Transcript, E&OE

Topics: quarantine in the UK; China-Australia Free Trade Agreement; Australian Taxation Office
22 May 2020

David Bevan: Senator Simon Birmingham, good morning.

Simon Birmingham: Good morning David.

David Bevan: Now, before we get on to China and JobKeeper and borders and all sorts of things, there’s a report in The Sydney Morning Herald today: Australia seeks exemption from Britain’s impending international quarantine. Now, you can’t even get the states to open up their borders, are you saying we might be able to fly to Britain?

Simon Birmingham: Well, not anytime soon because right now, Australia’s international borders remain closed and that includes for Australians who wish to travel overseas unless they have an exceptional circumstance as reason to do so. But the UK, as I understand it, has been looking at how they might facilitate international travellers entering into the UK and whether or not they would have the type of 14-day quarantine period that of course Australia imposes on the handful of people trickling into Australia at present, primarily returning Australians or people with exceptional circumstances, who would then have to stay in a hotel for 14 days under strict quarantine and supervision provisions and so on. The UK is looking at doing something similar. Obviously, COVID-19 is somewhat less under control in the UK but it’s been improving. And as they’re looking at that, they have contemplated whether there might be some countries that have the situation completely under control and where they could have high confidence the person would not pose any risk of spread being exempted from that 14-day requirement. And obviously, if that’s their choice, that they allow an exemption regime, well, we would think that Australia would be a stand out country for that, given just how few cases we have in Australia and how well under control it is.

David Bevan: So how soon do you think an Australian could travel to Britain and not have to go into 14-day quarantine?

Simon Birmingham: So, practically, if they do this, it’s more likely to be of benefit to any Brits who are still in Australia and seek to return than it is to any Australians travelling to Britain unless they had exceptional reasons as to why they needed to go there. So anybody who’s thinking about it in the context of a holiday or quickly visiting family or a short business trip, I’d pretty much say forget about it for a while; that the sort of issues of outbound travel from Australia are really the same as inbound. If you’re looking at a short trip, that means you’re going to have to want to come back. And for the protection of Australia’s management of COVID, we’re not seeing a circumstance where the international borders reopen anytime soon really. But obviously, there are some who are travelling for longer term purposes: to fulfill work commitments or who are Brits who are returning or those sorts of circumstances, and this would just be of help to those very small categories.

David Bevan: Okay. Now we’re talking to Simon Birmingham, Federal South Australian, Minister for Trade, Tourism and Investment.

Martin Haese is the CEO of Business SA. He wants to ask a question about JobKeeper. Good morning Martin Haese.

Martin Haese: Morning David. Morning Minister.

Simon Birmingham: Good morning Martin.

David Bevan: Now, your members want JobKeeper to continue beyond the deadline of September. Is that correct?

Martin Haese: David, I must say, from the outset, that JobKeeper has been a very good initiative by the Federal Government. In so many ways across so many industry sectors, it has proven to be the glue which is holding the business community together during this time – certainly through until of course August. However, if we look at border controls, so to speak, as a measure – so state borders then of course national borders as the Minister was just sharing – those industries or those industry sectors and in some instances, subsectors within those industry sectors which are very reliant on the international borders being relaxed, will still be in a very difficult position post-August and September. And this is certainly the feedback that we’re receiving from industries, of course, like accommodation, some sectors of the hospitality sector, those that are working in conferencing, and of course, those that have tourism businesses which are reliant on international tourism.

David Bevan: So, you want JobKeeper to continue beyond September?

Martin Haese: For selected sectors, because although it’s been extremely welcome, which it has and it’s been a very good initiative by the Federal Government, is that those industries or selected industries post August will still be in a world of pain.

David Bevan: Okay. Simon Birmingham?

Simon Birmingham: Well, thanks Martin, and obviously as Tourism Minister I’m acutely aware of, especially, those businesses that really rely on international visitors – and as we were just discussing, I don’t expect to see them back to our shores anytime soon or international conferences and events taking place and the like, that they are going to face difficulties for some time to come.

