TREASURER:
Whilst there are divided opinions in the room about whether the United States Federal Reserve should increase interest rates, I think the danger for the United States Federal Reserve now is that if they procrastinate, if they don’t make a decision to increase interest rates, then that could be more damaging and stir more volatility on international capital markets than if they actually did move. So, I think it is time for the United States Federal Reserve to move on interest rates, to remove the uncertainty, because even if they do increase interest rates they’ll move from an ultra-accommodative monetary policy setting to an extremely accommodative monetary policy setting.
LOUISE YAXLEY:
The other key focus of this meeting has been the state of the Chinese economy. You’ve had a meeting with your Chinese counterpart, what’s emerged from that?
TREASURER:
The Chinese leadership at the G20 was more open and more transparent than they’ve ever been and I think that was warmly welcomed by the rest of the member nations. I think it’s clear that the Chinese understand that when there was significant volatility in their markets, direct government intervention at times caused more harm than provided help and support to the market. They’re still learning how to run a capitalist market. I think there is a great deal of misinformation around about the Chinese economy at the moment. For example, over the last two months we’ve seen more iron ore go through the Port Hedland port than we’ve ever seen. So the volumes of iron ore exports to China are rising. Whilst they have oversupply of steel in China, they are going through some restructuring of their economy and we should support them in that process. As the starting point, get on with the free trade agreement with China, and I have absolutely no doubt that if the Labor Party is successful in trying to undermine the free trade agreement with China, it will take a decade for the Chinese to come back to the table…
LOUISE YAXLEY:
What was specifically said in your meeting with your Chinese counterpart about the free trade deal?
TREASURER:
Well, we recognise how important it is to both countries…
LOUISE YAXLEY:
Yes - but what did they say about the political discussions in Australia, from unions and Labor, was that specifically mentioned?
TREASURER:
It was discussed and I pointed out the determination of the Government to proceed with an agreement that has taken a decade to negotiate and I think they were reassured; but quite obviously, they’re confused about the approach of the Labor Party which previously had supported free trade agreements, but now seem to be reneging on that bipartisan policy approach.
LOUISE YAXLEY:
So, what did they say to demonstrate that confusion?
TREASURER:
Well, I’m not going into the exact words of the conversation, but you can be rest assured that it will be a very long time before the Chinese would ever approach Australia with a free trade agreement should the Labor Party undermine, and ultimately destroy, the free trade agreement that we’ve negotiated.
LOUISE YAXLEY:
And did they express any concern that the free trade deal might fall over?
TREASURER:
Well I informed them of the challenges presented by the Labor Party and the more militant unions in Australia and they’re fully aware of that situation…
LOUISE YAXLEY:
Did they raise it or did you?
TREASURER:
I’m saying to you, that we discussed the matters relating to the free trade agreement. I think they are very aware that the Labor Party and the unions are taking a very militant approach to this. I’m saying to you that if it is not approved by the Parliament it will take a long time before it will be negotiated again.
LOUISE YAXLEY:
Finally Mr Hockey, there’s been more leaks, the latest is story in the Sunday papers that the Foreign Minister, Julie Bishop, had a conversation late last year with Tony Abbott about removing you as Treasurer. What’s your response to that?
TREASURER:
That’s just gossip. That’s just gossip and I’m focused on doing the job that a Treasurer should do, which is laying down the foundations for more growth in the Australian economy and greater opportunities for Australians to get ahead and get a job.