PRIME MINISTER:
Well, we’re here in Berlin fighting for Australian jobs.
We need to have a free trade agreement with the European Union which provides the opportunity for more Australian exports to Europe and more investment, both in Australia and in Europe. We need to see a higher level of economic activity between the EU and Australia. Of course, Germany is at the heart of Europe and Angela Merkel, the Chancellor, who I will meet with tomorrow, is a very strong supporter of a high-quality free trade agreement with Australia.
Europe is our second-largest trading partner and the largest source of foreign direct investment, the European Union. So this is a really critical economic relationship.
It’s also a very important strategic relationship. We’ve just been to the Ministry of Defence and met with the Defence Minister, with our Defence Minister Marise Payne, and we’ve seen the Boxer Combat Reconnaissance Vehicles that Rheinmetall is going to be building in Australia in partnership with so many Australian firms. I’ve just been talking to their Chief Executive about the jobs that are already being created in Australia in anticipation of this project going ahead, with the vehicles to be built in Ipswich, and how more and more Australian companies are going to find their way into the global supply chain for Rheinmetall’s Combat Reconnaissance Vehicles.
So this is just one example of the partnership. Of course Lürssen, the shipbuilding firm, is going to be the prime contractor on building the Offshore Patrol Vessels, again built in Adelaide and then in Perth. Again, an example of our Defence Industry Plan, investment plan, delivering jobs and building a sovereign defence industry in Australia. A critical part of our economic growth and of our economic future.
So there’s a lot to talk about here; vitally important. Trade creates jobs. The reason we’re having strong jobs growth in Australia is in no small part due to the trade deals we’ve set up and the trade deals we’re working on. Whether it’s the Trans Pacific Partnership - which we’ve concluded as you know, it’s an 11 country TPP - or the free trade agreement we’re working on with the European Union, these are all absolutely critical for Australian jobs.
So a long way from home, but working hard to deliver more Australian jobs.
More Australian jobs is the key to our economic growth and our economic security.
JOURNALIST:
Prime Minister, you were going to mention on your trip here, to the Europeans on their FTA that they have to lift the restrictive farm barriers. A) are you confident that can be achieved? And b) is there a timeframe when you’d like to see the European FTA concluded? I know they’re dragging the chain a bit.
PRIME MINISTER:
Well the European Union has a process and we’re confident - the process is underway. We’d like to get the agreement concluded as soon as possible, plainly. But of course the EU is a complex organisation of many nations that have to develop a consensus and agreement around agreements of this kind.
But you know, as I’ve said to you all before, negotiating free trade agreements is a laborious business, but if you don’t start and if you’re not tenacious you won’t get there.
Remember Bill Shorten’s approach to the TPP? When Donald Trump pulled out Shorten said, “Give it away.” He wanted to give it away. He wanted to abandon all those Australian jobs it’ll create. He said I was delusional, persevering with it.
Well, I stuck with it, because I don’t give up on Australian jobs. We stuck with it and now it’s signed and other countries including the UK, where I’ve just been, are interested in joining.
JOURNALIST:
Prime Minister, is it also strategically important to strike a free trade agreement with Europe to set the road rules for the world?
PRIME MINISTER:
We think it’s very important to have high-quality free trade agreements - and I’ll be talking about this tomorrow - which set the rules for investment and for trade, which eliminate behind-the-border barriers to trade. So they don’t just cut tariffs, but they also remove other barriers.
Because if you set the rules for the road, if you establish and maintain the rule of law consistently, you will get not just more trade, but more investment. I mean the biggest barrier to investment, foreign investment around the world, in most countries, is concern about the rule of law. So the more you can set the rules of the road, as you’ve described it, Chris, then you’ll get more investment. That’s one of the reasons Australia sees so much foreign direct investment; because people are satisfied that if they invest in Australia, there is a legal system there that protects their investment.
JOURNALIST:
Prime Minister, your Minister Kelly O’Dwyer has had some trouble explaining why the Government resisted a Royal Commission into the banks for so long. Can you now explain that, given what we’ve seen over the last week?
