Interview with David Speers – PM Agenda – Wednesday, 25 January 2017




DAVID SPEERS: With me now Labor’s Trade spokesman, Jason Clare. Thank you very much for joining me this afternoon. Let’s just start with what Bill Shorten is saying there, build Australian, buy Australia, what does that mean in practice?

JASON CLARE, SHADOW MINISTER FOR TRADE AND INVESTMENT, SHADOW MINISTER FOR RESOURCES AND NORTHERN AUSTRALIA: Well it’s just common sense, what it means is where you’ve got Australian Government infrastructure projects we want to maximise Australian content. On top of that what Bill Shorten was talking about yesterday – when I was with him in Rockhampton, he was making the point that when you’ve got those big government infrastructure projects we want at least 10 per cent of the work force to be Australian apprentices. If we’re going to get over this problem of bringing lots of people in from overseas to work on big Australian projects we’ve got to skill up Australian workers and a key part of that is making sure we’ve got enough apprentices being skilled up to do those jobs into the future.

SPEERS:So to be clear on this, if it’s an Australian Government piece of infrastructure – if there’s a piece of money going toward building a road, a rail, a port piece of infrastructure you are saying that Australian materials should be used in those projects. 

CLARE: What we’re saying is we want to maximise Australian content, we’re not saying it’s mandated. If you were to say it ‘has to be Australian 100 per cent’, that’d breach international trade rules. We want to maximise Australian content. You’ve seen this in other states where other state governments have said we want as much Australian content as possible on those jobs –

SPEERS:What does it mean in practice though?Maximise sounds good but what does it mean in practice?

CLARE: I’ll tell you what it means in practice, it means more Australian jobs, more Australian businesses working on those projects and that means more benefits for Australians long term, because you’ve got Australian money being invested in those projects. That means that those workers are then spending that money at Australian shops and Australian businesses and the benefits multiply.

SPEERS:How would policy change? Like the Turnbull Government at the moment if they’re putting money into a road – and there are plenty of projects we could list – what would your policy do differently?

CLARE: What we’ve said, and we’ll have more to say on this in the coming months, David, is that we want to maximise Australian content for those projects, we’ve said we want to get apprentices at 10 per cent of those projects, and in terms of making sure that we’re putting Australian workers first – employing Australian workers – we’ve also said we want to change the rules – beef up the rules on 457 visas. We want to strengthen that labour market testing. We’ve talked about this before, David. Before a company brings workers in from overseas they really do need to make sure there’s an Australian who can do that job first.

SPEERS:And fair enough, we’ve seen you policy on that. But with the use of Australian steel, or aluminium or cement on some of these big projects where federal money is involved, what would you do? Would you say you have to use a certain percentage? What practical differences would there be to how current projects would be rolled out.

CLARE: We haven’t set a percentage yet. Other state governments, if you have a look at what other state governments have done, they’ve done that, they’ve set percentages. But we’ll provide more detail over the course of the next few months and as we get closer to the next election on how we would implement a policy like that.

SPEERS:But that’s the thinking at the moment, there will be a higher percentage of Australian material required?

CLARE: Well we want to maximise it, this is common sense. Even the Government is talking about wanting to get as much Australian content as you possibly can into projects like the submarine project, because of the flow on benefits that come for the Australian economy for doing something like this.

SPEERS: But as you know there’s the argument, shouldn’t we when spending taxpayer’s money go for whatever product is cheapest and best quality, regardless of where it’s built?

CLARE: You’ve got to look at the whole thing in its entirety. For example, the State Government here in NSW want to build new train carriages, they’ve decided to give that to a Korean company, I think. Which means those trains will be built overseas. Now the price of building it in Korea might be slightly less than building it in Australia, but we then lose some of the benefits of the jobs that would have been created in Australia from building those here, the taxes they would have paid that would have went to the Federal Government as well as the money those workers would have spent in the local shops and in the local businesses where those trains are being built. You’ve got to be careful here, you’ve got to make sure you give tax payers value for money, but you’ve got to look at not just the final price, but the total impact on the economy.

