Commentary on Political Economy

Wednesday 26 August 2020


Federal Government seeks power to veto Victorian deal with China

By defence correspondent Andrew Greene

Marise Payne, left, wears a black and white jacket with pearls at her neck as she shakes the hand of Wang Yi, in a suit.
Foreign Minister Marise Payne, seen meeting Chinese Foreign Minister Wang Yi, could have more more powers under proposed laws.(Reuters: Athit Perawongmetha)

Victoria's controversial trade deal with Beijing may be scrapped by Australia's Foreign Minister, using new powers being proposed by the Federal Government.

Key points:

    The Coalition is pushing to regulate all agreements that state and territory governments, local councils and public universities make with foreign nations.

    A public register would soon be established where all existing arrangements would have to be disclosed, then reviewed by the Foreign Minister.

    Under the Foreign Relations bill, the Foreign Minister could then terminate any existing agreements, such as Victoria's Belt and Road deal, if they are considered adverse to Australia's foreign relations or are inconsistent with foreign policy.

    In 2019, the Victorian Government caught the Commonwealth by surprise when it signed up to the Chinese Belt and Road Initiative.

    The deal has angered many in the Coalition who were worried about Chinese influence in Australia, but Premier Daniel Andrews insisted the deal is designed to boost the Victorian economy and jobs.

    The deal also drew criticism from US Secretary of State Mike Pompeo, who said the Belt and Road deal increased the Chinese Government's ability to "do harm".

    Victorian Premier Daniel Andrews at Tiananmen Square in China.
    Victorian Premier Daniel Andrews signed the Belt and Road deal with the Chinese Government last year.(Twitter: Lisa Tucker)

    Now the Federal Government wants veto powers over any future agreements, arguing that constitutionally the Commonwealth has exclusive responsibility for conducting Australia's foreign affairs and for representing Australia internationally.

    "Australia's foreign policies and relationships must always be set to serve Australia's interests," Mr Morrison said in a statement.

    "One of the most important jobs of the Federal Government is to protect and promote Australia's National interest."

    In 2017, concerns over foreign interference prompted then-prime minister Malcolm Turnbull to ban all overseas political donations and to establish a new public register for anyone working on behalf of other nations to influence Australian politics.

    Mr Turnbull announcing the proposed new laws outside Parliament House in December, 2017.

    A year earlier, then-treasurer Scott Morrison announced a tightening of the nation's foreign investment rules in the wake of the controversial "sale" of the Port of Darwin to a Chinese company.

    Deals involving commercial corporations and state-owned enterprises would be excluded from the new regime, as would foreign universities unless they are arms of a foreign government such as military colleges.

    In recent weeks, state and territory leaders have been briefed by security agencies on what arrangements could pose risks to Australia, including some covered in the new bill.

    "It is vital that when it comes to Australia's dealings with the rest of the world we speak with one voice and work to one plan," Mr Morrison said.

    "Australians rightly expect the Federal Government they elect to set foreign policy."

    "These changes and new laws will ensure that every arrangement done by any Australian Government at any level now lines up with how we are working to protect and promote Australia's national interest."

    Foreign Minister Marise Payne said there is currently no legislative requirement, or clear understanding, that states and territories consult properly with the Commonwealth on arrangements with foreign governments.

    "These changes will provide governments, institutions and the Australian people with confidence that due diligence is given to international arrangements to ensure they are consistent with our national interest and our values," Ms Payne said.

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