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QUESTION: This isn’t your first time in South Africa is it?

SIMON CREAN: This is my first time as trade minister.

QUESTION: Did you visit as a member of the trade union movement?

SIMON CREAN: Not in the labour movement, but in opposition when I was shadow trade minister. I went to Nigeria and also went to Morocco and Algeria.

QUESTION: That’s six or seven or eight years ago?

SIMON CREAN: No only three years ago. We only got into government two years ago.

QUESTION: What’s the purpose of this trip here now?

SIMON CREAN: The reason I’m in South Africa essentially was to attend the Mining Indaba conference, because there is a large Australian commercial footprint in Africa. The mining ministers from many African countries attend the conference and it was the largest Australian presence at the Indaba mining conference. The purpose was twofold: it was to reinforce the strength of Australian mining and the unique brand that Australia mining is and why its well-received in all the countries where it operates.

But secondly to reinforce the message, which the Foreign Minister had delivered a month or so ago, that the Rudd Government was making a renewed and much stronger commitment to the aid program in Africa. So it was to reinforce as Trade Minister, not as a mining minister, that in trade negotiations with developing countries it isn’t enough to simply ask for market openings, we also have to address capacity building. That’s what we do in ASEAN, it is what we do in the Pacific and what we do here in Africa. And if in fact the mining companies that have a presence are also committed to social responsibility agenda, we should be able to partner better with them in responding to the capacity building needs of the African countries.

QUESTION: That’s why you’re going off to plant some trees tomorrow?

SIMON CREAN: The planting of the trees tomorrow is part of the BHP Corporate social responsibility, concern for the environment. They’ve also got some community sporting programs. BHP has also got some HIV/AIDS programs. So the companies are doing a whole lot of initiatives so it’s always good to go and see how they translate on the ground because the community to community engagement is very important.

QUESTION: I was thinking of Australia and South Africa’s connection – water resources. You’ve had a bit of a drought and a couple of floods there, parts of this country is always in drought. What kind of opportunities are you finding, are you looking for in water technology, recycling, smart irrigation, desalination. Presumably it’s an area that you’re finding some niches.

SIMON CREAN: It was interesting, I’m meeting up with the Minister for Environment and Water. She was in Davos. She was in a meeting that I participated in on water and we discussed that very question. We have very significant strengths in technology for water management, dry land farming and we are participating actively in programs here. One of them that comes to mind is drought resistant maize production for food security, especially the climate dimension.

The water agenda I think is - I’d say that there are four big agendas - food security, resource and energy security, skills development and water. And we have strengths in all those fields, and not limited to that, there are a range of other areas in which we’d be interested in opening up trade and investment opportunities, but if one looks at the capacity building argument, this is where I think there can be significant strength injected by us.

QUESTION: I love the phrase capacity building, it means anything and everything.

SIMON CREAN: There’s no point in opening a market unless you’re competitive enough to take advantage of it, if you haven’t got the skills that enable you to undertake the productivity. If you haven’t got the roads or the bridges or the physical infrastructure or the ports to get the resources out, you haven’t got the innovation that enables the adaption of the technology, so there’s a whole range. I mean they’re just examples, the generic term is capacity building but it essentially is strengthening the ability of countries to be able to more actively participate in the more globally, open economy.

QUESTION: Is this in connection with South Africa or are you thinking more generally for the subcontinent?

SIMON CREAN: The subcontinent but the discussion we have it in terms of our bilateral relationship with South Africa but it's not limited to just South Africa. And the aid program isn’t just limited to South Africa.

QUESTION: The government here has been in power for almost 20 years, its strength is in part, maybe in a large measure in labour unions. How do you see your relationship in a government that also draws the same kinds of strengths?

SIMON CREAN: Well, I think provided there’s an interest in it, we’ve got a very strong message to convey as to how working cooperatively for common objectives but in which individual interests are taken into account, you can really build a sustained, productive, outward looking economy that creates big job opportunities. Why has Australia been the only developed country in the world that has avoided a recession? Because it undertook the big structural reforms in the '80s with the cooperation of the trade unions, when I was leader of it. It took the big structural adjustment reforms. It also took the conscious decision to engage more with the fastest growing region in the world and then it moved decisively on a fiscal stimulus package. All of those ingredients worked. Now, the first two of them came about with the active engagement with the trade union movement so I think that’s a message that not only I’m proud of because it’s been an important part of securing Australia’s future in the world but I think it’s a very good message to impart.

