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.
Don't cook the goose on tax reform, Huffington Post, 4 September
What does an efficient tax system look like? Economists will tell you that its one where we minimise the unwanted distortions on behaviour. Most taxes change what people do: if you tax chocolate bars at a higher rate than apples, people will be more likely to pack a Granny Smith with their lunch.
But some taxes lead to far bigger distortions than others. Insurance taxes discourage people buying insurance, which means they’re more vulnerable to risk. Stamp duty discourages mobility, which means we have too many empty-nesters rattling around in homes that would be better used by growing families. The result of inefficient taxes like these is underinsurance and higher house prices.
Efficiency isn’t the only thing that matters, but it has to be part of the debate. As 17th century French politician Jean-Baptiste Colbert put it, ‘The art of taxation consists in plucking the goose so as to get the most feathers with the least hissing’.
BELCONNEN COMMUNITY WELL ACQUAINTED WITH ABBOTT GOVERNMENT & FARCE
Last Friday, all of Australia looked on with open-mouthed astonishment at the Abbott Government’s ‘border farce’ debacle.
For Canberrans however, another farce has been unfolding for almost a year now as the Government has continually put off making a decision about where to base the merged Department of Immigration and Border Protection.
Since September last year, the Government has been considering ripping the department out of the Belconnen Town Centre, where Immigration has been based for more than 40 years.
RADIO NATIONAL DRIVE
THURSDAY, 3 SEPTEMBER 2015
SUBJECT/S: China Free Trade Agreement; State of the Australian economy; Canning by-election.
PATRICIA KARVELAS: Let's kick off with the China Free Trade Agreement, which the Coalition has been defending today. The Opposition has reservations about arrangements for foreign labour under the deal, but Trade Minister Andrew Robb says those aspects of the negotiations are the same as when Labor initiated negotiations 10 years ago. Dr Andrew Leigh is the Shadow Assistant Treasurer – nice to have you back on RN Drive.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Patricia, lovely to be with you.
KARVELAS: The Opposition Leader, Bill Shorten, is pushing for changes to be made to the FTA. But as the Trade Minister told us yesterday, making those changes is likely to lead to the Chinese walking away. That's the risk, they say. Is the Opposition playing politics as the risk of losing a deal vital to the national economy?
LEIGH: Patricia, we simply want the Government to sit down with us and work through the real concern that many Australians have about the fact that this is the first trade deal that removes labour market testing for Chinese migrants in the trade and technical occupations. That's a threat to what free trade agreements ought to do, which is to create more jobs and better paying ones. I'm a free trader not from blind ideology, but because I know the evidence that bringing down trade barriers has been good for creating Australian jobs. It's the migration portion of this agreement that Labor has concerns about.
The Abbott Government's super blind spot, Business Spectator, 3 September
Joint op-ed with Bernie Ripoll MP
People sometimes ask why those of us in the Labor Party are such strong advocates for evidence-based policymaking. The reason, of course, is that without drawing on evidence, personal prejudices can quickly come to guide public policy, paving the way for blind spots to cloud the view of what needs to be done.
The Abbott Government is letting just such a blind spot block out good evidence when it comes to changing the governance arrangements for Australia’s industry super funds.
The Government is proposing to end more than two decades of successful joint governance by employer and employee-nominated fund directors and instead force boards to take on both an independent chair and one-third independent directors.
THURSDAY, 3 SEPTEMBER 2015
SUBJECT/S: State of the Australian economy; Superannuation; Government backflip on Bank Deposits Levy
STUART BOCKING: Labor's Shadow Assistant Treasurer is Andrew Leigh and he's on the line now, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Stuart.
BOCKING: What's your take from the figures yesterday, those GDP figures, what we've seen with the value of the dollar and of course, the market volatility over the past week or so?
LEIGH: Stuart, we're in an economic transition with the investment phase of the mining boom phasing down and subtracting from growth. What we need is a Government with a clear plan for what comes after the mining boom. For mine, that would involve heavy investment in technology and engineering jobs, making sure that we're creating jobs in renewables rather than attacking the solar and wind sectors, and making sure that we've got significant investment in long-term growth. What I worry is that Joe Hockey is much keener on finding excuses than finding solutions. Last time the growth figures came out he was all focused on the quarterly numbers because that's what made him look good in the international comparison. Now he wants us to look at the annual numbers because that's what makes him look good.
BOCKING: In fairness, governments are always at that – you'd be doing exactly the same thing and have in the past when you were in government. You're always going to look for the numbers that do seem most appealing. I think one of the difficulties many people have is accepting that countries like the US, countries like Greece have a better rate of economic growth than we do.
LEIGH: That's absolutely a concern for me, Stuart. And you can take simple numbers that we know should be going in one direction and see that they're going the other. The unemployment rate should be going down, instead it is now at a 13-year high. Consumer sentiment should be getting better, but instead it's 11 per cent down from where it was at the election. Growth ought to be getting better but instead growth is waning. The deficit ought to be falling – Mr Abbott said that would be his number one test of economic credibility – but the deficit has doubled in just the last 12 months. So the numbers that should be going up are going down, and the numbers that should be going down are going up.
