TopicsBalloons entering US airspace; US-China relationship; Stephen Jones undermining RBA;

07:45AM AEDT
14 February 2023

Pete Stefanovic: Let’s go live to Canberra now because joining us is the Shadow Foreign Minister, Simon Birmingham. Simon, good to see you. What a fascinating time it is for global politics at the moment. We were talking about this just last week. A few more balloons have been found since then. The spy balloons, the US out this morning accusing China of running a high-altitude balloon program for, quote, intelligence collection. How troubled are you by this?

Simon Birmingham: Well, this is troubling and the lack of engagement or transparency from China in relation to this is also troubling that they have declined to engage in officials level conversation with the United States to be transparent about what it is that they’ve been doing, what they’ve been undertaking, and to try to make sure that they can move beyond this increased area of tension. Now we want to see an environment which is pursuing as much peace and stability as possible, but it’s hard to see that advancing when, of course, the United States are dealing with now not one but four incidents in the space of just a couple of weeks.

Pete Stefanovic: In recent weeks and months, you know, there has been a change in dialogue, the relationship, particularly between Australia and China, more so than China and the US seems to be getting closer. Do you think that this spy balloon fiasco could derail everything that’s happened in recent times?

Simon Birmingham: Well, certainly between the United States and China, what we saw was a three-hour meeting between President Biden and President Xi Jinping take place in the margins of the G20 in Bali. Since then, there was the scheduled visit of Secretary of State Blinken to meet to be visiting Beijing only, of course, in the days following the shooting down of the first balloon. That visit was cancelled and deferred as a result. I hope that it can be rescheduled. I know that was the intent of the US in terms of announcing a delay and a deferral of it rather than a full cancellation. But incident after incident won’t help in terms of that rescheduling and from an Australian perspective, it just puts increased tension across China’s engagement with much of the world. And that, again can’t help in terms of all aspects of the relationship. But we do wish the Australian Government well in trying to get the trade sanctions that China unfairly placed on Australia removed. And we do want to see continued breakthroughs in that, particularly if China is genuine about trying to work to stabilise the relationship.

Pete Stefanovic: Mr. Kirby had said this morning that there’s evidence that these balloons had flown over dozens of countries, multiple continents as well. ASIO has already denied that it’s happened here. But in your time in recent years, could it have happened and our surveillance systems in the air missed them?

Simon Birmingham: Pete, I’m not aware of it occurring. Could it have happened? Well, of course it could. And we can’t say these things are impossible in terms of the scope and reach of the type of surveillance systems. They’re questions really for our defence and other security experts, and I’ve got no doubt that some of those questions will unfold as Senate estimates and other processes continue during the course of this week to ensure that we have the confidence in the security of Australia’s airspace and our sovereignty to be able to protect Australia from incursions and spying activities that could be of concern.

Pete Stefanovic: Just, a final one here on the economy. Simon, Stephen Jones, he’s been out this morning, he’s mirroring comments that he made last week when it comes to the economy at the moment and his concerns about the RBA’s rate rises. He’s worried about that on the households of Australians. He says the Government’s doing its bit and there is evidence that rates are working. Economists on this program a short time ago have backed that up. Do you think he’s right?

Simon Birmingham: Well, it’s a remarkable situation where the Assistant Treasurer of the Government of Australia is undermining the messaging of the Reserve Bank of Australia. Now, Treasurer Chalmers and Prime Minister Albanese need to pull Stephen Jones into line or push him out of the ministry if he’s going to continue to speak out of turn and undermine the independent Reserve Bank. Ultimately, the Reserve Bank sent a very big warning sign to the Government last week with the, not just increase in rates but also importantly the statement made by the Reserve Bank Governor. And in that statement he’s foreshadowing the risk of further rate rises. And far from helping, the Albanese Government is pushing up the rate of government spending. They are legislating many more multibillion dollar funds that they want to put in place and of course reforms like their industrial relations ones will only hurt productivity across the economy. So it’s a government that is making a difficult situation worse and from that causing Australians to pay more.

Pete Stefanovic: But is merely expressing a concern really undermining the Reserve Bank?

Simon Birmingham: Stephen Jones was out there last week suggesting that there shouldn’t be any more interest rate rises. So he is undermining the independence of the Reserve Bank. He is one of the Treasury ministers of Australia and one of the fundamental principles that pretty much every Treasurer and every Treasury or finance ministers have stuck to is to support the independence of the Reserve Bank in their role [indistinct] Stephen Jones doesn’t seem to.

Pete Stefanovic: Do you have concerns for households?

Simon Birmingham: We absolutely have concerns for households and the pressures that they are feeling and real concerns that the Albanese Government, with increased spending, creation of multi-billion dollar new funds, policies that hurt productivity that all of those things are going to add to that pressure rather than help.

Pete Stefanovic: Right, but what would it be your preference that things don’t get tougher for households in the face of increased rate rises?

Simon Birmingham: Of course it is our preference and that’s why we would rather see a government applying fiscal policy-

Pete Stefanovic: And what’s the difference between that and what Stephen Jones is saying?

Simon Birmingham: Because we want to see the government not attack the Reserve Bank, but make the Reserve Bank jobs easier. Make the job of the Reserve Bank easier by ensuring that fiscal policy is working in tandem with monetary policy. Not that the spending and the policies of the government are actually putting more pressure on the Reserve Bank and through that more pressure on Australian households, which is the real risk of what’s happening at present.

Pete Stefanovic: Right. Simon Birmingham, appreciate your time as always. We’ll talk to you again soon.