Topics: Free trade agreements, entitlements and US debt ceiling debate
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David Lipson
…joining me now is Matt Thistlethwaite and Parliamentary Secretary for Education Senator Scott Ryan to discuss trade and other matters of the day. Good morning to both of you gentlemen. First to you Scott Ryan, let’s start with trade and this ambitious target from Tony Abbott for a free trade deal with China within 12 months. He says that he will push for quote “whatever we can get” is there a risk he’s broadcasting a message to China that if they hold out Australia will cave in?
Scott Ryan
The message is, David, that this government is serious about finalising an agreement. The tragedy with negotiations with free trade agreements, particularly with China, is that in comparison to New Zealand which is one of our major competitors for agricultural trade into the region and into the emerging economies to our north and the developing economies. The truth is New Zealand started after Australia but New Zealand has already finalised and has implemented a free trade agreement with China which sees for example, their dairy producers, our major global competitors, have a significant advantage. So what the Prime Minister made clear yesterday is that we are serious about finalising an agreement and he also made it clear that the perfect cannot be the enemy of the good. It is important to finalise a deal but that is not where it settles, you can build upon a deal and improve it over time.
Lipson
Matt Thistlethwaite, do you see any downsides to a free trade deal with China?
Matt Thistlethwaite
No I don’t and I think it’s important that we do prioritise finalising a free trade agreement with China. The issue for Tony Abbott is that he’s quickly going to find that the rhetoric you can get away with in opposition isn’t the same as being the Prime Minister. They have got a serious issue in the fact that the policy they took to the election was to reduce the threshold for the Foreign Investment Review Board to oversee foreign investment applications into Australia. They want to reduce it from $248 million to $15 million, now we all know the key issue for the Chinese is to actually liberalise that threshold, their looking at a similar deal to the Australia/US free trade agreement where the threshold is close to $1 billion. That’s completely contrary to the policy the Coalition have on foreign investment at the moment. So I’m confused, is this a signal Scott that you’re moving away from your policy, and this is going to cause some ructions with the National Party, you’re moving away from your policy of reducing that threshold by which the Foreign Investment Review Board has a look at foreign investment in Australia.
Lipson
Yeah Scott Ryan, it is only for oversight and review, it’s not a cut off but is that policy still Coalition policy?
Ryan
The Prime Minister made it clear that we are standing by the policy to have the Foreign Investment Review Board scrutinise investment applications. That’s all it does, it’s a scrutiny process to ensure that they are in our national interest. It’s not a threshold to stop people investing in Australia, which Labor seems to be implying. Let’s go back a step and look at one of the major reasons Labor failed to progress free trade agreements with Korean, Japan and China…
Lipson
…before you go any further I just want to nail you down on the other stuff. China does want that threshold raised as Matt Thistlethwaite said a billion dollars…
Ryan
…the Coalition stands by its election commitment to lower the threshold for Foreign Investment Review Board scrutiny for investment for agricultural land and bring it back into line for some of the other decisions FIRB looks at. It’s not a threshold for an actual investment; it’s a threshold for the Foreign Investment Review Board to look at it to ensure it’s in our national interest.
Lipson
Matt Thistlethwaite, China hasn’t said they won’t strike a deal unless that’s raised but there has been some indication that would be their preference though.
Thistlethwaite
Well no they haven’t but if you look at the rounds of negotiations that have occurred in the past under both sides of politics, under the Howard Government and under the previous Labor Government, that was a key issue for the Chinese. They wanted to see Australia liberalise that threshold by which the Foreign Investment Review Board has a look at decisions. Now I’m not saying the threshold is one of ruling out foreign investment, it’s one where the Foreign Investment Review Board reviews the decision and the Chinese want that liberalised, they want the same deal the US has with Australia. I can’t see at all the National Party anywhere within the realms of possibility agreeing to that, unless Scott…
Lipson
…Scott Ryan has just made it very clear though, it is still the policy…
Ryan
…the history here is very important David. The major opponents to these free trade agreements being concluded have been on Matt’s side. You have the ACTU, AMWU and the AWU all the acronyms of Labor’s union paymasters who have spent the last six years lobbying Labor MPs and arguing against these free trade deals being concluded. That’s where the real opposition is. We are not going to shy away from negotiating what’s in Australia’s national interest, but we are also not going to do it on television.
Lipson
A quick response to that please, Matt Thistlethwaite.
Thistlethwaite
Well the approach Labor took in government was to do a national interest assessment and to see whether or not the free trade agreement was in the nation’s interest. That was the only test Labor applied to any free trade agreement, sure there are lobby groups and interest groups that put their views to government as to what should and shouldn’t be in free trade agreements and governments of all persuasions take those into consideration, but at the end of the day the key point for Labor in government was whether or not the free trade agreement was in the nation’s interest, that was the basis on which we made decisions.
