Q&A National Press Club

  • Transcript, E&OE
Subjects: Australia-China trade relationship, The Voice, Calvary Hospital, CPTPP membership, Australia-EU free trade agreement, ISDS provisions.

Jane Norman: All right, thank you. Our first question, Tom McIlroy from the Fin Review.

Tom McIlroy: Thanks for your speech, Minister. Thanks, Jane. Minister, in Beijing a few weeks ago there was clearly goodwill between you and your Chinese counterpart. At the time of the trip you talked about a pathway to the stabilisation of relations and the end of the year as a possible destination point. With regard to barley and the other things that you’ve talked about, what are the steps on that pathway, and does the end of the year still ring true?

Trade Minister: Thanks, Tom. Look, I think it does. I had another good meeting with Minister Wang last week in Detroit. It was interesting that before he met with me, he met with Gina Raimondo, the American Commerce Secretary, and the comments in the American media was that the Americans are following the Australian pattern of stabilising the relationship. So that was a good meeting both from my point of view and obviously Secretary Raimondo's point of view. We’ve managed to get a number of products back into China and we have seen the ones I’ve mentioned today, including the announcement in respect of timber. Barley is next cab off the rank. As you know, we were prepared to, as an act of goodwill, suspend our WTO application against China in return for the Chinese Government fast tracking their review of the 80 per cent tariffs that are currently applied to Australian barley. That process is close to completed, and the messages I got back from our officials in China was that things are going in the right direction, so I’d be hopeful that when that decision is finally made that it’ll be a positive decision and we can get Australian barley back into China.

And I met with the Western Australian barley group yesterday just to talk about how that might happen. We’ve said to Minister Wang that we think that the template that we’ve established with barley should be the process that we look for with wine, and I reiterated that at our meeting in Detroit on Friday. Again, it was another positive, warm and friendly meeting, I think it would be fair to say, so things are progressing.

The problems didn't occur overnight, as I’ve said before, and they’re not going to be resolved overnight. My job is to keep pushing and pushing and pushing, and I think the direction is heading in the right direction but there’s still a lot more work to go. I don’t want to build up expectations, but I do think that bit by bit, and we discussed some other impediments at that meeting on Friday, but I think bit by bit we’re going to get back to a stabilised, pre-COVID, pre-bans relationship with China. And that’s obviously going to be good for Australian wine and food producers but also good for Chinese consumers who are looking to buy our products.

Jane Norman: And just with the barley review, would you accept anything less than a full revocation of the sanctions?

Trade Minister: No.

Jane Norman: Right, so all sanctions go, or no deal.

Trade Minister: Yeah, we’ve got a Free Trade Agreement with China. It’s got certain provisions in it, and we want the Chinese Government to comply with their obligations under that Free Trade Agreement. That’s our expectation, and that’s what we’ve asked for. If we find ourselves in a situation where we’ve shown an act of goodwill to suspend our WTO application, and we don't get the result we want, well, we’ve made it clear to the Chinese Government that we’ll resume that application.

Jane Norman: All right. Our next question is Karen Barlow from the Canberra Times.

Karen Barlow: Minister, thank you. Look, I want to take you to your mysterious Special Minister of State portfolio. I don't know whether this is one of your before-mentioned bodies, but I would love to know if there is still active consideration for additional territory representation, indeed wider representation, added on? And look, where would they all sit if that is correctly coming in?

Trade Minister: Well, you can never have enough politicians, can you, in this country? [Laughter] Look, I don't want to pre-empt the outcome of the inquiry that’s almost about to be released, but I am happy enough to give consideration to that issue, as I’ve said in the past. But there is a process here. After each election, the Electoral Committee, examines the outcome of the last election, they take submissions from a variety of groups, and of course, they then come down with some recommendations, which are very close to being released.

We are in this situation of course where, since the last time the numbers were reviewed across the country in 1984, there’s 10 million more Australians. So, we have had a very significant increase in population with no increase in the number of members of Parliament. So, look, I understand the issue. ACT is growing very strongly, Northern Territory is growing very strongly, and it’s an issue I think we need to address and give consideration to.

Jane Norman: Our next question is from Rhiannon Down from The Australian.

