Industry assistance and entitlement - ABC NewsRadio, 4 February 2014

On ABC NewsRadio this morning I highlighted the Abbott Government's inconsistent approach to propping up business. The transcript is below.


SUBJECT/S: Industry assistance

PRESENTER: The Opposition says the Federal Treasurer's warning that the age of entitlement in Australia is over displays a double standard. The Shadow Assistant Treasurer says it seems that for Joe Hockey the age of entitlement is coming to an end for the disadvantaged but it's just beginning for the affluent. Dr Andrew Leigh is speaking to Steve Chase.

STEVE CHASE (REPORTER): Andrew Leigh, Joe Hockey's right isn't he, when he says 'the age of entitlement' is over?

LEIGH: I've never been quite sure what Mr Hockey means when he refers to the age of entitlement being over, to be honest Steve. What it seems to mean is that you're going to cut back on income support for some of the most disadvantaged Australians, get rid of the School Kids Bonus which targets assistance to low income families and middle income families on their first day of school; but then put in place unfair and expensive paid parental leave, that gives the most to those who earn the most and get rid of the mining tax which overwhelmingly benefits mining billionaires. Seems to be as if the age of entitlement coming to end for the most disadvantaged, but it's only just beginning for the most affluent.

CHASE: But surely he's speaking in the context of industry assistance?

LEIGH: Well even there, you've got to wonder what the difference is between Cadbury which received an assurance of industry assistance from the Abbott Government before the election and SPC which isn't getting it. The only difference that I can see is that Cadbury is in a marginal electorate and SPC is in a safe Coalition electorate. That doesn't seem to me to be a good basis for determining industry policy.

CHASE: But in the case of SPC, the Government has argued that they're not going to give money to a company that's already profitable. They can dip into their own funds to sort out their problems in Shepparton.

LEIGH: And the same argument would or course apply to Cadbury. So it's then difficult to see how that justification holds up. The fact is that there are two main arguments for industry assistance from an economic standpoint: spillovers to other industries, which is certainly something you see in the automotive sector and regional concentration of jobs, which is there in the case of SPC. Instead we've seen this odd episode of seeing Abbott Government ministers earning generous salaries having a go at workers, whose jobs involve stacking cans, earning 50, 60,000 a year. It's been a bit unedifying I think.

CHASE: You would have seen the Prime Minister on the 7.30 Report arguing the money given to Cadbury was not for their day to day operations but for a tourism project in the area. What do you say to that?

LEIGH: Well, tourism is an industry like everything else. The Prime Minister's argument seems to be a Jesuitical splitting of hairs rather than a substantive argument. If he has a coherent philosophy on industry assistance then I'm yet to hear it. You do recall all of the discussion in Peter Costello's autobiography about Mr Abbott in Cabinet, urging more and more lavish spending for his own electorate. That appears to be starkly at odds with the philosophy he's shown towards low and middle income workers at the SPC cannery in Shepparton.

PRESENTER: That's the Shadow Assistant Treasurer, Dr Andrew Leigh, speaking to Steve Chase.


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