Interview on Sky News Live, Afternoon Agenda with Laura Jayes

  • Transcript, E&OE
Topics: COVID-19 impacts on trade and tourism in Australia;
03 April 2020

Laura Jayes: To Adelaide now. The Trade, Tourism and Investment Minister, Simon Birmingham, joins us.

Simon Birmingham, thanks for your time. If I could take a more macro look at this this afternoon, we are a country that relies so heavily on trade. We’re an island nation. We’ve made such a virtue of doing such free trade agreements over the last decade and beyond.  Are you concerned that after this whole episode that we might become- or countries right around the world might become a little bit more protectionist, a bit more insular?

Simon Birmingham: Laura, I think they are concerns that we have to be absolutely mindful of and proactive in terms of seeking to curtail any of those instincts that may come about towards a more protectionist stance by countries around the world following this crisis. It is important for a country like Australia, where historically, in recent times, one in five Australian jobs have been trade related. That we continue to see strong support in terms of open trading environments, the flow of trade being as successful as possible. What we want to make sure in that regard is that countries who will rightly during these crisis times look to make sure that essential supplies are available to them. People want to make sure that in the future they have critical national capabilities in place. They’re all reasonable propositions, but we certainly shouldn't see a global erecting of barriers that would see a loss of efficiency in the global economy, and would hurt potentially countries like Australia. It would also hurt the many other countries who have benefited so significantly from the opening up of trade markets in recent decades.

Laura Jayes: The tourism industry and trade is the canary in the coal mine, almost, for what we're now seeing in Australia and right around the world industry-wide, in terms of the downturns and the loss of economic activity. What is the state of the tourism industry at the moment? There’s no international travellers. In fact, if there are any visitors left, the Prime Minister today said it's now time to go home, and we are being told to stay home, not even go outside around our own suburbs.

Simon Birmingham: That's right. Look, it pains me as the Tourism Minister to be saying again and again at present the message to Australians is stay put. Don't go away. Don't take a break. What we need is for people to stay within their homes, within their immediate communities so that we don't see a spread of any cases from one community within Australia into another community because of domestic travel. That means, essentially, the tourism industry is in a full state of hibernation right now. And the decisions we've taken as a government in terms of support for businesses, support to maintain employment — particularly the JobKeeper allowance that was announced this week — the support through financial instruments in terms of additional liquidity delivered by the Reserve Bank, and low-cost underwritten finance for small and medium sized businesses. These are all very important measures to make sure that our tourism operators can survive through these incredibly tough times, that they will receive payments to those SMEs, they can access finance, they can support their staff so that they are able to stand back up again at the end of this when Australia will still have a world class tourism product that we can make available to people right around the globe.

Laura Jayes: Let's talk Virgin. What are you willing to do for Virgin to make sure that there isn't a monopoly with Qantas being the only operator?

Simon Birmingham: So, look, we want to have the strongest possible aviation sector at the end of this crisis. And not having a viable aviation sector is non-negotiable for Australia, not negotiable in terms of our tourism sector or in terms of a range of other sectors that rely upon transportation across this country. But equally, that doesn’t mean that it's a blank cheque to airlines. What we have done already is to provide billions of dollars of support, some of it economy-wide that will help the airline, such as the JobKeeper payment, such as the extra liquidity into the bank. Some of it targeted to the airline sector in terms of hundreds of millions of dollars of support, repaying fees and charges and levies that they'd already paid this year. We've seen from there that Qantas has been able to go out into the market, raise an additional significant volume of funds to support and sustain their operations, and-

Laura Jayes: So, do you expect Virgin to be able to do the same? And what does it mean if they can’t do that?

Simon Birmingham: Virgin has some very significant equity holders in terms of Singapore Airlines, in term of Emirates, in terms of Chinese holders as well. So obviously any business at times like this would be turning presumably to their equity partners first and foremost as part of any response.

Laura Jayes: Why wouldn’t the government be an equity partner? That is what Katherine King was suggesting just a moment ago. Is that something that is on the table? Is it a reasonable idea?

Simon Birmingham: Look, we’re not playing rule in, rule out games on anything that business puts to us at present. But I would say very seriously that we expect business with all of the support that government is giving, whether it's the airline or any other part of the Australian economy, to be able to pursue financial solutions, to do so through their equity partners, through the raising of greater equity, through debt mechanisms that they can use given the liquidity was put into the financial markets. And of course, noting the many billions of dollars, more than $300 billion they're using, to support keeping people in jobs, keeping businesses afloat around Australia, and the airlines are big beneficiaries of that support already.

Laura Jayes: Yes, they are. What would be the result if you like, were we going to operate with one airline. Are you countenancing that as an option at least in the short term?

Simon Birmingham: We've been down that path before as a nation and I think it's been demonstrated that Australia is a country that firmly supports two domestic carriers and that we have the market to be able to do that. So were we to face such hypothetical scenarios in the future, I have no doubt there would be other entrants into the marketplace.

Laura Jayes: Have you identified who they may be? I mean, it was suggested Ryanair?

Simon Birmingham: I think I’ve heard- that’s well and really getting into the realms of the hypothetical. If you'd asked this at the time of the Ansett collapse whether we would have envisaged Richard Branson and Virgin coming along, nobody probably would have foreseen that. But as always these will be commercial decisions undertaken by airlines as commercial businesses.

Laura Jayes: Okay. Just quickly on the cruise ships. When all this is not in the crisis zone, will you look closely at how the cruise ship industry is regulated, how those health issues on board are actually reported once they dock in various ports? Does there need to be a national approach rather than a state one?

Simon Birmingham: I have no doubt that there are some serious questions to be looked at a global level in terms of the transparency regulation effective health requirements on board cruise ships. We have seen problems not just affecting Australia but affecting places right around the world. And just today we'll have Australians arriving back from South America who we managed after much negotiation to get off of cruise ships that had been stranded off the coast of South America. We'll have more than 120 Australians hopefully disembarking in Florida where again the Foreign Minister and Foreign Affairs officials have been working hard to negotiate to get those people who had been stranded on cruise ships off of those cruise ships. When they all get back to Australia, they'll be going firmly into 14 days of quarantine at government designated facilities. And look, in the long run, there will be many questions to be answered following the dealing with this crisis. And one of them I'm sure will relate to the cruising industry, the health standards they meet, and the transparency they give governments in times like this.

Laura Jayes: Senator Simon Birmingham Thanks for your time this afternoon.

Simon Birmingham: Thank you very much Laura.

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