E&OE TRANSCRIPT

BREAKING POLITICS

FAIRFAX VIDEO

MONDAY, 18 NOVEMBER 2013

Subjects: Sri Lanka and human rights, child care review, shopper dockets, debt ceiling, role of the Speaker of the House of Representatives

TIM LESTER: The approach of two conservative leaders at the Commonwealth Heads of Government meeting in Sri Lanka could not have been more marked. Britain's David Cameron visited some disaffected families in one part of the country, also upset the government by calling for a war-crimes enquiry. Australia's Tony Abbott, well he gave the Government a couple of patrol boats to help with asylum seekers and seemed only to praise them. Which leader was right? Well, to discuss that issue and others, we're joined on Mondays in [the] Breaking Politics studio by Andrew Leigh, Labor MP here in Canberra. Andrew, thank you for coming in.

ANDREW LEIGH: A pleasure Tim.

LESTER: Who was right in their approach to Sri Lanka, Britain's David Cameron or our Tony Abbott?



LEIGH: I think when we go overseas Tim, we do a little part of the exercise of telling the rest of the world what Australia is - what we stand for. Through each of our statement and our actions we convey Australian values and to have Mr Abbott in Sri Lanka saying of torture, 'I accept that sometimes in difficult circumstances difficult things happen' was to me pretty troubling.  That attitude seemed to contradict what I would have seen as a long standing principle going right back through Labor and conservative prime ministers of Australia that we would never accept that there are any difficult circumstances in which torture was acceptable. David Cameron conveyed his country's values to the world. Mr Abbott, I think, took a domestic political agenda that was smaller than the big-hearted country he represents.

LESTER: What about those two patrol boats, can we be comfortable they will be well used and will not in fact, become a tool of infringing peoples' human rights?

LEIGH: It certainly something we need to watch. The Sri Lankan navy is said to have behaved less than properly at the end of the civil war. And so I think it's an issue worth bearing in mind, and I do think that David Cameron's call for an international investigation is something that would be beneficial to Sri Lanka itself, allowing it to stand taller on the world stage after a CHOGM in which Canada and India boycotted Sri Lanka.

LESTER: Is it good enough for Scott Morrison, our Immigration Minister to say, 'well we'll work out with Sri Lanka how those patrol boats are used' and wave off questions about Australian oversight on their use?

LEIGH: Tim, I did wonder on the weekend, are there in fact two Scott Morrisons? Was there a different Scott Morrison who went to Malaysia to excoriate them on their human rights record, who held a press conference in Malaysia to say their human rights record wasn't good enough? Is that a different Scott Morrison from the one who's now talking about Sri Lanka? Because I can't see any consistency here, apart from the consistency of supporting the Coalition's political interests.



LESTER: So, the use of those patrol boats needs continuing Australian oversight?

LEIGH: I think the Opposition will be asking appropriate questions about how those patrol boats are to be used. I think it's important for Australians to know that their assistance to other countries is properly used.

LESTER: What strikes you about Tony Abbott joining Canada and rejecting a decision by the summit to push for a green capital fund that would have helped vulnerable island states and poor African countries address climate change?

LEIGH: It doesn't seem in either our economic interests or our strategic interests Tim. I was one of the speakers at the climate rallies around the country yesterday, 60,000 Australians calling for tougher action on climate change. One of the speakers at the Canberra rally where I spoke was a representative of a small Pacific nation that is at risk of inundation from climate change from the sea level rises. Australia is experiencing probably what’s going to be our hottest year on record but for these countries climate change threatens their very existence and they will be raising an eyebrow when they see Australia being unwilling to support them in what they regard as their hour of need.

LESTER: Andrew Leigh, is our system of childcare benefits and rebates, apparently one of the most complicated on earth, in need of a big overhaul?

LEIGH: Tim, many Australians rely on child care in order to stay in the workforce. Certainly, I'm one of those. We have our middle child in childcare at the moment and our youngest will soon be going into childcare. Certainly I expect that many Australian families were concerned when they saw that Mr Abbott intends to review the entire system. No additional money and no guarantees there won't be cuts. Labor's agenda of childcare while we were in office was one of making it more affordable, raising the rebate from 30 to 50 per cent and increasing the quality, recognising that this is early childhood, not babysitting, so we had to increase the qualifications and bring smaller group sizes in those early childhood centres. I worry that much of that is at risk with Mr Abbott's review which might end up given large subsidies to affluent families to use nannies and au pairs at the expense of families in the middle and bottom of the distribution for whom childcare is an essential to get to work.

LESTER: We're not at that stage of course. We're only at the stage of a review. Do you believe the system is strong and healthy enough that it shouldn't be reviewed, that a review is the wrong thing to do?

LEIGH: I think we do have a strong and healthy system and I think that if you're going to initiate reviews, you want to give some assurances to families as to what will come out of that review because I think many Australian families will be concerned about the suggestion by Tony Abbott and Sussan Ley of a root and branch review but a commitment to put no more money in. So the only promise that you absolutely count on from Tony Abbott is that early childhood won't get any more money.

LESTER: Independent Senator Nick Xenophon says there is a need for a moratorium on Coles and Woolworths shopper dockets, the ones that allow us to get us our petrol more cheaply after we've bought groceries. He says that the moratorium should be in while the ACCC concludes an investigation. Is that a good idea?

LEIGH: This is an issue that the ACCC has been looking at for a number of years as to whether it's anti-competitive to have a system of shopper dockets which only work at certain fuel stations. But I'm concerned by the suggestion that parliament might micromanage competition policy down to the level of individual firms. We have the ACCC for a good reason because we need an external watchdog that stands up for consumers and competition. I think it's appropriate they do their review. Labor's time in office was focused on making sure that the ACCC had an Act and the resources necessary to stand up for consumers.

