ABC RN DRIVE
MONDAY, 7 MAY 2018
SUBJECTS: Murray Darling Basin Plan; Budget 2018-19; Asylum seeker policy, Katy Gallagher.
PATRICIA KARVELAS: It's going to be all about tax. Andrew Leigh is the Shadow Assistant Treasurer, welcome back to RN Drive.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks, Patricia. Great to be with you.
KARVELAS: Before we get to the budget, Labor has struck a deal with the Government on the Murray Darling Basin Plan and it remains intact. What is that deal all about?
LEIGH: Well, we've determined that we won't allow an amendment to the Basin plan. That's because Tony Burke, our responsible Shadow Minister, has received sufficient assurances such as the allegations of corruption and water theft in the basin being properly dealt with, that the Government will deliver the 450 gigalitres of environmental water, and that there will be a new Northern Basin Commissioner.
KARVELAS: Okay, let's move to the budget. If we are going to see a surplus a year earlier than forecast, you'd have to hand it to the Government that that's a job well done, right?
LEIGH: This is a Government that said they would be in surplus in the first year and every year after that. As best I can tell, they've failed to meet that promise that they made before the 2013 election. What you're seeing from the Government is a budget which yet again will be great for multinationals and millionaires but not so good for schools and hospitals, not so good for Australia's pupils, not so good for those who depend on our social support system.
KARVELAS: The Government wants to limit the amount of tax paid in Australia to 23.9 per cent of GDP, you're arguing that this has no basis in sound economics. Why shouldn't it be limited? Why shouldn't there be a cap?
LEIGH: Patricia, you can understand why they have pivoted to making this argument. They had been arguing that we ought to take $17 billion away from Australian schools and give it to Australia's biggest banks. Turned out that wasn't a particularly popular idea.
KARVELAS: To be clear, they never said take money from schools and give it to banks? The Government has never made that argument.
LEIGH: That's exactly their policy, Patricia.
KARVELAS: You've conflated that as their policy - they've never said they want to take money from schools and give it to banks.
LEIGH: That's exactly their policy. Their aim is to give an $80 billion tax cut to some of the world's biggest companies. We know the first round benefits of that will flow offshore. We're seeing already in the United States, an acknowledgement even by Republicans such as Marco Rubio that the benefits of the US corporate tax cut are being enjoyed by shareholders in the form of buybacks rather than workers in the form of higher wages. The Government is unable to point to a country in which this magical wages benefit has followed a corporate tax cut. Yet they're stuck with this extraordinarily expensive policy rather than the much more efficient policy of an investment guarantee which Labor has committed to. Our policy is much more economical. Indeed, one analysis says it gets three times the bang for the buck if you want to incentivise investment.
KARVELAS: So you don't think there should be a limit on tax paid by Australia?
LEIGH: Taxes should be as low as necessary in order to fund the services Australians demand and pay down debt. When we put in place the National Disability Insurance Scheme we added another -
KARVELAS: But you are going to go into the election campaign as the higher taxing side of politics and you think that's okay?
LEIGH: Patricia, I doubt many of your listeners would disagree with the proposition that we ought to close down multinational tax loopholes that let billion dollar overseas firms shift their profits offshore in a way Australians in business can't.
KARVELAS: But that's not the only reason that taxes will be higher under Labor? There are other policies as well, you've kept a range of other policies in the mix there. You don't support business tax cuts, you want top earners to pay more tax and then there's the changes to the tax paid on shares. It's not just about corporate taxes, there are a range of other taxes Labor would support.
LEIGH: Indeed. We would close loopholes that would allow people to use trusts to avoid paying their fair share of tax. We would end negative gearing for new purchases of homes that aren't new built. We believe that we ought to stop this unique tax concession in Australia which provides refundability of dividend credits. All of these things are closing loopholes, they're supported by strong economic evidence and they allow us to properly fund our schools and hospitals. But somehow Malcolm Turnbull and Scott Morrison think it’s ok to take $17 billion out of our schools and to give a tax cut whose impact is to give $17 billion to the banks.
KARVELAS: Do you think businesses with a turnover of under $50 million should keep their tax cut?
LEIGH: Well, as we’ve said many times, we will announce our position on those medium sized corporate tax cuts ahead of the election-
KARVELAS: But do you think those businesses deserve to keep that tax cut? Would you take it away from them?
LEIGH: Patricia, I’ve just answered your question. We will announce our position on that policy well ahead of the next election. You’ve asked me this on this program before-
KARVELAS: I’d love, I obviously really want an answer.
