AustCham Corner JUNE 2022

Labor of love:
By Sir Billy Chan

PM Albanese era offers the potential to reboot and revive

Since Australia became a federation in 1901, this is the 15th time that the Australian Labor Party won the general election, effectively ending a decade of conservative rule. Labor finally secured 77 seats today in the House of Representatives and got a majority in the house. The Honourable Anthony Albanese has taken the office and become our 31st Prime Minister of Australia. Now, Labor is back in power.

PM Anthony Albanese’s mother was of Irish descent from Australia and his father was from Barletta, Italy. He is the son of a single mother who grew up in public council housing in Sydney. Albanese told the audience during his campaign speech that he came from humble beginnings and learned the values of social justice and fairness. He said how he treasured every hard-earned dollar during his college days juggling multiple jobs while studying full time.

I was watching ABC news this morning and it is very encouraging to see that our country now has a record number of women that have been appointed to the front bench by our new Prime Minister who has unveiled his new ministerial line-up today with the big announcement of a front bench of 30 members with 13 of them being women and 10 of them actually in the cabinet. This is a breath of fresh air in comparison with our former leader whom often made controversial comments about protests and demonstrated lack of empathy towards women.

The Labor Party has always been advocating multicultural policy as a solid foundation of our Aussie values and social cohesion. We are delighted to see Ms Anne Aly became the first woman member of Muslim faith woman to serve the front bench as Minister for Early Childhood Education and Minister for Youth. And in addition, Mr Ed Husic became first Muslim male to take on the role as Minister for Industry and Science.

The Foreign Minister is Malaysian-born Penny Wong whom has made history to be the first Asian born person to hold the cabinet position. Members in the business communities are now with high hope that Labor would look into repairing Australia’s battered relationship with China.

Whilst on the same day the Honourable Penny Wong was sworn in to take the top role, she travelled to Japan to attend the QUAD meeting with PM Albanese on the 23rd May, then she flew straight to Fiji for a two-day visit, meeting with Fiji’s prime minister and foreign minister at the same time Chinese Foreign Minister Wang Yi and his huge entourage was on a Pacific Island tour with a bold mission to have 10 Pacific nations endorse a sweeping new agreement encompassing many hot topics from security, economics, tourism, e-commerce, climate change, infrastructure to fisheries.

So why did our former PM Scott Morrison lose the federal election? I believe he has experienced many gaffes such as “passing the blame” type errors and many embarrassing moments since his inception in 2019. This included his now infamous saying, “I don’t hold a hose, mate” whilst he slipped out of the country to a Christmas holiday in Hawaii with his family during the worst bushfire crisis.

He made international headline news during the historic diplomatic rift between Australia and France when President Macron was asked if the former Prime Minister was being dishonest during a boiling exchange with the press at the G20 Summit in Rome due to cancelation of the $90 billion deal with the French company to manufacture our next generation of submarines.

To the mishandling of relief funds during several fatal floods along the east coast followed by the start of the deadly Covid pandemic where Scott Morrison consistently presided over a ‘bungled’ vaccine rollout. And in the wake of the recently signed and sealed security agreement between China and Solomon Islands, it is now branded as the worst Australian diplomatic failure in the Pacific since the end of World War II.

The Labor party launched the campaign in helping humble folks in purchasing their homes by giving 10,000 AUD per annum to purchase a home with a minimum deposit of 2%, while the federal government would take up to a 40% stake. Many believe this is a good policy in tackling the issue of housing affordably.

These are some of the reasons why we saw Labor have a two-point lead all the way in the poll’s two-party-preferred voting and maintain a strong advantage over the Coalition during the entire campaign. Many Australians are suffering and having trouble making ends meet due to the past 12 months of high food prices with necessities increasing uncontrollably by almost 10%. This includes petrol prices which have gone up 32%. Our official inflation rate in Australia has reached 3.5%.

Many economists are predicting The Reserve Bank of Australia will put the interest rate up to 2.5% within the next 18 months. This spells the beginning of an era of unimaginable super high inflation. Some estimates put our gross debt at around one trillion AUD by the end of June 2022.

