2UE, Talking Lifestyle
MATTHEW TUKAKI: With uncertainty in the global economy, the one thing you can bank on is a government committed to free trade, David. Now, over the last few years, the Australian Government has done an immense amount of work in making sure that Australia is able to trade with the world, and there is no better way of doing that than making sure we've locked in free trade agreements. Chile, Malaysia, Singapore, Thailand, the USA, China, and Japan are all major markets for Australian business, and then there's those Kiwis, David. A free trade agreement in place for nearly 30-odd years, worth tens of billions of dollars. The question is what more can we do to grow and expand Australia's business footprint, and also see growth in the small business sector? Now, we're joined by Federal Trade Minister, Steve Ciobo to talk free trade. Steve, welcome to the show.
STEVEN CIOBO: Great to be with you.
MATTHEW TUKAKI: Mate, let's start at the beginning. Why are free trade agreements so important to our economy because, you know, some people get a little bit nervous about them?
STEVEN CIOBO: And I understand that and appreciate that there are some people who think that trade's, you know, all a win-loss relationship, in other words, if another country is winning out of a trade relationship, Australia must be losing. But that's not the way that it works. The fact is that trade actually produces win-win outcomes. Think about it from an Australian perspective. The more markets that our exporters can gain access to, the more keenly-priced our exports can be relative to competitors – which doesn't mean that we're taking price-cuts in Australia, it just means relative to other countries, that our prices on Australian goods are better than competitor countries – then that's the more, you know, goods, whether they're manufactured or agricultural goods that grown, that we can sell to consumers in those markets, which of course, generates export income for Australia. And that's the reason why these kinds of trade deals are good.
MATTHEW TUKAKI: Now, one of the things that is interesting about what's going on in the Asia region as well, is we're seeing a rise in the middle-class. Where once they were able to afford certain products and services, because their income is on the rise they are willing to buy more premium goods, and there's no better place to get them from than Australia, right?
STEVEN CIOBO: And we're talking a big increase too. I mean, at the moment there's roughly 600 million Asians that are considered to be middle-class, in the middle income. By 2030, 2035, that number will go from 600 million to around 3 billion people. Now Australia already exports - just to focus on, for example agriculture - Australia already exports about two thirds of the food that we produce. This is excess food that we wouldn't consume, and can't consume here in Australia because we don't have that much demand. The fact is we're very, very good at producing high quality food stuffs at a good price, which we can then sell to that growing market to nearly 3 billion people across Asia over the coming decade or so. This is a key part of driving economic growth in this country, of driving employment opportunities for Australians to be able to work in the export sector. And of course, it helps to generate income for our country.
DAVID PRIOR: Yeah, jobs and growth fall off the back of good deals, right?
STEVEN CIOBO: Exactly. Precisely.
MATTHEW TUKAKI: Well we can't help but put it out there, because, you know, when we talk about the Australian economy in 2017 we do have some people that are a little bit nervous. You know, what's going on with the United States at the moment and Brexit, and Europe, and all this other stuff. But what we've really got here is quite a resilient Australian economy, right?
STEVEN CIOBO: Look, we've had 26 years of continuous economic growth. And I won't even be political about it. This is not about Labor versus Liberal. The fact is, in Australia, we have had - on both sides of the political aisle - a commitment to opening markets for Australia through free trade agreements. The consequence of this has been that we have had now 26 years of continuous economic growth. That is better than basically any other developed economy around the world. If you want to take it to an extreme example, about the benefits that flow from engaging with the world on trade versus those that, you know, don't flow when you don't engage with the world, look no further than the difference between North Korea and South Korea. I mean, South Korea, obviously, was a very impoverished country. They opened themselves up to investment, they opened themselves up to trade with the world and now they've got significant brands - Samsung, Kia and others, for example. Versus North Korea who, of course, put a wall around themselves and said 'No, we want nothing to do with the outside world, you know, we're just going to have jobs just for North Koreans, we're only going grow things for North Koreans, we're only going to make effectively a closed circuit economy just for North Korea'. And you can see what a complete failure that's been.
