Q&A - Australia's Economic Outlook 2025

Prime Minister

I know you're sick of questions about Donald Trump, so I thought I'd start with that.

ANTHONY ALBANESE, PRIME MINISTER: I've got practise that seamlessly segueing into -

CLENNELL: Let's see what segues, I'm worried about your segues today. Are you more confident after Penny Wong's meeting with Marco Rubio you'll get this one-on-one meeting and perhaps more importantly, even if you did, does it make a difference on things like tariffs and AUKUS?

PRIME MINISTER: Well, of course we will have meetings. There'll be a range of meetings between now and the end of the year with President Trump, where all members of various forums - of course, Australia and the United States - so that will occur. But I'm confident as well that we will be constructive. But we know that no country has a better tariff, if you like, level than 10 per cent. Now, we'll continue to put our case as we do, as I did with Secretary Bessent and Jamieson Greer and others on the sidelines of the G7 in Canada. Penny Wong was able to have a really constructed meeting with Marco Rubio as part of the Quad Foreign Ministers meeting this week. We continue to be engaged with our American friends, but they have a different position on tariffs. I have said that's an act of economic self-harm. I stick to that. I have a different view about the economy and about trade, and the concern for Australia isn't - if you look at what the impact has been so far, our beef exports are up. Our exports in a range of other products are up as well. Lamb's down a little bit, steel and aluminium have been impacted, but not hugely. We are in a position where on 9 July, that won't really have an impact on us because that's about other countries who have higher rates overnight.

CLENNELL: We won't get a letter on 9 July? We won't get a determination?

PRIME MINISTER: Well, we're on 10 per cent.

CLENNELL: That's what we're going to stay on after next week?

PRIME MINISTER: Well, I assume that will be the case. The United States -

CLENNELL: What about the steel? Do we see any -

PRIME MINISTER: No. Well, we will continue to put our case, but bear in mind that during the first Trump administration, it took some period of time for change to occur then as well. We'll continue to put forward our argument. There aren't new steel plants that have appeared since either 20 January or April. All that's happening is that the purchases of Australian products and indeed products from around the world are more expensive for the American purchases of those products.

CLENNELL: But you have this conversation with Trump where he says, he comes out later and says, 'I'll give great consideration to a change on steel,' and then they don't deliver it. Is Peter Navarro the problem there, do you think?

PRIME MINISTER: Oh, I'm not going to get into the personalities, but -

CLENNELL: You must've been disappointed when he didn't -

PRIME MINISTER: Well, we did have a constructive discussion, but President Trump, of course, made a decision that's consistent with his public comments. When -

CLENNELL: Except for that one.

PRIME MINISTER: No, well, when you're negotiating with someone - he did say that, but he has also said that there's no more beautiful word in the English language than 'tariff'. Now we have a different view. That wouldn't even be - not in my, to quote top 10 lists, all the thing at the moment in The Oz this morning, that wouldn't be in my top million of words.

CLENNELL: Could he pull the rug on AUKUS or could he charge us more for AUKUS? Or could he say you'll get less subs than the deal says?

PRIME MINISTER: Look, AUKUS is a good deal for Australia and it's a good deal for the United States. We are contributing to the industrial capacity in the United States right now. We need to, I think, be really proud of ourselves. It's one of the themes I hope came through in the speech there. Speaking about our contribution. When it comes to defence and national security, we're not people who don't pay our way, we pay -

CLENNELL: But do you fear he could pull the rug on it?

PRIME MINISTER: Well, I think that President Trump will know everything that he has said. He's said nothing negative about AUKUS, nor have other people, including Marco Rubio this week.

CLENNELL: Alright, so, we're at the G7. I'm there with you and you do a press conference where you're talking about what you're going to say to Donald Trump. You're about to meet him. You've consulted Greg Norman. Then half an hour later, we get a tweet from Karoline Leavitt saying Donald Trump is leaving the G7 after dinner. So, your officials aren't told. You're not told - well, you're told by Twitter, and after that -

PRIME MINISTER: I had you there to tell me.