LESTER: On the debt ceiling, do you believe the government will get its way and ultimately get the half-trillion dollar new credit limit that it seeks or do you expect Labor will be successful in frustrating it?

LEIGH: Here's what we got to last week. Joe Hockey came to parliament saying he would like a half trillion dollar loan and provided not a single bit of paper to justify it. Parliament went back to Joe Hockey and said, well without any bits of paper, we'll give you $400 billion. Your debt projected to peak in three years’ time at $370 billion so this gives you a comfortable $30 billion buffer for the point in 2016 when your maximum debt will be reached. Joe Hockey threw a tantrum. I guess we're waiting this week to see what he's going to come back with. But I think he should do the smart thing, recognise that either he puts up the mid-year update and provides some evidence as to how his decisions, the $9 billion handout to the Reserve Bank, the $700 million to multinationals, the $4 billion dollar tax cut to mining companies, what impact those decisions have had on blowing out the debt.

LESTER: To close, Bronwyn Bishop is in the chair in the House of the Representatives and speakers set the tone of the house to a great extent? How's the tone of the House of the Representatives under the new speaker?



LEIGH: We'd been promised Tim that the adults would be in charge, but when the name-calling began on the first full day of parliament, I think people began to wonder whether they could trust that promise. The extent to which the Government has been using parliament as opportunity to sling mud is disturbing to me because ultimately trust in parliamentarians and the institution of parliament is absolutely vital for all of us. I think name-calling in parliament fundamentally diminishes all parliamentarians.

LESTER: Even 'Electricity Bill'? I mean it's as offensive as names go, not nigh in the stakes is it?

LEIGH: We can all come up with nicknames for one another Tim and we can begin to spiral down from there. I don't think that's the right way for parliament to go. I think this is ultimately a debating chamber where the issues of how best to manage our nation are determined and if name-calling rules then I think that that probably ends up with worse decisions being made, less respect for parliament and more people switching off politics...

LESTER: ...And reflects on the Speaker?

LEIGH: I do hope that the Speaker will be cracking down, especially on Standing Order 64 of not allowing name-calling in parliament.

LESTER: Andrew Leigh, grateful as always to have you on Breaking Politics.

LEIGH: Thank you Tim.

I think Australians are increasingly realising that the government they elected is not the government they were promised. We saw in question time today the minister for immigration refusing to answer basic questions, attempting to hide the boats. We have seen for months now the opposition hiding the ministers—ministers who were everywhere before the election are suddenly nowhere to be seen, because they cannot get permission from the Prime Minister's office. And now we are seeing the hiding of the budget update, a budget update that yesterday the Prime Minister told the parliament sometimes under Labor came out in December. I’m afraid not. The Prime Minister was dead wrong on that. The budget update should be out now—and it should particularly be out now if you are asking for an increase in the debt limit.

The Treasurer is the only person in Australia who thinks he can ask for a doubling of his credit card limit from the bank and not give them a single piece of paper to justify it. And it is always someone else's fault: maybe it is someone else's debt, maybe the Greens did it, maybe 'the dog ate my homework'. But the very fact is that this Treasurer is making decisions that are going to worsen the 2013-14 budget. He is giving a huge tax break to mining billionaires, who I noticed were very well represented in the parliament today. He is giving $700 million back to multinationals because he cannot crack down on profit shifting seriously. And he is giving $9 billion to the Reserve Bank of Australia. Now, he says he is giving $9 billion to the Reserve Bank because they so desperately need it. He says it is because Labor ‘raided’ the Reserve Bank dividends. It is just a pity we can actually go back and look at the facts. When you go back and look at the facts you see that the amount Labor took out per year by dividends was half as much in real terms as what the Howard government took out. So if we, according to the Treasurer's statement, ‘raided’ the Reserve Bank, then the Howard government doubly raided the Reserve Bank.

The fact is that the Treasurer has given the Reserve Bank $9 billion not because they have asked for it—he has not shown us a shred of evidence of that—but because he wants to take out a bigger dividend in future years. He is like the coach who takes over a quarter of the way into the season and wants to blame his predecessor for the finals result. And he is still out here trying to trash-talk the economy, with this ridiculous suggestion that $400 billion would not be enough for the debt cap. The fact is, $400 billion is below projected debt. And if the Treasurer thinks projected debt is going to go higher then he can release an economic statement and explain why. He can explain how the decisions he has made have weakened the budget—why that tax break to mining billionaires, why that tax break to multinational companies, why that parental leave scheme that gives $75,000 to millionaires to have a child have worsened the budget outcome.

Of course, there is a clear pattern here. Before the election, in May of last year, we were told by the Prime Minister that the debt limit should only be increased where there are the ‘strongest possible arguments’ for doing so. Now we are told that you can do it with the wave of a hand and a few mistruths in parliament. Before, we were told by the Treasurer that were they to win election on 7 September, 'We will own the economy from day one'. After, we are told, 'Actually, sorry—what I meant is, I'll own it from day 300, and for the first 300 days in office I'm going to say it was the other guys' fault.' We were told beforehand that we would see a government that would be transparent, in which the adults would be in charge. But after, we saw the misleading of parliament, not once but twice on this very issue. The Prime Minister came in here and said that he had not voted against the debt cap. In fact, he had voted twice against the debt cap. He said that Labor had released the Mid-Year Economic and Fiscal Outlook in December, but we had not done that.

