Please read a transcript of my interview with Arijit Banerjee on NDTV Profit in India.



Journalist:

Welcome to the show. We have with us Bill Shorten, the newly appointed Cabinet Minister of Australia, whose responsibilities include employment, workplace relations and financial services. Welcome to the show.

Bill Shorten:

Thank you.

Journalist:

When Australia looks at India, what sort of financial relations or economic relations do you see between the two countries?

Bill Shorten:

All Australians are impressed by the Indian growth story. What India has accomplished in recent decades and years is very remarkable, and Australia sees much opportunity but at many levels. Obviously we like it when we can export coking coal, or gold to India but we see the relationship being much deeper than that. The fact of the matter is that the Indian middle class continues to grow, and we see huge opportunity in infrastructure; we see huge opportunities to deepen our ties in educational services; in agribusiness; in logistics.

We're also very keen to continue the people-to-people relationship. India is now the ninth largest source of visitors to Australia. The Australian High Commission has just issued over 100,000 visas this year in terms of people coming to Australia.

And also just the sheer numbers of trade. The trade numbers between our two nations have increased in the last five years from just over $10 billion to over $20 billion dollars. We see the Indian story as a great story for the Australian story.

Journalist:

You are also here to talk about the Free Trade Agreement between the two countries and also a new taxation agreement. Can you talk about that?

Bill Shorten:

Well in particular I am here to help sign the amended protocol to our taxation treaty. Back in 1991, we signed a tax treaty with India, which is excellent. Now we are amending the protocol to deepen our ability to exchange information so that Indian business and Australian business, so Indian citizens and Australian citizens, can have much more certainty in the tax regimes which apply.

Tax is one of those facts of life that if we are able to orgnise, as good friends can do -- India and Australia's attempts at creating more certainty on our tax laws - then I am sure everyone is happier.

Journalist:

What about the fact that India is also looking at a free trade agreement with Australia? Some initial talks have happened. How soon do you think an agreement can be reached between the two countries?

Bill Shorten:

Australia always believes in liberalising trade. These talks have been conducted by some of my colleagues. My visit on this trip is about deepening an awareness within India of the Australian financial services sector and of the Australian superannuation sector.

Some people in India may not be aware of our privately-run pension system where workers put away money every week while they work so they can retire adequately. We now have the fourth- largest privately administered pension funds under management market in the world.

Now, to a large nation like India, being first, second, third or fourth is not unusual. But for Australia to be the fourth largest in the world, we have significant savings and investments so that Australians don’t work hard their whole life and retire poor. But obviously it is important that we diversify the venue for where we invest and clearly the Indian growth story is one which Australian fund managers are interested to explore further.

Journalist:

What are the areas do you think the fund managers will be looking to invest in?

Bill Shorten:

Well at the end of the day, it doesn’t matter where you come from, a good deal is still a good deal. So it has to pass the test of being a good investment. But there is no doubt, it seems to me, that as India continues to grow and improve, there are opportunities in infrastructure, there are opportunities in agribusiness.

I noticed that a large construction company, Leightons, has multi-billion dollar developments here. I know that Rio Tinto has developments underway and plans underway for both diamond and iron ore mining. One of Australia’s largest transport companies, Linfox, has been making considerable investments in India.

We also want to attract Indian investments to Australia. We have been meeting with some of your legislators and regulators today. We are also keen to be clear about the evolution of a roadmap for India’s financial structures.

Journalist:

Indian companies in their search for resources have, in a way, holed-in or targeted Australia in a major way. There are a lot of Indian companies now who are looking at Australia, especially for gold mines or even for LNG now. I wanted to understand, what sort of investment opportunities Australia provides in terms of natural resources for Indian companies?

Bill Shorten:

Australia has been very blessed to have a lot of natural resources. You have mentioned gold, we know about iron ore, we know about coal, LNG, hydrocarbons.
Australia is fortunate in being blessed with resources. But of course, we need to develop those resources.

Approximately over the next four to five years, there is $430 billion of proposed investment in Australian resource developments, both on-shore and off-shore. Indian companies are part of that success story and we do certainly welcome foreign investment.

Journalist:

Do you think that the new carbon tax and the mining tax, which has cleared the lower house, will impede investment in the mining sector?

Bill Shorten:

Not at all. Again, it all comes down to 'is a good deal a good deal'? In terms of our mining tax, what we are doing is moving the taxation to profits. So in those early days when you are exploring, those early days when you are building an outlay in the capital construction, we are focusing the mining tax when a company is making its resources profits. We think that is a smarter way to do business than just simply taxing volume.

In terms of the price on carbon, we, like India, like everyone in the world, want to help – over time, gradually, slowly – become more energy efficient and reduce the rate of growth of carbon emissions into the atmosphere. The measures that Australia has put into place are very moderate and very sensible, and it is really a 40-year transition.

Some people of course, never want to deal with change. Though we do believe that just simply telling the people of a particular nation that you never have to change, that you can stay as you are, and that if you don’t deal with a problem today that in fact it won’t be worse tomorrow, we think that is unwise.

Journalist:

Talking about the Indian mining sector, the Indian mining act is being debated in the parliament, it will be put to vote very soon. But companies, when we talk about Rio Tinto or BHP Billiton, they have been facing large delays. A lack of a clear mining policy is something which is impeding mining in India, especially for foreign companies, Australian companies, coming to India. Do you think that there is need for a clear policy guideline on mining?

Bill Shorten:

I think as a guest in India, as a visiting Minister from another country, it is probably not best for me to start commenting on the internal workings of the Indian parliament. You have plenty of your own legislators with things to say on that.

Clearly, delay is not desirable. On the other hand, every jurisdiction, every nation has the right to frame its laws in its national interest. So I will take a pass on how India should run its mining laws. But, accept our companies are interested in the opportunities to help generate jobs and wealth for Indians as well as their own shareholders.

Journalist:

Recently of course, the Labor Party approved the export of uranium to India. There was a sort of unanimity there. What do you think are the
chances of Australia starting to export uranium to India?

Bill Shorten:

Certainly in very recent times, the governing party had a conference where we changed our policy -- we have given the green light to exporting uranium to India. I certainly supported the Prime Minister’s position on this policy change.

It will still require a treaty-level agreement to work through the details, but rest assured, the interest is there and as we know, when great nations have a will, there is always a way.

Journalist:

Finally, when you talk about the whole issue of taxation, you are of course here to look at that, do you think that clear and transparent tax policies will help both the countries (because that money is a big debate now, not only in India but globally, because that money can be used for funding activities which most nations don’t want)?

Bill Shorten:

Taxation is one of those features of political life. They are not popular, but the absence of coherent, transparent taxation policies are even worse. A student of economic history is very clear and I use the example: if you don’t have a good, transparent, honest tax system, then you can get yourself into the sort of strife some of the European nations have got themselves into.

There are no shortcuts to national development. Schools need to be funded, hospitals need to be run, roads need to be built, and we need a good taxation system. It is with taxes that you build a civilization. Of course, getting the balance right between private sector entrepreneurship and innovation, keeping red tape to a minimum, that is also very important. But a system where cheating the tax system is regarded to be the rule rather than the exception is certainly not the Australian way.

Journalist:

Minister Bill Shorten, thank you for your candid interview.

Bill Shorten:

Thanks very much.

 

ENDS