Interview on 2GB, Afternoons with Deborah Knight.

  • Transcript, E&OE
Topics: Australia-China trade relations; US election impacts on Australia; RBA rate cuts; state borders
04 November 2020

Deborah Knight: Lots to talk about with Simon Birmingham, our Minister for Trade, Tourism and now, Finance. The world's focus, of course, on the US election; the count is unfolding right now, he's watching that closely. But, China is causing the most concern at the moment, because it's fair to say that tensions between Australia and Chine, they're high. China is upping the ante, targeting our key industries with trade crackdowns. So, Simon Birmingham is with me now, to get the very latest on that and if you've got a question for him or on any of his portfolios, he's got a few of them at the moment, he's happy to take them. Call in, 131 873. Simon, great to have you here with us in the studio.

Simon Birmingham: Hello, Deb, it's great to be with you. Thanks for having me in.

Deborah Knight: Now, first up, what is happening with these lobsters? These tonnes of live Rock Lobsters stranded at the Chinese airports. Do we know – are they alive? Dead? What's happened?

Simon Birmingham: There is a mixture, there is product loss that's occurred in that sector; some products have still managed to make it through. So, it's a bit of a mixed bag at present and there are clearly delays, in terms of the processing, as additional testing is being put in place and the industry has sought, quite rightly, clarification around what this means. Will there be longer processing times in future? Because this is a high value, short shelf life type product, in terms of how long it can be sitting around.

Deborah Knight: That's it. They can't be sitting around and we've been blindsided by this move, haven't we? I mean, this came out of the blue?

Simon Birmingham: This absolutely came out of the blue, with no clear forewarning and so, we've raised real concerns with China about this move and it is part of a number of moves that we've seen, that do present a higher risk, higher concern environment in terms of Australian businesses trading with China and what we want is greater clarity, so that our businesses can plan with confidence and Chinese importers can also plan with confidence. It's a disruption on both sides.

Deborah Knight: Absolutely, that's it. I mean, China needs us as much as we need them and now, we've got the imports of Australian wine possibly being impacted here? A ban on timber and barley, because of bark beetle. What's happened here? Have we got these products being banned? Rumours, speculation about that is the case? That China is off the record, banning a lot of key industries?

Simon Birmingham: There are lots of different rumors and stories at present and it is hard to quite define and discern which things are true, which things are inflated. We certainly know that there are some actions that have been taken during the course of the year that are clear steps by the Chinese Government. In terms of the imposition of tariffs on Australian barley, the banning of certain meat processing plants in Australia, the commencement of anti-dumping proceedings against our wine industry, they are all transparent Government decisions. We dispute aspects of them and continue to argue the fact that Australia is not a country who subsidises our industries. We're not a country who dumps our product, and we work to defend the integrity of our exporters in that regard. Then there are others, more technical issues, such as these questions of extra testing of lobsters and holding them up at the ports.

Deborah Knight: And even labelling not being correct on some of the products too?

Simon Birmingham: That's right and in some cases, there seem to be issues, such as with timber. That there is an issue applying to one company occurring, but it's being talked about as an industry wide factor. Now, we're again seeking to get to the bottom of that.

Deborah Knight: And I know you've got to -

Simon Birmingham: One shipment can have a problem and that can happen from time to time. That doesn't necessarily mean that it applies to the whole sector. But, I do know that China's Ministry of Commerce have said in relation to these rumours that meetings have taken place with importers, telling them not to buy Australian product. And that China's Ministry of Commerce have denied that and now if those denials are true and accurate, then I expect we should be able to get answers from China for our lobster exporters, for our other exporters to give them the certainty they deserve and that their Chinese customers deserve and that it's incumbent upon China if their denials are genuine and accurate, to provide that type of certainty in those answers to Chinese businesses and to Australian businesses. So, they can maintain and continue trade that has been mutually beneficial for many years.

Deborah Knight: Because they're very much on edge. And the rumours are that from Friday, this coming Friday; that our wine, copper, barley, coal, sugar, timber and lobster will be banned. That's a $6 billion hit. I mean, I know you've got to be diplomatic here, but what's the end game? What's China playing at?

Simon Birmingham: That is a question very much for Chinese authorities and right now, they have said that these types of meetings instructing Chinese businesses not to buy, have not occurred. If that's the case, then there's no reason why our exporters should see any disruption in terms of the business that is being undertaken and that is really where the proof will be in the pudding over the coming days to come. And what I would urge Chinese authorities to do is to make it very clear that the commitments they've given to Australia under the China Australia Free Trade Agreement. The commitments they've made through the World Trade Organisation will be honored. Australia is a country who plays by the rules when it comes to our trading obligations, and we expect our major partners to do likewise. And their certainly should be no disruptions or distortions in terms of governments seeking in any way, shape or form to influence what should otherwise be commercial transactions between businesses and consumers.

