Remarks to the 2015 NATSEM Post-Budget Forum
Parliament House, Canberra
It's a real pleasure to be here with some of my favourite economics thinkers – Michelle Grattan, Saul Eslake, Ben Phillips and Arthur Sinodinos - and at an event organised by NATSEM at the University of Canberra. Some of you may know that last year, perhaps due to an unfortunate printing error, the Family Impact Statement was left out of the Budget. That meant that we couldn't observe some of the analysis that had been possible going back to Peter Costello’s era. Fortunately, Australia had NATSEM and they were able to conduct some vital analysis on the distributional impacts of last year's budget which made up for the accidental printing error, and helped spark a national debate around fairness.
I wanted to speak firstly today about the things I like in the Budget. Given that there's no person I like more on the Coalition side than Arthur Sinodinos, it seems churlish to start a conversation about the Budget without talking about the things that I think are good in the package. There is the National Disability Insurance Scheme IT upgrade. There’s investment in the Australian Bureau of Statistics which will be going towards an IT upgrade there as well. So long as that isn't accompanied with cuts to the bureau's surveys, that will be important too. I also like the instant asset write-off. It's a policy that aims to encourage investment, recognising that what you want to do with tax cut that change behaviour is to work on the margin. We had an instant asset write-off under the previous government which was scrapped for by this government. My only concern about the new one is that it's only there for two years. What will happen when it suddenly finishes?
Why should we care about inequality?
The 2015 Economic and Social Policy Public Lecture
University of Wollongong
Dutch economist Jan Pen once suggested a simple way of visualising the extent of inequality in a society. Imagine, he suggested, a parade, in which each person’s resources were represented by their height.
Suppose we were to conduct such a parade in Australia. People of average wealth would be average height. Those with half the average wealth would be half the average height. Those with twice the average wealth would be twice the average height.
Let’s suppose the parade took an hour to pass you. What would you see?
For the first half a minute, people would be literally underground. These are the people with more debts than assets. Perhaps they are homeless, but have credit card debts. Or they are a business owner about to go bankrupt.
Then would come the little people. For the first few minutes, they are no bigger than lego figures. They might have some clothing and a television, but little else. By the ten minute mark, people are the size of a child’s doll. They might own an old car.
Twenty minutes have gone by, but still the marchers are no taller than a newborn baby. Most probably don’t have regular work – they might have odd jobs, or be reliant on the pension. Few would dream about them – or their children – breaking into the central Sydney property market.
It’s now half an hour. The watchers are getting bored. Heights aren’t rising much. Are we really only halfway through the parade?
UNIVERSITY OF WOOLONGONG
WEDNESDAY, 20 MAY 2015
SHADOW ASSISTANT TREASURER ANDREW LEIGH: I'm here with my colleagues Stephen Jones and Sharon Bird, and we've just been touring the iAccelerate building at the University of Wollongong. Learning about their programs to encourage women entrepreneurs; engaging with companies producing 3D printers and pop-up ergonomic desks and potentially game-changing medical technology. It's really impressive to see the range of technologies and the extent to which firms are looking towards the future. It's exactly that future that Bill Shorten was looking to build towards with Labor's announcements in the budget reply about investment in science, technology, engineering and maths, and supporting Australian students to learn coding. I might just throw now to my colleague Sharon Bird to make a couple more quick comments.
VISIONLESS ABBOTT VACATES THE FIELD ON SHARING ECONOMY
The Abbott Government is ducking responsibility for leading a serious conversation about the sharing economy.
Today’s ruling by the Australian Tax Office shows the Government is leaving it up to line agencies to drive national policymaking on services like Uber.
These are not the actions of a future-focused government.
Internationally, some authorities have ruled that sharing economy apps represent a different type of service which requires a distinct regulatory approach. But the Abbott Government has been slow to recognise that new technologies may require the rules to be updated.
Getting off Struggle Street - how we can tackle Australian inequality
Speech to the Financial Counselling Australia Annual Conference
Thank you to Lauren Levin, Fiona Guthrie and all the friends at Financial Counselling Australia for inviting me to share in your conversation today. Lauren was the one who first made contact with me about this conference, and her email really grabbed me from the opening line. Never before have I received an email that began: ‘It is most unusual to be de-funded and still continue with a major conference.’ So when I received that email from Lauren, of course I couldn’t resist saying yes to speaking today.
