New Treasurer Jim Chalmers stares down ‘aggressive’ China

Treasurer Jim Chalmers says China will need to drop trade sanctions against Australia before relations can thaw, as Foreign Minister Penny Wong prepares to shore up the nation’s position in the Pacific.

The Albanese government has put China’s damaging ­tariff and trade restrictions at the top of its agenda as Treasurer Jim Chalmers outlined plans to deal with the increasingly “aggressive and assertive” global superpower.

Echoing sentiments shared by Prime Minister Anthony Albanese this week, Mr Chalmers revealed China would need to start dropping trade sanctions against Australia before relations could thaw, as Foreign Minister Penny Wong prepares to head to Fiji today to shore up Australia’s position in the Pacific.

Beijing’s restrictions on Australian export industries have been in place for almost two years, with Mr Chalmers noting the relationship with China had become more complex due to those actions.

“China has become more aggressive and more assertive and our responsibility as the incoming government is to manage that complex relationship in a considered and sober fashion,” he said. “If there is to be an improvement in relations it makes sense to us for the first part of that … to be the removal of some of those sanctions and tariffs, which are doing damage to our economy and to our employers and exporters. That would be a good place to start.”

Treasurer Jim Chalmers. Picture: NCA NewsWire / Dan Peled

Senator Wong will head to Fiji less than 24 hours after a whirlwind trip to Japan with the Prime Minister to meet with the Quadrilateral Security Dialogue, or Quad.

Australia’s relations with the Pacific are set to be a key foreign policy challenge for Mr Albanese, who used the Solomon Islands’ inking of a security deal with Beijing during the election campaign to parry charges that a Labor government would be weak on China.

Chinese Foreign Minister Wang Yi is doing his own tour of the region, meeting with Solomon Islands Prime Minister Manasseh Sogavare in ­Honiara on Thursday.

Senator Wong said the fact the visit was in her first week in the job “demonstrates the ­importance we place on our relationship with Fiji and on our Pacific engagement”.

“Australia will listen to our Pacific partners as we work ­together to face our shared challenges and achieve our shared goals – including tackling climate change, pandemic recovery, economic development and regional security,” she said in a statement. “(Australian) commitments include taking real action on climate change at home and with our region, as well as increased development assistance and security co-operation, and reforming and expanding our Pacific Australia Labour Mobility (PALM) scheme.

“I look forward to sharing our ideas on how we seek to bring together Australia‘s defence, strategic, diplomatic and economic capabilities to support our region’s priorities.”

Australia's new Foreign Minister Penny Wong. Picture: Saeed Khan/AFP

Mr Chalmers also revealed it would take a generation to pay down the $1 trillion debt, indicating there would not be a surplus this decade and warning there were “pressures on the budget” not disclosed by the previous government.

But he declined to say what those pressures were, as he continues to receive briefings.

Mr Chalmers said he could not “flick a switch” and make the debt disappear, but he ruled out reviving scrapped policies around negative gearing and franking credits.

He said the priority would be multinational tax reform and a “waste and rorts audit”.

“We think it will take generations to pay down $1 trillion in debt but we want there to be a generational dividend for all that debt that has been racked up,” he said. “Our predecessors promised surpluses in the first year and every year. We are not going to make that mistake.”

Asked whether Labor’s own commitments to new sporting fields, pools and other commitments would be included in the “waste and rorts audit”, Finance Minister Katy Gallagher said the government would proceed with commitments made during the campaign.