Deborah Knight: I'll get you to pop your headphones on, because Bill has called in with a question regarding the trade issues. Bill, what did you want to ask the Minister?

Caller: Thank you for that. Yes, Minister I wanted to ask you whether or not I mean, I believe this is what most of the Australian public believes, that this has nothing to do with our produce or our products that seem to be fine before the coronavirus issue. But, after Scott Morrison called for an independent enquiry into the coronavirus or the Chinese virus and China became very upset with that and they didn't keep it a secret. They said: we will punish you through trade, and isn't this what we're seeing now?

Deborah Knight: It's a good point.

Simon Birmingham: Well, Bill, I certainly understand why many Australians would rightly question China's motivations at this time, because China's ambassador to Australia did come out and make certain threats earlier this year. And now at the time, we were very clear that we wouldn't respond to any type of coercion, these sorts of comments and threats related, I think not just to the enquiry into COVID-19, but a number of factors. Now, in the end, our government has proudly acted to make sure that we protect Australia's critical infrastructure, our communications systems. And of course, we've acted in a way in response to COVID-19 to say the world must learn the lessons from COVID-19. We're not seeking to apportion blame. We're seeking to make sure that we are all better prepared to prevent this from occurring in the future or to handle it better if it does occur again in the future. And these are perfectly sensible propositions that Australia takes and positions that we take, which we expect any other country to take as well in terms of protecting their critical infrastructure, their types of systems and institutions to make sure that in their countries their sovereignty is protected and respected. And we expect no less in terms of Australia and that shouldn't though get in the way of having good relations with key partners. And with China, we do still aspire to have those relationships that have helped not just businesses in Australia or businesses in China, but frankly, have helped to grow the economy across our South-East Asian region over the last few decades.

Deborah Knight: Beneficial for everyone, which is the point.

Simon Birmingham: It has lifted hundreds of millions of people out of poverty. This is a huge achievement for humanity in recent decades and that ought to continue to be celebrated.

Deborah Knight: But, COVID has proven that we can't put all of our trade eggs in one basket, that we do need to divest. We need to ensure that our industries can actually make stuff here in Australia rather than relying solely on overseas trade. And Ashley's got a question on that point for us. Hi, Ashley.

Caller Ashley: Yes, hello. Good afternoon. Thank you for taking my call.

Simon Birmingham: Thanks, Ashley. Good to speak with you.

Caller Ashley: Yes, thank you, Simon. Yes, I that I have an opinion and a question. My opinion is that the way we have been treated by China and I believe that the way they're treating a few other countries; they're acting like a bit of a bully. And we do have an understanding that they probably would like to be the domineering country in the world. However, I do think the way we have been treated, considering all of our consideration of their country over the years, I do not think that we should give them so much of our trade. I do think we should be definitely looking for other trade partners. And I wonder what you are doing in that regard, please?

Simon Birmingham: Well, thanks Ashley. So as a government, we don't conduct trade. Businesses do that. But as a government, what we do is try to open as many doors as possible for Australian businesses. And so, during our last seven years in office, we've not just done a trade agreement with China. We've also pursued trade agreements with Japan, with Korea through the Trans-Pacific Partnership. For the first time ever, we've got trade deals with Canada, with Mexico. We've just in the last few months have brought into force our new trade agreement with Indonesia and whilst pursuing strategies with Vietnam, with India to open up more economic engagement there and negotiations we're pursuing with the European Union and the UK. So, in that sense, we are pursuing a very strong agenda of diversification. The opportunity for business...

Deborah Knight: But those do take time to bear down and a lot of our industries are being hurt here and now.

Simon Birmingham: They do take time in terms of the deals that we're negotiating, the ones that are enforced we have seen strong growth in terms of our exports into Japan or Korea this year, or into Vietnam over recent years. And so, we're seeing enormous opportunities to keep growing in those types of markets as well. We have to be realistic. China is the biggest economy and the biggest population centre in our region. So, it's not just our number one trading partner, it's the number one trading partner for pretty much every other country in our region as well. And that's just a function of their size and scale as much as anything.

Deborah Knight: Have you heard from your Chinese counterpart yet? I know that the phone call is there, but you and the Agriculture Minister and the Foreign Minister still have not heard back. Has that changed?

Simon Birmingham: It hasn't changed, Deb. Now, from the Australian government's perspective, we think that dialogue and mature dialogue, even where there are differences, remains the best way to work through these sorts of issues. And our door remains open to that dialogue. And the ball is in their court.

