Monday, July 18, 2016

"There's a lot of love": Fiji trade minister Faiyaz Koya as diplomatic tensions with Australia ease

Fiji's diplomatic and trade relationship with Australia has almost normalised as tensions about a history of military coups continue to fade, according to a senior Fijian government minister.

The South Pacific nation's Trade and Tourism Minister Faiyaz Koya says concerns about coup-driven political stability are no longer an issue after Australia lifted sanctions imposed in 2006 when Frank Bainimarama seized power in a military coup.

Listen to the full interview with Faiyaz Koya

"I think we've gone quite far already. There's a lot of love and now we're just strengthening that love," Mr Koya told The World Today.

"We've pretty much normalised our relationships and we're on a firmer footing now."

After years of bilateral tensions steming back to military coups in 1987, Australia lifted the remaining sanctions and sought to normalise diplomatic relations with Fiji in October 2014 after Prime Minister Bainimarama was returned in democratic elections.

At the time Foreign Minister Julie Bishop said the decision to lift sanctions marked "a new era" in Australia's relationship with Fiji which she described as a "work in progress".

Mr Koya has been visiting Australia to build relations with government and industry as Fiji's economy continues to recover from tropical Cyclone Winston which devastated parts of the nation in February this year.

The impact of the cyclone, which harmed the tourist industry, rocked Fiji's economic growth (GDP) after steady rises in recent years.

But Mr Koya was positive when he spoke to the ABC saying it was fortunate that the cyclone steered away from major tourist hotspots.

"We've done all right. We've had some growth and the Aussies and the Kiwis have still been coming across and that's our major market," My Koya said.

Mr Koya says Fiji is monitoring the impact of Britain's decision to leave the European Union amid concerns the uncertainty could disrupt important sugar exports.

"Britain especially because of sugar. And our sugar exports go out to the EU so people think it could have a massive effect on us," Mr Koya said.

In addition to sugar, Mr Koya is working to attract investors to Fiji's still untapped agricultural assets.

"For us, it has to be agriculture. We are trying to expand it as much as we can," Mr Koya said.

"We have vast tracts of unused land and very very good virgin land. It's the economic base that we need to expand."

Despite the focus on economic recovery and rebuilding diplomatic and trade links, Fiji remains synonomous with political instability and military coups steming back to 1987.

But Mr Koya says while the world might see Fiji that way, it's not the image for locals.

"Not at all. I actually spoke with a young gentleman and I asked - what is it that you find good about Fiji?," Mr Koya said.

"He said 'the best thing for us is the stability. This is somebody at home telling us.

"So stability is not really an issue any more."

Mr Koya also says Fiji is dealing with its corruption problem with the establishment of the Fijian Independent Commission against Corruption.

"I think we followed some of the models out of Hong Kong and we have done quite well in getting rid of it as much as we can," Mr Koya said.

"Again it's something that has effected a lot of countries. But I think Fiji has led the way with that and we have done fairly well out of it.We have advanced quite well in terms of corruption at home."

Mr Koya rejected concerns about media censorship in Fiji and believes political and social tensions between indigenous Fijians and Indians which have played a role in previous coups are being resolved.

"Everybody's a Fijian. No one is labelled or put into a little group," Mr Koya said.

"Obviously there's going to be some small elements that always exist but the fact that they're all known as Fijians has gotten rid of that problem.

"It's something we were left with when the English were around, the divide and conquer thing happening but not any more."




Monday, July 11, 2016

PM must restore stability and community confidence - says super fund boss Ian Silk


Australia's biggest superannuation fund says the newly-elected Turnbull government needs to re-establish political stability to regain the confidence of the community.

Ian Silk, chief executive of AustralianSuper, says it's now imperative that the Prime Minister send a positive message about stability after several years of uncertainty under both Labor and the Coalition.

AustralianSuper chief executive Ian Silk with the ABC's Peter Ryan

"I think that's the number one task - to establish some political stability and regain the confidence of the community," Mr Silk told The World Today.

"Obviously the rise of the independents and the minor parties in the Senate is reflective of a community that is seeking strong leadership and a clear direction for the country."