The fact is that if the Treasurer wants an update on the debt cap he ought to listen to serious commentators like Laura Tingle, who said that 'Joe Hockey's failure to prosecute in the parliament a persuasive argument as to why an increase in the debt cap … was needed made it look more like a political stunt than a serious, needed piece of economic infrastructure'. And as Ms Tingle said, 'Why not $400 billion?'

DOORSTOP INTERVIEW PARLIAMENT HOUSE

THURSDAY, 14 NOVEMBER 2013

ANDREW LEIGH: Since it’s the first time in this new parliament doing doors, I feel as though I should acknowledge Peter Veness, whose ghost seems to still haunt politicians around this spot here. We saw the Prime Minister on 7.30 last night, very clearly saying why he needed $500 billion as the debt cap. It was because he wanted to avoid parliamentary scrutiny. There’s nothing more than that for the Government in this. They don’t need a $500 billion cap. Simply, they want it because they don’t believe that they should go back to the Parliament. It speaks to the arrogance of this Government and it speaks also to their secrecy, their unwillingness to release a budget update.

You know when the Prime Minister’s pressed because he starts to mislead the House. Yesterday when he was pressed on the issue of the debt cap, he misled the House twice. First of all saying that the Liberal Party had never voted against an increase in the debt caps and of course they had. And then saying that Labor had released the MYEFO budget update in December. Which of course we never did. The Prime Minister, if he needs $500 billion for his debt cap he needs to tell us precisely why by releasing the budget update which I suspect will tell us about the deterioration of the public finances, perhaps due to things like backtracking on cracking down on multinationals’ profit-shifting and also giving a big tax cut to mining billionaires, who I understand will be well represented in the parliament today.

JOURNALIST: Just in regards to the debt ceiling, is Labor playing a dangerous game given we’ve got the deadline of mid-December for this decision to be made?

LEIGH: Labor has been absolutely clear that we will support an increase in the debt cap to $400 billion. That will be plenty to keep the Government going now and indeed right up to peak debt which let’s not forget is projected to happen after the next election. So, if any party is playing political games here, it is the Liberal Party.

JOURNALIST: [inaudible] has indicated that there may have to be deeper cuts in the Budget in order to keep the debt below that ceiling. Would you own those cuts?|

LEIGH: That strikes me as a nonsensical argument David. We’re talking about peak debt in 2016-17 for which there would be a $30 billion buffer and Joe Hockey is saying he wants to make cuts in 2013-14. Frankly what Joe Hockey is about is he wants to tank the 2013-14 Budget because he wants that to be Labor’s Budget and he wants his books to look better in future years. But he's the Treasurer who took over a quarter of the way into the season. He's got to own the result in the finals. 

JOURNALIST: Will Labor agree to have a confidential briefing with Treasury on it?

LEIGH:  We're always happy to take briefings but fundamentally this is about releasing a regular budget update which would normally be released around this time. When we wanted to raise the debt cap by a mere $50 billion, a quarter of what Mr Abbott and Mr Hockey want to raise it by, Mr Abbott went on 2GB and said you need the ‘strongest possible arguments’ for doing that. Well that argument comes back to him, four times as strongly now. We were looking for an increase in the debt cap detailed in the Budget brought down weeks earlier. Mr Hockey and Mr Abbott have released no paperwork on why they want this increase. What other Australian would go to the bank and say, 'I'd basically like you to double my credit limit but I won't give you a single piece of paper to show you why?

JOURNALIST: Are you going to miss Kevin Rudd?

LEIGH: I will. Mr Rudd has made a great contribution to the Parliament and to the nation. I think on the world stage he strode it in the great traditions of Doc Evatt and Gareth Evans. Somebody extraordinarily knowledgeable about foreign aid. I remember an aid forum in my own electorate which was just packed out and where Kevin's performance was a tour de force. And of course the Apology, Paid Parental Leave and finally getting rid of WorkChoices, these are achievements that will stand the test of time.

JOURNALIST: Wasn't he a very divisive character for the Labor Party and could he cost more than he brought to the job? 

LEIGH: Mr Rudd was a fine Prime Minister and a great Foreign Minister, somebody who has given his all to public life and somebody whose [shown] passion for making Australia better…

JOURNALIST: You don't think there'd be people popping champagne corks last night?

LEIGH: I think people who have served in the role of Prime Minister have the right to decide when they will leave Parliament and when they will move to the next chapter of public life. And, in Mr Rudd's case, that will involve many important contributions in Australia and overseas.

JOURNALIST: Do you think it was the right time?

LEIGH: I think the timing is always a matter for the individual. If it was the right time for Kevin Rudd then it was the right time. Thanks folks.

At the outset, I wish to register my concern about the duration of this debate. In September 2011, the coalition described as ‘ridiculous’ this House's decision to schedule 35 hours of debate on the carbon price bills. They were bills which, according to the Climate Institute, ultimately had ‘an undetectable impact’ on the overall economy. Yet this House is now scheduling 70 minutes to debate $200 billion—that is $47 million per second of this debate. Every second of this debate that elapses, the debt limit will rise $2 for every single Australian. That is how little this government regards debate in this House.

Fundamentally, what we are debating today can be best understood through the lens of AFL. In AFL there is a tactic that teams sometimes engage in when they are getting towards the bottom of the ladder. They know the best draft picks come from being at the bottom of the ladder, so they engage in a strategy called tanking. They hope to put themselves in a better situation in the next season by doing worse in this season. In Carlton versus Melbourne 2007, fans were hanging their heads in shame. And that is what the Treasurer is attempting to do for the 2013-14 budget: the Treasurer is attempting to tank the 2013-14 budget because he wants that budget to be regarded as Labor's budget. Of course, that is not what the Treasurer said when he was asked before the election what his attitude would be after 7 September. He said, 'If we are to win we will own it from day one.' But actually it appears that what he meant to say was, 'We will own it from day 300.' The Treasurer wants to load as much debt as possible into 2013-14 because he thinks he can blame it on someone else. He wants to tank the 2013-14 budget.

