Topics: trade relations with China, industrial relations reform, NZ backpackers




Patricia Karvelas:         Simon Birmingham is the Minister for Finance, Trade and Tourism and Investment and I spoke to him a short time ago.




Minister, welcome.


Simon Birmingham:     Thanks, Patricia. Great to be with you.


Patricia Karvelas:         We’re going to get to industrial relations reform in a moment, but I want to start on your portfolio. China has applied a new round of tariffs to Australian wines, saying tariffs of either 6.3 or 6.4 per cent would apply to Australian wine due to claims that winemakers are being subsidised. What’s your response?


Simon Birmingham:     Well, we reject those claims out of hand, and the evidence just is not there to sustain it. And the idea that Australian winemakers dump their product in China, as was originally claimed by China, or that they are subsidised by government to some extent to export to China, is just false. The evidence is very clear in the Australian wine industry’s favour, and we will continue to defend the wine industry by using the domestic processes available in China and, ultimately, considering the appeal rights of the independent umpire through the World Trade Organization. This is obviously another step in what has been a disappointing, a frustrating and a deeply concerning pattern of decisions by China over quite some period of time. We have called out those behaviours and that pattern of behaviour. We’ve done so publicly. We’ve done so directly with China. We are continuing to do so through the WTO, and we will keep standing up for Australian industry.


Patricia Karvelas:         Will it make it worse for Australian winemakers, or was it so bad it can’t get any worse?


Simon Birmingham:     Look, a 6 per cent tariff on top of a 200 per cent tariff is obviously marginal compared to the initial harm that was done, but, on the whole, it just shows that China’s making of these decisions is not being based properly on the evidence. Any idea that our wine is dumped in the Chinese market doesn’t stand up to scrutiny. Australian wine is the second highest price point in the Chinese market. And for Australia, it’s basically our highest-priced market, and so our producers are sending their premium product at premium prices into that market, and they’re doing so free of any government subsidy. Winemakers are more likely to complain about how much tax they pay than how much subsidy they get. And so we will defend all of these arguments and these cases back to China and through all the systems available.


But, of course, we appreciate there’s a bigger picture and issue here. It’s why we will also, whilst trying to bring China to the table for dialogue, help our industries in terms of their access to all the other markets we’ve struck trade agreements with, be that Japan or Korea, Canada or Mexico, Vietnam or Indonesia, the growth opportunities in India, or the new trade agreements we’re pursuing in the UK and EU. These are all about trying to help people grow in other markets too.


Patricia Karvelas:         Look, I’ve talked to people, not only in the wine industry, just across the board in different industries who are facing these kinds of ramifications, and they say this push to diversify might sound good on paper, but you just don’t get the value that you get from China anywhere else. How do you answer the value question?


Simon Birmingham:     Look, China is obviously a very large market. It is not only Australia’s number one trading partner, but it’s the number one trading partner for the vast majority of the countries in our region. That is a function of, of course, our geographical proximity and the scale of the Chinese market, the scale of population, the growth of the middle class, and with that, the propensity towards premium products. So, yes, there are clearly impacts there. It’s not easy to simply pivot away. And our businesses have made commercial decisions over recent years in terms of where they sell their products. We recognise that some are now under stress and pressure as a result of the decisions China has taken. That’s why we want to work with them through our trade offices and other avenues to help them grow into other markets, but we don’t pretend it’s ever easy to grow a new export market. And, of course, the need to diversify for some means choosing access points into many different markets, not just one, if they had a more singular focus on China before.


Patricia Karvelas:         What’s your response to the Chinese Embassy saying your concerns around Beijing’s adherence to the free trade deal are totally unfounded?


Simon Birmingham:     I’m afraid that the evidence just doesn’t stack up in terms of China just trying to deny that there’s nothing to see here. Our wine industry knows there’s something to see here. Our live seafood industry knows that there is. Our timber industry knows that there is. Our fresh meat industry knows that there is. Our barley and grain sector knows that there is. The sectors that have seen the obvious, continuous accumulation of impacts throughout the course of this year, and, indeed, in the case of the barley processors that started a couple of years ago, clearly can see a pattern of behaviour, and that pattern of behaviour is inconsistent with both the intent and the spirit, as well as the letter of ChAFTA or, of course, the commitments China has made more broadly to the World Trade Organisation.


Patricia Karvelas:         Is the Government considering withdrawing or changing the proposed alteration to the BOOT Test, the Better Off Overall Test?


Simon Birmingham:     No, Patricia. The Government has presented this week industrial relations reforms that have been the subject of around 120 hours or so of consultation by Government, sitting down with unions and businesses, hearing all of their arguments, working through the different potential changes to make our IR system more adaptive to help with jobs growth out of the COVID-19 recession. And so, we are focused very much on delivering the reforms. They’ll go through a Senate committee process. We will listen and engage through that process. But in terms of the Better Off Overall Test, look, Paul Keating has previously described it as being too complicated. We are simply proposing a two-year-


Patricia Karvelas:         No, no, no. The enterprise bargaining process has been criticised, but the idea that workers would be worse off is clearly really contentious. I’ll just- you’re going in to the summer period not retreating from this position. I mean, that’s pretty dangerous, isn’t it?


Simon Birmingham:     Well, Patricia, you know what still has to be met for a change in enterprise agreement under this test, don’t you? Workers have to vote for it themselves. They have to agree, by majority vote, that they want changes. And then it still has to pass the test of an assessment by the independent umpire, by the Fair Work Commission. So there is a very clear standard that we are maintaining. The tests will be maintained where workers get to vote and have the say in relation to any changes to the enterprise agreement. The idea that Labor’s trying to cook up, that there’s going to be some mass reduction in terms of wages or entitlements, is completely false. These are lies being told by the Labor Party. These are sensible reforms instead-


Patricia Karvelas:         Well, it’s not- they’re not entirely lies because it is possible to reduce wages or conditions under the legislation. So it’s not a lie, it is possible that workers will go backwards.