But with two million members and a $100 billion dollars of superannuation funds under management, AustralianSuper worries that navigating the makeup of the new parliament and a fragile Senate will be "challenging" for the Prime Minister.

Mr Silk also cast doubt on the government's proposed corporate tax cut for small business which is expected to be revised after the global ratings agency Standard and Poor's put Australia's AAA rating on a negative outlook.

""I think the prospect of the company tax cut even being legislated is remote," Mr Silk said.

"Even if it was, I don't think there are too many people who thought a decade long company tax program would actually be implemented without any changes over that period."

However, business groups are urging the government to maintain the proposed corporate tax cut despite the warnings about the need for budget repair.

James Pearson, chief executive of the Australian Chamber of Commerce and Industry, told AM  the tax cuts remain justified.

"We still support that. It makes just as much sense today as it did before the election," Mr Pearson said.

" I think it's a phony choice to say it's about cutting spending or raising taxes.

"It's a moderate measure. It comes in over 10 years, and it starts off with small businesses. And the benefits as shown by Commonwealth Treasury research flow overwhelmingly to households."

But Mr Pearson agrees that despite Mr Turnbull's narrow win, the new parliament is an opportunity to build new stability.

"There's no doubt that the Senate which has been elected, it will be a much more diverse body than it was before," Mr Pearson said.

"The degree of difficulty may well have gone up but business is ready to build a constructive relationship with the new crossbenchers and the old, and we'll do so with genuine goodwill.

The responsibility is on all politicians, be they Government, Opposition or on the crossbenches. We cannot afford another three years of policy gridlock."


Monday, July 4, 2016

Business edgy on election deadlock amid AAA rating concerns

Business groups are warning the election deadlock is likely to create of an extended period of uncertainty with critical decisions set to be put on hold in the absence of a clear outcome.

The looming prospect of a hung parliament or a minority government also puts doubt over budget repair, raising concerns that Australia's prized AAA credit rating could be in jeopardy.

Listen to my interview with Business Council chief executive Jennifer Westacott broadcast on The World Today

Australian Industry Group chief executive Innes Willox says there are concerns that the Turnbull government's  reform agenda could be derailed or compromised.


"What's the tax regime that they're going to have to deal with? What incentives are there around investment? What are the issues around hiring a new apprentice or a new trainee or hiring new staff?

"We may go into a period of some weeks of those sort of decisions being deferred or delayed unfortunately."

Australian Chamber of Commerce & Industry chief executive James Pearson also worries about the uncertainty but is urging compromises amid the political chaos.

"We'll be calling on the minor party MPs and the senators to move beyond the narrow agendas and make new decisions in the new parliament in the national interest," Mr Pearson told AM.

"It's important that whatever major party forms government they build a constructive relationship with the cross bench because they need to get things done.

"We can't afford three years of policy gridlock."

Innes Willox warns international investors could become more wary about stability in Australia and that the election deadlock rekindles memories of leadership coups under both Coalition and Labor governments.

"We already have a reputation that Australia is a very difficult place to do business and political risk certainly came on to the agenda during 2010 to 2013 because of unstable or minority government," Mr Willox said.

"Those sort of things that were around are likely to return."

Mr Willox says whoever forms government must ensure the necessary budget repair is undertaken to ensure Australia's AAA credit rating is preserved.

"The last thing that any government that is elected as a result needs to do is to rack up further debt in a way that does impact on our credit rating."


Business edgy on election deadlock amid AAA rating concerns

Business groups are warning the election deadlock is likely to create of an extended period of uncertainty with critical decisions set to be put on hold in the absence of a clear outcome.

The looming prospect of a hung parliament or a minority government also puts doubt over budget repair, raising concerns that Australia's prized AAA credit rating could be in jeopardy.

Listen to my interview with Business Council chief executive Jennifer Westacott broadcast on The World Today

Australian Industry Group chief executive Innes Willox says there are concerns that the Turnbull government's  reform agenda could be derailed or compromised.


"What's the tax regime that they're going to have to deal with? What incentives are there around investment? What are the issues around hiring a new apprentice or a new trainee or hiring new staff?

