The Turnbull Government has added competition reform policy to its 2016 list of failures and broken promises by reneging on the commitment it made in its response to the Harper Review to “unleash the spirit of competition”.
This time last year new Treasurer Scott Morrison was describing competition reform as:
“one of the best options we have to boost growth and productivity in the years ahead, and this is why it’s at the heart of the Government’s economic plan.”
Now it has abandoned its support for the funding altogether until the budget “is in better shape”.
This leaves only Barnaby Joyce’s “effects test” – which will have a chilling effect on competition and drive up the cost of living for Australian families – as the Coalition's signature competition reform.
This absurd focus on the effects test, according to Productivity Commission Chairman Peter Harris, demonstrates how far Australia has, ‘fallen off the pace in national economic reform.’Read more
The day after Labor announced that the Senate Economics Committee will inquire into the Petroleum Resource Rent Tax, the Turnbull Government has hastily announced an “independent” Treasury review into the same issue.
As with the multinational tax debate, the Coalition is scrambling to follow Labor's lead. Labor's 2015-16 multinational tax inquiry, chaired first by Senator Dastyari and then by Senator Ketter, shone a critical spotlight on multinational tax avoidance and forced the Government to take action.
Now we see the same pattern with the Petroleum Resource Rent Tax – Labor leads and the Turnbull Government is dragged reluctantly in our wake.Read more
By failing to introduce into Parliament its Diverted Profits Tax legislation by the end of this year, Treasurer Scott Morrison has broken yet another Turnbull Government promise.
On June 27 this year, Mr Morrison said:
“The DPT will be introduced in the second half of 2016.”
Later in the year, Mr Morrison said:
"We have budget revenue measures which are about improving the integrity of the tax base – there’ll be our diverted profits tax legislation which comes in later in the year.”
– Scott Morrison, 20 October 2016, 3mins 39secs.
However, yesterday Mr Morrison confirmed that the diverted profits tax will not be introduced in 2016.
The delay matters because the Treasurer is still promising his diverted profits tax will commence on 1 July 2017. It will be a huge and complicated impost for businesses to prepare in the short time between its passage through Parliament – if it ever gets there – and its implementation.
WEDNESDAY, 30 NOVEMBER 2016
MEDIA CONTACT: TAIMUS WERNER-GIBBINGS 0437 323 390
The Cost Of Inequality Can't Be Priced In Dollar Terms, Huffington Post, Monday, 28 November 2016
Why should we care about inequality? The starting point is to acknowledge what economics lecturers everywhere teach their first years. Economics is about maximising wellbeing, not money. If one person had all the money in Australia, we’d be just as wealthy, but much less happy.
Globally, there are about one billion people who live on less than a dollar a day. Most of it goes on keeping hunger at bay. But then there are about 1800 people who have more than a billion dollars. For them, more money means a faster jet, fancier jewellery or another holiday home. If you believe that moving a person from $1 a day to $2 a day brings more happiness than giving a billionaire another dollar, then you’ve accepted the idea of diminishing marginal utility of money. There is no better argument for caring about inequality.
Putting numbers around this can be tricky, but an analysis by Lateral Economics finds that to get the same increase in life satisfaction, you either have to give someone on $15,000 another $6000, or someone on $100,000 another $100,000. Lateral Economics estimates that the cost of inequality to national wellbeing is the equivalent of $54 billion, making it a bigger problem than mental illness, obesity or long-term unemployment.Read more
'The party that has always stood for needs-based funding for schools is the Labor Party' - TV Transcript
SKY AM AGENDA WITH KIERAN GILBERT
MONDAY, 28 NOVEMBER 2016
SUBJECT/S: Education funding; Senator Brandis’ shonky deals; Ipsos poll
KIERAN GILBERT: Joining me now the Shadow Assistant Treasurer, Andrew Leigh. This Grattan Report, I want to start with your thoughts on that. It seems to me to be a no-brainer – that you can have the same funding envelope, achieve the aims that the Gonski reforms intended without all of the additional costs simply by reining in some of the over-funding of just three per cent of schools?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, Pete Goss has done a lot of careful work on this report – it's certainly something that Labor will be engaging with. I had the privilege of seeing a draft copy of the report last week and I think it’s a thoughtful contribution. Obviously we'll work through it methodically. We need to make sure that the schools that need the resources get them, and that was what a good part of the last election was fought over. Labor's plan for funding schools where they needed it versus the Coalition's plan for a $50,000,000,000 corporate tax giveaway.
GILBERT: But the government's also taking it seriously as we heard from Minister Birmingham there. If you've got some schools with 280 per cent of the funding required per student, surely there needs a re-think in that regard?Read more
Companies that lie must be hit harder, Herald Sun, 28 November 2016
When it comes to household brands, who do you trust? That’s the question Australians were asked earlier this year as part of a Reader’s Digest survey. The top three were vacuum cleaner manufacturer Dyson, and battery makers Energizer and Duracell. But what’s more interesting is who came in at number four: paint manufacturer, Dulux.
