Sky News, PM Agenda

  • Transcript, E&OE
Subjects: Indonesia-Australia Comprehensive Economic Partnership Agreement; Penalty Rates; Newspoll.
27 February 2017

DAVID SPEERS: Withme now is the Trade Minister Steve Ciobo. Thank you very much for joining us.

STEVEN CIOBO: Goodto be with you.

DAVID SPEERS: Sowhat sort of impact will the measures announced on the weekend actually have onjobs in Australia?

STEVEN CIOBO: It'sa beneficial impact. The fact is it will make Australian sugar exports morecompetitive. It will also mean that we are able to get more cattle intoIndonesia, which is of course also going to help boost our export trade aroundthat. So both of these measures will see increased Australian exports and thatis going to be good for Aussie jobs.

DAVID SPEERS: Thesugar tariff comes down from eight to five per cent is that really a big deal?

STEVEN CIOBO: Lookit really is because one of the biggest competitors for Australia is Thailandand Thailand was enjoying five per cent tariff while we were -

DAVID SPEERS: IntoIndonesia.

STEVEN CIOBO: Correctinto Indonesia, while we were paying an eight per cent tariff and we'veactually been seeing over the past several years slippage, in terms of thetotal volumes of sugar that we are selling, into Indonesia. Securing thisoutcome was one of my prime objectives in my discussions with Indonesia's TradeMinister and so it is a really good outcome. It is going to make a bigdifference especially with those in Northern Australia around Innisfail, Mackayand all those regions.

DAVID SPEERS: Nowin return we're going to drop tariffs on herbicides -

STEVEN CIOBO: Pesticides.

DAVID SPEERS: Andpesticides. Why do we have them still in place?

STEVEN CIOBO: Wellwe still have, of course, relatively modest tariffs in place across many goods.

DAVID SPEERS: Whyis that?

STEVEN CIOBO: Butwe reduce -

DAVID SPEERS: Wellon these ones.

STEVEN CIOBO: Wellit's advent of history. Well look it is historical. But the point is we are pulling that forward. We will reduce itto zero. From five per cent down to zero. We don't really manufacture much interms of herbicides and pesticides. So it also just means that that will becheaper for Australian households.

DAVID SPEERS: Sowhat more needs to be done when you're negotiating this free trade deal? Youwant to get it done by the end of the year with Indonesia.


DAVID SPEERS: Theyhave a few priorities. They want better access for their paper, their palm oil.Are you going to move on those fronts?

STEVEN CIOBO: Wellpaper is not something they're seeking a specific outcome on. We had anAnti-Dumping Commission recently that found that they were dumping A4 paperinto the Australian market.

DAVID SPEERS: Indonesiawas?

STEVEN CIOBO: Correct.That is what the ADC, the Anti-Dumping Commission found. And that's independentof government. The Anti-Dumping Commission is not an – it's an agency ofgovernment, but it is not something that we control. So that's at arm's lengthto us. They obviously just raise their concerns about that decision.

DAVID SPEERS: Soyou can't do anything about that?

STEVEN CIOBO: Notdirectly, no, because it's an independent agency that has taken that decision.On palm oil my understanding is that there is only one palm oil refinery inAustralia. There is not a regulatory barrier per say to bringing palm oil in.There is just that there is only one customer. And they make decisions,obviously as a commercial business, about where they buy their palm oil fromand so on.

DAVID SPEERS: Soas a Government again there's nothing you can do?

STEVEN CIOBO: No.As I said there are no real barriers to trade. I mean look, I think it's abroader issue-

DAVID SPEERS: Sowhat else do they want?

STEVEN CIOBO: Wellit's a lot more than that. I mean the broader issue is that we want this to bea comprehensive, trade, services, and investment agreement. It's one that isgoing to underpin our relationship with Indonesia going forward. This will helpmaterially change it. There our 13th largest -

DAVID SPEERS: Thisall sounds great but what I am getting to is what practically is standing inthe way of better trade right now?

STEVEN CIOBO: Wellwe have got to work through the deal. I mean -

DAVID SPEERS: Isthere anything you can offer them as a government? Nothing on paper, nothing on-

STEVEN CIOBO: Thereare thousands and thousands of items. I mean there are thousands and thousandsof items. There's all issues around investment and thresholds of investment.There's all services; whether we allow recognition of architects both ways;doctors; I mean there are so many different examples.

DAVID SPEERS: Wouldyou be willing to do that - recognise their doctors in Australia?

STEVEN CIOBO: Ican understand why you might want to delve right into the granular details.

DAVID SPEERS: Iam just after something that you're willing to give them as part of this tradedeal. Would Indonesian doctors be able to practise in Australia?

STEVEN CIOBO: Wewant to get - and this is what a negotiation is - we want to get a good outcomefor Australia. What I am focused on is a good outcome for Australia. WhatIndonesia is focused on is a good outcome for them.

DAVID SPEERS: Whatdoes that mean?

