Interview on ABC Radio Adelaide Breakfast with Spence Denny

  • Transcript, E&OE
Topics: Tourism in Australia; China Trade Dispute; Shipbuilding in South Australia.
15 May 2020

Spence Denny: Senator Simon Birmingham, Senator for South Australia, Minister for Trade Tourism and Investment. Good morning to you.

Simon Birmingham: Good morning, Spence, and good morning to your listeners.

Spence Denny: Good. Can we start by talking about the cruise ships, if we can? Because a lot of people would have had overseas holidays cancelled, and then they get a credit. Is there any- is it wise to be booking a cruise in advance now?

Simon Birmingham: Spence, I probably wouldn't be, I'd have to say, I think that cruise shipping will be one of the last activities that comes back online. There were quite clearly failures in terms of public health management, around social distancing and the like, that contributed to the spread of COVID-19 on a number of cruise ships around the world. So I think public health officials will be very careful in terms of giving a green light to cruise shipping anytime soon. I think the industry has got work to do to both convince the public health officials, but frankly also to convince the public again of the safety standards that are being applied. And also, to be honest, from an economic perspective, our tourism industry, our little accommodation providers right across Australia, are doing it so tough at present, and are more interested in getting Australians, South Australians, when they can, in their cars, and ultimately when we can, on planes around Australia, staying in local accommodation places, spending money in those towns, and really helping to sustain those small businesses and the jobs in those communities.

Spence Denny: And the problem comes when you've booked one which has been cancelled, and you've got a credit for it. In fact, David's on the phone from Marion. David, you actually booked a river cruise, didn’t you?

Caller David: Yes, I have booked a river cruise and we're supposed to be leaving from Budapest this morning.

Spence Denny: Oh, really?

Caller David: Yes. But still it's a lovely day in Adelaide, so we’ll just have to make the most of it. Our major beef is that the river cruise company who are based in Melbourne- do you want me to mention their name or not mention their name?

Spence Denny: Look, it's probably- if it's relevant, do say. But if it’s not, don’t.

Caller David: No, okay. They’re dealing with us in a very unconscionable manner. Most people had their tour suspended because of the force majeure and they’re all been offered a 100 per cent future travel credit. If you want to get a money back, the company is offering less than 50 per cent, so they're retaining somewhere between eight and ten thousand dollars per cabin for overheads and it includes marketing, which is just ridiculous at the moment. Our trip has been cancelled, and in the brochure they say if we have to cancel the trip, you’re entitled to the nearest alternate travel date or cash refund, and they're refusing to give us a cash refund.

Spence Denny: On the credit concept, David, are they putting a timeline on when you would need to use that credit?

Caller David: At the moment you have to book on December 2021- sorry, December 2020, but they have extended it for some people to 2021 and to use before December 2022.

Spence Denny: Right. So you'd need to book it before the end of the year in your case,

Caller David: End of this year.

Spence Denny: And you'd have to- you could book it up to two years in advance?

Caller David: Yes.

Spence Denny: Right.

Caller David: Well if they’ve got their bookings- if they’ve got their cruises sorted out this far in advance.

Spence Denny: Yeah. That's a difficult situation. David, look, I hope that goes well for you. Thank you. And Senator Birmingham, I don't think that would be an uncommon story.

Simon Birmingham: No, it's not. There are lots of people who are holding credits for travel that has had to be cancelled, and now these are very much consumer affairs matters. It depends on the contracts and the travel insurance policies and all of those sorts of things that people have. I can certainly say looking prospectively into the future that anybody who is thinking about making a booking for an activity that is still restricted or banned, and that there is no end date set for, such as cruising activity, cruise ship activities, or for international travel generally, you should only do so if you have ironclad insurance or very strong policies that are obviously in place that will guarantee you a refund, because there are no guarantees around when those activities will come back on stream. But obviously, if you're- in the case of David and you had already paid and already booked, if you have documentation that indicates that the company had promised a cash refund in the event of cancellation, well then that is absolutely something to take up with Consumer Affairs authorities. If it’s Melbourne based, then we can get in touch and point you in the right direction for the Victorian State Consumer Affairs officials to take that up with those businesses.

