A $50 billion tax cut to Australia's biggest companies isn't the way to get our deficit under control - Media Release

E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS AM AGENDA WITH KIERAN GILBERT

THURSDAY, 17 NOVEMBER 2016

SUBJECT/S: Donald Trump’s tax plan; 457 visas; US alliance; Trans-Pacific Partnership.

KIERAN GILBERT: Joining me on the program now, the Shadow Assistant Treasurer, Andrew Leigh. Mr. Leigh, thanks very much for your time. Jennifer Westacott from the Business Council of Australia will tonight – at their annual dinner – be making the case that our country, even more so with a Trump victory, needs those tax cuts to make our businesses competitive alongside the US. Mr. Trump is going to reduce corporate tax down to 15 per cent. 

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: That's what his plan says Kieran. But don't forget that independent experts have that increasing US debt by somewhere between five and ten trillion dollars. It's a staggering amount of money. And whether or not Mr. Trump is willing to go down that path-

GILBERT: Under his plans is that what the forecast is?

LEIGH: That's under his plan. Whether or not Mr. Trump chooses to go down that path, I'm not sure it’s right for Australia to massively blow out the deficient in order to get a very small economic growth pay-off. And this is under the government's own modelling, which suggests that the benefit for households will be trivial, but we know the impact on the debt would be massive. 

GILBERT: So that's the projected debt of that plan just for the tax cuts, not the military spend as well? Or is that the whole Trump agenda?

LEIGH: That's the tax plan. The impact of his overall tax plan.

GILBERT: So we're talking about massive spending when you include the huge increase in military as well from Donald Trump.

LEIGH: Absolutely. The independent experts' analysis of Mr Trump's plan suggested that it would blow out the deficit by more than any other plan that any Presidential candidate has ever taken to the US people. I'm surprised, frankly, that Australia's peak business lobby group is arguing for Australia to go down that track. Because while our debt is lower than many OECD countries, we still have seen a significant debt blow-out over recent years.

GILBERT: He's obviously hoping that the inflation impact and the growth impact of all of that spending will help counter the increase in debt. Is that a possible scenario that would work?

LEIGH: That's what you might hope but that's not what history tells you. That's not what happened when Ronald Reagan massively cut taxes in the mid-1980s. That led to a significant blow-out in the US debt that was only reigned in under Bill Clinton. In Australia we've seen an increase in debt of $5000 per person since the Abbott-Turnbull Government came to office. We do need to be focusing on ways of getting that deficit back under control. A $50 billion tax cut to Australia's biggest companies isn't the way to do that.

GILBERT: Is the 457 campaign that Mr Shorten's running – is that trying to tap into the same concerns that Donald Trump did, about foreign workers and immigration?

LEIGH: Well this is a policy we took to the last election and we've re-committed to it. We've said very clearly that we want the 457 program to be filling temporary vacancies. We had more of those temporary vacancies during the mining boom of course. A sudden demand for mining engineers in order to get that coal and iron out to market while the price was high. But now we need to make sure that 457s are filling skill gaps, rather than supplementing Australian workers. That's what the program was intended to do.

GILBERT: Not trying to tap into fears?

LEIGH: We need to get the settings right. I notice that Malcolm Turnbull has gone yesterday from saying that Labor's changes were xenophobia to today announcing 457 changes of his own.

GILBERT: They're saying it wasn't the catalyst – that they were already in the mix. But that's neither here nor there, you both agree on that issue. When it comes to Trump it doesn't look like there is agreement. In fact for the first time we've seen a bit of a split on the bipartisanship around the alliance – the first time for a while anyway. Can you clear up the position of the position of Labor when it comes to the US alliance and our region? Because it certainly seems like there was a difference of emphasis from Mr. Shorten and Richard Marles yesterday to that of the Shadow Foreign Minister.

LEIGH: We've got a strong commitment to the US alliance, Kieran. It's an alliance that goes back decades. It's one that's very important to Labor and goes right back to the days of John Curtin. We also need to make sure that as changes occur in our region that we're making sure that we engage strongly with Asia. That's what the 'Australia in the Asian Century’ white paper was about. It's why I'd like to see more Australian kids having the chance to learn a priority Asian language in high school – something you can do with a super-fast national broadband network. Improving our Asian literacy is a natural step for Australia, but also that relationship with the United States remains strong. Frankly, you expect it of me as somebody who's married to a woman born in Ohio.

GILBERT: That's right, but is that view held by all of your colleagues as strongly as you in terms of the alliance? Because it looks like some within the left want to put a bit of distance between Australia and the US in the wake of the Trump win. 

LEIGH: Absolutely. The alliance isn't about personalities, it's about national interests, and those national interests are still strong. Of course Labor will hold strongly to our values and I don't think anybody believes that we shouldn't call out sexism and racism when we see it. But the relationship with the United States is one that will continue to endure while we look for opportunities to build partnerships in our region. Chris Bowen's recent visit to Indonesia for example is an important part of that, and the engagement that you've seen from Penny Wong, Richard Marles and Bill Shorten is an important part of that. 

GILBERT: Is one particular thing that you agree with Mr Trump on is that the TPP should not be ratified? Are you encouraged by the fact that he is going to reject it? It's essentially dead, the Trans-Pacific Partnership trade deal.

LEIGH: It's a bit like saying do I think we should send a spaceship to Mars? It's just not going to happen anytime in the foreseeable future. The TPP is effectively dead and buried. Let's now look at how we can engage in other trade deals – while maintaining those important worker protections that Labor's always stood for. 

GILBERT: Mr Leigh, I appreciate your time as always. Thanks very much.

LEIGH: Thanks Kieran. 

ENDS

 MEDIA CONTACT: TAIMUS WERNER-GIBBINGS  0437 323 390


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