G7 agenda; Iran's Foreign Minister; Meeting with President Trump; Tariffs and China-US trade; Strait of Hormuz; Tackling online terror and hate; Digital Taxation; Free trade deals
Prime Minister
PRIME MINISTER: It's a great privilege to be here representing Australia here at the G7 as an observer. It’s the first time Australia has been extended that opportunity. That invitation has followed on from the work that we’ve done to promote the very important cause of ensuring that the internet, digital platforms, this incredible new technology which changes the lives of people all around the world, is great for our economy - this is all tremendous. But at the same time, in the hands of terrorists and in the hands of those who would seek to do others harm, it can be quite a weapon. It's very important that we ensure that the rules that apply in the physical world apply in the digital world as well.
It's one of the biggest changes we've seen in the global economy and it's important that our systems keep up with those changes and that consumers are protected. Of course, tax bases, revenue bases of countries continue to be able to function. Just because someone is in the digital business doesn’t give them a leave pass on all the other obligations and all the other responsibilities that go with businesses that operate in the physical world. Of course, it's a very complex time in the international environment at the moment, particularly when it comes to the global economy. There are many pressures, there are many tensions. And so it's been a good opportunity for me today to engage with a number of leaders, to hear their perspectives, to offer Australia's, and to ensure that we're in a position to be able to best advance Australia's interests in what is a complex and challenging time.
And so I look forward to the opportunity to do that again tomorrow. I remind everyone we're here as an observer, we're not part of the G7, so we're not part of all the other various sessions that have been going on today. Tomorrow we'll take part particularly on the on sessions to deal with oceans and that deal with terrorist content on the internet and that's where we'll be making some contribution. So happy to take questions.
JOURNALIST: Sir, we know that you’re not part of the G7 but can you say if President Macron alerted you that Foreign Minister Zarif would be arriving today?
PRIME MINISTER: I haven't had any contact with President Macron today.
JOURNALIST: Did you know he was going to be coming tough, the Foreign Minister of Iran?
PRIME MINISTER: No, I wasn’t aware of it.
JOURNALIST: Would you consider meeting with him?
PRIME MINISTER: We have already had engagements with the government of Iran in relation to our most recent announcement and that's where those engagements need to take place.
JOURNALIST: Would you consider it [inaudible] though?
PRIME MINISTER: I haven't really reflected on it or offering any comment on it at all.
JOURNALIST: Can you tell us more about your pull-aside meeting with President Trump?
PRIME MINISTER: It was a good opportunity. We are in contact, obviously, with President Trump and the administration on a regular basis. Today was yet another opportunity to do that to go over a range of issues that are currently out and about. I've just come from Viet Nam to this meeting and was able to have a good conversation about the engagement I had with Viet Nam and the positive role they're playing in the Indo-Pacific and the strengthening of their economy and the opportunities that we're seeking to develop in that part of the world. And obviously, the presence of the United States in the Indo-Pacific is a stabilising one. It’s good for peace and security in the region, it's good for independent sovereign states in the Indo-Pacific, and we're always keen to ensure that the US is very engaged in that part of the world. And I believe they will continue to and continue to contribute to the peace and stability in the Indo-Pacific.
JOURNALIST: Did you raise with him the tariffs that he announced before flying out here on China, the increase in tariffs?
PRIME MINISTER: We had a good discussion about the China-US trade exchanges, and what I would simply say is that the United States has raised a number of issues for some time now with China. Equally, China has raised some matters and it is for both of those countries to sort these issues out and come to an agreement. And I'm always hopeful that they will be able to do that and, of course, we'd like to see that happen sooner rather than later. It does have, obviously, a broader impact on the global economy. But equally, you can't just sort of brush these issues aside forever. They have to be dealt with, and we obviously want to see that happen as well.
JOURNALIST: So did you push for that in your conversation? Did you ask Trump if there were opportunities to deescalate the war with China?