STEVEN CIOBO: Wellfor us it means improved market access to Indonesia. It means reducing tariffsso Australian exports are more competitive. It means that we have better accessto -

DAVID SPEERS: Sowhich ones?

STEVEN CIOBO: Letme give you a concrete - I can see you're very keen on this -

DAVID SPEERS: Letme say why. The Prime Minister today has had a real slap at the media. He hassaid, 'Can you guys focus on jobs and practical…' So that's exactly what I amtrying to do.

STEVEN CIOBO: Sure.Alright let me tell you so if you look at for example education services. NowAustralia, both at a tertiary level and in vocational education, has a greatreputation when it comes to education services. Now we can export thoseservices, and the great outcome - and this is where we talk about trade dealsbeing win-win - the great aspect about this is if we can get improved marketaccess into Indonesia, for Australian campuses to be able to run Englishlanguage courses or teach a trade-

DAVID SPEERS: Sothey can't at the moment.


DAVID SPEERS: Sothe University of Sydney, for example, would not be able to set up a campus inIndonesia.

STEVEN CIOBO: Well,it gets complex, but it's very difficult.

DAVID SPEERS: I'msure we can keep up with it.

STEVEN CIOBO: Well,it depends on where the location is and what the course is and all these sortsof things, but the broad principal is this: It's difficult. We want to make iteasier. So, if we get more access into Indonesia, the reason it's a win-winoutcome is because we've got an Australian business which is able to exporteducation services, but it's also good for Indonesia because it means that theybuild up their capacity over time, they get more people trained up in a trade,they get more people who understand a tertiary course, and that's the win-winoutcome.

DAVID SPEERS: Ok,but again, why hasn't it happened by now?

STEVEN CIOBO: Because,there's barriers. So there's, for example-

DAVID SPEERS: Onthe Indonesian side.

STEVEN CIOBO: Recognitionbarriers. So, they'll say, we don't recognise ... If someone's done this coursein an Australian institution, we won't recognise it in the Indonesian system.

DAVID SPEERS: Letme give you another example, we would be willing to give Indonesia the samestatus we give the United States, when it comes to foreign investment, notrequiring, Foreign Investment Review Board scrutiny in Australia.

STEVEN CIOBO: Well,no, there is always a requirement around scrutiny, so let's be clear on that.What differs is the threshold.

DAVID SPEERS: That'swhat I mean.

STEVEN CIOBO: So,there's always -

DAVID SPEERS: Wouldit be the same threshold as the US?

STEVEN CIOBO: Well,maybe, this is what we'll negotiate. So, we'll sit down with them, we'll sitdown with them and we'll have those kinds of conversations, and obviously we'llwant more ability for Australian businesses to invest into Indonesia. It's abig market; 255 million people, around 50 million middle class, there's a lotof Australian expertise. Take, for example, tourism. There's around a millionAussies a year that go to Bali for a holiday. If we have the opportunity to getsome Australian investment in around there, to get more Australian resorts-


STEVEN CIOBO: -inand around Bali, for example. Well, not just Bali, but other places too. That'sgreat news for us, a return for our investors, a return on Aussie investment inthere, and there's a lot of Australians going there to holiday anyway. So,these are the kinds of things that are very much in the mix that we're going tobe negotiating.

DAVID SPEERS: Becausethere are restrictions at the moment, aren't there, around what land can beowned by Australians in all those tourist areas-

STEVEN CIOBO: Correct.This is why-

DAVID SPEERS: So,that's something you'll be after, to allow Australian individuals andbusinesses to buy up land.

STEVEN CIOBO: Well,more investment into Indonesia. More Australian investment into Indonesia,which is great for us, so-

DAVID SPEERS: Iget what you're seeking now-

STEVEN CIOBO: Butthe thing is, David, this is why these agreements take a while to work through,because actually, when you get into the granular detail, there's a lot ofterrain you have to cover.

DAVID SPEERS: Yeah.It's important to explain to people, what are you doing and why.

STEVEN CIOBO: Absolutely,absolutely.

DAVID SPEERS: Letme ask you about a couple of the issues today, so you've just come fromQuestion Time, a lot of debate there about penalty rates. Your electorate,Moncrieff, has, according to a story I saw in the Fairfax press over theweekend, the highest number of retail accommodation food service workers thatare going to be impacted by this decision on Sunday penalty rates. Do you thinkit's a good decision or a bad decision?

STEVEN CIOBO: Well,I think that Bill Shorten's a complete fraud, because the Fair Work Commission,as you know, is independent.

DAVID SPEERS: Okay.Well do you think the decision is a good decision or a bad decision?

STEVEN CIOBO: Ithink there's good aspects, I think there's bad aspects.

DAVID SPEERS: What'sgood and what's bad?

