Andrew Leigh

E&OE TRANSCRIPT
RADIO INTERVIEW
2CC BREAKFAST WITH STEPHEN CENATIEMPO
TUESDAY, 19 MARCH 2024

SUBJECTS: Airline competition, increasing paid parental leave, making sure multinationals pay their fair share, expansion of tax treaty network.

STEPHEN CENATIEMPO, HOST: All right, let's talk federal politics with the assistant Minister for Competition, Charities and Treasury and the Member for Fenner, Andrew Leigh. Andrew, good morning.

ASSISTANT MINISTER FOR CHARITIES, COMPETITION, TREASURY AND EMPLOYMENT ANDREW LEIGH: Morning, Stephen, great to be with you.

CENATIEMPO: You've talked about competition policy in the airline industry in a recent speech. I don't think anybody would disagree with the principles of what you're saying, but competition in the airline industry in Australia has been difficult because running an airline is not particularly profitable.

LEIGH: That's right, Stephen and as one person put it, we've basically got three big airlines in Australia, the trouble is two of them are owned by the same outlet, Qantas and Jetstar. That's meant that you've had less competition than you would have if you had three independently operated competitive airlines. We do have this evidence from the Competition Task Force that when you've got three airlines flying a route, then the price per kilometre is half what it is when you've got a monopoly carrier. And I think Canberrans have experienced that there's a range of routes where you've really just got one carrier flying. People in Darwin feel it, too. Sometimes it can be cheaper to fly from Darwin to Singapore than Darwin to Sydney, despite the fact that Sydney is closer. So, airline competition is a big issue for the Government and the Aviation White Paper that Catherine King is spearheading is really aimed at making sure that flyers get a better deal.

CENATIEMPO: But how do you do that? Because in the past when we have had three carriers the prices have been down for consumers, but that third carrier invariably ends up going broke.

LEIGH: You've got to make sure that the third carrier is able to get slots and I was really worried when Bonza set up in Australia, but wasn't able to fly out of our biggest airport, Sydney, because of concerns about getting access to slots. So, the Slots Review that the aviation minister Catherine King has put in place is an important part of that puzzle. It's also critical that we're working with the airports in order to make sure that we get the maximum amount of competition. I know Canberra Airport's constantly out there saying, let's get more airlines flying in, not only because it's better business for them, but also because it means lower fares for flyers.

CENATIEMPO: The Government has been accused of kowtowing to Qantas on a lot of these slots, though, given that Qantas is well and truly on the nose with most Aussies, it gives you a free pass, doesn't it, to actually tighten things up and maybe open things up to other carrier/s

LEIGH: I think there's a recognition that we need more options for domestic flyers and for providing those routes that are served not only by Qantas, but also by Virgin, by Bonza, by Jetstar, by a range of other airlines. It's a challenge for domestic flyers, no two ways about it. At times when we've had more airline competition, we've had lower prices. It holds in the aviation industry just as it holds in other industries, too, competition is good for consumers.

CENATIEMPO: Well, no two ways about that and obviously we've talked quite a bit, well, when I say we've talked, everybody's talking about competition when it comes to the grocery industry. At the moment, I want to talk about this new paid parental leave scheme. So, eventually it will increase to 26 weeks of paid parental leave. Who actually pays for this and where does the money come from?

LEIGH: Well, this is the government paid parental leave scheme for people whose employers aren't paying paid parental leave, and that's an appropriate measure which recognises the cost of having kids and the value to kids of having somebody who's at home with them. All we're doing here, Stephen, is making sure there's more shared care. One of the things we know about the gender pay gap is that the biggest driver of it is what's called the ‘motherhood penalty’. Men and women who don't have kids, their wages tend to track pretty similarly. But among mums and dads, there's a big widening of the gap over a lifetime, mums can end up earning half what a dad earns. Part of the way of getting around that is better shared care, which is why shared care is a part of this as well as expanding paid parental leave from 20 weeks to 26 weeks.

CENATIEMPO: One of the criticisms that David Pocock has had of the scheme is the way the actual payments are delivered. Is he right? Should it be just as easy? Should it be Centrelink, just paying the money directly to the parents rather than employers having to get involved?

LEIGH: Well, we thought about that, but the reason that it involves employers is we want to maintain that connection to the workplace. We want to make sure that when parents return to work that there's that connection, that the employer doesn't forget about them. And having paid parental leave coming through employers is one way of maintaining that connection. Making sure that those parents are front of mind for the boss, that they're thinking, what role will this person play in the workplace once they come back from leave?

CENATIEMPO: Yeah, okay. I'm just worried about the administrative costs for businesses where it could be managed by an organisation that is supposed to administer these kind of things already. Now the Government is working to expand Australia's global relationship with consultations opening for the expansion of the tax treaties network. Explain to us how this works, because one of the biggest concerns is that multinational companies aren't paying their fair share of tax, and I imagine that's a problem for every country. How do we combat that?

LEIGH: Cracking down on multinational tax is big priority for the Government, closing the debt deduction loopholes which have been used by too many firms. They basically set up internal loans and the Australian subsidiary then pays interest to the offshore subsidiary, driving down its tax bill. What we're doing here is working to build a stronger network of global relationships. The better we work in with other countries, the less likely we are to be played off by multinationals between other countries. So, these are new negotiations with Brazil, New Zealand, South Korea, Sweden and Ukraine as part of our overall tax treaty network and as part of the global 15% minimum tax that we're now legislating, which was agreed at a global meeting a couple of years back.

CENATIEMPO: Andrew, I know it's not your portfolio area, but this decision to not have the heads of ASIO and ASIS as permanent members of the National Security Commission is just madness.

LEIGH: Look, I haven't followed the details of that one, Stephen. Certainly we're always concerned to make sure we have advice that we take from our agencies. We're constantly discussing those matters with those officials. They're well respected and they have an important role in the government.

CENATIEMPO: Andrew, good to talk to you. We'll catch up in a couple of weeks.

LEIGH: Likewise, Stephen. Thank you.