Sky News Lunchtime Agenda, Interview with David Lipson

Release Date: 
10 November 2014

Topics: China FTA, manufacturing.

DAVID LIPSON: New Zealand is really being seen as the benchmark in terms of the trade deal that they already secured with China. If Australia was to get a similar deal, what would that mean for everyday Australians?

ALAN TUDGE: New Zealand got a particularly good deal in relation to dairy and our aim would be to match that deal. We’ve got a broader agenda as well in negotiating this free trade agreement. But it’s potentially worth $18 billion to the Australian economy and what that translates to is more jobs on the ground, higher wages for people and generally more wealth for the Australian community.

We’re very determined to strike this deal. We’re confident we can strike it before President Xi comes to Australia next week. Should we do so, along with the Japanese free trade agreement, the Korean free trade agreement and the Chinese free trade agreement, it would constitute free trade agreements representing 50 per cent of our overall exports. That would be a very good outcome.

DAVID LIPSON: That would be a significant achievement for the government in just over a year in power. Doug Cameron though, what would your concerns be in regards to a free trade deal with China?

DOUG CAMERON: Well I don’t know if it would be a significant achievement at all. You have to look at the quality of the agreements and I must say the two previous agreements have not been of very high quality. They have not reduced the trade bias against many Australian goods and produce. It’s about the quality and my concern is a concern I’ve always had – that these so called free trade agreements are not free trade agreements – they are bilateral agreements. They are agreements that carve out many areas of trade and are a second best option to multilateral trade.

This argument that we’re going to get $18 billion benefit – I’ve been around a long while now on these trade issues – I have never seen any trade agreement that delivers what the government promises at the time it will deliver. I’ve asked the parliamentary library to look at that and they can’t provide the details. The Productivity Commission is highly sceptical of this. So there’s lots of rhetoric on these trade agreements, but not a lot of delivery especially from the Coalition trade agreements.

DAVID LIPSON: Alan Tudge, there are always winners and losers in these sorts of deals. It looks like sugar is going to miss out. Cane growers won’t be happy with anything in this free trade deal from what we hear. What about some of the concerns raised there by Senator Cameron about the true benefits or otherwise of such a deal?

ALAN TUDGE: This deal that we are negotiating now will have immense benefits and it will be worth in the vicinity of billions of dollars, we estimate about $18 billion. Doug is an old unionist, he’s never liked free trade but every economist in the world will tell you that free trade ultimately leads to greater wealth for both countries, for both the trading countries.

This free trade agreement will be good for our agriculture; it will be good for the service industry particularly because China is hungry for more services as they become wealthier and grow. Services represent 70 per cent of Australia’s GDP. I think that will be one of the real benefits out of this free trade agreement. I hope that Labor does get behind this agreement that we negotiate. It will be a good one, it will absolutely be in Australia’s interest and it will lead to more jobs and more wealth for Australia.

DAVID LIPSON: One of the things Bill Shorten pointed to in his conference, when he held a news conference in Hobart earlier today, was to ensure that any changes to the workforce as a result of this free trade deal do not impact adversely on either country. Andrew Robb, the trade minister, was asked specifically about the prospect of cheap Chinese labour coming to Australia a couple of days ago.

[plays excerpt]

Doug Cameron, that was a pretty clear assurance from Andrew Robb. Do you find that satisfactory? 

DOUG CAMERON: I can hear what Andrew Robb said but let me say this. Alan should deal with the issues. He should not deal with attacking me personally. The issue is quite clear that we are concerned about jobs in Australia. We should be concerned about jobs in Australia. All the rhetoric and all the spin from Alan doesn’t take away from the concerns that groups like the AIG have raised, that the ACCI have raised. We want to ensure there are jobs in Australia for Australian workers. That should be the priority. Another low grade, low quality, bilateral agreement will not deliver jobs for Australians and that’s got to be the core issue for all political parties at the moment.

DAVID LIPSON: Alan Tudge, in your home state of Victoria – you can respond but I just want to do it in this framework – in Victoria you know better than most how significantly the manufacturing industry is struggling. This deal is expected to open up manufacturing to increased competition from China. That’s really not going to help the manufacturing industry or at least portions of it, is it?

ALAN TUDGE: A lot of our advanced manufacturing industry is not subject to any protections at the moment, so it will make no difference what we negotiate there. What it might mean actually is for our fantastic advanced manufacturers, they’ll have more opportunities to export into China just as they have into other countries into Asia.

Of course, for other areas of the economy, if tariffs are coming down then there will always be transitional arrangements which will be put in place. But I think overall this will be beneficial particularly to our advanced manufacturing and that’s the future of this country. I hope that Victoria will always be a stronghold of manufacturing. We’re heading in that direction; we’ve got rid of the carbon tax, we’re reducing electricity prices, we’re trying to free up the economy so that they can be as strong as possible.

With this free trade agreement, they’ll have even more access to the huge market in China.

DOUG CAMERON: There’s two areas of advanced manufacturing in this country, one that the Coalition have deliberately set out to destroy and that’s the vehicle industry and the component industry – highly technical manufacturing, highly advanced manufacturing.

The other area is in submarines… [interruption]

ALAN TUDGE: Doug, you are the one that supported the carbon tax which added $2,400 to every Australian car.

DAVID LIPSON: Let’s just let Senator Cameron finish and I can come back to you Alan Tudge. 

DOUG CAMERON: These are the issues that we need to look at. There’s no use coming up with this so called advanced manufacturing gobbledygook and nonsense that we hear when you are actually destroying the basis of advanced manufacturing in this country.

The other question is general engineering, the engineering base of the country. It is so important that we can continue to construct all of the coal mines, all of the plants, all of the equipment that we need in this country. We will not be able to that if we open the borders up to a massive amount of imported labour. We need to ensure that there are jobs for Australians. This is not xenophobic. This is not about trying to close the borders up, but there has to be a quality agreement that protects Australia’s interests. 

ALAN TUDGE: I think there is a real split within the Labor party in relation to these free trade agreements. On the one hand you’ve got some who will still prosecute a Hawke-Keating line and that’s the type of government that actually did lower tariffs and that helped establish APEC which is going on right at the moment, which is all about free trade across the region.

On the other hand you’ve got Doug Cameron and people who are supporting the likes of Sarah Hanson-Young who are just vigorously opposed to free trade overall. I would hope that the Labor party can finally find its moral compass again and go back to that Hawke-Keating era, because that was a good government. That was a government that understood that we need to be globally competitive. It understood that if we reduced tariffs and lowered taxes all of us could be better off. That there’d be more jobs, that we’d be more competitive, there’d be higher wages.

Because at the end of the day, we have to be competitive as a nation. Hawke and Keating understood it; people like Doug Cameron, Sarah Hanson-Young and some of those others do not. 

DOUG CAMERON: I won’t be lectured by the Coalition on a moral compass or on morality. Any government that came to power based on lies, continual lies on all of the issues has got no right to argue about moral compasses. This is a government that on the day we see petrol taxes going up, we were told there would be no increase in taxes; that education would be protected, the health system would be looked after. These were lies by the Coalition. This is a government that has lied its way into power and did it off the back off lies and fear campaigns, so don’t talk to me about morality. I think the morals of the Coalition are just ridiculous.

DAVID LIPSON: Doug Cameron, Alan Tudge, we’re right out of time. Great to have a fiery discussion and thanks very much for your company. 

ALAN TUDGE: Thanks David.