Sky News with Laura Jayes

23 November 2023


Laura Jayes: It's two weeks, a little over two weeks since Anthony Albanese returned from this historic visit to China as the first Prime Minister to do so in seven years. And that meeting came a, quote, "normalisation of the relationship."

The Assistant Trade and Manufacturing Minister, Tim Ayres, joins me here at the desk, as he does on a regular basis. Good to see you.

Tim Ayres, Assistant Trade Minister: G'day, Laura. Hey.

Laura Jayes: There's so much hope coming from that meeting. Xi Jinping essentially said that trade was going to get back to normal. In that intervening time, and these things do take time. Has anything actually happened? Have, you know, Aussie exporters been able to sell more of their products to China, or is it the situation normal?

Assistant Minister: Well, first things first. The government's strategy has been to carefully, calmly and consistently work towards a normalisation of the relations with China. The trade component of that has been important, but it is by no means the only component of the relationship with China and dealing with some of the challenges that exist in that relationship. We've been working through that in a calm and consistent way. Out of the trade impediments that have been put in the way of Australian exports to China, we've resolved about 18 and a half billion dollars worth of the $20 billion that are to go. There is still progress to be made.

Laura Jayes: What's in the road?

Assistant Minister: There is wine, beef, are the critical issues here.

Laura Jayes: So, what's the problem, there?

Assistant Minister: Well, there's a range of issues that need to be worked through. Wine --

Laura Jayes: I thought that was solved in China.

Assistant Minister: Wine. There is a process to resolve the wine questions. There is of course still - there is a process that there is a review that the Chinese are undertaking of the impediments that they have put in place of wine. It looks exactly the same kind of process as has been undertaken to --

Laura Jayes: What is it a labelling thing? Is it a country of origin thing? What is it?

Assistant Minister: Well, I think those are questions that are best put to the Chinese Government.

Laura Jayes: Yep. But surely if you’re normalising the relationship we know what they are. Do we not know what they are?

Assistant Minister: The point I'm trying to make, Laura, is that it is working through a step at a time that the meeting in China was important progress. The fact of having that meeting and some dialogue at leader level is important progress. It does not mean that every single issue is resolved.

Laura Jayes: But you'd think it would be more than progress. We've been making progress for quite some time. But you’d think the first Prime Ministerial visit from an Australian PM going to China in seven years, that there would be something material, not just more of the same.

Assistant Minister: Well, dialogue's critical.

Laura Jayes: Yeah, I know. But if the Prime Minister's going to China and Xi Jinping has made all the right noises and said, you know, we're getting back to normal, you'd expect something to happen quite quickly, practically.

Assistant Minister: I think, from the Australian Government's perspective, we want to see fast progress on those issues over the coming weeks and months. It was a very successful visit.

Laura Jayes: How do you measure that success?

Assistant Minister: Well, in Shanghai, the Trade Minister and the Prime Minister, there were 250 companies that would employ tens of thousands of Australians.

Laura Jayes: Yeah, but sure, I mean those companies go on every single trade delegation and visit they've ever been to. So, that surely can't be a measure of success?

Assistant Minister: There haven't been many of them going over the course of the last three or four years.

Laura Jayes: Because of COVID.

Assistant Minister: Because of COVID, because of the challenges in the relationship. And that is an important piece of work that actually matters.

Laura Jayes: Yeah, but surely that's not your measure of success. I mean, farmers and exporters and winemakers, particularly in South Australia, will be watching this this morning --

Assistant Minister: That’s right.

Laura Jayes: -- going, "Hang on, we need to see a little bit more than just, you know, business leaders meeting in Shanghai."

Assistant Minister: It's been good to see the progress that has been made thus far, but we need to see more progress on those final three categories of goods.

Laura Jayes: Okay. So was it - it's wine, beef, lobster?

Assistant Minister: Yes, that's right.

Laura Jayes: Got it.

Assistant Minister: That's right. And the thing about those exports and the exports that have been the subject of the impediments that have been resolved is they are all regional. These are all regional jobs. They are categories of industry that employ people in good jobs in regional areas. And the government's approach is, yes, stabilise the relationship with China. That is important from a trade perspective, it's also important from a strategic perspective. But as you know, the government is all about diversifying our trading relationships, making sure --

Laura Jayes: Yep. It's hard to do that, though. Because we have tried.

