Interview on Radio National, Drive, with Patricia Karvelas

  • Transcript, E&OE
Topics: economic impacts of COVID-19; Australia-India trade relations.

Patricia Karvelas: Simon Birmingham is the Federal Minister for Trade and Tourism, and I spoke to him from Mumbai.


Simon Birmingham, welcome.

Simon Birmingham: Great to be with you.

Patricia Karvelas: Economists have been warning for close to two decades that Australia’s economy is too exposed to China. Was this situation, the economic ramifications of coronavirus, inevitable?

Simon Birmingham: Well, I don’t think anything’s ever inevitable, but- these risks are risks that businesses choose to make, from a government perspective, we have been seeking to give the maximum number of choices and opportunities for Australian businesses during our six years. We opened up the market to China through our free trade agreement there. But we did the same with Japan, with Korea, through the Trans-Pacific Partnership, with Indonesia. We continue to pursue talks with others such as the European Union, ultimately the UK, and pursue other opportunities like those I’m doing here in India at present. But we can’t choose where Australian businesses choose to do their business. We can simply only create the opportunities for them, and that’s what we’ve been doing quite determinedly.

Patricia Karvelas: Your government has made signing free trade agreements a priority, as you say. You have been doing that. But Australian business has been slow to diversify. Is that partly a crisis of their own making?

Simon Birmingham: Businesses do have to factor in all of the risks of their business operations. Now, some are seeing those risks come home at present, and that is devastating for some small businesses, for employees dependent on them. But these are risks that businesses take. We as a government can’t choose who they sell to or who they do business with. As I say, what we try to do is give them the maximum choice, and then they have to factor in the risks alongside the prices they’re getting, and the reliability in those markets.

Patricia Karvelas: The share market fell more than two per cent today in what’s been described as panic selling. Are investors right to be panicking, or do you see this as an overreaction to what we’re seeing?

Simon Birmingham: There are clearly market implications out of the economic impacts of coronavirus or COVID-19 at present. Now, markets will determine the extent of those implications. But as the Trade and Tourism Minister, I am incredibly conscious of the impact on tourism operators, big and small, across a range of different regions in Australia. As well as many trade exposed businesses – from the seafood sector through the wine industry, and now increasingly the impact in terms of supply chains being disrupted impacting other parts of the economy.

But all of that said, the Australian economy has shown incredible resilience before, whether it was through the Asian financial crisis, the global financial crisis, and we have built us- ourselves to a position where a stronger budget position enables governments to enter difficult terrain like this in a better position, and where our economy hopefully has the resilience to see it through.

Patricia Karvelas: You're leading a big trade delegation to India right now; you're talking to us from Mumbai. You've got trade ministers from New South Wales and Victoria with you. Was this prompted by coronavirus or has this been in the works for a while?

Simon Birmingham: This has been in the plan for many months, and certainly well before anybody had ever heard of coronavirus. And it’s really acting on the India Economic Strategy that our government commissioned a number of years ago. We then in responding to that strategy identified the need for more coordinated trade activity across India, and so we've got more than 130 different business, education, tourism sector representatives who are here, spanning out across six large Indian cities, really implementing That India Economic Strategy to deepen the trade ties here, and that is about taking advantage of a market where we're already seeing huge growth, doubling over the last five years in our trade volumes and doubling of twoway investment flows as well. And huge opportunities as the middle class continues to grow here, exemplified, for example, just by a big announcement we made with Amazon here in India, who are now putting a dedicated Australia channel on their platform for our produce to be available to more than 400 million Internet consumers in India.

Patricia Karvelas: India is notoriously cautious on trade because it sees itself as a developing economy. Where do you see the biggest opportunities for greater investment?

Simon Birmingham: Australia's economic relationship with India really is a very complementary one. If you look at the growth in Indian manufacturing - well, of course, our energy, our resources helps to fuel that growth. If we look at the growth in Indian IT sectors and other skilled sectors, our education and training services are helping to provide the skilled workforce that India needs. And as the middle class emerges more strongly in the many hundreds of millions in India, we see the huge potential there for premium Australian goods, produce, wines, et cetera, to make their way in increasing value and volume into the Indian market.

