Australia's Living Standards Continue to Decline Under the Liberals - Transcript


SUBJECT/S: The Liberals’ superannuation divisions; national accounts; declining living standards; company tax cut; housing prices

MARIUS BENSON: Andrew Leigh, good morning.


BENSON: I'm well. Beginning with superannuation – you'd obviously be enjoying the Government's embarrassment on that issue with the internal rumblings in the Liberal Party. But you – the Labor Party – you haven't decided yet if you like the Government's moves to trim those tax breaks on super?

LEIGH: Like the Coalition backbench, these government changes have literally just been dropped on us. Labor's had our superannuation policy out there for more than year now. We've consulted carefully with industry.  But the Government's lurching from crisis to crisis. It's a bit like their tax policy, which lurched from the GST rise to state income taxes to a $50 billion company tax cut. These changes to superannuation have caused a backbench revolt. Malcolm Turnbull now is quietly promising to his backbench that, 'It's alright; if I can get you over the line to the election then I'll just change those policies.'

BENSON: Alright, well I'll leave that there because I'm not quite sure that's exactly what the Government is saying.  But from superannuation to the economy more broadly – the Government pointing to those strong growth figures yesterday. Obviously gratified to see 3.1% as the general growth figure. Questions being raised about the living standards that are flowing from that. The Government basically saying, 'Doughnut' and you – the Labor Party and others – saying, 'Hole.'

LEIGH: Marius, in the last quarter we saw all of the growth coming from exports. So unless the Government wants to take credit for what's going on overseas, that's an export-driven figure. But that's just the GDP figure and the one that I tend to look at is the one that better reflects living standards – Real Net National Disposable Income per Person. That's down 4% since the last election. So many people will go into the polling booths on 2 July and ask themselves the question, 'Am I better off since the last election?' And most Australians will say, 'No.' Living standards down 4%. And that's in part because of the big fall in public sector infrastructure investment. Down a fifth. The failure to invest in schools and hospitals. It's a government which has had a series of short-term strategies but no long-term plan.

BENSON: But the question that the voter might have in mind is, 'Am I better off compared to the last election?' You said the voter is worse off. The next question that the voter has to decide is, 'Would I be better off if Labor were running the show?' And the jobs and growth appeal that the Government is putting out there – they point to 300,000 jobs being created – that, they say, is a performance that can't be matched by Labor.

LEIGH: You're absolutely right. That's the question that people would ask themselves Marius. Bill Shorten has been articulating policies over the long-term and we are united behind Bill Shorten around those policies. With Labor, you know you are electing a Prime Minister that leads his party, rather than one who is led by his party. And one who leads a party united around an economic agenda. Our agenda is to make sure we have proper investment in schools. That we build a first rate National Broadband Network. That we build our roads and rail based on cost-benefit numbers, rather than pork-barreling. All of that is a clear economic plan to build jobs and growth into the future. 

BENSON: But the government would say that is an economic plan for spending – you don't have a plan to generate the economic drive to finance that spending. 

LEIGH: Marius, the biggest bit of spending in this election campaign is the $50 billion company tax cut. A company tax cut which on the government's own figures, will deliver households somewhere between 0.1% and 0.7% over the course of the decade – somewhere off in the 2030s. The price for that is going to be very high. The cost of a company tax cut will mean worse-funded schools and longer emergency and elective surgery waiting times. It will mean that households will end up paying more through bracket creep in the long run. This is an Australia – as we have talked about before – in which inequality is at a 75 year high, and wage growth is at a 30 year low. Where the home ownership rate is as low as it has been since the 1950s. The last thing Australia needs at the moment is a personal income tax cut, 94% of which goes to the top 1%; and a company tax cut, two thirds of which according to Gol dman Sachs goes to foreign shareholders. 

BENSON: Those company tax cuts are pretty theoretical, aren't they? Because they come into effect only over the course of a decade. In that decade, even if you lose government, the Government won't have the numbers in the Senate. You will presumably be blocking them in the Senate yourselves – Labor will be voting against them – they won't happen. 

LEIGH: The thing about making long-term plans is to make sure that you think for the long run, rather than simply come up with a cunning ploy in order to get yourselves through the next few months. We have seen Malcolm Turnbull at his chameleon best over the last year. Slipping around on climate change, the republic, same-sex marriage and tax reform. What you have seen from Labor is a real seriousness about getting those long-term policies right. That's why Chris Bowen challenged Scott Morrison at the Treasurer's debate to release 10 year costings. The Liberals have squibbed that challenge, because they are not willing to talk about the long-term cost of their policies. Yes, the world can change around you, but unless you are thinking long-term, you are not going to put Australia in the best position to deal with the challenges and opportunities in the future. 

BENSON: Andrew Leigh, just a final question on housing prices. There is a bit of a spike in house prices at the moment, and one guess in the industry is that it is buyers concerned about the prospect of Labor winning government and bringing in those changes to negative gearing. Do you think your prospective policies are driving up house prices at the moment?

LEIGH:  I don't think that is likely. What we have seen at the moment is yesterday’s ANZ figures ­– 9.8% increase in house prices. It is a little higher in Melbourne and Sydney than in previous quarters, but it continues a strong trend of house prices growing about five times faster than wages. For young couples like Nathan, who I was chatting to down in Geelong the other day, that means that just when he thinks he has gotten enough a money together for a deposit to buy his first home, suddenly the prices accelerate again. The auction prices accelerate out of his reach. That is why Labor has got a housing affordability policy. When it comes to housing, ­ Malcolm Turnbull only has a scare campaign – that is the only thing he can offer to first home buyers. 

BENSON: Andrew Leigh, many thanks. 

LEIGH: Thank you Marius. 


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