Deb Knight: Well, with the threat of recession looming on a global scale, the pressure is on our government to shore up the economy and fend off what markets expect could be the worst.

Trade Minister Simon Birmingham joins us now from Adelaide, along with Labor frontbencher Tony Burke in the studio with us now. Good morning fellas, to you both.

Simon Birmingham: Good morning.

Tony Burke: Good morning.

Deb Knight: So, if the US bond market is right, which it usually is, a recession is on the way. It looks like an inevitability in the US. The Treasurer has said that he’ll take the necessary actions to shore up our economy. Simon, what exactly will he do?

Simon Birmingham: Well I think firstly, you heard from Ross Greenwood there that he thinks it’s highly unlikely we would see a recession in Australia. What we are facing, though, are very uncertain global times – the US-China trade war, events in Hong Kong, Brexit, tensions between Japan and Korea – all of these things compound to create significant economic uncertainty. But the Australian economy continues to show a high degree of resilience. Just yesterday, we had the employment statistics out, showing a further 41,000 jobs created in Australia, 34,000 of those full-time. That’s following a long- term trajectory since we’ve been in government, a very significant jobs growth. Now more than 1.3 million jobs that have been created …

Deb Knight: So steady as she goes, but will you- is there room, then, to rethink the surplus and to start spending on things like infrastructure, or maybe some more tax cuts? That could do the trick.

Simon Birmingham: We we’ve certainly got a record spend on infrastructure – $100 billion – and we always stand ready if the states have projects that can go faster to look at those requests. Equally, we’ve just of course delivered tax cuts. And I think this is where the wisdom of the Australian people is seen. That at the last election, they voted for a government with a plan to lower taxes. Imagine how much worse situation would be today if they’d voted for a Labor Party with plans to increase taxes more than $300 billion, and the hit that would have had on our economy at precisely the wrong point in time.

Deb Knight: Okay. And Tony, in terms of the tax cuts, Labor was dragged kicking and screaming into approving the tax cuts that we have at the moment. Should you be cutting the Government some slack here, in terms of facing a global recession? If we are facing those dire times, should you get on with the job and let the Government get on with the job?

Tony Burke: Well, hang on, Deb. First of all, the tax cuts that are in place now are the tax cuts that both sides of politics took to the election. There was an argument about the ones that don't come into play for five years ...

Deb Knight: And that argument played out long and hard within the Labor party room.

Tony Burke: That’s right. But the tax cuts that are relevant to the economy now weren't just somehow accepted by Labor. We campaigned for them at the election as well. Both sides of politics campaigned for that.

Deb Knight: Will you cut the Government some slack, though, if they need to boost spending, if they need to raise the surplus …

Tony Burke: Oh we have been cutting them slack the whole time, saying, bring some infrastructure forward. Bring some of the- a whole lot of the projects they promised don't even happen this term. A whole lot of the roads that they talked about during the election, they won't start digging a hole this term. Where we are with Australia, look, you can't use the international circumstances as cover for the fact that structurally, we do have some weaknesses in Australia now. You know, when Labor was in office, we were- we got to number two in the world in terms of economic growth for the developed nations. We've gone from number two to number twenty. Structurally, we are becoming much weaker within- throughout the world. Simon just spoke about the employment numbers. What they won't talk about are the underemployment numbers. Yeah, we’re getting close to 2 million people who either don't have work or don't have as many hours as they are trying to get. These are structural problems within the economy, where if you do simple things like start to bring those infrastructure projects forward, you create jobs, you boost the economy.

Deb Knight: Okay, we’ll let's see if you will hold hands, play kumbaya and actually approve things. But in terms of the uncertainty, the violent protests in Hong Kong are really adding to the uncertainty on a global scale. Chinese forces amassing near the border, neither side is backing down here. Are you concerned, Simon, about how things could end in Hong Kong?

Simon Birmingham: Well look, we would be very worried if we saw any further escalation of violence. We urge restraint on all sides. We urge dialogue to try to resolve these issues. Hong Kong is a central part of the global economy, it’s a key trading partner for Australia, we have a separate trade agreement with Hong Kong that we have to our trade agreement with China. And that's because we respect the one country two systems model that applies there. And we urge authorities to recognise the values that underpin that, and to respect rights for peaceful assembly to take place and to try to resolve the underlying issues that have created these problems.

Deb Knight: I also want to talk about the Pacific Islands Forum. The Prime Minister has been left very much on the outer over the issue of climate change, Scott Morrison refusing to commit Australia to move away from coal. Tony, it is hypocritical of the Pacific islands to be criticising Australia on climate policies and yet still take investment and loans from China, which is very much- their emissions are far greater than Australia?

Tony Burke: Have a think about what’s happening in the Pacific islands at the moment. They are literally watching the ocean creep up towards their homes. And, you know, they know the Australian Government has made- has boasted about it not taking climate change seriously. Peter Dutton, who’s normally the guest here today - you got two proxies here with myself and Birmo - but Peter Dutton was the one who publicly made jokes in front of the cameras about people losing their homes with rising sea levels. Imagine how Australians would feel if Pacific leaders made jokes following one of our natural disasters. And that's why you've got the Pacific nations knowing that this government isn't serious about climate change. It's real and there are few parts of the world where it's so blatantly real than the Pacific.

Deb Knight: Just quickly, Simon, your view on broadcaster Alan Jones' comments on Jacinda Ardern, suggesting that Scott Morrison should shove a sock down her throat?

Simon Birmingham: Well, completely inappropriate. And look, what we took to the Pacific Islands Forum was our policy plans which involve some of the biggest per capita action in the world, and already per capita emissions out of Australia are their lowest level in 29 years. And we’re going to keep driving them down as part of our plans and our investment here, as well as a $500 million plan to support Pacific island countries in terms of their adaptation, their resilience and their measures to help contribute to minimising emissions and climate change.

Tony Burke: People don't need to listen to him anyway, they can watch this.

Tony Burke: Fixed.

Simon Birmingham: There are many other choices, on that we agree.

Deb Knight: Simon and Tony, thank you very much for your time this morning.

Tony Burke: Great to be with you.

Simon Birmingham: Thank you.

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