PRIME MINISTER: Well, we want just basically… we want to see the matter resolved. The US has legitimate interests that they wish to pursue as part of that trading relationship. It's not for us to dictate to them, any more than it is to China what they should be concluding. I think it's just more broadly in everyone's interest that they're able to proceed to a conclusion.
JOURNALIST: Did you discuss any further Australia’s commitment in the Straits of Hormuz?
PRIME MINISTER: We were able to talk about that. I mean, it's our involvement that is fairly straightforward and that's appreciated, of course, by the United States. But again, our involvement there is specifically to deal with the safe shipping lanes and I had the option to discuss that with. Chancellor Merkel also this morning and Prime Minister Abe to make it very clear what the nature of our involvement was and why we're there. It's in Australia's national interest to be there. We are always for freedom of navigation, whether it's in the Straits of Hormuz or the South China Sea.
JOURNALIST: Sir, Australia has been very successful at preventing mass shootings I would say since you changed your gun laws in 1996. Did President Trump seek any advice from you on the issue?
PRIME MINISTER: We didn’t discuss that issue.
JOURNALIST: On the Indo-Pacific though, what matters did you discuss in terms of the US-Australia role and engagement in the Pacific? Is there any advancement on…?
PRIME MINISTER: We're going to have the opportunity to discuss those issues a bit more when I visit Washington in September. But today it was really to provide a bit of an update on what we've particularly taken out of those discussions from Viet Nam. Viet Nam's economy is really growing strongly and I think they're providing a very positive role in the region. And it was a good opportunity to share that with the President.
JOURNALIST: On your social media and extremist material measures, both measures you’ve announced today with the OECD and that Minister Fletcher announced back in Australia yesterday. How will those deal with the kind of places with these manifestos are actually being posted like message boards like 8Chan that aren’t run by big companies?
PRIME MINISTER: Well, you've just got to methodically work through all the changes you need to make. You've got to get the political level leadership to bring about these changes and I think the momentum that has been created from what we were able to achieve at the G20 and what has been affirmed here again at the G7. Then you've got to get the mechanisms in place, which is what we’re... we’ve put $300,000 Australian in to supporting the OECD to actually work through the transparency mechanisms which is the reporting framework which keeps the whole system to account.
Now, the OECD we've always believed is the right vehicle to do that, just like they were to work through the base erosion and profit shifting. Quite technical issues that led to ensuring that multinationals are actually paying their fair share of tax in all of these jurisdictions and Australia has been a particular beneficiary of putting those changes in place. So they are a very credible and capable organisation that can work through, you know, proper rules and processes to ensure that there's a transparency of the way that these digital platforms operate. I mean, this is difficult to do and you need countries to operate together and put in place similar systems. Now, we will continue to take action on our own part, as we have the telcos, as we already have with platforms and the Taskforce report and we'll be taking further action there. Countries have got to do their own thing on their own side of the line but globally, you've got to have mechanisms that everyone can implement and the OECD I think is well-placed to advise on it.
JOURNALIST: Just on the trade issue, you mentioned that Donald Trump is talking about legitimate issues in terms of how China goes about things. Does the end justify the means of Donald Trump's trade tariff war?
PRIME MINISTER: What do you mean?
JOURNALIST: Well, the way he's going about things hoping to get China to play by the rules even though it might hurt the global economy. So does the end justify the means in that regard?
PRIME MINISTER: Well, they're taking responses in relation to a disagreement they're having over trade matters. And these types of responses are not... I would say they're fairly obvious in terms of how that would play out until this matter is resolved.
JOURNALIST: And you back the approach?
PRIME MINISTER: Well, I want to see the issue resolved.
JOURNALIST: In your conversation with the OECD on digital taxation, were they receptive to Australia's place on how that should be managed?
