Topics: MYEFO; domestic borders; JobKeeper; Australia-China trade relations




Gary Adshead: Simon Birmingham is the Minister for Trade, Tourism and Investment. Plenty to talk with him about this morning. Thanks very much for your time.


Simon Birmingham: G’day. Great to be with you. Thank you.


Gary Adshead: First of all, what’s the feeling in the Federal Government about the sort of rebound of our economy right now given today’s results are starting to paint a more positive picture than we might have expected?


Simon Birmingham: Well, they sure are. Look, Australia, compared to the rest of the world, has managed the health crisis caused by COVID far better than pretty much any other comparable nation. And also the economic crisis, and now thankfully, recovery. We’ve seen really strong jobs data come out today, some 85 per cent of the 1.3 million Australians who either lost their jobs or saw their working hours reduced to zero at the start of the crisis are now back in work. And so that is a huge relief for those individuals, a great lift in terms of seeing now 734,000 jobs created across the Australian economy over the last six months and indeed, seeing this month the vast majority of new jobs full time, and some 11,400 jobs in WA. So it’s good news in terms of Australians being able to get back to work, get back to their lives, regain a sense of economic security. But clearly, there’s still plenty of uncertainties and challenges ahead.


Gary Adshead: And again, in relation to sort of JobKeeper payments, good news there in terms of the savings on what you thought you’ve projected or had in the kitty just in case. That seems to be better by the tune of $11.2 billion.


Simon Birmingham: It is, and it makes a real contribution to the budget bottom line. The budget update we’ve released today now shows that it’s expected to be $24 billion less in terms of the scale of deficit over the forward estimates, over the next few years than had previously been forecast. And that’s the function of very much stronger consumer and business recovery, more Australians being back in work, which means reduced reliance on government payments and support, and stronger than expected revenue. Now, these are still incredibly trying and challenging times. And we face significant ongoing deficits and real risks in terms of the way that COVID unfolds and in ensuring that vaccine delivery is successful. But you’d much rather be in Australia in our position than pretty much anywhere else in the world.


Gary Adshead: Now having said that, Minister, I’m sure you’re acutely aware of what’s going on in New South Wales, could that throw a big spanner in the works as that develops?


Simon Birmingham: Look, I don’t think we should get too far ahead of ourselves in terms of what’s happening in New South Wales. Obviously, everybody is monitoring the situation there closely. But New South Wales has proven itself time and time again during this crisis to have pretty much the best contact tracing system in the world, arguably. They have managed to withstand numerous potential risks and shocks and shut them down again, and again, and again. And so we hope and trust that they will be in a position to do so once more on this occasion. It’s a reminder that bringing Australians back from overseas is a fraught and dangerous business. It’s why we’ve worked closely with states and territories to make sure that the health safety and checks are as strong as possible. And no doubt once more, they will be reviewed and potentially strengthened further as a result of this.


Gary Adshead: Just with your tourism hat on, and perhaps trade as well to some extent, but what would you say to our Premier, because you know that we’ve taken a very strong line on shutting down when we think there might be concerns. Should he be waiting a bit longer? They’re having a meeting at 12 o’clock today. Should they be waiting a bit longer or should our border be shut to New South Wales by the weekend?


Simon Birmingham: I’d urge caution and for all states and territories to enable New South Wales to work through the evidence, work through the genome sequencing, demonstrate just how their contact tracing systems are responding effectively. There are, of course, tens of thousands of Australians whose jobs depend upon the operation of our airlines and airports, and all of the associated businesses in hire car companies and hotels and otherwise. And whilst nobody wants to take any chances with the safety of Australians and the suppression of COVID, we equally don’t want to see huge jolts of uncertainty come across the economy by reactions that are taken before all the facts are available. And so I would just urge that caution. Follow the facts, follow the evidence. And it is still very early days in terms of the situation in New South Wales. And they, as I said, have demonstrated before time and time again that they have the capabilities to get on top of these things.


