One of the most interesting emerging trends in the competition portfolio is the rise of collaborative consumption services like Uber and AirBnB. In the Australian Financial Review I've explored some issues that these services raise for governments and how we can spread their benefits while also protecting consumers. Here's the article:
WHEN THE DISRUPTORS RATTLE OLD REGULATORY SYSTEMS, Australian Financial Review, 27 August 2014
In today’s tech parlance, Nikola Tesla was a disruptive innovator. When he invented the alternating current electricity supply system and began marketing it to cities across America, Tesla took on the corporate might of Thomas Edison’s Illuminating Company, which used the inferior direct current system.
Tesla’s technology punctured the status quo by offering consumers a different way to meet their energy needs — one that was cheaper, more efficient and bypassed existing network structures. Edison went so far as to publicly electrocute an elephant in his efforts to discredit Tesla, but consumers voted with their wallets. Consumers moved from DC to AC power, and Edison’s firm was spurred into innovative new technologies in search of fresh profit.
As Parliament resumed for the first sittings of the spring session, I joined Lyndal Curtis on Capital Hill to talk about why the government has found itself in such a budget quandary. Here's the video and transcript:
ABC CAPITAL HILL
TUESDAY, 26 AUGUST 2014
SUBJECT/S: Tony Abbott’s unfair Budget
LYNDAL CURTIS: Throughout the five-week parliamentary winter break, the Opposition has stuck fast to its plans to oppose budget measures it disagrees with. The Shadow Assistant Treasurer is Andrew Leigh and he joins me now in the studio. Andrew Leigh, welcome to Capital Hill.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Lyndal.
CURTIS: If I could start with the Finance Minister's comments on increased taxes this morning: isn't it a statement of the obvious that if the government needs to rein in spending, rein in the budget or make room for future spending, it will have to cut existing spending or raise future taxes, won't it?
LEIGH: Those are the clear options for a government that wants to pay down debt, Lyndal. But one of the important things to understand is how we've got to where we are now. Part of that has to do with the government saying ‘no’ to a very large source of revenue in the carbon price. The carbon price isn't just the smartest way of reducing Australia's carbon emissions, it is also an important boost to the budget.
As we enter the first Parliamentary sitting week of the Spring Session, the Abbott Government's first budget remains unresolved and there is significant division within the Coalition over key environmental policies like the Direct Action Plan. I joined Sky AM Agenda to discuss why the best thing the government could do is go back to the drawing board on all fronts. Here's the transcript:
SKY AM AGENDA
MONDAY, 25 AUGUST 2014
SUBJECT/S: Tony Abbott’s Unfair Budget; Coalition’s flawed Direct Action plan
KIERAN GILBERT: With me now on the program this Monday morning, Shadow Assistant Treasurer, Andrew Leigh and also the Parliamentary Secretary for Communications, Paul Fletcher. Paul Fletcher, first you've heard what Senator Xenophon had to say in his proposal. What is the government's position on this?
PAUL FLETCHER, PARLIAMENTARY SECRETARY FOR COMMUNICATIONS: Good morning Kieran. The government's position in relation to the emissions reduction fund has consistently been than it is in relation to domestic expenditure. So that point was made very clear when the white paper was issued earlier this year. Now I think we heard Senator Xenophon say that he's put forward a proposal, he's been in discussions with the Environment Minister, Greg Hunt, as you'd expect. Environment Minister Greg Hunt is in discussions with a range of independent senators, as you'd expect when we have a policy and a legislation you want to get through the senate which is directed towards achieving that 5% reduction target. Achieving a reduction by 2020 on the 2000 levels of emissions in Australia and our policy instrument to achieve that is the Direct Action Policy. We've consistently advocated and pursued that policy for several years, two elections. We are now obviously working to get the legislation through the senate.
GILBERT: Do you think that it makes sense to have this as a complimentary measure to the Direct Action Plan, to have this prospect of having carbon permits bought internationally, legitimate ones? Might that be a good way to compliment the efforts to meet that target?
FLETCHER: Well look, it's not in our policy. Minister Greg Hunt is dealing with them in a courteous and professional fashion, as he always does I might add; with Senator Xenophon and all of the independent Senators and crossbenchers in relation to getting our legislation through for the emission reduction fund, implementing the Direct Action policy through the Senate. We'll continue to have those discussions and those negotiations with the view to getting our legislation through the Senate so that we can achieve that very important reduction in emissions that is our policy. We can achieve that through the implementation of our Direct Action Plan.
