15 October 2014
Transcript - #2014040, 2014

Interview on Sky News, Lunchtime Agenda

JAYES:

-at the G20 summit with the Parliamentary Secretary to the Treasurer Steven Ciobo. First can I ask you about this growth target, 2.1 percent, as I understand it? And leaders do need to put policies in place. There are measurable outcomes here but there's a political reality attached which of course that you are very attuned to and so is the Treasure Joe Hockey. So what you achieve here is certainly a step forward but do you admit that perhaps when these member nations go back to their countries they're faced with their parliament, their political processes that some of these measures might not actually be achievable?

CIOBO:

Well we outlined at the outset that we wanted to achieve a 2 percent growth target that was the decision, the consensus that was made by finance ministers from across the globe in terms of the G20, the first meeting back in February. Since then nearly 1000 reforms have been put forward by G20 member states. We're now look to be on track to actually achieve 2.1 percent growth. Now as you remember Laura of course there's going to be some domestic challenges that different countries will have to encounter as part of their implementation plans.

That's precisely the reasons why the PM took a very good initiative we believe, this particular G20 to have that leaders summit, that retreat, that we saw earlier, where leaders sat around and talked about what they can do respectfully in their own individual countries what some of the domestic political challenges were and what some of these experiences were so they can share that across the groups.

JAYES:

Well some of the our domestic political challenges in certain policy areas in which Tony Abbott did note at the beginning of this retreat and that is the Medicare co-payment and university deregulation. There was not a lot of support for this across the political divide so if you don't get that through how do you achieve this growth target? How do you maintain that promise to these G20 nations?

CIOBO:

Well we've got our economic action strategy. We've outlined what our plan is to get Australia back on track. We've obviously got a very significant fiscal repair job to do. The Labor Party left us in a situation where we're borrowing a billion dollars a month just to pay the interest on the debt that Labor accumulated. Now we know that the Labor Party wants to walk away from any responsibility with respect to what they're going to do to repay the money. But from our perspective we've got a reform agenda there, we've got an economic action strategy. We called upon the mature people on the crossbench, in the Labor Opposition to respect the fact that we have a mandate to keep-

JAYES:

But you've been calling on them for some time with respect and not much has changed so where do you go from here? Don't you have more of a need to really maintain these promises now that you've committed to other world leaders to do so?

CIOBO:

Look, I mean of course we want to make sure that we can get on with the job that we've been elected to do. Our job is to repair the budget; our job is to make sure that Australia has a brighter tomorrow than it does today. That's what we're focused on doing. Now people say we weren't going to get the future financial advice reforms through, we did. People said we weren't going to be able to repeal the mining tax, we did. People said we weren't going to be able to repeal the carbon tax, we did.

The fact is that we all continue to work in good faith and in a mature and responsible way with reasonable crossbench senators. I simply say to the Labor Party they need to deal themselves back into the game and actually start to take some decisions that are in the national interest.

JAYES:

Okay can I ask you now that multinational profit shifting which is of course another major theme in this G20 agenda. Now this has been discussed since the beginning of the G20 process. So it's been discussed for really the better part of the decade. Why would this summit be different? What's been agreed to that we'll actually see real change?

CIOBO:

Well we'll wait until we see the actual communiqué that's released. Until that point in time all the signs look to be really promising. Fundamentally there's been a lot of work that's taken place over the last nine months in relation to basic-

JAYES:

-is the United States a critical element here?

CIOBO:

Well the different countries have different perspectives on what needs to happen. The fact is though collectively there's a consensus for there to be reforms in relation to... Let's be frank what is effectively tax minimisation by some large multinationals. The ability to use different intellectual property frameworks to minimise tax something that collectively that countries want to fix.

JAYES:

Can I just stop there and ask you about this in particular because as I understand it there is an argument about where in the text is actually taken. Where the wealth is made or where the profit is made. Now the United States for one as I understand it, let's take Apple for example, the iPhone. The intellectual property, the invention is made in the United States and the phones are sold elsewhere. Isn't it right that United States makes money out of an American led invention or is it on the flip side that you know and nations do have a right to make money out of the profits to get sold in their country?

CIOBO:

Well the consensus is that the tax should be paid where the activity takes place, that's the absolute of the consensus.

JAYES:

So activity, what are you talking about, profit or wealth?

CIOBO:

Well we're talking about profit basically. We're talking about where the sales are made. Now obviously the Americans you know they're great innovators on-

JAYES:

Inaudible

CIOBO:

Well this is from where I'm standing in a point of contention.

JAYES:

Will it be resolved at the end of this meeting?

CIOBO:

Well, I can’t crystal ball gaze about what will happen in the future. We all know what we'd like to have happen but whether that is actually followed through on or not is a whole separate issue. Fundamentally though what we're very focused on is delivering, continuing to live up on the important reforms they've made in the tax field already. We've had some big wins in relation to common reporting standards, some big wins in relation to tax information exchange.

This weekend we want to put the icing on the cake and really get consensus around an agreement that tax we pay, where activity takes place. We might have some reforms in relation to transfer pricing for digital economy because transfer pricing, although it’s a bit technical important elements of what countries are trying to achieve.

JAYES:

Okay so let me just put this to you then, when will we see real change because when these nations go back again to the political reality of their nations there needs to be domestic legislation changes so it's still either way.

CIOBO:

Well no we've had some reforms that go through already. As I said company reporting standards, the United States has been leading the charge on that. We want to see multinational sharing tax of information as well. That's country to country so we can start to see how much tax they're paying in different jurisdictions. Fundamentally as far as we're concerned it's incumbent upon these large multinationals to pay their fair share of the tax. We're going to make sure that it's harder for them to avoid doing that and if they do the right thing because by doing that it helps us prepare our budget repair task.

JAYES:

Okay, turning to climate change now we're about to hear this address from Barack Obama and he’s pledged over night three billion dollars to this UN Green Climate bank. Australia has pledged nothing so far, what will we pledge or will we?

CIOBO:

Well look I mean Australia adopted the view and the Abbott Government came into the last election indicating that we didn't really see a lot of sense in private sector businesses and private sector banks weren't willing to fund any particular enterprises why taxpayers funds should borrow money to-

JAYES:

United States obviously thinks differently now though.

CIOBO:

Sure I mean United States is in serious financial debt. We have a job to do and that's to repair the budget.

JAYES:

Are you ruling it out?

CIOBO:

What I'm saying is that we've got a slightly different focus. Of course in addition to what's happening on an international basis domestically we've got our direct action approach to climate change, that includes of course our emission reduction fund. We are putting money into driving down emissions in Australia-

JAYES:

Are we really doing our fair share though if Germany and the United States to really commit to this fund and we're not.

CIOBO:

Well the fact is that we've already got money on the table and we already have our Direct Action Plan. We already have billions of dollars set aside to reduce Australia's emissions. We already have a five percent reduction on year 2000 levels by the year 2020. I mean sure other countries have been on board but we're actually following through with real action and I think that's the key difference in terms of our approach.

I know that some people get disenchanted because they’d like these big lofty announcements with little follow through, well we're actually focused on is developing real follow through.

JAYES:

Steven Ciobo thanks so much for joining me.

CIOBO:

Pleasure.