ABC AM - Interview with Michael Brissenden

  • Transcript, E&OE
Subjects: Australia Week in China (AWIC), trade with China, Austrade, royal commission into banking sector, Australian Securities and Investments Commission (ASIC).
11 April 2016

MICHAEL BRISSENDEN: Minister, welcome to the program.

STEVEN CIOBO: Good morning Michael.

MICHAEL BRISSENDEN: So China, still our number one trading partner; obviously incredibly important to us. What sense are you getting about the state and health of the Chinese economy?

STEVEN CIOBO: Well look, the feeling on the ground is quite positive. Obviously we've seen a slowdown in recent years compared to where China was tracking previously, but when you consider the sheer size of the Chinese economy obviously a slightly lower level of growth still represents a very significant clip.

MICHAEL BRISSENDEN: And it's not all, the relationship isn't all, all good for us, is it? I mean we've seen China recently undercutting steel markets globally. That's had a big impact on us. We can't compete with them on some of these areas, can we?

STEVEN CIOBO: Well like anything it's not static, it's a dynamic market place and so there is, from time to time, areas where we can work effectively together and areas where we cannot in terms of levels of competition. But that notwithstanding, there is tremendous opportunity in China for Australian businesses. And in many respects the fact that more than 1,000 delegates are participating in Australia Week in China just underscores the immense value that Australian businesses - and this isn't just large corporates; we're talking about small to medium size enterprises making up the bulk of the delegation. They're really representing them here in big numbers because they recognise the opportunity that exists here in China.

MICHAEL BRISSENDEN: Ok I'll ask you about those broader opportunities in a minute, but just on the steel issue it's been reported that the Prime Minister won't actually be bringing this up in any discussions formally. Why not and isn't this something that we should be broaching with them?

STEVEN CIOBO: Well we recognise that there's an international oversupply of steel. That's the first point; so this isn't about Australia or China per se, this is about what's happening on an international basis. And let's not lose sight of the fact as well Michael that most of the steel that's being made in China is actually being made with Australian iron ore, so indirectly Australia is the winner from China's production of steel because we sell them the iron ore that they use to make that - not exclusively but obviously –

MICHAEL BRISSENDEN: That's a hard message for the 7000 people – 7 to 8,000 people who might lose their jobs.

STEVEN CIOBO: Well not for one moment am I dismissive of the immense structural change that's taking place and of course the real challenge that exists with respect to Australian workers. But the real question at the core of this is what can we do as a Government to make sure that we continue to have a strong industry in the future? We know that the production of steel in Australia is high quality steel. We know that we have some very significant market opportunities in that space. What we've got to do is make sure that we make Australian steel as cost competitive as possible. That's what the Government's focused on. We're doing it through both orders; we've already announced an upgrade of the Adelaide Tarcoola rail link, some 600 kilometres worth of rail. But in addition to that, one of the worst things that we could do quite frankly would be to reintroduce the carbon tax, which Labor's policy is proposing and which we of course abolished, because that reduces the business input costs for the steel industry to help make them more competitive.

MICHAEL BRISSENDEN: Okay, so you think there is still a future for steel in Australia?

STEVEN CIOBO: Absolutely. There's no doubt that we can have a strong, vibrant steel manufacturing industry.

MICHAEL BRISSENDEN: What then are the broader opportunities that you see in the trade relationship with China?

STEVEN CIOBO: We've seen trade grow significantly over the years as China's economy continues to mature. We've got eight streams that we're focused on as part of Australia Week in China from agribusiness and innovation through to education, financial services, tourism for example just to touch on a couple of them. In each of these there are significant opportunities. Because the Coalition delivered the China-Australia Free Trade Agreement, we know that compared to other competitor nations, Australia has real preferential market access into China. Plus, we've got a strong investment framework for Australian businesses to be able to invest in the fast growing market that is China.

MICHAEL BRISSENDEN: Okay now, the Prime Minister won't be bringing up the issue of steel with the Chinese, but there are reports that he will be talking to China, counselling China against expansion into the South China Sea. Is this sabre-rattling from China in this area? Is this undermining our relationship?

STEVEN CIOBO: No, our trade relationship continues to go from strength to strength. We're focused on creating the jobs and growth that will flow from that trade relationship. And, look, with respect to the South China Sea, I mean Australia doesn't take sides in what is in many respects competing territorial claims with respect to the South China Sea, but we do want to ensure that there is a continuation of peace and stability in the region. We make it very clear that we expect respect for international law; that there should be unimpeded trade, freedom of navigation, as well as over flight with respect to the South China Sea.

MICHAEL BRISSENDEN: Sure, because trade routes obviously, if we're talking about trade, could be adversely affected by all of this instability in the region, couldn't they?

STEVEN CIOBO: Absolutely. But that notwithstanding in conversations that I've had with the Chinese they themselves have acknowledged to me that they have a great interest of course in the maintenance of stability and those trade routes remaining open. So, you know, I think that we will find a high level of pragmatism from all parties associated with this.

MICHAEL BRISSENDEN: Okay, well while we've got you on the line, obviously one of the big issues brewing here at the moment is the discussion about a royal commission into banks. Now I know that clearly Labor is going to push for this but also there are five Nats, your Coalition partners who are supporting it. Why not support a royal commission into unscrupulous behaviour by banks?

STEVEN CIOBO: Well this is just a publicity stunt frankly from the Australian Labor Party. I mean I note Michael that in June last year Labor actually voted against a Greens motion for there to be a royal commission into misconduct within the financial services sector. So only last year, less than 12 months ago, the Labor Party actually voted against a motion for a royal commission into the financial services sector. Plus we know that the Labor Party frankly do not respect the findings of royal commissions. If you think back to the Cole royal commission, it recommended the establishment of the AB, of the Australian Building and Construction Commission. Of course Bill Shorten disregarded that when he was a minister and he abolished it. We know that the Hayden royal commission recommended that the Australian Building and Construction Commission should be restored; again, Bill Shorten and the Labor Party ignored the findings of that royal commission. So, you know, frankly this is clearly nothing more than a publicity stunt-

MICHAEL BRISSENDEN: Okay but some of your own colleagues support it. There are five Nationals who support it.

STEVEN CIOBO: Well, you know what, as part of a diversity of views people put forward different points of view. But I think what the Australian people care about is that governments make decisions that are in the Australian national interest with finite resources. Royal commissions are expensive. We've just had the David Murray inquiry into the financial system. We've had multiple inquiries. But let's get back to the core element of this Michael which is why would you have a royal commission? Now we know that there have been elements of misconduct in the industry. That concerns the Government. We're focused on it. It's why we had, well part of the reason we had the David Murray financial system inquiry. But we have a tough cop in the beat already in the financial services sector through ASIC. We also have an ombudsman that operates in the area. So let's not pretend that there aren't already a number of agencies that are focused on trying to stamp out the kind of conduct that worries not only the government but the Opposition and consumers more broadly.

MICHAEL BRISSENDEN: Ok, Steve Ciobo we'll leave it there. Thanks very much for joining us.

STEVEN CIOBO: A pleasure, thank you.

MICHAEL BRISSENDEN: Trade Minister Steve Ciobo on the line from China there.

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