denmark and Spain announced increased guarantees for depositors and new guarantees for wholesale funding.
Several European countries injected billions of dollars into their financial systems to partly nationalise their largest banks.
And in the coming weeks, members of the Group of 20 Nations will meet to discuss further global action to address the crisis.
This meeting in Washington on 15 November will provide a mechanism for the world’s major economies to coordinate our responses to the global financial crisis and the economic impact it is having.
President Bush’s leadership in calling this meeting of the G20 has been decisive.
It is the right decision because it looks to the future.
And it is a decision that Australia welcomes.
Australia has responded to the crisis with early action.
We have responded with decisive action.
We have responded with strong action.
Through the course of this year the government has acted to maintain financial stability by:
Ensuring liquidity in our financial system by legislating to increase to $25 billion the maximum value of government bonds that can be issued at any one time;
Acting to protect financial institutions from predatory speculators by introducing an immediate ban on short selling;
Supporting competition and liquidity in the mortgage market by announcing a program to purchase up to $8 billion of residential mortgage backed securities.
Reaching agreement with the states on the reform of the regulation of credit in Australia by moving to a seamless national regulatory framework.
Taking a prominent role through the Financial Stability Forum to develop recommendations to reform international financial regulation.
In each of these areas, Australia has acted early, invariably ahead of the curve – anticipating events, rather than simply reacting to them.
On October 12 the government took two further historic decisions to guarantee Australian deposits, and to guarantee term wholesale funding for APRA regulated banks, building societies, and credit unions.
The government’s action was necessary to maintain the stability of the financial system in the midst of destabilising developments abroad.
Importantly for Australian families:
- It has given mums and dads the confidence that their deposits are safe;
- It has put downward pressure on funding costs, and thereby downward pressure on interest rates.
- It has helped to stabilise financial markets.
As APRA Chairman John Laker said recently: ‘The government’s deposit and funding guarantee, which APRA fully supports, has calmed what was a growing disquiet on the part of some depositors.’
All of the major banks have seen their costs of funding fall since the guarantee.
As Ahmed Fahour, NAB Executive Director and CEO Australia, has said: ‘Policy measures announced by the Australian government earlier this month have started to have a positive impact ... we hope to be in a position where we can pass on further interest rate cuts to our customers.’
In the last two weeks, each of the major banks announced they will reduce their interest rates by around 0.2 per cent.
The government has acted decisively because we know that our primary responsibility is to maintain confidence in the financial system.
A failure to act on the guarantees could have meant significant difficulties for Australian families and businesses seeking to access credit – as well as having to pay higher interest rates.
This could have in turn affected investment and consumption and ultimately our growth and employment.
If the government had only guaranteed deposits up to $100,000, as some argued, we would be excluding around 40 per cent of all deposits by value and some ¾ of a million deposit accounts.
The consequences of a partial guarantee under the prevailing circumstances would have been destabilising in the extreme.
It would have left those depositors with the largest amounts of cash without a guarantee – and therefore inclined to move their money to the big four banks and away from a range of other financial institutions.
Some large depositors may have even withdrawn their cash entirely from the Australian banking system.
Any partial guarantee of deposits in the prevailing circumstances would have been irresponsible.
In relation to market-linked investments not covered by the deposit guarantee, the government is working systematically with industry to maintain a secure, strong and diverse financial system.
Treasury has taskforces dealing with each category of market-linked investments institutions in what is a complex sector involving highly diverse and risk-differentiated investment products.
I indicated on Tuesday that APRA is preparing to fast-track applications by mortgage funds and other financial institutions seeking to attain the status of a prudentially regulated APRA institution.
A number of financial institutions have indicated their interest in becoming APRA regulated ADIs – and their applications will be handled in the usual way by the regulators.
There is also an important role for the market in addressing some of the broader liquidity problems in other parts of the financial system.
Larger and more liquid institutions – including the major banks – could provide liquidity to various market-linked investment vehicles within the financial system by buying their securities at market prices.
Our major banks have performed responsibly during this crisis.
The banks are the beneficiaries of banking licences, and the government’s guarantee on deposits and wholesale funding.
It is not unreasonable, therefore, to expect that the banks will play a continuing role in supporting the wider financial system and thus the Australian national interest.
The government has asked David Murray, Chairman of the Future Fund and former Chief Executive of the Commonwealth Bank, to assist the Treasury in its liaison with relevant financial institutions on this and related matters. Mr Murray will be assisted by senior officers from the Treasury, APRA and ASIC.
