ABC, RN Drive

  • Transcript, E&OE
Subjects: Australia’s economy; Superannuation; Pacific Agreement on Closer Economic Relations (PACER) Plus; Asylum Seekers
25 August 2016

PATRICIA KARVELAS: I spoke to Steve Ciobo. He's the Minister for Trade and Tourism and Investment a short time ago. Minister, welcome to the program.

STEVEN CIOBO: Pleasure to be with you.

PATRICIA KARVELAS: You're in New Zealand for trade talks at the moment and we'll get to that in a moment but first the Treasurer has given a speech that we have less than a decade to get debt under control or risk recession. Isn't that a bit of an alarmist warning?

STEVEN CIOBO: Not at all. We've seen what happens when governments in other parts of the world have lost control of their books, so to speak, of raised debt to GDP levels that are so high that they basically are not in a position to fund their way out, and Australia doesn't want to end up in that situation. It was a core focus of the previous Coalition Government under John Howard and Peter Costello to pay our debt down. We've made that a key focus for this Government as well. Obviously global economic circumstances make that more of a challenge now. But we're still very focused on that outcome.

PATRICIA KARVELAS: Isn't this just the 'lifters and the leaners' repackage - this language that he's using in his speech?

STEVEN CIOBO: No, it's a frank and honest appraisal as to the challenges that Australia faces. It's the recognition that we cannot allow situation to arise where Australians are on welfare funded by tax payers. Where some people basically go there their entire lives, never making a taxable contribution to the Australian public. Now look, there will be circumstances where that is the case, but for most Australians that should certainly not be the situation. The Treasurer's speech today simply outlined a stark reality about the need to make sure that we have the balance right between those who are generating wealth, earning income, paying tax, and those that are reliant on the taxes that are paid.

PATRICIA KARVELAS: So I understand there is that omnibus bill, that will be before the Parliament and that deals with some of that, but is the Government softening up the Australian people for larger cuts to welfare that go beyond what's already been announced. It sounds to me like this is the beginning of what will be a reform process that some people won't like at all.

STEVEN CIOBO: Well Patricia, you're sort of getting into a real crystal-ball gazing element here and that's not what the focus is. What the Treasurer's outlined -

PATRICIA KARVELAS: There must a reason he's telling us that there's the taxed and the taxed-nots. You're trying to start some kind of conversation here or make some kind of argument for a long term, really significant change to the way we see welfare payments, aren't you?

STEVEN CIOBO: This is not the start of a conversation at all. This is simply the latest chapter in an ongoing conversation that the Coalition has been having with the Australian people, which is best summarised as the following: We need to live within our means. That's what this comes down to. Patricia, let's never lose sight of the fact that every single dollar of debt, every single dollar of debt that we incur today, is a dollar that has to be paid back, with interest, by future generations. You can never escape that fundamental fact. That's the reason why we as a Coalition Government say we can't live the kind of fantasy that Bill Shorten and the Labor Party live where they just keep kicking the can down the road, where they just keep imposing on future generations of Australians – more debt, more interest and a greater tax burden than they're willing to accept today. That is the height of your responsibility and it simply is not an Australia that I believe most people want to see.

PATRICIA KARVELAS: If you're just tuning into RN Drive, I'm talking to the Trade Minister Steve Ciobo, who's actually in New Zealand at the moment for trade talks. The Treasurer now says we have an earnings problem. That's the first time I've heard this language. That's a revenue problem isn't it? That was something you were not saying during the election and before it.

STEVEN CIOBO: Patricia I think, frankly with the greatest respect to you, it's word games.

