Interview on 2GB, Money News, with Janine Perrett

  • Transcript, E&OE
Topics: COVID-19; India-Australia trade relations.
27 February 2020

Janine Perrett: You’re with Janine Perrett. Now, the coronavirus has been a rude wakeup call for many Australian corporations as it’s highlighted Australia’s vulnerability to shops and trade with China. So it was rather timely that a delegation of a hundred Australian businesses visited India this week in an important investment mission led by Trade Minister Simon Birmingham. He’s also Minister for Tourism and Investment, both of which are at the height of the health crisis we’re seeing at the moment.

He joins me now from Bangalore. Minister, thanks for taking time out in India.

Simon Birmingham: Great to be with you Janine, thank you for the opportunity.

Janine Perrett: Before we get to the trade mission, you’ve no doubt heard about the PM’s big pandemic press conference this afternoon. What will this mean from a trade point of view?

Simon Birmingham: Well, this continues what are very challenging times for our tourism and trade sectors. Obviously, the Government has at every step of this coronavirus situation acted out of an abundance of caution to keep Australians safe, and that has worked in terms of Australia, who compared to some other countries has a much greater exposure usually to China and travel out of those regions where coronavirus began. We of course have managed to contain it within Australia, but that’s not proven to be the case elsewhere around the world.

Now, we don’t know quite how it will unfold from here, but we’re obviously seeing growth in transmissions in other countries, and that’s why the Prime Minister has enacted these next steps. And depending on what occurs from here, we could see circumstances where indeed there’s further downturns in travel or trade in different ways.

Janine Perrett: Right. That’s what I want to ask about. What does the pandemic- moving it up to that level, what will that mean for travel and trade, because that’s obviously two of your portfolios, tourism and trade, and we saw today the impact on tourism. One estimate put it at one and a half million visitors lost. What will the PM coming out, as he said, ahead of the curve, being the first in the world to call it a pandemic – what is that going to practically mean?

Simon Birmingham: So it doesn’t automatically mean anything in terms of further movement or further restrictions of travel movements or the like. What it does mean though is that we’re going through a range of preparations with the states and territories and areas such as medical supplies and contingency and scenario planning around what could unfold, so that everybody is as prepared as we possibly can be. Now, there could be a circumstance that comes where there are further restrictions placed on travel from other countries, and clearly if that’s the case then that would have a further impact potentially on our tourism sector. But it is safe to say that regardless of travel restrictions countries are imposing around the world, that people’s movement and travel is down substantially already; that many countries such as Japan and Korea, we’re seeing significant decline in the visitation already, as a result of their hesitation about getting on planes or travelling and moving in public places.

Janine Perrett: I’m wanting to ask you specifically about the business impact. Obviously, as I said, tourism and trade are being hit heavily. The Prime Minister was asked about the potential for- or the need for a stimulus package. He’s left that door open. You must be getting a lot of calls - as I said, the sector being hit, tourism today. What are you think about doing, or what do you think you can do to help companies, especially small businesses who must be finding it difficult to survive this.

Simon Birmingham: So we can’t pretend that it’s easy just to backfill the loss of a market like China in the tourism space or in other sectors who are impacted like seafood, or increasingly the wine sector, other parts of agriculture. And you can’t- there’s no easy fix either for the disruption to supply chains that’s happening in Australia and right around the world now as manufacturing and production struggles to deal with these impacts.

But what we are doing is trying where we can to stimulate other areas of visitation into our tourism sectors. We’ve put $76 million, the largest ever single surge, into Tourism Australia's budget and our related tourism activities to happen in a single year. So that's all funding being spent in 2020 on top of record budgets, and we're investing that firstly to try to encourage Australians to holiday here this year. And so for listeners who want to help out a struggling tourism provider: make a booking, plan a trip. Those are the things you can do to help at present within Australia. And also looking at what other markets we can still safely activate, such as New Zealand, for example.

Janine Perrett: Okay. And speaking of other markets - obviously this trade mission to India is very timely, but for years we've had successive governments pushing companies to go into China, it was going to be the panacea, the answer to everything. Is there now a recognition, do you think, that some industries - maybe education, for example – were too reliant? Is that what this mission is about? To say, hey, there's another big market, you don't have to be this reliant on China, because this is the downside, what we’re seeing at the moment.

Simon Birmingham: Well, our government’s always sought to provide the maximum number of options for Australian businesses. Yes, we did the free trade agreement with China, but we also did one with Japan, one with Korea, one- the Trans-Pacific Partnership involving a multiple of nations that gave us opportunities to places like Vietnam, our recent FTA with Indonesia that we've just completed legislative arrangements for on both sides, Peru, Hong Kong, pursuing one now with the European Union. So, yes, Australian business has gone to where the markets were strong and were paying premium prices, and business will in some ways always behave in that way. But this coronavirus circumstance certainly demonstrates that businesses need to factor in the risk of extreme reliance in one market ahead of all others. And that as our government builds these opportunities, whether it's in the future in India or elsewhere, that they do need to consider those risk factors.

Janine Perrett: Do you think we focus too much on China and ignored an obvious and closer market in India?

Simon Birmingham: We have been enjoying success already with India. A two-way trade between Australia and India has doubled in the last five years, so it hasn't been that we've ignored India. We haven't had the success government to government in being able to strike a free trade agreement like we have elsewhere, and so that’s continued to…

Janine Perrett: Are you any closer after this trip?

Simon Birmingham: Look, I hope so. We had hoped that India would sign onto a regional pact involving 16 nations. That doesn't look likely, but what the Indian Trade Minister and I have agreed to do is to take the work that we did together as part of that regional pact and see whether we can make something else of it. Now, that's going to take a little while to work through those contingencies, but I hope that we can eliminate some of the trade barriers and make it easier for our farmers and small businesses to do even more business with India to take that doubling of the last five years and hopefully double it again in the next.

Janine Perrett: One more quick question just before we go, on the theme of the day. Very few cases of coronavirus have been confirmed in India. With a billion people- we have all concentrated on Indonesia underreporting. Are you concerned at the low level of reporting in a country the size of India?

Simon Birmingham: I can say that India appears to be taking measures pretty seriously. On flying into the country, I faced temperature checks before I passed through the airport. On the various domestic flights I've caught within India, there have been warnings and announcements made continuously. So, look, it’s always a concern that clearly in intensely populated areas, something like this could get away quite quickly, but I think India is a good global citizen. And if there were scenarios of possible cases, then I have confidence that India would be doing the right thing in terms of making that public. And that certainly they are doing all of those sorts of border checks that I just talked about.

Janine Perrett: Okay. Well, Simon Birmingham, thank you very much for your time tonight and we'll let you get back to your trade mission in India. Thank you.

Simon Birmingham: Thanks Janine.

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