Interview with Greg Jennett, ABC Afternoon Briefing

E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING
WEDNESDAY, 12 JUNE 2024

SUBJECTS: Over $86 million of Australian wine exported to China; Queensland Government Budget. 

GREG JENNETT, HOST: Murray Watt, welcome back once again to the program. Now, we find you today in McLaren Vale, only days ahead of Premier Li's visit to Australia of course. Confirming that South Australian winemakers alone have restored about $80 million, I think, in trade to China within a month of the door reopening there. Nationally, though, I think there's a long way to go, isn't there? To get back to where the market was before it closed? What does this early trend there in South Australia tell you about the likelihood of a full rebound?

MURRAY WATT, MINISTER FOR AGRICULTURE, FORESTRY AND FISHERIES: Yeah. Well, there is some very encouraging news even at this early stage, Greg, when it comes to wine exports and agricultural exports getting back into China.

As you mentioned, I'm here in the McLaren Vale just outside Adelaide, with Trade Minister Don Farrell and the South Australian Agriculture Minister Clare Scriven at Wirra Wirra Winery. Now that would be a winery probably well known to many of your viewers. Some of them may have spent a bit too much on Wirra Wirra products over the years, but even this one winery has already been able to sell 15,000 extra bottles of wine into China just in the last month or so since those suspensions were lifted. And they were telling us that they have another shipment planned to go in the next couple of months and are obviously intending to keep it going from there.

So, the fact that even within a month of those suspensions on wine exports being lifted by China, that we've managed to get $86 million worth of Australian wine - the bulk of it here from South Australia - that is a really encouraging trend and, frankly, probably goes further than what we expected to happen quite so soon.

If you look at the figures, before the impediments were imposed by China on wine, China was our biggest wine export market, and they were buying about $1.2 billion worth of Australian wine. Now, if you multiply 86 by 12, we're not actually too far off on a monthly basis the kind of figures that we were achieving before those suspensions were lifted, and that's just in the first month.

So, we want to be moderate about this and not get overexcited. There is a long way to go, but it's a very encouraging signal. And as I've said before, it's a sign that the stabilisation of our relationship with China that the Albanese Government has worked so hard on is producing real dividends for our farmers, for our winemakers, for the whole agriculture sector in Australia.

GREG JENNETT: It's not universally across the sector going to be a success story here, though, is it?

And I think there's an acknowledgment of you and the government towards that end with $3.5 million in assistance to what you call long-term viability in the sector. Now, one peak industry group, this would be Australian Grape & Wine, had in the budget context, asked for $86 million. This is going to be seen as quite inadequate, isn't it?

MURRAY WATT: Well, I think it's not surprising to hear that particular interest groups would like a lot more money from government than government is able to provide. But the new funding that we've announced today of $3.5 million is a significant investment from taxpayers to assist this industry to rebuild itself and get back to the strength that it had before it lost the China market.

Our government's focus is really not so much on paying people to exit this industry, but actually about rebuilding this industry and making it even stronger. You know, you cannot underestimate the importance of restoring that China market, and those dollar figures show the importance of that. But the other thing we've been working on, and this funding will go towards, is diversifying our markets so that this industry isn't as reliant on China as it was beforehand. So, this funding does involve extensions of marketing personnel to be in markets like Japan, the USA, as well as China.

We're also going to be using the funding to boost domestic marketing of some of the industries and some of the regions that have been suffering the most. But also it's doing really practical things, like providing a register that growers can go to get much better information about who's growing what types of varieties of grapes at the moment, what the demand is, so that people can make better informed decisions about where they invest their money, what type of grapes they plant and harvest, so that they can be more confident that they're going to get a good return on that in the future.

GREG JENNETT: You are pointing out here, Murray, that exit isn't the government's goal. It's viability and a long-term future. Yet the brutal reality for many operators in some regions in particular, is that exit will be a must for them. The only option available, isn't it? I think production has to be cut by up to 20 per cent in some regions to bring it back into market equilibrium. What's in it for them?

