Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Thursday, 6 July 2017
DAVID SPEERS: What does Australia want to get out of this G20 summit, on climate change, on trade, on terrorism and indeed on North Korea. As I say, the Prime Minister will be here in the next few hours. But already here is the Finance Minister Mathias Cormann. I spoke to him a short time ago.
Mathias Cormann, thanks very much for your time, good to see you here in Hamburg. Now the G20 is going to be, no doubt now, focussed very heavily on what’s been happening in North Korea and its provocations, its latest missile test. How concerning do you think this is for Australia not just in terms of the military threat but what this could mean in terms of trade sanctions now as well?
MATHIAS CORMANN: Australia has condemned North Korea’s actions most severely. Not only are we implementing the United Nations sanctions against North Korea, we also are expanding on those sanctions through autonomous sanctions of our own. This is an extremely concerning development. North Korea’s actions are utterly unacceptable. We call on all countries to comply with the United Nations’ imposed sanctions.
DAVID SPEERS: To that end though, is it time to look at sanctions against others who do trade with North Korea and we know we’re talking about China here.
MATHIAS CORMANN: The Australian Government is not considering any trade sanctions against China. Of course not. But like others, we are strongly of the view that China is the one country with the necessary leverage to be able to rein in the North Korean leadership.
DAVID SPEERS: Are they doing that do you think?
MATHIAS CORMANN: China maintains that they are imposing, complying with the United Nations sanctions against North Korea. We believe that China is in the best position to get North Korea to come to its senses. That is obviously going to continue to be part of the conversation.
DAVID SPEERS: The US is making some threats. Nikki Haley, the US Ambassador to the United Nations, says there are countries that are allowing, even encouraging trade with North Korea, such countries would also like to continue their trade arrangements with the US. That’s not gonna happen, she says. So there’s a bit of a threat there that they might contemplate some action against China.
MATHIAS CORMANN: As I’ve said to you, Australia is not considering trade sanctions against China.
DAVID SPEERS: Well Barnaby Joyce who is acting Prime Minister has said that the Australian Government has some sympathy with that US line.
MATHIAS CORMANN: What Barnaby Joyce was talking about, and he has since clarified this, was individual companies that might be working with North Korea in breach of relevant provisions. There are sanctions in place in relation to these sorts of circumstances now … interrupted
DAVID SPEERS: The individual companies including potentially Chinese companies?
MATHIAS CORMANN: That is already the case now. That is not a new development.
DAVID SPEERS: Although Chinese companies and the Chinese Government sometimes is very hard to tell them apart.
MATHIAS CORMANN: I have answered your questions.
DAVID SPEERS: Right, now as far as trade goes, the G20 as an organisation, as body, really does embody trade, open trade, trying to break-down trade barriers and yet we have the US making these threats about tougher trade sanctions, we have got Britain on a path to Brexit from the EU. Is the G20 still working as an organisation for open trade?
MATHIAS CORMANN: I would not have thought that Brexit has anything to do with restricting trade. If you listen to what the United Kingdom is saying, they are very much looking forward to engaging in more free trade and to open up their market more perhaps than what might have been the case in the past. So I don’t think that you can put it all into the same basket. From an Australian point of view, we are unequivocally committed to free trade, to open markets. We believe that in Australia and around the world, free trade and open markets have led to a lifting of living standards. We believe that there is great opportunity in the future for more trade and more open markets to continue to drive improvements in living standards right around the world.
DAVID SPEERS: But the question has been whether trade is a zero sum game. It seems to be how President Trump sees it as a winner and a loser. That’s not the Australian attitude is it?
MATHIAS CORMANN: That is not the evidence in the market. If you look at the evidence in the world over decades now, trade, open global competition is an engine for innovation, is an engine for improvements in living standards on the back of delivering better products competitively priced. If any country around the world is able to export their products and services around the world into the global market, that is good for exporting businesses. It means that they can employ in Australia more Australians, pay them better wages. But for consumers it also means that they can get access to the best possible products from around the world at the best possible price.
