E&OE
Interview on Insiders with Annabel Crabb
Topics: G20 summit; US-China trade relations and implications for Australia; Huawei; legislating tax cuts; Christopher Pyne.
30/06/2019
Annabel Crabb: Standing by in Adelaide, is Trade Minister Simon Birmingham. Thank you for joining us and welcome back to Australia.
Simon Birmingham: Great to be with you Annabel.
Annabel Crabb: Let’s go to the developments overnight at the G20. The conclusion of the talks between Presidents Trump and Xi. Are you satisfied that this is a genuine de-escalation to trade hostilities?
Simon Birmingham: As President Xi has said himself, dialogue is always better than confrontation, and what we’re seeing here at least is a commitment to dialogue. We take at face value, the positive comments from both President Trump and President Xi that there is going to be genuine dialogue and there are genuine efforts to try to resolve these trade tensions. We heard clearly from the IMF leaders at the G20 about the impact that these trade tensions are having on global economic growth, and that if the threatened increases in tariffs were to have been applied, that would have seen a further deterioration, markedly, from 3.6% down to 3.1% in terms of projected rates of global economic growth. So averting that is an important first step. Clearly, we want to see a structural, permanent resolution, and we hope that the parties can get to that point.
Annabel Crabb: Obviously, President Trump has retreated on his threat to impose further tariffs and has liberalised trade with the controversial company, Huawei. But he also said in his lengthy press conference that the Chinese Government had agreed to buy, “a tremendous amount of food and agricultural product from American farmers.” Do you understand what that means?
Simon Birmingham: Well, we’ll be watching very closely in that space. What we want to see is that any agreement between China and the United States is compliant with the basic rules of the World Trade Organization, that allows countries to compete, we’ll back Australia’s farmers and businesses to compete on fair terms with anybody. But we don’t want to see a managed outcome that sees particular contracts stuck in a way negotiated between governments that cut away opportunities for farmers or businesses from other countries, such as ours, to be able to compete fairly. So we’ll see exactly the terms there.
Annabel Crabb: President Trump has said that he was writing a shopping list for what the Chinese would be buying from American farmers. Aren’t Australian, let’s say wheat farmers, entitled to feel a bit concerned about an agreement that sounds like this one sounds?
Simon Birmingham: Let’s see exactly what comes out of it. But our position is clear and it’s been publicly and privately put, for some period of time now, and that is that we want to see outcomes that as I said are WTO compliant, that enable countries to compete. That we back our farmers and businesses to compete, but it’s got to be the type of fair playing field, not managed outcomes, that could be to the detriment of the reasonable competition between players, farmers, businesses from other countries. Now, we also hope that some of the structural issues will be successfully addressed in this, and by that I mean some of those issues around technology transfer and intellectual property protection, which are important issues that were at the heart of this. But it is, on the whole, when you take a long-term perspective, good news that we’re not seeing a further escalation of trade tensions. But we’ll keep an eye on the detail and be monitoring that very, very closely.
Annabel Crabb: Now, the US tariffs on steel and aluminium, from which Australia famously was exempted, have actually worked out pretty well for us. The exports of Australian aluminium were up 350% in the first quarter of this year in a development that reportedly horrified US officials. Earlier this month, there was talk that the exemption might be reviewed. Do you have any news for us from the G20 on that front?
Simon Birmingham: We had great discussions with the United States administration, particularly the discussions between Prime Minister Morrison and President Trump. The arrangements that were struck previously, we understand, will continue. We’re working to make sure that all aspects of those arrangements, including ensuring that there aren’t surges of Australian exports into the US in those categories where we’ve got the tariff exemption, are honoured, and we’re working closely with companies to deliver outcomes there that preserve that agreement, and we don’t expect to see, based on the discussions we’ve had, any changes to the terms of that agreement.
Annabel Crabb: So when you say that you understand that that agreement will be continued, is that just a vibe thing? Or have you had an explicit undertaking to that effect?
