Transcripts → 2020


WION - Gravitas

Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia


Date: Tuesday, 18 August 2020

Australian economy, Australia’s relationship with China, Australia’s relationship with India, digital economy

PALKI SHARMA UPADHYAY: Hello, welcome to the interview with me is the Finance Minister of Australia, Mr Mathias Cormann. Mr Cormann welcome to WION.

MATHIAS CORMANN: Great to be here.

PALKI SHARMA UPADHYAY: Earlier this year you decided to step down from your position in the Cabinet, but in the months ahead you have your task cut out. More than one million Australians are out of work. Australia is witnessing its first recession in twenty-nine years. What is your plan of action? 

MATHIAS CORMANN: Right now, like every country around the world we are grappling with both the health and economic effects of the coronavirus pandemic. Australia both from a health and from an economic point of view is in a better position than most. Yes, our economy has been contracting, but it has been contracting significantly less than other economies around the world, 0.3 per cent in the March quarter. Our unemployment rate at 7.5 per cent is higher than what it was but still well below other parts of the world, certainly in a better position than the OCED average. Right now we are focusing on continuing to roll out our historically unprecedented level of fiscal support, providing support to business, to keep as many businesses alive as possible, keep as many Australians connected to their employer as possible, providing enhanced support to those Australians who lost their job. At some point we will have to transition carefully out of this transitional support back into life as close as possible to normal, the new normal. In the Budget on 6 October, we will be delivering the next instalment of our five year plan for the strongest possible economic and jobs recovery on the other side of this pandemic.

PALKI SHARMA UPADHYAY: The new normal is also an evolving situation, Mr Cormann. Australia was quick to control the outbreak, but then it saw a resurgence. What impact is this going to have on your economic revival plan?

MATHIAS CORMANN: We did get on top of the outbreak relatively quickly. We remain on top of the outbreak everywhere except for Victoria and parts of New South Wales. In most parts of Australia there are very low numbers of active cases, in the single digits, and there is no community transmission. In fact in some places there are zero active cases. Certainly in Victoria we have a significant problem and all levels of government are working very hard to get on top of this. There is no question that this has had a negative effect on the economy in the state of Victoria and nationally. Ultimately, the plan of action is to get on top of this second wave in Victoria as quickly as we can and we are working on that, to make sure that businesses can have the confidence to invest in their future growth and success as soon as possible so that they will start hiring more Australians again.

PALKI SHARMA UPADHYAY: Your Prime Minister was the first leader to call for an investigation into the coronavirus outbreak. More than one hundred countries backed that call at the WHO. Are you satisfied with the pace of, and the shape that that investigation has taken and do you believe that it will yield something meaningful.

MATHIAS CORMANN: We do hope that it will yield something meaningful. It is just good practice that when something bad happens that you try and get to the bottom of what happened and why and to make sure that you put yourself in the best possible position to prevent such events into the future and to improve the way you can respond to it. In this circumstance right now, around the world, countries continue to deal with the crisis. We are very focused on the crisis response as the first priority. That is as you would expect, and that is entirely appropriate. We do expect that the independent review by the WHO will continue at the appropriate pace. Eventually we do hope that it will yield outcomes that will help the world avoid such a disaster in the future and respond to it better in the future.

PALKI SHARMA UPADHYAY: Would you say that the tariffs imposed by China on Australia were a retaliation after your demand for an investigation?

MATHIAS CORMANN: We have a very important relationship with China. We have a very important relationship with countries all around the world when it comes to trade. These are mutually beneficial relationships. From time to time there will be differences of opinion on certain issues. Every country, every sovereign country, will address these issues from the perspective of its national interest. We take the view that between countries in a mutually respectful relationship these issues have to be worked through positively and constructively. As a trading nation, we are committed to having the best possible relationship with all countries around the world. That is the position we come from. But from time to time as issues arise, like the one that you have just mentioned, we just have to work our way through it. The amount of people around the world who have lost their jobs, who have died, who have got sick, of course we need to deal with that issue. It is unremarkable that this is something that ought to be inquired into to ensure that we put ourselves into the best possible position to deal with this, to prevent it, and to deal with it in the future. That is in the interest of people all around the world.