DAVID SPEERS: But this can be a difficult argument to prosecute even in Australia at the moment can’t it at times whether it is the car industry shutting down, whether it is the trade in our natural gas, forcing our prices. People have concerns that the system of global trade just ain’t working for them.
MATHIAS CORMANN: Competition can be disruptive and it does force you to be at your best. It does force you to focus on those areas where you can be better than others. While it is something that is good in aggregate for the economy as a whole and for the people in Australia as a whole, there is no doubt that from time to time it impacts on different sectors of the economy in different ways. It is incumbent on us as policy makers and it is incumbent on business to help those people who are impacted by those transitions to help them transition. That has always been the case. When you transition from one circumstance to another, when you transition to new economic opportunities for the future, then you have to make sure that people who are impacted by that most directly are assisted those transitions.
DAVID SPEERS: Let me turn to climate change because Angela Merkel, the German Chancellor, the Chair of this G20 summit has made it clear that she wants something of a united front on support for the Paris Agreement. Donald Trump, the Trump Administration is withdrawing the US from the Paris Agreement. Angela Merkel essentially wants other G20 countries to make it clear here in Hamburg they are still on the board. It is not quite clear they all are though, there is some doubt over some countries, Russia, Saudi Arabia, Indonesia as well. How important do you think the G20 will be to give a strong statement of support for the Paris Agreement?
MATHIAS CORMANN: We let others talk for themselves. As far as Australia is concerned we have been very clear. We remain committed to the commitments we made in Paris. We remain committed to the Paris Agreement. It will be an item for discussion here at the G20.
DAVID SPEERS: But is this a bit of a litmus test, the G20? How strong the statement is on the Paris Agreement?
MATHIAS CORMANN: Again I can speak for Australia. I will let others talk for themselves. This will be no doubt one of the outcomes out of the G20.
DAVID SPEERS: So it will not matter how strong or weak the statement is for Australia, we are on board, we are staying in Paris, we are not budging?
MATHIAS CORMANN: Again as I have said to you, I can speak for Australia. Australia has made it very clear that we remain committed to the Paris Agreement.
DAVID SPEERS: What about your own view on the debate about the Government’s energy policy at the moment. The Clean Energy target, a position is coming on this, do you have any view of your own strongly?
MATHIAS CORMANN: My view, which is the Government’s view, is that we need to ensure that our policy framework when it comes to energy helps to deliver secure and reliable energy supplies at prices that are as affordable as possible and that we do so in a way that helps us meet our emissions reduction targets. So downward pressure on prices, reliable energy supplies and to do it in a way that is as environmentally efficient as possible.
DAVID SPEERS: Is the Clean Energy Target the best way to do that?
MATHIAS CORMANN: The Clean Energy Target is the one recommendation the Government is continuing to work through, to consider if and how best to deal and respond to that recommendation moving forward. There is a process to go through. We are going through that process. It is a process through the Cabinet, through the party room so there is still a way to go.
DAVID SPEERS: We have resisted talking about Tony Abbott until now, but he is someone who is quite critical about the Clean Energy Target idea. Today he has also justified his ongoing critique of the Government policy issues, he says he wants to keep speaking out on important issues for disenfranchised party members. Do you share the frustration that is being shared now by a growing number of your colleagues, Josh Frydenberg, Fiona Nash and others that this just is not helping?
MATHIAS CORMANN: I have said what I have to say in relation to this. All the way back in February and since then. I am not going provide a running commentary.
DAVID SPEERS: Is he helping Bill Shorten?
MATHIAS CORMANN: I have made all of the comments I am going to make in relation to these matters in the last few months. I stand by those comments. I am not going to keep providing a running commentary.
DAVID SPEERS: Is this because you feel you are fuelling it further, that it is best to ignore? Malcolm Turnbull will not even say his name.
MATHIAS CORMANN: David, I think you know that I have said quite a bit about this. I am focused on the job of the Government, which is to implement our plan, which is to continue to strengthen the economy and create more jobs. I am focused on all of the responsibilities that we have to the Australian people.
DAVID SPEERS: Finance Minister Mathias Cormann, enjoy the G20, thank you very much for joining us here in Hamburg.
MATHIAS CORMANN: Always good to talk to you.