RADIO NATIONAL DRIVE
THURSDAY, 3 SEPTEMBER 2015
SUBJECT/S: China Free Trade Agreement; State of the Australian economy; Canning by-election.
PATRICIA KARVELAS: Let's kick off with the China Free Trade Agreement, which the Coalition has been defending today. The Opposition has reservations about arrangements for foreign labour under the deal, but Trade Minister Andrew Robb says those aspects of the negotiations are the same as when Labor initiated negotiations 10 years ago. Dr Andrew Leigh is the Shadow Assistant Treasurer – nice to have you back on RN Drive.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Patricia, lovely to be with you.
KARVELAS: The Opposition Leader, Bill Shorten, is pushing for changes to be made to the FTA. But as the Trade Minister told us yesterday, making those changes is likely to lead to the Chinese walking away. That's the risk, they say. Is the Opposition playing politics as the risk of losing a deal vital to the national economy?
LEIGH: Patricia, we simply want the Government to sit down with us and work through the real concern that many Australians have about the fact that this is the first trade deal that removes labour market testing for Chinese migrants in the trade and technical occupations. That's a threat to what free trade agreements ought to do, which is to create more jobs and better paying ones. I'm a free trader not from blind ideology, but because I know the evidence that bringing down trade barriers has been good for creating Australian jobs. It's the migration portion of this agreement that Labor has concerns about.
KARVELAS: But is that portion worth risking the entire deal?
LEIGH: Patricia, I don't think we need the sort of brinksmanship that the Prime Minister and the Trade Minister have been engaged in over the last few days. When John Howard sat down to do a trade deal with the United States in the early 2000s, he had a conversation with Labor about how we could make sure that deal garnered bipartisan support. Labor now is simply asking for the same respectful conversation about how we can make sure that as this agreement is incorporated into Australian law, it works for all Australians.
KARVELAS: Here's what the Prime Minister had to say about this:
ABBOTT: If it was right for them in Government, why is it somehow wrong for them in Opposition? They should drop the silly politics and back this country. Back our workers, back our exporters and dump the CFMEU.
KARVELAS: The Government says arrangements for foreign labour in the trade deal are the same as when Labor was in power. In fact, it was the former Trade Minister Simon Crean who has advocated for this deal in recent days. Why are you protesting now given, in fact, a lot of this deal was negotiated under a previous Labor Government?
LEIGH: Patricia, I'm all for a high quality free trade agreement which China, as is the whole Labor team.
KARVELAS: I know you say that, but you keep actually arguing against crucial elements of it; elements that were negotiated under Labor.
LEIGH: It's simply not right to say that Labor previously negotiated agreements which removed labour market testing for temporary migrants from China in the trade and technical skills category. That's a new element of this trade agreement, and it's an element that has caused broad community concern. People want to make sure that when we've got unemployment at the highest level in 13 years, we have trade deals that are creating jobs rather than replacing them. It's important to get our migration settings right. We've had the fastest rate of migration per person across the advanced world over the last decade. Rapid migration since World War II has served Australia very well and we need to continue to make sure those setting are absolutely right going forward.
KARVELAS: And if they don't meet you to make the changes that you're insisting on, you're happy to sink the deal?
LEIGH: Patricia, I'm a temperamental optimist. I believe that the Government will ultimately see sense on this and will recognise that there is value in having bipartisan support for a trade deal with China.
KARVELAS: I'm not convinced they will. I'm quite convinced, from speaking with Andrew Robb last night, that they will not negotiate with you which is why I'd like to find out what your parameters are. If they don't negotiate with you, if you don't get what you want with these migration issues you've raised, will you sink the whole deal?
LEIGH: I hope it's not going to come to that. I hope we're going to be able to have a sensible conversation, as John Howard did with Kim Beazley in the early 2000s.
KARVELAS: But if it does come to that? Is there a real risk that Labor would vote against the entire deal?
LEIGH: I think we're going to be able to work our way through this. I don't want to engage in the shouting and brinksmanship game that I'm criticising Tony Abbott and Andrew Robb for engaging in. I think good people, sitting down carefully, can work through this and make sure we get all of those benefits of market access and trade liberalisation which have strong bipartisan support. But also make sure that our temporary migration system is working for all Australians. These aren't unreasonable demands.