PALKI SHARMA UPADHYAY: It is indeed. Would you say that Australia is in a trade war with China?

MATHIAS CORMANN: We do not use language like that. We have a very important trade relationship with China. China buys our products because they value and need our product. One of our biggest exports into China is iron ore. The reason we are able to sell iron ore into China is because it is of high quality and China is able to use that iron ore in order to help develop and grow their economy. As I say, trade ultimately is most successful when it is mutually beneficial. That is how we always look at it. 

PALKI SHARMA UPADHYAY: I will come back to that statement from you. But staying with the relationship between Australia and China, China has been Australia’s largest trading partner. As of June this year, China accounted for more than 30 per cent of Australia exports. Considering this dependence, quote unquote on China, can your Government still pursue an aggressive strategy when it comes to an investigation on the coronavirus?

MATHIAS CORMANN: I do not accept the framing of the relationship as one of dependence. We sell Australian products and services all around the world. We sell them into countries where there is demand for the products and services we sell. The reason we are able to sell Australian products and services into China, is because there is a demand for those products out of China. It is a mutually beneficial relationship. China needs access to some of the products that we have to sell. We of course want to have the best possible relationship with all countries around the world. We will never go out of our way to gratuitously have a negative relationship. But by the same token, like any self-respecting sovereign nation when there are issues of national interest that arise, we will stand up for our national interest. That is what you would expect any sovereign country around the world to do.

PALKI SHARMA UPADHYAY: Are certain forces in China threatening your national interest?

MATHIAS CORMANN: No. As I say, we have a very important strategic, as well as commercial bilateral relationship with China. It is a relationship which we value. We will continue to do our best to have the best possible relationship. But, when there are issues from time to time, as there will be in any relationship, on which we have a difference of opinion, our perspective is that those issues have to be worked through constructively on their merits. That is what we set out to do.

PALKI SHARMA UPADHYAY: Recently Chinese funding to Australian universities came under the scanner in your country. Especially when some students spoke up against the Communist Party of China. Do you believe that the inflow of Chinese cash into educational institutions in Australia is a matter of concern and what are you working on to regulate such funding.  

MATHIAS CORMANN: We have world class universities. International education is our third largest export earner. The activities of our universities internationally are somewhat constrained at present given the restrictions on international travel. But nevertheless, international education out of Australia is a very high quality, world class, valued product around the world, including among students from China. We hope that in the years to come many students from India, from China and from all around the world will continue to come to Australia to take advantage of our world class universities.

PALKI SHARMA UPADHYAY: The students are welcome, but what about Chinese money?

MATHIAS CORMANN: To the extent that there is international education sold as an Australian service into the world, then those students who come to us from around the world, from countries all around the world, pay for those services.

PALKI SHARMA UPADHYAY: Okay. In June, the Prime Minister of Australia participated in a virtual summit with his counterpart in India. Many saw this as a new alliance taking shape or solidifying. There is a lot of talk about the Quad. How would you describe Australia’s relationship with India at the moment?

MATHIAS CORMANN: Australia’s relationship with India is incredibly warm. It is a very important relationship. Our Prime Minister Scott Morrison and Prime Minister Modi have a very strong, personal relationship. They enjoy working with each other on matters of mutual benefit. Australia has a very strong, highly valued Indian migrant community here in Australia, which is making a magnificent contribution to our country. We believe that the Indian-Australian bilateral relationship is in very good shape. We look forward to it going from strength to strength into the future.

PALKI SHARMA UPADHYAY: Australia has set a goal to send $31 billion in annual exports to India. But in 2019 our trade deficit stood at almost $10 billion in your favour. How do you plan to open more opportunities for Indians to balance the scales?

