KIERAN GILBERT: Steven Ciobo joins me here in the Canberra studio. Mr. Ciobo, thanks so much for your time. As I said, the DOW/Jones below 25,000 points. It was quite some day. What's your reaction to that? Should we be worried here?
STEVEN CIOBO: No, I mean, this is typical when you, I mean look at the US economic context. We've seen big increases in terms of economic growth there, unemployment's down. So you’re starting to reach what is often referred to as the latter part of the economic cycle. Now the question is, "Well, when is the federal reserve going to start increasing interest rates?" The market price is that end. They think, "Well, if we're starting to reach capacity constraints in the US, that means that the Fed is more likely to increase interest rates." That starts to temper, obviously, output and potentially demand. As so a consequence, you get some of those price corrections happening. That's what's happening there. This is why our Reserve Bank Governors get paid the big bucks, because they've gotta try to get these calls right.
KIERAN GILBERT: There'll be some flow on here, at least on the markets if not the RBA.
STEVEN CIOBO: Well, there's a reason why things are clichéd about when America sneezes, the rest of the world catches a cold. Don't get me wrong, Australia's economy is doing exceptionally strongly. We have seen 403,000 jobs created, 1,100 jobs a day being created under the economic policy settings that this Government's put in place. That's an incredibly fast rate of growth. Three quarters of those jobs, Kieran, have been full-time jobs. We are seeing really strong economic growth in Australia. We're seeing great employment creation. More importantly, we've got the policy settings right, through reducing company taxes, which will create even more incentive for companies to continue to invest and create jobs in the future.
KIERAN GILBERT: We haven't seen the wage growth that many would like. If that does kick in, is there a concern about, potentially, quite a dramatic impact on inflation, then, as well as the impact of the borrowing costs for banks from those global rates?
STEVEN CIOBO: Sure, I think that people get a little bit ahead of themselves. Let's deal with what we're facing right now. What we're facing economic are conditions in Australia that are really strong, conditions that have been brought about because of sound economic policies. We've been in a situation where we've been able to reverse Australia's debt trajectory under the previous Labor Government. People know that as Government, we've made hard decisions to make sure we get our budget back on track for a surplus. They know we're creating the right business conditions for businesses to invest and to create employment. That's the reason why, as I said, 403,000 jobs, of which three quarters are full-time, that's happening because we get these settings right.
KIERAN GILBERT: So everyone, basically, should take a deep breath?
STEVEN CIOBO: I think because we've been through a long period, a number of years now since the GFC, there’s some people are spooked by some of what's happening. But I mean, really, we've seen all this before. These are, frankly, good problems to have.
KIERAN GILBERT: Let's look at a few other issues. You're heading to the US as part of that delegation with the Prime Minister. Big business delegation, as well. Can you give us any sense of what we can expect when you and others head to the US for that Governors’ Association meeting?
STEVEN CIOBO: Well, as you know, we've been very focused on making sure Australia continues to engage with the world. That's what lay behind our trade and investment agenda. We've put in place a whole range of new agreements. This is part of a continuing effort to make sure we build very strong linkages with the United States. The US is our biggest foreign investor into the country. They helped to drive the Australian economy. We want better business to business linkages, plus its 100 years of mateship, which recognizes that Australia and the United States have fought alongside each other for common views and values now for 100 years. Our Ambassador, Joe Hockey, has done an outstanding job at building that relationship, as well. So this is now another opportunity to continue to develop that.
KIERAN GILBERT: Just returning to something you touched on a bit earlier in terms of the policy settings on company tax, the Australia Institute has released some numbers today showing two thirds of those surveyed as part of their poll on this issue, would prefer investment in public services, things like health and education, to help economic growth as opposed to company tax cuts. In fact, a minority of Coalition voters supported company tax cuts. Do you need to do more to try and convince people here?
STEVEN CIOBO: Well, we do, because the fundamental fact is that if you get more investment across the economy, if you get more economic growth, then that means governments have at their disposal more revenue, i.e., more tax, that they can invest in services. If you try to short circuit that and say, "Well, let's just spend more money in services. Let's just spend more money in these areas and not worry about what's happening in the economy," that's just a recipe for the kind of economic stuff up, frankly, that we saw under the Australian Labor Party. What happens is that you get a huge blowout in government debt and you get the economy slowing down. That's the worst outcome of all. That is Labor's approach. It falls upon me and others to continue to make the case, and this isn't just an argument. These are the fundamental laws of demand and supply, Kieran. These are-
KIERAN GILBERT: Do you need to put more data out there as well, to prove your point?
STEVEN CIOBO: I think people can look around the world and see what's happening. We have seen examples of where countries have tried to tax their way to prosperity, so to speak, which is effectively, what the Labor Party's proposing. Labor's out there arguing for higher taxes. Labor's out there arguing for less investment. Labor's out there arguing that the way to make sure Australia is in a stronger position in the future is to keep borrowing more money. We reject all of that. We say, "No, actually, let's keep the horse in front of the cart. Let's get the economy growing strongly. Let's make sure that more people have a job. Let's make sure that as a consequence of that you do get an uptick in wages growth." That will mean more revenue for government because we have to pay fewer unemployment benefits and we get more tax from these incomes.
KIERAN GILBERT: Would it help you if companies, major companies, made these commitments up front? If this corporate tax rate is passed on, to 25%, then we will pass this wage rise as a percentage onto our workers.
STEVEN CIOBO: Kieran, we're already seeing that. We are already seeing as a result of improving business conditions. We're already seeing, as a result of the company tax reductions that this Government has put in place, that companies are employing more people. I mean, there is already a massive social dividend out there in Australian population. That massive social dividend is employment being created, three quarters of which is full-time, are 403,000 people. That is a tremendous social dividend. If you are someone who is unemployed who now has a job, the difference that means for you, potentially for them and their family, for them being able to service a mortgage, this is really important stuff.
KIERAN GILBERT: The Chamber of Commerce and Industry says that it would cost up to $8 billion a year to lift the minimum wage to the ambit claim made by unions of 60% of the median wage as a living wage. Are those numbers realistic? Is this just a scare campaign, as Sally McManus says, that big business have tried to drive down people's wages and now when they want a fair wage they say the sky's gonna fall down?
STEVEN CIOBO: Yeah, this is a great shame of the Labor Party and the union movement that they try to pitch employers against employees. Kieran, without employers, you don't have employees. In other words, without investment by business, without investment by risk-takers, there aren't jobs available for people to work in. We actually need to encourage a culture where people understand the symbiotic relationship between the two. I, frankly, grow tired. I know that many people I speak to in the community grow tired of this class warfare rhetoric. Bill Shorten is the biggest class warfare warrior that we've seen for years in this country, a massively left-wing agenda, and it's echoed by the union leadership from which he came.
KIERAN GILBERT: Minister Ciobo, we're out of time. Appreciate it.
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