Spence Denny: Alright. Okay. David, good luck with that. Let's talk about China. China if we can please, Senator Birmingham. Trade relations with China have historically been like walking on eggshells, I think you'd agree with that, wouldn't you?

Simon Birmingham: Well, I think- I mean, right through Australia's diplomatic relations with China, which go back 45 years or so now, a little bit more than that, we and we've always had tensions on matters of human rights or the like. So it's not unusual for us to have little issues that come up from time to time that strain the government to government relationship. But pretty much consistently, we've still seen the business to business and the people to people relationship grow and flourish through that time.

Spence Denny: Well the current standoff over barley tariffs and restrictions on Australian beef, who's in the position of power here? Who's in the most powerful position? Who can- who’s going to blink first in this situation?

Simon Birmingham: Well, these matters, China's put them to us as administrative matters around compliance with different aspects of trade law and customs and quarantine regulations. Now they're different matters. The barley one is a so-called anti-dumping dispute, where they claim that Australian barley is either being subsidised or is being dropped in the Chinese market at below cost. Now, we reject that completely. I think everyone in Australia knows that we don't subsidise our farmers to grow crops like that, and they just happen to be some of the best in the world that grow them very productively at big scale and high quality, and are able to price competitively, and they do so at global market conditions. So we're fighting hard in presenting a compelling economic case there in defense of our barley growers. On the beef side, it's more a case of there are a number of technical issues about labelling discrepancies or the like that they claim have come up. Now we're disappointed that we were given no notice of suspension for these four abattoirs around Australia. And we hope that in demonstrating that they've rectified any of those issues, putting in place better procedures and policies for the future, that we can get those suspensions lifted. But that'll take a little while, we've seen that happen before. It happened about three years ago to half a dozen meat processors at the time. And we’ll have to go through a very similar process, and I expect to rectify it for these four on this occasion. But these are the standards that China puts in place for businesses to import into their market and it doesn’t really matter where you do business or where you go around the world, you, of course, got to work by the terms, conditions and laws of that place in the world.

Spence Denny: Well you know, we spoke to John Lush yesterday. I’m sure you know John, grain grower.

Simon Birmingham: Absolutely.

Spence Denny: And he made the point with grain exports and particularly barley to China that they’re very much aware of the quality of the grain that is being loaded onto a boat to be sent overseas and then on arrival, they’re told that there are contaminants and the price automatically comes down and it’s almost impossible to prove anything’s contrary to that.

Simon Birmingham: Occasionally, we do get those instances and those stories and there are all manner of risks with any country around the world in some ways in terms of once you're doing business offshore, you've got to take into account that different systems will operate according to different legal practices, different degrees of standards, different values, customs and so forth. And so that is a risk that everyone has to factor into exporting.

But we're an exporting country. Our farmers produce food for three times the Australian population. So of course, we must export and we have to and we put a lot of effort into supporting our farmers to get their product into other countries under established trade agreements that we strike, that means they face lower taxes, lower tariffs on their product when they get there; that they should face better access. But the Australian Government can never guarantee that everything will go perfectly in another country because it's the- that's in the gift of that other country not- not under our control.

Spence Denny: Twenty past nine is the time; you're listening to ABC Radio Adelaide. We’re speaking with Senator Simon Birmingham, Minister for Trade, Tourism and Investment, I think David from Maylands, he wants to actually talk about the ban on beef.

Caller David: Yes, and barley. Now, look, comments by the Minister and also by the Prime Minister have sort of rebutted that it's anything to do with the Prime Minister's statement about investigating the source of COVID. But one thing, one fact in pubs, I think the pub test, most people would think that this is not coincidence, that this is China doing sort of bullying type behavior and it is- the timing is not a coincidence.

