In just a year the Abbott Government has managed to set off industrial action within one of its largest public service departments, gut the CSIRO and cause ACT unemployment to rise to its highest level since 2001. How much worse will things have to get before Liberal Senator Zed Seselja will speak up against Tony Abbott's public service cuts?
ABBOTT’S CUTS CAUSING CHAOS ACROSS THE PUBLIC SERVICE
The Australian Public Service is in turmoil because of the Abbott Government’s harsh budget cuts. Industrial action is imminent within one of its largest departments, more scientists are set to go from CSIRO and 7,200 staff have been forced out of their jobs in the past year in Canberra alone.
Yesterday staff at the Department of Human Services (DHS) overwhelmingly voted to pursue industrial action in protest against the Government’s below-inflation wage offer.
“The Government is trying to force the department’s 35,000 staff to accept longer working hours and reduced conditions in return for a pay offer that will see their real wages decline over time,” said Member for Fraser Andrew Leigh.
“The decision to pursue industrial action comes after months of stonewalling from the Government when staff have tried to negotiate a fairer deal.”
Colour me surprised: Joe Hockey has emerged from the G20 meetings with nothing except a series of reheated announcements on multinational tax avoidance.
NOTHING NEW IN G20 TAX PACKAGE
True to form, Joe Hockey has failed to deliver anything new on multinational tax avoidance from this weekend’s G20 summit.
Although he and Tony Abbott are touting agreement on the Common Reporting Standard and the OECD’s base erosion Action Plan as big wins, in fact both of these things had been agreed long before the world leaders sat down on Sunday.
What’s more, they depend on individual governments taking domestic action to implement them. Joe Hockey has squibbed it every time he’s had the chance to act on multinational profit shifting, as his record shows:
This weekend's G20 summit wasn't a good one for Tony Abbott and his government. He was forced by the other world leaders to talk about climate change after working hard to keep it off the agenda, he failed to deliver anything new on multinational tax avoidance, and his so-called growth package turned out to be nothing more than a list of the budget's most unfair measures. I joined Sky AM Agenda to take stock of it all; here's the transcript.
SKY AM AGENDA
MONDAY, 17 NOVEMBER 2014
SUBJECT/S: G20 growth target; climate change; China Free Trade Agreement
KIERAN GILBERT: I'm joined now by the Shadow Assistant Treasurer, Andrew Leigh; you'd welcome the growth target? This is unequivocal win out of the G20, isn't it, 2.1 per cent from the 20 biggest economies?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: We'd certainly support anything that boosts growth, Kieran. The question here isn't about the value of the target, it's about the believability of how the Abbott Government intends to get there. If anyone can produce a serious economist who says that slapping on a GP tax or $100,000 degrees are going to make it easier for Australia grow rather than harder, I'd like to meet them.
GILBERT: But in terms of the overall commitments, this is a multilateral organisation, the G20, and we hosted it. Tony Abbott and Joe Hockey drove this agreement – that's a clear win for them, isn't it?
LEIGH: It's a huge event, the biggest gathering of world leaders ever on Australian soil, and it's always great for Australia when these things happen. My concern was that on the world stage, when given the opportunity to talk about big global issues like climate change, we have Tony Abbott showing that it doesn't matter how big the stage is, he's going to show how small he can be. I was surprised in those opening remarks when he was complaining about getting things through the Senate, I almost expected him to start talking about Brookvale Oval and how its redevelopment is going to add to growth. Frankly, it's an agenda which was too small for the gathering of world leaders we had, and to suggest that climate change isn't a big economic issue is to fly in the face of IMF evidence which says unchecked climate change will take two per cent off global growth.
As the G20 leaders meet this weekend, this is Joe Hockey's opportunity to show he's capable of more than talk on multinational tax avoidance.
TIME FOR HYPOCRITICAL HOCKEY TO ACT, NOT TALK
Joe Hockey has gone into overdrive with hypocritical rhetoric on multinational tax as the G20 leaders meet this weekend.
But all the talk in the world won't make up for the fact that the Treasurer consistently fails to act when it counts.
Every time he and the Coalition had the chance to work with Labor to close tax loopholes in the past few years, they voted against this.
