2 March 2009
Interview – Jason Morrison, Radio 2GB Drivetime
Subjects: Global Economic Situation; Jobs and Free Trade Agreements
JASON MORRISON: There was a period where no-one in government would say the word, the r-word, recession. That's changed. Reality has kicked in. And I do get the feeling that we're being lined up for a movement towards that. I don't think anyone wishes it. But when the Federal Treasurer comes out and says things to the effect of about seven of Australia's top 10 trading partners are now in recession, that tells you that, it's kind of a quiet way of warning us that we might be heading there too.
Trade is an interesting thing for this country. At the moment, some sections of the economy are being kept alive by it. And others are being driven into the ground as a result of it.
And later this week, we'll get the latest national accounts data, probably telling us that the economy is pretty close to going nowhere at all, barely growing.
I mean, we can only pre-empt that by what the Treasurer is saying: we're being lined up for some bad news.
You'll remember the latest statistics told us in September, in the September quarter, we were barely positive. And the December quarter, we'll find out soon, that will tell us how the economic stimulus went, and how the $10.4 billion spent through the economy in the… mostly, pensioner and welfare recipient bonus that went through before Christmas, how it went.
I have on the line the Trade Minister Simon Crean.
Mr Crean, g'day, nice to talk to you again.
SIMON CREAN: Good… ah, good evening, now, Jason.
MORRISON: It's one of those, isn't it.
CREAN: It's got dark while I've been waiting.
MORRISON: Yes, oh well, my apologies.
CREAN: That's all right, no, that's okay.
MORRISON: Now, the Treasurer said what he said today: politicians don't say those things unless I sense they are pre-empting. But it's a reality. Seven of Australia's top 10 trading partners are now in recession.
Do you feel we're going there?
CREAN: I think it's more reality than pre-emption, Jason. We obviously have to wait for the official figures to come out. I know from previous experience as a minister, you do not get advanced notice of these figures. I think the point that Wayne was making today was that seven of our 10 top trading partners are in recession. That's true. But when you look at the other three - China, Thailand, India - they are areas in which we have had significant growth in our trading relationship over recent years.
And that's stood us in good stead.
It's one of the cushions that, like the strength of our banking system, for example, that puts us in a position better than most in this economic storm. But the truth is that none of us are immune. And the trade circumstances are such that exports earnings for those countries with whom we trade have dropped dramatically for them.
And that could have a big impact on us.
That's why what we've got to do is to try and position ourselves better to take advantage of any of the opportunities. And one of the things that we've done to position ourselves better for that is this recent signing of the free trade agreement with the ASEAN group of countries.
MORRISON: Mmm.
CREAN: They are 600 million people in the ASEAN group of countries - and in that group, the trade between our… us and them is 80 billion. That means lots of jobs for this economy if we can build on it.
MORRISON: Yes. Can I talk about free trade for a moment. You would have heard it. Plenty of people have argued it on talk radio and other places that what's happened with Pacific Brands has come about because governments and not just yours, of all persuasions, are so addicted and committed to this free trade situation - and that Australia has been, and countries like us, almost sold down the paths by our political leadership because of free trade.
How do you answer that?
CREAN: Well, it's just not true. The facts are different. Tariffs have never grown job opportunities. Whatever the argument is about them protecting jobs, they don't in the long-term.
What grows job opportunities is our ability to engage with the rest of the world. Think about it, Jason. We're only 22 million people. We are too small simply to keep producing for a domestic base.
World trade grows at a much faster rate than world output.
MORRISON: Mmm, but at these times, what jobs are growing as a result of the free trade agreements?
CREAN: Well I think that there is still important, has been important growth, obviously, in the resources, the value-added food processing sector in specialist manufacturing, especially at the higher end - those that have got design and innovation and logistics.
Our services sector, by far, has been the biggest opportunity for jobs growth, because it's 80 per cent of our economic base. So there are big opportunities for Australia, if we can get the markets opened.
That's what trade negotiations are about.
If we can get our skills, our expertise, not just doing good things in this country, but selling them to the rest of the world, that's where the big opportunities come in.
MORRISON: Yes. I - it's interesting talking to you about this, and I'm not being sarcastic at all, but if I take in what you're saying now, the Simon Crean of 15-20 years ago, before entering politics, to hear you arguing for free trade. I think most people that would have surrounded you in those times would not have believed it.
CREAN: Yes, but I was arguing it then, too…
MORRISON: Were you, as a union leader, union official protecting jobs here in Australia? Because people listen to this and they go but what jobs are being protected, what jobs are - what jobs are growing, what area is growing?
CREAN: But as President of the ACTU in those days I was arguing very much that we had to be competitive and productive. Arguing very much that we had to support those industries that had the potential to expand and grow overseas, and invest in their skills, in the infrastructure, et cetera. We argued very much that the Government had a role to play in doing those sorts of things but we were consistently, not just supportive of Government going down this path of restructuring, but we were saying that the workforce should be involved in the process of adjustment. It should be assisted through the adjustment process but - and they should also be able to share in the gains where the benefits accrue. In other words where you get higher profitability and productivity you should share the benefits. In other words if you can contribute to it, you should share in it.
MORRISON: But, Mr Crean, you walk through shops, you know this, I mean everyone listening to it knows it that you go through a shop, more items on the shelves come from elsewhere than come from here. We're at the stage where very soon manufacturing in Australia - I think Terry McCrann, respected columnist, wrote off the business with Pacific Brands as being the death of manufacturing in Australia.
I mean we start to wonder, we hear this from political leaders that this will create jobs and no-one ever feels or sees these jobs.
CREAN: Yes, but I also see in the same shops overseas in the countries with whom I do the negotiations for the trade deals, a lot more Australian product…
MORRISON: Do you? Give us an example; like what?
CREAN: Well in terms of the - the food processing areas, the dairy products, the meat products, seafood, wine. All of those - that's just to take the agriculture sector as a value added dimension.
I go to countries in which we sell our raw materials but in which our mining sector is up there with its technology, its expertise, its skill base doing the mining activities in other countries.
I go to countries that are building heavily in infrastructure and our businesses are up there building the roadways, constructing the buildings, developing the housing sites, designing.
Now this is where Australia is uniquely positioned. We have a skill base, a workforce that can compete with the rest of the world. Our task is to open the markets up so they can do it.
And that's why trade agreements are important. It's why we have to talk about more than just exports, we have to talk about trade flows. Because it's the interdependency: us to our trading partners and the fact that we rely on each other, not just us taking advantage of them or vice versa.
MORRISON: All right. Well I've got to go because time is against us here. I appreciate your availability. I think, though, what's clear is the gap between what the public understands with free trade and the Government's position on it has never been further apart. Because I have not heard one member of the public ring up and argue for it but, you know, I guess that's how it goes. I appreciate you coming on. Thanks.
CREAN: Good to talk to you any time, Jason.
MORRISON: Simon Crean, who is the Trade Minister.
You might have a view on that. What do you think of, not just what he's had to say, but, indeed, the argument for free trade? Do you feel that? Or are you in those sectors that benefit?
[ENDS]
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