Speakers: ABC Afternoon Briefing Host Patricia Karvelas; Business Council of Australia Chief Executive Bran Black
Topics: Australia-EU Free Trade Agreement, fuel supply, work from home arrangements
E&OE
Patricia Karvelas, Host: For business, it’s a big moment in an uncertain global economic environment. To get their reaction, I spoke to the Business Council’s Bran Black a short time ago.
Bran Black, welcome to the program.
Bran Black, Chief Executive: Thanks so much for having me.
Patricia: Is this a dud deal for Australians?
Bran: Well, we understand that there are some sectors, of course, that are unhappy, but our position is that when you look at this deal as a whole, it is a good thing for the country.
Patricia: Why is it a good thing? What will change for ordinary Australians watching, they hear a free trade deal, there’s a lot of stigma around the concept of free trade and what it means for Australian jobs. How will it change or increase jobs and opportunities here?
Bran: Well, one in four jobs, as is often quoted, is trade-dependent in Australia. So if we have better trading relationships with partners, then that immediately means that there is an automatic dividend.
We also know through this particular agreement that we’ll have access to food, we’ll have access to various other things that people use and consume each and every day, which is going to be a very important benefit for the country.
But we also think about some of the export opportunities that we’ll have as well, so particularly in the context of procurement opportunities with respect to infrastructure into the European market, we’ve seen, of course, the university sector talking about Horizon Europe, and the access to research and development opportunities that that will bring to. Critical minerals and our opportunity to trade in that respect as well.
So again, on balance, we think that this is a good deal for Australia. The final point that I’d make there is that what we’ve seen with Australia’s free trading arrangements is that if we’re fortunate enough to enter into a deal, then we often have an opportunity to improve it afterwards. So it’s a good thing to get things started, and then we can move forward, we hope, with subsequent negotiations down the track.
Patricia: It’s an interesting point you make, because the National Farmers Federation are making a very different point. They’re saying, actually, this locks us in, and actually is a dud deal because of the time frame, and that it locks them into a substandard deal. Do you disagree with that?
Bran: Well, I think there is opportunity, there is clear opportunity for us to establish these types of further partnerships. We know that, as an example, because we have on foot right now discussions with India to improve on our existing free trade agreement with India, and we know that both countries are working towards trying to achieve that outcome.
So our hope is always that if we can get our foot in the door in the first instance with a good on balance agreement, and we think that at the moment, what we’ve seen here, on balance, supports Australians. 98 per cent of exports from Australia to Europe are going to be tariff-free, that is a good thing. So if we can build on that in future, that’s even better.
Patricia: Is this all just about Donald Trump? It seems that some of the positions the Australian Government had have changed a little, but ultimately, there has been a lot of compromising from Australia as well. Is that because of the role Donald Trump is having around the world on trade?
Bran: I think we should always be looking to establish strong bilateral agreements. If Donald Trump has done anything, it’s prompt countries to think more about those opportunities, and let’s recognise that for the opportunity that it is.
So we’ve, of course, established in recent times a free trade agreement with the UAE, as I mentioned before, in discussions with respect to India and extending the existing arrangements that we have in place there. And now we’ve established a free trade agreement with our third largest trading partner and our second largest investment partner. Those are good steps forward.
And I do stress for Australia, the Business Council for Australia, we recently released our Global Investment Competitiveness Index. We ranked 21 of 42 countries in that, but across the seven areas that we measure, we looked at trade, we come second of those 42. If we can improve our position, that’s even better.
Patricia: I just want to talk about a couple of other issues. We have a fuel crisis, the world has a fuel crisis because of the war in the Middle East. The Government’s lowered diesel standards to get more diesel into the country. Is that wise and do more measures have to be looked at?
Bran: Well, we’re of course, looking at the lowering of standards across the board in terms of diesel, but we’ve also seen that in terms of petrol as well. Now those are sensible steps to take in the circumstances. My perspective with where things are at right now is that the very best thing that we can be doing is two things. Firstly, coordinating, so having really solid coordination arrangements in place as between the private sector on the one hand and government on the other.
Patricia: The Government did announce that National Coordinator, and yet there are so many petrol stations that still now have no fuel. What’s going on?
Bran: I think those things take a little bit of time. And we also know that we’re dealing with a reasonably significant challenge in the context of demand going up quite significantly, and then we also saw, of course, that increased demand put pressure on supply networks or distribution networks, which led to further price increases.
So we are seeing challenges that need to be addressed, but having the appointment of a coordinator is a good start. And then I think beyond that, what we really need to focus on is the scenario planning. We know now that this war has a potentially uncertain duration. It always did, but we’re really seeing the consequences of that play out now.
So we need to be planning for all different scenarios, identifying the real weaknesses or potential weaknesses in supply chains, and then looking sensibly at, well, what are the mitigating factors or actions that we can bring to bear to address those potential problems?
Patricia: Minister Bowen suggested if people can, they should work from home. I know you’ve had strong views, and other groups have had strong views about that, but isn’t it sensible that, you know, fuel, obviously, at a shortage around the world, prices are record high. Why wouldn’t we be making people work from home if they can?
Bran: I think we’ve always said that with respect to work from home, generally, is that it is something that should be negotiated as between employers and employees. Now, circumstances are now a little bit different, of course.
And we know that we should be looking at wherever we sensibly can reducing our fuel consumption, but at the same time, this is all about balance and being sensible. So at the same time, we need to account for the fact that there are businesses that depend for their livelihoods each and every day on foot traffic, and we need to make sure that they can continue to stay open.
A lot of commentary has been about the extent to which what we’re seeing now is very similar to what we’ve seen during Covid. There are, of course, similarities in terms of this being a supply chain problem, but there are also core differences. We don’t have to socially isolate, we can use public transport, and my advice would be, if people can sensibly use public transport coming to work as they ordinarily would, support their small businesses, then they should absolutely do so.
Patricia: And should the governments be stepping in to make that more accessible, cheaper, to help workers?
Bran: Well, I think those types of options should certainly be on the table, but the priority has got to be, I think, making sure that we respond sensibly and encourage people to use public transport to the extent that they can.
Patricia: Okay, are you worried that there might be overreach in relation to measures on this crisis?
Bran: I think we need to be cautious about that. There’s been quite a lot of commentary, indeed, we’ve seen recently the New Zealand government, for instance, announce that it’s providing assistance, but it’s being cautious in terms of how it’s providing that assistance.
It’s being measured, it’s trying to target that assistance, that’s with respect to the cost of fuel.
And it’s doing that because it doesn’t want to see the type of high inflation post-crisis that it experienced post-Covid. I think we need to be cautious about the approach that we take during this period as well.
Patricia: Thank you so much for coming in.