3 September 2008

Interview - Sky Business

Subjects: BCA Beijing, Austrade, ASEAN FTA, WTO Doha round

CARSON SCOTT: Anyway. We were talking Olympics, and of course, London hosting that event coming up next time round, and the gamble for Westfield. But of course we can put that aside for the next four years. In the meantime, the Government was over in Beijing, really, for what was a bit of a gold rush for our athletes, of course. It was trying to strike gold over business, of course, trying to stitch up some links, care of what's called the Business Club Australia.

BROOKE CORTE: Yeah. They say it had another successful run in Beijing, providing a whole range of opportunities for business owners to meet potential clients and partners. Essentially, Business Club of Australia is a business matching service. It started during the Sydney Olympics, and it's gone from strength to strength at major international sporting events like the Rugby World Cup, the concept, in fact, being so successful the International Olympics Committee has ordered a case study to see how other countries may be able to utilise this idea.

SCOTT: And we can get more on this now, live, from Canberra, with Federal Trade Minister Simon Crean who of course spearheaded that delegation to Beijing. Mr Crean, always good to have you with us on the business channel. Let's just understand if we can from you how that Business Club Australia scheme works out in practice?

SIMON CREAN: Okay, well two propositions, Carson. First is, sport is a business. And we have many businesses - 40 of them, in fact - that won 50 contracts to help build the Beijing Olympics. The second is that sport is also a platform that either provides the basis for more effective marketing of a businesses products or services, or the basis for networking. What Business Club Australia tries to do is to bring all these three together.

So it's built round a networking concept, but it builds off a critical mass. It really says we're not just turning up at sporting events, we are competitors in the world of sport at the very highest of levels, and because of that, that demands as an industry the best possible facilities for our sports people, whether that's the physical ground, the construction of the stadiums, whether it's the sports medicine, whether it's the coaching, whether it's the catering, whether it's the media that's associated with it. And these are businesses that we too have become world leaders at. We want to export those. We want to use the showcase that, whether it's the Olympics or the world cup, or whatever - to try and win more contracts.

And one of the issues that we undertook whilst we were in Beijing was to host a dinner with LOCOG, the London Olympics Organising Committee, to use that as the opportunity to market our wares to them and try and win a greater slice of those contracts that are on offer.

SCOTT: Putting to one side then the kangaroo steaks and the caviar and the canapés, how is it different to Austrade, Mr Crean?

CREAN: Well no. It's an aspect of Austrade. But I think it's more the launching out, as to platforms, it's more strategic. What we did with this Business Club Australia was focus on four particularly key sectors. One was clean energy. One was financial services. The other was the sporting infrastructure, and the other was mining. These are industries, these are businesses that we have common interest with the Chinese in particular on. Clean energy, for example. Climate change. How do we, together, work to reduce carbon emissions with smarter technologies and better cooperation?

This was a significant side agenda – but integral to build out of Business Club Australia. So there are many different ways in which we can use a platform.

SCOTT: You did. You mentioned those policies - people will be interested to know, I guess, how separate Austrade works with your department, Minister, as far as you've identified their key government policies at play that you're trying to feed through into business relationships. But how free does that leave Austrade to work, independent of that, to come up with its own investment decisions?

CREAN: Well no. It doesn't make the investment, it does the networking. It brings the investors together. It brings the partners together. It's got a network of people around the world as well as the strategic base here.

But for example, last week, we concluded the free trade agreement with ASEAN. ASEAN, collectively, is Australia's biggest market: $71 billion in trade. The agreement means we're reducing tariff levels and will have most of them eliminated by the middle of the next decade.

What Austrade's challenge...

SCOTT: Let's talk free trade in a moment. I'd like to talk free trade with you in a moment. And if we could just stay on the idea of that relationship with Austrade. And as you say, their networking role. I'm wondering, Mr Crean, how satisfied you are with the performance of Austrade to date, given its rather chequered and notably high profile faux pas over the likes of Firepower and errant funding to institutions that have gone to the wall.

CREAN: Well I mean, obviously, with all the successes, there are bound to be some failures, Carson. I think that happens in any business. That's the nature of entrepreneurship. You know, one needs to...

SCOTT: That's - the differences are not, because this is public money at stake. Entrepreneurship is the market. We're dealing with taxpayers money, Mr Crean.

CREAN: Yeah. But judgements need to be made as to which entrepreneurs you back. Some of them go bad. Banks find that, just as much as Austrade might find it.

SCOTT: And shareholders vote with banks when they do make mistakes, they sell the stock. But consumers and taxpayers don't get an option over this decision.