That has a considerable cost for the Australian economy. Mark Kenny in today's Sydney Morning Herald said that when discussing the unprecedented rise in the debt ceiling—the $200 billion rise in the debt ceiling which we are debating at a rate of $47 million a second—said that Mr Abbott:

'… appeared to acknowledge it was essentially a political move crafted to avoid the need to seek another increase during the 2016 election year.'

And of course when the boot was on the other foot the attitude was very different. At the National Press Club on 16 May last year, the member for North Sydney said: 'Labor has now sought increases in the debt limit of the Commonwealth from $75 billion, to $200 billion, to $250 billion and now $300 billion. On each occasion they promise not to exceed their limit. Well, enough is enough. We are going to keep them to their promises.'

Well, that is what Labor is doing today: we are holding the government to its promise to provide open and accountable government. Indeed, the Prime Minister himself told 2GB in May 2012: 'Our money, our future, is too important to be mortgaged like this without the government giving us the strongest possible arguments for it, because every dollar that they borrow has got to be repaid.' And yet we have not heard substantive arguments from the government. We have not seen the mini-budget announced which would provide details as to why this increase in the debt limit to $500 billion rather than $400 billion would be appropriate.

In question time today the Prime Minister said that the coalition had not voted against increases in the debt limit. That was in fact untrue, and I am disappointed to see that the Prime Minister did not follow the example of former Prime Minister John Howard in coming to the dispatch box at the end of question time to correct the record, to admit that he had made a mistake—to admit that in fact what he had said was not true.

In the National Press Club address that I referred to earlier, the member for North Sydney said that budgets are 'a window into a government's honesty and honour, a government's competence and capacity, a government's substance and sustainability'. In the Australian today, the Treasurer quoted my words in speaking about the opposition's attack on raising the debt limit. What he failed to alert readers of the Australian to was that I was referring to not a $200 billion increase in the debt limit but a $50 billion increase in the debt limit. I was referring not to an increase in the debt limit which was unjustified by the economic papers but to one for which the case had been made in the budget brought down just weeks beforehand.

The coalition has campaigned in front of debt trucks and now they are looking at increasing the government debt limit, just about doubling it. Frankly, that debt truck has now become a double-decker. They are standing in front of the debt truck—and it had better be a B-double because that is the size of the debt increase. One can make reasonable arguments for debt, but those arguments have to be articulated. You cannot simply go to the bank and say, 'I would like to just about double my credit card limit, or my mortgage', without providing some documentation. No Australian household would do that, and this House should not allow the government to do it.

When Labor took on modest levels of debt, some of the lowest levels in the developed world, we did so to save jobs and save small businesses. If you think Australia should have no debt, then fundamentally you think when the global financial crisis hit we should have had more unemployment and more small businesses hit the wall.

But now we have debt increasing because the Treasurer is choosing to give $8.8 billion to the Reserve Bank. Why is he doing that? In question time today the Treasurer referred to dividends which had been taken out from the Reserve Bank by the Labor government. That is a great question to look at. Let us have a look at the dividends that have been taken out from the Reserve Bank. In an article in Business Spectator, Stephen Koukoulas pointed out that the Reserve Bank of Australia's annual report detailed dividends paid by the bank to the government since 1997-98. Under the Howard government, the Reserve Bank paid a total of $20.2 billion in dividends, $1.83 billion a year. In today's dollar terms, that would be $30 billion or $3 billion per annum. Under Labor, the Reserve Bank paid a total of $7.9 billion in dividends or around $1.3 billion each year on average. In today's dollar terms that would be $1.5 billion dollars per annum.

So when those opposite refer to Labor ‘raiding’ the Reserve Bank, they should have a look at their own behaviour in office. What the coalition under the Howard government took out of the Reserve Bank was twice as large per year as what Labor took out. Hypocrisy, thy name is Hockey. Those opposite took out $3 billion a year in real terms from the Reserve Bank; we took out $1.5 billion dollars a year. So let us not have any talk about how it is necessary to give $8.8 billion to the Reserve Bank to recapitalise it. Fundamentally, this is about tanking the budget and ensuring that in future budgets the Treasurer can take a larger dividend from the Reserve Bank. This House should approve an increase in the debt limit, but only to $400 billion—unless the Treasurer is willing to bring forward an economic statement that justifies a $500 billion debt cap.

Can I congratulate the members for Bass and Corangamite on the passion with which they have delivered their first speeches and hope that they will serve their constituencies with the same energy and passion as their predecessors did.

I want to begin my remarks today with the stories of two constituents of mine: Carol and Denise. Denise has a 21-year-old son, Tim, with Down syndrome. She regularly has to prove his eligibility for a modest Centrelink payment and work within a system that has not been working for her and has not been working for Tim. Tim's chromosomes are not going to change, but the old system required her to prove that. DisabilityCare will change that.

Then there is 48-year-old Carol, who works as a cleaner. Despite working on Sundays to earn some overtime she still earns less than $37,000 a year. Carol is not alone. A lot of low-income workers in cleaning, aged care, retail and hospitality are not full time and they are predominantly women. The removal of the low-income superannuation contribution will affect 3.6 million Australians and two-thirds of them are women. All of them, like Carol, work hard to make ends meet. They are the mothers who work part time because they are looking after young children. For them, saving for later in life is not a tax strategy.