SPEERS: Sure, but the other flipside of that is the danger if everyone were to say we need to maximise more local content. I mean, we want the Indonesians to buy our beef, we want the Chinese to buy our wine, we want the Japanese to buy our rice. If they all said no, no we want to maximise local content on these things we’re the losers. Aren’t we?

CLARE: To be fair, you ask the Indonesians, they want to maximise beef production locally as well, they want to get to the point where they can produce beef themselves as well. All the countries are doing this, they want to maximise local benefits for their economy. That doesn’t mean pulling up the draw bridge and building big tariff walls, if we do that that is a catastrophic mistake. Free trade is critical to not only Australia’s future, but to the world’s future. What we’re simply saying here – and it’s a common sense proposition that I think the government should agree with, is you want to maximise that content.

SPEERS:I guess it all comes down to percentage, doesn’t it? How you maximise it and what you’re saying today is that is something you will announce later this year, exactly how you will maximise it.

CLARE: This is not a new policy I’m announcing today, David. Labor’s been talking about this for some time and what I’m saying is that we’ll announce more details about that as we get closer to the next election.

SPEERS:The Trans Pacific Partnership, can I ask you if the US was still in it – is it something that you actually support, that Labor supports?

CLARE: Well I’ve said it’s got merit, it would have had merit. This is an agreement which would have provided a modest economic benefit for Australia. You know, we shouldn’t go over the top, it wouldn’t have provided a massive economic stimulus for Australia, but it would have provided a modest increase in GDP over time and its strategic benefits would have been significant as well by helping to create road rules – trade road rules – for the region by creating one trade agreement that brings together a number of countries in the region.

But there were problems with the agreement as well and we’ve talked about those, one of the problems with the agreement is it removed labour market testing for six different countries, but overall the agreement had merit.

The real problem with the agreement is it’s now been killed off by Donald Trump. The Executive Order that he signed yesterday our time, means that the agreement that was signed in New Zealand last year can now not come into effect legally. So the legislation that the Government was talking about introducing last week, if they were to go ahead and introduce that legislation they’d be introducing laws that couldn’t legally come into effect and that would be ridiculous.

SPEERS:So just on that point, because my understanding based on those I’ve been talking to today in the Government is that they are keeping this open, this option open, of putting a bill to the Australian Parliament to ratify the TPP. They’re still waiting to see where things land on some fronts, but you’re suggesting there that may not actually be legal.

CLARE: I tell you what, if they do that then that’s just Malcolm Turnbull playing politics, and frankly he’s not that good at it.

He would be introducing legislation here that would have no legal effect, that couldn’t legally come in to force. I can’t think of one piece of legislation since Federation that’s been introduced by a government knowingly that would have no legal effect. But that is what this would be doing; it would be like introducing legislation to bring back the Dodo, that wouldn’t work either. What the Government should be doing is saying ‘ok look, the agreement we signed in New Zealand is now dead we can’t pursue that, we can’t introduce legislation to ratify and implement that. But there are other opportunities out there for us to create jobs, to create economic growth’

SPEERS:  I want to come to those, but if they do put this up for a vote, what would Labor do?

CLARE: We’ll talk about those I’m sure, but that’s where the focus has got to be

SPEERS:  If they put it up for a vote nonetheless, I mean you’re saying it’d be dead as a dodo and questionable legally, but what would Labor do? Would you vote against it?

CLARE: If they do that, then it’d go through our normal process, the bill would be introduced, I’d take a paper to Shadow Cabinet and we’d make a decision there.

But the point is, I think most people would see this for what it is, which is just politics, they’d see it as ridiculous. I know you’re talking to Greg Sheridan later in the program, he’s got a piece in the Aus’ today where he says that would be utterly ridiculous. What they really should be doing here is saying ‘where are the new opportunities?’ Let’s sign Australia up to deals that create jobs.

