Sky News Interview: China, Foreign Donations, AGL, Monash Forum, Company Tax Cuts, Live Export



SUBJECTS: China, Foreign Donations, AGL, Monash Forum, Company Tax Cuts, Live Export 

LAURA JAYES, HOST: Welcome back to Newsday. It is that time of the week. The time that you wait for every week. It is Kelly versus Khalil and we are all in the same spot today. I don’t know whether that’s a good thing or a bad thing…

CRAIG KELLY, LIBERAL MP: This could be dangerous, that we’re sitting so close to each other


JAYES: I could force you to behave. I’m not sure that is going to be the case, but anyway, let’s get into the issues of the day. Let’s talk about China. Of course, there has been tention for some time. We heard the trade minister describe this as ‘irritants’. We heard Michael Keenan say it’s been overblown in the last hour. When you look at the Global Times and what we’ve heard. Let’s just show our viewers once again.

JAYES (reading on-screen graphic): “It’s necessary for China to leave Australia hanging for a while, instead of being too quick to bury the hatchet whenever Canberra tries to put a smile on its face, so as to make Australia pay for its arrogant attitudes it has revealed towards China over the past two years.”

JAYES: Now, Peter Khalil, you were foreign policy adviser to Rudd. Kevin Rudd has been very critical of the Turnbull Government and how it has dealt with this relationship with China. What’s your read of this editorial? How seriously do we take it?

KHALIL: Firstly, you should work for Chinese television. You said that with a lot of relish, the way you read that message from the Global Times. I think that’s good. No, rightfully so because I think the relationship has really diminished in some respects under this Coalition government. And I saw in the paper today that Julie Bishop after her meeting, she said ‘oh, I raised the issues of pressure tactics’, you know the go slow on wine exports and so on, and they’re going to stop. Well, I’m sorry, it doesn’t work that way, Foreign Minister. You don’t just wave a magic wand and tell them ‘please stop doing that’. That doesn’t work that way. You have to build up the relationship over time and the problem with this Government is they’ve been back and forward like a yo-yo. At one level, you know, they’re all bolshy in the Bennelong by-election, talking tough. It’s almost like Malcolm Turnbull is the Basil Fawlty or foreign affairs. He’s either all over them, ‘yes, yes, I’m going to give contracts to your state owned enterprises’ and so on in one moment, and the next moment he’s talking tough. You can’t build a relationship – an effective one – on that kind of foreign policy negotiation style. You know, I’d rather have Penny Wong and Richard Marles in the front driver’s seat dealing with this.

JAYES: Of course. That’s no surprise.

KHALIL: Well, because Marise Payne has been as silent as a Trappist monk on this.

JAYES: But Rudd has his problems with the Chinese when he was Prime Minister.

KHALIL: Sure, sure. But we managed the relationship far for effectively. It is a…

KELLY: The word he used started with an ‘R’ and it had an ‘F’ in there somewhere.

KHALIL: It is a very important relationship and it’s right for us to talk about human rights, it’s right for us to stand up for our principles, but you’ve got to have some consistency in relations.

JAYES: This is a family show, so I don’t want to…

KHALIL: You can’t use swear words.

JAYES: …actually give the exact quote which Rudd used, but the Chinese did not like that term at all. Craig Kelly, do you concede that there has been a bit of mismanagement on your [inaudible]

KELLY: Not at all. What Peter is saying, that we should actually kowtow to China…

KHALIL: I didn’t say that.

KELLY: That’s the policy that the Labor Party wants.

KHALIL: Don’t make up stories. I didn’t say that.

KELLY: We should have to have some strength in our relationship. And ultimately China will respect strength. We are right to criticise China on the South China Sea. On their position.

KHALIL: Well, actually we’re the ones who have been doing that better than you.

KELLY: We are actually correct, so what Peter’s saying, ‘oh, don’t go hush hush hush, go quietly, don’t say anything’. Ultimately they will respect strength. And if China is doing something that we should criticise, we should criticise them. And if it’s ultimately going to cost some slight trade relationship. But in the long term, that is in the best interests of the nation.

KHALIL: Sorry, you can’t blame the earpiece because he’s sitting right next to me. I actually just said, literally one minute ago, that we should be standing up on human rights, on our principles and having a consistency. I never said that we should kowtow. That’s not the case.

