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Efficiency argument for GST reform doesn't stack up - To The Point

E&OE TRANSCRIPT

TV INTERVIEW

SKY TO THE POINT

MONDAY, 14 SEPTEMBER 2015

SUBJECT/S: Deloitte tax reform report.

LAURA JAYES: Talking about a broader-based GST and the cost it would have to the economy, Chris Richardson, the economist at Deloitte Access Economics, says that it is far more efficient to look at the GST because you can compensate those lower to middle income earners. Andrew Leigh, do you agree with that assessment?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Laura, Chris has been a really important contributor to the Australian tax debate over the decades. I think it's an interesting report, there is much to agree with in broad terms. I like the point that the report makes that anyone that argues for a tax cut without saying where the revenue will come from shouldn't be taken seriously. But on the point of the GST, I did think that the report was mistaken in saying that the GST was a more efficient tax than income tax. Indeed, the report reprints a chart from the Treasury's tax white paper which shows the GST and the income tax as having the same efficiency cost on the economy. About 20 cents cost for one every dollar raised. And then, the efficiency cost goes up if you have to compensate households through increasing Government payments. That's something that the report doesn't take enough account of. If you look at where the highest marginal tax rates are in Australia, they're not the ones being paid by multi-millionaires. They're the ones being paid by welfare recipients. Raise them and that’s got to have a big efficiency cost.

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Tax reform doesn't begin and end with the GST - Breaking Politics

E&OE TRANSCRIPT

ONLINE INTERVIEW

FAIRFAX BREAKING POLITICS

MONDAY, 14 SEPTEMBER 2015

SUBJECT/S: Deloitte tax reform report

CHRIS HAMMER: Andrew Leigh, Deloitte Access says Australia has its tax mix wrong. Just as a basic principle, would you agree with that or do you think the status quo is pretty much right?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Chris, I always welcome the chance to talk about tax and I've enjoyed many conversations with the lead author, Chris Richardson, over the years. I do think this Deloitte report though misstates the efficiency benefits of the GST and undersells the efficiency costs of raising the GST.

HAMMER: That is pretty much at the core of the report, as I understand it. There are lots of other things in it but the basic argument is that the GST is an efficient tax and that it can be increased or broadened without being regressive because it's possible to compensate people. There's more than enough money to compensate low income earners. Is that correct?

LEIGH: Let's step through a couple of those things, Chris. First of all, the report suggests that the GST is highly efficient, but it quotes the Government's tax white paper which says that the efficiency cost of raising $1 through the GST is about 20 cents, which makes it about as efficient as income taxes. That therefore suggests that a trade-off which raised the GST and cut income taxes would have no efficiency benefits for Australia. It also, I think, undersells the extent to which the household assistance to compensate for a GST rise would, itself, have an efficiency cost. The highest effective marginal tax rates in Australia aren't those paid by multimillionaires; they're the effective marginal tax rates for welfare recipients. An assistance package that accompanied a GST rise would have to raise effective marginal tax rates at the point at which they're highest. So the household compensation would have an efficiency cost. 

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Sharing is good but everyone needs a fair go - Herald Sun

Sharing is good but everyone needs a fair go, Herald Sun, 14 September

In March this year, I gave a speech about the rise of the sharing economy – new app-based services that are changing the way Australians buy and sell things. In this speech, I calculated that AirBNB, which had only operated here for two years, already listed one in 300 Australian homes for temporary rental.

It's a measure of how rapidly the sector is changing that in just the six months since I gave that speech, the share of Australian homes listed on AirBNB has risen to almost one in 200. 

People right across the Australian community are now buying and selling things through the sharing economy. Whether it’s university students and stay-at-home mums finding jobs on Airtasker, retirees booking holidays with Camplify or families ditching the second car in favour of GoGet, these services are rapidly becoming part of our daily lives.

With so many of us using sharing economy services, it’s easy to forget that some of these still sit in a complicated grey area when it comes to rules and regulations. Our laws haven’t changed anywhere near as fast as these services have been growing. 

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Jobs numbers a worry when the Government has no plan for growth - ABC NewsRadio

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RADIO INTERVIEW

ABC NEWSRADIO

FRIDAY, 11 SEPTEMBER 2015

SUBJECT/S: Unemployment figures; Abbott Government’s failure to plan for growth; Ministerial re-shuffle.

MARIUS BENSON: Andrew Leigh, good morning.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Marius.

BENSON: Just in broad terms, is it good news with the jobs figures?

LEIGH: I don't think we should spend a lot of time analysing movements in the unemployment rate that are well within its margin of error. But my concern more broadly is that the unemployment rate is still around the highest that it has been in 13 years and well above that of countries with which we compare ourselves, such as the UK and the United States. When the Abbott Government came to office the unemployment rate in Australia was a couple of points below where it was in the US and UK, and now it's about a point above those two countries. So our labour market is performing worse than theirs in absolute and relative terms.

BENSON: But if you look at the graphs of unemployment, the graph was heading down under Labor and continued to head down after the 2013 election. Now it's heading up, it's looking quite optimistic.

LEIGH: As I said, the unemployment rate – like opinion polls – is measured with a bit of error and yesterday's movement is well within that. But we do have figures which are the worst they've been in broad terms in 13 years. Youth unemployment is again sitting at around 14 per cent – that's one of the worst figures we've had in more than a decade. We know, Marius, that if we want to bring down the unemployment rate then we need growth probably above 3 per cent. Instead we've got growth of around 2 per cent and every quarter since the Abbott Government's first budget came down, the annual growth figures have been revised downwards. We did have growth around that 3 per cent level, now it's down around 2 per cent. If it gets worse and worse then it's going to be harder and harder to generate the jobs we need.