CLENNELL: Well, I did tell one of the departmental staff, I'll never forget the look on his face. Anyway, look, Trump then has a telephone conversation with Narendra Modi. He has one with the Mexican president. He invites Modi to the White House. We're right there. Is there something wrong here? Where's your phone call from Donald Trump in that scene?

PRIME MINISTER: I've had three. I've had three.

CLENNELL: But is it discourteous of him not to call you?

PRIME MINISTER: I'm not worried by someone making an understandable decision, which he did, to return to Washington. And one of the things that we've got to do, Andrew, and if you compare it with some media overseas, is we've got to stop talking Australia down, and look for, this is a decision by the United States. The Australian Government haven't made a decision about tariffs. We're not imposing any, we're not replicating. We speak about reciprocal tariffs. We're not making a difference there either. And the relationship between Australia and US officials, we have people when it comes to AUKUS, we have, there's over 60 people currently in Hawaii working at the, working essentially through our naval personnel, getting those skills. We have people in the United States. I've been on the Hawaii sub when it was in Western Australia. There was an Australian working, submariner working, on that. We're getting on with things and we need to, I think, talk Australia up -

CLENNELL: Alright, that's fair enough.

PRIME MINISTER: About what we contribute in defence and security. What we contribute in our region -

CLENNELL: Understand, but -

PRIME MINISTER: Is pretty unique.

CLENNELL: Let me put this to you, is the problem, Kevin Rudd? I mean he basically called him a traitor to the West, a village idiot, the most destructive President in history. Dan Scavino, one of Trump staff, has put on that hourglass. A Trump pollster, Brent Buchanan tells Laura Jayes on air the other day that the President doesn't like -

PRIME MINISTER: Sorry, a Trump pollster from the election before last, and the one before that, you know.

CLENNELL: Yeah, but is there something to this? Is there fire where there's smoke?

PRIME MINISTER: No.

CLENNELL: So, the Administration's told you they've got no problem with Kevin Rudd, despite what he said?

PRIME MINISTER: It's been very positive, and he's had meetings, and when I went to the US, the connections that Kevin Rudd has, as much as people might have had a view about Kevin over a period of time, no one could doubt his capacity, his hard work, his ability to work strongly. The discussions that I've had have been very positive. Nothing but positive in comments that have been made to me.

CLENNELL: So, he's not a bar to any phone call, any meeting, anything?

PRIME MINISTER: No.

ANDREW CLENNELL: Okay.

PRIME MINISTER: No.

CLENNELL: Let me move on to the Productivity Roundtable, the big theme of your speech then. Now -

PRIME MINISTER: And no American, no American political person would talk down the US Ambassador to Australia. I make that point.

CLENNELL: What if a US Ambassador had called you a bunch of nasty names? Would you be fine -

PRIME MINISTER: Well, JD Vance had some things to say too. He's now Vice President of the United States of America.

CLENNELL: Okay. This Productivity Roundtable. You never promised this before the election. Did you intend before the election to call this, or is this because you've got this huge number of seats now, so you say, 'well, now I can actually do reform'?

PRIME MINISTER: No. Well, we, before the election we had a pretty ambitious agenda that we put to the Australian people. It wasn't something we developed during the election campaign. It's consistent, what we said, with what the speech I gave here last year, and the speech I gave the year before. We have a view going forward that we've been taking every opportunity to outline. Last year, of course, the primary concern was about inflation and the primary concern of punters, of voters, of listeners and viewers, or readers, was cost of living. Now, that's still front and centre. I've got to tell you, on July 1, the concern that Australians had wasn't over who met whom where, it's paid parental leave, it's their wages going up, it's the tax they pay. It's whether their kids will be able to afford a home. They're the issues that we want to concentrate on. And my Government has been laser-like focused on that. And we were during the election campaign, and the lead up, and in discussions that we had both on air and outside. I would've said that to you and why I was confident about an outcome. Cause I thought that only one side of politics was talking about things that mattered to people. And so the agenda going forward on productivity, there's an opportunity early in a term to bring people together from business, civil society, we've invited the Opposition to participate as well, and have a discussion about things that aren't immediate, aren't about the 24 hour media cycle. They're not about the next week, or even the next year. It's how does Australia position ourselves for future growth? And part of that has to be productivity. And when you have productivity, which has basically flat lined for decades, isn't something that's emerged just since we came to government, it's been there for a long time. We want to open up dialogue for discussion. Just as in the first term, we had a Jobs and Skills Summit that led to the creation of the jobs and skills body that makes those recommendations and involves the private sector. We want to have dialogue and we think it's a useful time early in the term to do so.

