MONDAY, 02 MARCH 2015
SUBJECT/S: Leadership, opinion polls, Medicare co-payment, private healthcare costs, troops to Iraq, Intergenerational report, Labor’s multinational tax package, ATO funding.
HAMMER: Andrew Laming is Liberal MP for Bowman in Queensland, Andrew Leigh is the Labor member for Fraser here in the ACT and also importantly today, the Shadow Assistant Treasurer, we'll move onto your portfolio response in a minute. But first, Andrew Laming, I must ask you about leadership, there's a new poll, a good poll for the Government. Does that show that Tony Abbott is rebounding or does it show that voters have already moved on.
ANDREW LAMING, FEDERAL MEMBER FOR BOWMAN: The different positive polls of course, the standard line is the only one that matters is election day, but I can guarantee there will be a fair bit of high-fiving in offices like mine and around the country to see improving polls. It's a positive signal and you'd always rather them going that way than the other way.
HAMMER: So is Tony Abbott completely safe at least until after the budget?
LAMING: I think, anywhere further than 50 metres from this building. I'm sure that within this building we'll still be talking about it all week, that's the nature of Parliament House.
HAMMER: But outside?
LAMING: The bigger issue now is starting to take over. You've got the intergenerational report, and Andrew's announcement makes a valuable contribution today and a whole range of other issues, from country of origin labelling to overseas deployment, need to become the issues for this week.
HAMMER: Ok, Andrew Leigh, is this the best possible result for Labor? Tony Abbott remaining in the job for the foreseeable future?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Chris, whether the polls go up, down or sideways you'll never get me saying anything other than the fact that they're not a particularly useful metric. What I do think though is that Australians, as Andrew said are focused on numbers. Numbers such as the fact that unemployment has gone up and that confidence is going down.
HAMMER: But would you prefer to see Tony Abbott in the Prime Ministerial chair than say Malcolm Turnbull or Julie Bishop?
LEIGH: We just think of Malcolm Turnbull as being Tony Abbott in a nice suit. He's told Alan Jones that he unreservedly and wholeheartedly supports the budget.
HAMMER: I'm not sure that people within the Liberal Party are seeing it in that way?
LEIGH: That's a business for them, and that you see them at loggerheads over questions to whether it's the Australian people or the party room that has the right to change the Prime Minister.
LAMING: Well Paul Keating had really nice suits and where did that get us, to build a better Australia?
LEIGH: We should have an extended session if we're going to talk about the virtues of Keating. A few minutes on Breaking Politics doesn't do the great man justice. But the real problem is these policies. These policies that are causing the business confidence to ebb away, that are driving up healthcare costs, that are leading so many Australians to feel deeply insecure. And insecure when they see things like the Prime Minister attacking the head of the Human Rights Commission rather than having respect for institutions as a good conservative should have.
HAMMER: Ok, let's move on to policy then. Andrew Laming, all the indications are that the Government is about to drop the Medicare Co-Payment, something that you've called for in the past. You appear to be ahead of the pack here. Given that, what if anything, should replace it?
LAMING: Right now, we don't need a fight over Medicare. We need to shine a light back on our good achievements - job notifications up 30.6%, three times as many jobs as last year or the year before …
HAMMER: Too hard basket then? Just do nothing on Medicare until the election?
LAMING: My view is on Medicare, and GP use of it is not an unsustainable part of the health system, that's been my argument for a long time. Hospital funding through Medicare has grown faster, our payments to the status of hospitals is growing faster and 26 of the 34 OECD economies have grown faster than GP use of Medicare, so no I don't see it as a key issue.
HAMMER: So you do see the need to address expanding health expenditure but that is the wrong area, have I got it right there?
LAMING: We can move from a cost focus to a quality focus and my particular area is high speed consultations from GPs. There's many areas that we can work on but the focus has to be on quality rewarding GPs that deliver.
HAMMER: Andrew Leigh, is Andrew Laming echoing Labor Party policy on health expenditure?
LEIGH: Well Andrew is always thoughtful on the issue of health, I do think though on the issue of private health care costs we need a Government that's going to do more to keep them under control. We've seen two of the biggest rises in private healthcare costs under this Government, the biggest rises since Tony Abbott was Healthcare Minister. And that's because this Government is taking a tick and flick approach to private healthcare costs, where Labor was much firmer with private healthcare insurance funds. Going back to them, demanding that they justify their trend in increases and securing premium increases that are significantly lower than the two sets of premium increases we've seen under this Government.
HAMMER: OK, we're moving onto another topic. It's widely expected that the Prime Minister will soon announce a further deployment of troops to Iraq. The New Zealand Prime Minister, John Key, generously announced this last week. Andrew Leigh, what's Labor's position? The fight against Islamic State is obviously a serious one, is this something that should have bipartisan support?
LEIGH: The activities of ISIL have continued to be of deep concern. Labor would expect to receive briefings on this before making it a commitment.
HAMMER: But no in principle opposition from the Labor party?
LEIGH: As far as I'm aware we haven't received the appropriate briefings on this.
HAMMER: Ok Andrew Laming, do you have concerns?
