ABC MELBOURNE DRIVE
MONDAY, 17 DECEMBER 2018
SUBJECTS: The Coalition’s debt-doubling debacle, Labor’s plans to close multinational tax loopholes and make big business pay their fair share, Labor National Conference.
PRUE BENTLEY: Andrew Leigh is the Shadow Assistant Treasurer and is with us now. Andrew Leigh, good afternoon.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Prue. Great to be with you.
BENTLEY: First, before we get to the National Conference, the Government released their mid-year budget update this morning and they’re crowing about - particularly about a projected surplus for next year of $4.1 billion. This is what Treasurer Josh Frydenberg said to Ali Moore this morning.
JOSH FRYDENBERG, TREASURER: Well, the results today are the product of more than five years of hard work - disciplined design making, including more targeted and restrained spending, as well as putting in place tax cuts for small business people and for households and for families. So today’s, the first job we need to do is to deliver a surplus and the seance job we need to do is pay back Labor’s debt and we’ve still got that to do.
BENTLEY: That was Treasurer Josh Frydenberg this morning. Andrew Leigh, a return to surplus, that’s good news for the Government. That’s good news for the Australian public, isn’t it?
LEIGH: It's certainly good news, but I think what you heard there it wasn't merely crowing - it was what George Orwell called blackwhite. This is a government that came to office in 2013 promising a surplus in their first year and in every year after that. And they’re on track, on their own numbers, to deliver six deficits and finally promising a surplus after having doubled net debt. As you know, Labor took on debt during the global financial crisis to save the economy in the teeth of the worst global recession that we'd seen since the greatest since the Great Depression. We managed to save 200,000 jobs. But what's the Coalition's excuse for having doubled net debt since 2013? They just don't have one.
BENTLEY: That said though, this is a really good news story for the government and that bottom line - that figure, $4.1 billion - is really going to be a plus for them.
LEIGH: Well, the good news is in the global economy and global economic circumstances are doing well and that's reflected in some countries having unemployment rates well below ours. Germany and the United States have unemployment rates more like 4 per cent rather than 5 point something. That means hundreds of thousands of Australians who'd be in jobs if we had their unemployment rates. So I worry, Prue, that the government isn't making the investments that we need to get wage growth going again, to bring inequality down. They’re not doing what’s needed to educate young Australians through investing in pre-school. They're not tackling climate change or the crisis on energy prices. So many of these big challenges that Australia faces demand attention. When the global economy is this good it’s a particular shame not to be tackling some of those big challenges.
BENTLEY: It’s been described as a war chest for the government. It’s effectively going to give them room to roll out the tax cuts that they’ve promised, they’re always going to be popular with he electorate. Is that going to be a problem for the Labor Party’s messaging on economic management?
LEIGH: Prue, politics isn’t a game. This is about us making responsible decisions in the national interest. It is not simply about sitting there and saying ‘well, what can I do to get my party reelected’. It's far more important than that. I think about that biblical saying that the time has come to set aside childish things. We need a government that isn't going to be engaged in the backbiting and the attacks, that'll stop the revolving door in the prime minister's office, that will take seriously the challenge that climate change poses to the Great Barrier Reef. Labor's announced we're going to invest in 250,000 affordable homes. We’ll crackdown on tax havens and multinational profit shifting, so we can make sure our public schools have the resources they need. We're not playing a game to win the next election. We are fundamentally serious and ambitious about building a better Australia.
BENTLEY: Your mentioned a couple of those policies that you’ll be taking to the next election. If it does happen to be a surplus, as is the projection, will you be spending it on tax cuts or infrastructure or both?
LEIGH: We've already said that we'll meet the trifecta - we will pay down debt faster than the Liberals, most Australians will see larger personal income tax cuts under Labor and we will invest more in hospitals and schools. We can do that because we're willing to get tough with multinationals, we’re willing to close unsustainable tax loopholes whose benefit is flowing disproportionately to the most affluent Australians. With inequality at a 75 year high, we just can't afford to be providing, for example, refundable dividend imputation credits where half the benefit is going to people with more than two and a half million dollars in their superannuation.
BENTLEY: I don’t want to spend all day on this. I do want to ask you about something that Josh Frydenberg said this morning to Ali Moore. He said that his party had reduced the tax to GDP ratio. It was in place at 23.9 per cent and wouldn’t be going above that, but he said that the ALP would dispense with that - the speed limit, is what he called it - if you’re elected at the next election. Have you committed to keeping a ceiling on the tax to GDP ratio?
