ABC Radio National Drive

  • Transcript, E&OE
Subjects: Australian Steel, trade negotiations, Royal Commission into Banks, AWIC.
08 April 2016

PATRICIA KARVELAS: Australia's international trade deals have come into focus today as politicians argue about how to help the local steel industry. Both sides of politics have called for more Australian steel to be used in government projects amid warnings that doing so may breach Australia's trade obligations. The Trade Minister, Steve Ciobo, happens to be in Hong Kong talking up Australia's credentials ahead of a week in China at the head of our biggest ever trade mission. Steve Ciobo, welcome back to RN Drive and thanks for your time.

STEVEN CIOBO: Good evening Patricia.

PATRICIA KARVELAS: How far could governments go in mandating or encouraging Australian steel to be used in government infrastructure projects before we risk breaching our international trade obligations, those deals that we've actually signed?

STEVEN CIOBO: Well there's a clear difference between the two. We can certainly encourage the use of Australian steel and indeed, of course, we do want to do that and that's the Coalition position. In fact, we've fast tracked 600 kilometres of rail track regeneration as part of our attempt to do what we can to assist Arrium, but that's different to Labor's position. Labor, under Bill Shorten, has turned around and said that he would mandate the use of Australian steel. Now on the surface that sounds fine, except what it shows is that Bill Shorten simply doesn't understand trade policy, but it also shows that he's prepared to walk away from the jobs and livelihoods of thousands of Australians who are employed in businesses that export goods and services to other governments, into other public services around the world. We can't have it as a one way street. We can't say, well we reserve the right to lock out any foreign purchases or any foreign supplies when it comes to government in Australia and expect that foreign governments wouldn't seek to do the same thing to Australian businesses.

PATRICIA KARVELAS: Do you support Christopher Pyne's statement that, and I'm quoting, "state and territory governments and any federal government projects should use Australian steel?"

STEVEN CIOBO: Well of course I support that statement. The aspiration that they should…

PATRICIA KARVELAS: What's the difference if they should do it?

STEVEN CIOBO: The aspiration that they should have, well the difference is aspirational versus mandated. Our position is that, of course, we should comply with our trade obligations. We recognise that there are thousands of Australians who are employed in exporting businesses, exporting goods, exporting services to foreign governments, to foreign public services and all of those would be jeopardised if we adopted Bill Shorten's, not only knee jerk reaction, but actually a reaction that is in breach of Australia's trade obligations.

PATRICIA KARVELAS: How would you encourage it rather than, give me a scenario, you've got a project, you want to encourage it, what would stop you then using Australian steel? What would be the roadblock if you wanted to do it?

STEVEN CIOBO: Well we look for value for money and we look for transparency and competitiveness. They're the key drivers when it comes to purchasing policy in Australia and I think Australians understand and expect that governments will look for value for money and that governments will look for competition and transparency. That's what our focus is. That's a very different scenario, and I stress again, Patricia, the reason this is important is because there are a number of Australian businesses that are suppliers to governments abroad and are suppliers to government services abroad. They employ local Aussies and we can't jeopardise their livelihoods because that will just lead to even further job losses and frankly we need to be focused on engaging with the world, recognising that the world is more global than it's ever been.

PATRICIA KARVELAS: On RN Drive, my guest is Steve Ciobo, he's the Minister for Trade and Investment and he's on the phone with us from Hong Kong. Our number here is 0418226576 if you want to text us and join in on this conversation. Are you pro-protection or do you think free trade means that we need to keep our economy open, 0418226576. Given you're in Hong Kong I have to ask, where are talks on free trade deals with Hong Kong and Taiwan up to?

STEVEN CIOBO: Well I had conversations with Minister Greg So here in Hong Kong yesterday. It was a chance for us to look at what opportunities exist with respect to building on those trade linkages and investment linkages between Australia and Hong Kong. We've got two way investment stock between Hong Kong and Australia that's worth around $123 dollars, so we're very focused on promoting those opportunities and in particular, can I say Patricia, given both Australia and Hong Kong have very low levels of goods tariffs in place, basically zero, that the real opportunity sits with respect to services trade. I'm talking about opportunities, for example, for Australian lawyers, for doctors or accountants and those types of things to be able to move between the markets because that's great for driving Australian jobs growth.

