MALCOLM TURNBULL: 'We cannot retreat into the bleak dead end of protectionism'

Prime minister Malcolm Turnbull. Photo: Peter Parks/ Getty Images.

Prime minister Malcolm Turnbull has warned of the risk of retreating into protectionism as Australia enters a new era of global competition for jobs and trade.

Speaking at the National Press Club on Wednesday, a day after Opposition leader Bill Shorten fronted the same gallery, Turnbull warned that strategies like those recently employed by US president Donald Trump will not protect Australian jobs.

His warning follows Shorten’s comments yesterday which in part appeared to evoke the protectionism espoused by Trump.

“Everybody loses when people are brought in from overseas and exploited,” Shorten said.

“Good employers, Australian companies who do the right thing, can’t compete with third-world labour costs and conditions.

“We cannot allow our country to become an unskilled enclave in a modernising Asia.”

But Turnbull today rebutted that idea, saying that more trade means more exports, which in turn means more jobs and more opportunity for Australia.

“The test for every policy and every decision of my government is this: does it create more opportunities for Australians to do their best?” he said.

“We have lived through a remarkable era of prosperity, fuelled by a once-in-a-generation mining construction boom. But we must never become complacent.

“New challenges abound and competition for capital and skilled labour is fiercer today than at any point in history.

Turnbull said Australia “cannot retreat into the bleak dead end of protectionism”.

“Political opportunists want us to turn inward and revert to higher barriers to trade and investment.

“But they are doing nothing more than playing on the fears and hardships of those in our community who feel they have not shared in the benefits of globalisation and technological change.

“They offer the false promise that subsidies and trade barriers – under the banner of Australian first – are the answer to protecting jobs.

“But we have seen that film before. And it’s not a pretty one.

“Whatever other countries may think, it is very clear that for Australia, more trade means more exports, which means more jobs and more opportunity.

“Why would we want to limit opportunities at a time when demand for ‘made in Australia’ has never been stronger?”

“That is why, although disappointed by America’s withdrawal from the TPP, we continue to work to open more markets for our exports with negotiations underway with India, Indonesia, the EU and in due course the United Kingdom.

“Without a competitive business tax rate Australia will be less able to attract investment. And without investment, there will be fewer jobs.”

He said in order to continue to be part of a competitive global economy, in which other countries will continue to cut their company tax rates, Australia must consider company tax cuts.

“We cannot afford to get left behind and let Australian jobs go offshore,” he said.

“Cutting business tax will create more opportunities, overwhelmingly benefitting small business – family owned businesses that are the lifeblood of so many communities in our regions and cities.”

He announced the government will begin by cutting tax to 27.5% for small and medium businesses with a turnover less than $10 million.

“This means a small Australian business will be able to invest more, hire more and increase wages,” he said.

“But while we want to lower business taxes, we do not accept self-help approaches to tax reform and our continued efforts to stamp out corporate tax avoidance continue with the Diverted Profits Tax legislation.

“It will impose a 40% penalty on profits earned in Australia and transferred offshore and will apply from 1 July this year to all large multinational companies.

“By making sure everyone pays the right amount of tax we can better afford to invest in important services and infrastructure.”

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