Lipson
Scott Ryan, what about the Transpacific Partnership, we have been negotiating that for years and it hasn’t borne fruit yet. Do you still have hope or still have confidence that it can be signed between 12 nations?
Ryan
Look multilateral trade agreements are always slow to negotiate and hard to conclude. That’s one of the reasons the previous Coalition Government was keen to have a dual track process, which included having free trade agreements with nations on a bilateral basis to augment that. It’s not my portfolio area and I’m not aware of the details but any step forward to trade liberalisation provides more Australian jobs and provides more Australian opportunities for the economic transformation for our region.
Lipson
Matt Thistlethwaite, the Coalition in government is continuing what Labor had tried hard to do, to get this Transpacific Partnership going. Obviously Australia would only really have a small amount of influence in actually getting the agreement signed between some much bigger and more powerful nations. Do you credit Tony Abbott for pushing on with this?
Thistlethwaite
Labor was making progress on this important multilateral trade agreement while in government. I was a member of the Treaties Committee that had a look at what had been negotiated to date, what the key issues were on the Transpacific Partnerships Agreement and we made some recommendations at the executive level of government to the Minister Craig Emerson and to his credit Craig Emerson was doing all he could with the department to meet those requests of that committee. We welcomed the fact that Japan was making serious moves at coming into those negotiations. The committee had looked to put in place protections for our Pharmaceuticals Benefits Scheme, for copy-write in this nation; we were making progress on this issue.
Lipson
Okay, we need to take a quick break but after that we will look at travel entitlements and ask the question whether politicians are taking the mickey out of the taxpayer. Stay with us.
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Lipson
You’re watching AM Agenda thanks very much for your company. I’m still joined by Matt Thistlethwaite and Scott Ryan here on our political panel this morning. I want to cover travel entitlements now after Tony Abbott was chased down of course in Bali with questions about his entitlement claims, in particular 600 odd dollars for attending Peter Slipper’s wedding and another $1,100 for attending Sophie Mirabella’s wedding. First to you Scott Ryan, it’s been paid back now of course after it was highlighted by the media. The crux for me is why would an MP think that attending a wedding is something the taxpayer should pay for?
Ryan
I’m not aware of all the circumstances and so I’m not going to provide rulings or commentary on individual circumstances. The Prime Minister made it clear all MPs should comply with the guidelines and there are longstanding procedures in place to allow people to repay them where there is doubt or when something has been used outside of entitlement.
Lipson
So if it’s within the guidelines, do the guidelines have to change because on the general concept, aside from the details of each case, do you think it’s appropriate for MPs to charge the taxpayer to attend a colleagues wedding?
Ryan
Well mistakes can be made and I noticed former Senator Joyce said when he made his particular statement the other day that it was an error. So the guidelines are there for MPs to use and I note that on occasions when you seek advice, an answer can’t be provided by the Department of Finance, and that’s the case in one of these circumstances I understand, as to whether given the whole schedule is within the guidelines or otherwise.
Lipson
Matt Thistlethwaite, what do you think of the guidelines themselves? Are they appropriate as they stand at the moment?
Thistlethwaite
Well I know one thing David and that’s the guidelines certainly don’t say if you’re going to a wedding you can claim it on the taxpayer and you shouldn’t be…
Lipson
…but do they say you can’t?
Thistlethwaite
Well you don’t need to look at the circumstances in this case, common sense prevails. You shouldn’t be claiming want are essentially entertainment value claims on the taxpayer. The issue really here is the hypocrisy of Tony Abbott and the likes of George Brandis and other Coalition members who held themselves out as holier-than-thou when it came to this issue and Peter Slipper’s claims. They said that they were the bastions of transparency and accountability and that Peter Slipper had done the wrong thing. What we found out in the wake of the actual facts is that they are no different to Peter Slipper, they’ve made claims and mistakes and they’ve had to pay that money back. My view is if there’s any doubt you simply don’t claim it. You shouldn’t be claiming entertainment value on the taxpayer.
Lipson
Matt Thistlethwaite, there are claims that some Labor MPs have charged the taxpayer for attending Bob Hawke’s 80 birthday celebrations, are you aware of that?
Thistlethwaite
No I’m not and I’ve only read those reports in the newspaper. Look I can only go on the basis on what I apply to these things and we ring the department and the department either says you can claim it and then you do and if the department says you can’t claim it or indeed it’s up to you to make a decision on whether you believe you should be claiming it, well my view is you err on the side of caution and you don’t claim it, that’s the approach I think most people should take.