Simon Birmingham:     And the test there, that workers in a workplace have to vote for a new enterprise agreement. Can’t be forced upon them. Can’t be done without their consent. Needs their consent to be able to move forward and then still has to have the ruler run over it by the independent umpire. And that ruler involves an assessment, still, that there is a Better Off Overall Test. Nobody’s getting rid of the test.


Patricia Karvelas:         Okay.


Simon Birmingham:     It’s staying. It’s staying put with that dual criteria of workers having to vote for it and the independent umpire ensuring that, under that enterprise agreement, workers will be better off overall.


Patricia Karvelas:         So, Minister, do you believe that a better definition of a pandemic-affected business would maybe ease some of the concerns expressed by the labour and union movement?


Simon Birmingham:     Well once again, you would expect that the Fair Work Commission is only going to accept that a pandemic-induced business is one that has actually suffered as a result of COVID-19.


Patricia Karvelas:         But what’s suffered? You could lose a dollar and say you’ve suffered, I mean, everyone’s suffered. You need to define that don’t you?


Simon Birmingham:     I think the businesses who have run the gauntlet of the Fair Work Commission know full well that that would never pass the assessment test or criteria there. Again, this is about building up straw men in terms of the types of arguments that are being made. Now these reforms will go through a Senate inquiry process. These are actually very modest reforms. They’re being criticised by Labor trying to mount a scare campaign but by others saying that government hasn’t gone far enough. What we have sought to do is walk a middle path in relation to these reforms, to create a system where enterprise agreements can be struck in a faster way and not held up by lengthy deliberations or debates in the Fair Work Commission about completely fanciful or hypothetical matters. And there’s no point considering the impacts of a change in the use of a chill freezer in a business that doesn’t even have a chill freezer, they’re the types of ridiculous arguments that can apply at present. What we want to put in place is a system that actually has the support of workers, which is why their vote is important. A clear test they’re still better off overall. And when the Fair Work Commission looks at it, it is looking precisely at what is happening in that workplace, not some other hypothetical rubbish completely irrelevant to the workplace.


Patricia Karvelas:         Just- let’s speed through a couple of issues. Why hasn’t the Prime Minister been offered a speaking slot at the Climate Ambition Summit?


Simon Birmingham:     That’s a matter for organisers in that regard. We will happily go out – anywhere, any time – to talk about Australia’s overachievement in relation to our emissions reduction activities. We can stand proudly on the world stage having achieved more than 400 million tonnes of emissions abatement in excess of the commitments that we had made to the rest of the world. Many other countries have failed and have had to go and purchase credits from other nations to be able to claim to meet their targets. Australia can stand tall on the world stage that, through the first Kyoto commitment period, or the second one that ends this year in 2020, in both of these, we have been able to go out there as Australians. Australian farmers, Australian businesses, Australian people, through their investments, alongside the Australian Government have been able to actually achieve emissions reductions well in excess of the commitments we have made to the rest of the world. And we will happily tell that story anywhere that wishes to hear it.


Patricia Karvelas:         Do you have a target for the number of New Zealanders you’d like to attract to Australia through the scheme that you’ve announced today?


Simon Birmingham:     Look, the more, the merrier. We hope to see some thousands of potential New Zealand backpackers decide to come and travel around Australia. The great thing about backpackers is that they come here and they usually spend every dollar they earn, they spend the savings they brought with them, they sometimes ask mum or dad to send them more money to spend, so they’re very good economic stimulus. But they also do jobs, particularly in regional areas, agricultural or seasonal work that is very valuable in terms of filling labour gaps. We would ordinarily, at this time of year, have about 130,000 backpackers in Australia. Because of COVID, that’s down to about 50,000 who were here at the start of the year, and have stayed. If we can get a few Kiwis come across, that would be a good start for our tourism industry to start to see some internationals return again.


Patricia Karvelas:         National Cabinet’s meeting tomorrow as you know, the last meeting of the year. It’s been such a big part of all of our lives, I feel. Now, all state premiers and ministers will be in attendance except for WA Premier Mark McGowan, who says he won’t attend in person because he wants to avoid mixing with his South Australian counterpart, Steven Marshall. Is that reasonable?


Simon Birmingham:     I think most people think it’s a little bit ridiculous. There are zero active cases of COVID in South Australia at present. I think it’s 12 days in a row now that that’s been the case, or that there have been zero new cases. It is, of course, up to Premier McGowan whether he chooses to come or not. But frankly, as Tourism Minister who wants to see Australians not only get out there and travel across the country to support jobs in airlines, airports, hotels, hire cars, tour companies, et cetera, I also do want to see normal business and corporate travel resume. And I think that Premier McGowan should be setting a more positive example to businesses by demonstrating that Australia is in such an incredibly good place relative to the rest of the world in managing COVID-19 that we can get back to business, get back to travelling where it’s appropriate to do so, and sit down like mature adults recognising the incredible success of every single state and territory now in suppressing COVID-19.


Patricia Karvelas:         Minister, thank you so much for your time.


Simon Birmingham:     Thanks, Patricia. My pleasure.


[End of excerpt]


Patricia Karvelas:         That was the Minister for Finance, Trade, Tourism and Investment, Simon Birmingham.