GILBERT: Andrew Leigh, what's Labor's view on this? I recall that the idea of international permits was part of the emissions trading scheme proposal, is that correct? And what's your view on this suggestion by Senator Xenophon?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: That's right Kieran. Just to respond to Paul, the Labor policy was very clearly going to be to use the most efficient, most effective way of reducing carbon emissions and that's a carbon price. Now we've got 30 countries around the world going down that route for the simple reason that when you put a price on carbon pollution, you can get more abatement. Direct Action is a misnomer because it is not direct nor does it take action. There's no credible economist in Australia that thinks that Direct Action alone can meet those emissions reduction targets that are vital to Australia doing our part to combat dangerous climate change. We know very well that we've had temperature records broken, record hot temperature last year, record hot winters, record hot summers. And as a result we've just got the Coalition now saying that they're going to put in place a fig leaf – as Malcolm Turnbull very correctly noted – from a government that really doesn't deep down believe in climate change.
Following Treasury Secretary Martin Parkinson's call to bring forward the national discussion about tax changes, I joined Marius Benson to talk about changes that could make the Coalition's budget fairer. Here's the transcript:
FRIDAY 22 AUGUST, 2014
SUBJECT/S: Ways to make the budget fairer; fuel excise; Tony Abbott’s broken promises
MARIUS BENSON: Andrew Leigh, do you agree with Martin Parkinson that it would be a good idea for the government to bring forward consideration of tax changes, particularly to look at tax breaks that favour the rich, as a way of balancing some of the budget measures that hit low and middle income earners?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I think it would absolutely be a good idea, Marius, if the government looks at making savings across the entire distribution. What's wrong with this budget is not just that it breaks promises, but also that it asks so much more from those who have the least. So if you're a sole parent on $60,000, this budget is taking $6,000 away from you. It's taking one dollar in ten away from the poorest single parents. But at the same time, it's giving money back to the most affluent through tax breaks for multinational profit shifting, and through reversing Labor's very modest measures to ask those with more than $2 million in their superannuation accounts to pay a bit more. If you don't have a budget which is balanced and which looks at the whole community, then you end up with the kind of unfairness which this budget demonstrates.
The Australian Charities and Not-for-profits Commission has revoked the charity status of over 240 not-for-profits this month, proving what a great job it is doing in promoting transparency and accountability within the charity sector. This is further evidence that the commission should be retained, not scrapped as the Coalition government is working to do.
CHARITIES COMMISSION IS WORKING TO CLEAN UP SECTOR
The Coalition’s plan to abolish the Australian Charities and Not-for-profits Commission has again been revealed as folly, following news the commission has revoked the charity status of more than 240 organisations and is moving towards de-registering over 3,500 more.
The Coalition Government is trying to abolish the commission for ideological reasons. But these de-registrations prove that the regulator is keeping an effective eye on charity activity around Australia.
The de-registered charities include religious organisations, trusts and foundations from every state and territory. The commission de-registered these groups after they failed to respond to multiple requests for up-to-date information about their activities and financial status.
Importantly, the loss of charity status means that these organisations will no longer be eligible for generous tax concessions or deductable status for donations, if they are still operating.
With reports this morning that the Coalition Government is preparing to scrap Australia's Renewable Energy Target, I joined Kieran Gilbert and Simon Birmingham on Sky's AM Agenda to talk about why that would put $11 billion of clean tech investment at risk. Here's the transcript:
SKY AM AGENDA
MONDAY, 18 AUGUST 2014
SUBJECT/S: Coalition plants to abolish the Renewable Energy Target; federal Budget “reboot"
KIERAN GILBERT: With me now on the program, the Shadow Assistant Treasurer, Andrew Leigh and also the Parliamentary Secretary for the Environment, Senator Simon Birmingham. Senator Birmingham, is the government getting rid of the Renewable Energy Target altogether?
SIMON BIRMINGHAM, PARLIAMENTARY SECRETARY TO THE MINISTER FOR THE ENVIRONMENT: Good morning Kieran, and good morning to your viewers. The government is doing what we promised to do before the election and that is having a thorough and independent review of the Renewable Energy Target. It's a statutory review which is built into the existing legislation. We said we'd go through and we would make sure that we've assessed whether it was working in Australia's national interest, in terms of providing Australia with competitive power prices with efficiency, and whether the system of the Renewable Energy Target is working as effectively and efficiency as it should. That's exactly what we're doing. That review is yet to provide a final report to government, but when it does of course it will be properly considered. What's important to realise here though is that as a government, we are absolutely committed to ensuring that Australia is as competitive as possible when it comes to having cheaper electricity prices. That's why we voted to repeal the carbon tax, providing real pressures to drive down electricity prices, something the Labor party opposed. But that's something they've said they will reintroduce in government...
