ABC NEWSRADIO BREAKFAST
TUESDAY, 3 MAY 2016
SUBJECT/S: Parliamentary Budget Office policy costings, Labor’s policies, Government’s protection of the big end of town, Interest rates
MARK TAMHANE, REPORTER: Andrew Leigh, Good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Mark.
TAMHANE: Treasury has found a $20 billion hole in your policy costings, is that the end of all that extra revenue Labor promised to see all the Gonski education reforms through in full if elected
LEIGH: Well Mark, let's go back a little bit. We announced this important policy on tobacco excise, making a controversial decision, and were attacked at the time by the Government. But our numbers were determined by the Parliamentary Budget Office and we're confident that the Parliamentary Budget Office stands at arm's length from Labor.
This is the same outfit that did the costings at the last election. The Parliamentary Budget Office works with Treasury, using their numbers, and of course Labor's numbers will be updated as we get closer to the election. But the Government's really just trying to cover up the fact they've spent months attacking Labor and they're now adopting Labor policy.
TAMHANE: Well imitation's the sincerest form of flattery, so I guess you'd be pleased about that -
LEIGH: If they want to adopt Labor policy we're happy to support that.
TAMHANE: But the point is isn't it, that the Government has costed this using all the resources of Treasury as you said, not the smaller Parliamentary Budget Office, and if you become the Government you'll have to use Treasury's costings because they're the official forecaster?
LEIGH: Well, these two organisations work very closely together Mark. There's staff seconded between one and the other. There's a Parliamentary Budget Office officer who spoke at Senate Estimates just in February and said that the data they use to cost Labor's policy was Tax Office data, and it was current at the time the costing was done. It was the same data that underpinned the budget estimates.
The reason for that is that you don't want a situation in which the Parliamentary Budget Office is using different methodology from the Treasury. You want to make sure these two organisations are working carefully together. And I say again, really this is a desperate government that has adopted a Labor policy and is now looking to fearmonger about it and distract Australians' attention from the fact that as always they say one thing and they do another.
TAMHANE: It's pretty worrying though if one economic forecaster says $47.7 billion over ten years and another says $28.2 billion. That's like ordering 12 Barracuda submarines but being only able to pay for 7 of them.
LEIGH: Well, this is yet another leak from a Government which is leaking worse than a blow-up dinghy that has run aground. The Government is desperate to distract. They don't want Australians to be talking about the fact that they still have plans to cut family payments. They they're not serious about taking on multinationals, and that they're still going to the election with Tony Abbott's policies. You know, you've changed the Prime Minister but ultimately you've got Tony Abbott-lite in charge of the country.
TAMHANE: More broadly though, from what we already know about Scott Morrison's budget; a bit of tax relief for middle-income earners and small business incentives to get mothers working again. Taxing smokers, the rich and cracking down on corporate tax avoidance - that's a budget a Labor Treasurer would be pretty proud of wouldn't it?
LEIGH: I don't think a Labor Treasurer would be making the sorts of decisions this Government has made: bashing the bottom end of town; unwilling to go tough on the big end of town. Labor has always been tougher on multinationals and the Government's mooted changes still fall well short of what we believe is appropriate. And the Coalition's cuts are still in place. Severe cuts to schools and hospitals will see waiting lists blow-out and kids not get the resources they need. Cuts to families that will see some families lose $5000. We're absolutely serious about making these tough decisions, which is why Bill Shorten and Chris Bowen have announced more than $100 billion of Labor savings. Things like making sure that we crack down on the excesses in negative gearing and superannuation. Areas in which the Coalition is either unwilling to go or unwilling to deal with the full extent of the excesses.
TAMHANE: If you are though, in favour of support for families as you say you are, would you support income tax cuts for those Australians earning $80,000 and above and let them pass through Parliament?
LEIGH: In fairness, if the Treasurer is not going to tell you whether or not that's in the budget, Labor will take our time to work whether or not we support it.
TAMHANE: You're not going to have a lot of time though. You're going to be asked to pass it pretty much the next day aren't you?
LEIGH: Well, we'll have a look at the budget in its entirety and that's what you'd expect a responsible opposition to do. We've got more policy out there as an opposition, than any other opposition in two decades. Bill Shorten and Chris Bowen have been absolutely focused on making sure that Labor is leading the policy debate. I would say to you Mark, that it's pretty rich for this Government to be taking money away from families in the thousands and then saying, "Well, we'll give the top quarter of wage earners a modest tax break." That in no way makes up for the savage cuts to services that they've delivered.
And it also leaves open the risk of a credit ratings downgrade which I think is the spectre that hangs over this entire budget. Moody's now threatening that the AAA credit could be at risk, and that would hurt households and small businesses, because the loss of the AAA credit rating means higher interest rates for everyone.
TAMHANE: Speaking of interest rates, you're an economist, do you think the Reserve Bank will cut interest rates today Andrew Leigh?
LEIGH: Smart economists don't speculate on what the Reserve Bank's going to do. Certainly the numbers do suggest that it is running finely in the balance. We'll have to see how it goes. But I do think that the Moody's decision is one that is not being taken seriously enough by the Government. We've got Moody's senior vice-president Marie Diron saying that Mr Morrison's announcements excluded measures to raise revenue and she's threatened that there will be a potential credit ratings downgrade. It's very serious and it's an issue which is not being taken seriously enough by the government – a government that has blown out debt by more than $100 billion since taking office.
TAMHANE: Andrew Leigh, thanks for your time.
LEIGH: Thanks Mark.
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