TOM ELLIOTT:
Let us go back to the Free Trade Agreement now, the one that was signed today with China, follows on from the ones that have been signed over the last year with South Korea and Japan. Joining us now, the Small Business Minister in the Federal Government, Bruce Billson, good afternoon.
MINISTER BILLSON:
Good day to you Tom and your listeners.
TOM ELLIOTT:
Firstly, what does this do for Australian business? Who are the winners in Australia from today’s Free Trade Agreement?
MINISTER BILLSON:
What is great about today’s agreement, Tom is it is so comprehensive there is opportunities right across the economy. If you are a dairy producer, the 20% tariff is gone, so that will put us on a level playing field with New Zealand.
Beef tariffs of up to 25%, gone. Lamb tariffs, 23%, gone. Our wine tariffs, 30%, gone. Seafood tariff is gone, pharmaceutical tariff is gone.
But also in the area of services Tom – 70% of our economy, domestically, is the services economy yet only one in seven of our export dollars come from the services sector, so anything from training and education of aged care workers all the way through to what do we do with too many lawyers through to design and consultancy advice in construction and engineering through to financial services and telecommunications.
It is really a big, exciting day and it is the third leg of the trifecta of north Asia trade agreements.
TOM ELLIOTT:
You mentioned lawyers, are you saying we could maybe sell some of our lawyers to China and have fewer here?
MINISTER BILLSON:
I am not sure we could export the lawyers, but we could certainly give them a new area in which to practice their skills through recognition of those qualifications. And that is part of what we are trying to do, is see greater mobility of our talented people where we have got world class skill-sets as well as world class export goods, to see service is a growing part of our growing economy and really tapping into these opportunities that are, frankly, delicious in north Asia and we need to make the most of them.
TOM ELLIOTT:
Obviously agreements like this have got to suit both sides, both sides have to feel that they have won something out of them. What do the Chinese get?
MINISTER BILLSON:
There is a few areas.
One, in terms of mobility of Chinese investors in and out of Australia, that is part of it. For multiple visitor entry visas, there was one visa that Chinese citizens could have that would cover three years, that has been pushed out to ten.
Even in areas of educational services, some upside there. And as many of your listeners would know, many of our tariffs have been dialling back for some time, so in some areas there are still, what I would call shrapnel tariffs Tom of around five percent or not much. They are going also.
But the other thing too is we are very much in a very much in a complementary economic position vis-à-vis China. What they are looking for and what they need we do well and the opportunities that flow from that will be of benefit to both nations and that is why today is really a significant day and comes hot on the heels of the Korea and the Japan agreements.
TOM ELLIOTT:
Are there any losers you might care to mention?
MINISTER BILLSON:
There is a couple that may be looking and thinking that five percent tariff on an imported item, a piece of hardware or something like that – you are directly competing against those and that five percent tariff which, frankly, is wiped out day in day out by movements in currency.
Some might think they would still like that five percent buffer, but I think in almost two in three cases of imported goods of that kind for businesses that are competing with other businesses, those goods end up being an input to something that the business does here locally, so that is something we need to watch and keep an eye on, but there will be a few that like that little buffer, however modest, but in most cases, they are business inputs that actually make us less competitive when added to other things we do here.
TOM ELLIOTT:
What about the housing market? Now this has been a topic, a very heated topic of discussion in recent times. We have got record high prices in Melbourne, the same sort of thing is happening in Sydney. A lot of people blame the rise in house prices on overseas investors and primarily, investors from China. Does the Free Trade Agreement make it easier for Chinese buyers to enter our property market?
MINISTER BILLSON:
No, I would not think it would in a residential housing sense. As you know, there are already restrictions for residential housing and this is a real focus that unless you are a permanent resident or you have some other basis on which you are purchasing residential housing, there are already constraints.
We have put in place a more rigorous Foreign Investment Review Board process, where you had to go through and get these proposals evaluated, Tom. But we found, upon coming to Government, there was no follow up and now you are seeing cases where significant investments, outside the rules, are now being brought to our attention and that, frankly, some of the buyers are being forced to sell.
TOM ELLIOTT:
Your Cabinet colleague, Barnaby Joyce, the Minister for Agriculture, he has come out and said that there need to be tighter restrictions on state-controlled companies buying Australian farmland. Does the Free Trade Agreement deal with that issue at all?
MINISTER BILLSON:
It does not change that. What we have got is an ongoing examination of any proposed investment in Australia where a state-owned corporation is involved. So where there is a government presence through a state-owned corporation or directly, the current Foreign Investment Review Board threshold is zero. So that is something that we already have close attention to.
What we have also put in place is for people wanting to invest in other businesses in the economy, new safeguards, new disclosure requirements and some payments to make sure we can fund the surveillance, the proper evaluation and the implementation of those foreign investment parameters.
TOM ELLIOTT:
Finally, when does the Free Trade Agreement come into effect, is it now or has it got a series of time hurdles on it?
MINISTER BILLSON:
Yes, still a couple of more action steps Tom. Under our law in Australia, once the agreement has been signed it goes to our Treaties Committee, that enables parliamentary and public scrutiny of what is proposed. There is a national impact assessment that sits alongside the document, that has now been referred to those parliamentary processes and people with an interest or a contribution to make are able to do so, before it becomes a ratified agreement.
So that is hard to pick, that timetable, but we are keen to get on with that this year.
TOM ELLIOTT:
Bruce Billson, thank you for your time.
MINISTER BILLSON:
Thanks, Tom