ABC 774 MELBOURNE
THURSDAY, 11 JUNE 2015
SUBJECT/S: Housing affordability; Negative gearing; Budget; Tony Abbott’s Royal Commission into Trade Unions
RAFAEL EPSTEIN: Andrew Leigh is part of Bill Shorten's team, he's the Shadow Assistant Treasurer and an ALP MP in the ACT as well. Andrew Leigh, good afternoon.
SHADOW ASSISTANT TREASURER ANDREW LEIGH: Good afternoon Raf, how are you?
EPSTEIN: Andrew, why does your leader refuse to answer detailed questions about his time with the AWU?
LEIGH: Raf, Bill has spent his entire life working to ensure that Australian workers get a better deal. He's been out there making sure that cleaners and shearers get a fair deal in the workplace. He's taken an absolutely firm line on wrongdoing in the union movement and said very categorically that there's no place for people in the union movement who do the wrong thing.
EPSTEIN: If he's done that, he's either negligent or a poor administrator because there's a lot of evidence to suggest that these deals were happening while he was running the union in Victoria.
LEIGH: We've said very clearly that we're not going to engage in a running commentary about Tony Abbott's Royal Commission. So I'm not going to go into that.
EPSTEIN: I should say, these are stories in The Age. These are not Royal Commission stories. This is just plain old-fashioned reporting.
LEIGH: Well a lot of this stuff flows out of an attempt to smear people in the union movement. I'm absolutely clear, as is Bill Shorten, that there is no place in the union movement for people who abuse members' resources. But I also think that it's deeply unfair to criticise Bill, whose career has been focused on making sure that those at the bottom of the distribution get a good deal.
EPSTEIN: A question is not a criticism, Andrew Leigh. I mean, I would also like to remind you that the reporters who produced this story produced the early stories about Cesar Melham, who right now is in a whole lot of trouble. If Tony Abbott had been part of a company that had signed up for some sort of deal – these things aren't illegal, is my understanding, but they're certainly unethical – we'd be asking tons of questions of the Prime Minister and he'd have to answer them. Why shouldn't Bill Shorten?
LEIGH: Bill Shorten has answered those questions.
EPSTEIN: He hasn't.
LEIGH: You played audio of him answering that question before, Raf. The key question here is what Bill has spent his career doing. And in a week when we've had Joe Hockey saying that people ought to go off and get a good job if they want to afford a house, Bill Shorten has been fighting for those very good jobs.
EPSTEIN: I want to get to that but they are really simple, detailed questions: Bill Shorten, when you were running the union, did you know about this deal? I challenge you to look at any transcript from today or previously where he has answered the substance of that question. That's a problem.
LEIGH: You can put those questions to Bill. But what I can tell you is the character of the man. This is somebody who has spent his life fighting for working people. I've seen Bill in kitchens, on building sites, engaging with workers and I know the important work he did in making sure workers get a pay rise. The real difference between the Coalition side of politics and the Labor side of politics is that Bill believes there's a role in making sure people's wages increase. There's a role in making sure that good jobs become better. You'll never see Bill Shorten out there arguing that we've got a wages explosion and we need to get wages down, as you'll often see from people on the conservative side of politics.
EPSTEIN: Andrew Leigh is answering my questions, he's the Shadow Assistant Treasurer. We did, of course, request the Opposition Leader but he wasn't available. He did give a press conference today.
LEIGH: I'm glad to be your back-up singer for today, Raf.
EPSTEIN: That's totally ok. I'm glad you're here answering the questions. I do want to try to nail down what Labor is leaving open the possibility of when it comes to negative gearing. My interpretation is that you are open to – but not committing to – no more negative gearing if you're an investor and you're buying an established home. Is that what you're open to discussing?
LEIGH: The starting point is we've been clear that housing affordability is fundamentally about supply. The housing affordability roundtable that Chris Bowen and Jan McLucas held focused specifically on those issues of supply. But there's also questions around negative gearing which were raised through the Henry Review and raised through the Government's own tax discussion paper recently. I think it would be irresponsible for an opposition to completely rule out doing anything on negative gearing. But Chris Bowen has set clear parameters on that. He's said that existing investors won't be disadvantaged, and secondly we'll look very closely at the impact on housing supply.
EPSTEIN: So am I right? I mean, Tony Burke appeared to say – and I'm really not asking you to commit to anything, Andrew Leigh, but I am trying to nail down what the ALP is open to – so negative gearing would still be allowed for new builds, for investors and for homeowners, but not for old housing stock if you're an investor. Is that right? Is that the sort of lines you're drawing?