Simon Birmingham: I mean, everybody heard the remarks that the President made before we sat down to dinner in Osaka. And the President there was very clear that we’ve worked through those issues, and we have worked through them. We’ll keep making sure that we address them from our end. But we are quite confident that the agreements that were in place will continue.
Annabel Crabb: President Trump also relinquished the hard-line stance on the company Huawei. Given how hard Australia’s gone, does that softening of the position worry you?
Simon Birmingham: Again, let’s see the detail there. Australia’s position has been about the construction of a 5G network and ensuring that as the 5G network is constructed, it is protected from any company, from any countries, where they may be subject to direct influence or interference potentially, from those countries. Now, in terms of the United States, there are broader issues that have been put on the table previously by President Trump. Not just isolated to 5G network construction. He may be taking some of those issues off the table. We’re not clear on that. But again, we’ll work closely with the administration and monitor those circumstances.
Annabel Crabb: Modern communications technology will have enabled you to keep in touch with developments in Australia while you were in Osaka, and, of course, there has been a rash of revelations about certain events last August. Now, Prime Minister Scott Morrison has always avowed that the spill had nothing to do with him. But it now seems very clear that the reason that the initial vote for Peter Dutton in August last year was so high, was that Scott Morrison’s personal backers voted for him. That’s clear, isn’t it?
Simon Birmingham: Look, Annabel there’s lots of commentary around those events. I realise that people such as Niki who is on the panel today, have been diligently writing books to go over the history of that. That’s a matter for history. For those was us who continue as members of the Government, our responsibility is to be working for the Australian people for the future, not to be reflecting on the past.
Annabel Crabb: Well, of the 7.5 billion people currently on the planet today, you’re in about the top five people in a position to be able to comment on this. You were doing Malcolm Turnbull’s numbers at the time. Do you agree with the proposition that that initial vote would not have been as damaging for Mr Turnbull, had Scott Morrison’s backers not been a part of it?
Simon Birmingham: Look, I have complete confidence that Scott Morrison did everything that he possibly could to support Malcolm Turnbull. As for individual votes in the party room, we are a Liberal Party in which every individual MP and Senator is responsible for their own vote. Much as any of us may try to influence those votes from time to time, each individual is responsible for their vote. I’m confident that Scott did what he could to continue to support Malcolm right through that process. I mean, a discussion of these matters, looking backwards on them, it doesn’t really serve anybody’s purposes. I feel, frankly, sad when I think back to the destructions that occurred at the time, the disruption that occurred at the time. Malcolm is a very valued friend and somebody who I believe has exceptional characteristics and abilities that he used to advance opportunities for our nation. But in the end, the Australian people drew a line under all of these matters, certainly on May 18, when they re-elected the Liberal-National Coalition, when they gave Scott Morrison a mandate and endorsement in his own right. And Scott, we’ve seen with the outcomes at the G20, in relation to countering violent extremism online, is out there getting results for Australia and doing a cracking job – not only for the Liberal and National Parties, but for all Australians.
Annabel Crabb: So you think it was plausible that Mr Morrison’s backers were acting without his knowledge?
Simon Birmingham: As I say, each and every individual member of the Liberal party room is responsible for their vote in those circumstances. And none of us can claim responsibility or expect to be able to direct the votes of any one of our colleagues.
Annabel Crabb: You’re about to move into a new Senate, where again, Finance Minister Mathias Cormann has the lead role in negotiations with the crossbench. If these crossbenchers have read Niki Savva’s book, they’re entitled to feel sceptical about any assurances they get from Senator Cormann now, aren’t they?
