TOM CONNELL: Joining me now in the studio is Steve Ciobo, of course, Trade Minister. I'll get your reaction first just to this YouGov poll, 50/50 it has the two parties. Is that your new favourite opinion poll?
STEVEN CIOBO: Well, it won't surprise you to know that, as per usual, I'm not too focused on what the poll numbers are. I'm focused on what we can do in terms of policy.
TOM CONNELL: All right. Short answer. I'll take that and move on. Now, I don't want to sound all xenophobic, but Ciobo, Italian descent, have you called mum?
STEVEN CIOBO: You're stereotyping, are you? Stereotyping based on my surname?
TOM CONNELL: I did look it up as well though, I believe you have Italian heritage, have you checked?
STEVEN CIOBO: I'm more than 1000% certain there's not an issue, so it's not a problem.
TOM CONNELL: Is it a conversation among your colleagues now?
STEVEN CIOBO: Of course people are, we're a multicultural diverse country. It's no surprise that there'd be elements of the Australian Parliament, where people have got heritage from overseas. After all, over 25 per cent of the Australian population had been born somewhere other than Australia. What is a surprise is when people haven't checked that, and verified that before entering parliament. Obviously, what's happened now with matters are quite different to the situation we saw with the Greens Senators. We've got here, someone who has become a citizen unbeknownst to them. They didn't sign any forms, or received no notification of any of that information. So, it's very different to a situation where people are actually born overseas.
TOM CONNELL: It also happened seven years before he actually came into parliament. So do we need to take the responsibility out of the hands of the parties, and have some sort of infallible check?
STEVEN CIOBO: Well, I'm not sure you could ever get an infallible check, but you would have thought that, unlike a child situation where you have an adult, and someone's claiming on that adult's behalf to do something for them. You would have thought at least they would be required to sign something or receive some formal notification or something like that. So I think, it is a very different situation with Matt to the situation that we have with the two Green senators.
TOM CONNELL: Does it not show some anomalies? I mean, I imagine if you had a form saying, sign this if it turns out you're a citizen of the country, you pay back your entire salary as an example, people might turn over some more leaves?
STEVEN CIOBO: Well, I think the system works. We see examples now where people are being found out. You know, look, really there isn't-
TOM CONNELL: How is the system working if it's happened four years after, though?
STEVEN CIOBO: Well I mean, the issue is that these things surface, and they typically always do. I'm not sure there is a silver bullet solution as you said. I mean, where someone can say, "well, I'm absolutely not a citizen of another country. I can demonstrate I'm an Australian citizen." Short of writing to every other country on the face of the planet and saying, "do you have me as a citizen in your country?" I mean, are we going to ask that of every aspiring Member of Parliament? That they have to write to every single country on the planet and verify that they are not a citizen of that country? I mean, this is what I'm saying. I'm not sure there is actually a foolproof way to determine it. What we can demonstrate, though, is that there's eligibility for citizenship, and then, of course, if you're found out and if you've been lying, then there should be repercussions of course.
TOM CONNELL: We'll see where it goes. Free trade, the deal with Indonesia, what are the big benefits this is going to be? Are we talking about in the main agriculture?
STEVEN CIOBO: Well the Government's trade agenda is really strong. We are very focused on continuing to open up export markets for Australian business, and the reason why, Tom, is because we know that if we can generate more Australian export activity, we're going to drive economic growth in this country, and we're going to drive employment outcomes. Indonesia is my number one trade priority; we're putting a lot of focus on doing this deal. We saw at the G20 recently in Hamburg, where President Jokowi from Indonesia, and Prime Minister Turnbull, both recommitted to concluding this by the end of the year. We want a good quality deal, one that we can both announce. It's going to be a win-win outcome for both countries.
TOM CONNELL: The Government put deadlines on previous deals. Are you willing to have a target date at least?
STEVEN CIOBO: I think I just enunciated it to you. Both President Jokowi and Prime Minister Turnbull have indicated we're striving to get this completed by December. That's what I've been very focused on.
TOM CONNELL: That's-
STEVEN CIOBO: That's what we're working to try to do.
TOM CONNELL: How firm is that?
STEVEN CIOBO: Well, that's what we're working to try to do. We want to get a good quality deal in place by Christmas this year.
TOM CONNELL: In terms of what we might have to trade off, is there any sense of what might happen? For example, on live cattle, would Australia insist on all the various safeguards that are in place at the moment?