PATRICIA KARVELAS: No it's not. You're saying it was a spending problem and now you're diagnosing a different -

STEVEN CIOBO: The fact is it's a combination of both Patricia. Australia is spending more money than the Government has. That's why we're going into debt year after year, to the tune of $20, $30, $40 billion dollars. We saw the Australia Labor Party reach debt levels or I should say deficit levels of more than $55 billion in one year. This is precisely the reason why the Coalition takes hard decisions. Sometimes decisions we know that are unpopular. We're not doing it because we think it's fun. We're making these decisions because we must, and I cannot stress this enough, we absolutely must make sure that our debt profile is lowered and that Australia's deficit returns back to surplus -

PATRICIA KARVELAS: Okay, but we don't just only have a spending problem do we? We do have a revenue problem.

STEVEN CIOBO: Well clearly revenue is lower than forecasted. We saw the impact to that with respect to commodities prices, which of course had a significant and a very material impact on Australia's federal budget and indeed on State budgets as well. This is all part of the challenge, but it's never static. These are always dynamic fluctuations between the revenue that Government's taking in taxation and the amount of money that we are paying out in terms of welfare and defence and all the kinds of initiatives that governments undertake.

PATRICIA KARVELAS: But you do concede that the Government's changed its analysis of our economic woes, of our budget woes, that it's not just a spending issue. It's now revenue issue as well.

STEVEN CIOBO: By definition, when you have a budget that's in deficit then it requires correction - both in terms of spending and in terms of revenue.

PATRICIA KARVELAS: Jacqui Lambie says if the Government properly taxed the richest 1 per cent, it would increase tax revenue by $94 billion over a decade and there would be no recession. Does she have a valid point?

STEVEN CIOBO: No she doesn't. It's completely fanciful. The fact is that there is no silver bullet solution. There's no panacea to the challenges we face. It's not the case for no reason, Patricia, that governments all around the world are facing the very significant challenge of dealing with large budget deficits and very high levels of debt. As much as Jacqui Lambie might say that there's some simple solution out there, it's not. These are complex matters, they exercise the minds of governments around the world. They exercise the minds of -

PATRICIA KARVELAS: Sure, but her point really is that she thinks there should be targeting of those who can afford to pay higher taxes, as opposed to people who are very poor on welfare. That's what she's talking about.

STEVEN CIOBO: Well those on high incomes already pay the vast bulk of tax already. Those on higher income, those Australians who earn significant amounts of money of course pay the most tax already and typically take very little to no welfare payments whatsoever. So let's not pretend that those on high incomes aren't already paying a fair whack of their wealth as tax to help support those who aren't paying tax or who are paying minimal levels of tax.

PATRICIA KARVELAS: Bill Shorten has blasted the Coalition's knee jerk rejection of the Opposition's $80 billion plan to boost the budget bottom line and chiefly that issue also of, what they've offered you, which is a new superannuation way out, including getting rid of, effectively grandfathering, getting rid of that 2007 start date for that lump sum amount. Does he have a point? They've offered you a deal, don't you need to kind of take a deal given you need to get this through to Parliament?

STEVEN CIOBO: We think that the Australian Labor needs to be fiscally responsible. In other words, they need to manage Australia's money properly and play an honest and mature role with that. We've got the problem at the moment Patricia, where statements that the Australian Labor Party and Bill Shorten made only a matter of some weeks ago during the Federal election campaign - savings that they themselves nominated, they won't even stand by those savings now a matter of weeks later. If you want to talk about a lack of responsibility, it surely has to be the fact that Bill Shorten and the Labor Party will not even stand still long enough, on a position taken only eight or 10 weeks ago, when it comes to the kinds of savings that they wanted to see.

PATRICIA KARVELAS: But if you want to see a significant superannuation reform package pass the Parliament, isn't it worth talking to the Opposition about their ideas? Some of them overlap, some of them require some change from the Government but it is a way out, isn't it?

STEVEN CIOBO: Patricia, we have taken to the election, a policy of reform. We've took those policies based upon what was announced in the budget. The Australian people have had the chance to evaluate it. We've had an election. The Coalition has been returned to government. We think that in terms of a litmus test it doesn't get any clearer than that. A clear indication of where Australian support is for the Coalition, for what we've proposed going forward and that's what we focused on trying to deliver.

