ABC'S AM Program, interview with Chris Uhlmann

Subjects: Trade negotiations with China, IR reform, tax avoidance

Transcript, E&OE, proof only

6 March 2014

CHRIS UHLMANN: After eight years of negotiations a free trade deal with China has moved a step closer, with the Chinese premier Li Keqiang saying talks would be accelerated. The premier told the National People's Congress China would strive to make progress in the negotiations.

It's good news for the man who has been pushing for the finalisation of a raft of agreements. Trade Minister Andrew Robb, good morning.

ANDREW ROBB: Good morning.

UHLMANN: So can you tell us what this deal would mean for Australia if it went ahead?

ROBB: Well, it's a very encouraging signal. It could mean many billions of dollars of increased sales, exports. It could mean a greater, a closer investment relationship. You look at a country like New Zealand who struck a free trade agreement four years ago, their sales of dairy products in that time have increased $2.2 billion at the same time that our dairy sales have increased by just $60 million into China.

So that's the sort of on the ground effect of these sorts of agreements.

UHLMANN: So have countries like New Zealand though stolen the March on Australia?

ROBB: Well, in terms of China, yes they have. New Zealand have been very effective in terms of China. Hopefully we've stolen the march on them now with Korea and hopefully we will with Japan in the near future.

UHLMANN: Now you're rushing to get through these deals, are there downsides as well as upsides? We've seen that it's very difficult for Australia to compete wage-wise with China, so are there industries that might be exposed by a deal like this?

ROBB: Well, the focus of our agreement or the discussions and negotiations has been to try and ensure that the things that we are very good at - you know, agriculture, resources, education, lots of things associated with health and medical research, all of the medical devices, these sorts of things, tourism - that these are advantaged by the agreement. That's been our focus, to stay with our strengths.

And of course that means that we liberalise areas that China is strong in. Now that's the Government's intent across the board, not just for free trade agreements. And that's why there will be some pressure and structural adjustment in some cases but it is a very healthy thing for Australia and it is critical if we are to get sustainable jobs in Australia.

UHLMANN: Well, we always talk about the free movement of goods and services in deals like this. Is the free movement of labour been discussed?

ROBB: No, no it's not; no more so than the usual business arrangements which are fairly sophisticated already with China and of course the tourism market. Now our biggest tourism market, 676,000 people came from China last year to Australia as tourists. Now that was a 17 per cent increase, our biggest market.

These sorts of areas are areas that we need to develop and it also includes what happens with aviation and these other sorts of areas.

UHLMANN: Now you were always hoping to finalise this by September. Tony Abbott, the Prime Minister, is going to China next month. Could the deal be finalised by then?

ROBB: No, I don't think. We’ve still got a few stages to work through I think on the China deal.

But the important thing is that to get Premier Li making these statements about the priority and the acceleration of these negotiations sends a signal to everybody throughout his administration, and it certainly gives us the encouragement to bring it to finalisation. I see no reason that we can't conclude this satisfactorily within this year.

UHLMANN: In order to take or make the most benefit of these kinds of deals, the Australian economy has to restructure. We've seen some painful restructuring at the moment. One of the parts of that that business is pushing for is industrial relations. And we see reports this morning in the Financial Review that the productivity report on industrial relations is going to be delayed until after the two state elections. Are you shying off industrial relations reform?

ROBB: No, we're not. I mean the move that we've made as one of the first steps when taking government to re-establish the Building and Construction Commission, last time when John Howard introduced that body it led to a $7 billion a year increase in productivity. We've got a very significant agenda and we're moving on it.

UHLMANN: And finally, the Australian Financial Review has also done a lot of work on what Apple is doing and it's found it's shifted $9 billion in untaxed profits offshore. So what can be done about that?

ROBB: Well, our view has been as a Government that all companies must pay a fair share of tax and we are very strongly committed to seeking to capture that tax which has been avoided inappropriately. It's why Joe Hockey has put this issue front and square in our G20 meetings this year.

UHLMANN: Just briefly though, if Apple is doing that, is it behaving as a good corporate citizen?

ROBB: Well, look, the point is in most cases the companies are doing what is legal, but is it fair? Is it what they should do as companies that are benefitting greatly from Australian commerce? No they're not and we've got to look though in a global sense as how we tackle this problem. That's why it's on at the G20.

UHLMANN: Andrew Robb, thank you.

ROBB: My pleasure.

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