Sky News, AM Agenda

KIERAN GILBERT: Joining me now on AM Agenda, SteveCiobo, the Trade Minister. Mr Ciobo, thanks very much for your time. It lookslike a bit more work to do in terms of getting that particular omnibus billthrough.

STEVEN CIOBO: Well, I mean look, we remain verycommitted to trying to do what we can to provide extra support to Australianfamilies, especially in relation to child care, and our reforms are going tosee most of the subsidy directed towards those on lower incomes. It's going tomake a big difference for families. Now, it would be great to have NickXenophon and his team's support. I know that Nick's of the view that thesavings should come out of the defence budget by reducing defence spending.That doesn't seem like the right way forward to us. The fact is that there's alot of families in South Australia especially who are reliant on the fact thatwe are building defence industries in South Australia. Not to mention the factthat in more uncertain times we need to make sure that Australia's defenceindustry is robust.

KIERAN GILBERT: He said the last straw was thelinking of the NDIS and its funding to these saves. He said that that was notthe right thing to do because we're not going to - he says - take money fromone family that's doing poorly to help the disabled; that funding should befound, and he wasn't willing to negotiate on that premise.

STEVEN CIOBO: But you can't magically inventfunding. This is the simple fact, Kieran. I mean we have had many years ofbudget deficit now. We know that Labor set the NDIS up so that it was unfunded.In other words, they had simply not put in place the required revenue that wasnecessary to keep the NDIS going. Instead they just sort of washed their handsof it and left us this problem for the Coalition to solve. Now, we areobviously very focused on making sure that we can fix this, but we've got-

KIERAN GILBERT: Politically, is that a bad look tobe saying, okay, we're going to make cuts to these families who are strugglingto pay for these families who need help.

STEVEN CIOBO: - I mean what we're doing is makingreform where necessary in order to make these things viable and to make surethat Australians don't continue to live in deficit. Now, the fact is that if wecut money out of defence, South Australian families are going to be hurt bythat. I mean, there's a lot of South Australian families, as I said, who arepart of the South Australian defence industry, not to mention the fact that italso goes to our national security and what it is that we're achieving there. Imean let's not ever lose sight of the fact that we saw defence spending in thiscountry reach its lowest level since basically the 1940s under the Labor Party,and it took a Coalition Government to restore that funding back to our defenceindustry so that Australia was not left in a vulnerable position.

KIERAN GILBERT: Just how much is the Governmentwilling to compromise though? Because the Labor Party says you're going toofar, Xenophon says you're going too far, while you think you've struck thebalance in terms of fairness. You look at the child care reforms and the paidparental leave reforms, it's hard to disagree with a more equitable policy thatyour Government has put forward but you can't deliver those unless you get themacross the board with the other measures.

STEVEN CIOBO: We'll continue being strongadvocates arguing for the fact that we have got the balance right. You see,it's not an endless money supply. There is no secret money tree in government.What there is at the moment are big budget deficits - a direct consequence ofthe Labor Party refusing to accept reasonable savings and people like some onthe crossbench on some issues refusing to support savings as well.

KIERAN GILBERT: Now, Nick Xenophon is going to bemeeting with a delegation of business leaders today, as well as I think talkingto the Treasurer and the Prime Minister, this group from Adelaide. I put it tohim this morning that companies like Haigh's, like Coopers would benefit from,you know, South Australian companies from a tax cut up to a turnover of $100million a year, let's say, he didn't rule that out. Is that your best casescenario here in terms of the company tax cuts, do you think?

STEVEN CIOBO: Well look, our proposition is verystraightforward. I mean it's a proposition that Bill Shorten and the LaborParty supported when they were in government, and that simply is that if wereduce the amount of company tax so that Australia becomes more competitive,because the fact is that we are not competitive right now. We're losinginvestment in Australia. We're losing the expansion of businesses in Australiaand that simply means there are fewer job opportunities –

KIERAN GILBERT: Well you're not going to get thefull plan through. Xenophon keeps saying, I'm not going to give tax cuts tobanks and so on.

STEVEN CIOBO: Well, we will maintain that we needto make sure Australia is competitive. I mean, this is a pretty fundamentalprinciple. Right? Capital is global. Labour is global. If we are notcompetitive, and we're not at the moment, but if we're not competitive then itsimply means that that money will go overseas. Instead of investing in a newfactory or a new manufacturing plant or a new business in Australia, whichwould employ Australians, that money will go to a different market overseas.It's a pretty basic principle.