As I have previously indicated, the government will continue to respond in a calm, measured and methodical way to deal with the challenges that will continue to emerge in this sector in the future.
The government has drawn on the economic policy machinery within the bureaucracy and the independent regulators to advise us during these challenging times.
The government is in daily contact with the Treasury, the Reserve Bank, APRA and ASIC.
The International Economic Policy Group, the Strategic Policy and Budget Committee of Cabinet and the Council of Financial Regulators are meeting regularly to address the crisis in a coordinated fashion.
These institutions have performed well, giving timely advice and helping Australia stay ahead of the curve in addressing the crisis and maintaining confidence.
A lack of confidence can have devastating consequences for all market participants and lead to irrational behaviour by individual investors.
That is why governments, business and all responsible leaders have a joint responsibility through what we say and what we do to support confidence, not undermine it.
Confidence is a precious commodity at a time of crisis.
It is maintained by strong action by governments and private institutions.
And it is also supported by recognition of the independence and integrity of our national regulatory institutions.
It is also maintained by being frank with the Australian people about the strengths we have and the challenges we face – and not playing or pandering to fear.
The decisive policy action by governments around the world has helped stabilise financial markets more generally compared with the parlous state of affairs the world faced on the weekend of 12 October.
But now policmakers must also deal with the consequences of the crisis on the real economy.
Few economists now doubt that even if we escape catastrophe in financial markets, we face unprecedented challenges in the real economy.
There is no doubt that the global economy is entering what will be one of the most painful periods in recent decades.
The coming year will be characterized by declining global growth and rising global unemployment.
The International Labour Organisation has estimated that the number of people who are unemployed worldwide could increase by 20 million to 210 million by late 2009.
Even before the events of late September, the IMF had revised down its estimates of global growth.
The IMF predicted that: ‘The world economy is now entering a major downturn ... and the major advanced economies are already in or close to recession.’ (IMF WEO)
The IMF has downgraded its global growth projections of the major advanced economies by 0.9 percentage points since July to 0.5 per cent in 2009.
The IMF is now forecasting growth in 2009 of less than 1 per cent in most of the G-7 economies.
This will be the slowest rate of growth in the advanced economies for over a quarter of a century.
And since that forecast was released, the UK economy has recently recorded a contraction of 0.5 per cent in the third quarter - the first quarterly contraction since 1992.
Policymakers around the world – most of whom have been immersed in the response to the financial crisis – must also now turn their attention to the emerging crisis in the real economy.
On Monday I received an email from the American economist, Jeffrey Sachs. Sachs, together with other economists, is among the growing number of people looking beyond the current financial turmoil to the consequences for the global economy.
They recognise that just as we needed unprecedented coordinated global action to address the financial crisis, we will need unprecedented global action to address the coming global slowdown in the real economy.
There is an emerging global consensus that part of that action involves further monetary policy loosening through coordinated central bank interest rate cuts.
And further, that the world will also need to undertake a coordinated fiscal expansion.
China and many Asian economies have the resources and the need to increase spending – to stimulate their economies and accelerate much needed investments in infrastructure and social spending.
Oil-producing countries must look through the current slide in oil prices to use their wealth of reserves for productive long-term investments around the world.
The US and Europe, despite their large budget deficits, would also be well served to support positive growth through appropriate fiscal expansion.
The challenge for policymakers is to ensure that fiscal expansion is coordinated across countries to boost the global economy – and that this does not occur too late.
And to ensure that a substantial part of this new spending is also used to fund productive investments which will make the global economy stronger into the future.
The fact is that the financial boom and the inflation of asset prices over the last decade has masked a slowdown in the real driver of prosperity – productivity growth.
And that brings us to the need globally and nationally to continue to prosecute a long-term economic reform agenda to boost productivity growth.
During the 1960s, productivity growth in OECD economies peaked at an average annual rate of 4.7 per cent. The 1950s and 1960s were a ‘golden age’ of growth, development and productivity for western countries.
The most likely cause for rapid productivity growth in the 1950s and 1960s was the massive investment in technology during the war and in infrastructure during reconstruction.
Since the 1960s, productivity growth in OECD economies has been trending downwards.
In the 1990s, the transformative effect of investments in information technology drove strong productivity growth.
Since then productivity has been in decline – falling to an average annual rate of 1.7 per cent so far this decade.
The current crisis is a painful reminder that – in the words of former US Treasury Secretary Larry Summers: ‘Finance-led growth is problematic. The wealth and income gains from the easy availability of credit are highly concentrated in the hands of a fortunate few and the benefits are often temporary.’