PRIME MINISTER:
Well, sure. Look, about two years ago - in fact on April the 6th, 2016 - I gave a speech in Sydney at a function of Westpac’s in which I called out the unacceptable behaviour of the banks. I talked about how there had been a failure to put customers first and that the culture of the financial services sector was not delivering on their fundamental fiduciary obligation to put the customers first. They operate with a social license and they have an obligation to do that. Now, I called that out.
I made the decision not to proceed with a Royal Commission and look politically, of course, you’re all right when you say it would have been better for us politically if we’d done so years ago, or several years ago. No doubt Bill Shorten should have called a Royal Commission when he was Financial Services Minister in the Labor Government. But the reason I didn’t proceed with a Royal Commission is this: I wanted to make sure that we took the steps to reform immediately and got on with the job. My concern was that a Royal Commission would go for several years – that’s generally been the experience – and people would then say, “Oh you can’t reform, you can’t legislate, you’ve got to wait for the Royal Commissioner’s report.” You know, that’s exactly what everyone would have said. So, if we’d started a Royal Commission two years ago, maybe it would be finishing up now and then we’d be considering the recommendations. Isn’t it better, with the benefit of hindsight and recognising you can’t live your life backwards, isn’t it better that we’ve got on with all of those reforms?
We’ve strengthened ASIC.
We’ve created a one-stop-shop for consumer complaints against banks and other financial institutions.
We’ve strengthened penalties.
We’ve got them turning up the House Economics Committee to be accountable.
We’ve changed the law so that bank executives are accountable.
There’s been a huge change of reform and now we have a Royal Commission which has got much wider terms of reference than it would have had if it had been set up two years ago.
JOURNALIST:
But along the way, you bagged the idea of a Royal Commission. Was that a mistake?
PRIME MINISTER:
No, but hang on. What we’ve done is we’ve now got a Royal Commission with wider terms of reference than it would have had two years ago and the ability - and in fact the obligation under the terms of reference - to consider the reforms we’ve put in place and then give us advice as to whether or how they can be improved. So politically, all of the political commentators are right when they say politically, we would have been better off setting one up earlier. But as it’s turned out, I think we’ve put customers first, we’ve put substantial reform first and we’ve got a lot of legislation and reform passed already. It’s law that would not have been able to have been done if a Royal Commission had been started two years ago.
JOURNALISTS:
[Inaudible]
PRIME MINISTER:
Hang on, okay? We’ll go to you and then to Dennis.
JOURNALIST:
One of your other arguments at the time and has been, was that the financial cost to the banks themselves and their international reputation and their reputation in general would be harmed by going to a Royal Commission. Given what’s progressed, do you still hold that view? That was the argument by yourself and Scott Morrison.
PRIME MINISTER:
Well, no, the argument I put was that we knew what the problem was and frankly, we do. I mean some of the evidence is shocking before the Royal Commission but it is all consistent with the problem I identified two years ago, which is that the culture of the banks and other financial institutions has deteriorated far too frequently, in a way that does not put customers first.
You see, the banks have – and other financial advisers and insurance companies and so forth – they all operate in a trusted relationship. Typically they’re dealing with customers who are not financial wizards and certainly don’t have the same level of knowledge and information that the bank does or that the financial institution does. So the obligation to put the customer first is enormous. It’s preeminent and that’s what I said two years ago. Now my assessment was that the Government needed to take action and get on with the job of reform immediately and that’s what we’ve done. Now, I understand when you’re writing the political criticisms you’ll say the Government would have had less political grief if it’d set up a Royal Commission two years ago, you’re right. You’re right about that clearly with the benefit of hindsight. Having said that, you have to ask yourself, would we have been able to get all of the reforms done? Because everyone would have said - particularly the banks by the way - they would have said, “Oh you’ve got to wait until the Royal Commission delivers it’s report.” So whichever way you want to analyse it, you can’t live your life backwards.
We’ve got some very big reforms in place. The Royal Commission is underway. It’s got very wide terms of reference. I might say, they’re a bit wider than Bill Shorten thinks they are.