MURRAY WATT: Yeah, I acknowledge that like in every agricultural sector, there will be particular farmers and particular growers who decide it's in their commercial interest to exit an industry rather than stay in it. But what we want to be doing overall as a government, and especially when it comes to spending taxpayers' money, is investing in the future of the industry and encouraging people to stay in it and create the market conditions that make it viable for them to do so.

There have been calls from some growers to pay people to exit the industry. That has been tried before in Australia and it was a dismal failure about 15-20 years ago when the industry was also going through hard times. The government of the day did pay people to leave the industry. It resulted in an undersupply of grapes within a very short amount of time.

So, we do need to make these decisions carefully, make sure that we don't cause that sort of perverse consequence and as I say, do as much as we can to get this industry back up on its feet, performing as highly as it was before we lost the China market.

GREG JENNETT: Just a process question, because I do want to move you on to a couple of Queensland questions, Murray Watt, as you hail from there. But just on process, why wasn't this $3.5 million you're announcing today put into the budget?

MURRAY WATT: Well, obviously governments make announcements at every different point in the year, Greg, but one of the key priorities that we have had, as I say, is restoring that China market that has now been achieved and we are seeing the benefits flow from that. But we recognise that not everyone is going to be benefiting from that and we need to make sure that we are providing support to assist those who aren't going to benefit from that decision.

I should also make the point that for growers who are undergoing real financial hardship at the moment, and there are some who are in that position, we do have a range of income support measures available for farmers every day of the week, which I'd be very much encouraging people to take up. So, things like the Farm Household Allowance, concessional loans that are available through the Regional Investment Corporation. For any farmer who's experiencing financial difficulty, whether it be in wine or other industries, those supports are available, as well as this kind of restructuring support that we're providing in this new funding today.

GREG JENNETT: All right, well, thank you for pointing that out. I hope that any growers watching this program will access that if necessary.
Can I finally take you as a Queensland Senator, we saw a fairly extraordinary state budget handed down by Treasurer Dick yesterday, splurging $11.2 billion in hip pocket relief. How is this not inflationary and not counter to everything Jim Chalmers carefully tried to work together in his own budget?

MURRAY WATT: Well, obviously, every state government is responsible for their own decisions around what they put in their budgets. But I think what you can see from the Queensland government is a real attempt to address the number one issue that Queenslanders are facing, which is cost of living pressures. The range of announcements that the Queensland Government made up to and in the budget yesterday really go to those cost of living pressures. You know, things like bringing in 50 cent public transport fares for any journey taken on public transport, the stamp duty concessions for first home buyers, which is obviously great in terms of a cost of living measure, but also really helps people get into the housing market, which is a challenge as well.

I think they also announced that they're freezing every other government fee and charge, which, again, is recognition that people are doing it tough. And like us, they provided a significant energy rebate for Queenslanders to help with their power prices. So, I think Treasurer Cameron Dick and Premier Steven Miles have acknowledged that right now that is the biggest issue facing Queenslanders and they're prepared to put the Queensland budget to work to deal with that.

GREG JENNETT: So, was all of this known? I suspect the energy bill relief component from the Queensland government may have been, but were all the other elements, and as you list them there, Murray, there is a lot. Was that known to the Federal Treasury, the RBA, the Treasurer, Jim Chalmers, when the May Budget was put together here in Canberra?

MURRAY WATT: Look, I wouldn't be able to comment on that, not having been directly involved in that, but I suspect that each of these measures was announced when they were ready to be announced.

Even yesterday in the state budget, there were new announcements made by the Queensland Government that we weren't aware of, but really, I wouldn't be able to comment on how much of that was known in the preparation of the Federal Budget.

GREG JENNETT: We might get an economist to run a ruler over it and get them to tell us what they think about the inflationary effect. Murray Watt, I'm sure you have somewhere else to be soon. Well, thank you once again for being on the program with us.