Lipson
Scott Ryan, just on Matt Thistlethwaite’s previous comment about hypocrisy, it’s something Peter Slipper has pointed to as well, he says it’s breathtaking hypocrisy and he’s understandably upset about this. Why is it that some MPs are able to pay back these entitlement claims that are in question, Tony Abbott being one of them, Peter Slipper offered to pay back the entitlement claims he made but wasn’t able to and it went through the courts and it’s still there?
Ryan
On that technical question David it’s not my portfolio and I actually can’t answer it. I’m not going to comment on the Peter Slipper example as it’s before the courts and I think you’ll understand me avoiding any comment on that. Matt mentioned the phrase holier-than-thou but people who have paid back entitlements recently include the former Prime Minister Julia Gillard so I think Matt should keep that phrase holier-than-thou in mind.
Lipson
She offered to do it though before it was raised in the media…
Ryan
…as I understand some of these examples refer as well. It’s a longstanding process to allow people to go back over their reports and repay if there’s doubt or if they’re concerned whether it was within entitlement. So that’s be happening for years.
Thistlethwaite
…the former Prime Minister in this case didn’t pursuit other MPs uphill and down dale until the Federal Police got involved. That’s the real issue here Scott, it’s the hypocrisy of the likes of George Brandis who day-after-day got up in the Senate and said the Australia Federal Police need to get involved in this case and investigate Peter Slipper for his travel claims. Well if you apply that same rule to what’s gone on in the wake of the election and the likes of George Brandis and Barnaby Joyce, then rightfully the Australian Federal Police should be looking at their claims as well.
Ryan
Well look Matt unless you’re privy to a great range of details that I’m not about individual circumstances then I’d be careful about making such claims.
Lipson
What about study tours, Scott Ryan, I understand there are arrangements for funding study tours as they are known have been changed, but still there are reports in the newspapers like Dick Adams being refunded $17,000 and Ross Vasta $14,000. Are the taxpayers really getting value for that?
Ryan
Again I’m not going to comment on individual circumstances, a line in a newspaper may not be representative of…
Lipson
…they were just examples. Broadly on study tours?
Ryan
MPs elected since 2010 are not eligible for study tours and those elected beforehand have a few years left to use the entitlement that remains. So they have effectively been abolished and I don’t think there’s any proposal to bring them back whatsoever.
Lipson
Do you agree with the current arrangements, Matt Thistlethwaite, for study tours?
Thistlethwaite
I agree with them in the fact that the likes of myself who came into Parliament after 2010 don’t have study tours anymore. So I have no experience at all of study tours and I’m not likely to experience them. I think again David, common sense prevails here and if it’s really for entertainment value that you’re making the claim then you shouldn’t do it.
Lipson
I want to finish briefly on the US debt ceiling which could impact on Australia. It’s going to come up in the US Congress soon and if they don’t pass this raising of the debt ceiling then they would default on loans and repayments. Scott Ryan how significant would that be for this country?
Ryan
Well I think it would be significant for the global economy and in particular the finance sector. US Treasury bonds are effectively the global currency. Without necessarily making a comment on domestic political debates in America, I don’t think anyone can overstate the importance of the US financial system and its integrity to the global financial system.
Lipson
Matt Thistlethwaite, probably some minor similarities you would have to say between the US and Australia, we’re raising our debt ceiling later this year.
Thistlethwaite
Look I know this has occurred in the past in the US but this current republican shutdown of the Congress and refusal to move on the debt ceiling is becoming a very worrying incident. There’s no doubt that it will have an effect if it plays out the way it looks like it will play out on domestic consumption in the US, it will have an effect on their housing market and that will affect their biggest market for imports the Chinese, which no doubt have an effect on Australian’s economy. It’s a very worrying development. I think common sense should try and prevail in the US and these republicans, a minority, who are holding their country and the world economy to ransom need to have a look at themselves.
Ryan
I’ve just got to comment here David. I’m not going to get into domestic political debates but there seems to be an obsession by the Labor Party talking about domestic American politics. The history lesson here is the Democratic Speaker of the House shutdown the government multiple times on Ronald Reagan. It’s not uncommon as Matt said but at the same time I think it’s fair to observe the stopping of the constant accumulation of debt for the next generation of Americans and indeed Australians, you mentioned we are going to increase our debt ceiling here in Australia because of the mess Labor left us in, and that’s something I’m personally determined to address along with a Coalition Government because you have to stop borrowing on the kids at some point.
Lipson
…Okay we will have to leave it there. Scott Ryan and Matt Thistlethwaite thanks for your time this morning.
Thistlethwaite
Pleasure David
Ryan
Thanks David
Lipson
We’ll have more on AM Agenda after this.
(Ends)