CLENNELL: You mentioned tax reform in your speech. Are you open to raising the GST and lowering income tax?

PRIME MINISTER: Well, one of the things that we're trying to avoid is just that question.

CLENNELL: You brought it on the agenda though.

PRIME MINISTER: No. What we're trying to do is to have an adult conversation. And what has occurred over a long period of time is that people, you know, is it on my agenda? No, it's not. Okay. No.

CLENNELL: Would you consider it?

PRIME MINISTER: But one of the things we're trying to do, is to not say, 'we're going to have this forum, and people are entitled to come along and have ideas, but at the very beginning, we're going to do interviews between now and August, where we get asked by you and others to rule things in or out.'

CLENNELL: Well, I'm not asking you to rule it out.

PRIME MINISTER: Yes, you are.

CLENNELL: I'm asking if you'll consider it.

PRIME MINISTER: Yes, you are. People are entitled to put forward whatever they want to put forward.

CLENNELL: What's your instinct about it?

PRIME MINISTER: It's not on, well, you can ask it different ways, but it's the same question, Andrew, and it's the same headline that you're looking for. And what I want is a mature -

CLENNELL: I'm actually curious, as is the audience, I'm sure, to what your view is about increasing the GST and lowering income tax.

PRIME MINISTER: Well, it's not something that we have given any consideration to, but if people want to put forward ideas, we're not saying, 'these are the conditions, you can put them up.' We of course will take into account the response. I'm a supporter of progressive taxation, consumption taxes by definition are regressive in their nature, so that's something that doesn't fit with the agenda. But people are entitled to put things up and this will not succeed if we have the next month being asked day after day after day what are effectively, as much as you put it, very politely and skilfully, essentially asking for headlines to be written of "Labor open to considering XXX."

CLENNELL: Let's see what else you're open to.

PRIME MINISTER: And then what happens on day two is we rule it out. If we want to go down that track, we can.

CLENNELL: But let me just ask you two principles here. Would you like to see lower income tax in this country, including for the top rate?

PRIME MINISTER: I always want to see income taxes as low as possible and wages as high as possible, consistent with -

CLENNELL: Including the top marginal rate?

PRIME MINISTER: Well, we're the first Government to reduce the top marginal rate. We increased that threshold.

CLENNELL: Paul Keating did.

PRIME MINISTER: In recent times, Paul Keating was last century, this century -

CLENNELL: Showing my age.

PRIME MINISTER: This century, we are the first Government to change the top rate in a long period of time.

CLENNELL: Would you change it again?

PRIME MINISTER: The conservatives were there for 10 years. They didn't do anything about it. We lifted it from 180 to 190 so that when we changed stage three, something that was - we didn't envisage, when we went to the 2022 election, we didn't envisage that we would change it. I was fair dinkum about that. Circumstances with the cost-of-living with the pressures that we're on with inflation, meant that - I think it was a responsible thing to do. We did it. Our opponents said they would oppose it and we should go to an election on it before they voted for it and now no one, no one that I've seen comment for a long period of time says we did the wrong thing.

CLENNELL: Would you like to see lower company tax in Australia?