Assistant Minister: It's hard work, but it's necessary work.

Laura Jayes: And we have done a little bit of that, Indonesia, India, certainly in the frame there. But the reason why this is so important, and I'm so bolshie with you this morning, is because cost of living is the number one issue. This directly affects people and their household budgets. Last night, we hear from Michele Bullock that inflation isn't caused by overseas, not the Ukrainian War, not what's going on in Israel. This is homegrown now. That sounds like a you problem.

Assistant Minister: Trade is important. It is important in terms of jobs. The jobs in firms that are trade exposed provide better wages and better quality jobs than jobs in the rest of the economy. It's absolutely vital for our growth, for good jobs for Australians, and indeed attending to the kind of issues, the long-term structural issues that you're alluding to.

Laura Jayes: But what I'm trying to say, Tim, and I'm sorry, I keep on interrupting you today, and I hate that, but we are running out of time. What I'm trying to say to you is that the government has - has Michele Bullock thrown you under the bus here? Cause essentially this is a you problem now, there needs to be done more on the fiscal side, whether it's migration, better skills match up or direct support, or will that be inflationary?

Assistant Minister: All of these issues are being attended to by the government in a pretty careful way.

Laura Jayes: Yeah, not fast enough, though.

Assistant Minister: You've seen a $23 billion cost of living package which has been demonstrated to have not only provided relief for Australians who are facing big challenges in terms of inflation, but also to have put downward pressure on inflation. Electricity –

Laura Jayes: But one thing you do have control over --

Assistant Minister: -- is cheaper than it would have been, 18 per cent cheaper.

Laura Jayes: Sure. But one thing you have control over the level of migration and whether that matches the skills it feels like and it looks like, and there's evidence that that has not matched. I mean, you've had 500,000 migrants come in the last twelve months and you still have a massive skill shortage in the construction sector, for example, and a shortage in housing. That is pushing up inflation, that is pushing up the cost of homes. Yet your government still has a massive migration intake plan for the next year. Doesn't that need to be seriously limited?

Assistant Minister: Well, there are inflationary pressures across the economy. Don't forget where this started, where we've started and where we've got to. Inflation is certainly moderating. We'd like to see it moderate, faster.

Laura Jayes: Migration?

Assistant Minister: In terms of migration that we've inherited a migration system that has been broken and the government has - there are challenges there in the economy in terms of skill shortages that --

Laura Jayes: I'm sorry, I fully accept that. But you cannot blame the intake of 500,000 migrants on the previous government. It was squarely the choice of this government and how you match those skills was in your power. Yes, you needed more migrants to fill those skill shortages. But was the level too high, too quickly?

Assistant Minister: Well, I don't believe it was too high. I don't believe it was too quick. It does mean that we've got to focus on, in an ongoing way, on making sure the migration settings are right for now --

Laura Jayes: Are they right now?

Assistant Minister: -- but also in a structural way for the future.

Laura Jayes: We’re now having economists, we just had the Shadow - sorry, the Opposition Leader in NSW, saying it is too high, it needs to return to pre-COVID levels, which was about 250,000, if not lower.

Assistant Minister: Well, we've got skill shortages --

Laura Jayes: Can you see the argument?

Assistant Minister: -- that we've got to attend to and --

Laura Jayes: Do you see the point in that argument, though?

Assistant Minister: And we've got to get homes built. We've got to get houses built.

Laura Jayes: Yeah.

Assistant Minister: We've got to get infrastructure built. We've got to make sure that we attend to all these issues. Yes, for inflation in the short term, but also for making sure we're attending to the big productivity and other challenges for the future. We have had a decade where government's been sitting on its hands and coasting. Now the government is actively engaged with resolving these issues, whether it's in terms of migration, productivity, infrastructure, the energy --

Laura Jayes: Sure. But more hairdressers aren't going to build those homes.

Assistant Minister: That's right.

Laura Jayes: Right. So, we're bringing in the wrong skilled workers is my point.

Assistant Minister: Well, we need workers in the areas of the economy where we need to see skills growth or capacity growth. Housing is obviously one of those, but it's not the only one Laura.

Laura Jayes: Okay. Always good to talk to you, Tim.

Assistant Minister: You too, Laura. See you soon.

Laura Jayes: See you soon.