• Transcript, E&OE
Topics: International air freight; trading relationship with China.
23 April 2020

Linda Mottram: Well, a tiny glimmer of economic hope today: we are still selling quite a lot of goods around the world. After a significant trade slump in February, Australia’s exports made a solid recovery in March — an $8 billion dollar rise indeed according to the Australian Bureau of Statistics. They are preliminary numbers, unadjusted so caution is advised. And the Trade Minister Simon Birmingham says it’s also a mixed picture.


Simon Birmingham: The bulk commodities that go out in specialised vessels, they’re still getting it out market. Be that the LNG exports from Northern Australia, of course, our traditional mining and resources exports and many of the bulk agricultural goods. They can find their way to markets still using those specialised shipping routes, and often, those ships are at sea long enough to be able to deal with the 14-day quarantine requirements of different nations too. But those that rely on air freight, well, they obviously have had severe impacts in terms of the logistics there and that’s where governments had to step up and try to find different solutions to help them still get their goods to market, where those markets are still open and viable.

Linda Mottram: Yeah. Now, air freight has taken a huge hit. Of course, the Government’s put in resources to get some freight in the air. I see you’ve expanded that today. How many businesses are putting their hands up for these flights?

Simon Birmingham: Hundreds and hundreds of businesses right across each and every state have expressed a need and a demand for support in terms of getting their goods to market. Now, we’re not offering them a free ride. Our expectation is that if we can help, it’s about helping with the logistics first and foremost for additional air freight and then, helping to make sure that the cost is at least still viable for them to do business. For listeners to understand, more than 90 per cent of Australia’s air freight traditionally goes out in the belly of passenger aircrafts. Now, of course those passenger aircraft, by and large, aren’t flying anymore, and so whilst we have the specialist freight flights, we need more of those to make up for the absence of that volume and capacity in the passenger aircrafts. And we’ve gone out to market to strike deals with a range of different airlines that can get goods from right around Australia into key hubs right around the world. But those exporters are still going to have to pay their way, pay a premium, but Government is at least stepping in to do a bit of the logistics and to invest some money to make sure that at least it’s viable to run those routes.

Linda Mottram: And is it your sense that those companies are holding up okay; they’re getting enough product out to their markets, enough markets are open that they’re actually able to sustain themselves?

Simon Birmingham: Some have seen quite a roller coaster ride. For example, our live seafood exporters, who would traditionally send large volumes of products out for the Chinese Lunar New Year celebrations, saw those markets collapse at the start of the year. And so, even though they could still access the flights at that stage, they didn’t have a demand for the product. They’re now seeing that demand come back online as parts of China have reactivated their economy. But of course, the flights aren’t there and so that’s where we’ve helped to fill that void. We are a quality goods supplier. We are a premium goods supplier. But we’re also a reliable supplier. And you want to make sure you don’t let your customers down if at all possible.

Linda Mottram: I think the word diversification is one of the hallmarks of this crisis when we’re thinking about our economies. A big wakeup call from this pandemic. Will Australia be walking away from China as a cornerstone of our trade?

Simon Birmingham: We need to be realistic. China is going to still be the second largest economy in the world, the largest consumer market within our region, and will remain a very important economic player and one with whom we should continue to support Australian businesses to do business with Chinese businesses. But some Australian businesses will no doubt have paused to look again at that risk versus reward profile that individual businesses face. And have they created too much risk in some of their businesses by only having essentially one customer that they undertake business with. Now, that’s an ultimately a business decision. As a government, we’ve continued to try to provide more and more opportunities for businesses to diversify, to seize new markets. That’s what our India Economic Strategy is about. Indonesia Free Trade Agreement, our negotiations with the European Union; all about building on the market access opportunities we’ve created in China, Japan, Korea and elsewhere as a part of our trade deals to date.

Linda Mottram: Simon Birmingham, thank you for your time today.

Simon Birmingham: Thank you Linda. My pleasure.

Linda Mottram: Trade Minister Simon Birmingham.