FAIRFAX BREAKING POLITICS
MONDAY, 25 MAY 2015
SUBJECT/S: Budget hurting low income families; Marriage equality
CALLUM DENNES: Joining me now are our Monday regulars Andrew Leigh and Andrew Laming. Good morning to you both. Andrew Laming, do you accept NATSEM's modelling that the budget disproportionally affects lower-income families?
FEDERAL MEMBER FOR BOWMAN ANDREW LAMING: I don't accept any evidence until I've seen the backend of the analysis. We haven't seen that and we won't see it for some time. There's great detail in a budget, I doubt that they've looked really closely at the childcare measure or that they're capable of even working out the impact of the extra subsidies that are available to families. But let's go back a step, this is not a race to see how much welfare you can get, this is a race to give Australia the best possible future and moving people off welfare and into a job is an absolutely legitimate goal that may not be picked up in a NATSEM report. But Australia has $5.5 billion to reactivate and kick-start small business, it's going to have a huge impact that wouldn't have occurred had there not been that stimulus.
DENNES: So this modelling found that the poorest 20 per cent of families lose the most, whereas the top 20 per cent of families don't lose anything. On the face of it, that doesn't seem fair, does it?
LAMING: Well it seems to come out of the NATSEM report each year, it seems to be their conclusion even before they've started to do the analysis and yet again they've said the same thing.
DENNES: So you're suggesting a conspiracy here?
LAMING: Well I'm suggesting superficial analysis potentially until I've seen the way they've done the analysis. There's an enormous amount of detail in our childcare package that responds directly to the needs of children in centres as ascertained by those running the centres. That means, those that need it most will get a 100% subsidy that could not possibly be modelled by NATSEM.
DENNES: NATSEM modelling last year also found the budget was unfair and as we know, fairness has become the central theme of the Opposition's attack on the budget. One the Government seems to have conceded, so bodes well for this modelling doesn't it?
LAMING: Well, no different to Bill Shorten himself taking $80-$140 a week by cutting the parenting payment which Labor did just a handful of years ago. So let's be honest, Julia Gillard ramped up spending and we have a spending issue which is not sustainable and were Labor to be in Government today, they'd be in the same predicament. Spiralling into a debt and deficit disaster they’d have to ultimately find solutions to. Labor, sitting there in this seat, would have to face those same challenges and I suspect they'd be cutting just the same way. They would have to; we've just done it earlier, done it fairer and activated the economy to start giving people opportunity that's not purely based on welfare.
DENNES: Andrew Leigh, your response – particularly to Andrew's claims there that the modelling is superficial?
SHADOW ASSISTANT TREASURER ANDREW LEIGH: I'm surprised that Andrew's critical of NATSEM. This is, after all, the organisation that Tony Abbott said when he was in opposition, was the premier modelling organisation in Australia. As Opposition Leader, Tony Abbott was quick to praise the credentials of NATSEM, so I'm frankly surprised that Andrew is critical of their methodology. We know they have a rigorous analysis and last year, no-one faulted the details of that analysis, which showed that so many Australians recognised this was an unfair budget which took the most from the most vulnerable at a time when inequality is at a 75-year high. We see it again, nine out of ten low-income earners lose under these two budgets and nine out of ten high-income earners gain. It's just not fair.
DENNES: What about the claims made by Andrew there, that because of the budget situation where cuts to spending are required, the burden is going to fall somewhere and there are going to be losers. That's a fair point, isn't it?
LEIGH: Callum, you have to make values decisions when you're in Government. These are the Coalition's values: we've seen them ramp up the deficit, ramp up tax and ramp up spending but also put in place measures that will ramp up inequality. They decided very deliberately to go hard on spending early on with their Commission of Audit but to hold off on things like superannuation tax expenditures which are projected to double over the course of the next four years, and which go more to the top 1 per cent than the bottom 40 per cent. Super tax concessions aren't fair and they aren't sustainable. Labor has a plan to find budget savings there, as we do with multinational tax. The Coalition aren't willing to go for those measures and instead they're looking at cutting payments to the most vulnerable Australians.
DENNES: Labor said that it would look at the detail of the Government's plan to amend the pension taper rate: is Labor gotten any closer to working out its position on this? Will Labor support the Government's policy here?
LEIGH: As the legislation comes out, we'll put it through our usual processes and announce what we plan to do.
DENNES: But having looked at it, what do you think?
LEIGH: We'll go through our regular processes, Callum. This is an important change and one that affects many Australians. You'd expect a responsible Opposition to take the time to consult widely and analyse the detail.