CREAN: That's right, and that's why the shareholder is the Government, on behalf of the Australian people. It is taxpayer's money. We've got to ensure that it is spent wisely. I've got no doubt that what Business Club Australia has done in development, since the Sydney Olympics, has been unequivocally good for the country.

As to the broader question you ask, am I satisfied with the Austrade performance, I think Austrade does a very good job. I think it can do a better job. But it will only do a better job if it has a policy framework that's more conducive to setting the strategic framework that I started to talk about earlier. That's why...

SCOTT: All right, but how can you have a body - you talk about a policy framework, how can you be running an organisation when you don't have, finally, a policy framework that you're happy with.

CREAN: No, that's because we are continuing to develop the policy framework that I will be happy with. This week...

SCOTT: But should you not roll out Austrade, though, and sit on it and wait 'till you've got a framework you're happy with until you let it go to market using taxpayers' money?

CREAN: No, I don't think so. I think that Austrade has got to continue to do what it has been successfully doing in the main for many years. What we want to do is to improve it, because Australia's trade performance over the past five years has been appalling. Australia has had 72 consecutive months of trade deficits. It's only in the last few months that we've started to see the corner turn. Now, we didn't just inherit a high inflation economy from this government from the previous Government. We inherited an economy whose net exports were mostly detractors from GDP growth.

We want to turn that round. Australia has to be a more effective exporter. It needs to be a better trader. It's future is in trade, because world trade grows faster than world output.

And if we want to secure our economic future, particularly beyond the resources boom whenever that might end, what we've got to become is a much more diversified exporter. And that's why when we got elected, we undertook to revamp not only what Austrade does, but the focus of our trade agreement negotiations. I've commissioned Mortimer to give us a blueprint. I've received that report. We'll be responding to that within the next few weeks. And we'll be releasing it in the next few weeks, and responding to it progressively from there. I'm convinced that we can turn this around.

SCOTT: Well...

CREAN: But it will only happen with a better policy framework. Just relying on Austrade won't be good enough. And Austrade will be...

SCOTT: And it will only happen if you have a global commitment to really free up what is a sclerotic trade system. Doha, post Doha, where have your successes been?

CREAN: Well last week, we concluded the ASEAN free trade agreement. This is the most comprehensive free trade agreement ASEAN's ever entered into. It's the largest free trade agreement that Australia has ever entered. ASEAN, collectively, is Australia's biggest market, worth $71 billion, much bigger than China, much bigger than India.

And what we have is a timetable for tariff elimination well in advance of the pre-existing framework, which was Bogor and 2010. We will have this elimination and practically all product and s... all products by 2015. Now that is a big breakthrough, Carson. But that only happened because we were determined to get the breakthrough, to get the FTA up.

I must say, in terms of Doha, I am still an optimist in our ability to get Doha concluded in the timetable this year that we originally set for ourselves, to get the modalities in tariff and in agricultural products, in goods. I'm still optimistic. I don't say confident. I'd like to be.

SCOTT: You have to say you're optimistic. But Mr Lamy's not optimistic. Mr Lamy's wringing his hands in grief.

CREAN: I spoke with Mr Lamy last night as a matter of fact. He wasn't wringing his hands in grief. He was very appreciative of the role that Australia's been playing, post the breakdown in the talks, the role that we've been playing in helping get these talks back on track. I've also spoken with my counterparts in the United States, in India, in Brazil, in Japan, in China. These are all the members of the G7, the group that was given the task and we are still actively working to try and get this round concluded.

SCOTT: Well you've just used the matter for it getting back on track. How have you put the train back on the rails?

CREAN: I think it requires two things. It broke down because of a problem with one element, the special safeguards mechanism. The formula that we had didn't work. We've therefore got to try and devise a new formula that achieves the same sort of an outcome. The second thing, though, is to re-engage at the political level. It's not going to be solved simply by the technical solution, it requires the re engagement and re commitment of the political will. That's why I have been active in engaging my counterparts. And Mr Lamy, the other one that I've obviously been talking to is Peter Mandelson, the Trade Commissioner from the EC.

They're all the members of the EC, of the G7 group, with Pascal Lamy. It's that group that people are looking to for the leadership and the solution. I hope we can give it to them. And I will play whatever role I can in giving that leadership.

SCOTT: And we look forward to talking to you when those talks are concluded. Mr Crean, as always, appreciate your time. Federal Trade Minister, many thanks.

CREAN: Okay.

SCOTT: Right. Simon Crean, live, Canberra.

ENDS

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