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The Abbott Government's 'export agreement' with China - Media Release

THE ABBOTT GOVERNMENT’S “EXPORT AGREEMENT WITH CHINA”

The Abbott Government’s claim today that it had concluded an “Export Agreement with China” raises troubling issues about whether it has followed proper procedures.

As the Abbott Government undoubtedly knows, Export Agreements are contracts, arrangements or understandings that relate exclusively to the export of goods from Australia or the supply of services outside of Australia.

Export Agreements are listed as such on the ACCC website.

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How can Eric Abetz fix unemployment when he doesn't even understand it? - Joint Media Release

HOW CAN ERIC ABETZ FIX UNEMPLOYMENT WHEN HE DOESN’T EVEN UNDERSTAND IT?

Joint media release with Shadow Minister for Employment Brendan O'Connor

The man in charge of keeping Australians working has today revealed he lacks even the most basic understanding of the unemployment rate.

In his press conference defending an unemployment figure which stubbornly continues to have a six in front of it, Employment Minister Eric Abetz said:

“a 6, a 5, a 4, a 3, a 2 or a 1 in front of the unemployment figure is unacceptable.”  

Eric Abetz - Press Conference - 10 September 2015

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Encouraging words on charities commission must be backed by action - Media Release

ENCOURAGING WORDS ON THE CHARITIES COMMISSION MUST BE FOLLOWED BY ACTION

Social Services Minister Scott Morrison has today given the strongest signal yet that the Abbott Government has walked away from its plan to abolish the Australian Charities and Not-for-profits Commission.

But the charities sector will not have certainty until Minister Morrison formally withdraws the abolition bill which is still before the House of Representatives.

This morning, Minister Morrison told the Philanthropy Meets Parliament summit that his Government had “consulted widely, and there is very strong support for the ACNC.”

He went on to admit that: “I don’t believe there would be support in the Senate for there to be any change.”  

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Abbott Government an omnishambles after two years - Breaking Politics

 E&OE TRANSCRIPT

ONLINE INTERVIEW

FAIRFAX BREAKING POLITICS

MONDAY, 7 SEPTEMBER 2015

SUBJECT/S: Syrian refugee crisis; Two years of the Abbott Government.

CHRIS HAMMER: Andrew Laming, Andrew Leigh, good morning.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning.

HAMMER: Andrew Laming to you first. Should Australia be taking more refugees from Syria in total?

ANDREW LAMING, FEDERAL MEMBER FOR BOWMAN: We will be taking more in total as a portion of all refugees, that number increases from 13,000 to 18,750 in 2018-2019.

HAMMER: That was always going to happen though so special circumstances, should Australia be taking more people?

LAMING: This is a major humanitarian catastrophe and I think Australia, by going to Europe and saying we're part of the solution, by offering to take more places that take months to process, we’re actually saying to Europe that by having intact borders we can do more. Australia is showing that we've sorted out our own borders and we can now be part of solution to the European exceptional circumstance like this.

HAMMER: So what are you suggesting?

LAMING: I think we will be taking more and I think we'll be taking more than the current 30 per cent ratio. I think that this is a holding position until a further figure is arrived at in a few weeks.

HAMMER: Andrew Leigh, how many Syrian refugees should Australia take?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I think we should take more, Chris. But not because we're taking less refugees from other countries. It's not as though the situation in South Sudan or Iraq and Afghanistan has gotten significantly better over the past years. Yet one of the first acts upon coming to office was the Abbott Government cutting the refugee intake from 20,000 to 13,750. It's not good enough to send people up into Geneva with a plan of shuffling around refugees from different countries. We ought to be going over there saying Australia will take more refugees. Labor would like to see us take 27,000 refugees and the Government should immediately reverse its cut to the refugee intake.

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Syrian refugee crisis and the China Free Trade Agreement - AM Agenda

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

MONDAY, 7 SEPTEMBER 2015

SUBJECT/S: Syrian refugee crisis; China Free Trade Agreement.

KIERAN GILBERT: Andrew Leigh, a lot to get across. First off on the issue of refugees and the Syrian intake particularly: what's your view on this? Should there be an extra contingent that the government takes in and what sort of number are you talking about?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, unless you think that the needs of other developed countries have gone down, the only way in which you can provide more assistance, be more generous, is to raise the refugee intake. I've consistently argued that it was a mean-spirited decision of the Government to cut the refugee intake from 20,000 to 13,750 when they first won office. Labor would like to see that go back over time to 27,000; doubling today's intake.

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Two years since Tony Abbott's 'lower taxes' falsehood - Media Release

TWO YEARS SINCE TONY ABBOTT'S 'LOWER TAXES' FALSEHOOD

Two years ago, Tony Abbott and Joe Hockey’s Liberals promised Australians that “taxes will always be lower under a Coalition government.”

– Real Solutions campaign brochure   

It turns out that even when he writes things down, you can’t trust Tony Abbott. The Coalition are now running one of the highest-taxing governments in Australian history.

In Joe Hockey’s second bungled budget, Australia’s tax-to-GDP ratio rose to 22.3 per cent. The tax take is set to rise even further to 23.4 per cent over the forward estimates.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.