Doorstop

Transcript
04 Sep 2016
Hangzhou, China
Prime Minister
E&OE

PRIME MINISTER:

Speaking as a father and indeed a grandfather it is a happy day, Father’s Day. It’s a reminder too that everything that we are doing here at the G20 is about families. It is about ensuring that our children and grandchildren in every country have the opportunities to realise their dreams. To continue the strong economic growth that has been such a feature of the last few decades, of course and to Australia 25 years of uninterrupted economic growth as I spoke about at the B20 gathering earlier today. The challenge now for the G20 is to ensure that we maintain that momentum of economic reform to ensure that we commit to open markets, to free trade, hold back rising tides of protectionism in some countries. Make the case for openness and open markets. Make the case for innovation. Make the case for investment, entrepreneurship. And these are all very familiar themes to Australians. Indeed, China has made innovation the absolute centre of its economic agenda going forward and the centre of its agenda here for the G20. It is obviously something of a very familiar theme from my point of view in Australia. Innovation is one of the first big elements of our economic plan that I announced after I became Prime Minister. We are seeing here also a focus which we strongly support and are taking up and indeed really leading the way by example in Australia. And this is about ensuring that multinationals pay their fair share of tax. I mean, all companies should pay their fair share of tax. The wonderful opportunities of the digital economy have obviously transformed the world and global economy, you know at a pace and scale never seen before. But it also creates opportunities for people to avoid their tax paying obligations. And you’ve seen we passed last year important multinational tax avoidance legislation. We have a diverted profits tax element as part of our Budget and we’ll be forging ahead with that and of course we seek stronger cooperation from other countries to ensure that everywhere in the world, businesses pay their fair share of tax. We believe in lower taxes for business because that encourages investment and jobs. But as I said to the B20 this morning, paying tax is not optional – everyone has to pay their tax and we are doing everything we can to ensure they do. So this is a very important G20. Good meeting with President Xi to the China-Australia relationship I believe is getting stronger and stronger. We’ve seen enormous benefits from the China Australia Free Trade Agreement - massive growth in exports, wine up 35 per cent. We’ve seen 1.15 million Chinese tourists in Australia in the last year and that is only going to grow. Added on to that are growing numbers of Chinese students and so on. So that is the key to growth and jobs, open markets, trade, innovation, investment. That is the key and that is what we are focused on here in the G20.

JOURNALIST:

Just on your meeting with President Xi, the Chinese Ministry’s briefing to media, President Xi raised the issue of foreign investment. I wonder how you responded? In the meeting did you also raise the issue of regional security? And you also said in your opening remarks about reform behind borders – can you elaborate on what you were referring to?

PRIME MINISTER:

Yes the issue of investment was certainly raised and as you saw from what the Chinese Foreign Minister has briefed out, they welcome our foreign investment policies and seek them to be continued and of course they will continue. But China understands as well if not better than anyone - our sovereign right to determine who invests in Australia and the terms in which they invest. As I have said elsewhere, you know China has more freedom to invest in Australia - indeed all foreigners have more freedom to invest in Australia than almost any other country. We have a very open foreign investment policy, so we mostly say yes, we almost invariably say yes but from time to time we say no and we make no bones about that and China respects that. In terms of maritime security, we again discussed that and its importance to maintain stability and peace in the region. Our position on these issues, in the South China Sea in particular, is very well understood by the Chinese side. We have been completely and utterly consistent for a long period of time. I have been completely consistent on this – what I say publicly and privately. We believe in the maintenance of the rules based order. Any conflicts or disputes about territory should be settled peacefully and in accordance with international law and we expect all parties to show restraint and not exacerbate any tensions.

JOURNALIST:

Barrack Obama had a warning for China yesterday on the South China Sea. Did you reiterate Australia’s position to President Xi in today’s meeting and how would you describe his response to Australia’s position?

PRIME MINISTER:

President Xi and I have discussed this issue on a number of occasions now. This must be around the fourth or fifth occasion we’ve discussed it. Our position is thoroughly consistent. I just described it, summarised it in the answer to Phil and the Chinese side respect and understand our position.

JOURNALIST:

But Prime Minister this is your first meeting since the international court of arbitration ruling in July. Did you go to that ruling? Did you point to that and urge China, urge the President to follow that ruling?

PRIME MINISTER:

We discussed the South China Sea issue and the critical importance of complying with international law and for disputes to be settled, where disputes exist, to be settled peacefully between the parties in accordance with international law and for all sides to show restraint and Australia’s position is respected, it is consistent, it is very well understood.

JOURNALIST:

Just back on investment Prime Minister. Did the President actually seek any clarity on particular decisions?

PRIME MINISTER:

No. There were no specific investments discussed.

JOURNALIST:

As you say, you’ve made your position very clear to China. There is no sign that China is paying any attention to you at all. So what changes when you make your position clear?

PRIME MINISTER:

Let’s see as the matters develop. It is very important for Australia to be consistent. We are a good friend of China and good friends are very honest with each other. We are consistent and our position is very clear that we expect and encourage all parties to comply with the rule of law to show restraint and not act in a way that would exacerbate or create tensions.

JOURNALIST:

During the meeting you talked to Mr Xi about behind the border issues – can you spell out some of the problems that Australia has with, particularly with China and it’s behind the border issues?