DisabilityCare and the low-income superannuation contribution demonstrate how Labor take the initiative to defend those who are doing it tough. Labor are the party of ideas and we are the party of reform, the party with the courage to make the big decisions when they are needed. As the opposition leader said at this year's Fraser lecture:

'We’re the dreamers, doers and fighters.

'We have ideas, and … we’re prepared to fight to make them a reality.'

I agree. Only the Labor Party is prepared to fight for a fair go for all and shoulder the responsibility for reform. Only Labor knows that reform must balance economic imperatives with social need and hope. I am sorry to say that that is in stark contrast to the approach of the Abbott government. We have already seen how quick they are to protect sympathetic vested interests and how much quicker they are to slug those doing it tough.

The Treasurer would have you believe that drastic action has to be taken because of the economic legacy left by Labor. Over the next few weeks we are doubtless going to hear, time and time again, what a terrible state the economy is in. Before the Treasurer attempts to airbrush recent history, let's take a sober and sensible look at the economy that the government have inherited and what they have done with it so far. That look has to recognise the simple, fundamental truth. The government have inherited economic statistics and public finances that are better than those of almost any country in the developed world.

In Business Spectator Stephen Koukoulas wrote, following the 2012 budget outcome in September this year, about some of the salient economic statistics. He pointed out that the budget deficit had fallen to 1.2 per cent of GDP in 2012-13, a reduction of 1.7 per cent in the deficit from the previous financial year. This was, as Mr Koukoulas pointed out, the largest year-to-year fall ever recorded for a budget deficit. Net government debt rose by a paltry 0.1 per cent of GDP in 2012-13, and a 10.1 per cent of GDP gives us one of the lowest levels of government net debt in the world.

Australia remains, despite talk of budget emergencies, one of the few countries to maintain a AAA credit rating from all three international ratings agencies. It fell to the Labor government to deal with the worst economic crisis since the Great Depression. But, at the end of that, we left Australia with an unemployment rate well below the average for the developed world and with a level of public debt well below the average for the developed world.

In spite of the global financial crisis we created over one million new jobs, while the rest of the world shed 29 million new jobs. Australian families saw their interest rates fall. A family with an average mortgage of $300,000 was $5,500 better off than they had been when the coalition were last in government.

When he released the budget outcome, the Treasurer claimed that the next year's budget would be the legacy of the Labor Party. How times have changed because, when asked on 6 August, when would a coalition government own the economy, the Treasurer answered:

'We will own the economy from day one, whether it's Labor's fault or not. I'm not afraid to accept responsibility and I'm not afraid to be accountable.'

But as soon as he became the Treasurer the tune changed. As Stephen Koukoulas has argued, the government has inherited some of the best budget and government debt circumstances in the world. As a share of GDP, government spending is 24 per cent in 2012-13, a little less than the average of 25 per cent over the last 30 years, and approximately the same as the average spending to GDP ratio under the Howard government.

Let us not have the rhetoric of 'profligacy' and 'budget emergencies' in this place. No coalition government has ever once delivered a single year in which there was a cut in real government spending. By contrast, Labor delivered real spending cuts in the last year's budget. Not only did we deliver real spending cuts, we delivered nominal spending cuts. Despite inflation, dollar spending actually fell.

So much for the Treasurer's bluster about waste. Labor's investments were vital investments for Australia's future: DisabilityCare, Better Schools, making sure that Australia's low-income workers did not end up getting a worse deal out of superannuation than the highest income workers. I look forward to the explanations of the Prime Minister, his hand-picked adviser Maurice Newman and the Treasurer to people like Carol and Denise, who are seeing threats to DisabilityCare and who are seeing their superannuation taxes rise, and to those unemployed Australians who are seeing an effective cut in unemployment benefits through the withdrawal of the income support bonus. I look forward to them receiving an adequate explanation from the Prime Minister and the Treasurer.

Treasury estimates that 36 per cent of tax concessions for superannuation contributions went to the top 10 per cent of income earners. As for the bottom 10 per cent, they were actually penalised rather than subsidised out of the superannuation system. This is not fair. It is not fair for people on low or modest incomes to give up more to increase their superannuation savings. It is not fair that this government places a higher priority on looking after 16,000 Australians with superannuation assets over $2 million than it does on looking after the interests of three million low-paid workers, two million of whom are women.

The Prime Minister has made a great deal of the importance of promise keeping. A few days before the election he told the doyenne of the press gallery, Michelle Grattan, that he would 'move heaven and earth to keep commitments and only if keeping commitments becomes almost impossible' could he ever be justified in not keeping them. He went on to say, 'The electorate would take a very dim view of breaking promises, even in difficult circumstances.' After just three weeks in office this government had already broken three promises.

The first has been the budget non-emergency. After railing against debt and deficits, after relying on the misleading gross debt figures, the Treasurer was already looking to reclassify debt so he could borrow more for his favourite projects. The budget deficit is going to be significantly larger under Treasurer Hockey than it would have been under Treasurer Bowen. This week the Treasurer will ask the parliament to increase the debt limit to half a trillion dollars. We on this side of the House understand and support a necessary increase to the debt limit. We will move amendments to set a debt limit of $400 billion. We are not going to play Tea Party games with the economy. But we demand the Treasurer be up-front and honest with the Australian people about why he wants an increase to $500 billion, why he wants a 66 per cent increase in the nation's credit card limit. The Treasurer has refused to release the Mid-year Economic and Fiscal Outlook, his mini-budget, which would track any estimated increase in peak net debt and which would show whether those decisions were decisions for which the new Treasurer should take responsibility. It is not reasonable for the Treasurer to expect Australians to tick off a two-thirds increase in the nation's credit card limit with no information provided.