Gary Adshead:             On another issue, how do you go to bed at night without the words China keep popping up in your mind as you trying to get into a restful sleep? It seems every day there’s a new issue thrown up at you.


Simon Birmingham:     Well, as the Trade Minister and for the last couple of months having also been the Finance Minister all at the same time, safe to say that the limited hours I get to put my head on the pillow I crash pretty quickly for the short period of time that’s there. But look, the situation with China is of deep concern. And it worries me. It worries the government, particularly in terms of the impact that it has on individual businesses who are more heavily exposed in relation to China. You know, Australia’s economy has shown – as we were just talking about – huge resilience and ability to recover. This year, our exporters work across a vast range of countries. China is our biggest export destination. But we see huge exports that go to Japan. Big growth this year to the United States in a range of agricultural goods, in particular. Opportunities across South East Asia, the Middle East and elsewhere that we keep pursuing. But the China situation is not one for us to pretend that we aren’t concerned. Of course, it’s of concern, particularly for those businesses impacted. That’s why we’ve sought time and again to be able to discuss these issues with China. We haven’t made decisions that caused these trade disruptions, China has. We’ve sought to try to resolve them directly with China. And we’re now, particularly in the case of barley, taking action through the World Trade Organisation to seek to bring China to the table for discussions that up until now they’ve been unwilling to have.


Gary Adshead:             I know that you get asked this a lot, but what is that level of communication like right now? Is it non-existent? Can you pick up the phone to any advisors or the minister themselves or your counter minister? Can you do it? Or is it literally the only level of communication seems to be through the Chinese state-owned media who make the statements through organisations like Global Times, for example, which are worrying, where are you at with that? Is there backroom diplomacy going on?


Simon Birmingham:     We certainly deploy all the backroom diplomacy options that we can. It’s publicly well-known that China has been unwilling to engage in ministerial dialogue for some time in talking from minister to minister at that level. Our officials still have certain degrees of access, and we are still deploying all of the appropriate –shall we say – diplomatic courtesies and niceties that a country like Australia should. So when we were making the announcement about the WTO challenge on barley yesterday, we made sure that in Canberra to the Chinese embassy, in Beijing from our own embassy, and where the WTO is headquartered in Geneva, through our ambassador there, that at all of those different points, we gave China clear, advanced notice of what Australia was intending to do and so that there was no reading about it in newspapers or hearing about it from the media, but instead applying those proper processes. Australia is consistent, I would argue, in all the things that we do. And that includes, of course, defending our values and our sovereignty and our national security interests. And we won’t compromise on those for anybody. But we also are consistent about recognising that China is an important regional economy and nation, and that we want to maintain the type of productive partnership with them that we have had in the past and that we are willing to put the effort in to work on that.


Gary Adshead:             And just finally, obviously, Western Australia relies heavily, as does the rest of the country, on our iron ore industry. Are you hearing anything or any concerns that that could be targeted in some way, shape or form next?


Simon Birmingham:     Look, there’s always lots of speculation that runs through the media. But we see nothing of particular impact there. This year has seen a huge surge in relation to iron ore prices and demand. That’s a function of a couple of things; China in restarting their economy, driving volumes hard, also the disruptions that have occurred in Brazil in relation to their production of iron ore has increased reliance on Australian iron ore. And so the combination of factors there is significant in terms of what it’s meant for the Australian industry this year. In the budget update, we’ve just handed down, we’re continuing to take, though, a very conservative approach. Iron ore for the last month has run at about $132 per tonne. We’re projecting, as we have consistently in budget updates, for a much lower rate so that we take a prudent and conservative approach. And we’re forecasting that to come down to about $55 over the period to September next year, just as we had previously forecast it to come down to that point at about the June quarter.


Gary Adshead:             All right, lots to discuss there. I do appreciate your time, Simon.


Simon Birmingham:     Thank you. My pleasure.