Topics: PM trip to China; Israel-Hamas conflict; Labor need a plan for inflation; CPTPP;

10:00AM AEDT
Tuesday, 7 November 2023


Simon Birmingham: The Coalition welcomes the fact that the Prime Minister has had further dialogue with President Xi Jinping of China. And we welcome the fact that China is engaging in a way that involves less of the wolf warrior diplomacy that had been deployed over recent years and has ended the counterproductive ban being put in place on ministerial engagement with Australia.

We want to ensure that Australia can engage with countries like China in ways to advance peace, stability and prosperity throughout our region and the world and in ways that advance Australia’s national interests. The test of this visit, the test of the Prime Minister’s meetings, will be whether outcomes are ultimately achieved for Australian winemakers, for our live seafood exporters, for our meat industry, for Dr. Yang Hengjun and his family, and in terms of achieving a more stable, peaceful, prosperous region. We won’t yet know clearly given the Prime Minister says there aren’t any clear outcomes from today as to whether or not there has been success and breakthrough in relation to those tests. But Australians will judge quite rightly this visit, and they will judge the Prime Minister’s meetings on whether there are real outcomes for Australian exporters or detained Australian Dr Yang Hengjun and in the other challenges that we face.

It’s critical that the Albanese Government maintain clear eyes about the challenges with China despite the enormous symbolism attached to the events around this visit, they not apply any rose-tinted glasses to the relationship. Just over the last month, we’ve been reminded of the challenges with China. Over the last month, we’ve seen China engage in ways with the Philippines that risk military confrontation in the South China Sea. We’ve had warnings from our security chiefs about the extent of cyber espionage engaged in by China, and we’ve seen the Chinese president host the Russian president, Vladimir Putin, in an extension of their no limits partnership between China and warmongering Russia. So there are real and ongoing challenges that require a very clear eyed approach by the Australian government, by the Albanese Government, and a recognition of the challenges that will continue to endure.

But those challenges shouldn’t stop us from dialogue, it shouldn’t stop us from engagement, and should ensure we seek to try to achieve outcomes that we hope will come from this dialogue, but are not yet evident from the Prime Minister’s visit.


Journalist: Just a question on the Middle East. When asked last night about who should govern Gaza after the war. Prime Minister Benjamin Netanyahu said that Israel will have overall security responsibility for an indefinite period, suggesting that Israel intends to fully reoccupy Gaza. Joe Biden has warned against that. Do you agree?


Simon Birmingham: Firstly, can I note that today will mark one month since the horrific attacks of Hamas into Israel and the tragic loss of life that occurred through those barbaric attacks and of course, has occurred since. The quickest way for this war to end and for peace to be achieved would be for Hamas to surrender, for Hamas to release the hostages, for Hamas to hand over the leadership, the weapons, the terrorist capabilities that enabled it to launch the attack in the first place. We all want to look forward to the day after this conflict, a day after when Hamas has been removed from a position of power in Gaza. But that is quite sometime down the track. If you look back to Senate Estimates Hansard from a couple of weeks ago, you will see, though, that I engaged in some extensive discussions with Senator Wong at the time about the types of scenarios that could evolve, the need for the international community working with Israel to be thinking about stability and how that is achieved within the Palestinian territories, and how that type of stability can underpin peace long into the future. What that looks like is something for much discussion, much engagement between Israel, its international partners and other Middle Eastern and Arab nations. I would encourage that discussion to take place without prejudging precisely how it is achieved, or the different steps or stages that may be necessary between the removal of Hamas and ultimately some type of long term peace.


Journalist: But would Israel reoccupying Gaza enhance stability in your view?


Simon Birmingham: Well, again, I’m not going to judge one comment in what will be a very complex set of circumstances and most likely require multiple stages. The removal of Hamas needs to be the first objective. We all wish to see that happen as quickly and effectively as possible, so that some type of peace and stability can be achieved, and so that we can see an end to the loss, tragically, of innocent lives that is taking place. The steps after that, in terms of how long Israel may play a role there. What other steps may be undertaken? They are ones that will require strong leadership and extensive engagement from Israel, from its international partners and friends, and from all of the other Middle Eastern and Arab nations who have clear interests as well in the region. And ultimately, I would hope, in seeing stability in the region.


Journalist: We’re going to see potentially another interest rate rise today. What exactly can the government do to ease cost of living?


Simon Birmingham: Well, this is a government now presiding over a situation where Australia’s core inflation rate is higher than Canada or the United States. It’s higher than Italy, Germany or France, it’s higher than Japan. The Albanese Government has handed down two budgets. It has responsibility now for the national economy. He wants to take credit for some things, but if it’s going to do that, it has to take responsibility for interest rate rises, for inflationary pressures and for the cost of living pain that Australians are feeling. The Government, whose last budget was described by many economists as being inflationary and as ultimately putting pressure on interest rates to be higher for longer. Tragically, today Australians may end up paying the price. If interest rates go up. It will be proof that the economists, who said the Albanese Government’s budget would keep interest rates higher for longer, were right, and Australians will be paying the price for that.


Journalist: What can be done, what can be done to help those really struggling right now?


Simon Birmingham: So, the government firstly needs to have a clear plan for how it will bring inflation down, not just a few talking points which you get from the government, where they talk about a handful of policies that they took to the last election that weren’t focused on tackling inflation at all. They need a comprehensive plan for bringing inflation down. They need to show proper spending discipline. They need to work with the states and territories in terms of that type of discipline and how it can be achieved, and they need to make sure that they aren’t putting pressures upwards on inflation, which, tragically, is what things like their industrial relations reforms do through the anti-competitive approaches and the measures there that will hurt productivity and just drive up costs in a whole range of sectors.