LEIGH: Two things to say on that, Prue. First of all, the tax take is now $108 billion higher than it was when the government came to office. The tax to GDP ratio is now expected to be over 23 per cent for the forward estimates and we haven't seen that since the Howard era. Labor's view is that we need to make sure that we have the tax base in order to fund the services Australians demand. You’d remember when Labor put in place the National Disability Insurance Scheme, that came with a modest levy alongside it in order to make sure that we could fund that critical pillar of the Australian social safety net. We're closing multi-national tax loopholes and cracking down on tax havens because we want to make sure that every three-year-old in Australia gets access to pre-school. Three-year-old preschool is happening around the world. There's a range of other advanced countries and some developing countries that already provide three-year-old pre-school, but Liberals won't even commit to continuing to fund pre-school for four-year-olds. So that was a key thing that was missing out of the budget update today. If you don't make these tough decisions on closing tax loopholes, Prue, you can't invest in the services that all Australians need.
BENTLEY: But just briefly, to the question of the ceiling or the speed limit so to speak, would the ALP commit to setting a limit on the tax to GDP ratio? In effect, not bring in new and excessive taxes?
LEIGH: To do that would be effectively be say ‘well, we have to leave open a multinational tax loophole because if we close this multinational tax loophole then we're going to raise the tax take’. I don't get that sense from many Australians that I speak out on my street stalls, I don't go around on my street stalls in Gungahlin or Belconnen and have people saying ‘oh for goodness sake, please let these multinationals keep abusing tax havens because if you if don't do that then you're going to raise the tax to GDP ratio’. I hear them saying these companies should pay their fair share of tax, just like local small businesses do, so we’re able to invest in public transport, build the infrastructure of the 21st century, get the National Broadband Network right, make sure that National Disability Insurance Scheme is humming away. All of these things require having an appropriate tax base. When you hear Josh Frydenberg saying Labor is the party of higher taxes, well that not only belies the historical record but also suggests that he's pretty happy keeping these multinational tax loopholes.
BENTLEY: Andrew Leigh is with us. He’s the Shadow Assistant Treasurer. Let’s turn to the National Conference, which has just wound up in Adelaide. It’s been a pretty colourful few days for the ALP and there has been a number off protesters, protests that have interrupted the conference. This shows the breadth of feeling around issues across the Labor Party and beyond, including environment policy, I think there was a protest against the Adani coal mine project, refugees featured. How did that all play out?
LEIGH: Prue, there’s a lot invested in the Labor National Conference because people recognise that Labor is Australia's reforming party. We're not only the largest and oldest political party in Australia, but we also hold open democratic conferences where, unlike the Liberals, we have votes and, unlike the Greens, we let people in to see what's happening. That invites protests. It also invites healthy debate. I love coming to national conferences, but I'm really struck by this one as something that's different from others in the last 27 years I've been attending conferences. There's a sense of earnestness about what people are doing. There's a real sense of purpose that we need to get it right for the millions of Australians who are depending on us - the millions of Australians for whom Newstart is too low, who’d like to see Indigenous reconciliation in the Constitution, who'd like to see Australia become a republic and like to see us engage with our Asian neighbours rather than annoying them by breaking 70 years of bipartisan foreign policy on Israel. We need a grown up government and that's that's what Labor will deliver if we are given the opportunity to govern.
BENTLEY: Can I take you to that Newstart policy. There have been calls from ACOSS and other organisations, saying that Labor needs to commit to raising Newstart by $75 in some instances and certainly the $50 raising which was recommended in, I believe it was the Henry report. Is that something that has been committed by the ALP?
LEIGH: No, it's not. What we've done is we've said that we would take the same approach to Newstart now as we took to the pension in 2007. We went to the 2007 election not promising a particular dollar increase in the pension, but promising a review of the pension adequacy.
BENTLEY: But a review - reviews can happen and then they just fall into the abyss. Where’s the real action?
LEIGH: Prue, let's let's finish the story on that one. That Harmer review then produced the largest increase in the pension in its 100 year history. Because the pension moved above the poverty line, we took more than a million Australians out of poverty. I don't know another measure in the post-war era that has moved so many people out of poverty as Labor's 2009 pension increase. So we're following that that methodical process again. We want to get it right. We don't want to have anyone saying ‘well, you you made an increase without carefully considering the evidence from all sides’. We will engage in this review in good faith. There's this strong feeling across our political movement that Newstart is too low. I share that view.
BENTLEY: Andrew Leigh, good to talk to you. Thank you.
LEIGH: Likewise, Prue. Thank you.
Authorised by Noah Carroll, ALP, Canberra.