KARVELAS: It seems odd to me that the Victorian Premier Dan Andrews – really one of the most left-wing Labor figures in power right now – is happy with the deal but the federal Opposition isn't. There's something about that which does not match up to me. It doesn't make sense to me that Dan Andrews would be comfortable with this deal but your side of politics federally is not. Can you try and explain that to me, because I really can't measure it up.
LEIGH: Patricia, we may be reading Premier Andrews' comments differently. As I interpreted his comments, he – like me – is supportive of the trade liberalisation benefits that will flow to Victoria as to other parts of Australia. But he recognises there's work to be done on the temporary migration side and he recognises the conversations that federal Labor is keen to engage in are important ones because we do need to make sure the labour market testing – or something that achieves the same result – is there in place in the China Free Trade Agreement deal.
KARVELAS: On RN Drive, my guest is Dr Andrew Leigh who is the Shadow Assistant Treasurer and the Shadow Minister for Competition. Let's move on to the National Accounts which were out yesterday. There's a fierce discussion going on around the economic figures. Do you think we're heading for a recession, Dr Leigh?
LEIGH: I certainly hope not, Patricia. We've got a growth rate which is below where it should be. If you want to get the unemployment rate down, you need a growth rate probably upwards of three per cent – we've got two per cent annual growth and the last quarterly number is 0.2 per cent. Indeed, it would have been negative were it not for a big blip upwards in government spending. But overall, government spending is detracting from growth – it has detracted about half a percentage point from growth over the last year and that's why the markets are increasingly forecasting a rate cut. They're expecting the Reserve Bank is going to have to do the work of supporting economic growth over the next year because the Government doesn't seem to have been doing that.
KARVELAS: We can't entirely blame the Coalition Government for this set of figures, can we? I mean, surely you recognise that the downturn in the global commodities market has had a huge role in all of this?
LEIGH: There's always international factors which are facing us –
KARVELAS: Which are dominant.
LEIGH: Well, let's not forget that the previous Labor Government saw off the biggest global shock in two generations with an unemployment rate lower than we have today. We've got the unemployment rate now at a 13-year high; consumer sentiment is 11 percentage points below where it was at the election; we've got a government that said its top economic priority would be to reduce the deficit and yet just over the last 12 months they've managed to double the deficit. The numbers that should be going down are going up, and the numbers that should be going up are going down. That's a real concern for many Australians who want to see a government with a long-term plan to make sure we have jobs that go beyond the investment phase of the mining boom.
KARVELAS: I just want to take you to the Canning by-election – all eyes are on Canning. Does Labor want to win the seat? Because so many commentators have pointed out that a win for the Coalition candidate would keep the current government as is, with Tony Abbott as leader. What do you make of that theory? It's certainly just a theory at this stage.
LEIGH: Absolutely we want to win it. Matt Keogh will be a fantastic member for Canning if we're able to get him over the line. But no-one should be under any illusions about the scale of the challenge. It's not since 1966 that a party was able to win a seat following the tragic death of the incumbent member. But we're out there making a strong case as to why Matt will stand up for Canning, and why a Labor representative will make a difference in standing against the cuts that are hurting the West Australian economy just as they are hurting the economy right across the nation.
KARVELAS: Much has been talked about the Canning by-election, that it's all about Tony Abbott's leadership and a test for Tony Abbott's leadership. But in some ways, if you accept that logic, then you've also got to accept that it's a test for Bill Shorten's leadership as well. How big that swing is to Labor, he has to be held responsible for that too, doesn't he?
LEIGH: Patricia, I think people can get too caught up in their own insider analyses of these sorts of things. We have a terrific candidate in Matt Keogh, a local boy who is out there engaging with the community. He's just announced that a Labor Government would invest in a new ice strategy in that electorate, an area which has suffered from the scourge of the drug ice. So it is going to be important for us to continue to campaign there on the ground, and in fact Bill Shorten is there today.
KARVELAS: Do you think it's a test for Tony Abbott?
LEIGH: Every by-election is a test for the Government.
KARVELAS: So is it also a test for Bill Shorten in that context?
LEIGH: We will be putting our strongest arguments out there, we have a terrific candidate and I very much hope he wins. But I'm also aware that if Labor were to win this by-election, it would be the first time such a thing had happened in half a century.
KARVELAS: Dr Andrew Leigh, it's always a pleasure to have you on RN Drive. Thanks.
LEIGH: Thank you, Patricia.
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