The banking levy is an extraordinary exercise in chutzpah - Transcript, FiveAA

E&OE TRANSCRIPT

RADIO INTERVIEW

FIVEAA MORNINGS

WEDNESDAY, 10 MAY 2017

SUBJECT/S: 2017 Federal Budget.

LEON BYNER: The Shadow Assistant Treasurer is Dr Andrew Leigh. Andrew first of all, I'll pick out a couple of things. What do you think of the $6.2 billion taken off banks to fund the NDIS?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G'day Leon and good morning to you and your listeners. The banking levy is an extraordinary exercise in chutzpah. I’m old enough to remember just a few years back when Chris Bowen put a banking levy on which was just a tenth of the size of this one. And with the revenue hypothecated towards a special financial stability fund rather than just put into general revenue. This is a very significant levy for the banks and for the Government – as on a bunch of other things – has done a complete backflip.

BYNER: Okay so you like it or you don't like it?

LEIGH: Look we'll support it, and we think that the budget could have been managed far better than it has been, but we need to pick our fights on these things.

BYNER: Alright let's move to a couple of other things. The increase in a couple of years’ time of 0.5 per cent of the Medicare levy, do you agree with that?

LEIGH: That's a tax rise for almost every one of your listeners, Leon. It's coming at a time when those at the very top are getting tax cuts. That doesn't seem a particularly fair approach. We're having a careful look at that and Bill Shorten will have more to say on it later in the week. It's certainly a measure which has raised concerns among many of the people that I have spoken to and goes entirely against what Scott Morrison said in the 2016 budget, that that wasn't the time to be increasing the tax burden on ‘hardworking Australians and their families’. He's done precisely that.

BYNER: Now what about the $70 billion infrastructure fund that is going to be spend in the budget, what do you think of that?

LEIGH: There's a lot of talk about infrastructure but as best I can tell, Leon, this is mostly moving things around special accounts. The biggest on budget infrastructure expenditure is the Collector Road, a worthy project, but hardly transformative for the nation. Many of these things are accounting tricks rather than new projects, or else they're being done off budget.

BYNER: Alright, if you were facing the same Senate as the Coalition and in government, wouldn't you have the same problem they've got? You could try all sorts of cuts, you're critical of the $600 billion odd deficit we've got and it has gone up since the conservatives have been in government but would you not face the same problem that you would have to face the reality that you'll need to do things which are likely to get passed in the Senate otherwise you're going to have a budget that is going to be meaningless?

LEIGH: Leon I think that's absolutely the right question to ask of a political party: can you get it through the Senate? Let me give you three examples of measures which would add to the budget bottom line that Labor has supported and I think would go through the Senate. One is the multinational tax package that Bill Shorten announced last week, a $5 billion package unlike the unquantifiable package of multinational tax measures that we heard from Scott Morrison last night. The second is our changes to negative gearing and the capital gains tax discount which raises a considerable amount of revenue over the course of the decade and I think would be supported by a Senate crossbench who care about housing affordability.

BYNER: Would that assist housing affordability because at the moment a lot of people have made a comment look, you can have a superannuation style tax cut, $30,000 or whatever, but that's not even going to pay the stamp duty for most people?

LEIGH: Exactly. And this idea that we should raid superannuation we believe is just wrong-headed. Young people shouldn't have to be poor in their retirement in order to get a house now. But we do believe that there is ways of reining in the superannuation tax breaks that are received at the top end. So those three changes – multinational tax, negative gearing and capital gains, superannuation – are all changes which would add to the budget bottom line and which Labor believes would be supported by the Senate. But instead, we have the Coalition fighting now for a massive tax cut for multinationals and for millionaires at the same time as cutting funding to schools and universities.

BYNER: Now you talk about education, you actually pointed out in a paper that we keep pouring money into education and no matter what we do the outcomes are worse. So I know you want more funding for education but surely something has to be done to ensure that if we're going to spend the money it gets the results we want?

LEIGH: Well you've got to spend the money well, Leon. And that's why when we increased funding for the Gonski reforms we didn't simply say ‘here's extra cash do with it as you will’. We had targeted reforms around improving teacher quality, around making sure that we had literacy and numeracy coaches, that we boosted student attendance and also locked the states into saying that they couldn't cut their funding. The no-strings attached approach that the Coalition has taken to school funding has meant that states and territories have been able if they wish to cut their school funding while the Commonwealth increased it. That's not the way to make our way to being a smart country.

BYNER: Being an economist, you'd know this. When was the last time Australia was in surplus?

LEIGH: Prior to the Global Financial Crisis which is basically true of most advanced countries around the world. Every serious economist thought that when you were hit with the biggest global shock since the Great Depression that you needed to use fiscal stimulus. Most advanced countries remain in debt, though many have managed to return to surplus. We on the other hand have real debt per person now 50 per cent higher than when the Coalition came to office. Every Australian now owes an extra $4000 in government debt than when Tony Abbott was elected in 2013. The annual interest bill is now around $500 a person. So a government that talked about debt and deficit disasters and drove debt trucks around the country has delivered more debt and higher deficits.

BYNER: Well do you think it is inevitable that taxes are going to have to keep rising?

LEIGH: Well it's tax cuts galore in this budget, Leon. From a Government that said we have a spending problem but not a revenue problem they seem to have entirely changed their tune, taxes going up in pretty much any area you can name. And they're doing that in order to pay for tax cuts to the big end of town, to millionaires and multinationals who are the big winners out of this budget.

BYNER: Andrew, thank you for joining us. 

ENDS


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