Rhiannon Down: Hello. Rhiannon Down from The Australian. Is Taiwan entitled to be considered for CPTPP membership? And can you name any reason why Taiwan’s application to join CPTPP should not be processed

Trade Minister: Thank you. Yes, it used to be called the TPP and it was a fairly easy word to say. But when Canada came in, of course, it became the CPTPP. So we had a meeting of all of the members of the CPTPP in Detroit last week, and consideration, not just of Taiwan -but the other seven or eight economies that would like to join that group, were given some consideration. The situation at the moment is that for the past couple of years we have been considering the first of the new applicants, and that was the United Kingdom. I think it’s probably fair to say it was a relatively slow and torturous proceedings that even at this point haven't quite been finalised.

We’ve got in principle agreement, but there’s still a range of things that need to be done to finalise that agreement and we're hopeful that all of those will be completed by July when the group meet in New Zealand. But even then, it’s going to require countries to make decisions about approving that new accession in their own countries. We took the view that let's finalise the United Kingdom, and after we’ve done that, we will give consideration to all of the other applicants who would like to join. I think it’s fair to say there was a mood in the room to just deal with the UK situation, and settle that down before we move onto the next step. That doesn't just apply to Taiwan, that applies to all of the other applicants that request to come into that agreement. That agreement is a popular agreement, as you know, and serves Australia very well. In fact, it gives us access to countries that we otherwise don't have free trade agreements with. So it's a very good agreement. It’s delivering good results for Australia and that is why I think there are so many applicants wanting to come into that agreement.

Jane Norman: Our next question, Daniel Hurst from the Guardian.

Daniel Hurst: Daniel Hurst from Guardian Australia. Moving to Investor State Dispute Settlement, ISDS, which, as you know, has been used by big tobacco on plain packaging laws and more recently by Clive Palmer. It’s clear that the Government, and you’ve said it again in recent weeks, that you won't be signing any new agreements that include ISDS clauses. But what about the existing agreements? The Labor platform said Labor will set up a full-time negotiating team within DFAT whose sole job will be to negotiate the removal of ISDS clauses and the reinstatement of labour market testing. Has that happened? And if not, why not?

Trade Minister: Well, there’s certainly been plenty of discussions in the department on this issue. We’ve made it very clear that in respect of new agreements, we will not include ISDS applications, and the reason for that is that they're simply misused. You can see the dispute currently by Clive Palmer in respect of using one of these provisions. We are working through all of our commitments in our platform. Of course, my announcement in respect of ISDS is a part commitment to dealing with issues in our platform. But bit by bit, we will resolve and make sure that we implement all of the items in our party's platform, which will be renewed at the August national conference.

Daniel Hurst: Do you have a spot team trying to negotiate changes to existing agreements?

Trade Minister: Look, we have people doing lots of things in the department, and all of my officials are well aware of the Labor Party's policies in respect of trade.

Jane Norman: Melissa Coade from The Mandarin.

Melissa Coade: Hi, Minister. Melissa Coade from The Mandarin. Thank you for your talk. You mentioned a conscious effort not to insert these bad superlatives, egotism, chest-beating, and bluster, and they are all superlatives I think of when I think of the GST debate. The reason I mention that is because GST and the way state revenue flows to the state jurisdictions has a big bearing on the basic services which can be provided to the higher education sector and the international students you talk as being very important to Australia's economy. When we think of any cost of living article or headline or news package which goes to a foodbank, there’s a large number of international students who feature in that story of struggling and surviving, and questions about dignity in their lives. And we don’t want to- that’s not much of a sell, is it, to the international student community. So if basic services like health, accommodation and so on, which fall into the state jurisdictions, rely on this question of state revenue flowing from GST, what’s your position on the methodology and also the no-worse-off subsidy, which is going to wind up soon enough such that it impacts future state budgets next year when they talk about their forward estimates?

Trade Minister: Well, I’m not the Treasurer, of course, but I think if he were here, he would definitely rule out an increase in the GST. We do find ourselves in a difficult financial position. To try and put this into perspective, I was previously a member of the Rudd Ministry. When we lost power in 2013, our debt was $300 billion. When we came to office 12 months ago, that debt had ballooned out to a trillion dollars. So, in nine years, it had increased more than double. So we’ve got a difficult economic set of circumstances to deal with. We have been fortunate with the terms of trade being so favourable in our interest, but one of the things that we have decided to do with that money is to pay down the debt.

