Sky News Australia – AM Agenda

Interview with David Speers

Subject: Trip to Indonesia

Transcript, E&OE, proof only

2 October 2013

DAVID LIPSON: Well, guest to Indonesia yesterday, host to New Zealand today. Prime Minister, Mr Tony Abbott will meet with his New Zealand counterpart, John Key, in Canberra today after what's been hailed as a successful trip to Indonesia. His first trip overseas as Prime Minister.

Tony Abbott dialled back much of the hairy-chested rhetoric on asylum seekers leading some to suggest that he may never implement some of the more controversial elements to his policy. There was also significant focus though on trade, most notably live cattle. And the Trade Minister, Andrew Robb, stayed behind in Jakarta overnight to host a round-table largely on that topic. The Minister spoke with our political editor, David Speers, overnight.

DAVID SPEERS: Andrew Robb, thanks for joining us. You've just come from a round-table with agricultural industry leaders looking at the live cattle trade. Where are things at now? Are you more optimistic about the trade picking up?

ANDREW ROBB: Yes, there's certainly movement. I think they have - the Government now has basically put aside quotas and they've introduced a permit system but it will lead I think potentially to a re-stabilisation of the trade. There's an extra 75,000… head of cattle for this quarter. And there's positive signs but there's still some issues to work through with the Government about the permit system.

DAVID SPEERS: What are those issues in particular that Australia wants addressed?

ANDREW ROBB: Well, there's - they've got different benchmarks which - on price and other factors. So it gets a little bit awkward. But the thing is the trade was so massively disrupted and it was a - the previous government with the way in which they killed the trade overnight and it has led to all of these consequences and we just have to work it through again I think. People have to get confidence. There has to be trust and some greater certainty before people start to reinvest and get back to the sort of levels that we saw before.

DAVID SPEERS: As part of that confidence and certainty, Indonesia's pretty keen on purchasing a large tract of farmland in Australia. About a million hectares they're talking about where they could grow cattle for export to Indonesia. Now do you think this is a good idea?

ANDREW ROBB: I think it's more, as I've seen from the discussions we've had, it's more a symbol of their keenness and I think it's a legitimate desire to work more in partnership with the industry in all sorts of ways because what we do really well is breed cattle. But we don't, in the north, fatten them effectively. What they do in Indonesia is fatten cattle very well. And there's a lot of symmetry there. But they've also got a lot of cattle themselves and we should be helping that industry and we can do with breeding, with a lot of other genetic issues and health issues for cattle and management issues and safety issues and slaughtering and butchering practices. All these sorts of things we can share a lot of our expertise and I think that is a symbol of that.

They might buy something but it should be I think as a joint venture because they need to pick up the expertise and the familiarity with what makes the Australian industry tick. That would help, I think, the industry within Indonesia.

DAVID SPEERS: So that your message to them has been any such investment in Australian farmland should be a joint venture, should involve some Australian business expertise.

ANDREW ROBB: Well, as I say, I don't think that is their necessary priority. They want to see a lot of joint activity, right. Some of that will be joint ventures. I think if they get to the point of buying any properties in Australia they should consider the joint venture because I think their primary desire is to learn more about the industry - how to breed these sort of cattle, to learn some of the expertise that our farmers have got.

DAVID SPEERS: Does that position have something also to do with the concerns in Australia including amongst some of your National Party colleagues about selling farmland to foreigners?

ANDREW ROBB: Well, we have said we're open for business. There has been foreigners buying Australian farmland since the year dot, since we were first colonised and it comes and goes. And we're not talking big licks of land so I don't think there's an issue there.

DAVID SPEERS: We might be here though talking about a big lick of land.

ANDREW ROBB: Well, what they've talked about so far is about 3000 head of cattle. We have got tens of millions of head of cattle so I wouldn't stress too much that - that's not the point. I think there's - we're here 13 days after the Government was formed because we want a deep and broad relationship. We're not here to do with cattle or farming. Food is a big part of our ongoing relationship but there's opportunities between our two countries with a population here of 250 million to see things in the health sector, in the education sector, in financial services, in engineering, in architecture. You name it, we've got opportunities up here and that has been our point. We're trying to be here to build trust, to build confidence, to build respect so that we can give expression to that relationship in all sorts of ways.

DAVID SPEERS: Why hasn't this trade relationship been as good as it should be? Do you think on the Australian side, Australian business leaders are still concerned about some of the problems here in Indonesia - corruption, infrastructure not being what it should? Do you think these have been obstacles?

ANDREW ROBB: Well, if you look at the growth, I mean the growth in investment is seven-fold in the last couple of years from Australia. So I think it had more to do with, previously, the smaller size of the middle-class here. There just weren't the sorts of opportunities there are now. There's now 50 million people-plus in the middle-class in Indonesia. There is two-and-a-half times our population. And it's going to grow to 150 million they think in the next 15 years or so.

So the opportunity is here if you're patient. You won't get immediate returns. I mean if you want immediate approvals for things, and all that, that's where the frustrations are and that's where sometimes, malpractice can come in. But if you're an ethical firm, you come in here, you've got long-term ambitions, there's very good profits to be made in Indonesia. Very good business to be done.

DAVID SPEERS: Just finally on that. We've seen a concerted push from the new Abbott Government to try and pick up the trade here in Indonesia. Do you Australia's been too focused on China when it comes to trade at the expense of opportunities like Indonesia?

ANDREW ROBB: Well, you look at the size of China. We've talking hundreds of millions of exports so and you've got to take the opportunities when they're there and China has been the case. I think it's a matter of now it's time. You look at what's happening in the region, there's just unbelievable opportunities with an explosion of the middle-class by billions of people over the next 20 or 30 years. We have to position ourselves. Part of that I think is linking up with what is going to be one of the super-powers in decades to come - Indonesia. It's going to be a big part of that growth story.

HOST: The Trade Minister, Andrew Robb, there with our political editor, David Speers in Jakarta.

Ends


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