When the year's G20 meetings come to a crescendo this weekend with the Leaders Summit in Brisbane, economic growth is the first item on the agenda. But as I discussed with Linda Mottram on ABC Sydney's 702 mornings show, we need to make sure that the benefits of growth are shared throughout our community. Here's the transcript:
ABC 702 SYDNEY
FRIDAY, 14 NOVEMBER 2014
SUBJECT/S: G20 growth target; inclusive growth; inequality; consumer confidence
LINDA MOTTRAM: Dr Andrew Leigh is a former professor of economics at the Australian National University in Canberra, and he's also the Shadow Assistant Treasurer in the federal Labor Opposition. He joins me this morning, Andrew — good morning. What does the evidence say about the gap between rich and poor in Australia and globally?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Linda. Certainly both in Australia and many developed countries, we've seen a rise in the gap between rich and poor. Over the last generation, incomes have risen three times as fast for the top 10th as they have for the bottom 10th, while the top one per cent have doubled their share of national income. We now have a situation where the wealthiest three Australians have as much wealth as the poorest one million Australians. That matters, of course, because it speaks to who we are as a society, and to the risk of challenging a really great Australian value which is egalitarianism. But it also matters in terms of consumer confidence, because the rich save about a quarter of their income but the poor spend all of their income – and often then some as well if they're taking on credit card debt. So say you take $10 billion and you move it from the poor to the rich, as some of the Government's recent measures have done, that's not only unfair but it actually detracts from retail trade. You're seeing that come out in various consumer sentiment surveys, whether it's the Westpac survey, the NAB survey, the Roy Morgan one. All of them are speaking to this sluggish consumer sentiment and poor retail trade figures.
MOTTRAM: So not surprising to hear Bernie Brooks from Myer reporting what he is reporting, which is that the hit to their profits is coming in the lower socio-economic areas?
LEIGH: That's absolutely right. It speaks to one of the really important insights from economics, which is that how you get a country going is different from how you get a company going. So you'll occasionally hear CEOs say: 'well, the secret to Australian prosperity is to cut wages at the bottom'. That might be quite successful for their own firm, if they were able to implement it. But when we're in an economy, your wages flow into demand for other people's services and so you can end up in a downward spiral if you keep on cutting away at the bottom. I fear that measures such as the $7 GP co-payment and $100,000 degrees, the income support cuts that see a single parent on $60,000 lose one-tenth of their income, all of those measures are chipping away at consumer confidence as well as at the Aussie fair go.
Ahead of the G20 meetings this weekend, the Treasurer has been trumpeting a so-called growth package which will boost Australia's economic performance. But when you get beyond the headlines, there's really nothing to it.
JOE HOCKEY'S FIVE POINT SCAM FOR GROWTH
Joe Hockey needs to front up about how much of his G20 growth package relies on unlegislated and unfair measures which he cannot get through the Parliament.
While Tony Abbott ignores climate change at the G20, Joe Hockey hopes to steal the show by bragging about his new GP Tax, cutting university funding and forcing jobseekers off payments for six months as new ‘growth initiatives’.
Each of the G20 participants have submitted a package of policies which are intended to collectively lift global growth by two per cent over the next five years.
Despite this package being submitted to G20 officials back in September, the Treasurer has refused to release any more details about the specific measures he is relying on to boost economic growth.
The Abbott Government is playing its state government colleagues for fools, forcing them to make the case for tax changes it clearly wants to make.
PREMIER NEWMAN ANOTHER PAWN IN ABBOTT’S GST STEALTH CAMPAIGN
Campbell Newman’s call for more tax revenue to be returned to the states shows Tony Abbott’s $80 billion in cuts must be starting to bite.
In an opinion piece in today’s Australian, Mr Newman has argued that the states and territories will need a greater share of Commonwealth revenue in order to continue providing high quality services like hospitals and schools.
Until the May Budget slashed the Commonwealth’s contribution to the states, they were set to receive substantially more federal funding – over $80 billion more over the next 10 years.
But Treasurer Joe Hockey ripped away this funding in one of the budget’s biggest broken promises, leaving state governments like Mr Newman’s to fend for themselves.
Richard Fidler was kind enough to have me on his 'Conversations' program for a good chat about the role of ideas in politics and how economic thinking can benefit public policy-making. You can listen in to the whole interview at the Radio National website (while you're there, subscribe to the podcast for lots more interesting interviews and ideas!)
