David Speers: We spoke at the start of the program about today's, well, historic current account surplus – the first one of these we've seen in 44 years. Not since 1975 has the Australian economy been taking in more than it's been spending. Well, with me now is the Trade Minister, Simon Birmingham, for a look at this. As I say Minister, it's a long time since this has happened. I think we were both just one-year-old when this last happened in 1975, but is it a good thing or a bad thing to have a current account surplus?
Simon Birmingham: Well, it's unquestionably a good thing to see Australia's exports at such a strong level. Now, the current account surplus, you're right, is a rarity in modern Australia, and so whilst it's nice to see – it gives us something to talk about and it's great to see the focus it provides us to be able to talk about our export strength as a nation – there are equally times where it's good and positive to see a significant investment by Australian business that may see occasionally surges in our import volume. So, we shouldn't get too fixated about the current account surplus versus deficit. But unquestionably, the good news in this data is to see our exports at record levels – $470 billion through the financial year; growth of around 15 per cent on the previous year; and growth across a number of countries. And the key thing across those countries is they're nations where we've struck free trade agreements, and that's reason as to why we're growing and keep expanding the opportunities for Australian exporters.
David Speers: How much of that good news on the export front has to do, though, with the iron ore price during the June quarter?
Simon Birmingham: So certainly that played a big role, and we should expect to see some fluctuation in terms of, not only the iron ore prices, but also as a result of that the value of our exports, as well as what happens in terms of the current account. But, we've seen growth in our exports across countries and sectors.
David Speers: But by that do you mean this won't be sustained in surplus – that we will likely see a return to a current account deficit for the next quarter?
Simon Birmingham: Look, I will leave it for the economists to make the predictions quarter-on-quarter, but I would expect to see as a result of the declining iron ore price, logically, there'll be a decline in the value of our iron ore exports. But we've seen, of course, adjustments to the Australian dollar happen in that timeframe. And there are a range of other different factors at play here. Indeed, one of the factors influencing the current account [audio skip] over the last couple of decades the huge growth in superannuation holdings by Australians. And from that, the overseas investments that those superannuation entities make on behalf of Australians. And so, there are a lot of different moving parts here. But in an export sense, in a pure trade, in goods and services sense, yes, the iron ore price has come down a little bit. It's still above what we budgeted for. It's below the peak that we've seen. Ultimately that will as commodity prices do keep moving around, but it doesn't change the core factor there, which is that across countries and across goods, services and commodities we've seen growth in our export value and volumes, and that that is underpinned by the fact that Australian exporters have easier, preferential access into a range of markets because of the types of free trade agreements that the Liberal-National Government has struck over the last six years.
David Speers: Does the fall in imports that we've seen in these figures point to some weakness?
Simon Birmingham: Well again, you will always see movements up and down. As I said at the outset in your first question there, there are times we're seeing lifts in imports. It can often be driven by business investment decisions, particularly can be quite lumpy if they are significant, high-cost capital items that are imported at particular points in time. So, there's all sorts of movements that occur in these figures over a quarterly basis. Now, what we've been looking for as a Government is to see good, strong, steady growth in our export volumes and values. That's what we've been able to achieve and that's where our eye is in terms of continuing to grow those exports because more exports from Australia means Australian businesses are doing better; and it is Australian businesses doing better that has helped to fuel the 1.4 million jobs that have been created on our watch.
David Speers: Can I ask you about the US-China trade war and the latest twists and turns here? China is now [audio skip] US at the World Trade Organisation in relation to the US tariffs on- 15 per cent imposed on Chinese goods. Does Australia support this action from China in the WTO?
Simon Birmingham: Look, I haven't looked at the detail of China's action there. Those are matters that the WTO will determine through their processes. Ultimately, what we support and continue to urge is for the parties to actually re-engage in dialogue. It is concerning that there is apparently not at present another scheduled round of discussions and negotiations. So we don't want to see a circumstance where we see continued escalation of competing tariff hikes on either side of this dispute and yet no dialogue happening to try to create or find an off ramp for it. Because what this dispute is doing is it's driving downwards the growth in global trade levels. Australia to date, has been able to buck that trend a little bit, but we have growth in global trade volumes, according to the IMF, at the lowest levels [audio skip] prices. That's resulted in key international agencies downgrading growth rates for economic growth, and that of course is bad news for everybody around the world and that's why we want to see the parties come back to the table and find a way to end the escalations of this dispute; and ideally, to deescalate it and remove some of these tariff hikes.
David Speers: As a general principle, they shouldn't be whacking unilateral tariff hikes on each other should we? I mean, that's not how the world trade system is meant to work.
Simon Birmingham: Well, Australia has said two things quite consistently through this process. One is that we share concerns about the need to ensure that countries don't engage in forced technology transfer or intellectual property theft, and that those issues ought to be addressed for the sake of all countries. But two, that we don't support the unilateral application of tariffs in ways that undermine free trade and undermine economic growth. And so, we have a clear position on that. Our position is broadly consistent with that of most other, particularly developed economies throughout the world with most of our other trading partners. But ultimately, only China and the US can manage to solve this dispute. We can't solve it for them. Our advocacy is but advocacy. What we can do as a Government is continue to try to buttress Australia through our budget position we took this year of tax cuts and infrastructure investment; as well as continuing to try to find new market opportunities for Australian farmers and businesses. And that's why seeing our Indonesian free trade agreement come into force is so important, and why the Labor Party ought to end their hesitation about supporting it and just come on board, give the certainty that that agreement will come into operation, which will also give people greater confidence about what can be achieved in our ongoing negotiations that involve the EU, or the RCEP partners, including India and others.
David Speers: Just quickly, Minister, the Tamil family who could be deported as soon as tomorrow. Do you think they should be allowed to stay?
Simon Birmingham: David, you know, there are often in immigration many difficult, challenging cases. Now, this is clearly one that has captured the emotion and the attention of many Australians. The facts are that courts have heard cases on, I understand, seven different occasions in relation to members of this family. And on each of those occasions they've found them not to be refugees, not to qualify for Australia's humanitarian intake in that sense. Now, we'll see what the court finds tomorrow. And of course, the Government always works through these court decisions carefully. But we do have to recognise that our approach as a Government – of saying that those who chose to come here by boat but who have not been found to be refugees not be resettled in Australia – has sent a very clear message that has been a successful part of our policy [audio skip] as new boats stopped the deaths at sea but enabled us to make sure that every one of our humanitarian places now is filled, ideally by those who are in refugee camps, who are applying through proper processes, who are often in the most needing places.
David Speers: Sure, but as you know, here we've got a family in the community, a country town in Queensland. They want this family to stay. The Minister has the power to let them stay. They need workers in these little towns. Is there not an argument here that this is a case that deserves that ministerial power?
Simon Birmingham: I understand the arguments, but also we have been incredibly consistent and it is that consistency as a Government that has underscored the success of our policies in stopping those boat arrivals. And it is because of determination and consistency that we've stopped those deaths at sea; that we've been able to point the humanitarian program back to taking people based on their need, based on thorough assessment; not based on their ability to be able to get themselves [audio skip] place.
Look, Simon Birmingham, Trade Minister, appreciate your time this afternoon. Thank you.
Simon Birmingham: Thank you. My pleasure.
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For a full transcript please visit www.senatorbirmingham.com.au/news/interview-transcripts/
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