Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 7 July 2017
FRAN KELLY: So, would Australia want to get, certainly wouldn’t want to, would it be prepared to get into a trade war with China. Our Prime Minister says Australia’s response, any response will be under the umbrella of UN action. Finance Minister Mathias Cormann is in Hamburg for the G20 talks as well. He is there along with our Prime Minister, our Treasurer and our Foreign Minister, Julie Bishop. Mathias Cormann, welcome to RN Breakfast.
MATHIAS CORMANN: Good morning Fran.
FRAN KELLY:So can we just clear this issue up over the sanctions? You heard Barnaby Joyce there on the program yesterday. We all heard the Nikki Halley comments about those who might support North Korea, might need to have some trade sanctions applied. Would Australia consider applying trade sanctions against China if the American government did so?
MATHIAS CORMANN: Australia has condemned in the strongest possible terms the utterly unacceptable actions of North Korea. The position of the Australian Government is very clear. We are not considering trade sanctions against China. The Deputy Prime Minister, as you would be well aware, has clarified his remarks since his interview with you yesterday morning.
FRAN KELLY: The clarification was I think that it was not talking about China the country, but if it included Chinese corporations. Is that what we are talking about?
MATHIAS CORMANN: It is not just Chinese corporations. It is a longstanding arrangement through the United Nations that if individual companies or entities breach relevant sanctions in relation to North Korea, then there are consequences for those individual companies and entities. That is not a new arrangement. That is an arrangement that is long standing. As far as Australia is concerned, we have gone beyond the United Nations imposed sanctions, by imposing autonomous sanctions in relation to individuals and entities in North Korea.
FRAN KELLY: Donald Trump and we heard in the speech in Poland, is calling on the world to confront North Korea, quote very, very strongly. Do you have any sense of what that means? And I mean, I think it is probably safe to say isn’t it, you are there on the ground in Hamburg, that the North Korea crisis, or the North Korea issue has really taken over the agenda of the G20. Is that fair to say?
MATHIAS CORMANN: It is going to be an issue that clearly will focus leaders’ attentions. It is a very serious situation. The actions of North Korea are utterly unacceptable and they do warrant a very strong and cooperative response from the international community. The Prime Minister has been very clear. Foreign Minister Bishop and many leaders around the world have been very clear that China is in a particular position of having particular leverage over North Korea. We believe that China is in the best possible position to deploy that leverage to rein in the North Korean leadership and bring them back to their senses.
FRAN KELLY: And I think I need to correct myself, I don’t think the Treasurer Scott Morrison is not there, is he. You are there, obviously. You have been in the talks as I understand it between, the meeting between our Prime Minister Malcolm Turnbull and German Chancellor and chair of this G20 summit, Angela Merkel. There is plenty more slated for this G20 summit, trade, climate change, global growth. What was the focus of the meeting with Angela Merkel?
MATHIAS CORMANN: The meeting between the Prime Minister and Angela Merkel was very warm. The bilateral relationship between Australia and Germany is probably the best that it has ever been. But yes, there is a lot on the agenda at this G20 meeting. The Chancellor and our Prime Minister talked through all of the issues on the G20 agenda. In particular, our commitment to free trade and open markets as a key way to continue to underpin our future prosperity and growth and all of the other issues on the agenda over the next few days.
FRAN KELLY: And how much is an impediment is the position from the new US President, Donald Trump to that free trade agenda, global agenda? He has pulled out of the TPP. He has threatened sanctions in a number of places. Talking about tariffs on steel. How much concern is there that the position of the US, this changed position of the US on trade will get in the way on any kind of any G20 agreement?
MATHIAS CORMANN: From an Australian point of view we will continue to make the case on how free trade and open markets contribute to the lifting of living standards and prosperity in Australia and around the world. If you look at our track record …. interrupted
FRAN KELLY: It is kind of so strange though isn’t it, that we are re-visiting that argument though. That argument was fifteen years ago, that was the argument, we thought it had been won and free trade seemed to be unquestioned and we seem to be back in an era now where we are having to argue against protectionism.
MATHIAS CORMANN: Australia is an open, outward looking trading economy. We are well into our twenty-sixth year of continuous, uninterrupted growth, underpinned by the capacity of our exporting businesses to export Australian products and services to markets around the world. Our consumers in Australia are able to benefit from being able to purchase high quality goods and services from around other parts of the world at competitive prices. Clearly, global trade, engaging with the world at a global level has been good for Australia. We believe it has been good for the world. We will continue to make that case.
FRAN KELLY: It is four minutes to seven, our guest is Mathias Cormann, Australia’s Finance Minister. He is there in Hamburg for the G20 summit. Almost three years ago now, Australia hosted the G20 meeting in Brisbane. It set a goal for global growth of two per cent. It was aiming to support an increase in trade and competition, boost employment and development and inclusive growth. But the criticism since particularly from civil society groups and we have got the C20 there now, is that the growth has not been inclusive and that has brought us to a number of the problems we are facing today, these issues of protectionism, problems caused by Brexit for instance and the change in the attitudes in America. Would you agree with that?
MATHIAS CORMANN: No. Firstly, growth is stronger than it would have been if we hadn’t taken the initiatives that followed from the Australian presidency of the G20 in Brisbane in 2014… interrupted
FRAN KELLY: But the argument has been that it has not been inclusive.
MATHIAS CORMANN: Secondly, for growth to be inclusive, in the first instance you actually have to have growth and we have had stronger growth. Some people are trying to throw everything into the same basket. The proposition that somehow Brexit is connected to some sort of criticism of free trade and open markets is just wrong. All of the people that were arguing in favour of Brexit in the lead up to the Brexit vote were actually making the case for more free trade and more open markets. It was not an anti-trade vote. It was a vote on a whole range of things, but certainly not an anti-trade vote.
FRAN KELLY: No, but those attitudes of protectionism often go hand in hand with open borders. And certainly open borders was an issue.
MATHIAS CORMANN: Global competition is disruptive. What we experienced around the world in the last few years is slower global economic growth, which imposes pressures on sections of the community. Then you have global competition and rapid technological improvements, which have been very disruptive, again for some sections of the community. It is important and it is incumbent on all of us as policy makers, as leaders, as business leaders to ensure that those sections of the community, those sectors of the economy that are impacted by that sort of disruption are properly supported through the transition to the future opportunities that are in front of us.
FRAN KELLY: Minister just very briefly, we need to get to finance news, but the atmospherics there, it is reportedly water cannons on the streets, a hundred thousand protestors?
MATHIAS CORMANN: This is a very important meeting. A lot of things are on the agenda. We will be focusing on making the right decisions and for Australia to make a contribution to keeping economies growing and keeping the focus on national security for Australia and around the world.
FRAN KELLY: Mathias Cormann. Thanks very much for joining us.
MATHIAS CORMANN: Good to talk to you.