JAYES:
Let's bring it home now to relative stability here in Australia. Let's go live to the Assistant Minister Stuart Robert who joins us live. Stuart Robert, thank you for your time. I first want to ask you about trailing commissions. The Government won't ban these now even though the Royal Commission said they were not in the best interests of clients so why will you maintain the status quo?
ROBERT:
Well, good morning, Laura. We've decided that with the 3 year review for the entire mortgage broking industry for upfront commissions we'd also put trail commissions into that review in three years. It became quickly evident to us over the last few weeks, dealing with the mortgage broking industry and the banking industry, that there was a great fear that competition would be adversely impacted by moving to remove trailing commissions quickly so we're added a bit of breathing room into that debate now. Three years' time, that review will look at both upfront and trailing and that's the decision we made.
GILBERT:
So in relation to the findings of Justice Hayne and the Royal Commission, you reject now his criticism about that, particularly the trailing commissions which there was bipartisanship on prior to yesterday?
ROBERT:
We've made the decision to push it out to the review in three years. I sat down with all the mortgage broking industry leaders and indeed sat with all of the mid-tier banks, all of them, and they all made the case that in terms of competition, 60% or thereabouts of all home loans are written by mortgage brokers, and if there was a sudden shock into that mortgage broking system, that they would find themselves deeply uncompetitive against the major banks. Now we don't want to see a lack of competition in any of the market spaces let alone financial services, hence a more cautious decision to protect competition in the short term and to put that trailing commission into the 3 year review.
JAYES:
Shorten is promising to lift the wages of 2.3 million Australians. Can the Government promise the same?
ROBERT:
I'm not too sure what Bill Shorten is promising, whether he's being a mouthpiece for the union movement or what he's doing. I gather this living wage construct is the minimum wage redefined. We've made the point, I think every economist has made the point that we all want to see wages go up but that of course is generally linked to productivity so the Government's agenda is all based on a stronger economy, greater levels of infrastructure spending, we're focused on reducing taxes and cutting taxes, we're focused on red tape reduction. All of these feed into productivity and you're seeing that with the wages price index
JAYES:
On those measures, then, your Government has failed, though, haven't you, with a 0.4% increase in wages growth?
ROBERT:
Completely reject that, Laura. We've seen the waging growth at 2.3% in the December quarter figures, highest in three years. You're seeing unemployment at 5%. The current tax plan will see 95% of Australian taxpayers receive a tax cut and of course the abolition of the 37 cent tax bracket going forward. I'd say we've got a very strong record.
GILBERT:
You spoke about productivity being the key and I guess most economists would agree that that's fundamental but it's not the only issue, isn't it? Because right now we've seen a disconnect over the last decade between profits and wages. You would accept that in terms of a percentage of GDP, the profits have increased as wages have decreased as a percentage of GDP?
ROBERT:
Well, the last 10 years have shown that the wages as an index has gone up to 31%, as opposed to the CPI index that's gone up by about 7 points less.
GILBERT:
Why is there a disconnect now between profits and wages? Because it's a clear disconnect that the increased profits aren't flowing through as they've done previously.
ROBERT:
Well, you continue to see profit growth and we continue to see that across the economy and we're seeing that with the uptick in terms of company tax receipts coming through to the bottom line of the budget but wages growth is traditionally linked through to productivity and it's linked through in terms of cutting taxes, getting red tape down, getting greater infrastructure spending, all the things this Government is focused on.
Artificially increasing the minimum wage will have a detrimental effect right across especially small business. It's centralised planning, I guess, at its absolute height. Now, we all want to see higher wages, I think everyone's particularly focused on that, but we want to do it responsibly and seeing wages grow through tax cuts and through a focus on productivity is, we believe, the most responsible way to go about it.
JAYES:
Is there a choice here between higher wages and lower unemployment? Because that has been suggested by business in recent days.
ROBERT:
Well, I think the national accounts show that we can have both. We saw the wage price index rise to 2.3, the highest rate in three years, and we've also seen unemployment now at 5% which is the lowest level. We inherited unemployment of 5.7%. So I think quite clearly the Government's performance here is showing that you can have good, steady unemployment figures or employment figures at 5% as well as have wage growth.
GILBERT:
What's your message to your Queensland counterparts who are pushing for Government backed coal fired power stations and really causing internal division on the eve of the election?
ROBERT:
Government doesn't pick winners, Kieran, when it comes to energy mix. We've always made the point that we are technology neutral when with it comes to energy. Now, I'm a Queenslander, something like 75% of the generation is owned by the Queensland State Government and regardless of what energy mix is chosen in Queensland, the Queensland State Government is the approving authority. So the bottom line when it comes to new and next generation power, the Government will take a technology neutral approach as recommended by the regulators in this space and I encourage all of my colleagues let's not pick winners, that's not our job. Our job is to provide a regulatory setting to allow market to operate and that's what we intend to do.
JAYES:
You're a member of the LNP in Queensland, of course. Your views are very different to some of your other members there, including George Christianson and a number of Queensland Nationals. Is it time where the LNP in Queensland was decoupled? Has it been a failed experiment?
ROBERT:
No, it's been a superb experiment.
JAYES:
Where's the proof?
ROBERT:
The Liberal National Party is going from strength to strength, its membership is strong, the Party Room is strong, the number of seats we hold in the Federal Parliament is strong so I reject any notion of any need for the Liberal National Party to move apart or split at all. It's a very, very strong union, it's performed exceptionally well and I'm looking forward to very good election results as we work together as a team, Laura.
JAYES:
Well, we haven't seen much evidence of that of late. Stuart Robert, we'll leave it there, thank you.
ROBERT:
Great to talk to you.