Simon Birmingham: I think that the crossbenchers, especially those who have been dealing with Mathias, with the broader Senate leadership, the government, over many years now, know that when we strike deals with them, we honour them. But when we’re sitting down in this new Senate, what we want to see, first and foremost, is the Labor Party acknowledge the result of the election that was had on May 18. You’ve got seemingly, Mr Albanese, completely tone deaf to the fact that we had an election, which was a stark contrast between the Coalition arguing for lower taxes and Labor arguing for higher taxes. The result – a Coalition win, and all we are seeking to do at present, is to get on with implementing the promises that we made to the Australian people when it comes to having lower taxes and delivering on those. And it is so reckless and irresponsible of Labor to stand in the way of our Government delivering on those promises of lowering income taxes for hardworking Australians.
Annabel Crabb: But you did campaign very strongly on lowering income taxes. In fact Prime Minister Scott Morrison swore black and blue that millions of Australians would have the first round of tax cuts by today – the 30th of June. Well, today has arrived and they haven’t been delivered. Do you owe all of those taxpayers an apology for the broken promise?
Simon Birmingham: What we owe all of those taxpayers is exactly what we promised them, which is that they would get $1,080 per person, in many cases, as a result of the increase in the low and middle income tax offset. That they’re going to get that in their tax returns as they are lodged through the coming months. Now, there might be a week or two’s delay in terms of the legislation passing from what would have been optimal, but ultimately, we want to make sure that people get every cent, every dollar that we promised. We’re committed to doing that and the Labor Party need to end the verbal gymnastics about exactly what their final position will be. Our position is clear – we are bringing to the Parliament exactly the tax relief legislation that we promised before the election, and we will seek to legislate it exactly in that form. No negotiations, no deviations from that. Labor should be clear that when we reject any and all attempts from them to vary what we promised the Australian people, will they, at the final vote, let that tax relief go through so those Australians can get that extra $1,080 for low- and middle-income earners now, so that ultimately, we can see the 32.5 cent in the dollar rate reduce down to 30 cents in the dollar for people earning upwards of $45,000.
Annabel Crabb: You seem very confident of getting this wrapped up within a week or two. Do you think it is more likely that the Labor Party will fold? Or you’ll get a deal with the crossbench?
Simon Birmingham: We want to work with whoever is willing to pass this. But it is a stain on the Labor Party that will last all the way through to the next election. If they block and vote against tax relief for hardworking Australians. Now, what we know is that they say they’re going to try to amend this and put an alternate proposal forward. Not an alternate proposal that they took to the election, mind you. So they are saying that they won’t support the proposal the government…
Annabel Crabb: They might come around to your way of thinking (indistinct)…
Simon Birmingham: Let’s actually just acknowledge that the Australian people spoke, and they expect the Government elected, to deliver on the promises that we made.
Annabel Crabb: To have tax cuts in place by today.
Simon Birmingham: Well, no, but people are going to get every single dollar Annabel. Whether it comes a week or two later, they’re going to get every single dollar, as long as this legislation passes. And it will pass faster if the Labor Party support it.
Annabel Crabb: One more question before we run out of time, and that’s about the new job of Christopher Pyne, your former colleague, who has moved to EY as a defence consultant. Given that the ministerial Code of Conduct prohibits ministers working in fields of the portfolios within 18 months of leaving it, this is a pretty open and shut breach, isn’t it?
Simon Birmingham: I trust that Christopher will work in a way that is in keeping with the ministerial statement on statements and conduct. I trust that he will be mindful of that, that the job that he’s taken doesn’t engage in lobbying in relation to defence activities, and of course, that he sticks by the letter of it as well as the principle of it.
Annabel Crabb: But the ministerial code obliges him not to lobby, not have meetings and not talk to anyone and not use any of the knowledge that’s accumulated in the portfolio. It doesn’t make him much of an employee if he can’t do those things, does it?
Simon Birmingham: Well that’s a matter between him and Ernst and Young. But as I said, we expect that everybody should adhere to that Code of Conduct and that includes Christopher.
Annabel Crabb: Thanks very much for your time Simon Birmingham
Simon Birmingham: Thank you Annabel.