Journalist: So, spending cuts as opposed to cash handouts?


Simon Birmingham: The Government’s got to look carefully at how it ensures it doesn’t have any wasteful spending. It doesn’t have any excess in its budget. It doesn’t contribute to inflationary pressures. It’s equally got to make sure then any measures it applies have downward pressure on inflation if they are designed to assist Australian households. But ultimately it is for the Albanese Government. They’ve had two budgets now to ensure they have a plan to tackle inflation and to keep interest rates low. And tragically, after two Albanese government budgets, inflation in Australia is now higher than many of other countries when it used to be lower and Australians are going to pay a price for that.


Journalist: Would you like to see the government cut the fuel excise as the Coalition did?


Simon Birmingham: I think the Government needs to have all options on the table. It is for them to then outline a clear and comprehensive plan. Simply calling for one measure or another isn’t a plan. And unfortunately, that’s what the Government seems to think is a plan. If you ask-


Journalist: But it’s something right now. It’s something the Government can do right now. Reducing the fuel tax. Is that something that the Opposition will support?


Simon Birmingham: Well, we want to see the Government have a comprehensive plan to tackle inflation and get interest rates down. If you ask a government minister about it, they will rattle off a shopping list, half a dozen things that are mostly policies they took before the last election and had nothing to do at the time with actually getting inflation down. They’re responsible. They’re at the halfway point of an election term. They’ve had two budgets, and yet Australians are paying the price of higher inflation and likely higher interest rates.


Journalist: What do you make of President Xi bringing up China’s bid to join the CPTPP in his meeting with the Prime Minister? And how do you think Australia should navigate these talks?


Simon Birmingham: Australia’s go to have a strong and principled approach when it comes to CPTPP, and that those principles have to consider two key issues. The first is China’s actions in relation to world trade. And China has weaponized trade against Australia. It weaponized trade against Lithuania. And it’s done so with other countries as well. To the extent we’re just in the last few weeks, we saw the European Union put in place new regulations about how the EU would respond to coercive trade practices in the future. That was an EU response to the way China has targeted one of their member states, just as Australia was targeted. All of that shows that China has been a bad faith actor and acted in bad faith when it comes to its commitments under the China-Australia Free Trade Agreement and its commitments to the World Trade Organisation and to other nations. So if you’ve been acting in bad faith, should you be admitted quickly and easily into another new trade agreement? The answer to that is clearly no. Australia should be clear about that, that we would need to see a prolonged period of China having removed all of the trade sanctions against Australia, including those that still remain as attempts at coercion, wine, live seafood, meat industries still paying a price. We should expect to see all of that removed in China show that it can be a good faith player in relation to trade. That’s just the first principle. The second one is then actually living up to the high standards of the CPTPP. That is one of the world leading trade agreements. It has world leading standards in a range of areas. Just one example that is perhaps easiest to understand in the Chinese context is it has very strong practices around how state owned enterprises should operate in transparent and competitive ways. Well, China has much work to do to demonstrate that its state owned enterprises operate in transparent and competitive ways, and we should expect them to do that, prove that and achieve that before we entertain China entering into that trade agreement with such high standards.


Journalist: [Inaudible] Chinese business from the University of Sydney, Hans Hendrischke, said that ultimately Australia would stand to lose if China didn’t get accession into the Trans-Pacific partnership. What do you make of that assessment? This is a business expert.


Simon Birmingham: Well, I think that assessment is wrong. Australia already has with China a bilateral free trade agreement through the China-Australia Free Trade Agreement. We already have a regional free trade agreement through the Regional Comprehensive Economic Partnership Agreement involving the ASEAN nations, plus five others, including ourselves and China. So we have a range of areas in which we have already negotiated quite liberalised trade access between Australia and China, where Australia has been losing is because China has not been honouring the agreements that have already been reached. It has weaponised trade against Australia. It has sought to use it as a tool of economic coercion. But we should be proud as a nation that we have resisted that. And it’s to the credit of Australian industry and businesses that they have resisted China’s attempts at economic coercion and that our economy has remained strong throughout. That our businesses have remained strong. But it’s also a big reminder of the need for economic diversification. When China applied these tariffs and sanctions against Australia previously, the Coalition successfully concluded negotiations with the United Kingdom and with India as means to have new trade agreements to provide for economic diversification. The test is on the Albanese Government now to actually achieve that diversification, and the breakdown in their talks with the European Union don’t give much hope for their progress, and they need to come out with what their clear strategies are to not have all the eggs in the China basket, but to achieve successful diversification in the future.


Journalist: The coalition’s expressed support for Albanese’s visit to China. So how would you like to see this bilateral relationship grow over months, years going forward?


Simon Birmingham: Well, our belief is that we need to get the best out of the relationship by working as closely and carefully with China as we can, but also as honestly and forthrightly as we must. That honest and forthright approach means that we need to be clear about the unacceptability of the way China has treated Australian industry with its trade sanctions, the unacceptability of the way it has treated Australian citizens with its detention of Australian citizens – the continued detention of Dr. Yang Hengjun. The unacceptability of China having bounties on the heads of Australians as a result of their engagement with Hong Kong. The unacceptability of military actions in ways that risk conflict in the South China Sea or the Taiwan Strait. The unacceptability of cyber espionage. There are a number of deep and abiding concerns. And so, we have to be forthright. We have to be honest in addressing those, but also trying in doing so, to bring China down a path that is more in keeping with the type of actions to underpin peace and prosperity we would wish to see in our region. Thanks, guys.