KELLY: Well, you complained…

KHALIL: And we have been very firm around the South China Sea. Our former shadow minister for defence, Stephen Conroy, and our current shadow minister for defence, Richard Marles, have been very firm on those issues and the importance of freedom of navigation. Much more so than your mob.

KELLY: What’s the problem now with what we’re doing? You’re telling me we should show some strength. That’s the problem.

KHALIL: I didn’t say that. I said you’re all over the place. And one minute you’re telling them you’ll give them everything they want.

KELLY: We never said that.

KHALIL: The next minute you’re… Do you remember the Bennelong by-election? It was like, suddenly you’re all tough guys.

JAYES: What are you referring to exactly with [inaudible].

KHALIL: All the tough talk Malcolm Turnbull’s making and all the rest of it. Look, the foreign interference laws came around that time period, when we’re talking about that and we want those laws changed. We banned foreign donations back in June 2017 to the Labor Party. We’ve been working with the government, we’ve been calling for it for two years to get these laws up.

JAYES: What’s the problem, then? You’ve backed the Government on many of these changes.

KHALIL: The problem is, the Government comes out. They finally put out a draft bit of legislation. They capture everyone, including the entire NGO sector, they cast the net out, they catch all the dolphins as well as the tuna.

JAYES: I don’t think China is worried about standing up for the NGO’s.

KHALIL: No, what I’m saying Laura is this Government can’t get it right; even on the foreign interference laws. The drafting of that. They still can’t get that right. And we’re working as constructively as we can because we want these laws to pass. And I note that your Liberal Party has not banned foreign donations yet. And we have.

KELLY: Peter, you know these are issues that we’re trying to work on, on a bipartisan basis.

KHALIL: Well, just ban them. Stop taking them.

KELLY: We have to have constant and strong position on China. We can’t be frightened. If we think the Chinese Government is doing something that’s not in Australia’s interest, we cannot be in the position we are frightened to speak. And that’s what…

JAYES: Isn’t that what Andrew Hastie did last night with his parliamentary speech?

KELLY: That’s right. And I fear that the Labor is drifting towards, ‘oh, don’t say anything, you can’t upset China or something might happen’

KHALIL: That’s not true. Again, I have been on the record. You know me, I am a very strong supporter of the US alliance. I think we need to get both of those critical relationships right for Australia’s future security and prosperity. We need to get that right. We can walk and chew gum at the same time. We can manage our strategic and security alliance with the US and our economic relationship with China. And we need to expand and broaden that, as well.

JAYES: Do you support what Andrew Hastie did last night in the Federation Chamber?

KHALIL: Well, Andrew Hastie, it’s a matter for him. He has the right, parliamentary privilege, to raise matters that he wishes to do so. It’s a matter for the Government…

JAYES: [inaudible] in the context of our fraught relationship with China at the moment, he’s called out a Chinese Australia donor. I mean…

KHALIL: It’s a question you have to ask Andrew Hastie and Malcolm Turnbull.

JAYES: But do you think it hurts the relationship…

KHALIL: Who he got the intelligence briefing from…

JAYES: Well, the US..

KHALIL: Whether he warned his own Prime Minister beforehand and apparently he didn’t. Malcolm Turnbull didn’t even know about it this morning. That’s a matter for them and again another example of a complete civil war inside your own show.

KELLY: How is someone showing independence….

KHALIL: Well, he didn’t talk to your PM, did he?

KELLY: Civil war…He’s entitled to do it.

KHALIL: He didn’t talk to Julie Bishop.

KELLY: If he has that information. He is chair of the Intelligence and Security committee. He has every single right to raise that in the Federation Chamber, in Parliament, using parliamentary privilege.

JAYES: Last question on China to you Craig Kelly. It’s obviously imminent that this is a difficult relationship to balance. All of our economic eggs are almost in the one very golden basket at the moment. Our economy relies so heavily on China. Of course, there are obvious issues. You’re talking about a dictatorship or a communist regime, and a democracy. There are basic, fraught issues here. Can these ever be overcome? Because you say, you know, Australia is standing up to China. And if that’s the case, it hasn’t put the Australian Government in a good position at the moment.