Financial innovation is not a substitute for productivity growth throughout the economy.
As RBA Governor Glenn Stevens noted last week, this crisis should teach us that the historical role of the finance sector is to be the ‘handmaiden of industry’ rather than the master of industry.
Stevens is one of many economists calling for: ‘a renewed focus on the processes in the real economy which generate growth in productivity.’
In Australia, the government has also acted ahead of the curve to support continued positive growth in the Australian economy.
Given what is happening around the world, this will be a tough challenge.
Australia has been one of the first governments to adjust our fiscal setting to the new global economic reality.
We were able to take early and strong action because of the prudent budget surplus we had accumulated this year.
That surplus was meant to be a buffer for tough times ahead.
And those tough times have arrived.
The Australian economy now needs stimulus.
Fiscal and monetary policy must now work together to strengthen the Australian economy.
Some of that support will come from the tax cuts, which came into effect in July.
Some will come from the 100 basis points cut in interest rates this month.
And some will come from the $10.4 billion Economic Security Strategy.
Through practical support for households and across the economy more broadly, we are supporting continued positive growth.
The elements of the package are:
- a $4.8 billion down payment on long-term pension reform;
- $3.9 billion in payments to help around 2 million families; and
- doubling the first home buyers grant for the purchase of an established home to $14,000 and tripling it to $21,000 for those who buy a newly constructed home.
This package will provide a boost to families in need.
It will provide a boost to pensioners and carers.
It will provide a boost for the construction sector as well as helping families realise the dream of owning their own home.
The government’s Economic Security Strategy however goes beyond fiscal stimulus.
It also contains actions to deal with long-term productivity challenges by boosting training and bringing forward investment in infrastructure.
- We have doubled the number of productivity training places to 113,000 in this financial year; and
- We will be bringing forward the nation building agenda, with further announcements in December.
It is an Economic Security Strategy to see us over the short-term challenges and to position the economy to continue to grow in the long-term.
Through these policy measures, the government is dealing with: the immediate challenges of financial stability; the subsequent challenges of economic stimulus; and the long-term challenges of productivity growth.
This government will not be in the business of pushing to one side the productivity agenda while we negotiate our way through the present crisis.
As we argued throughout 2007, action on productivity is both urgent and overdue.
Throughout last year, this was the core of my argument for why Australia needed a new wave of economic reform and why we needed an education revolution.
Long-term prosperity is built through the hard work of building productivity growth.
With few exceptions, the nations that build and sustain the greatest wealth aren’t the nations with the most resources.
They’re the nations that use their resources to invest in their human and other productive capital to remain on the productivity frontier.
Australian experience underscores that basic economic fact. Treasury data shows that 80 per cent of the improvement in the living standards of Australians over our past 40 years has come from increased productivity.
The long-term economic challenge for Australia is the long-term decline in productivity, as the Reserve Bank Governor has noted.
During the productivity cycle of the mid-1990s, we averaged productivity growth of 3.3 per cent each year.
During the productivity cycle from 1998–99 to 2003–04, productivity growth fell to 2.1 per cent.
And in the current cycle since 2003–04, productivity growth has fallen further to just 1.1 per cent.
We cannot turn that around overnight.
There are long time lags between planting the seeds of future productivity growth, and reaping a harvest.
But the payoff of those reforms will endure for decades.
That is why we need to start today – to act ahead of the curve.
It’s why the cooperation of state and territory governments on the COAG agenda is so important.
It’s why productivity defines the government’s core economic plan for Australia’s long-term economic future.
The government’s productivity agenda contains five parts:
- the education revolution on skills, training and human capital formation;
- a nation-building infrastructure plan;
- innovation and growing the industries of a 21st-century economy;
- long-term tax reform; and
- the COAG reform and deregulation agenda, where we are working on 27 priority areas to build a seamless national economy.
In our first year in office the government has been prosecuting each item on this agenda.
And we have been informed along the way by our consultation with business – including the positive contributions of the BCA on productivity, on deregulation and infrastructure.
We kick-started the productivity agenda by establishing Infrastructure Australia earlier this year.
In response to the global financial market crisis, the Commonwealth agreed at the October COAG meeting to ask Infrastructure Australia to bring forward an interim report on the National Infrastructure Audit and the Infrastructure Priority List by the end of 2008.
In just eleven months of government, we have committed to a multi-billion dollar infrastructure investment program, allocating funds for key priorities such as transport, communications, and social infrastructure.