I understand that only today there has been some good news, and FCA has now secured funding to cover your work for the next two years. The Abbott Government has made quite a habit of changing its mind recently, but I’m very glad that in this case it has had such a good outcome. I’m sure that this reversal was in no small part due to the powerful advocacy of Carmel Franklin from CARE Financial Counselling in the ACT. Those of you who know Carmel will know that she’s a strong and consistent voice speaking on behalf of your sector and the Australians you work with.
SKY AM AGENDA
MONDAY, 18 MAY 2015
SUBJECT/S: Budget 2015; paid parental leave; Renewable Energy Target; iron ore inquiry
KIERAN GILBERT: This is AM Agenda. With me now the Shadow Assistant Treasurer, Andrew Leigh and the Assistant Social Services Minister, Mitch Fifield. Gentlemen, good morning to you. Senator Fifield first to you on the polling: I know you don't want to get into too much commentary but I guess it's got to feel a lot better this year than it did last year in terms of how this has been received, the second Hockey budget?
ASSISTANT SOCIAL SERVICES MINISTER MITCH FIFIELD: Kieran, we've been working to a plan to get the budget back on a path to being on balance, to creating an environment that's conducive to growth and the creation of jobs. It would probably be fair to say that the plan we have is better understood at this point than it might have been at the same time last year, but we're focused on that plan, on delivering it. You're right, we will leave it to others to commentate on the polls but I think you'll find that all of my colleagues are out this week and the weeks ahead, explaining the good news that is in the budget; the good news for small business, the good news for families.
GILBERT: And the Shadow Assistant Treasurer, Mr Leigh, famously – or infamously as far as I'm concerned – never comments on the polls at all. But this budget comparison, it's pretty stark and I guess it's understandable given that this is a much more generous budget than last year.
SHADOW ASSISTANT TREASURER ANDREW LEIGH: Kieran, I do appreciate that my unwillingness to commentate on polls is an enduring source of frustration for a Monday morning regular. But I do think that the number that really counts is not the polling number but the 80,000 mums who are finding out that they won't be eligible for parental leave under the Government's policies. This is a budget which still has so much of the unfairness from the last one but doubles the deficit. Not on Labor's numbers, but on the Government's own number, the deficit has doubled over the course of the year. And it lacks that plan to invest in the future which is why Bill Shorten spent so much time on Thursday night laying out an alternative Labor plan for investing in the future.
An 'app-ier' future for our cities?
Speech to Urban Taskforce Australia
You might not be familiar with the names Michael Nuciforo and Robert Crocitti, but they’re the kind of blokes you want to have around when you’re trying to solve a tricky problem. They’re the creators of ParkHound, an app that lets you find and hire private parking spaces in busy metropolitan areas. They decided to start the company after circling around East Melbourne on the hunt for parking near the MCG before an AFL game.
As they tell it: “We drove past parked car after parked car, after….empty space that required a parking permit. There were dozens of empty garages and driveways right near the ground. It then hit us. Wouldn't it be great if we could just knock on someone’s door and ask to park at their place for a small fee? The more we thought about it, the more it made sense. We don’t need more parking spaces, we just need to utilise the parking spaces we already have.”
ParkHound is just one of dozens of new app-based services that have sprung up recently in the so-called sharing economy. While the kinds of services offered differ, fundamentally they all link people who have surplus goods to those who can make use of them.
As the father of three young boys, the word “share!” comes out of my mouth pretty frequently. Unlike the kind of sharing I’m trying to teach them, money usually changes hands in the sharing economy. But the transaction happens directly between the provider and the consumer, with the companies themselves simply offering a platform for connecting people and collecting payments.
In thinking about the rise of services like ParkHound, AirBNB, and yes – the controversial Uber – it strikes me that the sharing economy has great potential to help us address some of the big challenges our cities face. As Australia’s cities continue to grow, issues like congestion and the use of space are becoming increasingly urgent. The mounting pressure on our built environment puts the people who live in it under pressure too – as all of you Sydneysiders would well know.