Now, when you think about a trillion dollars’ worth of debt, that’s a lot of money. When interest rates were 0.01 per cent, well, it wasn't all that expensive to repay it, but as interest rates have escalated – and we’ve got our friends from Westpac here today – they will tell you about how rates have gone up. So we’ve got a big job to stabilise the economy. We’ve tried to look after what we believe are the most disadvantaged people in our community. We’ve committed $15 billion in the most recent Budget to try and assist Australians who are doing it tough at the moment. Can we do more? Would we like to do more? Of course we would, but we’re going to have to do it in the constraints of the economic circumstances in which we find ourselves.

Melissa Coade: And on the bluster and chest-beating issue, do you accept, in particular as a Senator for South Australia, that the public discourse and debate around GST which characterises states as winners and losers is unhelpful?

Trade Minister: Yeah, I do.

Melissa Coade: Thanks.

Jane Norman: Our next question is Nicole Hegarty from the ABC.

Nicole Hegarty: Nicole Hegarty from the ABC News. At the end of last year, you said the question of whether an EU FTA would be able to proceed, or was possible without Australia conceding ground on geographic indicators, was a hypothetical question and you would have more of an idea in February. Now it’s June and you’ve just let us know of your travel plans in the coming week. Will you- are you expecting to come back with some more concrete ideas around that, or should your Australian vintner contacts turn their collective minds and budgets to designing new labels for their prosecco? [Laughter]

Trade Minister Not just yet. Every opportunity I get to speak with the Europeans, I explain this to them, that in the aftermath of World War Two, we accepted lots and lots of European migrants to this country. They obviously bought their culture, they bought their family, but in many cases, they bought their food and their wine. And in that period since, 70 years since World War Two of course, they’ve developed their own industries in Australia. Words like prosecco, like feta, like haloumi, you go through it – all of those are now names which we are comfortable with in Australia. We know exactly what it means, we know exactly what the product is. For the people who have produced those products, this is not just an economic issue, this is a way in which they have maintained links with their mother country. So for them, it’s not just an economic issue, it’s an emotional issue

I’ve been in the room with prosecco makers who have simply burst into tears at the prospect of losing access to that name because they feel so strongly attached to the name. So I’ve tried to express as strongly as I can just why Australian producers want to continue to be able to use those names. What will be the outcome of the final negotiations? Well, I can't tell you that at the moment, but I continue to say to the Europeans, and I can say it to the Ambassador here today, you have to understand this is not just an economic interest issue for Australia, it’s also an emotional issue.

Nicole Hegarty: So will it be at the top of the list next week in discussions?

Trade Minister: I don't know about the top of the list, they're all equal in my view. There’s a whole range of issues that are going to be discussed. We want greater access to European agricultural markets. We think we’ve been left behind there. Europeans have got a list of items, including the GIs that you’ve mentioned, the luxury car tax, and a range of issues. I don't want to prioritise them, at least not at this stage. They’ll all be subjects for discussion. My job is to represent Australia's national interests.

How do we go about making a final assessment? Well, we look at the things that are good for Australia, we look at the things that might be bad for Australia and make an assessment. Is this good in Australia's national interest? And if it is, well, then proceed with it; if it’s not, well, then we don't proceed with it.

Jane Norman: Our next question is from Tess Ikonomou from AAP.

Tess Ikonomou: Thank you very much for your speech, Minister. Just ahead of the Prime Minister's visit to Vietnam, what sort of products and services do you think have the potential to grow?

Trade Minister: I’ve just come back from Vietnam, and to be honest with you I was blown away with the opportunities that Vietnam now present. It's got a population of over 100 million people, mostly young people, very dynamic. A rising middle class and very keen to move from the status of a developing country to the status of a developed country by 2045. I have to say, I was blown away by the number of senior people I met, both in business and in government, who’d either been educated in Australia or educated by Australian universities in Vietnam, or who had children who are currently in Australia. So in terms of education, I think one of the greatest opportunities is in that education space - either more Australian universities setting up in either Ho Chi Minh or Hanoi or sending more students.