The Canberra Times is reporting that up to 250 jobs from the Australian Bureau of Statistics will be moved out of Canberra and sent to Geelong as part of a Victorian Coalition election promise. I joined 666 ABC Canberra to explain why pork-barrelling with public servants is bad news for effective national policymaking. Here's the transcript:
666 ABC CANBERRA
TUESDAY, 11 NOVEMBER 2014
SUBJECT/S: Tony Abbott’s pork-barrelling with public service jobs
PHILIP CLARK: The Government has announced plans that up to 250 public service jobs, this time from the Australian Bureau of Statistics, are to be shifted from Canberra to Geelong. The jobs are going from the Australian Bureau of Statistics which has most of its workforce based in the ACT, and a number of staff there have already been made redundant. There's a new so-called ABS Centre of Excellence for survey functions to be established in Geelong and opened in 2016, and 250 jobs are going to be moved out of Canberra to there to staff it. Andrew Leigh is the Federal Labor Member for Fraser and Shadow Assistant Treasurer, and he's on the line this morning. Andrew Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Philip.
CLARK: Isn't Canberra supposed to be the centre for national bureaucracy?
LEIGH: Well absolutely. The thing that I find really shocking about this decision, Philip, is that it's just so nakedly political. It seems that Tony Abbott has looked over at Denis Napthine and said: 'you're behind in the polls, so here – let me give you 250 Canberra public service jobs to see if that will help out'. The crass arrogance of using public servants as pork-barrelling pawns is terrible for a great national institution. You go around the world and people are in admiration of the Australian Bureau of Statistics. They have led the world in terms of national income accounting, and on a range of metrics they are an excellent outfit. So then to be gutting the organisation, to be taking 250 jobs and just plonking them down the day before the caretaker period starts in Victoria, I find that shocking.
CLARK: Look, there's been a lot of criticisms of cuts to the bureau anyway; it's a vital national resource. After all, if we can't accurately measure what's going on in the economy, we can't make sensible economic decisions. The Australian Bureau of Statistics is far more than counting heads; it's about making sure we've got the information on which to base critical decisions. But does it matter if it's disaggregated in that sense? I mean, we're all connected these days anyway by network systems, so does it matter if the bureau is disaggregated?
LEIGH: This comes down to one of those great 'death of distance' questions, Philip. One of the things that strikes me when talking to people in, say, the technology industry is that they talk about how even the IT sector and Silicon Valley is becoming more concentrated, rather than less. There's a great virtue in proximity – you rub shoulders with people and that serendipity leads to better ideas and to a better functioning system. So good organisations are housing themselves under a single roof, increasingly. If you were a corporation, you wouldn't be willy-nilly taking 250 people and just plonking them on the other side of the country, and the same holds true with the public service.
We're in the final countdown now to the G20 Leaders Summit in Brisbane, so I joined Breaking Politics to talk about what the Abbott Government needs to deliver from this. Here's the transcript:
FAIRFAX BREAKING POLITICS
MONDAY, 10 NOVEMBER 2014
SUBJECT/S: G20 growth target; Multinational profit shifting; China FTA; Renewable energy
CALLUM DENNESS: Joining us now outside his Electoral Office is Andrew Leigh, the Labor member for Fraser in the ACT. Good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Callum, how are you?
DENNESS: Good thanks. Now the G20 is due to kick off this weekend. The Government is promoting this growth target of 2 per cent over the next five years that it hopes the G20 will adopt. Is this an ambitious target? Is it a useful target?
LEIGH: Well I'm certainly all for improving the rate of economic growth in Australia, I wish the Government all the best in that target which is 2 per cent over 5 years, or 0.4 per cent a year. Where I'm troubled though is the sense that the government is missing some of the key issues and running in the wrong direction on others. We know that one of the ways of ensuring that we have sustained economic growth is to tackle climate change with an effective strategy, not to push it off to an expensive strategy like Direct Action. We also know that you can't cut your way to growth and that investing in health and education is absolutely vital for laying the foundations for prosperity. For the Government to suggest that somehow $80 billion worth of cuts to health and education will improve growth has it exactly backwards.
DENNESS: Another of their suggestions for boosting growth is cutting access to the dole. Does this have any economic merit?
LEIGH: So these guys are from the old 'trickle down' school of economics, the idea that the only way of making the poor richer is to first make the rich richer. There's no economic logic in that. We know that people who are on benefits tend to spend all of their incomes while those at the top of the distribution can save about a quarter of their incomes. The latest budget transfers so many billions of dollars from the most vulnerable to the most affluent. In the process it is taking away from consumer spending, which is why consumer confidence is in the doldrums. And ultimately, it's going to have a detrimental impact on growth. We need to get people into jobs, we need to tackle youth unemployment. We need smart, evidence-based approaches for doing that, not old fashioned ideology.