PATRICIA KARVELAS, HOST: From domestic borders to international tension. Let's bring in my political panel; Labor MP, Joel Fitzgibbon, and National Senator Matt Canavan, welcome to both of you.

 

JOEL FITZGIBBON, MEMBER FOR HUNTER: Thanks, Patricia.

 

MATT CANAVAN, NATIONALS SENATOR FOR QUEENSLAND: Good afternoon, Patricia.

 

KARVELAS: I'm going to start with you if I can, Joel. The war of words between Australia and China is continuing. This afternoon the Chinese Embassy in Canberra has put out a fresh statement accusing the government of trying to deflect attention from atrocities committed by Australia in Afghanistan. So, a doubling down again that response by our Prime Minister; what do you make of the way that they're approaching this?

 

FITZGIBBON: PK I'm as angry at the China – the Chinese government's response as anyone. It's most disappointing, and it's almost without precedent. They need to recognise that, unlike many countries around the world, we have taken note of the Brereton report and we've taken appropriate action and that action will be ongoing, and as a country, we will ensure that anyone who has been guilty of unlawful action will pay a price for that. And conflating the two issues in itself has been a great disappointment. But the real worry here, of course, is the deterioration of the relationship, a relationship which has been in a downward slide now for at least five years. And too many Australians are now paying a price for that in the agricultural sector, in the coal mining sector, and many others, and we're going to be losing lots of export income and lots of Australian jobs, and it's time the government found a way through repairing this relationship.

 

KARVELAS: Ok, Matt Canavan. We've heard there from Joel saying we've got to repair the relationship. How do we do that though? How is that possible right now?

 

CANAVAN: Well, look, I... it's the – the short answer is it's not possible if this is going to be the conduct of the Chinese government, the approach of them. And I know, Joel, has been saying this all year that all we need to do is pick up the phone or say some nice things and everything will be back to normal. That just ignores the reality of the very aggressive approach of the Xi Jinping Government. And it's not just Australia, they've been bullying and threatening other countries as well. I am equally disappointed with the conduct of the Chinese government, but in some respect, it's had the positive message in the past couple of weeks that it's revealed their true, their true intention and objective. And given that revelation, what we should do now is seek to diversify our trade relationships and get on with that job. There are going to be jobs lost. It will be very hard and difficult. But the longer we wait to do that, the harder it's going to be for us as a country.

 

KARVELAS: Look, there's a piece in the Lowy Institute arguing that, that Scott Morrison overreacted. I'll explain why. It's a complex argument. But the idea is that we should not have deployed our top asset – the head of our government – to respond to a propaganda post from some junior level official in the Chinese Foreign Ministry. They have got the attention that they were seeking, and that we fell for it as a country hook, line, and sinker. What do you make of that, Joel Fitzgibbon? That as an argument, that this is like a junior foreign ministry post to provoke us, and our Prime Minister responding gave it too much attention. Gave it too much kudos.

 

FITZGIBBON: I agree that it was an overreaction, it was probably exactly what the official was hoping for. And I think the overreaction can be best explained by Scott Morrison's belated recognition that he's done great damage, and Malcolm Turnbull before him had done great damage to the relationship. And now it's starting to really hit the economy. Therefore, the Prime Minister is under pressure, and when you're under pressure, you tend to overreact. Now, Matt just admitted that for the last almost eight years, the government hasn't been doing all it could to diversify our markets. I mean, that's the day job of any government. So, to say now, in the face of a China crisis, that we should be now rushing to diversify our markets is a little bit too late. We need to be doing both, of course, but this is our largest trading partner, PK, and we must fix this relationship. The government must put every effort and resource into doing so. And yet they are not even capable of having a conversation with their counterparts.

 

KARVELAS: Yeah.

 

CANAVAN: You have got to let me respond to that, of course.

 

KARVELAS: I will, of course.

 

CANAVAN: Well, look. We have been diversifying our relationships. We've been signing trade agreements with other countries around the world, some of which faced opposition from the Labor Party. One of the big reasons I supported the Adani project so much was it was the only major investment to come from India into Australia. And why would we look at that gift horse in the mouth? Thank God it's got away, despite the opposition and lack of support from Joel and his colleagues until they got thumped at the federal election last year. So, we have been doing a lot on that front. But this is going to be difficult. It's not going to be easy to replace a country that now takes half of our exports. But we've got to get on with that job. I mean, Joel just criticised the Prime Minister for his response; the response of all of the senior Labor Party politicians has been the same as the Prime Minister. So, it's a bit rich to criticise the PM.

