RISHAAD SALAMAT: Joining us live from the Credit Suisse Investment Conference is the Australian Minister for Trade and Investment, Andrew Robb. Mr Robb, thank you very much for joining us. Well you’re open for business. You were probably never really closed really. What’s changed?
ANDREW ROBB: Well, in many respects over the last few years, I think our predecessors have left somewhat of a legacy involving a lot more regulation; heavy dependence on government spending to fire up growth; and it is our determination to change that in order to maintain some strong resources and energy projects throughout Australia, but also to facilitate the move to wider growth across other areas of the economy if we are to sustain what has now been nearly 23 years of uninterrupted economic growth.
RISHAAD SALAMAT: Yes, and of course many people have accused the Australian economy of being too reliant on resources. Now what’s your view on that, and this trifecta of trade – is what your Prime Minister is referring to at the moment, in these trade agreements with Northern Asia. How much is that designed to get yourself off this dependency – as some would put it – on resources?
ANDREW ROBB: Well two things. Firstly I’d say to you that reports of the death of the mining and energy boom in Australia are fairly significantly exaggerated, to paraphrase Mark Twain in a way. We feel that over the next three to four to five years, there will be – especially in the energy space – there will be something in the order of $250 billion worth of projects that will be decided somewhere around the world, and we’re well placed, if we can become more competitive again, we are well placed to capture so much of that.
That will give us a bridge while we develop our food and agriculture; while we enhance our education; our tourism; our medical research and health fields. All of these areas are great strengths in Australia. And with the exploding middle class in the region around us, this is where we are seeing our future in many respects. A balance between resources and energy, with these other areas of great strengths that Australia has.
RISHAAD SALAMAT: I want to move on in a second to the trifecta of trade, but I just want to get your view on the effective ‘shutting down’ of the motor industry in Australia over the next two or three years. How big a blow is that?
ANDREW ROBB: Well it’s been in the pipeline for a long time, to be honest. Successive Australian Governments of all colours have thrown billions of dollars at the car industry. Unfortunately, it is not an area which we have a comparative advantage in compared with the rest of the world.
So as a new government, it has been our view that we’ve got to help transition out of motor vehicle manufacturing, and into higher value manufacturing – medical devices and a lot of high tech manufacturing areas. I think there’s still enormous potential for manufacturing in Australia – but the car industry, it’s been on the cards – I think it has been anticipated by the markets, it has been anticipated by many investors.
We have got other major strengths, especially when you consider the explosion of the middle class. That’s why we are focusing heavily on Korea and Japan and China, and other parts of Asia.
Those three countries alone make up fifty per cent of our total exports. And things like beef – two years ago we exported 60 thousand tonnes of beef to China. Last year we exported nearly four times that amount. There is really a growing demand for high quality food and agriculture in the region. We can capitalise on that, and it can really be a springboard for sustained economic growth and sustained job development.
RISHAAD SALAMAT: Minister, I mean you have probably hit the nail on the head there, because when we talk about this ‘trifecta of trade’, what Tony Abbott of course refers to here, and he does mention China, South Korea and Japan as well, each one of these countries represents a huge opportunity, it’s already a great deal of your trade already, as you have just alluded to, but you plan to wrap things up in the next six months having trade agreements with these three countries. What shape are they going to take, the individual ones?
ANDREW ROBB: Well, we have finished already the South Korean, we will sign that in 10 days’ time. That is a really high quality trade agreement, especially on agriculture, liberalising physically every area of agriculture, except for rice. And services are very important. I think the region is at a point where if they are to keep growing and accommodating the middle class emerging in the region, they are going to need significant services to help them train the trainers if you like, and Australia is very well placed on so many fronts, to assist in providing first class services, and the agreements are very much focused on agriculture and services, and investment. How we can encourage investment from those countries in a very targeted way, an effective way that can help us deliver the sorts of 21st century services and products that we can do well in Australia.
RISHAAD SALAMAT: Minister, just a final question, I think that you were planning to go to Moscow but due to the crisis in the Ukraine you’re not anymore. Now tell me, what about sanctions on Russia here as well, and how will they affect Australia?
ANDREW ROBB: Well, it’s quite premature I think, the question of sanctions, but you know Russia is an important market for us, it’s not huge, but in terms of beef and other areas it’s quite a significant market, and of course it’s part of the region, and over time we want to have good trade and political relations with Russia. It’s unfortunate the moves they have made in recent times, which the world has damned in fairly strong fashion but let’s see how things unfold. In the future, as in the past, Russia has been and will be again, quite an important part of our trading relationship.
RISHAAD SALAMAT: Thank you very much indeed Minister. Andrew Robb there the Australian Minister for Trade and Investment.
ANDREW ROBB: Thank you.
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