GILBERT: But you've heard Erwin Jackson say this morning, and what this report from the Climate Institute, their modelling suggests, is that even scaling back the Renewable Energy Target won't reduce consumer prices, it won’t have that long-term impact.
There's been lots of discussion about how scrapping the carbon price will increase dangerous emissions and mean Australia is no longer doing its bit to tackle climate change. But this move by the government will also increase inequality, as my latest opinion piece in The Australian explains:
CARBON PRICE BOOSTED THE FAIR GO, The Australian, 18 August 2014
THE Prime Minister’s key business adviser, Maurice Newman, has two preoccupations, perennially aired in these pages. He believes global warming is a hoax and, by extension, initiatives such as Australia’s now-defunct emissions trading scheme are unnecessary. And he thinks inequality doesn’t matter — or if it does, then the solution is weakening labour laws and cutting the top tax rates.
He could not be more wrong. Climate change and inequality represent major threats to our quality of life, which is why many developed nations believe they should be central to the G20 meetings in Brisbane.
The most recent figures show the largest drop in Australian emissions in 24 years, reducing the nation’s carbon footprint by 11 million-17 million tonnes, according to Australian National University’s Frank Jotzo. But scrapping the carbon price also increases inequality, at home and overseas.
This morning I was fortunate to join my friend and colleague Terri Butler in Brisbane for a community forum on inequality and the unfairness of the Coalition's first budget. Here's a quick run-down of what we discussed:
GRIFFITH COMMUNITY SAYS NO TO BUDGET INEQUALITY
More than three months after the Abbott Government handed down its first Budget, concern about the inequity fostered by its key policies continues to grow in the community.
Representatives from local church groups, multicultural peak bodies and community legal services today joined Shadow Assistant Treasurer Andrew Leigh and Member for Griffith Terri Butler at a community sector forum in Brisbane’s West End. The participants raised grave concerns about how budget cuts to health, education and welfare programs will increase inequality in the Griffith community and across Australia.
“The Abbott Government’s first budget aggressively hacked away at some of the key measures which have underpinned the Australian fair go,” said Dr Leigh, who last year authored a book titled Battlers and Billionaires: The Story of Inequality in Australia.
“People are really concerned about the kind of Australia we will end up with if the poorest single parents lose a tenth of their total incomes, if kids from disadvantaged backgrounds can no longer afford to go to university, and if wealthy mums get paid more for their maternity leave than poor ones.
Today brought the sad news that up to 45 staff at The Treasury will lose their jobs through forced redundancies. This is completely counter to the Coalition's promises before the election that no public servants would be sacked as a result of its budget cuts. Here's my statement on this troubling development:
TREASURY SACKINGS ARE ANOTHER BROKEN PROMISE FROM TONY ABBOTT
Tony Abbott’s promise that no public servant would be forced out of a job because of his savage budget cuts has been shown up as entirely untrue.
Yesterday 36 staff at The Treasury were told they had been deemed ‘excess’ and would face involuntary redundancy. The sackings have continued this morning with up to 45 Treasury staff expected to be cut in this round of redundancies.
Offshore profit shifting by big multinational firms is a big concern of mine, not least because it creates an unbalanced playing field for small Australian businesses. Here's my latest opinion piece in the Daily Telegraph explaining why:
SHIFTY BUSINESS OF DODGING THE TAX MAN, Daily Telegraph, 12 August 2014
Glen is a chippy running his own small company. He employs a couple of apprentices, mostly building homes and units in the western suburbs. Business has been good this year; so good that the Australian Tax Office should be sending him an end-of-year bill worth tens of thousands of dollars.
Except it won’t, because Glen has a cunning plan to reduce his tax bill to zero. He’s established a company, GlenCarp, with its registered office in Jersey (a tax haven) and a head office in Switzerland. His Australian carpentry business is a branch operation of the Swiss parent, using the now dormant legal shell of an Australian body corporate in an attempt to hide the reality of its Australian carpentry business. By taking large, unnecessarily expensive loans from associates overseas, GlenCarp avoided paying any tax this year.