Australian institutional investors should deploy more capital in the Asia-Pacific region, embrace the national interest issue of renewable energy, and take Trump at his word, says Minister for Foreign Affairs Penny Wong.
Speaking at a Conexus Financial Political Series event in Sydney this month, Senator Wong urged the superannuation industry to give greater consideration to neighbouring countries when allocating investments, particularly Southeast Asia.
“As engaged as some in the business community already are, we need to see much more from the private sector,” Senator Wong told the Political Series luncheon, in partnership with BT.
“I’ve said that smart business will take the opportunities created by the [Southeast Asia Economic] Strategy. Smart businesses will do more business in Southeast Asia. And smart businesses will see the advantage in Australia’s Asian diasporas.
“Greater economic engagement with Southeast Asia and across the region helps build alignment, and helps foster a dynamic that reassures the region of our intentions for peace and prosperity.”
In late 2022, the government appointed former Macquarie chief executive Nicholas Moore as special envoy for Southeast Asia for the Australian government, tasked with establishing a strategy for greater economic engagement with regional partners to 2040. As part of the initiative, a number of senior institutional investors have travelled with Moore throughout the region, including delegations to Indonesia.
“While Southeast Asia has grown rapidly, when we came to government, Australian direct investment in Southeast Asia was lower than it was in 2014,” Wong said. “We need to turn this around.”
‘Renewables energy superpower’
Wong, formerly Minister for Climate Change, also challenged the audience of financial services leaders to embrace sustainability and decarbonisation of the economy, despite US President-elect Donald Trump vowing to pull out of the Paris Agreement.
Nearly 200 governments, including Australia, are signatories to the 2015 international treaty, which aims to slash greenhouse gas emissions by almost half by 2030 and achieve net zero by 2050.
The withdrawal of the United States, for the second time, would make it one of the only countries not to support the 2015 international treaty.
Despite acknowledging the challenges of transitioning to net zero emissions by 2050 while preserving existing industries and jobs, and securing economic growth, Wong pointed to the ethical and economic imperative.
“Our Government is committed to achieving net zero and becoming a renewable energy superpower,” Wong said. “We know the economics of renewable energy are so strong, and it is in our national interest to embrace that and to expand renewable energy.
“We will do as we have always done and ensure Australia is doing its part to transition its economy and keep the Paris Agreement goals in reach.”
The comments came just ahead of the government’s controversial decision to amend the Future Fund’s mandate to encourage investment in renewable energy, alongside housing and national infrastructure.
‘Don’t be surprised by Trump’
As for Trump himself, Wong warned investors not to underestimate his ability to disrupt and pursue a significantly different agenda.
“President Trump has campaigned on change. He’s made it clear he’s determined to change things. So, we shouldn’t be surprised if there is change,” he said.
But the minister said Australia should be “confident” in its ability to work with the US despite what is widely expected to be an uncertain and volatile period under a second Trump administration.
“There is strong longstanding bipartisan support for the alliance in both Australia and the United States, and the United States is our principal strategic relationship,” Wong said. “Certainly, the government will be working very hard on those issues which matter very deeply to us – obviously AUKUS, but obviously also trade and our trading position.”
Conexus Financial is the publisher of Investment Magazine.