18 February 2009
Interview - ABC2 News Breakfast
Subjects: Economic downturn in Japan, Peter Costello
JOE O’BRIEN: The Federal Government has warned that Australian exporters will be hit hard by the severe economic slump in Japan and the financial slowdown in China.
VIRGINIA TRIOLI: Japan has recorded its worst economic figures in 35 years this week, with its gross domestic product shrinking drastically.
Federal Trade Minister Simon Crean joins us now to discuss this and other issues. Simon Crean, good morning.
SIMON CREAN: Morning Virginia.
TRIOLI: Saul Eslake yesterday, in one paper, was warning that when it comes to the global downturn, Japan is a far greater problem for us with its - what looks to be - depression than even China. What are your particular fears in relation to that key partner of ours?
CREAN: Well, the big drop in Japanese exports and its fall in growth - sustained fall in growth - is a problem for us. It will have an impact on our export earnings next year. But bear in mind that our contracts with Japan were locked in. They're still in place until April of this year, so that will carry us a fair bit into 2009.
And bear in mind this, Virginia, that our export earnings from Japan alone jumped $20 billion almost in one year. So even if they drop dramatically, they're still going to...
TRIOLI: [Indistinct]
O’BRIEN: Exactly.
CREAN: ... return to what was an historically high figure. So I think we have to get it into perspective. The other thing about Japan - two things: one, they've embarked on another important stimulus package.
TRIOLI: Well, they have to.
CREAN: Yes, they do. But if you look at what the rest of the world is doing, in terms of investment in infrastructure, that could have impact in terms of Japan's exports. Because what are they drawing on to build the equipment, to build the infrastructure, to undertake the investment that could help Japan.
That's why I think we've got to have a proper assessment of where the economic strengths are, what the extraordinary year just gone involved, try and put that into perspective.
From my point of view though, I think this is important for the Australian economy.
O’BRIEN: So your...
CREAN: We are still forecast to grow. Yes, we've been impacted and we've put a fiscal stimulus package in place that is designed to do one thing: keep us growing. That's the Government's strategy. Keep growth going. Why? Because that produces jobs.
Asia is also still growing. Despite the problems with Japan and with China, all of these things - the IMF is still projecting positive growth. The opportunity for Australia is to grab market share. One of the growing economies in a growing region, that's why we've got to focus not just on the Doha outcome but on bilateral arrangements and strategic ventures into these countries.
O’BRIEN: So you're suggesting Australia should be increasingly looking at opportunities in other Asian countries right now?
CREAN: Exactly. And if you look at what we're signing later this month, the free trade agreement with ASEAN. ASEAN is a group of countries, is our largest trading partner. It's larger than China, it's larger than America, it's larger than Japan. ASEAN, according to an index that I launched interestingly enough on Friday, has grown five times - we've grown five times with them, rest of the world three times, in recent times. So our trajectory, our positioning, our time zone, our focus, if you like – because of the decisions that we took back in the '80s, quite frankly, to reconnect with, to connect properly with the fastest growing region – is paying dividends.
The challenge for us now is to position, not just for the continuation of that direction, but content in the trade negotiations. Not just product, but services and investment flows, because it's been the investment flows in which we have fallen back in Asia.
TRIOLI: Can I just turn to politics for a moment, because it has been intriguing to watch what's been going on on the Opposition side. Now...
CREAN: It's very intriguing, yes.
[Laughter]
TRIOLI: ... you're a fellow...
CREAN: There's a, sort of, sense of deja vu in my case though.
TRIOLI: Well, indeed. I mean, you guys have been through this as well.
O'BRIEN: Happier on the other side.
CREAN: Yes, I can give them ex...
TRIOLI: For once.
CREAN: I can give them expert advice in this field.
TRIOLI: Well, in a sense you can, because you're a fellow Victorian with Peter Costello and you've been on the other side of many fights, particularly over industrial relations over the years with someone like Peter Costello. You know him reasonably well. What do you think he's up to?
CREAN: Interestingly enough, I was at Peter Howson's funeral with him yesterday and I asked that question, and he wouldn't tell me. I don't expect that he would, but...
TRIOLI: Did he smile?
CREAN: Look, he's got to make up his mind, does he want to stay in Parliament or does he want to get out? All of the vibes were that he wanted to get out into the private sector. The problem is, the private sector doesn't want him. Now, he doesn't want to commit to his party when they need him. In those circumstances, he should make a clean break or else accept the offer, if it ever was made, by Malcolm Turnbull.
TRIOLI: Yes. But I asked you what you think he's doing.
CREAN: I don't think he knows what he wants to do. I think it's as simple as that. But what he does like is the attention being focused on him...
O'BRIEN: [Laughs]
CREAN: ... speculating about what he might - and this is the worst possible outcome for the Liberal Party. They need to get their act together. But so long as they don't, it makes our task somewhat easier. But the truth is, we have gigantic challenges ahead of us. We're getting on with that. As a Opposition, they should be supporting us, because it's in the national interest. But if they can't get their own house in order, they can hardly expect to govern the country.
O'BRIEN: So you're up for offering some advice?
CREAN: I'm always prepared to...
[Laughter]
... offer advice.
TRIOLI: We'll leave that for another time.
CREAN: In the best spirit too.
TRIOLI: Simon Crean, good to see you again, thanks so much.
CREAN: Thanks very much.
[ENDS]
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