KIERAN GILBERT: You'd get most Australian companiesif you got it up to a turnover of, let's say, $100 million per annum. Thatwould be a win, wouldn't it?

STEVEN CIOBO: Look, of course, every incrementalgain is an improvement on Australia's position, but let's also not lose sightof the fact that these bigger companies, the ones that the Labor Party now,although they had a different position six years ago, and that some of thecrossbench say they don't deserve tax cuts, let's not lose sight of the factthat these are businesses that Australians have their superannuation investedin. If you're in an industry superannuation fund, if you're in a retailsuperannuation fund, if you've got your own self-managed superannuation fund,that money is typically invested in Australian businesses. That money flowsback to Australians anyway when those tax cuts are delivered.

KIERAN GILBERT: One comment you made yesterday,you're the Trade Minister of course, and yet you spoke of One Nation and thattheir approach has been economically rationalist and a bit more fiscallyresponsible. Is that jarring from a Trade Minister given how protectionist theyare as well?

STEVEN CIOBO: No, no, no. Let's be very clearabout what I said. What I said was that they were acting more economicallyrationalist than the Labor Party was. There's a difference there. The fact isthat they are. I mean, the Labor Party, and I look at this criticism from theLabor Party saying, "Oh, they're pro-protectionist. How could a Trade Ministersay it?" Well, guess what? I've got quotes from Bill Shorten saying how hedoesn't believe in free trade. We saw Bill Shorten running an incrediblyxenophobic campaign against the China-Australia Free Trade Agreement. The verydriver of economic growth and jobs in Australia right now, which has been ourblooming exports, especially to markets like China. The Labor Party want totear up our free trade agreements, because they say anything that contains adispute resolution clause, an ISDS clause, Labor doesn't want to have –

KIERAN GILBERT: So you're happy to preference OneNation over Labor, federally as well?

STEVEN CIOBO: That's not my decision. These aredecisions that are taken by the party –

KIERAN GILBERT: You're a Cabinet Minster fromQueensland.

STEVEN CIOBO: Well, what I'm going to say is thatI will call out Labor's hypocrisy every day of every week when Bill Shorten andLabor members start lecturing us about doing deals. I mean, this is the LaborParty that does deals with one of the most extreme political parties inAustralia, the Greens movement. The Greens movement, who incidentally wouldlike to tax tourism, especially in relation to the carbon tax, so that it'sactually cheaper for Australians to not be in a position to travel and it's actuallycheaper for international tourists not to come to Australia.

KIERAN GILBERT: But you can understand why BarnabyJoyce is peeved, to put it mildly, with Colin Barnett's move to preference OneNation over the Nationals?

STEVEN CIOBO: Well, I think one, you'reverballing him, but secondly –

KIERAN GILBERT: What? To say that he's annoyed?

STEVEN CIOBO: Well, I think, secondly the fact isthat the National Party in WA has preferenced other parties before the Liberalsas well.

KIERAN GILBERT: You don't think Barnaby Joyce isannoyed? Peeved?

STEVEN CIOBO: No, but what I'm saying ishistorically, if you go back over the past several elections in WA, the WANationals have preferenced other parties before the WA Liberals.

KIERAN GILBERT: Not one that's an existentialthreat to them. You said I verballed him. How did I verbal him? He's beenpretty clear cut on that.

STEVEN CIOBO: Well, no, I don't think he hasbeen. Look, in my view, Barnaby Joyce has exercised control, has made hisposition clear in a very matter of fact way, so I'm just saying that I wouldn'trun around saying that he's mad or angry or peeved. That's what my point is.

KIERAN GILBERT: Well, is it a threat though, if youstart, last question, if you start doing deals with One Nation elsewhere to theCoalition?

STEVEN CIOBO: Well, take for example - well, ofcourse it's not. I mean, the Coalition is the bedrock of good, conservativegovernance in this country and it will be for a long time yet. My point issimply to say that if you look at WA, the Nationals have preferenced otherparties before the Liberals. On this occasion the Liberals in the Upper Househave taken a similar decision. At the end of the day, Kieran, Australiansdecide where their votes go. They decide who their preferences flow to. TheCoalition will always be strong. We're all deeply committed to it, and workalongside our National Party colleagues very closely. In Queensland it's theone party, the Liberal National Party. We've got a strong healthy future.

KIERANGILBERT: Steve Ciobo, thanks for your time – the TradeMinister.