I think Treasurer Hockey is probably the only person in Australia who thinks he can nearly double his credit card limit without a single bit of paper to justify it. It was low-doc loans that got the US into some of its financial strife, but the Treasurer is now effectively asking this parliament for a no-doc loan. That is not good enough. As a prominent Australians said of a prior debt increase in May 2012:

'Our money, our future is too important to be mortgaged like this without government giving us the strongest possible argument for it. Every dollar they borrow has got to be repaid.'

That is the now Prime Minister speaking on 2GB in May 2012. What the opposition is asking of the government is nothing more than Mr Abbott asked of us in May 2012.

The Treasurer has topped up the Reserve Bank with close to $9 billion, an increase which it has funded through borrowing, costing the Australian taxpayer a million dollars a day. Again, it is a no-doc decision. Australians do not have the information in front of them to enable them to judge whether or not that is a reasonable course of action. Last week the Treasurer announced changes to taxation that will increase the budget deficit by $3 billion over the forward estimates. He has watered down Labor's attempts to get multinationals to pay their fair share of tax. Profit shifting is a vital international issue.

The G20 will be discussing this. Labor's reforms to stop profit shifting would have added $1.8 billion to the budget. But, by the coalition's reckoning, after they have finished their attempts to deal with profit shifting will only net $1.1 billion. That is money that has to be made up. That $700 million difference either means a reduction in services for Australian households or higher taxes.

As the shadow Treasurer stated:

The fiscal deterioration, the $9bn RBA grant and other major revenue announcements have all occurred since 7 September on Mr Hockey’s watch.

If, as he said on 6 August, the Treasurer owns the economy from day one and is not afraid to accept responsibility, then this broken promise falls squarely to him. Trying to blame Labor for the 2013-14 budget outcome would be like a coach who takes over a quarter of the way through the season and then tries to blame his predecessor for the finals result.

The second broken promise is the pledge that no public servants would be fired. That pledge was broken on the first full day the Prime Minister was in his job, when three agency heads were fired...

(The debate was interrupted).

I rise to speak in continuation. In the intervening period since I last spoke we have had an extraordinary intervention. I was speaking about broken promises by this government and we just had a question time in which the Treasurer was asked whether we will have three AAA ratings at the end of this government's term in office. He responded: 'I would certainly hope so. We were the ones who got them in the first place.' I have heard of a wing and a prayer, but that is, frankly, a hope and a mistruth, because of course three AAA credit ratings came under Labor, not under the coalition.

The second broken promise was the pledge that Public Service cuts would come by natural attrition. In my electorate, a postgraduate student, Dionne Wong, is one of dozens of young people deeply disappointed after their contracts were terminated. After having signed a contract with AusAID, DFAT has told her she is 'surplus to requirements'. That is not natural attrition; that is smashing the dreams of young people. At the same time we have seen AusAID staff being brought into the DFAT atrium, herded in like cattle, while DFAT colleagues look down upon them from the higher floors and one of them mimes machine-gunning the AusAID staff. That is not the way to bring about change management in an organisation.

Maybe I should not be surprised that a government without a science minister is slashing the CSIRO. Again, it is not by natural attrition but brutal cuts that will soon turn into forced redundancies.

There is a third broken promise. On 26 September the Prime Minister said:

'The assurance that I give the superannuants and the superannuation savers of Australia is there has been no adverse changes to their superannuation arrangements under this government.'

This is false. Three million low-income earners will have the low income superannuation contribution taken away from them. For them, this is indeed an adverse change.

In his Fraser lecture the Leader of the Opposition recounted how at his campaign launch Paul Keating had said Labor was on the side of the angels, and that the angels are:

'… the men and women of Australia … who make the place what it is, the ones who've got nothing to sell but their labour, nothing to sell but their time. No capital, particularly, and who need the support of the political system to give them a better standard of living, a better way of life and a better future.'

This is what Labor stands for and that is what we on this side of the House will be fighting for over the next three years.

JONATHAN GREEN: Welcome to you both.

ANDREW LEIGH: Good day Jonathan.

ARTHUR SINODINOS: Thanks.

GREEN: Well you're back. How does it feel?

LEIGH: Well it's exciting. Andrew Leigh here, I was particularly excited that Arthur and I got to have parallel roles once more. I think that was, of all the changes of responsibilities, the bit I enjoyed the most. The symmetry of what I think Walleed Aly called the two knights.

GREEN: Very nice indeed.

SINODINOS: Absolutely.

GREEN: Arthur Sinodinos.

SINODINOS: We're living in a parallel universe Jonathan.

GREEN: In so many ways.

LEIGH: But for me Jonathan there is something genuinely nice about shadowing somebody who personally I respect a great deal.

SINODINOS: And vice versa. Anyway.

GREEN: I'm glad to hear the love in the room. Clearly the kinder, gentler Parliament is off to a flying start. Arthur Sinodinos why can't we see the figures that demonstrate the need for this rather large lift in the debt ceiling?

SINODINOS: You will Jonathan. You will see them in the Mid-Year Economic and Fiscal Outlook, which will be out before Christmas. I think the Treasurer has already been pretty transparent about the reasons for this. I think Labor, when it put down its last budget in May, should have been prepared to have another debate on the debt limit then and raised it then. And the reason we're raising it now, is because we need to accommodate, on Treasury advice and the advice of the Office of Financial Management, is the increase in debt that's required given the budgetary settings that we have at the moment and to take into account potential fluctuations in the amount of debt that will be needed to finance Government activity within the year as well. The advice…

GREEN: Andrew Leigh, wouldn't you like to see that financial update before you vote on this debt increase?