Steven Kennedy, the Secretary of the Treasury, was asked about this yesterday at the parliamentary inquiries into JobKeeper, and he gave some very thoughtful remarks pointing to the fact that we have a review coming in June into JobKeeper – sort of three months in with three months to go, we’ve always said we’d have a look at it – that he didn’t think there would be a cliff scenario at the end of that six months, that indeed there would need to be a look at the sectors that still faced restrictions and still faced issues and how we might better target and taper JobKeeper for the future.

Now, I don’t want to pre-empt what that review will ultimately find, but they’re obviously the issues that we will have a look at. And as Tourism Minister, my discussions with the tourism sector often highlight that, it’s one of the reasons why I’m so desperate to see domestic tourism come back to life as quickly as we can so that we do get as many businesses off of JobKeeper and people back into real jobs as soon as we can. But obviously, there are some things, particularly those internationally exposed, that we know are going to face challenges for a longer period.

David Bevan: Okay. So- but Business SA and the Australian Hotels Association who are calling for JobKeeper to be extended beyond September, maybe up to the end of the year for selected industries like hospitality and tourism. They’re not being unreasonable, these- you’re not giving a promise, you are going to look at it and their request is not an unreasonable one.

Simon Birmingham: The request, in terms of if regulatory restrictions are still requiring some limited limitation to normal business activity, then it’s not an unreasonable request that we look at how we offset the fact that those regulatory restrictions put in place for health reasons have some form of assistance to offset the impact on those employees or businesses, so I fully understand the argument that’s there.

It’s obviously- it’s a program that is two months into a six-month life, we said that there’d be a review of it at the halfway mark to help inform forward thinking. So, we don’t need to- you know, we stood this program up in a much shorter timeframe than the four and a bit months that it’s got left to go, so nobody needs to be panicking about what happens in September just yet. But it’s certainly wise to have the conversation, and that’s why we always said there’d be a review in June.

David Bevan: Okay. Now we’ve got a text here from somebody, says it’s Anthony Madigan with Australia’s Wine Business Magazine and the text reads: Australian wine industry’s $1.1 billion exports to China are now in grave danger, before Mr Birmingham went out and humiliated China he must have known that it would jeopardise Australian wine exports and he must have had a Plan B – what is it?

Simon Birmingham: Well, I don’t accept the premise of Anthony’s question. I’m- he’s welcome to come forward and highlight how or where he thinks I’ve humiliated China; I’ve always made sure my language is very respectful. Yes, our Government, along with every, pretty much, government around the world including, ultimately, China, has supported an investigation and inquiry into COVID-19 and that’s perfectly sensible when it’s caused such huge chaos and devastation to people’s lives around the world.

But we continue to see record trade flows occurring between Australia and China. There’ve been some, obviously, reported difficult issues in the last couple of weeks, but equally, China in that time has publicly restated the ongoing two-way benefits that they see to the China-Australia Free Trade Agreement. And I share their sentiments and I hope that we can continue to have a positive trading relationship there whilst we also work very hard to increase opportunities for our exporters into many other markets too.

David Bevan: Do you think wine is at risk?

Simon Birmingham: I don’t see any reason why it needs to be.

David Bevan: You didn’t- you don’t see any reason for barley to be.

Simon Birmingham: Well, I don’t accept the evidence that the Chinese authorities have presented for their decision to apply anti-dumping duties on our barley industry. That’s true.

David Bevan: Are our iron ore exports now at risk?

Simon Birmingham: The iron ore announcement by the Chinese government yesterday is one that Australian mining sector have cautiously welcomed, and that I cautiously welcome as well. It appears to be on face value, essentially a red tape reduction measure that what the Chinese authorities are saying is they’re going to reduce the need for every single shipment of iron ore going into China to face quarantine inspections. And so if that’s the case, it will actually speed up the process and reduce regulatory costs. Which is why the Minerals Council of Australia, and BHP, and others have joined me in acknowledging that that is something that could possibly help speed the recovery of China’s economy, Australia’s economy, and the global economy.

David Bevan: So the stuff regarding iron ore is a good thing, not a bad?

Simon Birmingham: Potentially so. It certainly at face value, it looks like what we in Australia would call a red tape reduction measure, a removing of some unnecessary regulatory burdens that sort of ties up iron ore at the ports for a longer period of time and increasing the costs the processing.

David Bevan: Guy has called. Good morning, Guy.