Now, interestingly enough, there are now, I think, four Vietnamese airlines flying directly into Australia. I launched the first flight of VietJet from Ho Chi Minh to Brisbane. They told me privately that the next place they wanted to go to was Adelaide and I very much encouraged them to do that. [Laughter]

Sixty dollar airfares, Adelaide to Ho Chi Minh. So tourism is one, education is the other. One of my former employees who, before he worked for Austrade, used to work for me. Him and his wife have set up a little pizza bar in Ho Chi Minh and it’s booming. So food, wine, education and tourism. I think we’ve got some people here who could probably tell me the exact figures but I’m sure that the number of Vietnamese tourists to Australia and Australian tourists to Vietnam is higher [indistinct] pandemic levels. One of the reasons is there’s downward pressure on prices and plenty of availability.

Jane Norman: Our next question, Andrew Tillett from The Fin Review.

Andrew Tillett: Thanks, Jane. Andrew from The Fin and also board member here at the Press Club. Minister, thanks for your speech. Pivoting back to Special Minister of State hat, we’re obviously going to have The Voice Referendum later this year. I think there’s a feeling that the next cab off the rank, referendum-wise, should be the republic referendum. But I was wondering if it might be time for a bit of constitutional housekeeping have some other further referendums, particularly around things like around our electorate laws and parliamentary systems and things like that.

For example, things like Section 44, the carnage that caused with MPs a few years ago; things like fixed terms, four year fixed terms. Going back to Karen's question about if you increase the size of the house that obviously has the nexus where you would have to increase the size of the Senate too. And also something that’s dear to the Prime Minister's heart also when he was in the Gillard government was about constitutional recognition for local government as well. They’re just some of the issues that have sort of been bubbled up and we’ve had past referendums on them. Do you think it’s time to maybe have a bit of a stocktake and look at them as well?

Trade Minister: Look, if referendums were easy, then, of course, we’d do nearly all of the things that you just mentioned there, I think. Unfortunately, referendums are hard and it’s, to be honest with you, it’s been a very long time since any referendum proposed by a Labor government has been successful. What's the obligation? Well, you’ve got to get a majority of votes and a majority of states. So it’s a high bar. I'm still optimistic that, well, firstly, I think The Voice is the one that we should be proceeding with. We’ve tried the republic, it didn't work, so I think The Voice is the correct one. I mean, there’s no other group of people in our community who’ve suffered such disadvantage as Indigenous Australians, and it's time that we had recognition in our constitution for them. In my capacity as Special Minister of State I had the job of passing the machinery legislation for the referendum, and I know there’s a lot of controversy about the general issue, but that went through the Senate unanimously a couple of months ago, which I think is a positive step. Even people, for instance, like Pauline Hanson, did not oppose that legislation going through and in fact spoke in favour of it.

But, look, I think it's one bite at a time. This will be a difficult item to get through. Most referendums fail, even where you have got the support of both parties - and of course we don't have that here, they’re hard to get up. So I think the Prime Minister has made the right call here. He’s passionate about this. He wants to see it, we’ve just seen in South Australia, the South Australian Government introduce a Voice to parliament. So I think it's an idea whose time has come and I am looking forward to voting yes.

Jane Norman: Can I follow-up on the Voice, you are saying it will be a difficult item to get through. Of course history is against it, simply because most referendums do fail in Australia. But looking at this specific one, your government is very firmly behind it. In all your years in politics, you have become renowned for your ability to sense the mood, interpret polls. Where do you reckon the yes campaign is at the moment and would you be confident if, for example, the vote were held tomorrow, this week, next month?

Trade Minister: Well, if it was held this Saturday, I think it would get up. There would be a majority of Australians voting for it, and there would be a majority of states. If I can break the contingent down into three groups, people under 35, very overwhelmingly in favour of a Voice to Parliament. People 35-55 are pretty evenly split. People over 55, generally a majority opposing. I think that young cohort will be enough to counter the no vote and I think it will be the young people who will deliver an Indigenous voice for Australia.

Jane Norman: Our next question is from Nic Stuart.

Nic Stuart: As an older person, perhaps I should say I identify with the younger people, so I’ll be voting yes.

Trade Minister: Good on you.

Nic Stuart You mentioned during your speech, though, that there was a degree to which stability and security was really important rule of law. Here in the ACT, we have the government deciding to take over the Calvary Hospital. What’s your feeling about, and talk about that going to the High Court to try and prevent that taking place. What’s your feeling about how that may be effecting other international people looking at investing in Australia? Because my understanding is that there are some people who are now- some investors who are considering whether or not there is a degree of country risk.