STEVEN CIOBO: Obviously,anybody who is going to see a reduction in their take home pay is,understandably, going to be upset about it. That's the bad side of it. The goodside of it, is that it's going to create a lot more job opportunities forpeople who are currently shut out of employment in the hospitality sector. Now,on the Gold Coast, we are a city built off hospitality, we're Australia'spremier tourism holiday playground. Now I can tell you, there are a lot ofbusinesses that do not open on Sundays, because of penalty rates. There's a lotof businesses that, if they do open, only open on reduced hours because ofpenalty rates.

DAVID SPEERS: Sowill they open because of this?

STEVEN CIOBO: Well,I can't say whether they definitely will or definitely won't, but I can tellyou-

DAVID SPEERS: That'sthe difficulty here, isn't it?

STEVEN CIOBO: Well,what I can tell you is what COSBOA, the Council of Small Business of Australia,says, what all the major peak tourism bodies all say-

DAVID SPEERS: Butit would be interesting if –

STEVEN CIOBO: Wellhang on, all the tourism bodies and the Council of Small Business and othersall say there will be many thousands of jobs created as a result of thisdecision.

DAVID SPEERS: Theyjust can't say where?


DAVID SPEERS: Wehaven't heard too many businesses-

STEVEN CIOBO: Ofcourse. It's logical.

DAVID SPEERS: Well,it would be handy if there was a business saying, 'When this happens, I willopen on a Sunday and hire three more people'.

STEVEN CIOBO: Sure.Well, I mean, I'm sure if you took your cameras out, you'd find businesses thatare pretty prepared to take that.

DAVID SPEERS: We'lldo that. We will try. Just wondering as the local member, whether you've - allthose business you'd talked to about this -

STEVEN CIOBO: Absolutely.I've spoken-

DAVID SPEERS: ...Whether any of them have said to you, 'I'll open on a Sunday.'

STEVEN CIOBO: Imean, I've spoken to shopkeepers and other people who have said exactly that tome. And yes, that's what I said, the good and bad aspects to this-

DAVID SPEERS: Canyou name them at all?

STEVEN CIOBO: Well,I mean, I can tell you for example, there's a caf̩ at Broadbeach called РIdon't know if he wants me to tell, but called Madison's РI'll say a great caf̩at the Oasis. Now, he opens on public holidays. He says he's got to be open ona public holiday because people want to know that they can go there andreliably expect to have the caf̩ open, but it costs him an absolute fortune. Hesaid that he often loses money on those public holidays. Now, that's a case inpoint where you've got a business, who says this is having a material impact onwhat they're doing. So, I got back to the point -

DAVID SPEERS: That'lljust make life a bit easier for him or will he actually hire someone else?

STEVEN CIOBO: Well,you need to ask him that.

DAVID SPEERS: Ok.Alright fair enough.

STEVEN CIOBO: AllI can say to you is what all the peak bodies say, which is this that this isgoing to create thousands of more jobs as a consequence.

DAVID SPEERS: Andlet's hope so, but on the whole, you seem to be arguing this is a good thing.

STEVEN CIOBO: No,I've said there's good aspects and bad aspects to it. I've made that veryclear, but I'll tell you what concerns me the most about this whole debate,David. And that is that Bill Shorten, the Leader of the Opposition, who saidnot once, not twice, but three times on 3AW radio that he would back theindependent unbiased decision, has just proven what a total fraud he is when itcomes to penalty rates. Bill Shorten is the daddy of this decision. He's theguy that set the Fair Work Commission up. He's the guy that made penalty rightspart of their jurisdiction. He's the guy that effectively owns this decision-

DAVID SPEERS: Someone'spoint-

STEVEN CIOBO: Now,he turns around and says, 'Oh, I'm not going to be a part of it'.

DAVID SPEERS: Someone'spointed out to me, cafes aren't affected by this decision. I'm sure it's agreat café that you've referred to there in your electorate -

STEVEN CIOBO: Hospitalityworkers, retail workers -


STEVEN CIOBO: LookI'm not the industrial relations expert.

DAVID SPEERS: Alright,alright. The Newspoll, how do you feel about that?

STEVEN CIOBO: Well,I mean, I'm going to tell you what everyone always says, which is that pollscome and go. We are seven, eight months into post-election period. We've gotmore than two years to go. We've got a job to do, which is to manage thenation's finances. We've had to make hard decisions, David. We haven't beentaking decisions that we know make us popular. We have been taking decisionsthat we know are the right decisions -

DAVID SPEERS: Andin those seven or eight months, the trajectory's been like this for the LiberalParty. It's been like that for One Nation. Why do you think that is? This isn'tjust one poll.

STEVEN CIOBO: Well,because I think that there's a view amongst some people that One Nation sayssome things that they want to hear. They highlight problems without offeringsolutions. They highlight views that don't, frankly, if they were put intopractise, people would see and actually put the country on a worse track. But,you know, I'm never am agitated by people who are looking elsewhere. At the endof the day, my job to be an effective advocate is to argue the merits of why webelieve what we believe. And I will either persuade people or not persuadepeople on the basis of those decisions.

DAVIDSPEERS: Well, you've done that here today talkingpolicy. Steve Ciobo, thank you very much.

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