TRADENZ DINNER

MELBOURNE

Tradenz Chairman Gavin Cormack, distinguished guests, ladies and gentlemen.

Thank you, Jon Davies, for your introduction and you, Gavin, for your remarks on Tradenz's support for New Zealand industrial participation in the ANZAC frigate project.

It's a pleasure to be here this evening, and to see such a good turnout.

It has been suggested to me that tonight's dinner, and this weekend's launch of Te Mana, are just an excuse for you all to attend tomorrow afternoon's big AFL clash between Carlton and Richmond!

I, of course, dismiss such innuendo absolutely, the more so as I'm told that tickets for the game may already be sold out. (But if you have a spare ticket, please see my private secretary afterwards!)

Neither am I here because the Auckland Blues are playing Wellington's Hurricanes in the Super 12 rugby competition and I am fearful about the Hurricanes' prospects.

I look forward to them meeting again in the Super 12 final.

Seriously, though, it's good to be back in Australia for what is a very important occasion.

Put simply, we are here this evening to celebrate excellence in Australasian industry.

From the outset the ANZAC frigate project had its detractors, in New Zealand at least.

Some critics confused naval capability with exposing one's midriff in public.

Both are indecent, and they wanted none of it!

My Government, by contrast, believes that a blue water nation needs a blue water navy.

On that subject I shall have more to say down at the dockyard tomorrow.

Other critics argued that the frigate project was unduly expensive, and would divert scarce human, financial and industrial resources into narrowly-focused technologies, with little return for New Zealand.

How wrong they were.

Scientists recognise the role of catalysts in making things happen faster, in triggering reactions, in enabling new things to emerge from other ingredients.

I believe that the ANZAC frigate project has been a significant catalyst in lifting the sights of New Zealand and Australian companies, in raising levels of excellence, and in helping our industrial sector gain the skills, experience and confidence to compete successfully in the international market place.

The timing of the project could not have been better for a number of New Zealand companies who, in the late 1980s, needed to move from a domestic to an international focus if they were to continue to develop their business.

The multi-year nature of the project provided much-needed ``baseload work'' to boost sales and help spread overheads.

In order to participate, companies needed to commit themselves to provide deliveries and services for the vessels for up to sixteen years out.

Companies had to think way ahead in terms of where they were heading, what they wanted to do in the long run, and whether they had the commitment and capability to support the ANZAC project.

In short, managers and Boards were forced to think strategically and invest long-term.

The project has also played a fundamental role in the push for quality assurance in New Zealand industry.

Work under the frigate project was available only to firms able to show, at tender submission stage, that they were qualified or were working with others who could ensure ISO 9000 series or equivalent quality assurance.

Simply attending seminars on the merits of quality assurance was not good enough.

Companies seeking to participate had to show they were serious about quality, and committed to excellence.

The record speaks for itself.

In 1990 when tenders were being called for the project, I'm advised there were only around 17 New Zealand companies certified to the ISO 9000 series level.

By last year, that number had increased to 1,317 firms - a 77-fold increase.

In the process, the ANZAC ship project has enhanced our industry's credibility on the world stage, capability in technical skills and depth in project management.

New Zealand is now highly regarded in the international defence industry for technical innovation, reliability and the quality of our equipment and services.

Such corporate behaviour builds business success in a global economy.

The project also underlines a trans-Tasman capability to work together.

Using modular design, ships are being built, in both countries, by Australian and New Zealand workers.

By its very nature, the project demonstrates the unique nature of the ANZAC relationship.

It is an example of both the Closer Defence Relationship - CDR - and CER in action.

When we, New Zealanders and Australians, can work collaboratively, compete ferociously, and achieve a world class result, then we need have few fears for the future - business or otherwise - in our own region and beyond.

New Zealand is already receiving the dividends at home and abroad.

So far, ANZAC ship contracts worth just under NZ$500 million have been placed with New Zealand companies.

Work undertaken in New Zealand includes superstructure manufacture, software development, electronic and heavy electrical manufacture, and complex engineering for the ships' transmission systems.

Over 11 million hours of work will be undertaken on the project - equivalent to 6000 years of employment.

Literally hundreds of New Zealand companies and thousands of New Zealanders are deriving work, either directly or indirectly, as a consequence.

In addition, since 1990, New Zealand companies have won a further NZ$175 million of other defence contracts.

Prior to the ANZAC Ship Treaty, New Zealand companies did not have access to the Australian defence network.

In acknowledging these gains, I would also want to recognise, and thank on your behalf, Transfield Defence Systems for the expertise they have brought to bear on the project.

Looking beyond Australasia, the technologies developed by New Zealand companies as a result of the ANZAC project, have enabled them to pursue defence and civilian contracts worldwide, with an initial focus on South East Asia.

New Zealand's defence exports now total over NZ$90 million per annum - a significant sector, which by its demanding nature, both requires and demonstrates that New Zealand's industrial sector has truly come of age.

So too has CER, which remains among the world's most advanced Free Trade Agreements.

If once CER was about removing trans-Tasman barriers it is now increasingly the base for cooperation, competition and collaboration within and between our economies.

Australia and New Zealand have so much in common that we are prepared, jointly, to not only reflect but also set world best practice in the liberalisation of trade and economic relations between us.

The success of CER has, in turn, helped both Governments to commit themselves to the larger process of removing all trade and investment barriers within and between Asia-Pacific economies under APEC.

The head start we each have made through CER give us a good start as we move towards realising the goals of APEC.

Of course, another ingredient for international success is also having sensible and stable domestic economic policies.

The marked reduction in New Zealand's unemployment rate, from 10.9 to 6.4 per cent since the adoption of the Employment Contracts Act, together with an increase in our productivity, are key springboards for international success.

Companies don't win contracts against international competition, and economies don't grow as ours is doing, if domestic costs are rising and productivity is falling.

And don't just take my word for it.

In the last ten days the Prime Minister of Japan, and the German Chancellor have each come to visit New Zealand - in part to see how we operate and manage a reformed economy.

Australia and New Zealand will have differences from time to time.

And, if remaining issues in the trans-Tasman relationship are difficult - in such areas as aviation, quarantine and broadcasting rights - this complexity is itself a testament to the fact of how far we have come together in building an outward-looking Australasian economy.

Now, only the hard bits remain to be addressed - which makes it all the more important that we press on to derive the gains that still lie in prospect.

I am confident that if we are able to harness the same commitment and cooperation which has typified the ANZAC project, then the further development of both CER and APEC will hold few fears, and rich promises for us in the years ahead.

In the meantime, I want to end from the point where I started. Tonight, ladies and gentlemen, is all about excellence in industry.

I extend my personal congratulations, and those of the New Zealand Government, to all the companies represented here tonight.

You have done, and are doing, a great job in building the ANZAC frigates.

I am sure that you will maintain these high standards in all the work that lies ahead.

The launch of Te Mana tomorrow afternoon will be a fitting tribute to the excellence of your endeavours and I would ask you now to raise your glasses - both to congratulate yourselves on a job well done, and in particular to extend to Te Mana, and those who will serve in her, all the best wishes for the future.

Ladies and gentlemen, `Te Mana'.

Thank you.

Ends.