THURSDAY, 3 SEPTEMBER 2015
SUBJECT/S: State of the Australian economy.
MARIUS BENSON: Andrew Leigh, the Government and some substantial economists this morning are saying things aren't that good but at least the economy isn't heading into recession. Do you agree we're not heading into recession?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Marius, I think responsible alternative governments are very, very careful in their language around that sort of thing. Yesterday's numbers are a significant cause for concern. We were told that the election of an Abbott Government would be like a shot of adrenalin to the Australian economy but instead we've got figures which are only positive because of a significant increase in government spending.
BENSON: But the Government says at least we're growing; look at Canada, look at Brazil, look at those other resources-reliant economies that are in recession.
LEIGH: They're casting around for comparisons. Last quarter Joe Hockey was doing his comparisons based on quarterly numbers; now he's doing them on annual numbers. The fact is, Marius, we've got unemployment at a 13-year high, consumer sentiment 11 per cent below where it was at the election, we've had the budget deficit doubled just in the last 12 months and we've got taxes and spending rising, contrary to what the Abbott Liberals told us before the election, that they would be a lower taxing government.
ARE BELCONNEN DELAYS A SIGN OF MORE PAIN ON THE WAY?
The Abbott Government has let another week go by without word on the future of the Department of Immigration in Belconnen.
Instead of announcing a decision on this drawn-out procurement process, this week Public Service Minister Eric Abetz floated the idea of slashing the Australian Public Service even further.
RADIO NATIONAL DRIVE
TUESDAY, 25 AUGUST 2015
SUBJECT/S: Share market turmoil; Income tax; Industry assistance to BlueScope Steel; Australian involvement in Syria.
PATRICIA KARVELAS: Markets have been on a rollercoaster today, recovering slightly after heavy falls yesterday and in early trading. The Australian share market's benchmark ASX 200 has jumped 2.7 per cent, defying further steep falls in China and across Asia. Shadow Assistant Treasurer Andrew Leigh joins me now. Hi, welcome back.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G'day Patricia, good to be with you.
KARVELAS: Have share markets bottomed out? What do you think?
LEIGH: Share markets are notoriously tough to forecast, Patricia. But certainly we've seen some huge falls over the last few days. We've seen this 8 per cent fall from the Shanghai Composite, the Nikkei in Japan is down 4 per cent, European stocks are down about 4 per cent. The Australian stock market yesterday fell back down to where it was in 2013. So these are pretty troubling developments and certainly speak to some of the concerns in the global economy. The first of those is the Chinese stock market and the devaluation there, and the second is the end of very low interest rates in the United States, which investors know is coming.
SKY AM AGENDA
MONDAY, 24 AUGUST 2015
SUBJECT/S: Taxation reform; China free-trade agreement; NDIS; Canning by-election
KIERAN GILBERT: This is AM Agenda. Thanks for your company this Monday. With me now is the Shadow Assistant Treasurer, Andrew Leigh, and in Melbourne we've got the Assistant Social Services Minister, Mitch Fifield. Thanks for your time gentlemen. Mitch Fifield, first to you: more calls for tax cuts from the Treasurer but how are they going to be paid for? He's got the idea but not necessarily the solution here.
MITCH FIFIELD, ASSISTANT MINISTER FOR SOCIAL SERVICES: Kieran, as you know we are for lower and simpler and fairer taxation in Australia. We've demonstrated that with the abolition of the carbon tax and the mining tax. We will have more to say in the future about personal income tax through the taxation white paper process. But we're not hearing any talk from the other side about how to reduce Australia's levels of taxation. Labor still want to bring back the carbon tax, they want to call it a different name, they want to call it an ETS. So I think the people of Australia really have two competing visions when it comes to taxation.
GILBERT: But I guess the question is, Senator Fifield, how do you fund this when it would run into the billions to bring the Australian marginal tax rate down to, say, a nation's like New Zealand for example.
FIFIELD: Kieran, I'm not here today to announce a Coalition taxation policy. We have the tax white paper process which is there for a reason. It's meant to gain views from the Australian community and Australian business as to how they think our taxation system can be more competitive. There are a number of stages to that tax white paper process and we will have more to say about personal income tax as part of the process.
GILBERT: Well it's a starting point I guess. Andrew Leigh, the point is that compared to other nations our marginal tax rates are not competitive, are they?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, if you look at what they call the tax wedge across the OECD, Australia is below average for income taxes. Our total tax take puts us in the bottom handful of countries in the advanced world.
We should always be trying to craft a better income tax system but if the average Australian had a dollar for every time they were promised tax cuts from Joe Hockey, they'd be as rich as he is.
The simple fact is, Joe Hockey is all hot air and no action when it comes to tax reform. Labor has announced our multinational tax plan and our superannuation plan. These are tax reforms that make a difference to the budget bottom line but are also fair and sustainable.Read more