MONDAY, 25 JUNE 2018
SUBJECTS: Malcolm Turnbull’s big business handout; Labor’s plan for a bigger, better and fairer tax cut.
TOM CONNELL: Joining me live right now is the Shadow Assistant Treasurer, Andrew Leigh. Thanks for your time today.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Tom.
CONNELL: Interesting turn it took today with this Labor ad attacking Malcolm Turnbull, saying he could benefit by millions. Do you really think that’s his motivation?
LEIGH: I think the Prime Minister has a bit of a glass jaw if he’s getting concerned over this sort of thing. This is a government which had two former Labor Prime Ministers dragged before Royal Commissions. Labor Leader Bill Shorten was called before a Royal Commission for two days. The government was attacking Tanya Plibersek and her husband in parliament last week. They’ve referred to Bill Shorten as being a ‘sycophant’, a ‘hypocrite’, accused him of taking ‘backhanders’. Now they’re unwilling to deal with the basic facts.
CONNELL: Fair enough. I think it’s fair to say that gloves are off. What about the claim itself? Basically, it’s not about his specific vested interest seemingly, because I don’t know about you, but my super account has a large percentage of business because that’s where a lot of Australians’ profit is made. Is yours the same?
LEIGH: Certainly, I’m invested in shares like most other people. But the point is that if you’re doing well, then you have an obligation not just to think about yourself but to think about others. I’m somebody whose income places me in the top couple of per cent of the Australian income distribution. I shouldn’t be going into parliament and voting for what’s good for me, I should be voting for what’s good for the country as a whole.
CONNELL: But it kind of means that the prism that it’s seen through is kind of more about an attack on his wealth rather than policy. I mean, it’s not like you’re actually saying he’s trying to do this, he’s trying to slant the tax cut towards his investments. Anyone with super – the more you have, the more investments you have – will benefit in that sense.
LEIGH: Well, we’ve seen that Malcolm Turnbull is entirely comfortable keeping investments in tax havens. We’ve seen that he’s comfortable pushing for a corporate tax cut that’ll benefit the big end of town. If Malcolm Turnbull was arguing to keep penalty rates, we wouldn’t be having this conversation. If he was arguing to maintain the pension age, we wouldn’t be having this conversation. If he was arguing for Labor’s bigger, better, fairer middle income tax cut, we wouldn’t be having this conversation. The reason we are having this conversation is the policies that the Liberals are bringing in right now.
CONNELL: And that’s obviously a conversation for the policy debate, but it seems from the outside that part of it is just about highlighting his wealth.
LEIGH: Malcolm Turnbull has been making a set of interests which are far better for those at the top of the distribution than for middle Australia. Seventy per cent of Australians will always be better off under Labor’s bigger, better and fairer income tax cut. On the company tax side, it’s very clear that the benefit to households is vanishingly small. Treasury’s own numbers put it at 0.1 per cent in the 2030s. This is a benefit that is going overwhelmingly to overseas shareholders.
CONNELL: Is that something that you hear from voters though? Are they uncomfortable with Malcolm Turnbull’s wealth itself?
LEIGH: I think voters are uncomfortable with a Liberal Party which is constantly making decisions to benefit the big end of town, looking after millionaires and multinationals-
CONNELL: But his wealth specifically? I mean a lot of Labor MPs, I don’t know if you’re one or not, a top hat has to go with basically every tweet about Malcolm Turnbull.
LEIGH: I don’t think I’ve used many top hat emojis Tom, but I think the point here is that in an Australia which is as unequal as we’ve been in 75 years, we need policies which are benefitting middle Australia, benefitting main street, not benefitting the fortunate few living on the Harbour foreshore.
CONNELL: So that’s your priority at the start. It’s interesting here – the government has got a $144 billion income tax plan over ten years. Your plan, basically, is about $40 billion of that have been committed to your version of phase one, which is more generous to those earners. What about the rest of the money? Are we talking about debt reduction there for the country, or maybe your own version of phase two down the track?