Trade Minister: I have to say I would be surprised if it has any international implications. Obviously, the ACT Government has made a decision in this- over this issue. The only advice I would give the parties is if there is a way of sorting this out by discussion rather than disputation, I use the same principles here that I would use in a trade negotiation, it is much better to resolve your issues by discussion and negotiation, rather than ending up in the courts. I would encourage the parties to do that, if that’s possible at this stage.

Jane Norman: The next question is from Julie Hare from The Fin Review.

Julie Hare: Mr Farrell, thank you so much for your speech. There’s a bit of a love-fest going on with India at the moment. As we’ve been evidenced by Anthony Albanese and Narendra Modi doing a lot of man-hugging. International students are actually critical to this. They are the fourth largest export sector and Indian students are now, just in number, just below those from China. We’ve seen a massive surge in Indian enrolments in the last year, in the last six months, unfortunately not all are genuine. There are horror stories from universities losing 40-50 per cent of their first year Indian students within the first six months as they bail into cheaper, often dodgy colleges, in other words they are using the student visa system as a back door to the work force. How do you balance integrity of the education system with an increasingly open door policy wrapped around promises of permanent residency?

Trade Minister: Well, with hard work and monitoring. I actually thought that the number of Indian students had actually taken over from the Chinese … no, that is not right? Well, Indians are right up there, whether it be as students, as tourists, because they’ve come back in very significant numbers, and, again, my friends from Tourism Australia would be able to tell us just how many numbers have come in. So they are becoming a very significant portion of our community, and not just going to the cities, if you go to any rural area in Australia, you will see significant numbers of people from the subcontinent.

We want to encourage those links, whether it be by migration, tourists, or students, but we want them to comply with the rules. I think increased monitoring is the way to do it. We don't want to discourage them from coming to this country, we welcome them. We have massive labour shortages in this country, so they represent an opportunity of filling some of those gaps, particularly in the hospitality area, in the tourism area. It is simply a case of monitoring, and if we have discovered that people are not complying with the rules, then that is a good thing. It means that the system is working.

Jane Norman: Our next question is Tom McIlroy again from the AFR.

Tom McIlroy: Thanks Jane, and thank you Minister. It was fascinating to hear your assessment of the age-by-age break down...

Trade Minister: I love your tie.

Tom McIlroy: Thanks Minister, yours too. [Laughter] It was fascinating to hear your assessment of the demographics for the Voice. The campaigns on both sides are looking at states like Queensland and Western Australia as possible weak spots for the yes case. Do you agree with those assessments? Give us an around the grounds of the states and territories?

Trade Minister: No, I don't. I think the Voice will get up in all states.

Tom McIlroy: Great.

Jane Norman: Alright. And our last question today is Karen Barlow from the Canberra Times.

Karen Barlow: Hello again. Well, on the Voice and particularly the pamphlets, do you have concerns about the tone or how they’re going to be worked out, the words, so on the yes and no side. Do you have any warning about the tone or concerns that were- I guess the issue raised by the AAC is it could get to point where there’s only one side that gets mailed out?

Trade Minister: Look, I hope it doesn't get to that stage. Let's go back a little bit. The original decision was for no pamphlet, and that created perhaps an impression that we were seeking to hide things from the Australian people. The Prime Minister correctly made a decision to reverse that call, and I was the one that had the job of negotiating, particularly with the Coalition, about the reintroduction of that into the legislation. During that discussion, there was contemplation about what the words would say. There is a process under the Referendum Act as to how this goes about, and you’ve mentioned the figure of 2,000 words.

I am hopeful that there will be a respectful debate, including in the parliament, about what the arguments will be on either side of the cases. So at this point, I think it will be a respectful discussion, I think the wording will be a respectful explanation. There is always two sides to the argument. You have got a yes and a no case, but at this point, I would still be very hopeful that we can sort out a pamphlet that accurately explains to the Australian people what the yes case is and what the no case is, without any acrimony.

Jane Norman: All right, Minister, we know you have to get back to Senate estimates. So thank you, very much.

Trade Minister: I’d actually prefer to stay here, to be honest. [Laughter]

Jane Norman: Thank you for your time today. Please accept our gift of membership to the club, and also nice Canberra drop, which maybe you will bring on your trip to the EU or to Europe next week. That’s it, and thank you for your time today.

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