LEIGH: No, what you've done there is to characterise the findings out of this new McKell Institute paper and that's a useful contribution to the debate. It's one of many different ideas out there. But it's certainly not Labor's policy. What we're doing is going out and consulting, and you'd expect us to take our time over this. You'd expect us not to suddenly turn around, in a week when this issue happens to be on the front page, and be throwing out policies. You've got to be systematic and careful.
EPSTEIN: Although you gain electoral advantage by saying you're open to idea; you might not commit to anything.
LEIGH: I'm not sure you do gain much electoral advantage in the current system from saying that you're open to things, Raf. But I think it's the responsible thing to do. You've got a fiscal challenge to address, and you've also got a housing affordability challenge. When you've got Glenn Stevens describing property markets as 'crazy' – that's not a word central bankers use. And when you've got the head of the Treasury saying that he thinks there's a bubble in Australia's largest city, then a responsible opposition looks at ways that we can address the challenge.
EPSTEIN: Andrew Leigh, I was looking for – and it may just be my poor research skills – but when we had prime ministers Rudd, Gillard, Rudd was much done on housing affordability? Because I couldn't see much done when federal Labor were in power.
LEIGH: The key initiative over that period, Raf, was the National Rental Affordability Scheme. That accounted for a significant portion of new building.
EPSTEIN: Is that like social housing?
LEIGH: What it is is developments that have a certain share of the stock set aside for below-market rent. So funding could be provided through the National Rental Affordability Scheme only if developers agreed to reserve a certain share of the properties as affordable housing. That added significantly to the housing stock and also helped maintain construction jobs during the Global Financial Crisis.
EPSTEIN: So would you agree that didn't really do much for first homeowners trying to get into the market? I mean, you're criticising the current Government for not doing much on it, but if that's all you did when you were in power then we could make the same critique of the Rudd and Gillard Governments, couldn't we?
LEIGH: It was a significant scheme. From my memory it accounted for about 5 per cent of new home constructions, which is not a trivial amount of development over that period. There were also sustainable housing initiatives over those years, making sure that you're adding on the supply side. Then, naturally the conversation turns to what the appropriate policy levers are that a federal government can pull in order to encourage development in cities. Federal Labor had a cities policy and invested more in urban public transport than all other federal governments going back to Federation, put together. That urban public transport investment ties very closely into making sure that you've got affordable housing because it allows people to live in medium-density homes closer to the city. The Abbott Government have washed their hands of a federal role for urban public transport, which is a terrible mistake in my view. It really risks causing sprawl which can, in turn, contribute to higher housing prices.
EPSTEIN: I'd be interested if you could address one of the repeated and central critiques directed your way from the Government. Debt and deficit have gone up under this Government, however if they had not cut – or limited – $80 billion to the states over 10 years; if they hadn't not committed to years five and six of the Gonski funding, then they're correct aren't they, in saying that debt and deficit would be higher now than they are? On Labor's settings – the settings you left wired into the budget when you were voted out – the Federal Government is correct, aren't they, that we'd have more debt and deficit if Labor's policies had been maintained?
LEIGH: Raf, government is about choices. You can always point to any particular cut and say that it's got a positive impact on the budget bottom line. But governments aren't just about a national balance sheet. They're also about making sure that we're making decisions which are in the long-term interests of the nation.
EPSTEIN: I'm not sure that's an answer.
LEIGH: Well, anyone who is a mortgage holder could immediately wipe off their mortgage by selling their house. That doesn't make it a smart decision. In our view, policies such as fair taxation of multinationals and fairer taxation of high-end superannuation put money back into the budget bottom line without hurting the productive capacity of the economy.
EPSTEIN: But they don't do enough to cover the cuts to the states or years five and six of Gonski.
LEIGH: They make a significant contribution towards the budget – in the order of $20 billion over the next decade. They sit alongside the more than $20 billion of government savings that Labor has supported. We've been responsible in terms of supporting savings, even in some cases when they were put in place in the way that a Labor Government wouldn’t have done things. But we're not going to support cuts which, for example, take $6,000 out of the pockets of the poorest single parents.
EPSTEIN: And that's a legitimate policy position to take, but I'm just not sure that you've responded to the initial question. Given the policies you advocate for, is the Government not correct that if you were in power, debt and deficit would be bigger?
LEIGH: No, I don't think that automatically follows at all. If you look at what happened when the Government came to office, if you compare the Pre-election Fiscal and Economic Outlook - which is the state of the books when they took over - to the way they are now, things are significantly worse, Raf. They've done things like giving a $9 billion grant to the Reserve Bank, which they didn't ask for. A billion dollar tax-break back to multinationals; some of the world's largest firms. So you have to look at the tax breaks to the top that the Government has given away in assessing the whole budget situation.
EPSTEIN: Andrew Leigh, thank you for your time.
LEIGH: Thank you, Raf.
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