STEVEN SEDGWICK: Andrew Robb is the Minister for Trade and Investment of Australia. Nice to see you Sir, thanks for joining us. Your stated aim is to remove government from the centre of economic activity. To roll back on regulation, roll back on the states, so actually the private sector can fill the void. Are they doing that at the moment? The RBA have left rates unchanged now, eight meetings in a row, your government wants to pull back but is the private sector ready to move back in?
ANDREW ROBB: We believe it is. There’s been a marked increase in confidence in the last few months since we came to power. A lot of the steps we’re taking to reduce business costs, increase trade and investment, these sorts of things, are injecting a lot of confidence.
We’ve finalised two Free Trade Agreements with two of our biggest export markets, South Korea and Japan. All of these things are adding up and I think it’s giving the confidence for business to reinvest and to replace the heavy-handed government that’s been really choking off so much activity.
STEVEN SEDGWICK: You mention the trade side of things. It may well be a bit patronising to say so, but a lot of people will look at Australia and say: What goes in China, what goes in those big economies there, effects Australia disproportionally in many ways. Is it all about trade with China? Is it all about trade with your Asia Pacific neighbours?
ANDREW ROBB: Well, fifty-one per cent of our export market is now Japan, South Korea and China. China’s 32 per cent. It’s our biggest export market now. So obviously they are very important to us, but bear in mind we’ve had uninterrupted economic growth now as a country for 23 years, despite all of the crises that have come along globally.
And yet we have still, because of all the structural adjustments we’ve made, a very open economy, which has made us very resilient. As a consequence I think, sure, we’re benefiting from those big Asian countries, but we have got breadth and depth in our trading relationships around the world.
STEVEN SEDGWICK: Colleagues (of mine) know Perth pretty well, and they’ve both spent a bit of time out there as well. They’re very concerned obviously about the mining investment story there, because of course, the end-user demand has tailed off a little bit, as China has slowed down a bit. Are you worried about the great legacy, the great situation in mining and the CAPEX falling back and that’s going to affect jobs and indeed the private sector more generally?
ANDREW ROBB: Well again, the resources sector is tapering off somewhat but the energy sector, with gas, LNG in particular, where we’re one of the lead exporters in the world. There are hundreds of billions of dollars’ worth of projects coming on stream over the next ten, fifteen years.
So, if we have our cost structure as it should be, and we need to improve it, we can capture many of these big projects. And there’s a very strong resources and energy future, but we are moving a lot more, agriculture starting to dominate, and services.
STEVEN SEDGWICK: We’ll talk about agriculture. You guys have got bragging rights over the Americans at the moment, haven’t you? You got that big beef deal with Japan about a month ago – a bilateral deal. Why do you need TPP if you’re so successful at bilateral?
ANDREW ROBB: Well, some would say we’re greedy (laughs), but we’re trying to cover all bases.
STEVEN SEDGWICK: But is multilateral better? I mean, look: you got a deal with Japan; you were the first major agricultural exporter to get that. The Americans didn’t get one. They were a bit sniping about it. We know that they were a bit patronising about it, saying ‘it wasn’t that ambitious.’ But I mean, why do you need multilateral TPP when you can go off and do these deals individually?
ANDREW ROBB: To me they’re like bricks in a wall. I mean, every bilateral can help; it helps through restructuring an economy, helps open markets for us. But you’ve got to keep growing your market base and if you get to a regional deal, which includes Japan and the US, you get more seamless trade between countries. It’s cheaper in terms of the costs of moving stuff around, and all the red tape and the green tape is reduced. All of these things help trade between nations. So they’re like building blocks, they move towards a multilateral outcome.
STEVEN SEDGWICK: But who does it help, Andrew? Does it help the corporates? I read a quote that said that the corporates would like to write the legislation for these big trade deals because it benefits them so much. Does it really have the GDP impact that is being touted?
ANDREW ROBB: Well, I’ll give you an example. New Zealand did a Free trade Agreement with China four years ago - mainly dairy, that’s a big part of their economy. We’ve got a big dairy industry. In the four years, New Zealand has increased its revenue from dairy by $2.2 billion. Over the same time, we’ve increased our revenue from dairy to China by $60 million. So there is a huge advantage in having these Free Trade Agreements. We’ve had Free Trade Agreement since 1983 with New Zealand. Every year, year on year, we’ve seen an eight per cent increase in trade between our two countries for a quarter of a century because of that Free Trade Deal.
STEVEN SEDGWICK: Andrew, how do you feel about your billionaires fighting in the streets? (Laughs)
ANDREW ROBB: Well, I’ve worked with both those guys. And boys will be boys, you know.
STEVEN SEDGWICK: Who’s your money on (laughs)?
ANDREW ROBB: Those two guys, they went to school together, and I worked with James Packer and with David Gyngell. And they’re pretty fiery, but I think it’s back in their boyhood. They’re going for each other.
STEVEN SEDGWICK: Well, I thought the Australians had calmed down a bit. As you thrashed us (England in Test cricket) 5-0, I didn’t even think you needed to fight in the streets anymore!
ANDREW ROBB: Well, you know, it’s a different thing with those two. They’ve had the strongest relationship, so I suspect that it’s tipped over the edge a few times.
STEVEN SEDGWICK: Andrew, very nice to see you.
ANDREW ROBB: Thank you.
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