FRIDAY, 15 MAY 2015
SUBJECT/S: Labor’s Budget alternative; small business tax cut; paid parental leave
MARIUS BENSON: Andrew Leigh, one of the centrepieces of Bill Shorten's policy speech last night was a 5 per cent cut to tax on small business. He's proposing working with the government to achieve that cut, to cut the company tax for small business from 30 per cent to 25 per cent. He said to Tony Abbott: let's work together. A bit disingenuous, isn't it? This is not a government of national unity; oppositions don't get to join the Government at the Cabinet table to work out economic policy.
SHADOW ASSISTANT TREASURER ANDREW LEIGH: Marius, I believe Australians very much want their parliamentarians to work together. We always have to be putting the national interest before partisan interest. What Bill Shorten did yesterday was to reach across the table in the Parliament and say to Tony Abbott that if he, too, believes in giving small businesses a better deal, then Labor is happy to work together to try and boost growth in that vital sector of the economy.
BENSON: Has Labor ever invited the Opposition, when it has been in government, to join it at the Cabinet table to work out policy like that?
LEIGH: We've certainly cooperated with the Coalition on a range of things. Whether they're in Government and we're in Opposition, or the other way around.
BENSON: What would a 5 per cent cut to the company tax on small business cost?
LEIGH: We'll work through the costings with the government. Certainly that'd be an important matter to be considered.
ABBOTT’S ‘SAVE OUR JOBS’ BUDGET EXPOSED AS CRUEL HOAX IN CANBERRA
After a year of savage cuts to Canberra, the 2015 Budget delivers nothing for our community except more uncertainty. This is just the latest proof that the Liberals see Canberra as little more than a political punching bag by the Liberals.
There is no new infrastructure spending for the ACT in this Budget, and no acknowledgement of how hard the Abbott Government’s 17,300 job cuts have hit Canberra since the Liberals came to office.
In fact, the Government appears to be gearing up for a fresh round of public service cuts, with so-called ‘functional reviews’ on the horizon for the departments of Environment, Foreign Affairs and Trade, Social Services, the Attorney-General’s Department, the Australian Bureau of Statistics, as well as the Australian Tax Office.
SKY PM AGENDA
WEDNESDAY, 13 MAY 2015
SUBJECT/S: Budget 2015
LAURA JAYES: Now on the Agenda panel is Parliamentary Secretary to the Prime Minister Christian Porter, and also the Shadow Assistant Treasurer Andrew Leigh, both joining me in the studio. Christian, you heard those comments from John Howard, is he right? Is this going to be harder down the track for Joe Hockey?
PARLIAMENTARY SECRETARY TO THE PRIME MINISTER, CHRISTIAN PORTER: It's very hard for Liberals to disagree with John Howard but I think what he says is very broad and it's the evergreen truth that you have to find the right balance here and the balance here that we must strike is between two things. Obviously expenditure restraint is necessary, but of course there's needs in the economy which is going for a range of structural adjustments to keep things moving which is what the small business package is about. So my view obviously is that we've struck that balance fairly well. There was probably too much ying and not enough yang in Budget number one but I think we've got that balance much better in Budget number two.
JAYES: Structural reform was such a big priority last year, does this budget reflect that it's the wrong time for this kind of structural reform so that's an admission that yes, last year did go do hard?
PORTER: Well I think the proof of this pudding is in looking at the way in which forward estimates project the decrease in the deficit. I think that the consolidation back towards surplus is probably somewhat less than spectacular but nevertheless I think it's impressive and it's surprised a lot of observers including those in markets and in banks who were projecting next year’s deficit to be a lot larger than what it is. So going from 48 to 41 to 35 and 14 and 7 is, I think, less than spectacular but nevertheless very impressive. And I think that demonstrates that the side of the Budget that engages in expenditure restraint, where we've got real spending at 1.1 per cent out to 2017-18, that's a very good result.
JAYES: I'll get to spending in a moment, but to you Andrew Leigh: these are the Treasurer's figures – I thought you might use that point in your answer here – many economists have said that yes, they think the growth in the outer years, even though some have said it looks a little ambitious at 3.5 per cent, is probably about right. Would you agree with that?
SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Well certainly Laura, I think this budget struggles to pass the test that John Howard would put on it which is getting debt and deficits under control. We've got the deficit coming in a whisker under market expectations but still twice what Joe Hockey said it was going to be last year. We've got spending as a share of the economy and tax as a share of the economy higher under this Government than it was under the last Government.