ABC NEWS BREAKFAST
SUNDAY, 9 SEPTEMBER 2018
SUBJECTS: Wagga by-election, GDP figures, migration debate, Labor's plan to level the playing field for first home buyers, gender pay gap, the Coalition's civil war over energy policy.
HOST: We're speaking with Dr Shadow Assistant Treasurer Andrew Leigh. Thank you for joining us this morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Absolute pleasure.
HOST: Before we touch on the issues relating to your portfolio, let's start with this morning's news and the likely loss by the Liberals in the state by-election in Wagga. What message do you think this sends to Canberra?
LEIGH: This was Scott Morrison’s first test and he’s failed it. A 30 per cent swing against the Liberals, they're certain now to lose the seat. It really does reflect the fact that the Liberal Party at a federal level now makes the Addams Family look like The Brady Bunch. So much infighting, focused on themselves rather than on the big problems facing the Australian people, whether it's energy prices or climate change, a squeeze on household expenditures or flat wages. There's all kinds of issues that Australians want their politicians to be focused on. This sort of shenanigans we have seen from the Liberals has now been punished at the ballot-box in Wagga.
HOST: Also making news this morning in the Sun Herald, it’s reporting that the Prime Minister has flagged tougher rules for immigration to deal with surging growth in Sydney and Melbourne and flagging a possible cut to overseas student numbers. Is it time to take action to curb population growth?
LEIGH: I'm old enough to remember a couple of months ago when Tony Abbott was suggesting a major cut to immigration and Scott Morrison slapped him down, saying if you cut migration by 80,000 a year, that would cost the budget a billion dollars a year. That's Treasury analysis, which reflects the standard economic view that migrants aren't just mouths to feed - they're muscles to build and minds to inspire. Yes, we need to get our migration mix right, but it's currently true that you get additional points for having studied in a regional area. I'm not quite sure how Scott Morrison's thought bubble would work. The Department of Home Affairs says you can't compel people to live in particular cities. So, let's wait and see where he's actually going with this.
HOST: Alright, let’s talk about the economy. Australia has booming economic growth it seems, the annual GDP rate up to 3.4 per cent in the June quarter. So when will workers around Australia feel the benefits of all of this with real wage rises?
LEIGH: That’s the $64,000 question, isn't it? We have seen wages essentially growing at about the same pace as prices since about 2012. Workers aren’t getting a share of the productivity gains, which are going disproportionally to capital owners- profit rising five times as fast as wages - and to CEOs whose average pay went up almost 10 per cent last year. One of the big challenges for Australia is getting household income moving again. Real net national disposable income per capita went backwards for the first couple years of Abbott-Turnbull-Morrison government and now is barely above where it was when they were elected. On that big question:“are you better off now than you were five years ago?”, many Australian households will say, "well, after inflation, no."
HOST: And these people are dipping into their savings when it comes to putting money into the economy. So how much of the GDP figure is legitimate?
LEIGH: That's absolutely right. GDP isn't the best measure of household wellbeing. Household figures look much less rosy than GDP. This has been a great period if you're in the top 200, the total wealth of the wealthiest 200 went up 21 per cent last year. We had a significant increase of the number of billionaires in Australia, but we still got a lot of people living in Australia living in poverty, struggling to afford Christmas presents, to afford to see a dentist, to afford the basics of life. That's not going to be helped by these sorts of attacks on the social safety net that we have consistently seen from the Liberals over the last five years.
HOST: Still on the economy, the president of the Real Estate Institute of Australia Michael Gunning, he made the controversial decree on 7.30 this week that people should get two jobs to afford higher rents. What do you think of that advice?
LEIGH: You might help more if we rebalanced our tax system so it wasn't providing more assistance to someone buying their 10th home than someone buying their first home. We used to have a situation where first home buyers could afford to buy a house on a modest income. Now, it takes two significant incomes and this argument that you ought to have three or four jobs between a couple is just ridiculous. Labor's got a plan to tackle negative gearing prospectively, to restrict it to new-built homes. We'd curtail the capital gains tax discount, put in place a proper ministerial approach to housing, reinstate the national housing supply council and ensure that we have got movement to try to get that home ownership rate back up, given that it’s now at a 60-year low.
HOST: He also made the suggestion that people could perhaps move to smaller cities like Adelaide and Perth or even regional centres for cheaper housing. Is this a realistic option for people?
