SKY AM AGENDA
MONDAY, 5 SEPTEMBER 2016
SUBJECTS: G20; Multinational taxation; Foreign political donations; Negative gearing; Superannuation reform; Inequality.
TOM CONNELL: You're watching AM Agenda, joining me now in the studio is Shadow Assistant Treasurer, Andrew Leigh. Andrew thanks for your time this morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Tom.
CONNELL: We're at the G20 in China this time around, a couple of years ago it was Brisbane we had that 2 per cent growth target that now we're hearing from the IMF has pretty much failed. How big a role could you really argue Australia had in that pretty small proportion of the economy?
LEIGH: Well there were some pretty big promises made back then by the Coalition, Tom. A promise of 2 per cent above expectations. I went back last week and had a look at how we're tracking on that, we're not 2 per cent ahead, we're 2.5 per cent behind where we were forecast to be at that stage. So the Government's achievements on growth are exactly the opposite of what they pledged. That's why I'm sceptical that not much is going to come out of this G20 from a Government that has been so much on the side of multinational tax avoiders rather than on the side of the Australian middle class.
CONNELL: It's this global target though, how much can you point the finger at the Coalition, all they wanted was to put a focus on the growth. You could argue that maybe it would be worse without it?
LEIGH: Well if all you wanted to do was have a chat about growth, don't set a target. If you set yourself a target, you're expecting to be measured by it. When you measure the Coalition against their own 2014 growth target, they haven't got 2 per cent extra growth, they've got 2.5 per cent less growth. And tracking to fall even further behind where we were back then. This year, the agenda is multinational taxation and what I fear is that Malcolm Turnbull will talk a big game on multinational tax avoidance but then come home and merely do what we've seen over recent years.
CONNELL: They have tried to make that a priority though as well, multinational tax. They've said it really has to be a global cooperation because Australia can't go it alone essentially companies will leave our shores?
LEIGH: Yeah look that's an interesting question, Tom. If you're talking about an overhaul, of course we have to engage everyone in that – for example, if you're going to redefine what's in a tax treaty everyone has to sit down and agree. But there are some things that we can do on our own. We can improve transparency, but Malcolm Turnbull has been fighting against that. We can close debt deduction loopholes, but Malcolm Turnbull beats up on the Labor Party every time we put forward sensibly carefully calibrated plans to tackle it.
CONNELL: You've got different plans on that. It's not like they're doing nothing in this area, you have different ideas about the best way to do it.
LEIGH: They've been dragged kicking and screaming to it, Tom. We've supported whatever they've done in the Parliament but we've just asked them to go further. We've asked them to bring down the disclosure thresholds on tax from $200 million to $100 million for private companies. We believe that we should close debt deduction loopholes, we've made other calls in this area. Malcolm Turnbull is a person who seems much more on the side of the tax havens than on tax transparency for Australians.
CONNELL: I'd like to look at political donations, Labor is trying to get on the front foot of this now. Pointing out their election campaign policy amongst other things, to ban foreign political donations. Did Sam Dastyari not get this memo? He was on the Bill bus during the campaign?
LEIGH: Tom we've argued for this change in the law but for the moment foreign donations are allowed. We believe that they ought to be banned. We also believe that the threshold for donations disclosure is too high. I heard Angus Taylor a moment ago talk about the virtues of transparency. Well if he believes that, he should support Labor's call to bring down the disclosure threshold from $13,000 indexed to $1000 not indexed. He should support our calls to ban donation splitting and to ramp up the penalties for doing the wrong thing.
CONNELL: You're talking that you want this ban, you can take your own action, Labor stopped accepting money from tobacco companies, you could stop accepting foreign political donations.
LEIGH: That's absolutely true Tom but we believe we actually need to change the law. But you're right there are ways in which you can behave which go further than the law and in the case of disclosure, that's actually what many Labor party branches do. Disclosing donations above $1000 rather than above the legally mandated maximum, the $13,000.
CONNELL: Why not make that blanket and specifically to foreign country political donations? Should that be a consideration, you can leave the pack and say we're doing this anyway.
LEIGH: This is also about cleaning up the whole system, Tom. About making sure that we don't have foreign donations in our system for any political party rather than tilting the playing field against us, actually saying that we shouldn't have foreign donations in Australia.
CONNELL: That was done on tobacco eventually the Liberal Party followed suit. So is that consideration in this area?
LEIGH: You're right, and it's been a precedent that has been applied in the past. I guess the point I'm making is: why not go ahead with an overall reform of political donations laws? I don't think that anyone has argued that Sam Dastyari breached those laws indeed these issues came to light because he appropriately disclosed the donation that was made.
CONNELL: Do you think though that that should be a consideration for Labor? Going ahead and just not accepting foreign political donations?
LEIGH: My first priority is getting a change in the rules, actually clearing up these rules.
CONNELL: To clarify, do you think that should be a consideration just banning them within Labor?
LEIGH: You can always consider these things but I think that we can have a full overhaul. I think there's a lot that can be improved in this system. In NSW for example, I think you have seen improvements through the banning of property developer donations. I think that's helped in cleaning up one of the real problems in that system.
CONNELL: Speaking of property, negative gearing analysis today. Some key seats that defied the swing for Labor are ones in which had the highest proportion of negatively geared investment properties. I know Labor still has this policy, is it on the blocks to tweak if you like, to consider changes to it that might make it more palatable to voters?
LEIGH: This is for me, about getting the policy right. Certainly one data point which would defy your analysis there is my own electorate of Fenner where there is a relatively high share of households that are negatively geared but where there was a swing towards Labor at the last election. My view is you need to set the policy right. Many people – even those with negatively geared homes – came up to me in the last election and said ‘look I benefit from these rules, but my kids are increasingly being locked out of the housing market’. We have to change the system because our big cities are becoming unaffordable for young Australians. You see it in the data, but you also see it when you're out at the street stalls, when I'm at street stalls in Gungahlin, Belconnen and Dickson, people are coming up to me and saying you're doing the right thing on negative gearing, keep up the argument for reform.
CONNELL: Another argument, superannuation reforms and reining in tax concessions. The Grattan Institute says if there can't be agreement with the Coalition on this, the system is irredeemably flawed. Are you going to really try and work with the Government on this? Because so far your party has delighted in pointing out that Malcolm Turnbull is having to make changes because of his divisions?
LEIGH: I think everybody has been making that point, Tom. But we've led the debate on this, we came out with our own policy in the middle of last year, carefully calibrated, not retrospective. The Grattan Institute analysis is another really valuable piece of public policy analysis. One of my favourite factoids out of it is that at the moment someone in the top 1 per cent gets two and a half times as much from the system as a low income pensioner receives over the course of their lifetimes. If we do reform, the Grattan Institute says that goes down to the top 1 per cent person just getting twice as much as a full rate pensioner. Again still, tax breaks skewed towards the top but not as skewed as they've been in the past.
CONNELL: We'll assume you're going to have some productive talks on superannuation.
CONNELL: Andrew Leigh, always a pleasure.