MATHIAS CORMANN: Our economy is incredibly open. There are no restrictions literally on imports into Australia. But ours is a small market compared to the Indian market. Ours is a small market compared to the global market. Clearly when you have a continent with a population of 25 million people, it is miniscule compared to the Indian domestic market. You have to look at things in that context. The opportunities for India to export into Australia and to export into markets around the world I believe are significant. We are keen to work with India on ways to further improve our bilateral trade relationship on a win-win basis moving forward.

PALKI SHARMA UPADHYAY: India is locked in a border stand-off with China at the moment. Australia is dealing with its own set of trouble with Beijing. How can Australia and India join hands for a united response, a strategic partnership against Chinese aggression?

MATHIAS CORMANN: I would not frame it in terms of joining together against anyone. I would frame this in terms of joining together in favour of the rules based international order. Australia is a globally focused, open trading economy. We are an active participant in global trade and we support the multilateral rules based trading system. We believe that countries like ours, that are like-minded on many things, need to work together as part of the global community to ensure that we can pursue fair and free and open trade wherever that is possible.

PALKI SHARMA UPADHYAY: Let me reframe the question then. How much of a factor will be the military relationship between India and Australia as both countries and governments seek to deepen ties? 

MATHIAS CORMANN: I think that goes well beyond the areas of responsibility for a humble Finance Minister. I think that that goes right into the territory of Foreign and Defence Ministers and I would hesitate to weigh into these very significant diplomatic questions.

PALKI SHARMA UPADHYAY: You have been very diplomatic in all your responses I have to say. India recently banned more than fifty Chinese apps, which included names like Tik Tok and We Chat. Lawmakers in Australia have made similar demands. The Prime Minister has ruled out a ban on Tik Tok, but is your Government working on a strategy to tackle the privacy risk posed by tech companies and apps, including those from China?

MATHIAS CORMANN: We are very conscious of the need to protect people’s privacy in the context of the ever increasing scope and reach of the digital economy. Any measures and any concerns would not be directed at any specific country. These are measures that would have general application. With the digital economy and the growth in the digital economy come new risks. Those new risks have to be effectively managed wherever they arise. Our Government is focused on that wherever that is appropriate.

PALKI SHARMA UPADHYAY: You have been a politician for a long time. You have been the longest serving Finance Minister of Australia. Would you say that this is the most challenging time for governments all over the world? Have you seen a turn like this in the past?

MATHIAS CORMANN: This is the worst period that I have gone through as a Member of Parliament, as a political representative. I think it is one of the worst periods in living memory. There is no question. The devastation that the health and economic impact of the coronavirus pandemic has caused in Australia, but all around the world is unprecedented over the last few decades, I would say since the Second World War. It is absolutely devastating. This will be a challenging period for some time. It will take some time for the world to return to normal. Governments around the world will continue to have to work very hard to get ourselves back into a situation where we can bring the economy into as close as normal a position as possible and manage things in a way that is as COVID-safe as possible. Assuming that the virus will remain with us for some time and that there will not be a vaccine or an effective treatment for some time.

PALKI SHARMA UPADHYAY: You worked with three different Prime Ministers as Finance Minister. Would you pick a favourite?

MATHIAS CORMANN: I have enjoyed working with all three of them. Prime Minister Morrison is doing an outstanding job. He did very well to win the election for the Government in May last year. I wish him all the very best for the next election. I wish, as an Australian citizen and on behalf of Australia, I hope that he has the opportunity to continue to serve as Prime Minister for a long time.

PALKI SHARMA UPADHYAY: And you plan to leave public life, this office at least by the end of this year. What are you plans after leaving office?

MATHIAS CORMANN: I will turn my mind to that at an appropriate time. While I am in this job, I cannot possibly think about private sector opportunities. If there are any other opportunities let’s see. But I will turn my mind to that at the appropriate time. At the moment I am focused one hundred per cent on this job.

PALKI SHARMA UPADHYAY: Right. Mr Cormann, thanks very much for your time sir, and wish you all the best.

MATHIAS CORMANN: Thank you so much. It was a real pleasure.