25 July 2016
Transcript - #2016091, 2016

Interview with Eunice Yoon, CNBC

SUBJECTS: Brexit; Protecting Australia's triple-A credit rating; G20 in Chengdu; Pensions; Protectionism

TREASURER:

It's very much the traditional British, stay calm and get it done, I think is what we're seeing. They're just working methodically through the issues, and they've got a very clear understanding of what the political message was out of the Brexit vote, but that now has to be worked through practically. A country like Australia has interests, particularly through the banking system and how many Australian firms will find their way through Europe through those sorts of channels. So it's a good opportunity to talk about some of those issues, and very comfortable about the way that's being progressed but patience in going to be necessary.

EUNICE YOON:

International ratings agencies such as S&P have warned that Australia could lose its AAA status in part because of the political gridlock. How confident are you that the Government will be able to push through fiscal reforms in order to reduce debt?

TREASURER:

Look I am realistically optimistic. I see no reason why we wouldn't be able to overcome that, but that is a matter for the agencies themselves. We have just have to demonstrate that we have got this practical working relationship and there can be no doubting our commitment to the fiscal consolidation that we have embarked upon.

YOON:

One of the tests that people are watching are how you're going to approach the overhaul of the pension system, how do you plan to accommodate the opposition Labor party and their concerns?

TREASURER:

Well in the House of Representatives, we have a clear majority and those policies are policies we took to the election which we were successful at. There are some minor technical issues that we are still working through which are part of the normal process but they overwhelmingly enjoy support in terms of obviously our own party. Then it is a matter of taking it through the Senate, now we will work those issues through with the Senate but these are reforms that are very critical to the long-term sustainability of our superannuation system. I think these reforms are somewhat overdue and they really do right what have been some very generous concessions that have sat around the system. But they also include some very important reforms as well particularly for those on low incomes, those who are both wage earners and contractors and there are a range - in partnerships, in couples.

YOON:

How concerned are you about rise that we are seeing of protectionist attitudes not only in Australia but anywhere around the world, we are just seeing this rise of protectionism.

TREASURER:

We have to double down on free movement of people for economic purpose, for trade, for tourism, for travel, for education and study, scientific collaboration all of these sorts of things which are critical to innovation policies. So we need to redouble our efforts to continue to pursue those trade objectives and those open market objectives. We will do that and I think that is the prevailing sense of the economies that are here. But that doesn't mean we don't have difficulties selling that in our own consistencies. Now at our recent election we took our free trade approach to an election and we were successful so these things can be done and it's important we do do them because if we don't in an open free trading economy like Australia if we don't see the sort of increases in world trade that we would like to see, well obviously that will limit our opportunities.

YOON:

It seems as though the Opposition Labor party is arguing that you're not, the Government is not thinking enough about those people who are being left behind and so that those voices are just going to get louder and make it more difficult for you to get things done.

TREASURER:

The Australian economy is now in its 25th year of consecutive economic growth, we are growing at 3.1 per cent. We are growing faster than South Korea, we are growing faster than the United States, the United Kingdom, New Zealand, Singapore so we have a good growth story and service exports, a transitioning economy out of the mining investment boom, this is all part of that but to maintain that and keep it going reform needs to continue and above all we have to ensure that private capital has a home in Australia where it can earn a decent return and you have got to have right settings to achieve that.