SUBJECTS: Economy, Hong Kong protests, climate change, Alan Jones.

DEB KNIGHT: So if the US bond market is right - which it usually is - a recession is on the way. It looks like an inevitability in the US. The Treasurer has said he'll take the necessary actions to shore up our economy. Simon what exactly will he do?

SIMON BIRMINGHAM: I think firstly you heard from Ross Greenwood there that he thinks it's highly unlikely we would see a recession here in Australia. We are however facing very uncertain global times: the US-China trade war, events in Hong Kong, Brexit, tensions between Japan and Korea. All of these things compound to create significant economic uncertainty. But the Australian economy continues to show a high degree of resilience. Just yesterday we had the employment statistics out showing a further 41,000 jobs created in Australia, 34,000 of those full time. And that's following a long-term trajectory since we've been in Government of very significant jobs growth: more than 1.3 million jobs have been created.

KNIGHT: So steady as she goes but is there room then to rethink to surplus and to start spending on things like infrastructure? Or maybe some more tax cuts, that could do the trick?

BIRMINGHAM: We've certainly got a record spend on infrastructure - $100 billion - and we always stand ready if the states have projects that can go faster to look at those requests. And equally we've just of course delivered tax cuts. And I think this is the wisdom of the Australian people at the last election. They voted for a Government with a plan to lower taxes. Imagine how much worse the situation would be today if they'd voted for a Labor Party with plans to increase taxes by $300 billion, and the hit that would have had on our economy at precisely the wrong point in time.

KNIGHT: Tony in terms of the tax cuts, Labor was dragged kicking and screaming into approving the tax cuts that we have at the moment. Should you be cutting the Government some slack here in terms of facing a global recession. If we are facing those dire times, should you get on with the job and let the Government get on with the job?

TONY BURKE, SHADOW MINISTER FOR INDUSTRIAL RELATIONS: Well hang on Deb. First of all, the tax cuts that are in place are the tax cuts that both sides of politics took to the election. There was an argument about the ones that don't come into play for five years.

KNIGHT: And that argument played out long and hard in the Labor Party room.

BURKE: That's right. The tax cuts that are relevant to the economy now weren't just somehow accepted by Labor. We campaigned for them at the election as well, both sides of politics campaigned for that.

KNIGHT: Will you cut the Government some slack if they need to boost spending?

BURKE: We have been cutting them slack the whole time, saying bring some infrastructure forward. A whole lot of the projects they've promised don't even happen this term. A whole lot of roads they talked about during the election, they won't even start digging a hole this term. Where we are with Australia - look you can't use the international circumstances as cover for the fact that structurally we do have some weaknesses in Australia now. When Labor was in office, we got to number two in the world in terms of economic growth for the developed nations. We've gone from number two to number 20. Structurally we are becoming much weaker throughout the world. Simon just spoke about the employment numbers. What they won't talk about are the underemployment numbers. We are getting close to 2 million people who either don't have work or don't have as many hours as they are trying to get. These are structural problems within the economy, where if you do simple things like start to bring those infrastructure projects forward you create jobs, you boost the economy.

KNIGHT: Well let's see if you hold hands, play kumbaya and actually approve these things. In terms of uncertainty the violent protests in Hong Kong are really adding to uncertainty on a global scale. Chinese forces are massing at the border and neither side is backing down here. Are you concerned Simon about how things could end in Hong Kong?

BIRMINGHAM: We would be very worried if we saw any further escalation of violence. We urge restraint on all sides and we urge dialogue to try and resolve these issues. Hong Kong is a central part of the global economy, it's a key trading partner for Australia. We have a separate trade agreement with Hong Kong than we have with China. That's because we respect the "one country, two systems" model that applies there. We urge authorities to recognise the values that underpin that, and to respect rights for peaceful assembly to take place, and to try to resolve the underlying issues that have created these problems.

KNIGHT: I also want to talk about the the Pacific Islands Forum. The Prime Minister has been left very much on the outer on the issue of climate change, Scott Morrison refusing to commit Australia to move away from coal. Tony it is hypocritical of the Pacific Islands to be criticising Australia on climate policies, and yet still take investment and loans from China, and their emissions are far greater than Australia?

BURKE: Have a think about what is happening in the Pacific Islands at the moment. They are literally watching the ocean creep up towards their homes. And they know the Australian Government has boasted about it not taking climate change seriously. Peter Dutton, who's normally the guest here today - you have two proxies with myself and Birmo - Peter Dutton was the one who publicly made jokes in front of the cameras about people losing their homes with rising sea levels. Imagine how Australians would feel if Pacific leaders made jokes following one of our natural disasters. And that's why you've got the Pacific nations knowing that this government isn't serious about climate change. It's real and there are few parts of the world where it's so blatantly real than the Pacific.

KNIGHT: Just quickly Simon, your view on broadcaster Alan Jones' comments on Jacinda Ardern suggesting that Scott Morrison should shove a sock down her throat.

BIRMINGHAM: Completely inappropriate. What we took to the Pacific Islands Forum was our policy plans which involve some of the biggest per capita action in the world. And already per capita emissions out of Australia are at the lowest level in 29 years. And we're going to keep driving them down as part of our plans and our investment here, as well as a $500 million plan to support Pacific Island countries in terms of their adaptation, their resilience and their measures to help contribute to minimising emissions and climate change.

BURKE: People don't need to listen to him anyway, they can watch this. Fixed.

BIRMINGHAM: On that we agree.

KNIGHT: Simon and Tony thanks thanks for your time.


Tony Burke