LEIGH: Cheaper housing isn't much good if your wage falls at the same time. Many Australian regional areas have higher house price to income ratios. That is that the lower wages don't make up for the drop in house prices. So you have got to think about this issue as a national challenge. We can't be a nation that can no longer afford to house our young. There used to be a party of Robert Menzies, which believed in home ownership for all. But the Liberals now are the great defenders of negative gearing, of the notion that you should have two, three, or four houses and that ought to be a bigger public policy priority than making sure people get in their first homes. The young couples who come up to me in street stalls don't want a mansion, they want a chance to be able to take on a mortgage, perhaps with the knowledge some of them may take a little time off when they have kids. But in many cities in Australia it's difficult to do that.
HOST: You also delivered a speech this week to the Women in Economics forum, some thoughts about how to fix the gender pay gap. What are some of those key measures as you see it?
LEIGH: The gender pay gap’s still stubbornly stuck around 15 per cent, which means women are working the first seven weeks of each year effectively without pay. We need to make sure that any changes to the tax system don’t worsen that, as regressive income tax changes would do. If the Liberals had their way and managed to deliver personal income tax cuts that go disproportionally to millionaires, it will also go disproportionally to men and widen the gender pay gap. We need party rooms that are representative of the community. The Liberals now have three men for every woman in their party room. The Nationals have nine men for every woman in their party room. Labor's nearly at parity. That's made a difference in how we in Labor think through issues like the tampon tax, reinstating the time use survey and standing against shifting the tax mix more towards consumption and away from income.
HOST: You do talk about having more women in key political positions and in key economic policy positions. By saying that, is the implication just that men can’t make fair decisions when it comes to women?
LEIGH: We need a Parliament and a decision-making group that looks like the community. Is it odd in Australia that we’ve had a female Prime Minister, most states have had female premiers, we’ve had a female Governor-General and we’ve got a female chief justice, yet we haven’t had a woman heading up the Treasury, or the Reserve Bank of Australia or the Productivity Commission or many other economic institutions you can name. Chris Bowen has been absolutely clear that Labor believes in gender equity and that goes to the appointments that we think about - making sure those appointments are representative of Australia. There are many talented women working in economics. I mean, I know well with my time at the Australian National University working in a department with a number of impressive senior women, such as Alison Booth and Deborah Cobb-Clark. There’s many talented women working in the bureaucracy, Jenny Wilkinson heading the Parliamentary Budget Office and many in Treasury as well. But we need to make sure that we're continuing to ensure that the leadership of these economic bodies is representative of the community.
HOST: Alright. Federal Parliament is back next week, the PM has said that the NEG will be officially killed off. So where do we go to from here when it comes to power prices and emissions targets?
LEIGH: Up, up and up if you believe the government's own modelling. They said that the National Energy Guarantee would reduce power prices by several hundred dollars a year for the typical household. So that means Australian households would be paying more for their energy as a result of the government playing pure politics with energy policy. They put a guy in charge of energy policy who doesn't believe in climate change and on their own admission they won't be tracking to meet the commitments we have made to the international community on climate change. If we don't deal with climate change, it's such a huge economic risk. One study said it would be like having a Great Depression every year on the worst case scenarios.
HOST: Are we going to see Labor playing some politics this week with the absence of Malcolm Turnbull? Can we expect to see you push for a no confidence motion on the floor?
LEIGH: We’ll certainly be asking some reasonable questions. Don't forget how we ended the last Parliamentary sittings - this extraordinary walkout from Parliament by the Liberals, the group that's always complaining about workers won't put in a full day's work suddenly said about 11am in the morning that they wanted to up sticks and close Parliament and go back to talking about themselves. So, yes, we'll be asking questions about that, about the ministers that have apparently been misleading the general public and the Parliament about their support for Malcolm Turnbull and why it is on earth that the Liberals needed to dump Malcolm Turnbull. We still haven't got a clear answer for that. Scott Morrison says it was a MuppetShow. On that basis he seems to be Muppet number one.
HOST: But is your strategy going to be to try to bring down this government on the floor of the House with Malcolm Turnbull not being there and the Coalition being down that one crucial vote on the floor.
LEIGH: Every government needs the confidence of the Parliament. That's how you form government in this nation. If the Morrison Government can't show the confidence of the Parliament, then under our constitution, it doesn't deserve to govern. Many Australians are asking themselves, "we didn’t vote for Scott Morrison, what's he doing in charge?" and "where are the Liberals going with their of their internal infighting?’ They’re making Oasis look like a band of team players.
HOST: It looks like it’s going to be another big week in Canberra. Shadow Assistant Treasurer, Andrew Leigh, thanks so much for joining us this morning.
LEIGH: Absolute pleasure.
Authorised by Noah Carroll, ALP, Canberra.