3AW Drive, Interview with Tom Elliot

Release Date: 
18 November 2014
Transcript
E&OE

Topics: Chinese Free Trade Agreement

TOM ELLIOTT:
Mr Tudge, good afternoon.

ALAN TUDGE:
G’day Tom, great to be on your programme.

TOM ELLIOTT:
OK, so for many of us a free trade agreement seems like a bit will of the wisp, I mean we already trade with China a lot, we already trade with India a fair bit. What does a free trade agreement do differently for us? How will it transform our lives?

ALAN TUDGE:
In essence this free trade agreement which we signed with China yesterday makes it much easier for our products and services to be sold into China. Now this will open up massive opportunities for Australian businesses and particularly Victorian businesses. Because the industries in which the agreement covers often are based in Victoria or they dominate in Victoria.
For example Tom, dairy is one such example where 85 per cent of all dairy exports come from Victoria. But they currently face up to 19 per cent tariffs going into China. I.e. China puts a 19 per cent additional cost on those dairy products. Now this free trade agreement eliminates that tariff.
Now when New Zealand did this with China it saw their dairy exports double over the period of four years.
So this is what it could mean for our dairy farmers, and you can go through industry by industry in relation to this. So for the wine industry, the fruit and veg industry, the beef industry, our coal industry down in the Latrobe Valley, our services industry where we’re so strong here in Melbourne in financial services, our law firms , our accountants etc.
So it’s a really exciting opportunity we’ve got here Tom to greatly expand our exports into China.

TOM ELLIOTT:
OK, let’s look at what the Chinese get out of this because these types of arrangements are never one way traffic. Now as I understand it the main two benefits for China are that firstly they’ll be able to more freely invest money in Australia so whether that’s property or businesses or agricultural land they’ll have the threshold raised as the amount they can put in here without going to the Foreign Investment Review Board.
But I think probably what worries people a bit – and worries me I might say – is this increased ability to bring in Chinese workers to work in Australia. Could you explain that for us?

ALAN TUDGE:
Yes, in essence there’s very little which is new in this Tom that’s not already in existing framework, that we’ve taken what’s in the existing frameworks and put it into the free trade agreement with China.
So for example there’s a provision that there’s big projects of $150 million of value or more, there’s provisions there. Now what it means (inaudible) it only applies to skilled people, if there’s a shortage of skilled people then China can bring people in if there’s no Australians that can do that job…

TOM ELLIOTT:
So we’ve got to be absolutely certain though that all the checks have been made to see other Australians who will do this job and only if that’s been exhausted then we bring in overseas workers?

ALAN TUDGE:
That’s exactly right. So it only applies to a) to skilled workers, b) there has to be a labour shortage in that skilled area, and c) they cannot undercut wages. So there’s three very important protections which exist previously and there’s no changes to that in relation to what’s in this trade agreement.

TOM ELLIOTT:
I had a caller yesterday from Port Headland, he said he works up there, he’s a fly-in fly-out worker. He reckons he gets $50 an hour doing whatever it is that he does and he said he thinks his job is being threatened because overseas workers are coming in and getting as little as $17 an hour or just a third as much. That sort of seems to be at odds with what you’re saying.

ALAN TUDGE:
And that doesn’t sound right and if there is a breach of the laws in that regard then the Fair Work Commission should be notified and they’ll come down on that business like a tonne of bricks.

TOM ELLIOTT:
Is that who polices this? Is it FIRB or is it the Fair Work Commission?

ALAN TUDGE:
Well the Fair Work Commission will still police any industrial relations arrangements like that. So if someone is undercutting wages then absolutely that would be a breach of the law. The Fair Work Commission should be notified and they should go and investigate this and fix the problem.

TOM ELLIOTT:
OK, are we now working on a free trade agreement with India?

ALAN TUDGE:
Yes that’s absolutely the intent, so our commitment is to try to negotiate this and have it completed by the end of next year. And that would mean that by the end of next year we will have negotiated free trade agreements with our three biggest export markets being China, Japan, South Korea, and then also with the world’s largest democracy and one of the emerging superpowers being India.
And these all mean greater access for our local businesses to be able to sell into these countries. These countries are all growing like gangbusters. Their middle classes are growing like gangbusters. What that means is they want many things that we provide. They want our clean, healthy food. They want more of a western diet. They want our products and our services, our banking services, our legal services, our property development services. They want our education services which again Victoria is so good at.
By getting these free trade agreements, it just makes it easier for us to access those markets and at the end of the day that means more jobs for Victorians, higher wages for Victorians and greater wealth for Victorians.

TOM ELLIOTT:
Alan Tudge thank you for your time.

ALAN TUDGE:
Thanks so much Tom.