Despite the war in Ukraine and the lingering Covid pandemic around the world, what grassroots Australians care about are not really those international issues, but a strong and long predicted economic headwind that has been predicted for quite some time. Our growth for the year is a meagre 2.8% and 0.5 for the quarter. The growth only represents a small percentage from the construction, agriculture and manufacturing sector. We all know that the mining sector drives these figures and the picture is not a rosy one, as we still have not re-established a good China trade relationship.

Prime Minister Albanese has formed a majority government but he has plenty of tough tasks on his desk. One of them is a multi-billion-dollar question as to how to reset the relationship with our most important trading partner, China. As we all know, China sees our previous government as acting hostile and unfriendly. The previous Australian government had also been priming the general public to see China as an enemy instead of working as a close partner in this dynamic region; so these are the consequences. Our exports to China are now under threat with millions of tons of coal on vessels not able to dock in China and hefty tariffs on Australian wine. China imposes 80% tariffs on Australian barley that is equivalent to 1.2 billion AUD income per annum. The international education sector is in deep trouble as university students coming from China account for almost 11 billion AUD per annum.

Our export sectors will be devastated if China stops sourcing iron ore from Australia along with their insatiable demand for wine, seafood and agriculture. On the brighter side, we see last week that Chinese Premier Li Keqiang wrote to congratulate our newly-elected Prime Minister Anthony Albanese on his election victory. It is a good sign of thawing of bilateral relations that have been largely frozen since 2019.

The Vice Chair Mr John Russell from the Australian Chamber of Commerce of China said to the press last week right after the big win of the Labor government, “there is no time to waste for a reset of the relationship, we are very much to have a robust debate on economic security of Australia and the role that China and the China relationship can play with that economic security as we see other countries are moving forward to that direction.”

We realised Australia’s successive foreign policies over the past 70 years have always been subservient to the US’s interest. And PM Albanese also reaffirmed that Australia’s relationship with the US is the most important one during his victory speech. Since the beginning of the Trump anti-China era, Australia has been accused of being the US deputy in the Pacific despite the fact there is no Southeast Asian nation willing to support Trump’s hostile position on China. Just last week, Biden’s visit to Asia to launch a new platform, the Indo-Pacific Economic Framework, or IPEF, would signal strengthened US engagement with Asian economies. Biden was inviting all the leaders of a dozen countries from across Asia except a few ASEAN countries and also China. If PM Albanese kept walking along this line as a staunch player in the diplomatic club led by Washington the reset of this China-Australia relationship will definitely suffer a deadly blow.

Singapore Prime Minister Lee Hsien Loong at the Nikkei Future of Asia conference in Japan last week, gave an amazing speech and said, “There will be no good outcome if Asian countries are split between the two camps, each siding with one or the other. A more stable, less tense configuration is for the two powers to have overlapping circles of friends.” And then Prime Minister Lee went on saying, “If US-China relations continue on this path, it will lead to further bifurcation of technology and splitting of supply chains, or even worse unintended consequences.”

In our previous dynasty, former PM Kevin Rudd successor and brief Prime Minister Julia Gillard maintained this balance of working closely with China on economics while appeasing Americans on security during her tenure from 2010 to 2013. This came into stark focus when former PM Julia signed off to allow a U.S. military base in Darwin in 2011. PM Julia assured Beijing that all was cricket with this, stating, “China has nothing to fear from an American military build-up near Darwin and knows that Australia and the U.S. are long-time allies.”

Honourable Antony Albanese gave a speech at a Gala Dinner in 2018 where he spoke in Mandarin, “Deepening ties with China is in Australia’s national interest” and we heard strong applause. So we are hopeful our new Prime Minister Albanese could manage these disputes with China diplomatically. And that requires real skills not just a speech but action. It is not inevitable that we get into disagreements like we do in a marriage, and it is certainly not healthy for us to take sides within this complicated political climate, as there are no permanent friends or enemies in politics.

We can enjoy Chinese meals and driving Chinese cars, but we have no power as a nation to reshape China. We must get along with China while befriending others to ensure our future economic prosperity. With a healthy economy, Australia can invest for our next generation and to equip us to be more adaptable in operating our trade and commerce at the national, regional and global levels; it will provide prosperity to all Australians, and assist our future generations to be more sophisticated and effectively manage our global affairs in achieving peace and harmony.