LEIGH: That's absolutely our position Jonathan. Somebody last year put the argument as follows, he said: "our money, our future is too important to be mortgaged like this without the Government giving us the strongest possible arguments for it." That's Tony Abbott speaking about the debt limit increase, which the Coalition opposed. We are happy to support a debt limit increase, which covers where debt was expected to peak on the last budget update. If Mr Hockey thinks that debt is going to peak at a higher level, if the decisions he's made is going to push us past that, then I think the Australian people are entitled to some information. It's a bit like if you're asking for an increase in your credit card limit, well the bank's going to want to see some evidence of how you're going to repay the debt and why you need that. This is a bit like going to the bank and expecting a low doc mortgage.

GREEN: This is a problem is it not, that, Arthur Sinodinos, you're arguments of May last year around this specific issue are now coming back to bite you.

LEIGH: Jonathan, I need to excuse myself, there is a division in the House. I am sorry. Apologies for slipping out. The respect I spoke about for Arthur now extends apparently to him taking both sides of this debate. I'm sorry, but I do have to go.

GREEN: Andrew of course you're excused. Arthur you now have the floor unimpeded.

SINODINOS: No look, Jonathan, there is complete transparency around this and you will see it all laid out in the Mid-Year Economic and Fiscal Outlook. The point I would make, is that we had asked, at the time of the last budget, that if there were to be a debate around this we'd need all the information. The Government should have been prepared to raise the debt limit then. The advice we received on coming to Government is that the debt limit should go up. 450-460 was the amount. The Treasurer decided that by going to 500 he would obviate the need to come back, hopefully within this term of Government.

GREEN: And yet you did argue pretty strongly, you know, in the middle of last year, against an increase for the previous Government. As Tony Abbott said then, the Government should be forced to specifically justify this, not just sweep it under the carpet and allow it to go through in the appropriations. I mean you're asking this of the Opposition now, are you not? To approve the increase, no matter how reasonable, but to approve that increase ahead of the information that would justify it.

SINODINOS: Jonathan, I think Andrew is able to come back so we'll have a proper debate. But to your point, the justification will be fully laid out in the Mid-Year Economic and Fiscal Outlook. There is no point doing this in dribs and drabs and the Government should have taken responsibility for doing this in May, they weren't prepared to, they didn't want to have another debate on debt. We're happy to have another debate on debt this week, next week and right up until Christmas, because that will focus on how we got to a debt of $300 billion in the first place.

GREEN: The problem there for you Andrew Leigh, is, you know what I mean, there is a sense that this is the Labor Government legacy, is the debt of this extent.

LEIGH: Jonathan, certainly Australia has a level of debt, it's a modest level by developed country standards. I suspect pretty much any economic policy maker in another developed country would happily take on our level of debt rather than theirs. We took that on in order to save jobs. But the Coalition, since taking office, has added to that debt and that's what we want more information about. So, some detail on why it was necessary to give another $9 billion to the Reserve Bank, about whether now is really the right time to be giving a big tax break to mining billionaires. So some of that sort of information, I think it would be useful to have on the public record before Parliament votes for what is really a massive increase in the debt ceiling, 66%.

GREEN: And apart from debt, Arthur Sinodinos, as Andrew Leigh points out there, the $8 billion, the Reserve Bank is building into what's going to be a steadily increasing deficit as well.

SINODINOS: Look, in relation to the Reserve Bank, they were very happy for us to put another $8.8 billion in at the beginning of the term to replenish their capital. It's an investment in them being better able to deal with economic and financial volatility in the global economy over the next little while. Their capital had been run down, they were uncomfortable about providing, I think, the last dividend to the Labor Government. So they were very happy to have this infusion and I think it took some courage on the part of the Treasurer to be prepared to wear this increase of 8.8 billion now, in order to give them that comfort. And most Australians, I think, would say it's better to be safe than sorry and rather than do things under the pressure of a crisis, have that money in the bank as it were and have the Reserve Bank ready to deal with whatever might come our way.

GREEN: That outlook is looking a little (inaudible) isn't it? I mean we've got debt increasing, the possibility of stronger deficits, we're sacking, well not, removing numbers in the public service, the potential for the pulling out of subsidy to the auto industry, the signs aren't, well they're not bullish, are they Arthur Sinodinos?

SINODINOS: Look Jonathan, on that front, there is a balancing act here. We do need, I think, to get the public sector into better shape. A lot of the budget challenges are medium term challenges, particularly in the second half of this decade, as we start to pay for the ramp up in the National Disability Insurance Scheme, as there are further payments on education, as the impact of aging of the population further increases, health and age spending. There are all these drivers around, which are going to be causing the budget to deteriorate further over that medium term period. So in a sense the budget emergency that we spoke about before the election, there is a short term impact, but there is a medium term impact as well and it's very important for us to start to address that, but to do it in a way, which doesn't put the state of the economy at further risk, in a context where unemployment is edging up and growth has been below trend. And you're right, business and consumer confidence has gone up since the election, but we need to build on that, we need to rebalance government spending with a greater emphasis on investments and infrastructure and get proper controls over the other elements of government spending.

GREEN: Are you confident Andrew Leigh that the Government can pull off that tricky balance?