STEVEN CIOBO: Better welfare standards you mean? Look, absolutely, we unapologetically do that. This is my point in relation to live exports frequently, is that people say, "Oh, you know, we should shut down this industry!" But they're ignorant of the fact that if we shut down this industry, there'll be other countries who don't maintain animal welfare standards that will simply fill the vacuum that's left if Australia was to shut this down. Not to mention, of course, the impact that would have on livelihoods in the country. We saw, unfortunately, what happened when Labor's knee-jerk ban on live exports took place a number of years ago. We saw the extent to which that materially affected our relationship with Indonesia and really sent it spiralling down for a while. Though we've recovered all of that. We're making great progress under the Coalition now with this free trade agreement. We've got good opportunities in a range of different sectors.
TOM CONNELL: And you wouldn't lift any of those standards if that was requested of Australia?
STEVEN CIOBO: No, we have always maintained a very vigilant approach to animal welfare standards and we always will.
TOM CONNELL: I want to talk to you about trusts. Labor's already saying they're not going to abolish trusts, they’re looking at the taxation. Is that a fair enough thing to look at, to put on the table?
STEVEN CIOBO: The challenge really, actually, is that Bill Shorten is not consistent. I mean, in 2011, Bill Shorten came out talking about trusts, saying what a valuable part of the landscape they were, how they wouldn't be touched, how they wouldn't be looked at. And how they were a crucial part of the operations of the Australian economy. Now, fast-forward five or six years later. All of a sudden, Bill Shorten's saying, "No, no." It's part of this war on the politics of envy, that trusts are some kind of vehicle that's being abused.
TOM CONNELL: Well, the use of them has grown a lot since then in particular. The family trust. So what's the argument for having a small business and that person using that to allocate income to an adult’s child who has no role in the business at all to minimise the tax they pay.
STEVEN CIOBO: Trusts have been around... There are a lot of different forms of trusts, charitable. A whole range of different discretionary trusts that operate. All of them are subject to the scrutiny of the ATO. I think there's a labour force of something like 1,800 people that look at, I'm talking about within the Australian Taxation Office, that look at the way in which people use trusts. If anybody's avoiding paying tax, then they're in a position to bring actions against those people.
TOM CONNELL: But this is not talking about dodging. This is legal minimization. They've been around for 800 years.
STEVEN CIOBO: So you're asking me, can we change tax rates? That's basically what you're asking me. Of course, a government can change tax rates, that's up to any government of the day to make those decisions. My point is to focus on Bill Shorten's inconsistency. Let's be frank: he's as inconsistent on this as he is on pretty much everything else. He said trusts were a critical part of our structure, but this is all tied up with his ongoing rhetoric around class warfare. Bill Shorten is trying to penalise people who have succeeded in life by saying to those who are struggling, "oh, look, they've got more than you've got. That's a shame and we need to change that by taxing them more." This is an agenda that Labor is running to basically tax as much as they can people in Australia that have gotten ahead and, frankly, I think it's an attack on prosperity and the long-term implications for Australians who are having a go, who are trying to move forward in life, is that under Labor, they will see a material decline in welfare standards for themselves and they will also see that the nation overall is in a poorer position.
TOM CONNELL: Joe Hockey said the tax structure on this had no basis in logic back in 2011.
STEVEN CIOBO: Tax structure on what?
TOM CONNELL: Trusts, family trusts.
STEVEN CIOBO: Well, I would need the context in which he said that. Trusts are, and have been, a part of Australia's landscape-
TOM CONNELL: I accept that, there's a whole different host of them, but what appears to be the indication is that it's going to be a narrow look at family trusts. As I said, that example again: do you think there's any logic in looking at the fact that you can have a small business or an investor allocate income to an adult child, no role whatsoever in the business? It's about spreading tax and getting taxed at a lower rate.
STEVEN CIOBO: But that tax will still be paid. People who are earning income still pay tax on that income.
TOM CONNELL: But it's less tax, because instead of the highest income, it might be the tax-free threshold, for example.
STEVEN CIOBO: Yes, but the fact is that in that situation, you have an outcome that's taking place where people are earning income whether it's in a family tax structure, or whether it's in a business, or whether it's their own private work exertion that's meaning that they're getting income. The point is people pay tax on that, so I don't see the difference between someone claiming the deduction for a work-related expense and paying less tax on that than using a legitimate form of structuring a business to reduce the amount of tax they have to pay. There's no difference. Getting a deduction or using a legitimate form of structuring a business are the same thing.
TOM CONNELL: Alright, we'll see what the policy is on Sunday no doubt. Chat to you again, down the track about it, Steve Ciobo, Trade Minister, thanks for your time today.
STEVEN CIOBO: Thank you.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555