SPEERS:  So where is the opportunity from the TPP, if indeed it’s as dead as a Dodo – and without the US that certainly seems to be the case – is it worth trying to find someone to come in the place of the United States, China? The Prime Minister has said just yesterday “There’s potential for China to join the TPP”, is there really?

CLARE: In theory it could happen.  I think it’s unlikely. The TPP was designed by the United States, it’s got a number of clauses in it which make it very difficult, I think for China to sign up to – some of the anti-corruption measures, the environmental standards and labour standards would make it very hard for China to sign up to it – at least in the short term.

I think it is more likely that China would try and push its own trade deal, it’s leading another trade agreement for the Asia region called RCEP, and given what Japan has said overnight, where they’ve said a TPP without America is meaningless and given what Malaysia has just said, the Malaysian Trade Minister’s just said the momentum should now shift to this other agreement, RCEP, I think that’s where you’re going to see a lot of collective action come. That agreement involves China, Japan, India, as well as ourselves and ASEAN nations.

SPEERS:  The comment from Japan was a junior minister and apparently does not reflect Prime Minister Abe’s positon on whether it’s worth pursuing something to salvage the TPP.

CLARE: We’ll have to wait and see. But certainly Prime Minister Abe has said it would be meaningless without the United States in the past. If you were to have an agreement without the United States the first thing we need to know is what would be the economic benefit for Australia, I’ve asked the Government for the economic modelling. 

SPEERS: And that hasn’t been modelled.

CLARE: Itthat hasn’t been modelled. So frankly we just don’t know. I hope that they do that work so we know what we’re dealing with here but it hasn’t been done yet. Given, David, that we’ve known this was going to happen for at least three months – you didn’t have to be Nostradamus to know that Donald Trump was going to do this – I think it’s frankly pretty lazy of the Government that they haven’t done this work and looked at what’s the impact of Donald Trump becoming President on this trade agreement as well as a whole raft of other things.

SPEERS: But it is lazy, or is this about keeping the pressure on the US and indeed the rest of the region to come up with something here because it is within our interests, whatever the benefit – if there is a benefit – shouldn’t  we pursue it?

CLARE:  Absolutely, but let’s be realistic here, Malcolm Turnbull was never going to change Donald Trump’s mind. Some of the things that he said about the TPP throughout the election campaign were pretty outrageous and pretty clearly designed to say: ‘I ain’t changing my mind’. He described it as the rape of the United States, so we knew this was coming, we’ve got to look at new opportunities here.

Frankly, yesterday Malcolm Turnbull looked a little unhinged and very flat footed, like he didn’t expect Trump to do this. Why on earth last week he said his big economic plan for the year was to implement this agreement, god only knows; because now it’s legally impossible for it to come into force. It just makes him look like a fool.

SPEERS: Let me ask you finally, Jason Clare, what should be the Government’s priorities? What would be your priorities, on the Trade agenda right now? Would it be trying to salvage something out of the remaining countries in the TPP, would it be the deal that you referred to, the China led RCEP deal of other countries, would it be the bilateral deals with India and Indonesia? Where should the priority lie?

CLARE:  I think you nailed it. First is Indonesia, our next door neighbour. A country of 250 million people that’s predicted to be one of the world’s biggest economies by the middle of the century and we don’t trade with them anywhere near enough. An enormous opportunity for Australia and I back the Government here where they’ve said they are working on this and encouraged Steve Ciobo and Malcolm Turnbull to get their skates on and get this deal done. It provides enormous opportunity for Australia.

India’s the same; a free trade agreement with India provides terrific opportunities. The Government said they’d do this and have this done two years ago, and we’re still waiting. So we need to push on with that.

And just to multilateral agreements, my suspicion here is that with TPP dead in the water – as signed in New Zealand – that momentum’s going to shift to this other agreement – this RCEP agreement led by China. We haven’t seen what’s in it, but I suspect that’s an agreement that could be finalised this year

SPEERS: Jason Clare thank you very much for joining us this afternoon. Catch up again soon.

CLARE:  Thanks mate