PATRICIA KARVELAS: Now, you're in New Zealand for bilateral trade and investment talks, as well as talks with, I think, the Pacific Island Forum countries. Will the issue of refugee resettlement come up in these talks?

STEVEN CIOBO: No it won't.

PATRICIA KARVELAS: What is coming up in these talks?

STEVEN CIOBO: I'm here for trade conversations. Australia has been pursuing something called 'PACER Plus', which is a Pacific Agreement on Closer Economic Relations. An agreement basically, in other words, of trade and development agreement between Pacific island countries, Australia and New Zealand, to try to drive the region forward in a sustainable way, recognising that we're discussing with many countries, countries that have significant economic challenges.

PATRICIA KARVELAS: And those talks, where are they at at the moment? You're on this visit. What is the pathway to the end of these talks?

STEVEN CIOBO: We've had really fruitful conversations over the last day or so and the bulk of the conversations among trade ministers will happen tomorrow. I'm hopeful that we'll be able to continue to build upon the great work we've undertaken over the last couple of years. Work that is really forming now, the basis of a regional trade agreement. One that will help to underpin a brighter economic future for Pacific Island countries, for many of them developing economies with small populations that are looking for a way to have a more sustainable and brighter future.

PATRICIA KARVELAS: And just getting back to that issue that I mentioned. You said it wouldn't be raised, but there are more than 854 men on Manus Island on PNG. The Government has made it clear that Australia won't resettle them here but Labor has been suggesting New Zealand as a third country. You're in New Zealand, should that be an option?

STEVEN CIOBO: Well I just had a bilateral conversation with my New Zealand counterpart, the Trade Minister Todd McClay, and this issue wasn't canvassed. It's not something that he and I are focused on. We have a task ahead of us, and look frankly Patricia, the Labor Party had their time in office. The Labor Party presided over policy reform that saw Australia's borders frankly fall apart. That saw us waste billions of dollars on a failed policy approach that saw lives lost at sea, 50,000 arrivals and something like 700 or 800 boats. So as much as I appreciate the Labor Party suddenly chiming in with their fantastic ideas now, the fact is that they have been nothing other than a vessel of failure when it comes to border protection and the Australia Government will continue to devise a pathway forward that actually provides a long-term solution.

PATRICIA KARVELAS: Malaysia was one of the options that they certainly tried to execute but it didn't work because the opposition was very fiercely opposed to it.

STEVEN CIOBO: We're opposed to their policies Patricia, because they were policies that were completely -

PATRICIA KARVELAS: No, wait, my question is coming here Steve Ciobo. My question is this; Tony Abbott who was the Opposition Leader, the most fierce opponent of the Malaysia option has since said he regrets stopping it. Do you regret it too?

STEVEN CIOBO: Well I just don't think you can cherry pick one little policy away from other policies. What we're opposed to and what I certainly don't have any regrets about is the fact that we were consistent in terms of saying that the only meaningful solution to stopping the flight of asylum seekers coming to Australia, which was costing more than 1000 lives - the only way you could achieve that, was through a firm policy that involved boat turn backs where it was safe to do so and that involved offshore processing and that literally broke the people smugglers' model. That's what we've put in place. That's what now is working and has worked, and that's the reason why we have stopped the flow of people smugglers to Australia.

PATRICIA KARVELAS: So you don't agree with Tony Abbott that that was the wrong position at the time?

STEVEN CIOBO: I just don't think it's wise to pick through one particular policy in isolation. What I'm saying is that there is a suite of polices that Labor put in effect. Policies which I continue to object to, which I thought were crazy policies and frankly the proof of the pudding is in the tasting and we saw what happened under Labor's watch.

PATRICIA KARVELAS: Many thanks for your time Steve Ciobo.

STEVEN CIOBO: Always great to speak to you Patricia. Have a great evening.

Media enquiries