FRAN KELLY: Federal Trade Minister Steven Ciobo is a senior Queenslander in Malcolm Turnbull's cabinet. He joins us in our Parliament House studios. Minister, welcome to Breakfast.

STEVEN CIOBO: Good morning Fran.

FRAN KELLY: Can I ask you first about the WA deal? You heard Bill Shorten, the Liberal Party criticises One Nation policies, but is cuddling up to them, in his terms. Do you see that it looks desperate?

STEVEN CIOBO: Bill Shorten's comments certainly look desperate, that's for sure Fran. The reason that I say that is, this is coming from a guy who actually preferences the Greens without any dispute, one of the most if not the most extreme political party in modern Australian politics. And here's Bill Shorten giving us lectures about preference deals and what preference deals represent in values. Seriously, please Bill, get realistic about what it is that you're saying. Because people can see through this kind of hypocrisy.

FRAN KELLY: Let's talk about values. Yesterday frontbencher Arthur Sinodinos was talking about how One Nation has evolved since John Howard decreed the Liberal Party would always put One Nation last on how to vote cards. He said, “One Nation is a very different beast to what it was 20 years ago. They are a lot more sophisticated. They have clearly resonated with a lot of people”. So that sounds like the Federal Liberal Party at least is clearing the way for more preference swaps, is that fair to say?

STEVEN CIOBO: Well preference deals are determined by the various state divisions and so in this particular case obviously the Liberal Party of Australia is a federated organisation. In this case it was the Western Australia division that took the decision. In Queensland it will be the Queensland LNP, the Liberal National Party that will look at what they do with the forthcoming State Election in Queensland.

FRAN KELLY: What do you think they should do?

STEVEN CIOBO: Well, I think we've got to make a determination based on what's best for the people of Queensland number one, and secondly what can put us in a position to govern. I mean, obviously I'm a member of the LNP. I want the LNP to be in a position to govern. I think that the LNP will do a far better job than the Labor Party when it comes to not only to the financial management of Queensland, but the long term future of Queensland. Now, let's not lose sight of the fact that in Queensland based on polling we've seen over the weekend, One Nation's sitting somewhere between 15 and 20 per cent, whatever the actual number might end up being. That's a fair swag of voters. That's one in five voters or thereabouts that are indicating that they would want to put their support to One Nation. Now we can't be dismissive of that. It doesn't mean that we embrace or that we cuddle up to their policies in the same way that I'm sure that Bill Shorten would argue that him providing preferences to and from the Greens doesn't mean that Labor is necessarily adopting all of their kooky ideas. So what we've got to do is make decisions that put us in the best possible position to govern, ideally obviously with the support of the vast majority of the people of Queensland.

FRAN KELLY: Well talk about ‘kooky ideas’ to use your phrase, Arthur Sinodinos’ quote there that ‘One Nation is a very different beast’, it's more sophisticated. In what way has One Nation evolved that makes it more acceptable to do a preference deal with it now than it was back in John Howard's time? Have their policies and their values changed that much? Or are they still full, to use your term, of ‘kooky ideas’?

STEVEN CIOBO: Well, honestly I'm not sure I'm the person to answer that question. I'm a member of a political party. I'm a Cabinet Minister, Australia's Trade Minister. I'm not here to run a commentary on One Nation or what it is in their policy, platform that I like or don't like. What I will say is that, of course, there are elements of One Nation policy that I reject unequivocally. There's elements of Labor Party and Green policy that I reject unequivocally as well.

FRAN KELLY: But do you reckon the Federal Coalition or the Federal Liberal Party would have more in common with Labor's approach to running the nation and running the economy than with One Nation's?

STEVEN CIOBO: Well, I think if you look at One Nation, the way that they've been voting in the Senate. If you look at the way, for example, Pauline Hanson has gone about putting her support in the Senate, you'll see that she's often voting in favour of government legislation. There's a certain amount of economic rationalism, a certain amount of an approach that's reflective of what it is that we're trying to do to govern Australia in a fiscally responsible way. One Nation has certainly signed up to that much more than Labor. One of the core concerns that I have, Fran, on an ongoing basis is making sure that we can continue to pay for tomorrow's spending and not indebting our children to more and more debt. Now One Nation, certainly when it comes to their votes in the Senate, have supported the Government in our efforts on savings and different initiatives like that, whereas the Labor Party has been prepared to make sure that we keep consigning more debt to future generations. So on that basis, I think, yes, their support indicates a mature approach to economic policy in this country, whereas Labor's continues to pretend like there is no problem with debt.

FRAN KELLY: You're a senior Queensland LNP politician. Support for One Nation in your state has jumped from 16 to 23 per cent, according to the published polls, in three months. At the last State Election, in 2015, the One Nation vote was minuscule, less than 1 per cent, so it's an extraordinary rise for a party. How has this happened in your home state? How is it that Steve Dickson defects from the LNP to lead One Nation? He says that the polls show the major parties have lost their way. Now that's just a cliché, I suppose, but what do you think has happened because you've been there, watching it on the ground?

STEVEN CIOBO: Well, there's no doubt that there is a certain amount of the general community that feel that their support is best anchored in what you'd call a protest vote. Now, whether that's the Greens, One Nation - previously, it's been the Australian Democrats - there is no doubt that there is a percentage of the Australian population who say, look, I'm going to vote for a minor party because that's better than voting for one of the majors.

FRAN KELLY: A growing percentage.

STEVEN CIOBO: Well, and perhaps it is. From my perspective, Fran, we've seen this rise and fall. At not the most recent Federal Election but the one before that, we saw the Palmer United Party picking up a big swag of what I, again, would call the protest vote. If you go back 10 years, it was the Democrats, the Palmer United Party. Now, it's One Nation. The fact is that these will rise, and they will fall. It ultimately comes down to either the Labor Party or the Coalition that are in a position to make the responsible decisions of government to be, in the case of the Coalition, the sensible centre right policy position that reflects broad-stream, mainstream values.

FRAN KELLY: And so how are you going to do that, and why haven't you been doing it already? Presumably, you think your policies have been representing broad-stream, mainstream values already, and this is happening.

STEVEN CIOBO: Well, I do think they represent broad mainstream values, and that's part of the reason why we won the most recent Federal Election because we wanted to be in a position where we could reflect those mainstream Australian values and take those values with us when it came to policy-making, and that's precisely what we've been doing so far the seven or eight months that we've been in Government.

FRAN KELLY: Can I just ask you finally, there's a story on the front page of The Australian today that suggests that an LNP member, not a politician – just a supporter, was sacked from the Liberal Party for holding a fundraising lunch and inviting Tony Abbott to it. Is that true?

STEVEN CIOBO: Well, I'm not in a position to comment on that, Fran. I don't have the details about that allegation. When you say the Liberal Party, do you mean the LNP in Queensland?

FRAN KELLY: The LNP in Queensland, the local LNP.

STEVEN CIOBO: Sure. Well, look, those decisions are taken by the LNP executive, and there is actually a very comprehensive statement of expectations. There's the party constitution that outlines what we expect of people. Now, based on what you've just told me, I doubt that's the case, but look, I would need to know the details, and I don't know the details.

FRAN KELLY: From your point of view, though, should Tony Abbott be welcome at any Liberal Party fundraiser?

STEVEN CIOBO: Of course. Tony Abbott is a member of the Coalition. He's our former Prime Minister, and he's a man who has a lot to contribute, so, of course, he should be welcome.

FRAN KELLY: Steve Ciobo, thank you very much for joining us.

STEVEN CIOBO: A pleasure, thanks.

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