PRIME MINISTER:

Well this is a WTO agenda called the Trade Facilitation Agreement, which the trade ministers have agreed to complete by the end of the year. It should come into force by the end of the year with enough countries having ratified it. And what this seeks to do is to address - and it is quite complex and it is very diverse – is to address all of those issues beyond the tariff laws. Most countries nowadays have relatively low tariffs relative to the past, but there are lots of challenges of licencing and approvals and regulation which can nonetheless constitute very significant barriers to trade. And if the Trade Facilitation Agreement were fully operative the increase in global GDP would be very substantial and add over 20 million jobs globally. It’s a wide range. Some of it is, frankly, some countries use these non-trade barriers in order to achieve a bit of defacto protectionism. In some places it’s just a question of bureaucracy and red tape. We have a big red tape removal agenda in Australia, as you know we have been successful with that. We are moving towards a one stop window for importers to again lead the way and lead by example and say we can make it simple to do business in Australia and we expect others to make it simple for us to do business there.

JOURNALIST:

Prime Minister May has indicated she’d like Australia to be one of the first, if not the first free trade agreement with Great Britain post Brexit.

PRIME MINSTER:

Me too. Me too. We are on a unity ticket with that.

JOURNALIST:

Is that something you can see happening and something that will happen while you are Prime Minister or in this term?

PRIME MINISTER:

Absolutely. I spoke to Prime Minister May as she acknowledged in her statement today very shortly after her becoming PM in the UK and we are already well advanced. We have got things moving towards having a free trade agreement with the UK. Britain, when it exits the EU, which is obviously not going to happen tomorrow, it will take several years, but they have got to put in place the free trade agreements and we enthusiastic and supportive – we are providing Britain with as much assistance and at a technical level. You’ve got to remember Britain has not negotiated a trade agreement for a long time - they’ve been a part of the EU. So there is opportunities for us to work together very constructively and yes, Prime Minister May and I are very committed to having an early free trade agreement put in place so that when Britain leaves the EU we have very open markets between Australia and Britain.

JOURNALIST:

Can Australia argue against protectionism at the G20 despite knocking back foreign investment requests from China?

PRIME MINISTER:

Well you are really talking about two things that are related but quite different. The most countries, I mean I would say all countries that are major countries reserve the right to determine, make determinations about foreign investment. We are a relatively, relative to others, a very open economy. It is a lot easier for a Chinese company to invest in Australia than for an Australian company to invest in China – so that is one obvious point. So yes we are a country of great opportunity for investment. Australia is the second-largest destination for Chinese offshore investment after the United States so China is not exactly being knocked back or turned away but we obviously do reserve the right as Australians would expect, as Chinese understand to say no in circumstances – in the Ausgrid matter which again was not raised specifically in the meeting but that is the one that you are talking about, that was on national security grounds.

JOURNALIST:

Did dairy come up PM?

PRIME MINISTER:

We did not discuss the dairy industry specifically. I have to say you have to remember President Xi and I have had a number of long discussions in the past. He is the host so he is meeting everybody – we had a longer meeting than was anticipated but you’ve got to understand he’s got to meet everybody so he is engaged in that.

JOURNALIST:

Can I just a big picture question. Do you believe US dominance will continue in the Asia Pacific region?

PRIME MINISTER:

The United States presence in Asia and the Asia Pacific will be strong – it will be a strong presence, it will be by far the strongest military presence for a very long time.

JOURNALIST:

Even under Trump?

PRIME MINISTER

I am talking about many decades – if there is a president Trump he won’t be around in 50 years let’s face it so no matter how healthy he is, there are term limits. I am looking forward into the middle of the century and beyond. The United States, the force of the United States, its presence, its stature, its military power, its economic strength will remain a leading force in this region and its military superiority cannot be overtaken in, well looking around you, in the lifetimes of almost all of us.

JOURNALIST:

This event is a showpiece for China and we see friction with China, whether it is the South China Sea or whether it is Ausgrid – should Australia be saddened about the ambitious of China or even fearful?

PRIME MINISTER:

I think Australians have, as has the President observed actually, as shown in the Lowy poll have a, by and large, a very positive view of China. The Australia-China relationship is a very positive one. It has been very positive for both countries. Both of our economies are going through a process of transition. Different economies, obviously particularly in terms of scale but the China Australia Free Trade Agreement supports that transition in both markets. The relationship is very good. There will always be points of difference and President Xi and I respect those difference of opinion but there is a tendency if I may say so in the media and the commentary to focus unduly and disproportionately on points of disagreement. Overall it is a very strong relationship. It is growing in terms of the people to people relationships, the institutional relationships and of course in terms of trade and commerce. So it is very positive.

JOURNALIST:

You plan to sit down with Prime Minister Modi.

PRIME MINISTER:

Yes, very shortly if I –

JOURNALIST:

What is your key objective? What more than anything do you hope to take away from that meeting?

PRIME MINISTER:

Well the most important thing is to continue to develop closer relations with India on so many fronts. We have a very good close relationship with India. I think it was John Howard who said some years ago that despite that fact that we had so many things in common, not least of which was John’s great passion of cricket, our relationship with India was not as developed as it should be at a state to state level. That is changing. We are certainly looking to open up closer economic relations. As you know there have been discussions along those lines in the past but we have many other areas of cooperation, strategic, economic and of course we have, we recognise, just as we have with China, we are the most successful multicultural society in the world. There are many Australians of Indian background. Many Australians of Chinese background. So our nations have become closer in no small part because of those people to people and family links that are so critically important. And on that note – I must leave you and see the Prime Minister.

Thank you.