So I just put that to the Minister. I understand the Minister can't inflame tensions but it really does appear that these are punitive rather than just merely coincidental or administrative or technical issues.

Spence Denny: Senator Simon Birmingham.

Simon Birmingham: Look, commentators and indeed once people do get to- get back to the pub, which I'm looking forward to as well when I get that chance, punters in having their discussions, will all be able to form their own views. My approach has to be one of acting in the best interests of our exporters without compromising on Australia's values, national security, health policies or the like. And so we think the best way to protect our exporters is to respond in good faith to these Chinese requests for more information and to address these technical issues.

And so we're backing our barley industry and our beef producers to do so and to respond with that sort of detail and we're applying all diplomatic efforts that we can. In no way are we deviating from our Government's view which is shared by many others around the world that there ought to be an investigation into the handling of COVID-19 around the world. Ultimately, hundreds of thousands of people have lost their lives; millions have lost their jobs; nearly everybody's lives have been disrupted in some way. The least that the world can do is have an investigation to learn the lessons of it.

And that's why next week when the World Health Assembly meets, we'll be supporting a European Union resolution to have that sort of investigation and we hope many others do and I hope that China ultimately does and cooperates as well because it's in the interests of every country to learn the lessons and to find ways to make sure that we don't have a repeat situation in the years to come.

Spence Denny: Tens of thousands of people have lost their job over the last couple of months, 40,000 I think it was here in South Australia. When the next unemployment figures come out, what are the expectations?

Simon Birmingham: Well unemployment figures are a bit of a lag on what's happening. So yes, devastatingly nearly 600,000 jobs were lost across Australia in the statistics that were released yesterday. And I would expect that the following month will probably be even worse because of course, we were only moving into the shutdown at that stage.

So the stats will of course lag. What's important is what we're doing now and that is hopefully getting people back to work by reopening and we're able to reopen thanks to the success of the health measures and the restrictions that have been put in place. And as long as South Australians and people across Australia still exercise caution where- wherever they can in terms of hand hygiene and those basics, well hopefully, we can get everybody back as quickly as we can, not quite to normality but we certainly want to and our ambition is to get hundreds of thousands of people back to work by lifting these restrictions.

Spence Denny: Is the 10 per cent unemployment figure an expectation?

Simon Birmingham: It's possible and there've been projections in that range. Of course, without the JobKeeper payment that we put in place to keep people tied and connected to their employer, Treasury was estimating that unemployment could get as high as 15 per cent. And so the major interventions that we've been able to apply because we had a strong budget position to start with, have enabled us to minimise that impact on employment and on households in terms of the hit to household income and make it easier for us to stand up economic activity again.

You know, if- if we'd had- if we'd not had JobKeeper and hundreds of thousands of more people, indeed millions potentially of people, noting that there are around six million Australians now receiving the JobKeeper payment. If many of them had been made redundant, that possibly would have seen many businesses, in paying out those redundancies, tip over the edge and go into administration or bankruptcy. And then when it came to reopening the economy, we'd have had far fewer businesses; people wouldn't have had jobs to go back to and then we would have been in a terrible, terrible depression.

Spence Denny: And it raises the point about that trying to get some sort of normality back and opening the borders and trying to get business back up and running again. Because the point that was made yesterday was that if that was done prematurely and there was a second wave and then there were more restrictions came into place, well businesses couldn't survive this twice.

Simon Birmingham: It’s one of the risk that we’re very conscious of. We have to all acknowledge that there’s every likelihood that there will be further cases. And that’s why we’ve encouraged and welcomed the fact that millions of Australians have downloaded the COVIDSafe app, that workplaces have developed new standards to ensure employees operate in a COVID safe way so that we maximise the chance of not having further outbreaks. But if we maintain high testing regimes, which we will, then we should be able to identify any outbreaks, quarantine those people, isolate any responses, perhaps to certain businesses, regions or areas to do so rather than having to have full nationwide type shutdowns as we’ve had again. So, the strategy is to really be able to closely follow any cases, make sure we can track them, make sure we can put a lid on it very, very quickly, and that hopefully enables the rest of the economy to function as close to normal as possible. And you know, the economy’s just an abstract; what we’re really talking about there is the small businesses of Australians and the jobs of Australians and making sure they can get out there and earn a living to pay their bills and get ahead.