LEIGH: Tom, we’ll hit the trifecta. We’ll deliver more generous personal income tax cuts for the majority of Australians. We’ll invest more in services, such as infrastructure, schools and hospitals. We’ll pay down debt faster than the Liberals. We can do that because we’ve made economically responsible decisions, pursuing a pro-growth agenda. Labor wants to ensure that we have an Australian Investment Guarantee to spur investment, which Victoria University says is three times as good at spurring investment than this across the board corporate tax cut.
CONNELL: But if you look at all the tax cuts all the time, eventually anyone earning any more than $75,000 will be better off under the government. That cohort out there, when they hear you talk, are you going to say look we don’t have anything for you now, but we will have something for you later down the track then?
LEIGH: Under Labor, you have better funded schools, you have better funded hospitals-
CONNELL: I’m talking about their tax take.
LEIGH: And a majority of Australians will be better off in a personal income-
CONNELL: But I’m talking about later down the track – that’s certainly true in the initial years, but later down the track, we get to $75,000 which is the sort of cut-off point where you’re better off under the government. Are you happy with that cut-off point off into the future, in future years?
LEIGH: No one is going to guarantee the tax scales now for a decade’s time. But if you’re asking what’s going to be the impact over the next election cycle – the period for which Labor is seeking to form government – then we have by far the better policy offering. We’re paying down debt faster as well, Tom, and this is one of the key points in the corporate tax debate. The Coalition can never again in history stand up and say that they are the party of fiscal responsibility. They have been so fiscally profligate in the way in which they have managed the budget.
CONNELL: I just want to touch on Anthony Albanese’s speech. Labor doesn’t have to agree with business on issues such as company tax rates, he said, but we do have to engage constructively with business large and small. Now, comments from the BCA and Australian Industry Group suggest that they don’t think that Labor is engaging constructively.
LEIGH: That’s a speech that I think could probably have been given by Bill Shorten. Certainly the comments that I’ve heard about engaging with business are those that I’ve heard regularly from Bill Shorten, from Anthony Albanese, Chris Bowen, Jim Chalmers – right across the economic team.
CONNELL: One of his lines is ‘we respect and celebrate the importance of individual enterprise and the effect and importance of the business community.’ A quote from the Business Council recently saying that ‘Labor is ideologically opposed to private enterprise’. So you might feel like you’re reaching out to business, they don’t feel like that’s happening though.
LEIGH: I obviously disagree with that statement from Business Council. I have had probably about half a dozen meetings just in the last week with various business and industry groups. I, as Shadow Assistant Treasurer, regularly engage with the business community and questions around taxation, competition, infrastructure, and our productivity agenda. I’m a pro-growth progressive, Tom, I make no bones about that. I think we need a faster rate of economic growth in Australia to bring down the unemployment rate, create jobs, have the infrastructure the nation needs.
CONNELL: Is it fair to say though from some of the comments of business - another one from AIG, that ‘Labor would put a dagger through the heart of the IR system’ - whatever is happening right now, the relationship between Labor and big business isn’t that good?
LEIGH: I think that statement again is a bit of overreach. We all have differences with business. They may prefer to get rid of penalty rates, we believe that penalty rates aren’t just good for workers, but that they’re good for the economy. Workers are also consumers.
CONNELL: But it could be better though, between Labor and big business right now? Does it need to be? Would it be better to be on better relationship, better footing right now?
LEIGH: Tom, you have to recognise that inequality at a 75 year high is going to mean that we need to do something about fairness in this country. Maybe some people aren’t troubled by that, maybe they believe that we can continue with ‘business as usual’ and make our tax system more regressive.
Labor voted against stages two and three of the government’s personal income tax package because they made the tax system more regressive. We supported stage one and in fact doubled it, because that made the tax system more progressive. That’s got to be the answer when inequality is as high as it is at the moment, when millionaires are doing so much better than people on the minimum wage and billionaires are doing so much better than battlers.
CONNELL: We’re out of time. Andrew Leigh, thank you for your time today.
LEIGH: Thanks, Tom, Always a pleasure.
Authorised by Noah Carroll, ALP, Canberra