We’ll invest $26 billion in roads and rail infrastructure through 2008-09 to the end of AusLink II.
Over time we’ll invest $20 billion through the Building Australia Fund in transport and communication priorities.
And from this, we’ll invest almost $5 billion in a National Broadband Network.
Over time, we’ll also invest $15 billion in education infrastructure, through the Education Investment Fund, Trade Training Centres in schools, computers in our classrooms, and by investing in our universities.
Over time, we’ll invest $11 billion in health and hospitals infrastructure, through the Health and Hospitals Fund and other programs.
Through these investments, we will build the foundations of future prosperity as well as supporting economic activity during a time of global uncertainty.
In recent days there has been conjecture – here and internationally – about the implications of the global financial crisis for climate change policy.
Some have said that the financial crisis means that the Australian government should postpone acting on climate change.
The government does not share that view.
And the Treasury modelling of the costs of acting on climate change – which we released this morning – does not support this view.
The modelling shows that Australia and the world will continue to grow strongly over the long term – and that growth is only slightly trimmed in responding to climate change. The modelling also shows that robust growth in real household incomes should continue while we reduce the carbon intensity of our economy.
The modelling also shows that action pays dividends. Those countries that begin structural change earlier will have a head start.
They will have more time to adjust their infrastructure and industrial structure smoothly for a carbon constrained world, avoiding more disruptive change later.
Such countries will be able take full advantage of the emerging growth opportunities.
The International Energy Agency has estimated that to halve global emissions by 2050 will need additional investment globally of US$45 trillion.
The business community has said that they look to the government for certainty.
Far from assisting industry, deferring climate change policy action would fuel uncertainty in the investment outlook — particularly in the energy sector.
It is important to remind ourselves of the original case for action on climate change.
We know from the work of Professor Ross Garnaut that the costs of inaction are high. Garnaut showed that if we do not address climate change, we face a rapidly increasing negative impact on wages and output.
Taking responsible, co-ordinated action in Australia and globally will insure us against severe and possibly catastrophic consequences for our material wellbeing during this century.
And it will help to avoid damage to Australia’s environmental assets.
We also know that there are international risks from not acting responsibly.
We need to be aware of the potential for unilateral and protectionist action, ostensibly in pursuit of climate goals. There are live proposals for border tariffs in a range of major economies.
For that reason, we must set also act responsibly.
In light of global financial instability, it is also worth reiterating some features in the government’s green paper proposals for the Carbon Pollution Reduction Scheme.
We proposed in the green paper that businesses can access international carbon credits to meet their obligations under the scheme. That feature is likely to reduce the cost of the scheme in Australia, given the availability of lower-cost emission reduction opportunities overseas.
We have also committed to allocating a significant share of free permits for those industries which face challenges to their competitiveness during the transition period until a comprehensive international agreement is in place. The Treasury modelling finds that this proposal significantly eases their transition to a low-carbon economy.
We will continue to progress this important reform in a careful and methodical way, taking into account the needs of households and industries as we do so.
Our policy response will promote clarity and predictability for industry.
Only that kind of response will provide a firm foundation for investment and job creation in the future.
The alternative – i.e. to keep deferring the decision, as our political opponents have done for years – is to continue to promote uncertainty in the investment environment.
The challenge of climate change is no less real today than it was before the financial crisis.
Addressing climate change is part of laying the foundations for long-term economic growth.
While we recognise that climate change, productivity and the global financial architecture are critical and urgent problems, we have to acknowledge that for the most disadvantaged in Australia they may seem remote, academic and of little practical relevance to their daily lives.
In particular, too many Indigenous Australians face disadvantages arising from the neglect and policy failures of past governments. We cannot allow their situation to continue unaddressed.
As Greig has just said, yes, we must focus on urgent challenges like the global financial crisis, but we must not lose sight of what’s also important in the long-term, like closing the gap between Indigenous and non-Indigenous Australians.
Like many of the challenges we face as a nation, government cannot close the gap alone.
Everyone – the corporate world, the non-government sector, Indigenous communities – has a part to play.
That’s why the BCA’s announcement tonight is a positive development. It tells the country, and Indigenous Australians in particular, that the corporate sector is collectively buying into this national challenge.
The government has outlined its closing the gap priorities:
- to close the seventeen year gap in life expectancy within a generation;
- to halve the gap in mortality rates for Indigenous children under five within a decade;
- to ensure all Indigenous four years olds in remote communities have access to early childhood education within five years;
- to halve the gap in reading, writing and numeracy achievements for Indigenous children within a decade;
- to halve the gap for Indigenous students in year 12 attainment or equivalent attainment rates by 2020; and
- to halve the gap in employment outcomes between Indigenous and non-Indigenous Australians within a decade.