Unfortunately, Dulux’s time atop the trust list might be short-lived. Earlier this month, the company was fined $400,000 by the Federal Court for misleading its customers. Dulux claimed that its outdoor paint could reduce the temperature of a house by up to 10 degrees.
If true, Dulux’s outdoor paint would’ve been a cool product indeed. Unfortunately, as soon as the temperature rose on Dulux, their claims began to peel away. When they couldn’t brush off the criticisms any longer, Dulux admitted that they didn’t have the evidence.
Alas, Dulux is not the first coat in Australian false advertising. Every year the Australian Competition and Consumer Commission receives 14,000 complaints of misleading and deceptive conduct. The competition watchdog can only take a small share of these complaints to court. The list of companies that have been reprimanded by the competition watchdog or the Federal Court over the last 12 months reads like the ‘who’s who’ of big companies, including Jetstar, Virgin, Arnott’s, Uncle Tobys, Optus, Harvey Norman franchisees, Kogan, Nurofen, Unilever and Volkswagen.Read more
What would modern Australia look like without China? The Australian Financial Review, 25 November 2016
Over recent years, there’s been no shortage of commentary on China from the glass-half-empty brigade. So it’s sometimes useful to ask the basic question: what would Australia be like today had China not opened its economy in 1978?
Based just on merchandise exports, Australia’s economy would be almost 5 per cent smaller. That’s $8,000 less for every Australian household every year.
Prices would be higher. Since 2007, the price of goods we import from China has fallen 20 per cent while the price of goods we produce at home has increased by 20 per cent.
Our universities would be nearly $6 billion poorer each year. They would educate almost 100,000 fewer students.
Our tourism sector would earn $6 billion less each year with 1.2 million fewer visitors visiting our attractions, eating in our restaurants and buying our souvenirs.Read more
Today the Senate Economics References Committee tabled its report into Malcolm Turnbull’s stuff-up of the 2016 Census.
The report details the damning evidence heard by the Committee about how the ABS was underfunded to meet its objectives for the Census and that current levels of funding for other ABS functions are inadequate.
An effective government could have delivered the 2016 Census, but the chaos and dysfunction at the heart of the Turnbull Government means it mismanages everything it touches.Read more
ABC NEWSRADIO WITH MARIUS BENSON
WEDNESDAY, 23 NOVEMBER 2016
SUBJECT/S: “Trumponomics”; Trans-Pacific Partnership; Sugar Tax
MARIUS BENSON: Andrew Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good Morning Marius, how are you?
BENSON: I'm well. "Trumponomics" – entirely unknown in practice obviously at this early stage – but people are seeing and Kim Beazley saw Donald Trump as a very left Republican and particularly they are pointing to this proposal to use the government as the agency to revive the American economy and particularly those rust-belt states. Just on that specific proposal – big government spending – what do you think of the virtue of that for the United States and for Australia?
LEIGH: The United States clearly has infrastructure challenges, particularly around its airports, but the challenge for them naturally is to make sure that they do that within a reasonable budget envelope. Some of the estimates that I've seen from independent experts put the impact of Mr Trump's tax plan as being between $5,000,000,000,000 and $10,000,000,000,000 additional debt. And that would be a big challenge for the United States going forward.
BENSON: I've seen figures of $5,000,000,000,000, in particular when you add together the proposals for big government initiatives in spending and to reduce taxation, and he's promising at the same time to reduce debt?
LEIGH: Naturally you want to make decisions for the long-term, but the challenges for the United States include dealing with climate change, tackling this huge inequality gap which has been rising and which has seen so many Americans suffering real wage losses over recent years. Many business people have this notion that they'd like lower-paid workers and higher-paid consumers. The problem is that when you move from running a business to running an economy, workers and consumers are actually the same thing.
The United States will benefit Australia most if it's engaged with the world. My real fear with Trumponomics is that these threatened tariffs could well see the United States retreat into protectionism, as it did indeed in the 1920s and 30s, with adverse impacts for Australia.Read more
SKY NEWS WITH BEATTIE & REITH
MONDAY, 21 NOVEMBER 2016
SUBJECT/S: AAA credit rating at risk; Deloitte economic report; fixing the Howard Government’s mistakes; World trade outlook
PETER BEATTIE: Dr Andrew Leigh is the Shadow Assistant Treasurer. Andrew, thank-you for joining us.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: It’s a pleasure gentlemen – good to be with you.
BEATTIE: We want to talk about the economy.
BEATTIE: The issue about the country's AAA credit rating. There's been speculation that it may be in danger. Can I ask you this; do you think – because you've been a professor of economics – that the AAA credit rating is in danger, and if it is, what do we need to do about protecting it?
LEIGH: It's certainly at risk, Peter. You've seen today analysis from Stephen Koukoulas-
BEATTIE: Yes.Read more