LAMING: Callum, we tend to get too swallowed up in these reports that someone is getting as much welfare as they did last year. In essence, this budget really refocuses on optimism and activating and mobilising particularly young Australians. So the $5.5 billion package I have already pointed out, it’s quite complex and almost impossible to model given that much of it is actually determined by need, not necessarily by income. But secondly the package, I hope, will see improvements in the economy, and in the end that's where you want people don't you? Walking away from welfare and taking up the opportunity of employment.
LEIGH: Let's be clear on the childcare package: I was on a panel with Ben Phillips at NATSEM last week and he went through, in detail, how NATSEM had gone about modelling the childcare package. It's based on a tightened work test and changes to the income tests. All of those are reflected in the NATSEM report.
DENNES: ACOSS has also found that last year's measures take $15 billion away from family income so you're talking about optimism and green shoots but ultimately if someone's going to be losing money from their pockets, that's cause for concern – especially when the burden of those spending cuts falls on low-income families.
LAMING: They're not being targeted; this is a rule that applies just as the parenting payment changes did under Labor.
DENNES: But the matter of fact is that low-income families…
LAMING: That’s assuming they don't find employment. Ultimately, many of these families, twelve months from now, will be far better off because they're part of the real economy and engaging. I've made this point before: between 9am and 3pm, many families don't have that luxury of being able to have stay-at-home parents. Ultimately what we want is not to be the nation with the most number of welfare dependent family units in the world, but we are in that group. That small cohort of two or three countries that have families completely and utterly disengaged. Now, of course, if you assume economically that they simply don't respond to these changes by doing anything except saying they got slightly less welfare, you're actually assuming that they don't act rationally, which would be to go out and seek opportunity. This budget seeks to support that.
DENNES: But your forecast in the budget doesn't show unemployment going down dramatically; doesn't show it falling below 6 per cent. Regardless of the points you just made, there will be families who won't be able to find work based on the forecasts in the budget.
LAMING: But they will be seeking work and they'll be engaging in a whole range of activities that include authorised volunteer work that increase their odds of finding that work. At the moment, we don't really have a serious work seeking situation apart from filling out a log book, and we all know that means to just record unsuccessful job interviews which I think in itself is soul destroying. Any Government needs to do better than that and that's what this Budget seeks to do.
DENNES: Andrew Leigh, your response?
LEIGH: Andrew's optimism denies the Government's own forecasts, as you pointed out there. It seems to me a bit like this promised ‘adrenaline charge’ that was supposedly going to hit Australia with the election of the Abbott Government but instead turned into a dose of Mogadon with consumer confidence and business confidence falling to extremely low levels over the course of the last few years. That reflects the fact that a good welfare-to-work policy needs to make sure that people have the supports to make that transition. Work can sometimes be more expensive – you need to buy uniforms, you need to get bus fares, and the simplistic notion that you can starve people into employment simply doesn't show through in the data.
LAMING: It won't be starving, but it is certainly optimising and encouraging economic activities. So for the first time, you will be able to do work experience in the private sector, with real workers, shoulder to shoulder and that just increases your chances of getting a real job. You're certainly not going to get that at home playing Xbox.
DENNES: It's all very well and good, Andrew Leigh, for Labor to criticise these spending cuts and their impact on low-income families but Labor hasn't signalled where it will cut spending. I notice in Chris Bowen's National Press Club address, he declined to commit to restoring the $80 billion cuts in health and education.
LEIGH: We've been clear that spending on superannuation tax concessions are the fastest growing area of the budget and would be curtailed under Labor. We've said we would do that in a fair and sustainable way, in a way that affects people with balances in excess of $1.5 million dollars; two thirds of the savings of those measures comes from people with more than $3 million in their superannuation accounts. So that's a fair way of helping bring the budget back to surplus, but we've also begun the longer term conversation. I worry that too much of the Coalition's economic strategy is focused on talking about the deficit. They have of course gone in the opposite direction economically, but their rhetoric is all about debt and deficits, not investing in the future, not about getting more students in science, technology, engineering and maths, not about introducing coding in schools. So Bill Shorten's budget reply was very much focused on those long-term agendas.
DENNES: Spending initiatives?
LEIGH: These are important investments for the future. We absolutely have to make savings on things like multinational tax and superannuation in order to make room for investing in training the scientists for the future.
DENNES: So those are two savings, but we are still nowhere near addressing the long-term gap between revenue and expenditure?
LEIGH: We'll certainly be bringing out further measures between now and the election. But make no mistake; this is a Government which has doubled the deficit from last year's budget to this year's budget. So, we won't be taking any lessons from this Government to get the deficit under control.
DENNES: But having campaigned so heavily on the Government's cuts to health and education, those $80 billion cuts, why won't Labor commit to restoring them?
