Transcript of Doorstop, Four Seasons Hotel Sydney



08 April 2014

2014 International Association of Ports and Harbors Mid-Term Conference

Warren Truss: Okay, well, today it's been a pleasure to address the international ports conference being held in Sydney. Australia is a major shipping country. We are heavily dependent upon the shipping industry for our exports. Indeed, around 10 per cent of the entire global trade goes through Australian ports and so for us to have efficient ports and efficient shipping industry is very important for our prosperity as a nation. We are increasingly reliant upon imported goods to service our consumer market, while on the other hand we export large quantities, volume commodities of bulk commodities and those commodities require global scale of technology, large vessels, efficient ports if we are to be competitive globally.

So the shipping sector plays a much more important role in our economy than just providing jobs or supporting Australian industry. It fundamentally, you know, underpins the way in which our economy will function. At the domestic level, unfortunately the Australian shipping industry has not been able to compete effectively with internationally flagged vessels. Unless Australian ships are able to carry a bigger proportion of our domestic cargo, our roads and our rail lines will simply be clogged up.

We need shipping to bear a bigger proportion of the Australian shipping task. We want Australian vessels carrying containers and other freight between our major capital cities and to our regional ports. We certainly need to ensure that ships are, in fact, playing their role alongside of trucks and trains in delivering our nation's freight task.

And unfortunately the share that shipping is playing on our domestic market continues to decline. This was an issue that was raised in the Productivity Commission report dealing with the Tasmanian economy and that brings it also onto the national agenda. Today, I'm releasing a discussion paper on the future shipping policy for Australia: what we can do to reduce red tape,

what we can do to make it more efficient and what we can do to ensure that goods can be moved from port to port in Australia in the most efficient and cost effective way.

The previous government made a large number of changes to the regulatory system for shipping in Australia. Those changes have clearly been a failure. Now, the Government claimed it would result in more Australian flagships applying the trade, that it would also result in there being a substantial increase in employment on Australian ships and more companies wanting to flag vessels in Australia. That simply hasn't happened. The number of ships flying Australian flags continues to decline.

They set up a second register under which ships could operate with substantial tax concessions and also with less regulatory requirements. There is not a single ship on that second register and so the whole fundamental reforms that the previous government introduced have failed. As a result, we are—the shipping industry is playing a smaller part in our nation's freight task. We must address that, otherwise our land transport network will simply become gridlocked.

So this discussion paper will provide an opportunity for the community—the shipping community, but indeed Australian industry as a whole—to look at what the policy settings should be to foster domestic shipping in Australia by Australian flagged vessels wherever possible or how we can make best use of internationally flagged vessels that fly our shores.

Question: Is the discussion paper only looking at the reforms brought in by Labor or across all regulations across the industry?

Warren Truss: No, the intention is that it will deal with the shipping industry as a whole. The most recent developments was the regulatory changes that the Labor Government introduced. Clearly they have not achieved their objectives so it's appropriate that they specifically be examined. But we want to look at the broader framework as to how we can ensure that shipping plays a bigger role in our national freight task.

Question: [Indistinct] free trade agreement with Japan, obviously a big positive for the beef producers in this country.

Warren Truss:Well, certainly the beef industry will be pleased at the significant reductions in tariff on their exports to Japan. The Japanese beef market is a premium market, one that's very highly valued by the Australian industry and certainly these long awaited tariff reductions will make a big difference to Australian beef producers and help sure up Australia's position in this market.

Question: Is it a concern though that the other side of the [indistinct]…?

Warren Truss:Well, my understanding is that the tariffs will not be lifted on larger vehicles such as those that are made in Australia until after the global manufacturers have carried through with their decisions to leave this country. So there is effectively no car manufacturing industry left for us to provide tariff protection for from 2017.

Now, I regret that fact. I would like us to have a continuing Australian car manufacturing industry, but those decisions have been made and they've been made in board rooms in other parts of the world. So this will, in fact, mean that Australians will have access to lower cost cars sourced from the most competitive markets in the world.

Question: Is it fair for cheese makers and dairy farmers to be unhappy with this deal?

Warren Truss:Well, I understand that there's significant benefits for the cheese industry, that they will have substantially increased access to Japan. There has been some criticism from sections

of the dairy industry and the sugar industry. In relation to sugar, my understanding is that this deal will reduce the effective tariff on high polarity sugars which are the sugars most commonly traded, from over 105 per cent down to about 67 per cent. Well, that obviously is still a high tariff but it is a substantial improvement and it is a privileged market access that will be available to the Australian industry.

Now, when you're doing trade deals there are always—there always has to be some element of give and take. We can't get everything that we would like. Clearly, I would like to see all agricultural trade barriers removed, and that would be a huge boost to the Australian farm sector. If global tariffs and artificial trade barriers were to be eliminated, our Australian farm industry would bound ahead because we are efficient producers of high quality products.

But there are barriers in place, and some of the biggest agricultural trade barriers have been in Japan. These negotiations eliminate some of those barriers altogether, some of them hundreds of per cent, but there are still some protection left in place for the Japanese industry. There will be opportunities as a part of this agreement to reconsider these issues are five-yearly interviews—intervals, and I hope that, as a part of those discussions, the protection that prevents the free flow of Australian sugar and beef and grain and dairy products and a whole range of other products might eventually be reduced, and that there can be, globally, genuinely free and open trade.

So this agreement doesn't achieve everything that the farm sector would wish, but there are very substantial gains across most sectors of agriculture.

Question: You've got an increase in dairy quotas but no reduction, we understand, to ease tariffs beyond that. Is that accurate, and is it less than ideal?

