Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 4 November 2016
HAIDI LUN: Minister we have been talking a lot about the two US Presidential candidates and opinions when it comes to the Trans Pacific Partnership. Are you still optimistic? A lot of people are saying this is dead in the water regardless of who enters the White House.
MATHIAS CORMANN: We think it is a very good agreement. It is a very important agreement. It covers 40% of the world’s economy and from Australia’s point of view we certainly are quietly hopeful that there is an opportunity to pass the agreement through the US Congress. World trade and the world economy would benefit.
HAIDI LUN: What happens if it is not passed? I mean certainly there are expectations that if you have Hilary Clinton in the White House there is a greater chance that she will back away from, a little bit from the sentiment so far. But what happens? Do you work harder to establish these bilateral deals?
MATHIAS CORMANN: From an Australian point of view that is what we have been doing. We have pursued a very ambitious free trade agenda and we have been able to finalise free trade agreements with China, South Korea and Japan. We are now focused on finalising a free trade agreement with India. We are keen to pursue a free trade agreement with Indonesia and indeed we are working with the European Union. We will continue to pursue bilateral deals, but we do believe the Trans Pacific Partnership in itself is a very good opportunity for the world economy that should not be lost.
HAIDI LUN: If the TPP is scrapped, I mean what kind of signals is that really giving to the idea of globalisation of global trade given that we have seen this rise in protectionism.
MATHIAS CORMANN: The global economy has gone through a challenging period since the global financial crisis and there is a level of anxiety in communities around the world that governments and business leaders need to take into account and work to address, to make sure that we take people with us to explain the benefits of open economies, of international trade, of investment flows and how that will continue to help drive increased living standards.
HAIDI LUN: Trump has really seen a resurgence in the polls in the last couple of days. Does your government have some sort of game plan on how it plans to deal with a Trump Presidency and the policies that might entail?
MATHIAS CORMANN: Any Australian government works well and will continue to work well and works to have a good relationship with whoever the American people chose to be their President. It is very much in our national interest for that to be the case in the future, whatever the outcome next week.
HAIDI LUN: This trip that you have had in Asia, has the issue of Australia’s foreign investment rules come up at all because there has been a great deal of confusion, especially coming through from domestic media in China about the clarity when it comes to Australia’s rules? You have had a couple of bad headlines Ausgrid, Kidman, is that something that you are here to address?
MATHIAS CORMANN: Over the last 20 years about ten thousand foreign investment proposals have been assessed through our foreign investment review board process and only five of those more than ten thousand proposals have actually been rejected on national interest grounds. Overwhelmingly Australia is an economy that is very much open to foreign investment. We rely on foreign investment for our economic development and our future economic prosperity and we will continue to attract significant levels of foreign investment. Like any country around the world, Australia does have a process to ensure that any foreign investment proposal is not contrary to our national interest and I think people across the world do understand that.
HAIDI LUN: Do you think the process could be clearer?
MATHIAS CORMANN: We are always open to suggestions on how the process can be further improved. From our point of view it is very important that the Australian people have confidence in the integrity of that process to ensure that foreign investment continues to have high levels of public support in the Australian community.
HAIDI LUN: There is a sense of dwindling public support when it comes to foreign investment in Australia, particularly when it comes from Chinese money. How do you balance that given that Australia does need that investment money?
MATHIAS CORMANN: I am not sure that I agree with that characterisation. The assessments that we made are not country specific. The assessments that we make relate generally to the nature of the asset and the nature of the transaction. Some assets are more sensitive, some transactions are more sensitive and any country, any sovereign country has a process in place to ensure any foreign investment is not contrary to their national interest.
HAIDI LUN: But perception though, I mean China’s Minister of Commerce calling the decision to block Ausgrid as being severely hurtful, as being protectionist, disincentivizing Chinese companies from investing in Australia. I mean surely that is a problem?
MATHIAS CORMANN: We do not accept that characterisation at all. It was not a country specific decision. It was a decision related to the nature of the asset and we made a decision as any other country would about what is in our national interest.
HAIDI LUN: Surely you can just make the rules clearer through?
MATHIAS CORMANN: We believe the rules are very clear. On these occasions when people like me come and travel through Asia, we go out of our way to ensure that to the extent that there is a need for further explanations, we provide those explanations.
HAIDI LUN: I want to talk about the economy, clearly this is a recovery that has in large been driven by a very very robust property market. The rebalancing when it comes to getting away from money investment to the broad economy is still happening. Are you feeling optimistic, do you feel like we are at a pretty good state at the moment.
MATHIAS CORMANN: The Australian economy is an economy in transition, from as you said a record resource investment driven growth to broader drivers of growth and a more diversified economy. Our economy continues to grow strongly, 3.3% growth in the most recent 12 month period which is higher that the OECD average, higher than any of the G7 economies. We are quietly confident that the reforms we have put in place together with various features in our system, low interest rates, floating exchange rate, low wage inflation, all of these things taken together, our investment in infrastructure, our focus on innovation, our focus on an ambitious free trade agenda, all of these things together will continue to put Australia on a strong economic foundation for the future.
HAIDI LUN: Just very quickly are you comfortable with where the Aussie dollar is at the moment?
MATHIAS CORMANN: The value of the Aussie dollar is determined by the market and we are very comfortable that that is the way it should work.
HAIDI LUN: Alright, Minister thank you very much for your time.
MATHIAS CORMANN: Thank you.