Deborah Knight: Absolutely. Now, Labor's trade spokesperson, Madeleine King, has been very critical of the government, saying you should be more measured in the way you communicate about China. Does she have a point?

Simon Birmingham: I don't think so. I'm not sure that I or the Prime Minister or the government can really be much more measured in our language. We're dealing with issues that are put upon us in terms of what is happening in China to Australian businesses. I'm not sure what the Labor Party would suggest we should have done differently in recent times in terms of those issues of national interest. They've sometimes cited that we have sought to protect Australia in terms of our critical infrastructure, or our democratic institutions, or the things that we should rightly always seek to defend as a country. Of course, we have to be honest about the difficulties that are there. But as I just said, the door remains open and ajar to have that sort of dialogue. And we will sit down as mature leaders of our country with mature leaders from many other countries as long as they are willing.

Deborah Knight: Yes, exactly. Now, obviously, the US election unfolding. And as Trade Minister, I know that we'll have big impacts whoever wins the White House and also with our standing with China. The stock market is watching it all very closely. Do you have any view on which way it'll go? Or I mean, how is Australia positioned? Obviously, we've been advised, Labor has been- Albo's coming out. Anthony Albanese yesterday warning the Australian government not to accept a victory speech too soon. And that's a valid point.

Simon Birmingham: We will let the democratic process play its course in the United States. And that is what everybody would expect us to. Who the American people choose to vote in as their president is their business. The alliance and the strength of the relationship between Australia and the US will remain regardless of who wins. It's bigger ...

Deborah Knight: Has our alliance been damaged with the US under Donald Trump?

Simon Birmingham: Not at all. And the alliance is bigger than any prime minister or any president in that sense. We've been able to forge working relationships with this US administration just as we have all of their predecessors and we will whatever happens into the future.

Deborah Knight: A couple of other quick ones, because you've got a big portfolio now, Finance under your umbrella as well. The RBA cutting interest rates to that record low of point one per cent. Now, we've heard lots of people coming out. Gerry Harvey, obviously, that big businessman saying that he thought that they should have held back with some of the measures that the Reserve Bank also announced with some of the money printing measures too. Shadow Treasurer Jim Chalmers saying this move is a vote of no confidence in the Morrison Government. The Reserve Bank is being the way it has. Do you think it'll help the economy? Because we certainly need all the help we can get.

Simon Birmingham: It will help the economy. The Reserve Bank governor was crystal clear in his remarks yesterday that their measures they see as complementary to the government measures. And together, we now have some $507 billion worth of economic support for Australia. That's been designed at a government level in terms of our investment, at the banks level, in terms of supporting investment across the economy. And investment is the key word in all of this, that what we've done in terms of some of the tax measures in the recent budget is about encouraging Australian businesses to bring forward and activate investments that will see them doing more and creating more jobs. What the bank is doing in terms of making financing more available and cheaper to businesses big and small is again about trying to drive that investment and that confidence. We've seen confidence lifting by record amounts in many ways since the budget was handed down. And we're going to make sure that that is continued in the business community, because that's the way that we will build on the more than 450,000 Australians that we've got back to work in the last four months. We just need to keep that trend going because it will be through that business confidence and that investment growth that we get real sustainable jobs recreated into the future.

Deborah Knight: And with tourism, good news today that the New South Wales government has moved to reopen the borders with Victoria. November 23rd is the date that we'll see the lockdown lifted. But Queensland still holding firm. The tourism industry is still struggling in this country.

Simon Birmingham: This is a great move by Gladys Berejiklian and her government. It's following the health advice and tracking down of cases in Victoria to a point where New South Wales can have confidence that the systems they have here, they're probably the best testing, tracing and isolating systems anywhere in the world. I suspect that it kept New South Wales safe, can now open up because Victoria's got its own circumstances under control. Reconnecting the two biggest Australian states is great news for travel, for tourism, for many Australians in terms of reconnecting with loved ones near Christmas as well...

Deborah Knight: Exactly, with families being able to actually get together.

Simon Birmingham: And I hope it does set a standard again for the other states and territories. We've seen other leaders, such as Michael Gunner in the Northern Territory or Steven Marshall in South Australia, again, showing strong leadership in these regards, following the health advice in cautious, careful ways, but not holding back unnecessarily for political or other motivations. It's crucial that we do have those reconnections of our country and that can help sustain and support so many different jobs that are currently threatened as a result of these different shutdowns.

Deborah Knight: Simon Birmingham, I know you're busy. We thank you for your time today and for taking some calls as well. Good to have you in the studio.

Simon Birmingham: Thank you, Deb. My pleasure.

Deborah Knight: Simon Birmingham there, our Finance, Trade and Tourism Minister.

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