PRIME MINISTER: I want to see taxes - of course I want to see taxes as low as possible, consistent with providing appropriate services and consistent with the overall macroeconomic interests of the country being looked after. So, I'm not going to play what is effectively, you're inviting me to do, the sort of rule-in rule-out game. You can look at our record of what we have done, which was when we made that stage three change, one of the things that was argued for was that we should not have that tax decrease at the top end and just put it back into revenue, put it back into consolidated revenue. What we did, there was $106 billion of tax cuts were envisaged under stage three. Our changes were worth $107 billion, but they meant that people didn't get left behind because we made sure right through the threshold - and at the last election, I remind you there's only one political party that went to the election arguing for lower taxes and that was the one that I lead.

CLENNELL: Alright. You talk about tax reform, what about some spending reform? I mean, the NDIS is pushing past $50 billion. It's projected to cost $64 billion. It's the third highest cost in the Budget. Are you happy with a situation where 11 per cent of six year olds and 15 per cent of Australian 6-year-old boys are on the NDIS?

PRIME MINISTER: No, I'm not.

CLENNELL: Is it time to take kids with mild autism off the NDIS?

PRIME MINISTER: No, I'm not. And one of the things that we've been trying to do is to make the system more sustainable. It had been allowed to just drift over the three terms of the former Government. My Government intervened. Credit where credit is due, Bill Shorten and credit where credit is due, the Opposition supported the reforms that we put in place.

CLENNELL: Will you have another go at it?

PRIME MINISTER: We will always look for spending to produce better value. Because if the NDIS, had we not done that reform, our concern is that - the vision of the NDIS is a great one. It's one we should be really proud of as Australians, of looking after people so that they benefit, but importantly as well, the whole society benefits if people can fully participate, including the economy. And we need to make sure that it is made more sustainable. We are working through the reform issues as well with State and Territory Governments because it certainly, the vision of the NDIS wasn't that those sort of numbers that you just quoted go on the system. And when you have well over half a million Australians on the NDIS, but you've got to be responsible about how you do it and work through with the sector because it's very easy for vulnerable people to feel like their support is threatened. We don't want that. People who need the NDIS need to keep it, but also there were massive rorts in the system. That's the truth.

CLENNELL: Let me ask, because this is one of the themes again of your speech, about business taking over where we've had a real kind of surge of government, state and federal spending creating jobs. The Ai Group, Australian Industry Group, recently analysed data and found that in 2024 the Australian economy added 410,000 jobs. 148,000 were in the public sector. Another 209,000 were in what you could call the non-market sector, so health, education, things involving government funding. Only 53,000 or about 13 per cent were in the private market sector. This tells the tale of a bit of a sick economy in the private sector, doesn't it?

PRIME MINISTER: There's a range of different figures have been used from time to time and in order to tell a story to back up something that people want to argue for. The truth is that overwhelmingly a majority of the jobs that were created in the last term were not government jobs, but it's true that there has been a growth in areas like the NDIS as well as aged care. We put something, a promise that we made in the 2022 election that I'm really proud of delivering was putting nurses back into nursing homes and now there is a nurse present 99 per cent of the time in our aged care homes. Now, that's a good thing that we have done that, it's a good thing in terms of getting higher ratios of care to people to enjoy that dignity and respect in their later years.

CLENNELL: But your IR reforms and your renewable energy target, when you talk about stripping away regulation, I guess they're examples of the hand of government making it harder for business, would you concede?

PRIME MINISTER: No, I think that paying people fairly actually assists business. I think that the reforms that were put in place there have been sensible reforms going forward. I'm proud of the fact that real wages have risen now seven quarters in a row and prior to us coming to office, they were falling. One of the things, if you look at the United States and you look at what's happened to the political system there, the disruption that occurs, it's a very divided society and if you look at areas of the Rust Belt states as they're called with the decline of manufacturing, a feeling like people don't have a stake in the system. One of the things that we have the opportunity to do in Australia and what my Government is laser-like focused on is making sure that people don't feel like they're left behind, that they don't have that stake. That's why we need to make more things here. That's why blue collar work matters. That's why my Government intervenes, from Whyalla to salmon to a range of areas as well. A Labor Government will always support jobs and we will support people having a stake in society and we don't make apologies for that. We think that that importantly can assist business rather than a sort of race to the bottom.