"We may go into a period of some weeks of those sort of decisions being deferred or delayed unfortunately."

Australian Chamber of Commerce & Industry chief executive James Pearson also worries about the uncertainty but is urging compromises amid the political chaos.

"We'll be calling on the minor party MPs and the senators to move beyond the narrow agendas and make new decisions in the new parliament in the national interest," Mr Pearson told AM.

"It's important that whatever major party forms government they build a constructive relationship with the cross bench because they need to get things done.

"We can't afford three years of policy gridlock."

Innes Willox warns international investors could become more wary about stability in Australia and that the election deadlock rekindles memories of leadership coups under both Coalition and Labor governments.

"We already have a reputation that Australia is a very difficult place to do business and political risk certainly came on to the agenda during 2010 to 2013 because of unstable or minority government," Mr Willox said.

"Those sort of things that were around are likely to return."

Mr Willox says whoever forms government must ensure the necessary budget repair is undertaken to ensure Australia's AAA credit rating is preserved.

"The last thing that any government that is elected as a result needs to do is to rack up further debt in a way that does impact on our credit rating."


Thursday, June 30, 2016

Global markets bounce but cloud over London banks, EU passports

With global markets less stressed about Britain's shock decision to leave the European Union, the focus is turning to the consequences for Britain including its once prestigious banking sector.


EU leaders are warning Britain that its financial services industry including a major hub in the City of London could be damaged once the exit provisions under the Lisbon Treaty are triggered.

Critically the current right to a European Union passport is set to disappear under the Brexit meaning the current easy access Britain has to financial services in Europe could become history.

The chair of the Eurozone group of finance ministers Jeroen Dijsselbloem says major banks based in London could see their businesses decline and prompt some to leave.

"Larger international financial institutions, if they have to decide where do we go and where do we invest, will take into consideration that London is in the future outside this very large European market," Mr Dijsselbloem told the BBC.

"London and its financial services industry is servicing all of Europe now and they do that with the (EU) passport that gives them access to all the markets in Europe.

"That position will inevitably change."

Britain's finance sector employs more than two million people across the UK, many in the City of London.

Most workers have an EU passport which currently gives them free movement to make deals and to service clients across Europe.

The Brexit impact on British banking and the City of London was sitting quietly in the background in the leadup to the referendum.

But London lawyer Simon Gleeson says with deals potentially unravelling for the British banking sector there would be an impact on related businesses in the United Kingdom.

"Passporting is pretty much essential for the provision of services to European corporates," Mr Gleeson told the BBC.

"If you take passporting away then something changes in the city of London and some businesses will simply have to be relocated elsewhere."

In Brussels as the fallout continues, the German chancellor Angela Merkel warned that whatever deal is hammered out, Britain must honour the free freedoms of the EU - the free movement of workers, goods, capital and services.

"The United Kingdom needs to clearly state its intention as to how it wishes to shape its future relationship with the European Union," Ms Merkel said.

"Access to the single market will only be possible with due respect of the four freedoms."

Meanwhile, global markets rallied for the second day in a row with some investors comforted that the Bank of England and other central banks are poised to blockade any Brexit related credit crunch.

London's main index ended 3.6 percent higher and has now recovered its Brexit related losses.

The Australian sharemarket bounced in the global optimism and the big miners were helped by a higher iron ore price.

The All Ordinaries Index was index 1.4 percent higher in late morning trade.


Tuesday, June 28, 2016

Brexit political turmoil escalates, UK credit rating downgraded

The political and economic fallout from Britain's decision to leave the European Union is continuing to escalate.

Here's my report broadcast on The World Today

Britain's outgoing prime minister David Cameron has once again called for unity after the "leave" vote triggered more turmoil in his Conservative party and the Labour opposition.

European leaders are urging Mr Cameron not to waste time in getting the agreed mechanisms in place to exit the EU as quickly and cleanly as possible.

Global sharemarkets ended sharply weaker and two major ratings agencies downgraded Britain's credit status adding to concerns that the UK might slip into recession.