Interview on Sky News Live, AM Agenda, with Kieran Gilbert and Annelise Nielsen.
Topics: RCEP, ASEAN, G20, Trade deals, drought fund, infrastructure.
Kieran Gilbert: Turning our attention now to trade issues in the region. Joining us is the Trade Minister Simon Birmingham. You’re going to China, as I believe, next week. This is for trade talks on the Regional Comprehensive Economic Partnership, which is the China-led regional trade group, is that right?
Simon Birmingham: Well, this is a 16-nation negotiation. It’s led by the ASEAN nations, the 10-member ASEAN bloc. But it brings together those 10 ASEAN members together with China, Japan, Korea, India, Australia, and New Zealand. So it’s a comprehensive discussion there and it has the real opportunity to ensure that our region, which has been the driving powerhouse of economic growth globally over the last couple of decades, continues to drive that economic growth into the future.
Kieran Gilbert: The Transpacific Partnership, which had been seen as an American economic grouping, even though they subsequently pulled out. RCEP is seen as the China-centric economic grouping, isn’t it?
Simon Birmingham: Well this has both China and India; obviously two enormous nations at its heart. But also, those 10 ASEAN nations, when you put them together, are an enormous economic power block themselves. All up the RCEP entities account for 60 per cent of Australia’s two-way trade relationship. And so you can see there that for Australia, these are potentially some of the most critical negotiations we could ever seek to have. But globally, they’re symbolically important at a time where you see increased protectionist sentiment elsewhere around the world. They’re economically important in the opportunity they provide to continue to lower barriers to trade and to make sure that this region, as that economic powerhouse of the last couple of decades, provides the leadership to the world in demonstrating that we are going to continue to open up markets, to open up trade, and to be economic drivers for the next couple of decades into the future.
Annelise Nielsen: China is arguably our most important trading partner and relations have been fractured recently. And we’ve seen in the past that that has translated into trade barriers for things like milk and beef. Are you confident that you will be able to negotiate with the Chinese against the backdrop of these tensions?
Simon Birmingham: Well Australia’s trade agreements that we’ve struck under the Liberal-National Government over the last six years, including the agreement with China, have been central to our economic prosperity and growth. We have a wonderful trading relationship with China. We support and value China’s economic growth and we want to see that economic growth continue into the future. And it is in our best interests and the best interests of the region for us to continue to cooperate, to lower those barriers. That’s what we’ll continue to fuel China’s growth as well as our own.
Kieran Gilbert: But when you look at the behavior of recent years that was talking about very recent in terms of Donald Trump and his protectionist approach. Is this China filling that void in terms of a leadership role on free trade?
Simon Birmingham: These negotiations have been going on for something like seven plus years. So they are longstanding negotiation-
Kieran Gilbert: But has taken to taking on more importance given Trump vacating the field on free trade?
Simon Birmingham: Symbolically, there is no doubt that these negotiations, as indeed but any major trade negotiations at present they have greater symbolism and standing because of those global trade tensions. That it shows that it’s not just a one-way negative storyline. And in fact, there is a range positive discussion that’s happening around the world. And the RCEP discussions, if we can substantially conclude those negotiations this year as is the ambition that was set by leaders last year, well that will be a huge accomplishment. It will be a real fillip to the global trading system in terms of that demonstration that all of these significant countries with the huge weight of population they bring, the huge weight of economic activity, and the massive potential they have for future economic growth are committed to further openness and are rejecting that pathway of greater protectionism.
Annelise Nielsen: We’ve seen that Australia has really been investing in countering China’s influence in the Pacific. We’ve a meeting with the Prime Minister of Papua New Guinea today. How do you counter that message with China when they do want to be dominant in the region that we’re deliberately trying to make sure they’re not?
Simon Birmingham: Well no, we’re not deliberately trying to do anything of the sort. What we’re trying to do is make sure that the sovereignty of all nations across our region is respected and what we welcome is the continued economic growth of each and every one of our regional partners, including China. China’s growth has been good for Australia, just as it has lifted hundreds of millions of people in China out of poverty and created enhanced opportunities there. And in many of their other regional neighbours, it’s critical for us to see Papua New Guinea succeed as a nation and for them to enjoy greater economic prosperity. And that’s what we want to see there, along within all the other members of our Pacific family. We welcome infrastructure investment across all of those Pacific countries, as long as that respects their sovereignty, their rights. They are equal partners with us and they should be equal partners with anybody else who chooses to invest with them and cooperate with them.
Kieran Gilbert: The Prime Minister met, during the G20 Summit, seemed to have quite a friendly exchange with the Chinese leader Xi Jinping. Are we starting to see a thaw in the relationship because things have been quite difficult, particularly under Prime Minister Turnbull for a period?