Spence Denny: Twenty-seven past nine, I might squeeze in one more call if we can please, Senator. Brian from Semaphore. Hello, Brian.

Caller Brian: Oh, hello. Look, my name’s Brian, yes, from Semaphore. Look, I’d like to ask Senator Birmingham about the announcement that Senator Patrick made, Rex Patrick, announcing that Senator Birmingham and a number of South Australia MP’s were either missing from or voted against the motion to retain this submarine- the maintenance of the submarine contract here in South Australia. And by not voting for it, it’s then in danger of going to Western Australia.

I would like to ask Senator Birmingham why he did not support the retention of that contract here in South Australia?

Spence Denny: Senator Simon Birmingham?

Simon Birmingham: Sure. Well firstly, the Senate motion is going to have zero bearing on the decision that's made about submarine sustainment and how it's conducted in the future. What Rex put up was, of course, a political motion to try to take a shot and get a few headlines; and that worked, so good luck to him.

What the Government did, with the support of the Opposition, was to amend the motion and indeed pass the motion that acknowledges the successful work that's happening down at Osborne at present, that recognises the $90 billion worth of shipbuilding activity that is there that is going to ensure there are many more jobs in shipbuilding in South Australia into the future. But also acknowledges the decisions like the sustainment of subs have to be made in the best interests of maintaining our national security capability — how do you make sure you keep the subs in the water for the maximum period of time whilst we're building the new ones? And that's the work that Defence and others are doing at present. And it's purely about making sure that we have that naval capability and submarines available for the maximum amount of the time. Noting that we've got to have maintenance work on the Collins-class still going while we're building the new Attack-class submarines, the 12 new ones, which will all be built in South Australia. And the building of those submarines, as well as the building of the new patrol vessels and the rest of the fleet are going to create many, many more jobs here in South Australia and that's guaranteed for the future.

Spence Denny: So do you support though, the retention of submarine maintenance in South Australia?

Simon Birmingham: If it can absolutely be done, if the land is there, if the workforce is there, if the capabilities are there to make sure we've got those subs sustained and in the water for the maximum amount of time possible, whilst successfully building all of the other new things that we're now asking to be built down at Osborne, then of course I want to see it maintained in South Australia. But it would be foolish to say the opposite, that I don't care whether or not we can maintain the submarines in the water, operational, serving the purpose of our nation's defences.

You know, clearly we've got to make sure that we sustain the Collins-class fleet, run all of the major maintenance on them and do that in a way that isn't compromised by the massive extra build that's happening there now. That's for the Defence experts to undertake their work on. Right now that work continues down there at Osborne — that's fantastic, I want it to stay there if it possibly can. But I certainly don't want to compromise, either the success of building the new ships and the new submarines which are all underway and which will create so many extra jobs down there, nor would I want us to compromise the Navy’s capacity to keep the existing fleet in the water and operational whilst we're building those new ones.

Spence Denny: As a matter of interest, Simon Birmingham, do other senators share your initial response there? That the Senate motions tend to be inconsequential and play next to no role in forming policy?

Simon Birmingham: Look, the Government will hear what the Senate says in terms of those types of motions. But these aren't laws that the Senate’s passing, they're not bills put to the Parliament as something that come into law — it's a statement of opinion of the Senate on any given day. Now, if the Senate did actually pass the motion, it amended what Rex put forward and it passed a motion acknowledging all the things that I said before. So, we're far from being absent from the chamber. What happened this week was that the Senate took the political stunt and put it into a sensible policy.

Spence Denny: Senator Simon Birmingham, Minister for Trade, Tourism and Investment, thank you.

Simon Birmingham: Thank you very much, Spence.

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