MARK PARTON: This time on a Wednesday morning we catch up with the Federal Trade Minister Dr Craig Emerson, who joins us on the line now. Good morning.
CRAIG EMERSON: Good morning, Parto.
PARTON: Wanted to say congratulations on the theme on the vibe on the direction of the Asian Century White Paper. But going through it more extensively since it's been released, there are parts of it that to me seem like a bit of a fairy tale, with all respect.
EMERSON: Well you've got to have vision, and this is a vision out to 2025. I know that it's been warmly welcomed broadly in the community, including in the business community. Obviously, we're happy to have an ongoing discussion – that's part of the purpose of this – and, indeed, last night in the Old Parliament House I was talking to a group of 21 up-and-coming Chinese decision-makers, and they were really just impressed by the breadth of it, the commitment to continue our economic integration into Asia. And I think more broadly people feel that there are good-quality jobs to come out of this.
PARTON: Malcolm Farr spoke with us earlier, and he made the comment that for most Australians we don't own any iron ore mines or anything like that.
EMERSON: Yep. That's true.
PARTON: And so let's say your children go through school and they learn to speak Indonesian. They get out at the end of it – what then?
EMERSON: Well, we've got on our doorstep in Indonesia alone a country with 245 million people. It's been growing at about six and a half per cent per annum. And so for those sorts of people – and I think Malcolm makes a good point – it's the very reason why we've brought in this Paper. We can't just rely on Australia as a mine and a quarry. Just think of the opportunities for young people, for example, who go to TAFE; they might do graphic design work. We've got so many people who are really, really good at computers. You know that. Even the traditional trades of electricians and plumbers. All of those skills can be used, not only here in Australia as we expand but I think there are possibilities for young people to go to some of these countries, spend a few months, even a year there, and teach other people. I'll give you an example: by 2020 there'll be 93 cities in China bigger than Sydney.
PARTON: But Craig, exchange rates would have to turn around so dramatically between now and this golden future for it to be worth anybody's while to move from Australia to these places to work, wouldn't it?
EMERSON: Well I think an exchange rate works our way in that regard, because it's actually cheaper to live in countries with our high exchange rate. But I'm not going to be the soothsayer on the exchange rate out to the year 2025, mate. I mean, it moves around a lot and I don't think that'll be the prime determinant, and we can't get ourselves in a position where we're relying on movements in exchange rates. We've got to earn our place in the Asian Century and make sure that we're ultra-competitive.
PARTON: Bernard Lane has pointed out in The Australian this morning that the 12,000 Asian Century student scholarships that your leader announced are actually already there; that they're part of an existing program, and that it's just been rebadged as a part of this to give it some more bells and whistles.
EMERSON: Yeah, I saw the reference that we've been 'caught out' on this. At no point did we say that we are announcing a new bucket of money to fund these Asian Century scholarships. And of course if we had we would have been criticised by the same people for spending too much money and not returning the budget to surplus. What we are doing is getting these scholarships out of a very rapidly expanding aid budget and we're ensuring that of all of the Australia Awards around the world, that the Asian Century ones get priority. That is, yes there will be these Australia Awards for other parts of the world, but this is essentially saying there will be 12,000 absolutely dedicated to the Asian region.
PARTON: Okay. Let's talk about Hurricane Sandy, which obviously has had a massive effect on the US. As Trade Minister, have you … I'm gathering you have given a fair bit of thought as to how this disaster is going to affect trade between Australia and the US?
EMERSON: I haven't actually, to be honest with you. I've seen the human tragedy of it all and the suffering. And like you, and like all of your listeners, we're human beings. And when we see this, your heart goes out to people, to the families of those who have lost their lives. To be perfectly frank with you, I haven't thought of the dollars and cents implications for Australia. We will, of course, and are making offers to assist with respective emergency services, as we did with the tsunami in Japan where we did provide assistance. The Americans are saying at this stage that they are quite capable of handling it, but if they do need our help all they have to do is sing out.
PARTON: All right. One of the other things we were chatting with Farry about is the ACT election and possible implications for the Federal seats in Canberra. Fraser's always going to be yours, but the southern seat of Canberra, which Gai Brodtmann holds by 9 per cent … you've seen some of these figures for Brindabella, haven't you, where the Liberal vote was, I think, 46 per cent to Labor's 35. It was an astounding result for the Libs. I know Brindabella doesn't encompass all of the Federal seat of Canberra. Nine per cent margin for Gai Brodtmann: surely she does win the seat when we go to election, but I'm tipping the margin's going to be a little skinnier than nine. What do you reckon?
EMERSON: Well, I think Gai is an absolutely outstanding Member of Parliament, and I'm not saying that simply because she's a friend and an ALP colleague. She has huge standing within Parliament House and I'm sure she has huge standing in her own electorate.
PARTON: She's got her critics, Craig, I gotta tell you.
EMERSON: Sure, well I think I could join that party. Nevertheless it is a great and robust democracy. I think, if I'm not mistaken, one of the influences there was this campaign that rates would go up a lot under a Labor administration. It was described by Katy Gallagher as a disgracefully wrong campaign, completely wrong. But it would have had some impact on the thinking of people who are sitting there with mortgages.
PARTON: I think it had a massive effect. But if you go through this Quinlan Review, which everything that they base this tax reform on is based on that, I think it's pretty clear that the rates will triple if it's imposed.
EMERSON: Well, Katy Gallagher absolutely denies that. But I think the connecting point that I wanted to make is that people who are experiencing cost-of-living pressures are getting relief at the Federal level from the sharp drop in interest rates. The Reserve Bank cash rate has gone down from six and three-quarter per cent to three and a quarter per cent. I think there've been six interest rate reductions under Labor; there were 10 interest rate rises under the Coalition, after Mr Howard pledged to keep interest rates at record lows. So in terms of the impact of the Government's policies on interest rates, the record speaks for itself. But we'll continue, through this return to surplus, to create the room for the Reserve Bank to do even more, and therefore ease cost-of-living pressures further – let alone mentioning the child care support that we're providing, Parto.
PARTON: Thanks for your time this morning, as always.
EMERSON: Okay, mate. All the best.
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