The groups have put the position paper to the country's trade ministers to discuss during talks on the Indonesia - Australia Comprehensive Economic Partnership Agreement at the East Asia Summit this week
The proposal is ambitious - calling on both governments to abolish two way trade and investment barriers, improve regulatory processes and make it easier for workers to migrate between the two countries.
Presenter: Del Irani
Speaker: Peter Anderson, Chief Executive of the Australian Chamber of Commerce and Industry
ANDERSON: The proposal here is for the Australian and Indonesian governments to undertake a serious and rapid set of discussions about the way in which both the Australian economy and the Indonesian economy can be strengthened by economic partnership and closer collaboration, and that is about all aspects of our economic activity, including investment, including the way in which transport and logistics occur, the development of service industries as well as people movement. And these are proposals that are being developed jointly by the business organisations and private sector communities of both Australia and Indonesia under the authority and mandate of both Prime Minister Gillard of Australia and President Yudhoyono of Indonesia. They're not proposals that have been accepted at this stage by the governments, but the governments have in a very significant move said that they would like the private sector from both countries to provide input to help frame the government-to-government talks.
IRANI: There is one part of this proposal that could prove to be quite controversial, and it's the part that says it would basically allow unskilled workers with limited English into Australia under the supervision of a foreign person with good language skills. This is a move that could possibly anger unions in Australia?
ANDERSON: Well clearly it's something which can be controversial but the way it's been reported is not quite right and I think it needs explanation, and with explanation it shouldn't actually cause any concern by either the Australian trade union movement or by the Australian community, because what's proposed here is for Australia to use our very extensive capability in education and vocational education as effectively one of our export markets to increase what is a pressing need in Indonesia, and that is an increase in the skill capacity of what is a young population.
IRANI: But is there a need for more unskilled foreign workers in Australia?
ANDERSON: Well the proposal is not to bring foreign workers in just to work in Australia, the proposal is actually for unskilled or semi-skilled people in Indonesia to be partnered in Australia through our vocational educational institutions to increase their skills so they can go back into Indonesia and add greater value to the Indonesian economy.
IRANI: And what would Australia stand to gain from this?
ANDERSON: Well Australia's education system is a vital export. Our education services are already part of our export product into Asia, and it's identified both in this report and in other work, such as Australia and the Asian Century White Paper, as being one of the lynch-pins of our future activity and integration with Asia. And we know that we have Australian professionals working in Asia in construction services and a range of other service sectors, but what Indonesia and other developing countries in Asia need is a rapid increase in their own skills capacity. And that can't be done without some assistance from countries like Australia who have good educational systems.
IRANI: So what would be the training component versus the work component in this?
ANDERSON: These details would need to be worked through if governments do commit to increasing people movement, and we're talking here about organised people movement for the purposes of increasing the skills capability back in Indonesia. We're not talking about bringing Indonesian workers in as some form of cheap labour in Australia. And I think that it's important that the Australian community recognise that our own Australian business community is deeply committed to ensuring that Australians are trained adequately to perform the work that we need done in Australia. But that we do have a responsibility to help Indonesia increase its skills capability because we've got a lot of learning as well as a lot of capability of having our education sector expand its operation and its reach into Asia. So the detail of how you mix on-the-job training with off-the-job training in order to develop some of these skills are matters that would need to be the subject of dialogue and discussion. But the first principle is that governments need to recognise that this is an area where Australia can add value, where Indonesia has an economic need and where a partnership can be formed to deliver an outcome that works for both countries.
IRANI: And what sectors or industries do you envisage these workers getting the vocational training that you're talking about in would be agriculture, mining, building?
ANDERSON: Look the areas where the Indonesian economy is rapidly growing is not just in some of the traditional areas of manufacturing and resources and transport logistics, and they're certainly areas where they need some increased skills. But as they're developing their own middle class, they are starting to develop a greater capability in relation to their own service industries, and that will increasingly be a trend. For Australia, Indonesia is not only a country that is going to have this growing middle class and consumer class that will be attracted to some increased quality in goods and services. But it's also an important potential transport and logistics hub for Australia as we reach out into Asia, as we reach out into the Middle East, and as we reach out into the Indian Ocean Rim and the growing economies in Africa.
IRANI: So Mr Anderson would you say it's not necessarily unskilled workers but rather middle class educated workers that would be looking at coming into Australia?
ANDERSON: Well we think that there is a need to increase the capability of the Indonesian labour force at both an unskilled and a semi-skilled level. The Indonesians themselves are suggesting that that is where their needs are, it's not for Australia to determine ultimately how they prioritise the balance between semi-skilled and unskilled. But from an Australian point of view there is a lot to be gained by ensuring that Indonesia has a more skilled workforce, and that means lifting people both at the lower ranks of their labour force, as well as at the semi-skilled ranks. And if we do that in a way that adds greater capability in the Indonesian economy, then it's much more realistic that Australian businesses can use Indonesia as a hub for transport logistics, energy security, developments, resource development, port development, all of the areas where Australia has some innovation and technical know-how.
IRANI: Ok and just lastly what's been the response of the government on this proposal?
ANDERSON: Well we, and I say we both the Indonesian business community and the Australian business community through our respective peak chambers of commerce, have jointly given the Indonesian and Australian governments this report over the course of the past week. Governments haven't responded in any official way and we don't expect them to do so in a matter of days. This is a substantial body of work, it's been the subject of three formal trade rounds between our own private sectors both in Sydney and in Jakarta. It's been the subject of plenty of consultation with business communities in Indonesia and in Australia. So we would like the governments to not just receive this report, give it serious consideration and use it very actively to frame the government-to-government economic partnership discussions that are scheduled for next year, and which so neatly fit in with both what our Prime Minister Gillard is discussing in Phnom Penh at the moment at the East Asia Summit, as well as what the government has set out as some ambition in the Australia in the Asian Century White Paper that was released three weeks ago in Canberra.