FRIDAY, 4 OCTOBER 2019
Subjects: Scott Morrison’s mishandling of the economy, climate change, nuclear power.
ROSS GREENWOOD: The Shadow Assistant Minister for Treasury is Andrew Leigh. He's always great with his time in the program and he joins me this evening. Andrew, many thanks for your time.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Pleasure, Ross. Welcome back. Great to be chatting with you.
GREENWOOD: Okeydoke. I want to go to a couple of bits and pieces here. Number one - the surplus, Australia's budget having a surplus right now. We haven't seen an actual surplus for more than a decade. How important is it for Australia to have a budget surplus?
LEIGH: Labor believes that Australia can meet the surplus target but also do more to support consumer spending. As you noted, the ‘cash splash’ has turned into a retail trickle. These July and August figures now seem to suggest that Australians have simply put that additional money into savings rather than putting it back into the economy-
GREENWOOD: We’ll find out in due course, Andrew, about that. But the second part about this is how? How do you actually support the economy more without cutting services and still have the budget in surplus? Because of course your party is famous for not delivering surpluses for many decades. The point was you had a plan to try to tax more, which would have again been taking if you like steam out of the economy while the Reserve Bank was trying to put it in and at the same time then delivered. The question is I keep on saying to people is, there's simply not enough money to go around. You can't have everything that you wish for.
LEIGH: It's a question of timing, Ross, when you're talking about a world economy that's looking pretty fragile and a domestic economy which has been running into trouble because the government's been asleep at the wheel. We think you should bring forward infrastructure investment, particularly in regional areas. We think the government should have brought forward stage two of the tax package, which would have provided more tax relief to middle income earners right now-
GREENWOOD: Okay, I agree. Now, I agree with that. Okay. In a perfect world I would say right, tick and tick right. Good things. Absolutely worthwhile. Except I know what happens when Parliament sits. You suddenly say ‘you guys promised a surplus, you didn't deliver it, you actually have now got a deficit, we've now got more debt’ so it becomes a political argument. So I to a certain extent understand why the government would say ‘no, we stick with the program, we stick with the plan, we get back into surplus and what we've got we then spend’. Because you're right - maybe the tax cuts are needed now if things start to turn down. But the truth is I can already hear the - I can hear you telling me this Government promised a surplus and never delivered. And look, reasonable political argument, but you can understand why the government might be a little bit shy about trying to back away from what they've already committed to.
LEIGH: Ross, I think they can do to do both. I think they can bring forward some of this spending, while also ensuring that we hit surplus. We've had the benefits of a higher iron ore price. The government has just got a lack of ambition. You know, we should be aiming at 4 per cent unemployment, as they've got in Britain and the United States and New Zealand and Germany. We should be tackling climate change, seeing emissions going down and putting downward pressure on energy prices. We need a government that's doing something about the fact that discretionary spending is in the doldrums. That's a real challenge as we come in towards Christmas, which as you know, is the big season for retail sales.
GREENWOOD: I'll go back a couple of issues here. You mentioned climate change here, but the problem is the fight over climate change is one of the reasons why now industry pays almost three times more for electricity in this country as compared with the United States. Why manufacturers in this country are picking up and moving their investments, into the United States in particular, to enjoy cheaper taxes, cheaper labour at half the cost and also cheaper energy prices at a third of the cost. Now that's actually, if you like, the political fight, the political hiatus that has actually caused that situation that we're losing jobs and losing industry. And it may not necessarily be, necessarily solely Labor's fault, but it's certainly the fault of politicians of all classes. The fight that they've had, the lack of agreement, the lack of a consensus as to how to tackle not only issues in regards to energy policies but then also even issues in regards to tax policies as well.
LEIGH: Ross, we've been willing to sign up to energy policies the government's successively put forward. The problem is they're in hock to the tinfoil hat faction within their party room, which has consistently blocked any sensible action on climate change. Most recently we had the National Energy Guarantee, supported by business. Labor said we didn't think it was perfect, but we were willing to back it. And yet the government walked away from their own policy, one which had been supported by Scott Morrison and Josh Frydenberg. I understand if you're a renewable investor that you don't want to put money into a country where a small group of tinfoil hat conservatives seem to be running climate policy-
GREENWOOD: Okay, but the tin foil hat conservative people that you talk about are also the pragmatists who actually sit there and say ‘I don't want blackouts in Victoria this year because we've closed down coal fired power stations too quickly’. And yet that is exactly and precisely the situation. I don't want to have a power bill that I can't jump over this summer simply because we've taken out coal fired power stations and capacity too quickly and not replaced them with certain energy. That's the problem. It's not about - well this is about getting philosophy ahead of the actual science of producing enough like electrons at the right time to make certain Australia has enough energy.
LEIGH: But many of our coal fired power stations are built in the 1960s and 70s, and they're coming to the end of their useful life. Indeed, some of the most recent blackouts were caused by failures in coal fired power stations, which are being held together by chewing gum and sticky tape at the moment. The importance is making sure we have a steady transition which moves us from coal to gas to renewables. That's a natural path that the rest of the world is following. You're seeing emissions now falling in many countries around the world. Australia is very unusual, Ross, in having our emissions rising and the government claiming this dodgy accounting trick of carryover credits in order to meet our international targets.
GREENWOOD: See, to a certain extent, I get the philosophy, right Andrew. I really get the philosophy. What I don't get, and I think the ordinary person in Australia - a business person who might be running a takeaway chicken shop and seeing their electricity bill going through the roof or a person who is in Victoria who this summer will not be able to use their air conditioner because either it's too expensive or simply the power's not on when they really need it - and that is the practical level. It's not about the philosophy of where we go to. It is the practical thing that you need to have enough electricity at the right time. And that means you need all forms of electricity generation – wind, solar. You need gas, you need a coal, you need whatever you've got. You need just enough of it. And the problem is, Andrew, at the moment we don't have enough of it.
LEIGH: We need to get the right mix. You're absolutely right there, Ross. But we also need to get more investment in cheaper electricity. We know now around the globe that new electricity investment in renewables exceeds new investment in non-renewable sources. So the rest of the world is moving ahead in investing in renewables and that's because it's got basically zero marginal cost. Once you've put in the capital, then you enjoy the electrons flying for nothing-
GREENWOOD: I've got to say - so that's the reason why Labor in the future will clearly have a caucus meeting where you will agree that nuclear power, in particular small scale nuclear power, is one way that Australia could go to solve some of its problems?
LEIGH: [laughter] Look, nuclear has many advocates, Ross-
GREENWOOD: And you would be one of them, Andrew, would you?
LEIGH: Look, I haven't seen Australia as needing to go down that route, given the plentiful abundance of sun and wind that we have in the country-
GREENWOOD: Go and get Ziggy Switkowski-
LEIGH: - the capital costs of nuclear remains very high-
GREENWOOD: Go and get Ziggy Switkowski to come and address your cabinet and your caucus and get him to explain why small scale nuclear just might be one of the solutions. Not big scale, not big stuff - the small scale stuff. I reckon that would be really instructive for your cabinet as well. I tell you what, I’ve got to leave it there, Andrew. I always appreciate your time.
LEIGH: Likewise, Ross.
GREENWOOD: The Shadow Assistant Minister for Treasury. Always a great chat with him, and many thanks, Andrew.
LEIGH: Thank you.
Authorised by Paul Erickson, ALP, Canberra