PATRICIA KARVELAS: I know you have Andrew Robb serving as a special trade envoy, but you have at least seven free trade deals on the go at the moment. How are you prioritising them? You can't possibly focus on all of them equally? What are you trying to land as a priority?

STEVEN CIOBO: The principle priority at this point in time is a discussion that I'm having with Indonesia. I met with Tom Lembong, Indonesia's Trade Minister, a couple of weeks ago and we announced the formal recommencement of trade discussions and negotiations around a comprehensive economic partnership with Indonesia. This of course is one of our closest neighbours, a very large population, a very large market and the trade investment relationship between our two countries is very underdone. This creates great opportunity. He and I, through our discussions, have committed to hoping to conclude this negotiation and reach an agreement in the next 12 to 18 months. That's a key focus for me. As Special Trade Envoy, Andrew Robb is focusing on ongoing negotiations with India and with Singapore, so they're the main three that are currently underway.

PATRICIA KARVELAS: On that, you're spending next week in China with what you're saying is Australia's biggest ever trade mission. Are there any concrete outcomes that you can promise us?

STEVEN CIOBO: Well, we certainly have a very high level of ambition with respect to this trade mission. With more than 1,000 delegates, it is Australia's largest ever trade delegation and it underscores the very high level of interest among Australia's business community to engage in trade with China. Let me stress Patricia, this delegation is largely comprised of SMEs, that's small to medium enterprises. It's not just large corporates. This isn't just about the top end of town. This is about small businesses sprinkled across the Australian community who are saying, we want to engage in trade with China. We recognise the tremendous potential that's there. The Coalition has opened up these trade agreements with Japan, South Korea and China. Now's the time to strike while the iron's hot and to capitalise on them.

PATRICIA KARVELAS: Just before I let you go, I know that you're overseas, you're speaking to us from Hong Kong, but you have a smart phone like everyone else, so no doubt you consume the news happening here. The Labor Party's just said that it will launch a bank Royal Commission if elected. Surely all the bad news we've heard about the culture going on within our banks justifies looking into this properly, are you going to be pushing for the same kind of Royal Commission on your side of politics?

STEVEN CIOBO: No, the reason being because we have had so many inquiries into the banking sector over the last 20 years, there are volumes and volumes and volumes of reports, inquiries, recommendations that sit there on shelves gathering dust. The fact is that if you look at the banking sector…

PATRICIA KARVELAS: I have to interrupt there politely, as politely as I possibly can, but really, inquiries are not Royal Commissions, they are different. You and I both know that.

STEVEN CIOBO: Yeah, but the point is though that we are talking about a sector that already has a tough cop on the beat in terms of ASIC, it's already got regulation in terms of APRA, it's already got close scrutiny by the Australian Competition and Consumer Commission. We've got an Ombudsman that also has oversight on the industry. I mean, it's very different to the scenario that's being painted by, for example, the Royal Commission we had into the trade union movement. That was highlighting that there were systemic examples of corruption, close linkages between the trade union movement and organised criminal motorcycle gangs, for example. You know, this is a different scenario without the same tough cop on the beat like the banking sector has with ASIC, the ACCC and APRA.

PATRICIA KARVELAS: But are they doing their jobs properly given what we've seen? I mean, rigging bank rates, ripping off of life insurance customers, you might say that the infrastructure is all there, but it's clearly failing.

STEVEN CIOBO: Well Patricia, I don't think it's a fair assessment to say that. I mean, Australia's banking system and the regulation as well by the Reserve Bank of Australia, serve the Australian nation exceptionally well. I mean, we just came through the global financial crisis, our banking sector was more strong, more stable than pretty much any other banking system around the world and I don't think I'm over stating it too much by saying that. The fact is that our banking system services the Australian people and the Australian public very well.

PATRICIA KARVELAS: Minister, many thanks for your time.

STEVEN CIOBO: A pleasure. Thank you.


Media enquiries