To harness the unprecedented goodwill following the Apology we are developing a strategy for business action to encourage corporate partnerships in the following core areas:
- Jobs – The basic building block for building personal wealth, establishing financial independence and interacting with the community.
- Education and training – To ensure that individuals are fully equipped for a life of success in learning and employment.
- Sports, arts and recreation – Those everyday community activities that give life meaning, and which most Australians love.
- Governance and community development – Helping organisations and communities to better manage their social and economic development.
- Economic development – to ensure that everyone has the opportunity to share in the prosperity of the nation.
I want to recognise the efforts of many of your members who are already doing extraordinary work to help close the gap in Indigenous disadvantage.
For example the National Australia Bank’s initiative to expand its not-for-profit business opportunity loans and microenterprise loans program.
BHP Billiton has, since 1996, participated in Reconciliation Australia’s Reconciliation Action Plan program which has seen the company provide education, employment and training to Indigenous Australians as well as involving Indigenous businesses in their supply chain.
The results speak for themselves.
BHP has 10 contracts with Indigenous businesses worth an estimated $350 million and an Indigneous workforce of around 10 per cent in its iron ore operations in West Australia.
Earlier today I launched the Australian Employment Covenant, led by Andrew Forrest, to create 50,000 new Indigenous jobs.
One of the covenant’s strengths is its focus on industry and private sector employers as the drivers for change – but the government is committed to supporting the covenant through:
- coordinating training to the appropriate job standards of the employing industry;
- ensuring government services support the take up of AEC jobs by eligible Indigenous job seekers; and
- facilitating ongoing support for employees.
Both the BCA’s announcement tonight and the AEC announcement earlier today, along with the existing work of major corporations like NAB and BHP, are exemplars of the kind of business action the government wants to encourage.
As another example of businesses working with government to tackle Indigenous disadvantage, we have an array of organisations providing exceptional scholarship programs for Indigenous kids.
In July this year Macquarie Bank committed $2.6 million for a further three year’s funding for the Higher Expectations Program which offers scholarships for Cape York children to study at our best boarding schools.
Tonight I am delighted to announce the Australian government will be working with the newly formed Australian Indigenous Education Foundation (AIEF) to improve the educational outcomes of young Indigenous people around Australia.
One of AIEF’s key strategies is to provide scholarships for Indigenous secondary school students from rural and remote areas to attend boarding schools in major cities around Australia.
Secondary school options for many Indigenous students, particularly in remote areas, can be limited. This initiative will provide families with the choice of sending their child to a high-performing secondary school, which will bring with it access to quality learning environments and educational opportunities that might not otherwise be available.
In order to achieve these outcomes, the government will provide $20 million over three years, starting next financial year, and AIEF has agreed to raise at least this much again in matching funding from business.
These monies will be invested in an endowment fund, and combined with investment revenues, will provide up to 2,000 six-year scholarships over the next two decades.
These scholarships of up to six years will cover tuition and boarding fees, and any other expenses that families might not be able to meet, such as uniforms and sporting equipment.
AIEF is the product of a strong existing partnership with Australian business.
The Commonwealth Bank and the Tenix Foundation are major foundation investors in AIEF, having also been major supporters of the St Joseph’s College Indigenous Fund since its inception several years ago.
Andrew Penfold from AIEF who is with us tonight will be moving through the audience later to expand that base of support to help achieve the organisation’s ambitious target of $20 million to match our investment in the education futures of Indigenous kids.
The government will continue to act decisively on the challenges we face today and the challenges we face for the future.
We are acting at home and in cooperation with our partners abroad on the immediate challenge of financial stability.
We are acting ahead of the curve to strengthen the Australian economy in the face of the coming global recession which threatens growth and jobs.
We are acting on the medium term challenge to improve Australia’s productivity performance.
We are continuing to respond to the long-term challenge of climate change.
And we remain determined to act on the enduring challenge of indigenous disadvantage.
The business sector plays a valuable role in helping Australia to meet these challenges.
I am confident that together we can overcome these challenges.
We are a people not given to panic.
We are by instinct a people given to productive action.
To deal with challenges as they arise.
And to chart a strategy through those challenges.
This government is of the same mind.
This government is resolved to take whatever action is necessary in the unchartered waters that lie ahead – to see Australia through.