QUESTION: So this is an implicit criticism of the kind of economic activity here isn’t it?

SIMON CREAN: No, because I don’t know enough about the economic activity here. I’m just saying I think that when people ask us, as they were asking us in Davos, how Australia has been able to do it, it’s a very good story. But it is about openness in trade, structural adjustments, competitive economy but sharing the benefits of the wealth created. Now the common ground that our colleagues here would have obviously would be in the latter. What we understood was the importance of the wealth creation dynamic that gave us the better ability to influence the distribution.

QUESTION: The Australian economy has comfortably been the world’s best performer in the global economic downturn. What do you think this is down to?

SIMON CREAN: Three things – the huge structural reforms that were undertaken that made us a more competitive nation and to argue actively and aggressively that markets should be opened and trade was an important dynamic. Secondly, to understand that we shouldn’t just rely on traditional markets – we should engage much more with the Asian region. And thirdly, given the global financial crisis, we moved decisively with a fiscal stimulus that did two things. It aimed at increasing consumption and the reason the consumption package worked was because we had safety nets, which were a product of those accords with the trade union movement. Consumption was 30 per cent of the fiscal stimulus package. The other 70 per cent was investment in the infrastructure deficit in our schools, in skill formation and productivity improvement, physical infrastructure. We set up the Future Fund, the Building Australia fund – key funds set up at an arms length from government as to what it prioritised in terms of the infrastructure spend. The key priority is that it added to the nation’s international competitiveness.

QUESTION: How confident are you that it will resume this pattern of expansion, especially with rising interests and the strength of the Aussie dollar?

SIMON CREAN: Well, even with the strengthening of the dollar over the last year, Australia was one of the few countries in the world to increase its rating of exports, so I’m very confident about our ability to continue the expansion of our trade. Trade isn’t just exports. It’s imports that either keep inflation down – good for the consumer or are inputs to production, which our competitive advantage on the skill front or the adaptation front, really turns into a greater advantage. We’ve recently concluded a free trade agreement with ASEAN and the two way trade with ASEAN nations is already as big as our two way trade with China. So we have new market openings from 1 January into the fastest growing region in the world. We’re advancing trade negotiations with Japan, Korea and India and China, of course.

QUESTION: Outlook on commodities, particularly iron ore and coal in terms of the impact on your economy?

SIMON CREAN: The outlook must be seen in a positive light. The reason, if you look at all the infrastructure packages that were undertaken, this becomes a question of the sustainability of the economies going forward and the impact of the exit strategies, but if you look at the peak demand for the physical infrastructure and this was an agenda that India was committed to before the global financial crisis because it knows its got an infrastructure deficit. Japan, Korea – all of these countries – what do they need? They need resources. They need iron ore, they need coal. And they need uranium for their development. Going forward, I think the prospects are strong because the region is growing. Economies are having to adjust so that they’re not just export driven but they’re domestically consumption driven and when you look around the region I think that Australia is pretty well placed. But we’ve got to be constantly vigilant.

QUESTION: The regulatory environment – on the global scene. Is there any talk in your government about moving in quite strongly and the need for financial reform? Financial reform of any kind – regulatory reform?

SIMON CREAN: We are part of that dialogue in the G20. We’ve been very strong in arguing that another significant reason we dodged the recession is that we have a strong regulatory framework in place and that is a lesson we learned out of the '87 crash and that’s why we didn’t get hit by the Asian financial crisis. What we want to do is to get greater acceptance of the need for getting the international financial architecture of a better rules-based system in place. The WTO has a strong rules-based system, that’s what has helped us avoid a return to protectionism – what we do going forward if we’re going to sustain growth is people, especially in Asia, are very critical of the model that was allowed to develop in terms of the financial system and we’re participating and arguing very strongly with active engagement in the development of these financial regulatory structures.

[ENDS]

Media inquiries

• Mr Crean’s Office: (02) 6277 7420
• Departmental Media Liason: (02) 6261 1555