PRIME MINISTER: Yeah, look, on digital taxation, the OECD has a process that will come back to the G20 next year and we support that process. We have concerns about proposals that are basically a souped-up sales tax and the potential for that to lead to retaliatory taxation in Australia, particularly in our export industries, particularly our commodities sector. I think there are real risks to Australia's national interests about how that taxation agenda has been proposed by some. We think the OECD is the sensible place for those issues to be worked through. They had a very good outcome when it came to base erosion and profit shifting. You know, I'm hopeful they would come to a sensible conclusion on this that they're working on now and we had a commitment from the OECD there that our ambassador to the OECD will be closely involved in that process and he was there for our meeting today. So we all understand that we want to ensure that these digital platforms - like multinationals more broadly - should be paying their fair share of tax. And if you're in the digital realm, well, you should be paying tax in the same way as companies are in the physical realm. But, you know, you've got to make sure that you think through all the consequences of these issues and you need quite a sophisticated, I think, answer. You don't need to go and change all the rules. You just need to make sure that you're applying the rules in a sensible way. Profits should be taxed where they're generated and we'd better have a better understanding of how those profits are generated, whether it's in Australia or whether it's in Europe or indeed the United States. The tax system has to properly capture that.
JOURNALIST: You mentioned that in the Gulf you got questions from both Japan and Germany asking about Australia's role in militarily there.
PRIME MINISTER: No, no, they didn’t question us, we offered our briefing on the decision that had been taken.
JOURNALIST: Did you detect any concern from them or did they accept your explanation?
PRIME MINISTER: No, there was no concern at all. No concern at all. And I think a great respect for the way that Australia thinks through these issues and is very clear about how we pursue our national interests and we do so in a way which is very well targeted in terms of what our objectives are here and we were very clear about what this was about and what it wasn't about. It's not about the JCPOA. Australia’s position is we maintain support for the JCPOA. The UK maintains support for the JCPOA. So it isn’t about that, it’s about simply ensuring that there can be free passage of shipping through that important area of the world, which directly impacts on Australia's petroleum flows.
JOURNALIST: The UK leaving the European Union, will that affect any negotiations on an EU-Australia free trade deal?
PRIME MINISTER: Well, we can't enter into an agreement with the United Kingdom until their arrangements with the EU have been officially resolved. But as soon as the UK is in a position to enter into an agreement with Australia, we'll be quick off the mark. And I think it'll be very much also in their interest to be able to conclude arrangements with countries like Australia as quickly as possible. I'm looking forward to having those discussions tomorrow with them with the Prime Minister. I'm sure he’ll give me a hard time about the fact that they clipped us in the latest Ashes, which many of you from other countries wouldn’t have the faintest idea what I'm talking about. But the Australian journalists and the British journalists will know very very well. But I'm looking forward to having a conversation around a whole range of issues with the Prime Minister tomorrow and to wish him well. He's got some challenging issues before him, but as soon as they're able to resolve that with the EU then we'll be moving very quickly. But equally, we're working very assiduously at the moment to conclude an arrangement with the EU as well, and we have further discussions about that today with the German chancellor and I appreciate her support.
JOURNALIST: Did you share with the German Chancellor Australian producers’ concerns about the range of geographical indicator names?
PRIME MINISTER: I updated her on where we're at with that process. I mean, that's a necessary part of the process and that was something that was raised with us by the EU last time that the Finance Minister and I met with them in Osaka. So look, we're making progress on that issue. It's quite a lengthy process but that's what you need to do. So these meetings are a good opportunity to have those other discussions on the margins of the core agenda. But the core agenda for us here, the reason we're here and I'm looking forward particularly tomorrow be raising these issues as I did with the Chilean President this afternoon, and that is the importance of looking after our oceans, the importance of ensuring that we stamp out illegal foreign fishing, particularly in the Pacific which is a big concern for us and the Pacific Island nations for whom this is their most important resource. And also to ensure that we're creating what they call the circular economy, that we are ensuring that we're recycling the plastics which at the moment are finding their way into the ocean and destroying our marine environments. And this is something that Australia takes very seriously and I'm looking forward to putting forward my view on that.
JOURNALIST: Is there a particular outcome that we're looking for from that discussion on oceans?
PRIME MINISTER: It's an issue of constant advocacy.