Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Thursday, 19 April 2018
RACHELLE AKUFF: I spoke with Australia’s Finance Minister Mathias Cormann about Australia’s economic goals and where it stands on US, China trade tensions.
MATHIAS CORMANN: We are focused on pursuing a pro-growth, pro-jobs, pro-opportunity agenda. As part of that we are pursuing reforms to make our tax system more growth friendly, reducing business taxes for all businesses down to 25 per cent. We are pursuing an ambitious free trade agenda which has included finalising free trade agreements with China, South Korea, Japan and of course the Trans Pacific Partnership agreement with 11 countries, sadly not involving the United States. We are pursuing an ambitious infrastructure program designed to get our products to market at a lower cost, more efficiently, more safely. We are focusing on making sure that households and business can have access to affordable, reliable energy supplies and getting additional investment into our energy generation sector. These are at a high level, some of the things we have been doing.
RACHELLE AKUFF: And speaking of trade ties, you mentioned the Trans Pacific Partnership, the TPP. What is your take on the US joining? There was some renewed hope there for a minute, seems like the US president pulled back a bit. What are your thoughts?
MATHIAS CORMANN: Our thoughts are that we are in favour of open markets and free trade. We believe for Australia, we believe for countries around the world including the United States, including China for the matter, engaging in global trade has helped lift living standards. It has helped lift hundreds of millions of people out of poverty. It has helped create opportunities for more jobs as we have been able to sell more of our products and services in our respective countries. It has helped our consumers get better access to competitively priced products from other parts of the world. So we are unequivocally in favour of open markets and free trade. The Trans Pacific Partnership represents an area of about $14 trillion worth of GDP, and about a quarter of our export volume goes into those countries. We would welcome the United States re-joining. It would be fantastic if they did, but it is a matter for the United States. If at some point down the track the United States decides that it is in their interest to be part of this exciting, rapidly growing part of the world, then we would welcome that.
RACHELLE AKUFF: Now China is Australia’s biggest trade partner both in terms of imports and exports. So how would you characterise this relationship?
MATHIAS CORMANN: It is an incredibly important bilateral relationship. As you say it is our most significant trade relationship. The two most important economic relationships for Australia very clearly are our relationship with China and our relationship with the United States. The United States is the biggest investor in Australia and China is our biggest trading partner and the United States are our second biggest trading partner for that matter. They are both very important economic relationships for us.
RACHELLE AKUFF: Does it put Australia in a difficult position when you see these rising trade tensions between two key trading partners for you?
MATHIAS CORMANN: We do not believe increasing trade tensions are in anybody’s interests. We do not believe it is in the interest of people in the United States, we do not believe it is in the interest of people in China and it would not be in the interest of people in Australia. Nobody wins from trade wars. There are no winners from trade wars. We believe, and we are quietly optimistic, that the issues that have emerged in recent times, that have been put on the table in more recent times by the United States, will be able to be worked through and that we will continue to focus on a win-win way forward that will help to continue to create opportunities for people in all countries to get head.
RACHELLE AKUFF: One of the issues that was raised by China’s Ambassador to Australia was this need that Australia needs to step up in terms of increasing mutual trust. What are your thoughts on that?
MATHIAS CORMANN: We value our relationship with China. As I have indicated to you before, it is an important economic relationship for us. There have been some issues in recent times that have come up and we will work our way through those.
RACHELLE AKUFF: Something else, we know that immigrants are responsible for a lot of the growth in Australia but there is a call now for reforms. What sort of reforms would you like to see?
MATHIAS CORMANN: The Government is very committed to our current immigration program. Australia is a migrant country. Australia today has been built significantly by migrants that have come to Australia from all corners of the world. Australia is fantastic. I am a migrant to Australia. Australia is a country where wherever you come from, if you come with the right attitude and with the commitment to do the best you can to help make Australia a better place, there is no limit to what you can achieve. Our migration program is non-discriminatory, it is entirely focused on getting the best people to come and help us become an even better country. From time to time there are conversations about whether we should have more or less and what sort of migrant mix we should attract. From our Government’s point of view we believe that the level of intake is about right, that we should focus on in particular attracting younger migrants with the sort of skills that are required in order to continue to grow and develop our economy. That is the way we are approaching it.
RACHELLE AKUFF: Looking ahead, we saw that the IMF’s growth outlook for Australia was at about three per cent. How does that square up with how your Government sees it and what would really be driving that?
MATHIAS CORMANN: The IMF now has upgraded their growth outlook for the world and for Australia for three consecutive updates now, which is great. It is broadly in line with where our growth outlook is at. We are now in our 27th year of continuous growth in Australia, which is a world record. We are focused on making sure that that growth continues so that more jobs can be created so that Australians today and into the future can have the best possible opportunity to get ahead. The growth agenda that we talked about at the beginning of the interview is a part of that. As the global economic growth outlook for the world improves, that is good news for Australia. Stronger growth in the US, stronger growth across Europe, strong growth continuing in China, stronger growth now in places like Japan and strong growth in India - all of that is good for Australia. It gives us a lot of opportunity to sell our products and services into those markets.