Warren Truss:Well, we would like all barriers to be eliminated. There have been substantial advances across all sectors, and we're grateful for that, and I recognise how difficult the achievement of those reductions has been for the Australian negotiators. Remember that—the history of the Australia-Japan free trade agreement. It was way back in the days of Sir Jack McEwan that our first economic cooperation agreement was signed with Japan only a decade after the end of World War II. That was an extraordinarily heroic achievement by Australian trade negotiators, and that is still the framework that underpins our trade arrangements with Japan.

So for over 50 years now, there have been few advances in the actual trade negotiations between Australia and Japan, so for us to have made this step forward is certainly historic, and it updates an agreement that was well and truly due for update but which has been so difficult to advance over a very long period of time.

So I think it's fair that we acknowledge the achievements of Andrew Robb and his negotiating team. They've secured an agreement which hasn't been able to be achieved now for decades.

Question: How much cheaper will it make the average TV or microwave? Is it five per cent?

Warren Truss:Well, there are a range of tariff reductions, and as the fine print is made—is finalised, all those sort of details will become apparent. Clearly, there'll be many weeks taken now to actually put into writing what has been agreed at a trade ministers and prime ministerial level, and that detail then will be scrutinised by the Parliament before an assessment is made as to whether Australia should ratify this agreement.

Question: Will those [indistinct] yesterday were saying that they [indistinct] Korea, for instance, a few of the details [indistinct] not enough time for business to assess those details?

Warren Truss:Well, once an agreement has been reached, it's then necessary to put that agreement into technical trade language, translate it so that all parties can understand it in their own language and be satisfied that it faithfully reflects the agreement. Now, that invariably takes quite a bit of time, and in the case of the Korean agreement there was a real determination on the part of the Koreans to make sure that all the detail was completely accurate and would not be subject to later dispute. You'll be aware that they had some issues with their US agreement after it was signed as to whether or not it—the final agreement actually reflected the spirit of what had been agreed by the negotiators.

So we respect that that is a part of the process. That will have to happen also in the case of this agreement with Japan. The detail now will have to be put on paper and agreed to by the negotiators, and then that's the time for us to be able to scrutinise that detail.

Question: Can further in-roads really be made on tariffs now when the deal isn't signed off?

Warren Truss:Well, certainly the agreement—the heads of agreement has been negotiated. Now it's important to make sure that the heads of that agreement is accurately reflected in the documents.

Question: Do you support putting commercial hotels into national parks like Kakadu?

Warren Truss: Commercial…?

Question: Commercial hotels into national parks like Kakadu [indistinct]…

Warren Truss:Well, I think it is important that there are tourism facilities available in our national parks so that people can enjoy them. They don't necessarily have to be in the parks, but they certainly need to be close enough so that tourists can have the experience of enjoying what natural flora and fauna in our landscape that we're endeavouring to preserve in the park and, of course, make available to the globe to enjoy forever. So you do need to have high-quality tourism facilities either in or near those parks to facilitate that visitor experience.

Question: How else could the Environment Department raise more revenue?

Warren Truss: Sorry?

Question: How else could the Environment Department raise more revenue?

Warren Truss:Well, the Environment Departments or, in particular, those who run the national parks, are generally state national parks. They often charge entry fees, they obviously receive substantial funding from government budgets, and that enables them to manage their parks and to ensure that the public who visit them have a pleasurable experience.

Question: Is it appropriate for a hotel concierge to move a media conference with the acting Prime Minister to the footpath?

Warren Truss: Sorry?

Question: I said is it appropriate for a hotel concierge to move a media conference with the acting Prime Minister to the footpath? We were moved to the footpath by the hotel here. Was he being a little overzealous?

Warren Truss:Well, I'm sorry, I wasn't aware that that had happened. This is obviously a rather noisy spot. I'm happy to go to a quieter spot if that suits you, and I'm sorry about the noise. I

wasn't aware that the press conference had been moved, but I respect the right of a hotel manager to manage the hotel in a way that he sees fit.

Could I just make a brief comment about the search for MH370? Obviously today is another critical day as we try and reconnect with the signals that perhaps have been emanating from the black box flight recorder of the MH370. The connections two days ago were obviously a time of great hope that there had been a significant breakthrough, and it was disappointing that we were unable to repeat that experience yesterday. I understand that they'll be using the autonomous vehicle to examine the water in the areas of interest today, and I hope that might lead to another breakthrough.

It's obviously important for us to pursue this search with great vigour. It is a disappointment that there's so much effort being put in without us having—being able to deliver some finality is to what actually is happening, what has actually happened to end this flight, but I can assure the families that we will continue the effort. There'll be a large number of aircraft and vessels involved in the search today. I'm told the weather conditions are quite good, so let's hope that today we're able to build on the work of a couple of days ago and help better establish what happened in the last moments of this flight.

Question: [Inaudible question]

Warren Truss:Well, certainly the water is very deep; that's a challenge. It's a long way from the shore; that adds to the challenge. The weather conditions have been a bit mixed, and we're relying on incomplete satellite data and other information to try and plot the course of the aircraft, but it's remarkable what's been achieved already, that these lines have been able to be drawn with the benefit of what technology has been available.

Everyone's anxious about the life of the batteries on the black box flight recorders. Sometimes they go on for many, many weeks longer than they're mandated to operate for. We hope that that'll be the case in this instance, but clearly there is an aura of urgency about the investigation, and we'll certainly be taking every available opportunity that we can to bring this whole search to some degree of finality.