LEIGH: There's been enormous damage done to the States and Territories. The Government will frequently, when asked about this, say it's alright, they'll be getting more money next year. But their own budget papers show the $80 billion cut. We'll obviously have to look at that damage as we'll be looking at damage in other areas if we're fortunate enough to win Government.
DENNES: Why don't you commit to restoring it then?
LEIGH: We have to make decisions across the spectrum. I agree with you, this is a deeply damaging cut to the States and Territories. You're expressing a concern that many Premiers have expressed, there's concern not only from Labor Premiers but also from people like Mike Baird about the fact that effectively what the Commonwealth is doing is trying to push its troubles off to the States and Territories. If we're fortunate enough to win Government, we'll look at how to repair some of that damage.
DENNES: OK, let's move onto another topic now. Ireland over the weekend voted in favour of same-sex marriage. Andrew Laming, the last time the issue came up before the Parliament you voted against marriage equality, is that still your view and what do you think about these calls for a referendum on the issue?
LAMING: Well the Irish decision was quite stunning. I thought it was an absolutely conclusive decision and it does mean that other countries really need to be looking – like Australia, if they're not reconsidering this issue – then they should be. So we have a bill in the Senate at the moment, it's very, very slow progress because the amount of crossbench time to debate the bill is quite limited and it should come up later in the year, but ultimately I think it will come back to the Parliament and as I've said before, it should be a conscience vote, certainly, on our side of the fence.
DENNES: And have you reconsidered your view? Will you still vote no?
LAMING: I consider it all the time. I'm open-minded and obviously it's almost impossible to find some sort of position that makes both sides happy, but in essence, the current situation still leaves couples disadvantaged. There's a number of issues including immigration that need to be addressed so I think it's becoming increasingly difficult to say that nothing should change.
DENNES: What will happen in the Liberal party room then? Should there be a conscience vote and should this issue be progressed through the Liberal Party?
LAMING: I support the current party position but I think increasingly there will be a need for a conscience vote. I've said this before and it's only a subtle point but if you're having a conscience vote you have to use your conscience to say yes or no. Our current party position doesn't allow people to even vote against the motion of gay marriage in conscience because it becomes their party position already. So I think removing that would be an advantage for our side of politics.
DENNES: Do you perceive that there's a shift here in your colleagues’ thinking here?
LAMING: I don't perceive any but nor do we discuss it in any great detail. It's a fascinating intellectual discussion, particularly if the country votes but by and large Australians are pushing us on other issues far more energetically than this one.
DENNES: Andrew Leigh, you are a marriage equality supporter, what do you think about these calls for a referendum? Is that the way to progress the issue through Parliament?
LEIGH: The system in Ireland is different, as you know Callum. In Australia this is an issue, like most policy issues, which is to be decided by the Parliament. My hope is that we're able to find a way through which allows the Liberal Party to vote its conscience. Tanya Plibersek has a Private Member's Bill drafted, and is looking for a Coalition co-sponsor. Maybe somebody like Malcolm Turnbull, for example, who has strongly hinted that he's a supporter of marriage equality. I thought it was interesting when Liberal Senator Dean Smith spoke out recently about how his views had changed after the death of Tori Johnson in the Lindt Cafe siege. Senator Smith said that his own feeling was that Tori Johnson never had the chance to marry his partner and he should have had that opportunity. We've had Alan Joyce speaking out recently, the Prime Minister's sister Christine Forster has noted what's happening. It reflects the fact that we're now the only advanced English-speaking country where same-sex marriage isn't possible anywhere.
DENNES: Andrew Laming, you said before that this isn't an issue at the forefront of people's minds but for a lot of people it is important and as Andrew Leigh said there, Australia will be the only developed English-speaking country that still outlaws same-sex marriage. Do you think this puts pressure on the Parliament to act so it is in step with public sentiment?
LAMING: Yes, Parliament does have to reconsider it and I didn't in any way suggest it isn't a very important issue for many Australians. I've acknowledged that our current system is not serving them well. That's not to say that I support complete change in the marriage act but certainly so long as there is some discrimination based on sexuality that does have to be addressed. We've come a long way but there are two or three areas that remain to be taken up but certainly those who support marriage remaining as it is need to recognise that there are still deficiencies in our laws on same-sex relationships that do need to be fixed. If we ignore those, it will simply allow a greater momentum to build in the Australian community for change.
LEIGH: Callum, many of us who support same-sex marriage have pitched it in equality terms and that's where I come from. But it's important to recognise also that there is a strong conservative argument. Marriage is a stabilising institution which can assist people in raising children. David Cameron famously said that he supported same-sex marriage not despite being conservative but because he is conservative. So I hope arguments like that will also appeal to some of my colleagues on the Coalition side.
DENNES: Gentlemen, thanks for your time.
LEIGH: Thanks Callum, thanks Andrew.
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