Simon Birmingham: Kieran, look I’ll let commentators try to interpret those sorts of things. Certainly, Prime Minister Morrison had strong constructive discussions with President Xi as he has previously in terms of sit down formal bilateral discussions with Premier. And it’s important that we continue to seize all of those opportunities. The relationship won’t always be a smooth one-way street. We know full well that there are difficult issues, as there always have been. But those difficult issues when, we handle them respectfully, calmly, most times behind closed doors are things that we can overcome and still grow the rest of the relationship. And I think what we’ve seen is that that positive engagement with China, particularly that positive economic engagement that has come during their decades of opening and reform, is one that has helped ensure that more Chinese people today not only enjoy higher standards of living and greater economic opportunity, but also many more enjoy greater freedom of movement and commercial opportunities that would have been quite unthinkable decades ago.
Annelise Nielsen: If we look at the week ahead, we’re back sitting fortnight, first one of the new government, and one of the big issues that seems to be quite divisive within the Liberal Party is on superannuation guarantee, whether that should be cut off before it gets to about 12 per cent target. What’s your thought?
Simon Birmingham: The government has no plans to make any changes to what’s been legislated in relation to the superannuation guarantee. What we do want to get on with doing is ensuring that the churn that happens in funds, the churn of people’s savings because of excessive fees, because of excessive charging or insurance products and the like, the lack of ability for people to be able to easily and readily see where they can get the best possible deal. Those are the reforms that we have as a priority in relation to superannuation that we look forward to bringing to the Parliament at the earliest opportunity.
Kieran Gilbert: But not everyone’s on the same page, obviously, as Annelise alluded to. There’s a number of MPs that have spoken to The Australian today in relation to this. Some that have said to us publicly on this program, they don’t think it’s necessarily the right course of action to go to 12 per cent on the superannuation guarantee. Why is that the best policy?
Simon Birmingham: These matters have been legislated, and so it’s not the government’s intentions or plans to change what’s legislated at this point in time. What we have as a priority is what we took to the election. And this is a consistent theme for our government. What we took to the election is what we bring to the Parliament as our priority, and in the superannuation space, that’s about making sure that people don’t get ripped off, they don’t lose their money due to insurance products they didn’t even know they were paying for they don’t see excessive fees and they can easily, accurately choose the best possible fund for their circumstances. That’s what we promised the Australian people. That’s what we’re going to get on and deliver, just as in relation to other areas before the Parliament this week. We’re going to deliver on our promises of establishing a drought fund for the future, ensuring we tackle issues around foreign terrorist fighters and prevent their early return to Australia. And these are critical things, we promised to do them. We’re getting on with the job as we just as we did with taxes.
Kieran Gilbert: On that drought fund, are you diverting money away from infrastructure in order to fund another very worthwhile, obviously, initiative in terms of trying to respond to the drought? The worst in 120 years.
Simon Birmingham: Far from it. As a government we’ve got a $100 billion pipeline infrastructure investments, and since we announced the creation of the drought fund, and we have committed to around six times the value of the drought fund in further infrastructure investments. And so we’re getting on well and truly with the infrastructure agenda, what we want to see here is a dedicated fund available to help deal with future droughts, in one of the worst droughts that Australia’s ever seen right now. And the question for the Labor Party is, are they on the side of farmers? Are they willing to actually back in Australian farmers? Why is it that they won’t just give certainty to this drought fund? Why couldn’t they give certainty for tax cuts for hardworking Australians? Why won’t they give certainty in relation to protecting Australians from foreign terrorist fighters? And you’ve got a question whether the Labor Party is capable of making any decisions at all at present. Instead, they seem to drag all of these issues out in a prolonged period of uncertainty. The government knows what we stand for and whose side we’re on. Who on earth is the Labor Party supporting?
Annelise Nielsen: What do you make of the Shadow Minister Fitzgibbon’s concerns that the money could end up being diverted to politically-charged things that would be used by the government to promote themselves when it could be in its own established fund?
Simon Birmingham: It’s just overlooking the terms of the legislation, which clearly set up a process including an independent oversight around how the fund is spent and recommendations for the fund. And we’re committed to make sure this is a fund that helps drought-proof the nation. The Prime Minister, since Scott Morrison took over, has elevated drought support to one of the key areas of activity for the government. You’ve seen him make multiple visits into drought-affected communities, make multiple investments, whether it’s funding to local shires and councils, whether it’s direct support farmers and in their circumstances. And this is about looking to the future, so that we don’t have to be as reactive next time there’s a drought. We’re able to have the plans and the support in place that have already given those communities greater resilience to deal with drought.
Kieran Gilbert: Minister, we appreciate your time, thanks so much.
Simon Birmingham: Thank you.