ECONOMIC FALSEHOODS, FANTASIES AND FICTION, Canberra Times, 17 March
In recent years, falsehoods, fantasies and fabrications seem to be playing an increasing role in the Coalition’s political strategy. Sure, John Howard occasionally told an economic whopper – saying he’d deliver lower interest rates while increasing spending and stoking inflation, for example. But these days it seems we can’t go a month without the conservatives peddling complete economic fiction.
Before the 2013 election, voters were told that the government would make no cuts to health or education, but would reduce taxes and produce a surplus budget every year. It was mathematically impossible, yet neither Tony Abbott nor Malcolm Turnbull have ever admitted the falsehood to the Australian people. Instead of ‘an instantaneous adrenaline charge in our economy’, we’ve got unemployment up, growth downgraded, investment languishing, consumer confidence flagging, and debt rising.
When it came to porkies, Team Abbott had a special gift. Do you remember when Joe Hockey told us that poor people don’t drive cars? Or that the secret to affording a home was to get a high-paying job? Or that Australia was a high-tax country despite having one of the leanest governments in the advanced world? Do you remember when Eric Abetz warned of a ‘wage explosion’ while Treasury warned in the Budget of slowing wage growth?
The latest special seems to be ‘tall tales on taxation’. Lately, Coalition members have been saying that changes to negative gearing will lower housing prices (and raise them), decrease inequality (and increase it). Having begun by complaining that Labor’s policy didn’t raise much revenue in its first few years, Prime Minister Turnbull then feverishly claimed it would ‘smash’ the market. He even claimed that changes to capital gains tax will hurt foreign investment, despite the fact that non-residents aren’t even eligible for these exemptions in the first place.
Treasurer Scott Morrison has continued this trend. He argued the GST is a fair and efficient tax, despite Treasury’s own Discussion Paper saying it’s regressive and no more efficient than the income tax. He claims ‘average Australians’ are the ones who benefit most from negative gearing, despite the data showing that the typical surgeon gets ten times as much from negative gearing as the typical teacher.Read more
BARNABY WANTS THE PRICE OF MILK TO GO UP
BARNABY JOYCE, DEPUTY PRIME MINISTER: If I go to a place and say ‘Well, I’m just going to start selling cases of beer at $15’ and say that’s the case. I know if I keep doing that, I’m going to send out every bottle shop in the district. People will say, well in the short-term didn’t they get a better price? Yeah, sure, and when you think they’ve all gone do you think they’re going to keep the price of that case of beer at $15? Of course not.
JOURNALIST: If I could change this term, what about dollar milk?
JOYCE: Well, this has been a discussion that’s been around for quite a while. I obviously believe that the proper price of milk is above a dollar. They say they are not selling it below cost. What I say is that in many instances, it’s a loss-leader that is bringing people into the shop and they pick up the money in buying other products. The way we had to deal with that in the Department of Agriculture is by starting to open markets into China and we sell that same litre of milk to China for up to $11.Read more
TURNBULL BACK FLIPS ON ECONOMIC POLICY WITH BAD EFFECTS
By supporting the ‘effects test’, a deeply divided Cabinet has come to a decision today that will chill innovation and investment. The only beneficiaries of this decision will be lawyers.
Malcolm Turnbull has totally capitulated on the effects test after earlier arguing against it.
Twelve months after the Harper Review was released and following a Cabinet brawl, the Government has adopted a thoroughly bad piece of economic policy.
Labor has consistently opposed an effects test, which will threaten legitimate competition and see higher consumer prices.
The Prime Minister talks a lot about innovation in the economy. Yet Australia’s largest employer, Wesfarmers, said in its response to the effects test that it is deeply concerned about the negative impact of an effects test on investment, innovation and growth.Read more
ABC 24, CAPITAL HILL
PARLIAMENT HOUSE, CANBERRA
TUESDAY, 8 MARCH 2016
SUBJECT/S: Tax reform, Labor’s economic leadership, chaos in the Coalition, moving the budget for pure partisan politics, double dissolution.
GREG JENNETT: Labor's Shadow Assistant Treasurer, Andrew Leigh, joins us now.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Greg.
JENNETT: Good afternoon. Looking at the calendar and the constitution seems an odd way to be governing but that's the situation we find ourselves in at the moment. Does an early budget seem likely to you?
LEIGH: It seems now like a live option, Greg, and that is just adding one more piece of chaos to what has been a terribly scrappy start to the year for the Government. The budget process, as you well know, is one which involves a range of different interest groups with each of them having their time to feed in over an agreed timetable. Then within the departments of Treasury and Finance - I've spent time seconded in the Department of Treasury - the Budget process is a huge machine. To now say to everyone working on that process you have to move not for economic reasons but for partisan politics just seems crazy.
JENNETT: Can they respond to that in your experience, having done a bit of work around there? Can they actually meet a deadline of a week earlier?
LEIGH: I'm sure they can, but the question is will the quality of economic advice be as good as it would be if the Government stuck to the timetable we have had for the last 20 years. The answer to that is surely: no.Read more
PARLIAMENT HOUSE, CANBERRA
FRIDAY, 4 MARCH 2016
SUBJECT/S: charities commission; tax reform; economic indicators
SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Thanks everyone for coming. My name is Andrew Leigh, the Shadow Assistant Treasurer.