LEIGH: You obviously do!
KARVELAS: You just admitted that you keep not giving me an answer to this crucial question.
LEIGH: Patricia, we have put out more policy detail than any Opposition in two decades. On Labor’s detailed policy manifesto-
KARVELAS: But I’m asking about this specific policy. You might sort of look at your overall how many policies you’ve put out, but on this, you haven’t provided an answer and we’ve been asking for months.
LEIGH: I understand your desire to nail down every single aspect of Labor’s policy platform a year out from the election, but it wouldn’t be responsible of us to settle a position on absolutely everything until we’ve seen the government’s budget, until we know the full state of the books. We need to make sure that we’re able to go into the next election with the strongest possible policy offering. But be in no doubt, under Labor our schools will be better funded. Our hospitals will be better funded. We’ll put the money back in where the government has cut it out. We’ll make sure that the demand driven system allows any kid with the smarts to go to university to get a place and we’ll ensure that our social safety net doesn’t see us at the highest pension age in the advanced world. And we can do these things Patricia because we’ve made the tough decisions on closing tax loopholes. When the Government says it wants to cap tax-to-GDP at a particular number, that’s another way of saying they want to go soft on tax loopholes. They don’t believe we should crack down on tax havens. Labor just takes a different view.
KARVELAS: Let’s just move to another issue. The Home Affairs Minister Peter Dutton says that people smugglers will attempt to bring more people by boat to Australia if Labor was elected to government. How would people smugglers use the policies that are currently being debated by Labor – including a sort of 90 day cap on detention – to their benefit? Do you worry about that?
LEIGH: Well, they wouldn’t and they don’t. When you’ve got Peter Dutton out-
KARVELAS: But they do actually trade on whatever policy changes happen in the country, don’t they?
LEIGH: Absolutely and when Peter Dutton goes out, telling lies about Labor’s policy, then he assists the people smugglers. This provision to do with 90 days has been in the party platform since the last election. There’s no change there. It’s a measure which says that we’re going to strive to ensure that people aren’t in detention for longer than 90 days. I don’t think that anyone in Australia would think that it’s appropriate to have people languishing in Manus and Nauru now for over four years and with Peter Dutton refusing to deal with New Zealand, a country which is quite willing to work with us to resettle refugees and with whom John Howard worked in the 2000s in order to resettle people out of Nauru.
KARVELAS: Air Vice-Marshal Stephen Osborne runs Operation Sovereign Borders, which intercepts and turns back asylum seeker boats. He suggested that any changes to the policy would harm its success. Would Labor keep Operation Sovereign Borders?
LEIGH: Operation Sovereign Borders has seen 32 boats turned back and since the announcement of the US refugee resettlement agreement at the end of 2016, there’s been three turned back. So principally, its effect took place in the early period of the Abbott-Turnbull Government. It is certainly one of the ways in which people smugglers are deterred, but the refugee resettlement agreement has the principal effect and Labor has no intention of changing that. We don’t think people should languish in Manus and Nauru, that’s simply unconscionable. These people have been there for way too long and Peter Dutton needs to resettle them into third countries ASAP.
KARVELAS: Wednesday is D Day for Labor Senator Katy Gallagher and her High Court citizenship ruling. It will also be instructive for Labor’s Susan Lamb and Justine Keay and Josh Wilson. How will you handle this? If it’s a negative finding for Katy Gallagher, does that just mean that those three will accept the verdict and accept that there should be by elections in their seats?
LEIGH: Patricia, I was an Associate in the High Court in the late 1990s and it was always something of an amusement for us within the system to watch people speculating about what the decision would be. You saw Malcolm Turnbull speculating on the High Court decision, saying ‘the High Court will so hold’ and then-
KARVELAS: No, I’m just wondering if it does find that way – I’m not saying it will, who knows – but if it does, does that mean that will be instructive for the others? That’s the question.
LEIGH: It would be a foolish politician to speculate on the High Court’s decision or indeed to hypothecate on what might happen. On a personal level, I very much hope that Katy stays where she is. She’s a fantastic ACT colleague, somebody who not only has a splendid policy nous but also an ability to communicate, to engage with electors. She’s just such a warm, decent person. So I very much feel for her and very much hope the decision will go her way. But I’m not making any predictions.
KARVELAS: Thank you so much for your time.
LEIGH: Thanks, Patricia.
Authorised by Noah Carroll ALP Canberra