BENSON:
Steve Ciobo, good morning.
CIOBO:
Good morning Marius.
BENSON:
Glenn Stevens, the Governor of the Reserve Bank has been speaking with The Financial Review, and one of the points he made, is that the economy, jobs, inflation, they're roughly where he expected them to be right now. Are they in line with where the government expected them to be right now?
CIOBO:
Well, obviously the Reserve Bank has a mandate to make sure that the inflation rate stays in the band of 2-3 per cent. We know that we've got stronger economic growth under the Coalition, 2.7 per cent under the first 12 months of the Coalition, 1.9 per cent under Labor. There's still economic headwinds that we've got to face. I think the most important comments that the Reserve Bank Governor made, were his comments that Canberra needed to get real and we needed to address long term tax and spending issues. That's exactly what the Coalition Government is attempting to do, and that unfortunately is also the exact thing that the Australian Labor Party and the Greens are fighting us on basically every step of the way.
BENSON:
In fact Glenn Stevens says that Canberra needs to get real, if it doesn't Australia's AAA credit rating would be threatened in the longer term. Is he right?
CIOBO:
Look this is the point that we have made repeatedly. The fact remains that we cannot continue to keep borrowing from future generations to pay for today's spending. That's the reason why the Coalition has had to take some unpopular decisions, but necessary decisions. They're decisions that mean that we over longer term can start to live within our means. Now I recognise, that Labor wants to pretend that there isn't a problem, wants to continue saying to people, "Look, we can just keep borrowing and spending, borrowing and spending." In fact, we also know Labor have plans to reintroduce of course, the carbon tax to pay for their massive deficit. But that notwithstanding, we must get structural reform in place in the budget and the Coalition is absolutely committed to doing that.
BENSON:
Another point Glenn Stevens makes is he welcomes Joe Hockey's decision not to make additional spending cuts in next week’s mid-year economic statement. So no spending cuts in that statement, pre-Christmas.
CIOBO:
Well there's speculation as to what will take place. I mean Joe Hockey as Treasurer of course has the difficult task to guide the Australian economy. We recognise that although growth is stronger than it was under Labor, it's not as strong as lots of people would like, including the Coalition. We're determined to make responsible decisions that put economic growth and jobs at the forefront of what it is that we're attempting to achieve as a government.
BENSON:
Beyond those broad principles that are always in place, no spending cuts next week?
CIOBO:
As I said, you'll find out what will be announced in MYEFO next week. Commentary around what might or may not be in my MYEFO I don't intend to add to. What I am telling you is what the government's focus is, and that's on delivering economic growth and delivering jobs for Australians.
BENSON:
Can you say what day my MYEFO will come out?
CIOBO:
I will leave that to the Treasurer to make all those announcements.
BENSON:
Is it going to be significant MYEFO, is it going to be a fizzer, just a restatement of known problems and a bit of a blame game again, pointing to the Senate.
CIOBO:
I think it's important to update the Australian people on where the economy is and how the budget is progressing. I mean we have got the vast bulk of our budget measures through. We've made important savings. We are fundamentally attempting to address a situation we inherited from Labor where we're borrowing a billion dollars a month just to pay the interest on the debt that Labor has left behind. We've made big inroads there. We've reduced our peak forecast debt from $667 billion by more than $300 billion...
BENSON:
This is just going over history Steve Ciobo. Is MYEFO going to do more than that?
CIOBO:
MYEFO will update the Australian people on exactly where we stand as of the date of the release of MYEFO.
BENSON:
Don't we know?
CIOBO:
Of course the Government and Treasury are always updating figures and taking into account the latest pulses from the economy, but I think it's important that we balance that against the frustration that the Labor Party and the Greens have served out in the Senate by refusing to acknowledge some of the serious challenges that Australia faces.
BENSON:
Going back to Glenn Stevens, he was, in his interview with The Australian Financial Review, he said that a year ago, he was talking when the dollar was 95 cents, about 85 cents being a good level. Now he says 75 cents would be a pretty good level. What do you think of that assessment?
CIOBO:
If you look at the long term average for the Australian dollar, we know that it's still at historically high levels. This is a combination of Australia having relatively strong standing in terms of our AAA credit rating and that's precisely the reason why we don't want to jeopardise that over the longer term. It's also, as part of the re balancing of the global economy and of course the shift away from mining in Australia. Over the longer term, we do need the Aussie dollar to come down further. By doing that it will help the Australian economy transition from being focused too heavily on mining to being refocused again more broadly on the services side of the economy which of course accounts for the vast bulk of the Australian economy.
BENSON:
Steve Ciobo, thanks again for speaking with NewsRadio this morning.
CIOBO:
It's a pleasure.