JOURNALIST:
Well he’s written to you now Prime Minister…
PRIME MINISTER:
We wrote me a letter. Well, he wrote it to you actually. He always gives his letters to the media first, he sends me a copy of them, of his letter to you.
In his letter, he says that the Royal Commission should pay attention to the importance of recompense, ensuring that customers who have had the wrong thing done are properly recompensed. Well you know what? That is a good suggestion, but it’s already in the terms of reference.
So I think what Bill should do is that he should read the terms of reference.
Of course you remember that great occasion when he went on Neil Mitchell and Mitchell said to him, “So you want a Royal Commission, what would the terms of reference be?”
He was honest enough to say that he’d just been thinking about it in a taxi on the way to the radio station and had noted a few things down on the back on envelope.
JOURNALIST:
But Prime Minister on this issue, doesn’t the scandal that we’ve seen about banks show that in the end Bill Shorten actually got the judgment right on that, by calling for the Royal Commission? Now you’ve had a lot of criticism of his judgment over time but didn’t he call it on the banks?
PRIME MINISTER:
David, you write the political commentary. I made the call - and I take responsibility for making the call - to put action and reform and legislation first. Clearly a Royal Commission is an inquiry, okay? It shines a big light on whatever it’s subject of investigation is. Clearly that’s what it’s doing at the moment and there’s great force in that.
But equally, at the end of the day you’ve got to change the rules. You’ve got to do something that will go forever, because no Royal Commission can go forever. A Royal Commission cannot compensate somebody. It can’t send someone to jail. It can’t fine anybody. So you have to change the law. The choice that we made was to put customers right at the forefront of our focus and say, “Right, we know what the problem is.” We don’t know every case of wrongdoing and we never will, let’s be frank, the Royal Commissioner has made that point. But what we did know, was that banks and other financial institutions had not been putting customers first. I spoke about that very plainly two years ago.
So the course of action I followed was the one of substantive reform, to get on with that job. My concern was that if we’d set up a Royal Commission, frankly it would have simply delayed by several years, the type of reforms that we’re undertaking now.
JOURNALIST:
On another subject, because that’s been pretty well ventilated…
PRIME MINISTER:
Thank you, I’ll take that as a compliment.
JOURNALIST:
So you should. So, the polls are looking better. Are you back on track?
PRIME MINISTER:
Well look, the political contest in Australia is very close. We’re focussed on delivering for the Australian people, delivering jobs. Here in Germany, focused on the European Union-Australia free trade agreement. My job is to deliver on the commitment I made of jobs and growth. Strong economic growth and the jobs that enable everyone to realise their dreams and for their children and grandchildren to get ahead.
We have record jobs growth in Australia and it is because our economic plan is working. You know, I said it many times in the 2016 election campaign, but that economic plan is working. That’s why we’re seeing the strong jobs growth in Australia and trade is part of it. There are a lot of trade deals, some of them massive, some of them smaller, but every single one of them adds to the opportunities for Australians to get ahead.
And you know, the more level the playing field is, the better Australians will be able to compete.
JOURNALIST:
Just on the question of compensation, Pauline Hanson has suggested the banks not get a corporate tax cut and the money be set aside to compensate victims of wrongdoing. What do you think of that idea and is this a threat to your legislation?
PRIME MINISTER:
Look, where banks have done the wrong thing, they must pay compensation. There’s no question about that, Dennis.
We’ve set up a new one-stop-shop, a financial complaints authority which is going to be able to deal with that. We are determined to ensure that where people have been wronged, that they are able to get compensation and able to do it in an efficient way. Now, that’s the type of reform that we’ve been able to implement and legislate.
So you see, there is no suggestion, no one could suggest that I have been anything other than very, very clear-eyed about what’s gone wrong in the Australian financial services sector. It is very simply this: that they were not putting their customers first. That’s required a number of changes, legislation, regulation and others. We’ve got on and done that and there’s more in the pipeline.
We now have a Royal Commission and we will get some very good insights from the Royal Commissioner both into the state of affairs in the financial services industry and we’ll get advice on the reforms we’ve already put in place and how they can be improved.
We look forward to that advice and I look forward to seeing you all tomorrow.
Thank you all very much.
[ENDS]