KELLY: We have to make sure we’re not like the farmer that only has Woolworths to supply to. This is why some of these trade relationships, we’re trying to expand. And why the work of Steve Ciobo, as trade minister, is so important. To open up and try to diversify more markets around the world. We’ll always be very reliant on China, because of the size of the nation, the population, the growth…

JAYES: But that doesn’t make sense then. Because we’re so economic reliant on China, we do have to pander to them in some way.


KELLY: I wouldn’t use the word pander. But it’s important that we show a constant strength, so China knows where we stand. It’s important that we have a constant position on something like the South China Sea and that’s why what Sam Dastyari was involved with, the former Senator, was so upsetting to everyone. Because he was showing different positions rather than both the Coalition and the Opposition being united together.

JAYES: Peter Khalil, finally, just back to my original question, the Global Times, how seriously do we take an editorial.

KHALIL: Well, the Global Times is an owned subsidiary of the People’s Daily. It’s an arm, an organ of the Chinese Communist Party. And they tend to be pretty aggressive as a paper. Much more so than the People’s Daily. I wouldn’t take too much credence in that. But what was interesting to me was the Chinese Foreign Ministry statement that the meeting between Julie Bishop and their foreign minister was not as warm and cordial as the Foreign Minister made out. It was actually a pretty strong statement to say it’s all our fault and the problems of the relationship are our fault.

JAYES: It’s always good to get the un-sanitised version of the official readout, isn’t it. Now, let’s, Craig Kelly, talk about AGL. You backed Tony Abbott in the party room yesterday. You’re calling for competition laws to change and repeated your call for the Government to look at a compulsory acquisition. Have you got much support [inaudible].

KELLY: Yeah, look, I’m not 100% convinced that compulsory acquisition is required. But what we actually have. We have a company here, supplying an essential service, that’s going to close an essential service down and the so-called replacement plan only replaces a fraction of the generation output.

JAYES: Have you seen the entire replacement plan or are you waiting on more details?

KELLY: Yes, I have. You are looking at what the replacement plan. They’ve only committed to a fraction of it. They’re talking about capacity. They’re not talking about generation output, so even if they do the full replacement plan, if they do, you’re only getting a fraction of the generation output replaced. So this will push up electricity prices. Here we have an asset, a productive asset, in the essential services sector for electricity, that they’re now planning to close down when there is a commercially viable offer on the market. This, in any other market, or any market, is an anti-competitive act. Our competition laws should catch it. I believe they do. There’s an area of grey…

JAYES: Just to be clear, what are you calling on Malcolm Turnbull and Josh Frydenberg to actually do here.

KELLY: I would like to see [inaudible – broadcast transmission fault]

KHALIL: [inaudible – broadcast transmission fault] have decided to replace Liddell, gas with renewables, with all sorts of… upgrading Bayswater. And yet, you want to change all of this. Are you in the Liberal Party or the Marxist Party? I’m not sure I understand.

KELLY: One of the things that underwrites a free market, enterprise society, is competition laws. That firms cannot…

KHALIL: What about renationalising…. These guys, under the New South Wales Liberal Party, they’re the ones that actually privatised it in the first place against the advice of the ACCC at the time. They said if you do that, prices will go up.


KHALIL: Now, you want talk to your New South Wales Liberal friends. Why did you do that?

KELLY: I’ll admit. I’ll admit, that was clearly a mistake. But we have seen from your home state, in Hazelwood, what happened when Hazelwood closed down. You all stood back in the Labor Party and cheered and clapped, ‘yay…

KHALIL: That’s not true

KELLY: Electricity prices went through the roof. The Andrews Government….

KHALIL: No, that is not true. The Andrews Government were given five months notice by Engie, the French company, and we put in a just transition policy to help those communities and those workers transition out of the…

KELLY: So what do you do in the Labor Party to try and keep from…

KHALIL: Sorry mate, we care about the workers.

JAYES: The Victorians should probably consider looking at lifting the moratorium on fracking as well. That is a problem in Victoria. Look, I don’t want to broaden this debate out any further than it has been broadened. Craig Kelly, I just want to ask about the status of the Monash Forum.


JAYES: How’s that going?

KELLY: Oh, look, we have meetings regularly and look, there’s many different forums and committee and parliamentary friendship groups.

JAYES: Yeah, but the Monash forum….