Caller Guy: Yes. Minister, when a country sends product overseas and it is sold at less than the Australian price, I understand that is dumping. Why isn’t this the case with natural gas? Thank you, Minister.

Simon Birmingham: So yes, the definition of dumping can be applied in a couple of ways. It can be demonstrated through government subsidy action, or it can be demonstrated if it is sold at below normal cost price. And now the definitions around normal cost price get into quite a technical realm, but it’s not a case of simply looking at what you would say is the retail headline sort of figure in one country and saying, well, it’s less than that under some contractual arrangement than it’s sold out in another country. And so what is often compared in terms of gas prices is people look at the contract value for bulk exports of LNG from Australia to another country, and compare it with the final retail price that users pay in Australia. Now that’s not really comparing apples with apples, obviously what you’re looking at more when a shipment leaves Darwin or Gladstone or elsewhere with LNG, headed for Japan or Korea, is it’s essentially a wholesale product at that point in time and it hasn’t gone through all of the distribution channels to finally end up at a factory or a user, which is a more comparable price point.

David Bevan: That’s the voice of the Federal Trade Minister Simon Birmingham, South Australian Liberal. Peter has called ABC Radio Adelaide. Hello, Peter.

Caller Peter: Yes, good morning, David. And listen, I’ve got a question for the Minister. Would the US-China trade deal that was settled at the end of January before the global breakout of pandemic, would that deal have always undermined Australia’s trade with China?

Simon Birmingham: Thanks, Peter. It is a case that the US-China trade deal where they are reducing tariffs to some extent on one another will increase the competitiveness of US product. And now Australia has, in many areas, had an advantage in the China market thanks to the China-Australia Free Trade Agreement that’s been in place for a number of years, where our products have landed in China and face lower tariffs, lower taxes and therefore being more attractive to consumers than products from elsewhere. That was never necessarily going to last forever, we still have a big tariff advantage in many categories, just not as big as it was. And so certain US products are now somewhat more competitive and competition is something we have to back ourselves in. We can’t expect that we will always have a tax advantage in another country or a tariff advantage in another country. So as long as the US-China deal is applied in ways that simply allow fair competition to flow, well, we just have to back ourselves and the quality of our product and our goods to compete against the Americans or anybody else’s. If it enters into some sort of managed trade realm that appears to be in breach of WTO, World Trade Organization obligations, well, then we’ll certainly be looking at that carefully and closely.

David Bevan: Okay. Minister, have you spoken to Premier Steven Marshall about opening up South Australia’s borders?

Simon Birmingham: Steven and I have had a conversation, in general terms, about these matters. You and I, obviously, spoke earlier this week, David, and we’ve had a chat subsequent to that. And as I said at the time, I fully understand that the states should proceed through the pathway of essentially, opening up their domestic economies first. Let’s get through this challenging process of getting people back into restaurants and pubs and churches and driving lessons and all of those other things that have been restricted of late. But then, if all of that is done safely and if the rest of the country is continuing to successfully manage COVID-19, as we currently are. I hope to see state border restrictions lifted and hope that that can happen sooner than the type of September timeframe that the Queensland Premier’s been talking about.

David Bevan: Where the status of the virus is identical and the restrictions are identical, is there any reason why a border should be closed?

Simon Birmingham: Look, I think it’s hard to necessarily see why. So, if you’re looking at the West Australia, South Australia type context; I would think that it’s perfectly logical that you could move faster there, given comparable status. But, look, the health experts on each state would probably need to agree that they think everything is comparable, in terms of their testing regimes, all those other things.
David Bevan: But if both states – maybe the Northern Territory, the ACT and- I don’t know, maybe Tasmania, have identical situations to South Australia. That is, they haven’t had any- haven’t got any active COVID cases and they’ve got similar testing regimes and they’ve got similar restrictions. Once those thresholds have been met, is there any reason why we can’t travel between those states?

Simon Birmingham: I’d have thought not, David. I think if we’ve got absolute confidence that there is comparable status, in the handling of cases to a high degree across different jurisdictions, then we should be enabling Australians to get back about their normal business, which includes travelling across those borders. Look, we are one country. We made the decision way back ahead of the Federation in 1901 to bring all of the states together and whilst there are strong public health reasons to maintain state borders as restrictions on the movement of people, well fine. But obviously, as those public health reasons diminish and evaporate then so too should the restrictions on the movement of people.