MATTHEW TUKAKI: Well. It's funny isn't it? I never forget, I remember when the LG product name wasn't LG, it was actually 'Lucky-Goldstar'. And I think our first video recorder in our house was a Lucky-Goldstar video recorder. Didn't last long.
DAVID PRIOR: But isn't it amazing, South Korea is one of the most technically advanced countries, North Korea, it's nowhere to be seen. They've been left behind.
MATTHEW TUKAKI: That's right. And this is the opportunity. Steve, let's talk now about ... you've got a small business background, I believe you and your wife, Astra, started up a small business on the Gold Coast - we love the Gold Coast by the way -
STEVEN CIOBO: Great. Good to hear.
MATTHEW TUKAKI: Now, what more can we do to engage small business into the equation?
STEVEN CIOBO: Well, I think Australians, naturally, are quite entrepreneurial. And this is a great thing for our country. It's those small businesses out there, the mums and dads, the people that are just taking a punt - that actually power our economy. Because they're also the people that actually employ millions of Australians. I mean, often the media will focus on a big factory, or a big hotel, or some big entity, and sure, they might employ 300 or 400 people. But you know what, in any suburb, all across this country, there's a whole host of small businesses that are out there, that each employ one or two people. And when you add them together, we're talking about the single biggest economic driver in our country. Now, what I want to encourage people to do is to embrace that entrepreneurial spirit, to realise that they have now, thanks to the internet and other technology, more ability to actually sell to customers all around the world than they've ever had before. I mean, now you can open up a shop, and not just trade with the people that might walk through your shop front door. Your shop could in fact be your kitchen table. You could have a web presence, and you could be selling to people all around the world. I mean, the mind boggles at what they can do.
DAVID PRIOR: Times have changed, haven't they?
MATTHEW TUKAKI: We were talking with Airtasker.com - Tim Fung, one of the co-founders, an Australian success story. I mean, quite an innovative, creative idea. In fact, you might appreciate this, Steve, for anyone that doesn't want to do stuff on the weekend, like myself and David. Apparently on this site you put the things you don't want to do, and other people will come and do them for a price. One of them, I think, last week, wasn't it David 'Deconstruction of an Ikea wardrobe' for 75 bucks. I'd take a sledgehammer to that. But Steve, let's just talk a little bit more and round this out, by saying what is the future for free trade, and what more can we expect to see from the Australian Government as it supports small business, or Australian business more generally, taking it up to the world?
STEVEN CIOBO: Well, I hope that the future of trade is a strong one. The fact is that trade helps to drive economic prosperity around the world. I mean, literally, there have been hundreds of millions of people, hundreds of millions of people that have been lifted out of poverty as a result of trade. Now as I said, there are some people - the cynics - who'll say, 'Woah, hang on! Those people are getting richer and it's all of us that are paying the price.' But, the fact is that's simply not the case. I mean, people will often lament, for example, that we see closures of factories from time to time here in Australia. And we do. I mean, take for example the car industry. But what they don't know is that because of the free trade agreements that we've put in place - and just to give you but one example - Boeing invested over $1 billion into a facility here in Australia that now employs something like 1200 people. Advanced manufacturing, you know, high-paying jobs that are really going to provide more income to Australia and to Australians than what we had previously. Likewise with the closure of, I'm pretty sure it's Ford; Ford's kept their design team in Australia because they want to use Aussie creativity and ingenuity to develop new vehicles and new approaches as part of the development of their vehicles. And again, high-paying, great jobs that Australians are getting access to, that otherwise would not be here, except for the fact that we've got these trade agreements, export agreements, in place.
MATTHEW TUKAKI: We've been joined by Steve Ciobo, Federal Minister for Trade, Tourism and Investment. And of course, shout-out to all of our listeners up there on the Gold Coast. He's also the Federal Member for Moncrieff. We love the Gold Coast, don't we, David?
DAVID PRIOR: Yeah, we love the Gold Coast.
MATTHEW TUKAKI: Steven Ciobo, mate, thank you very much for joining us on Talking Lifestyle.
STEVEN CIOBO: That's a pleasure, all the best.