KHALIL: Don’t call it Monash. Don’t call it that.

JAYES: Four weeks ago. Was it established four weeks ago or was that when…

KELLY: Yes, about four weeks ago, yes.

JAYES: How many members are there?

KELLY: Oh, look, we have about a dozen members

JAYES: So there’s not twenty signatures like you’ve previously claimed

KELLY: There are people who have signed the letter and I haven’t seen the full list of people

KHALIL: You can’t run your own numbers!

JAYES: Craig Kelly, where is this physical letter?

KELLY: The idea whether it’s eleven people, or twelve people, or twenty people, or twenty five people, makes no difference. We on our side… another thing that the Monash Forum is about is delivering low cost electricity to consumers and to industry…

KHALIL: Can I just say…

KELLY: The Labor Party have abandoned that

KHALIL: Can I just say, out of respect to the Monash family, I would wish that they would stop calling it that. I know some family members have been annoyed by the fact that you’ve called it that. Why don’t you give it another name.

KELLY: Peter, Peter…

KHALIL: Confederates!

KELLY: The thing about Monash is that, the General, he wanted to deliver low cost electricity to this nation and that is what the Monash Forum is about….

KHALIL: I don’t think he wanted to buy up coal fired plants

KELLY: Listen, this is the problem we have with the Labor Party. You have abandoned the workers, you have abandoned the idea that we have low cost energy and you are siding with the Greens on this issue.

JAYES: Let’s quickly hear from Pauline Hanson. She’s been outside the Royal Commission in Melbourne this morning, let’s have a quick listen to what she’s had to say.

[Footage of Pauline Hanson doorstop]

JAYES: There you go. Pauline Hanson is not in Canberra today. She’s outside the Banking Royal Commission, but Craig Kelly, we are running out of time, I want to ask you about the company tax cuts. Pauline Hanson’s not going to support it. Is it time that you drop a zombie measure.

KELLY: No, absolutely not. This is very important for the nation. We have to have internationally competitive corporate tax rates. We have seen, since the year 2000, since we reduced our company taxes, almost every other OECD nation has reduced their company tax rate. Italy is not reducing their… they’ve got plans to go from thirty per cent, not to twenty five. They want to go from thirty percent to fifteen per cent.  Now, whether we like it or not…

JAYES: Is this hurting you politically in the lead up to an election.

KELLY: Well, we have to explain to the public that whether we like it or not…

JAYES: You’ve been doing that for three years.

KELLY: We have to run an internationally competitive corporate rate of tax. And if all the other nations are reducing their corporate rate of tax, that we’re competing against, we have to respond. We live in a competitive international environment today, more than it’s ever been at any other time in history. We have to keep that international competitiveness up.

JAYES: Just quickly, Peter Khalil, I want to finish by asking you about live exports. There is a bill now in the lower house that’s been introduced and since that time, we’ve seen the Agriculture Minister, David Littleproud, go to the middle east and talk with the biggest customers Australia has when it comes to the live ship trade. There has been reporting and really confirmation from some of these big companies in Kuwait and Qatar that if this trade gets banned, or there’s a transition out of it, they might stop buying packaged meat in WA. Have you considered these broader ramifications? And how that might hurt farmers?

KHALIL: Yeah, actually I raised in Caucus yesterday. One of the important elements of our policy direction has to be the diplomatic work to explain our policy to our markets in the middle east and I’ve already started talking to some of the Arab ambassadors and Middle East and North African ambassadors about this. As have Anne Aly and others who have good relationships. So that’s got to be part of it. But the policy itself is sound and I’ve got to say, Sussan Ley has been quite courageous in this and standing up to her party and to Malcolm Turnbull and Littleproud on this. We’ve actually decided to support her bill, Labor has. And I’ve called, on this program before as you know Laura, we should stop all of the trade in the northern hemisphere summer months, the summer months in the northern hemisphere and phase it out over a very timely manner. About five years would be about the right time and in that period of time, that’s when you do the diplomatic work. Get out there to the gulf countries and North Africa and explain how the policy works and how we can export Halal certified chilled meat products.

JAYES: Okay, we’ll have to leave it there unfortunately. You’ll get a right of reply next week I’m sure. Craig Kelly, Peter Khalil, as always thanks for your time.