CLENNELL: We're out of time, but allow me two more.

PRIME MINISTER: It's your show.

CLENNELL: Are you minded to make any changes to the superannuation tax proposal on accounts of more than $3 million? Are you minded to alter that at all? There've been a few other proposals around.

PRIME MINISTER: Well, proposals around, but the proposal that was put forward, we put forward in the last term would affect just a very small number, half a percent.

CLENNELL: So, you're keeping it on unrealised gains and the rest?

PRIME MINISTER: Half a percent of people were impacted by that.

CLENNELL: You're not minded to change it?

PRIME MINISTER: Well, we went to an election on it and we have, as I said, half a percent of the population are impacted by it.

CLENNELL: And finally, I have to say after this discussion, I've still got an eyebrow raised about the Productivity Roundtable and what we're actually going to see about it, whether it's going to be bold reform.

PRIME MINISTER: Well, that's the point, Andrew, though. The point of a Productivity Eoundtable is not to have it pre-empted, not even on Sky News a month before it takes place.

CLENNELL: Is this, because you've often had a philosophy to the left, you've probably been more centrist than people would've thought as Prime Minister, but -

PRIME MINISTER: Well, people haven't been paying attention if they think that, Andrew.

CLENNELL: Is this you going to a Hawke-Keating type era of government in the Albanese Government?

PRIME MINISTER: I think that is the way that I have always governed and the way that I sought to govern and what I put forward from the day that I became Labor Leader in 2019. If you look at the work that we've done, take our emissions program, we did that. Stood up at a press conference with the Business Council Australia, the Australian Industry Group, ACCI, conservation groups and the ACTU. That's always been my model. I think that Australia works better when we engage people across business unions as well as civil society. The CFMEU was let rip under the former Government. My Government intervened to put it into administration when it was appropriate. My Government has always sought and I've always sought and built a really strong relationship with business. If you look at my period in public life, probably one of the things I'm most proud of is the creation of Infrastructure Australia, in my previous incumbence as a minister, that involved people from the private sector chaired by Sir Rod Eddington, a NewsCorp board member internationally was the Chair, as well as Ken Henry and Heather Ridout and people in industry, working out how do you changed the way the infrastructure investment happens so that it drives productivity going forward. If you look at, so that was in that portfolio. In regional development, I set up Regional Development Australia, that involved regional bodies looking at regional economic growth, involved the private sector there. The Australian Council of Local Government I established, that brought together for the first time the Commonwealth and every mayor around the country in a two-day forum. Not all the Cabinet Ministers were wrapped by this idea, but it was really positive as well. It's something that has characterised all of my political involvement since I've had the opportunity to be a minister in 2007 under Rudd and Gillard, but as Prime Minister as well, and that's why I always reach out to forums. I've participated in this one now I think well at least three years in a row and participate regularly across the board. I think that's how you get change, by engaging with people, including that doesn't mean you always have to agree. But if you shut down the debate before you've actually got people in the room - so, the Productivity Roundtable for example, I'll give you a bit of a preview. I'll begin, I'll start off, give a spiel if you like, an opening of what potentially people might want to discuss, but we won't say, 'you can't get in the room if you are going to raise issues or you can't put forward ideas'. It's the opposite and it costs nothing. The worst that can happen is that people develop relationships because they've spent a couple of days together. I'll host people at The Lodge on one of the evenings as well, and so we've got that worked out, but we want people to genuinely have a stake. I think it was Confucius, someone will point it out no doubt if it's wrong, who said, 'if you think you're the smartest one in the room, you're in the wrong room'. Now, I don't think I'm the smartest one in the room, in the country. I happen to have a responsibility as Prime Minister and part of that is mobilising the capacity of people in this room and people who watch Sky and people who watch whatever and read whatever publication, to say, 'okay, if you've got a good idea, put it forward, we'll give it consideration'.

CLENNELL: Great. Not like Malcolm Turnbull then. Alright, Anthony Albanese. Thank you, Prime Minister and please thank the Prime Minister for his time.

PRIME MINISTER: Thanks mate.

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