Former Minister for Trade
Australian Commonwealth Coat of Arms

Doorstop - Stoke Lodge, London

Subject: Bilateral relationship with the UK, Doha Round, London Olympics, UK Air Passenger Duty.

26 January 2010

Mr Crean: I came to London to talk to both the Government and the opposition in relation to the bilateral relationship, which between Australia and the UK is very strong.

The UK is the largest investor in Australia, two-way trade has grown substantially over the last year, and importantly services trade has seen big growth between our two economies. And so reinforcing the importance of that bilateral relationship was a major focus of the visit. Of course, working together as we have been with the Government to try and advance the Doha Round was also an important part of the discussion.

I also visited the Olympic site, and the Westfield retail development, which is quite huge, but also very exciting. In many senses it is a good example of the services trade from Australia to the UK. Australia has really become the expert in the Olympics. It has gained some $200 million in contracts already, and it is confident of continuing to win contracts when it comes to the operational infrastructure. What is undertaken at the moment is essentially the physical infrastructure, so Australia has done well out of the Olympics ever since the Sydney Olympics. This is another value-add dimension, because it has the retail complex as well.

So, all in all it’s been a good visit, and whilst we talked about a number of issues and extending the two-way trade, I also took the opportunity to raise with them a matter of concern to us, and that is the Air Passenger Duty. We’ve indicated to the Government that whilst this was originally said to be a duty for environmental purposes, it is now accepted that it’s just for revenue raising purposes. We’ve said that we understand governments need to raise revenue, but that they shouldn’t do it in the discriminatory way in which this tax applies. It hurts us particularly because people flying to Australia from here pay by far the biggest premium. It came in on the first of November, I’m the first minister to have visited and raised since it’s come in, but it is due to increase by some 50 [dollars] by next November. We’ve urged both the Government and the opposition to re-look at this, and to take out the discriminatory nature of it.

Journalist: What did they say in response to that?

Mr Crean: Well I think that, given it’s a revenue raising measure, in the end it’s Treasury that will determine the final outcome, but I think it is fair to say that both Lord Mandelson and Kenneth Clarke were surprised at the discriminatory nature of the tax and its impact, and they’ve undertaken to raise it themselves with Treasury.

Journalist: How damaging is it for the Australian tourism industry?

Mr Crean: Well if we’re trying to strengthen the bilateral relationship, and as I said the importance of the services trade between our two economies, what’s fundamental to that is the people to people contact. If you’ve got a tax that actually runs counter to it, it doesn’t help the two-way trade and it doesn’t help the strengthening of the relationship. That’s a very strong point that we’ve made.

Journalist: Doha? You fly out tomorrow for Davos, you’ll be talking about Doha there?

Mr Crean: Davos will provide the first opportunity this year to re-engage, following the ministerial meeting in Geneva last year. There was a decision at that meeting that we should have a stock-take by March, and it’s an important opportunity to talk about how best to move towards that stock-take, and advance the round. It won’t happen unless there’s the political will to make it happen, so therefore every opportunity there is to engage at the political level is terribly important.

Journalist: Just to come back to your talks with the opposition here, the polls are indicating there’s likely to be a change of government here, do you have any feelings on what the relationship between Australia and a conservative government would be?

Mr Crean: Well again, let’s wait and see what the polls are, but we’ve always taken the view, especially with an economy and a trading partner as strong as we are with the UK, it’s always important to engage both sides of politics, we have in the past, we continue to do it.

Journalist: Just back to the Olympic site, how was it to see the Olympic site today?

Mr Crean: Well I think the incredible thing about the UK site is that the physical infrastructure is going to be completed next year, in other words a year ahead of schedule. And in terms of the management of the site, on behalf of the London Olympic committee, it’s Australian expertise that’s involved, it will come in ahead of time and on budget, if not below budget. Again, I think look at how far we’ve come since the Sydney Olympics. We have become the experts in the Olympics. Because we’ve understood that sport itself is an export. It’s not just the performance on the field or in the competition, but it’s the industry that surrounds it. The building of the stadiums, the sports management, the events management, the ground-keeping, the sports medicine, the catering, and all the marketing that goes with it. This is what Australia has great expertise at. What we saw on display was their expertise, not just in the management but in the participation and the physical construction, and we are confident that more Australian opportunities will present themselves when it comes to the, what’s broadly called the operational infrastructure, but if you like the security, the ticketing, the events management, all of those sorts of things. Those contracts are up for grabs, and I urge all those Australians that have skills in this field, contact Austrade, get involved because the opportunities are there.

Journalist: What part does the Australian Government play?

Mr Crean: The Australian Government is playing a very active part through Austrade, in supporting and partnering businesses that are seeking to take advantage of these opportunities. We took the opportunity in the Beijing Olympics two years ago to host a function that involved the London Olympics Committee, to demonstrate the expertise on the contracts that we’d won in Beijing. And we have been active in the two years intervening, to ensure that the contracts already won were won, some $200 million worth, but confident that more are there to be won, and Australians will do well at it.

Journalist: Are there any new projects that are of particular interest to you?

Mr Crean: Well they’re still to be let, but as I say in all the operational infrastructure areas, the catering, the security, the ticketing, all of those sorts of things, so we look forward to them doing well.

ENDS

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