David Bevan: Bob has called ABC Radio Adelaide. Hello, Bob.

Caller Bob: Yes. G’day, look, just a quick question on the sector. Does the Government monitor any of the refugees that were in PNG and Nauru? The ones that were sent to the US? Have they actually monitored and identified where their situation is at the moment in the US, given the virus situation there?

Simon Birmingham: Thank you. In terms of US, has obviously its own refugee resettlement arrangements and processes even in these cases where individuals are not necessarily recognised as refugees, but are being resettled under other terms. They are supported in terms of finding accommodation and their placement in the community and so on. No, I wouldn’t think that we then follow in terms of other health issues or the like that individuals might face in once they’ve been successfully resettled in those different countries.

David Bevan: That’s the whole point of resettling. You don’t want to be responsible for them. Well, they’re now in the United States, it’s up to them?

Simon Birmingham: They have residency rights in another country and get on with living their lives there.

David Bevan: Okay, Bob, thank you for your call. Damien, good morning.

Caller Damien: Good morning gentlemen. I just found something a little bit anomalous. If you go onto the ATO website and you look at the instant tax write off prior to the pandemic being declared, the instant tax write off for small businesses buying a business asset was $30,000. That was lifted to $150,000 dollars. But, if you read the ATO website, the instant tax write off reverts to $1000 dollars on 30 June, which seems to me to be odd and probably an oversight.

Simon Birmingham: Thanks Damien. I’m pretty confident the ATO website will have the details right. It was announced as a temporary stimulus measure, to try to encourage small businesses to invest and sort of encourages one small business to buy off another small business and also to invest in things that can make them more efficient or grow their business in the future. And so, this type of shorter term stimulus measure comes in often. There have also been over recent budgets a series of rolling, if you like, decisions, that are taken almost each year to provide for the terms of the instant asset write off. So, once you get to the start of a new financial year; it’s entirely likely that it defaults back to an historic level, before the Government if it makes a budget decision brings it back to that that higher level, at a later stage.

David Bevan: Damien, does that make sense? Hello, Damien?

Caller Damien: I’m still here.

David Bevan: Are you happy with that?

Caller Damien: Well, I think I’m happy with it; because it’s not going to affect me but I’m just thinking that you know, it seems to be a very arbitrary sort of cut off. And I just wanted to raise it, because I think that it would be very unlikely that they want to have that shock happen at the end of the financial year.

Simon Birmingham: And yeah, Damien, you do raise an interesting point in the context at least of the fact that of course, the federal budget has been delayed this year. And so, we would have usually handed down the federal budget last week. And if there were to be variations to the instant asset write off to the next financial year, presumably they would have been considered in their usual budget context. So, I’ll happily double check with the ATO around the terms of what’s described there and if there are decisions that need to be made, I’m sure there will be.

David Bevan: All right. Thank you for your call Damien. Minister, just before you leave, one last thing. A listener has contacted us to say that they have been approved by the taxation office to access their super early. But after 30 days, 30 days after the approval, the application of the superannuation fund, they still haven’t received their money. And this listener wants to know what’s the timeframe for super funds to release the money, after it’s been approved by the ATO?

Simon Birmingham: David, I don’t know off hand what the required timeframe is. But I do know that many, many payments have not only been approved, but have been made to date. So, let’s perhaps grab that caller’s details and see if we can’t speed the process up for them. Because it sounds like it would be an aberration in their case, compared to what I’m seeing is the reporting elsewhere.

David Bevan: Okay. Or you could go to the ATO and say: hang on, you gave me approval, Is there a requirement on the super fund to hand it over once I notify them, within a certain amount of time?

Simon Birmingham: Certainly, could check on that and we will check and see if there is a standard requirement or timeframe, and let your producers know, so that you can advise listeners in in that sense. But, it’s obviously a two-step process. The ATO gives you the approval, then your super fund has to release the money and send it to you, but it shouldn’t take that long.

David Bevan: Simon Birmingham, thanks for your time.

Simon Birmingham: Thanks, David. My pleasure.