 

KARVELAS: I did note that too. Look, it didn't escape me that we've seen a bipartisan approach to this. Joel Fitzgibbon, what should have the Prime Minister and, therefore, your own leader Anthony Albanese done instead? If it's just some low-level foreign ministry tweet, should they just have ignored it?

 

FITZGIBBON: Well, of course, what was most important PK was bipartisanship. We all needed to be on the same hymn sheet…

 

KARVELAS: Okay, so we were. But you're saying...

 

FITZGIBBON: … the Prime Minister went out and went hard and we backed in his comments, but can I just say on the China...

 

KARVELAS: No, no, no, no, you can't because I asked a question. What should he have done instead? Should he have ignored the tweet?

 

FITZGIBBON: Well, he's the Prime Minister working in an environment created by him, PK. So, it's not my job to be giving him advice. The question now becomes whether his overreaction has made this situation worse. And made the effort which will be required to put this relationship back into some, on some normal basis is going to be now enormous. So, I'm not here to give him advice. I just wish five years ago, the government didn't start attempting to, through dog whistle, harness domestic votes here in Australia at the expense of the relationship with our largest trading partner. And when they, when they signed the free trade agreement with China, PK, you remember it was going to be a new nirvana. You know, the whole world was going to change. It's the most important thing that ever happened to our economy, according to members of the government. And now Matt says: oh, look, it doesn't matter. We don't need China. We can diversify our markets and go elsewhere. Well, producers don't think that.

 

CANAVAN: I did not say that at all. But anyway, let's move on.

 

KARVELAS: Okay, I like the way you just took over the hosting there. Now let's just move on from this issue. We'll park it.

 

FITZGIBBON: Well he has plenty of practice.

 

KARVELAS: It is, probably, but I do want to just go back to you there, Joel, since you're not taking the fall and just double check. So, you think it's an overreaction when these kinds of provocative things happen; what does Australia do? Do we pretend that a tree fell in the forest and we didn't notice what was happening on Twitter?

 

FITZGIBBON: No, we should absolutely reject the proposition and we should on every occasion put all our energy into defending our values and protecting our national interest. But when you look at the China response since the Prime Minister spoke yesterday, you can tell from their perspective, it’s mission complete. He could have been robust his language, but he set a test for himself by insisting on an apology. Now, we know an apology was never going to come or at least, PK, anyone with any experience in foreign relations knows the apology was never going to come. So, he set us up for fail in the way he responded to the tweet.

 

KARVELAS: Okay. Just finally, and I want to ask you about this. We haven't got much time left on the show. But Matt Canavan, you're calling on the Prime Minister to tear up its energy agreement, or the government's energy agreement with the New South Wales Government, and instead build a coal-fired power station in the Hunter Valley. Why should they tear up an agreement with a democratically elected government that has made a decision about how to move forward on its energy policy?

 

CANAVAN: Well, because the New South Wales Government has reneged on that agreement through the legislation they passed in the last two weeks, and that legislation has had real world impacts by companies pulling out already of their support that the federal government was providing to build, to upgrade a coal-fired power station in the Hunter Valley, and to build gas-fired power plants as well. So, since in that last week, people have said they're not – AGL said they're not going to proceed with gas-fired power plants and the Liddell's electricity not proceeding with her upgrade or the Vales Point coal-fired power station. We need to do something to act, and given that we're not having cooperation reciprocated, we should just do what's in our national interest. Now, there's a there's a link to our previous discussion here. Given what is happening with China, and the volatile environment we are in, we need to end the deindustrialisation of this country. We've got to reindustrialise. We've got to invest back in our manufacturing sector, we've got to build that back up and that won't happen until we invest in the reliable, affordable power sources we are blessed with like coal. China is building 101 coal-fired power stations right now. And we can't even build one here. I don't think that's the best approach in dealing with this very volatile environment.

 

KARVELAS: The Hunter Valley is a place you know well Joel Fitzgibbon. Would you like the government to do this, this go forward with this proposal that has just been suggested?

 

FITZGIBBON: Well, the proposition that the Prime Minister should tear up the agreement with a Liberal Government in New South Wales would be a slap in the face for New South Wales consumers and New South Wales manufacturers. This is an important commitment, particularly on gas extraction. I think there are faults in the New South Wales scheme, but I don't want the baby thrown out with the bathwater. We want our capacity to get more renewables into the system. But we want those coal-fired generators to run the rest of the physical and economic lives.

 

KARVELAS: Okay. All right. We're out of time Thanks to both of you.

 

FITZGIBBON: A pleasure.

CANAVAN: Have a good evening.