Over three years after the charities commission was created, the Coalition has finally decided they support it. Let's be clear: the charities commission was set up for practical reasons, and should always have enjoyed bipartisan support. The charities commission is good for charities who are able to be listed on the register setting out the charities who are doing the right thing. It's good for donors: someone turns up at your doorstep and you're wondering about whether they are legitimate, you can go to www.acnc.gov.au and check out their bona fides. And it's good for taxpayers to have the accountability of knowing there is a one-stop-shop charity register that provides everyone with the information they need to know who are the decent charities in Australia.
The charities commission came out of recommendations from numerous inquires going back to 1995. In 2006, a bipartisan Parliamentary inquiry recommend the creation of a charities commission. Malcolm Turnbull was one of the people who was on that committee, and signed of supporting the charities commission. In 2010, the Productivity Commission recommended a charities commission.
Yet the Coalition's opposition to it has always been ideological. Under Kevin Andrews, Scott Morrison and for six months under Christian Porter, the Coalition has had its official policy: killing the charities commission. It's taken six months for Christian Porter to finally be able to say to charities commission that they get to stay.
REINING IN TAX EXPENDITURES
Tax Institute National Convention, Melbourne
4 MARCH 2016
*** CHECK AGAINST DELIVERY ***
When I studied graduate public finance, one of my lecturers was Martin Feldstein. Feldstein was the chair of the Council of Economic Advisers under Ronald Reagan, and not exactly regarded as one of Harvard’s most progressive economists.
But as you know, there’s a surprising amount you can learn from someone of a different ideological persuasion. I liked Feldstein’s style – a meld of maths and war stories. Every now and then one of my classmates, Jason Furman, would get into a furious back-and-forth argument with Feldstein. At the time, it seemed a little impertinent. Less so now that Furman is serving as President Obama’s chair of the Council of Economic Advisers.Read more
Matter of Public Importance Debate
Tuesday 1 March
*** CHECK AGAINST DELIVERY ***
I was holding a street stall recently when a young couple came up to chat about their troubles buying a first home. She was a teacher, he was a builder, and they were thinking about having a family but they were worried that they would not be able to meet the mortgage repayments when their two incomes went down to one. Despite being in their late 20s, this couple were looking at moving back in with their in-laws. Changing nappies and juggling sleepless nights under the same roof as their in-laws was not their idea of the Australian dream. But their story is, sadly, typical.
Since the early 1980s the share of 25-34 year olds who own their own home has fallen from about 60 per cent to about 30 per cent. It used to be the case that the top fifth were just as likely to own a home as the bottom fifth but now there is a 15 percentage point gap in home ownership rates between the top and the bottom. In the early 1980s the average home loan for a first home buyer was $81,000. Now, it is $308,000. Over just the last two years we have seen house prices in Australia go up 20 per cent and yet we have got the slowest wage growth in 18 years. As the young Canberra couple said to me, 'It's hard to afford a mortgage when the prices are going up so much faster than your income.'
Those opposite want to pull up the ladder of opportunity on young Australians. The gap in homeownership is another part of the growth in inequality that Australia has seen over the course of the last generation, where earnings have risen three times as fast for the top 10th as for the bottom 10th, and where the wealthiest three Australians now have as much wealth as the poorest one million Australians.Read more
Seeking Social Capital Stories, The Chronicle, 1 March
Six years ago, the year I entered parliament, I wrote a book titled Disconnected, about the collapse of community life across Australia. In the decades leading up to 2010, Australians became less likely to join community organisations – a trend that can be seen in membership data from bodies as diverse as Rotary, Lions, Scouts, Guides and Apex. We became less likely to go to church and less likely to join a union. We became less likely to know our neighbours, and the average Australian reported fewer close friends.
Since becoming a member of parliament, I’ve met hundreds of passionate social entrepreneurs, and hoped that the trends might reverse. But if anything, new data suggest that the drop is continuing. Since 2010, Australians are less likely to be involved in social groups (down from 63 to 51 percent) and political groups (down from 19 to 14 percent). We are less likely to give money to charity (down from 71 to 65 percent), play sport (down from 74 to 70 percent) or volunteer (down from 36 to 31 percent).Read more
Hidden heroes who should be household names, Canberra Times, 1 March
The Lucky Country is fortunate to be served by so many inspiring public servants.
When Bob Stirling started working as a public servant, he probably never imagined that his skills as a dog breeder would come in handy. But thanks to him, beagles became the friendly face of Australia’s quarantine regime.
They ultimately helped him design and manage the detector dog program that put beagles as the friendly face of Australia’s quarantine regime. As Stirling once observed, ‘‘even people who are afraid of dogs are not afraid of beagles. Beagles are cute, they have a brilliant sense of smell and they are single-minded to the point of stubbornness.’’
These days, beagles have been replaced by labradors but, thanks to Stirling’s creative approach to solving a problem, Australia turned security screening into a positive public outreach effort that continues to set our airports apart today.
When you start looking, stories like Stirling’s pop up from all over the Australian Public ServiceRead more
UP, DOWN; RICH, POOR: IT’S THE TURNBULL HOKEY-POKEY
Having seen how well running two contradictory scare campaigns worked out yesterday, Malcolm Turnbull has decided to add even more confusion to his Government’s chaotic position on negative gearing.
Just as Malcolm Turnbull argues Labor’s negative gearing policy can simultaneously drive prices up and down, apparently it can be both an attack on the wealthy and a gift for them all at once.