Ninety-nine per cent of Australian exports to Indonesia will now be able to enter tax free, or will receive preferential treatment, under the free trade deal struck by the two countries in a “historic” Indo-Australia trade agreeement.
And everything Indonesia exports to Australia will enter without being subject to tariffs or taxes, which Prime Minister Scott Morrison says will reduce costs for Australian business, and grow Indonesian exports.
It was not immediately clear what goods or services have been excluded from the agreement.
Mr Morrison also suggested the Australian government would look at making greater use of technology to make it easier and simpler for Indonesians to get a visitor visa to come to Australia for a holiday.
He also flagged that the Australian government would sign a new security declaration at the Pacific Island Forum next week, but he would not be drawn on what the agreement would contain.
Indonesian Vice President Jusuf Kalla, who also addressed the Saturday business breakfast attended by Mr Morrison, highlighted the fact that Australian universities would now be able to open up campuses in his country.
He said his country of 260 million people needed greater access to education and “that’s why we invite Australian universities to operate in Indonesia”.
Australia’s economic and trade relationship with Indonesia lags behind much smaller nations in the region including New Zealand, Singapore and Malaysia, despite our northern neighbour representing a huge potential market.
Addressing the breakfast guests in Jakarta in his first major speech in a foreign capital since becoming Prime Minister, Mr Morrison again stressed the importance of the Indo-Pacific region remaining “secure, prosperous, open and inclusive” – a thinly-veiled reference to China’s increasingly assertive posturing in the region.
To that end, he said Australia would deepen its cooperation with key regional partners including Indonesia, India and Japan.
At the conclusion of his first, brief trip overseas Mr Morrison said the Indo-Austalia trade deal would “create jobs and it will create wealth for both countries” across agriculture, manufacturing, services and investment sectors of the economy.
He later added at a press conference that for key imports that come to Australian from Indonesia, “particularly petroleum and furniture and things like that – wood, even footwear – these are things that will no longer have these tariffs on them”.
Asked whether Australia would in the future look to cut red tape to make it easier for Indonesian to obtain a visitor visa to holiday – the current application process is time consuming, costs $140, and
asks applicants whether they have committed genocide, war crimes, crimes against humanity, torture, slavery among a host of other questions – Mr Morrison was receptive to the idea.
“The short answer to that is yes. But our comprehensive visa system is one of the most important elements of why we have such a successful immigration program,” he said.
“There are matters that have been brought forward to me which further enhances the technology that is available to us to make sure that our visa system ticks all the right boxes, but can tick boxes in a way using the technology that is available to us today.”
Mr Morrison cited the Australian company Bluescope as an example of how the Indo-Australia trade deal would help business.
“Once this agreement is ratified, the raw materials Bluescope Indonesia needs from Australia to produce its high-quality steel will be more affordable and supply will be more reliable.
That means Bluescope’s manufacturing facilities in Indonesia, and other Indonesian steel manufacturers, will be better able to supply markets across the region.
Farming groups have hailed the deal as a major win, as it will clear the way for the export of more Australian produce, as has the tertiary and vocational education sectors – which will be able to set up operations much more easily, while maintaining majority ownership.
“This agreement isn’t only about the goods and services that we buy and sell. Importantly, it will give Australian investors greater certainty in Indonesia and promote more two-way investment,” Mr Morrison said about the Indo-Australia trade.