LAMING: We prefer a much more positive approach than Labor on this issue of capacity building in non-frontline fighting. Particularly in training of the Iraqi army, we think if there's bipartisanship truly on this issue there needs to be far more energy from Labor supporting this. Together domestically, the intergenerational report - two very, very big areas for policy this week - and the intergenerational report will be putting out where we're heading and the risks of sticking with Labor's approach. And the hard work last year has made significant difference to our long-term trajectory. That's a very big topic this week.
HAMMER: Now it's widely expected that of course, that the intergenerational report will throw up some real budgetary challenges for whichever party’s in Government in the future. Labor is announcing measures to increase revenue from multinationals who have been avoiding tax. Andrew Leigh this is your policy baby, just outline briefly what Labor is proposing?
LEIGH: The challenge of multinational profit shifting is an ongoing one for Governments around the world. Three of the five biggest companies in the world are now informational technology companies, and that makes it easier for large firms to shift their profits across jurisdictions. Labor's putting forward a $1.9 billion package grounded in work carried out at the OECD.
HAMMER: So, $1.9 billion, which is the extra revenue the Government would collect over three years?
LEIGH: Extra revenue, we did the costings over the next four years but on the assumption it would come into place on the 1st of July this year. If the Government wants to bring it to the Parliament we will back it, it will be a measure that ensures big firms pay their fair share, it’s a measure backed by the OECD which doesn't conflict with our tax treaties and has been carefully costed by the Parliamentary Budget Office. We have a Government that at the same time as cutting the wages of cleaners who clean their offices, seems to be incapable of acting on an issue like multinational profit shifting. Which is why Labor, still in the first half of this Parliamentary term, has taken the unusual step of bringing this carefully costed policy forward.
HAMMER: So the policy is essentially, instead of allowing a company simply to present its accounts, its debt positions if you like for Australia, and have them seen in isolation, that there should be a more global view taken on how the companies are performing globally, am I right there?
LEIGH: One of the tools that companies have used to shift profits has been debt deductions. There's a range of different ways of assessing the appropriate level of debt deductions. Our view is that we should use a single test known as the worldwide gearing ratio which essentially says that firms can deduct a share of debt from their Australian subsidiary which is equivalent to the level of debt the overall multinational group holds. And that means that you can't load down on the Australian company if your group as a whole doesn't loan very much to third parties.
HAMMER: OK, Andrew Laming, on the surface it sounds like a fairly sensible proposal. Do you have any in principle opposition to it?
LAMING: Of course not, couldn't better articulate what Joe Hockey has been working on since we got elected, we inherited six years of no progress on this area. Andrew was directly working with the Prime Minister at that time, and in the budget of that final Labor year, page 21, they talk about a 1.1 billion dollar saving by changing tax concessions for big business but never did anything about it. Now what we have is, working with the G20, our Treasury has formed a relationship with the top six economies in the world and expanded it to 30. You can only do what you can do to you get an exchange of information from these other nations about the degree of profit shifting. But on the surface of it, I like what Andrew is proposing and I would be very open minded to see fast progress in this area.
HAMMER: Well Joe Hockey said you can't move forward without that sort of cooperation. Labor, am I right is saying you kind of can, am I right there Andrew Leigh?
LAMING: Looking at Labor's approach, which is booking savings now even if you're not sure it's going to work, our view would be you have to work closely with your international partners to get this done. But I think most parties are heading to a similar direction on profit-shifting. These are areas you have to negotiate with international partners, at least to share the information between them.
HAMMER: Is there a danger that Australia is moving ahead of the international consensus here?
LEIGH: Not at all, Chris. Certainly people have argued that we ought to, for example, look at the definition of permanent establishment of our tax treaties. Labor's package doesn't do anything like that, it keeps our tax treaties the same but it looks at opportunities for Australia to deal with profit shifting in a way that's been recommended by the OECD. Like Andrew, I support the idea of data matching, one of the aspects of our policy is to bring forward the data matching approach and that again, adds money to the budget bottom line. The thing is, when we were last in Government, Labor had a $4 billion package to tackle multinational profit shifting and when they came to office the Coalition only implemented three quarters of that, and gave a billion dollars back to multinationals. Now again, it's fallen to Labor, still in the first half of its term, to put together a package which tackles multinational profit shifting. Meanwhile the Government has done nothing but give money back to multinationals.
HAMMER: There's an old saying in business, spend a dollar to make a dollar. How much extra spending would be needed on the Australian Tax Office, which has suffered cut backs recently, to ensure compliance in this area?
LEIGH: Well you'll see full details of the package when it's announced by Bill Shorten. Certainly, looking at opportunities to improve the tax office's ability to crack down on multinational profit shifting and it's very important at a time when the Government's got rid of thousands of tax office staff, really hampering their ability to do proper audits on the big end of town.
LAMING: To complete that, you'd have to ask the head of that appropriate part of the ATO who, during estimates last week, said it was adequately resourced to do this job to address this issue of international tax evasion.
HAMMER: So are all these cutbacks in the ATO causing problems?
LAMING: It's not affecting that part of the treasury of the ATO, definitively from the head of that area last week.
HAMMER: OK, gentlemen; Andrew Leigh, Andrew Laming, thank you for your time today.