ABC RN BREAKFAST
FRIDAY, 1 SEPTEMBER 2017
SUBJECTS: Scott Morrison’s latest scare campaign, tax reform, energy prices, AEC redistribution.
FRAN KELLY: Andrew Leigh is Labor’s Shadow Assistant Treasurer. Andrew Leigh, welcome back to Breakfast.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks, Fran. Great to be with you.
KELLY: So last week Matthias Cormann was accusing Bill Shorten of taking Labor back to its failed Socialist roots. Now we’ve got the Treasurer saying Bill Shorten is leading a new red Labor. Is that a badge you’re proud to wear?
LEIGH: Fran, these sorts of ‘red peril’ scare campaigns really do remind you of that basic truth that when you’re having an argument and the other person turns to insults, it’s because they’ve run out of strong arguments. What Labor’s doing is sensible tax reform. When I was doing my PhD in the United States, one of my public finance professors was Martin Feldstein - the former chair of Ronald Reagan’s Council of Economic Advisors - and he made a strong case for closing tax loopholes as both equitable and efficient. A lot of what we’re doing in the tax space is looking at closing loopholes.
KELLY: But that’s not all you’re doing in the tax space. You’re also looking at putting up taxes. You’d be slugging the rich 49 and a half cents in the dollar if you were in Government.
LEIGH: Well, let’s not forget that at the last budget, Malcolm Turnbull said that he would increase taxes on every Australian earning over $21,000. Labor said we won’t support-
KELLY: But under your, if you were in Government, you would have a higher top tax rate?
LEIGH: And if we were in Government, we would have lower taxes on average earning Australians. That’s the choice for Australia, Fran. In an era where we’ve seen inequality steadily rise over the last generation and in which earnings have risen three times as fast for the top tenth as for the bottom tenth, do we really want a system where we raise taxes on middle income Australia but cut them on millionaires? Labor believes we need to work on closing these tax loopholes and what’s odd about it - I’ve talked about the Reaganesque origins of what we’re looking to do with tax loopholes, what we’re looking to do on income splitting follows in the steps of John Howard, who cracked down on income-splitting for children. We’re now looking at cracking down on income-splitting for distributions to adult beneficiaries.
KELLY: Ok. Let’s move away from the insults being traded and go to some of the substance of the Treasurer’s speech yesterday act Bloomberg, pointing out - he’s pointing out that conditions are improving. He says, and this is his mantra at the moment, that there are better days ahead. I wonder if you share the Treasurer’s optimism about the economic future?
LEIGH: I’m inherently an optimist, Fran. I think Australians have great reserves of ingenuity, I think we have terrific natural resources, I think we have untapped possibility. But governments need to be making decisions which are increasing the chances that we go on a positive path. You can’t simply stand there, crossing your fingers. You haver to actually be making the investments in schools. You have to be making sure that Medicare is accessible for all. You’ve got to making sure you’re doing the infrastructure investment which we’ve seen going into the doldrums under this Government as we go backwards on those international league tables of infrastructure investment. You can’t just hope that you’ll get an answer on emissions and energy prices - you’ve actually got to commit to a clean energy target or some other form of market based mechanism to provide the certainty that investors need to start creating renewables jobs.
KELLY: But if you look at some of the economic figures that are coming out, it would indicate that whatever the government is doing, it is on the right path. The Treasurer pointed out yesterday that conditions have improved for businesses in the last six months to the point that they’ve hired 200,000 full time workers. That’s a huge boost in jobs numbers, that’s bringing down the unemployment rates - that doesn’t happen without government policy, presumedly?
LEIGH: We’ve got underemployment still high. We’ve got the participation rate well down over recent years.
KELLY: But you accept the trend is going in the right direction?
LEIGH: The unemployment figures that recently came down were pleasing. There’s no doubt about that, Fran. But if you look at inequality, if you look at housing affordability, if you look at what’s happening with emissions, you’ve got concerning indicators in Australia. And saying 'it’ll all be better in days ahead' isn’t an economic plan.
KELLY: But that’s exactly an example of what the Treasurer accuses Labor of doing - now I’m not saying he's right or wrong, but it’s exactly an example and I’m quoting him. He says hundreds of thousands of Australians who now have a job are the direct beneficiaries of businesses doing well and, as we discussed there economic indicators are suggesting there are positive moves. He says, he calls that the economics of opportunity and contrasts this with what he calls Labor’s politics of envy. And as you were just talking there, you said let’s not concentrate on that, let’s concentrate on those missing out. Is that the politics of envy?
LEIGH: We need to make sure we have a strong private sector that’s creating jobs, Fran, but I don’t think that most job-creating businesses are relying on these income-splitting rules which disproportionally benefit the very top. If you’re talking about the incentives to work, then what you want to do is make sure you have lower taxes on the broad mass of Australian workers, which is what Labor’s campaigning for, rather than focussing on the tax rate for just the top two per cent of Australians. That’s not going to affect the unemployment rate.
KELLY: You’re listening to RN Breakfast and our guest is the Shadow Assistant Treasurer Andrew Leigh. A couple of quick questions on energy prices. You mentioned there the clean energy target. Labor’s energy spokesman Mark Butler said that Labor in government did know that gas prices would increase as a result of the energy policy the Gillard Government introduced, which paved the way for gas to be taken from the domestic markets to meet contracts in Asia. Did Labor know about the impact on prices and if so should it have not, should it have curbed this policy?
LEIGH: Fran, we can always do the kind of 'Monday morning quarterbacking' exercise. What we said at the last election was that there ought to be a national interests test for new gas developments-
KELLY: That was at the last election. When you were in government though, you didn’t bring in that test and you’re happy to point the finger at the Turnbull Government, to say they’re failing on gas.
LEIGH: What you need is you need a stable set of policies in this area and a renewable energy target is a stable form of policy, something that the Government has chosen to cease. You need the appropriate climate change target and you need to make sure that you have predictable ways of getting there. What we’ve seen under this government is energy policy being run by the far right of the Liberal Party rather than being calibrated based on attracting investment through to Australia. There’s big challenges in the gas market, there’s no doubt about that, but when we suggested a national interest test at the last election, we were accused by the Government of fearmongering, of potentially bringing down the industry. Now we see them coming around to that more sensible way of thinking. If only they’d do that with a market-based mechanism for climate change.
KELLY: Just a final brief question. The electoral commission has announced a shake up of the electoral boundaries. Canberra and Victoria will get an extra seat, South Australia will lose one. In the ACT where you are, it looks as though Labor will benefit from that redistribution but the Coalition plans to target aspiration voters in some of these new seats. Have you thought about how you might neutralise that sort of attack? Is Labor vulnerable in the ACT?
LEIGH: Labor’s always supported Australians’ aspirations. Right now, we’re arguing for the aspirations of same-sex attracted Australians to have the chance to marry the people they love. We’re backing the aspirations of poor kids who believe they ought to have a chance to get great teachers in their school. We’re backing the aspirations of Australians who’d love a job in a renewable industry, if only there was a chance of those industries coming to Australia.
KELLY: So in the ACT, are you banking on that being an extra seat for Labor?
LEIGH: I’d never take it to the bank, but I certainly believe we’ve got a strong case to make. Canberrans are a wonderful, progressive people and it’s a privilege to represent them in the Parliament.
KELLY: Andrew Leigh, thank you very much for joining us.
LEIGH: Thanks, Fran.