Now, it's not without its complexities as a marketplace, and that's identified and acknowledged in our India Economic Strategy. But it has huge potential, and there's great enthusiasm among the businesses who are here.

Patricia Karvelas: Australia's reputation as a good place to study took a hit after a series of attacks on Indian students. Australians- recent- Australia recently tightened visa conditions for Indian students. Do we have to repair that image?

Simon Birmingham: No. Australia's reputation as a safe high quality education destination is a strong one. There is a full stream of universities and education providers here who have bridged partnerships with Indian education providers, including in research streams and elsewhere.

Yes, there were incidents a number of years ago but I think we- well and truly based on all of the surveys that you undertake of students studying in Australia, have a very positive reputation now amongst those students, that overwhelmingly they feel safe in Australia, they feel welcome in Australia and they get a high quality education experience. And we have seen huge transformation in terms of multicultural Australia over this time as well. Hinduism is the fastest growing religion in Australia, Punjabi the fastest growing alternate language in Australia. So the reality is that the Indian imprint on Australia has grown significantly and that helps us to be seen as a more welcoming destination for students from India.

Patricia Karvelas: It's no secret the tourism sector has been hit very hard by the coronavirus travel ban. How much of that market do you think India can take up?

Simon Birmingham: Tourism is a big opportunity in India. Now I wouldn't- I would want to stress that I think in terms of the impact in the decline of Chinese tourism to Australia, our travel restrictions play a role. But everyone should also be mindful that China had already ceased all group travel out of China before we made those decisions and cautioned against unnecessary travel. So I think many of the tourism implications would have been felt regardless of the decisions we took on public health advice around restrictions of travel to Australia. But in terms of the India market, we see now around 400,000 visitors coming from India to Australia. That's been growing at about 12 per cent over the last year or two, and we have the Tourism Australia team here with us. Just yesterday we convened a roundtable of airline representatives here in India to make the case for stronger air connectivity between India and Australia for the future to help drive that tourism market. And we're investing, particularly around the T20 World Cup that's happening at present. We put $5 million extra on the table last year to drive bookings for that and we've seen some 40,000 ticket sales in India for the T20 World Cup. And we're now putting an extra $1 million, thanks to the success of that campaign, to continue to really try to stimulate travel demand out of India for that event, and knowing that from that event we generate and create many thousands of ambassadors and advocates who come back to India and spruik the benefits of visiting Australia on their social media platforms and elsewhere.

Patricia Karvelas: India is often seen as a safer place to do business than China because it's a democracy. But right now we're seeing the worst rioting in decades where you are, brought on by a controversial immigration law that targets Muslims. Do you have concerns around that?

Simon Birmingham: I think India remains a safe place to do business primarily because of the rule of law. Obviously the complementarities between Australia and India of having democratic structures, a legal system built on similar architecture and similar approaches to contractual law, are helpful in that regard. In terms of some of the domestic political issues at play in India, I mean, they are matters obviously for India but Australia continues to think that one of the things most valuable about India has been tolerance- approach to religious diversity, and we continue to stress that in dialogue with Indian Government.

Patricia Karvelas: Simon Birmingham, the World Health Organization is on the verge of declaring the coronavirus outbreak a global pandemic. Given it’s spread so far, is there much point blocking entry to people from one country?

Simon Birmingham: Australia’s management- well, Australia’s management to date has obviously had an incredible result in terms of ensuring that within Australia we've not seen human to human transmission occurring and that the numbers of cases in Australia have been so successfully contained. Now, we’ll continue to act on the public health advice that is continuing to evolve, in terms of us having a better understanding, not only of the transmission rates associated with this, but also of the impact in terms of mortality rates. It is obviously more serious than, for example, a seasonal flu, but nowhere near as serious as SARS or MERS. And those technical understandings and medical understandings will clearly inform how we approach future decisions around travel restrictions or the like.

Patricia Karvelas: Thank you so much for joining us tonight.

Simon Birmingham: My pleasure. Thank you, Patricia.

Patricia Karvelas: That's the Federal Minister for Trade and Tourism, Simon Birmingham.

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