Tuesday, 15 May 2012 00:00
- By The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations
In December last year I was invited by the Israeli Finance Minister Dr Yuval Steinitz, to lead a delegation to Israel in conjunction with the Australia-Israel Chamber of Commerce. So in early May I led a delegation comprising of senior officials and executives from major companies and institutions including the Australian Prudential Regulation Authority, Challenger Financial Services, MLC, and Science and Technology Australia.
Australia has a long-standing, close relationship with Israel, including strong people-to-people links which have underpinned the relationship. This provides a solid base from which to strengthen the bilateral economic and trade relationship. We laid a wreath for the 200 Australian soldiers from the Light Horse Brigade who died liberating Jerusalem. Our common history has been strong since the presence of Aussie troops during both world wars and since. Australia has been a firm supporter of Israel since its independence. My wife and I also laid a wreath at Yad Vashem memorial for the victims of the holocaust.
Israel Chamber of Commerce and Financial Service Delegation led by Minister Bill Shorten
Anyone who has been to Israel is immediately impressed with its vitality not to forget its culture and history. Our financial services trade mission was also about creating an increased awareness of Israel as an emerging market for Australian goods and services and superannuation fund investment.
It was also an important objective for the delegation to increase investment awareness in the other direction — for Israel to identify the strong opportunities in Australia to invest in for example, commercialisation of research and development and other forms of local venture capital, for which Israel has become well-renowned.
Indeed, why is it that Israel, despite its size (a population of less than 8 million and gross domestic product of around US $240 billion), has the ability to produce more start-up companies, through a thriving venture capital industry, than much larger nations such as Japan and Korea?
When I travel overseas, I often get asked to tell Australia’s economic story — why did Australia perform so well compared to other countries during the global financial crisis and why we are not afflicted with many of the lingering problems experienced in the US and Europe.
But I always tell overseas questioners that our Australian government is not complacent about the risks confronting the global economy and Australia. And the delegation was reminded of global uncertainty in meeting the distinguished economist Professor Stanley Fischer, Governor of the Bank of Israel.
Bill Shorten Minister for Financial Services and Superannuation and Minister for Employment and Workplace relations and wife, Chloe Shorten with Israeli President Shimon Peres
I can see some similarities between Australia and Israel’s respective economic performance. Like Australia, Israel rebounded strongly from the global financial crisis — in fact, along with South Korea, Poland, Australia and Israel were the only advanced nations whose economies grew in 2009.
Like Australia, Israel punches above its economic weight. In Israel’s case it is its high-tech exports and entrepreneurs who are not afraid of failing.
Taking full advantage of what both countries excel at on the world stage, be it natural resources extraction, financial services or hi-tech developments, allows nations like Australia and Israel to prosper in today’s globalised marketplace. We can harness each other’s strengths.
My friend Michael Danby, the Chair of Parliament’s Foreign Affairs Committee and my wife Chloe and I attended the Shiva of Prime Minister Benjamin Netanyahu for his father Benzion. Despite the Prime Minister’s loss, he engaged on a range of topics.
Mr Netanyahu told us that he recognised Australia’s expertise in liquefied natural gas — after Qatar we are the largest producer of LNG in the world— calling on Australian LNG companies to help develop Israel’s significant offshore reserves.
Michael Danby MP and Amanda Mendes De Costa thank Israeli Supreme Court Justice Eliezer Rivlin
But I also observed a key difference. Israel’s commitment to innovation and commercialising that innovation is hard-wired into key institutions. There is a Chief Scientist in every Government Department, a defence industry that spins out innovation for industrial use and a tolerance for risk and failure, because investors realise that it’s often an entrepreneur’s second or third business that will be their most successful.
I think there are lessons for Australia in this approach to innovation. The delegation also learnt, in meeting with the President of Israel Shimon Peres, that so much of Israel’s success owes to hard work and developing human capital rather than any natural resource endowments.
President Peres also acknowledged the strength of the Australia-Israel relationship, remarking that ‘We have a real love for your country and we appreciate that Australia has stood on our side’.
Australian superannuation fund managers should look beyond the continent for investments in developed, well-managed and well-regulated high-growth economies. There are also opportunities for Australia to export its LNG expertise to Israel. During the delegation’s visit it became clear that the already strong Australia - Israel relationship has tangible opportunities which warrant greater attention.
- Earlier Michael Danby was in Tunisia, where he confronted Rached Ghannounchi, the Chairman of the first victorious Islamic Party from the Arab Spring, Ennahda
- Jeremy Cooper, retirement income chairman at Challenger, was member of the delegation to Israel withMminister Bill Shorten, and argues that Australia could learn much from robust Israeli example.
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