Talking money, power & budgets on Sky AM Agenda

On 5 May 2014, I joined Kieran Gilbert on Sky AM Agenda to discuss Treasurer Joe Hockey's strategies for fundraising from big business, and government decisions that have allowed multinationals to shift profits offshore.



SUBJECT/S: Federal Budget; Debt tax; Political donations

KIEREN GILBERT: This is AM Agenda. Thanks for your company this Monday morning. With me now, the Shadow Assistant Treasurer, Andrew Leigh.

Andrew Leigh, you've heard a lot of what Josh Frydenberg has had to say and the Liberal Party of the last couple of days about getting the budget back. This is normal for pre-budget season, that ideas are floated and if it's going to be a tough budget of course, it's not going to be that popular.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, what's normal at this stage is that the budget is off at the printers and what's extraordinary is that the Government is still clearly trying to work out what's in the budget. I mean, the idea that Mr Abbott couldn't go to Indonesia at the personal invitation of the Indonesian President does indicate that there's a real sense of crisis in the Government about the budget. And, they're engaging in what troubles me, because it's such a misleading campaign about the true state of nation's finances when the Coalition took over. Since then, the Government's added $68 billion to the four year deficit, doubling that deficit and as Josh Frydenberg noted, getting the IMF to blow the whistle on rampant spending. But that's the IMF blowing the whistle on Joe Hockey who has now taken off the spending cap that existed when Labor was in government.

GILBERT: You've watched politics and been close to it for a long time now. You know full well that budgets are deliberated on, worked on, until the last days. It's very rare that you would have a budget go a week out to the printers. That's not accurate is it?

LEIGH: It ought to be done and dusted at this stage Kieran and the notion that the Government’s still trying to decide whether or not it's going to break its promise on the debt tax, whether it's going to break a promise on a GP tax, whether it's going to break a whole range of range of promises to pensioners and vulnerable Australians really ought to be concerning to anyone who wants to see good public policy done in Australia.

GILBERT: But what the Government argues and what the Prime Minister has argued this morning, we played the comment at the start of the program, is that for equity basically, they're suggesting that you've got to look at the idea of a debt tax for those on higher incomes because. And I'll put it to you, that if you do target those on welfare and welfare payments at the lower income scale, why shouldn't you target those wealthier Australians to also make a contribution?

LEIGH: What the Government is doing, is basically unravelling the carbon price mechanism. So, the carbon price raised the tax on pollution and lowered the price of work at the same time. The Government is doing the reverse.  They want to raise the price of work and the want to lower the price of pollution. So, we'll get less participation and more pollution as a result of what the Government's doing. And it has to do that because it loses such a large amount of revenue in scrapping the carbon price. Scrapping the carbon price isn't just bad environmental policy, it's bad economic policy as well.

GILBERT: In terms of the equity scenario, if they are trying to reduce debt and deficit, and you're going to reign in middle class welfare and welfare for those on lower incomes, shouldn't those on higher incomes also make a contribution?

LEIGH: It's such a clear broken promise Kieran from a man who criss-crossed the country for three years saying that if people should know anything about him, it would be that he wouldn't break his promises. To take a simple example, if we have a one per cent levy on people earning over a $100,000 that raises less than $2 billion a year in an environment in which the Government has already added $68 billion to the deficit.

GILBERT: I want to look now at the front page of the Sydney Morning Herald and The Age. This is the story on Joe Hockey. 'Treasurer for sale' is the headline. The Prime Minister has responded to this story this morning. Let's play you a little of Tony Abbott on the Nine Network Today Show.

TONY ABBOTT: I haven’t actually seen the story but I do want to make the point that all political parties have to raise money. Typically you raise money by having events where senior members of the party go, and obviously they meet people at these events. The alternative  to fundraising in this time-honoured way is taxpayer funding at a time when we’re talking about a very tough budget indeed. The idea that we should scrap private fundraising and fund political parties through the taxpayer I think would be very odd.

GILBERT:Is there anything wrong here? This is something that has gone on for a long time isn't it? Peter Costello had a very similar Club 200 in his seat of Higgins for years.

LEIGH: Joe Hockey likes to give the impression that he is everyone's friend. But now we learn it costs $5,500 to be a friend of Joe's, or $11,000 if you want to be a friend with benefits. And you can see the sorts of benefits that flow. For example, one of the government's first decisions on coming to office was to go soft on the taxation of multinational companies, to take away a $700 million measure that Labor was going to put in place that would have seen those companies fairly taxed.

GILBERT: So, you're alleging that Joe Hockey has been bought by big business?

LEIGH: I'm not alleging a specific link between a specific payment but this is a Government which is clearly running schemes in which they get corporate donations from the top end of town and then run a Commission of Audit by the big end of town and then institute policies that benefit the top end of town such as going soft on multinational taxation.

GILBERT: Isn't this just donations being paid for access, and the Labor Party has functions where you have companies and other groups like the unions having to pay to attend and sit at the table of a Shadow Minister for example.

LEIGH: We worked to bring down these disclosure thresholds. Don't forget John Howard took the disclosure threshold from $1,500 to $10,000. It's now indexed up to $11,500, coincidentally, just a bit higher than the payment amount of friends of Joe Hockey club. The result of that is very large donations can be made without being disclosed.

GILBERT: He's within the rules though. That's what you're saying.

LEIGH: He is certainly within the rules from everything that we have read so far. But I don't think it's appropriate for people to be making such large donations and for them not to be publically disclosed because I think ultimately cash of that scale does cause challenges for the effective operation of our democracy. And this is a Government which is taking away the income support bonus, the Low Income Superannuation Contribution, the School Kids bonus from low and middle income families and then it's giving tax breaks to mining billionaires, tax breaks to multinationals who are profit shifting. It's refusing to even fairly tax people with super balances over $2 million. So, for the top end of town, the age of entitlement is just beginning.

GILBERT: Andrew Leigh, thanks for your time.

LEIGH: Thank you Kieran.


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