Senator the Hon Mathias Cormann
Minister for Finance
RICHARD QUEST: Those countries that are most affected by commodities, of all of the advanced nations perhaps none more so than Australia. The Australian economy is now expected to grow at a much slower pace than previously forecast by the Government. There has been political turmoil with the ousting of Tony Abbott as the Prime Minister and the installing of Malcolm Turnbull as his replacement. And now the question is how the Reserve Bank of Australia will keep growth going at a time when everything seems to be slowing down. These were all issues I put to the Finance Minister of Australia, particularly the idea that the country was being very badly hit.
MATHIAS CORMANN: Australia continues to grow. We are in our twenty-fifth year of continuous growth and unlike other commodity based economies around the world, which are in recession, we continue to grow. One of the reasons is we have pursued a very ambitious free trade agenda, including in relation to China. What we are looking at doing in relation to China is to broaden our access to that market beyond resources. Our China-Australia Free Trade Agreement is a very good way of achieving just that.
RICHARD QUEST: Of all of the nations that are, the advanced nations that, the OECD countries, in many ways where we can see the most visible effect of a slowdown in China, Australia is there isn’t it? You’re seeing it right across the cut in commodity prices, to the mining jobs, right they way, it is a serious matter.
MATHIAS CORMANN: Our trade relationship with China is certainly the most important trade relationship we have. Yes, China’s ongoing success is very important to Australia. What I would say is that China, despite all of the commentary, continues to grow strongly by international standards. Clearly they are going through a transition to more sustainable growth, but we are quite optimistic about what lies ahead.
RICHARD QUEST: Do you expect the Federal Budget to have to be impacted because of this slow down?
MATHIAS CORMANN: As I say, our economy continues to grow. We have an orderly and methodical process in terms of making updates to our Budget position. Our next update will be in December this year, in our Mid-Year Economic and Fiscal Outlook. We will be considering these sorts of questions in that context.
RICHARD QUEST: Do you think that the Australian people need to be prepared for some hard times.
MATHIAS CORMANN: The Australian people and all of us, we are focussed on doing everything we need to do to be the most successful we can be. We are always facing some challenges, but there are also a lot of opportunities for us. We are part of the Asia Pacific, where most of the global economic growth will continue to be generated over the years and decades to come. We are focussed on putting ourselves in the best possible position to take advantage of these opportunities.
RICHARD QUEST: On the question of trade, TPP, Trans Pacific Trade Partnership, this has now been agreed, we don’t really know what’s in it. To quote Hillary Clinton before she agreed, “until I’ve had the lawyers had a look at it,” as Madame Lagarde said, “the lawyers have, I’ll know what I think about it when the lawyers have seen it.”
MATHIAS CORMANN: Australia is a trading nation and whatever initiative around the world frees up trade is good for Australia. This is an opportunity for Australia to improve our access to about forty per cent of the world market through this TPP agreement. So we are very supportive and we are very pleased that this has been successfully concluded.
RICHARD QUEST: It’s successfully concluded, but its not a done deal yet, because in the United States, of course the President’s going to have problems, not only with his own party, and there are some in the Republican party and even Hillary Clinton says that she is against it. Are you worried about the US ratification process?
MATHIAS CORMANN: Every government has agreed and it is now a matter for us domestically to go through our domestic processes. I am sure that the Americans will do that in the appropriate way.