LEIGH: Well Jonathan, I certainly agree with the goals that Arthur is talking about, but I do think that we differ on how to get there. I for example would think it's important not to take away the Mining Tax, a tax which has been put in place during a period in which there has been unprecedented level of investment in the mining industry and where you've got $4 billion of revenue, which are pretty important to Australians. I'm not sure it's an appropriate time to be putting in place an extremely expensive parental paid leave scheme, which unlike the present system gives the most to those who have the most. Yet at the same time you've got the Coalition effectively cutting income support, taking away the Schoolkids Bonus and you've got the Prime Minister's handpicked advisor Maurice Newman questioning whether or not initiatives such as disability care and better schools should go ahead and whether perhaps Australian wages are too high. I think that that low wage road is the wrong one for Australia to go down. I certainly for one, would prioritise the most disadvantaged Australians ahead of the mining magnates.

GREEN: And I wonder Arthur Sinodinos what we ought to do about foreign investment. We had the decision today from the Treasurer on Warrnambool Cheese and Butter. GrainCorp, is that decision on Warrnambool concern an indicator of the Government's attitude to foreign investment that might also apply to GrainCorp?

SINODINOS: I think Jonathan, both the Prime Minister and the Treasurer have made the point that we look at these on a case by case basis. If you go back to the Howard era, pretty open attitude to foreign investment but there were cases like Shell and Woodside, where that takeover of Woodside wasn't allowed to happen. In Labor's time we had the Singapore Stock Exchange takeover, which was not allowed to happen. So there are circumstances in which on a case by case basis you have to judge whether a particular proposal is contrary to the national interest or not. So I can't comment specifically on the GrainCorp one, but as a general proposition, on both sides of politics, I think, there is strong support for continued foreign investment in Australia. And if I look at the agricultural sector for example, it's quite clear, foreign investment will be crucial to developing that potential we've got, including in the north of the country.

GREEN: Andrew Leigh..

LEIGH: I think…

GREEN: Go on then.

LEIGH: I was just going to say Jonathan, I think Arthur is exactly right in terms of the importance of foreign investment and agriculture and you just need to go back to companies like CSR and look at the importance of Japanese investment in the beef industry. I do worry though that with this decision it's getting too much caught up in internal politics between the Liberal and National Party, with Warren Truss suggesting that the Australian Stock Exchange will fall over if a company that constitutes 0.2 per cent of it becomes foreign owned, Barnaby Joyce threatening to throw a dummy spit and Joe Hockey responding that he won't be bullied by anyone. This isn't, this doesn't bode well for the Government making these decisions in a mature, sensible fashion that put the national interest first. And I fear we might for example get to a place where Mr Hockey wants to please both sides and ends up putting in place an approval with so many conditions attached that effectively it's a rejection.

GREEN: I must say gentlemen that if your conduct between each other this evening is any guide, we can in fact look forward to a more civil and considerate Parliament.

LEIGH: Thank you Jonathan and my apologies from my end for mistaking an adjournment for a division, which you're parliamentary wonkish friends will appreciate.

GREEN: Rookie error Andrew, rookie error. Thank you both for your time and …

SINODINOS: Thanks.

GREEN: Good wishes to you both for the coming engagements.

ENDS

BREAKING POLITICS

FAIRFAX VIDEO

MONDAY, 11 NOVEMBER 2013

Subjects: Asylum seeker stand-off with Indonesia, Warsaw Climate Change Conference, Grain Corp takeover.



TIM LESTER: There is debate about how many times it has happened in recent days but no debate over the fact that it is happening. Indonesia is turning back asylum boats that the Abbott Government would like our near neighbour to take. What does this say about the Abbott Government's asylum policy going forward? Every Monday Breaking Politics is joined by the Labor MP in Fraser, Andrew Leigh. Welcome in Andrew.

ANDREW LEIGH: Thanks Tim.

LESTER: First, does Indonesia's stance on tow-backs surprise you?

LEIGH: Not in the least Tim. This is what Labor has said for upwards of a year would happen. The Indonesian Government has been firm and consistent in their position on Mr Abbott's tow-back policies. That's why before the election he conspicuously failed to raise it with our Indonesian colleagues. I think calling the Government's asylum seeker policy ‘shambolic’ is probably being too generous. We're now learning more about what Australian navy vessels are doing through the Jakarta Post than we are through the official briefing from Mr Morrison. It appears now that the reason he wants a General to stand next to him is so that he can shield behind that General and refuse to answer questions. And, as to the ‘buy-back the boats’ policy, we've heard precious little of that in recent times. It's really disappointing Tim. This is a vital relationship for Australia. We must treat our Indonesia colleagues with respect. They are the fourth-largest country in the world; a very important relationship for Australia being dealt tremendous blows by the toing and froing, the back and forth that is this Government's asylum seeker policy.

LESTER: Tremendous blows? Is the damage to our relationship with Jakarta really that bad?

LEIGH: I think it is Tim. I think it is. The relationship with Indonesia is a vital one but you can see, reading the accounts in the Indonesian media, a real concern that the Australian Government is not treating Indonesia with the respect to which it is entitled. Policies like the boat buy-back were very worrying to Indonesia as were suggestions of payments being made directly in Indonesia for intelligence tip offs. These things would be deeply offensive to us were our Indonesian neighbours to suggest them in their political system.

LESTER: For all of this the Immigration Minister, Scott Morrison, is at least at the moment able to say in his briefings is that the trend is in the right direction, that numbers of asylum boats and asylum seekers are reducing. We're heading in the right direction, at least the policy at the core of this, is being achieved isn't it?

LEIGH: Since Labor put in place the Refugee Resettlement Agreement we've begun to see a decline in asylum seeker boats and frankly I don't think there's anything that the Coalition has put in place since winning office which could reasonably be said to have contributed to that. The turn-back policy clearly is having no effect because it isn't taking effect. The buy-back policy has been hidden and I don't think anyone believes that Scott Morrison hiding from the media is having any impact on asylum seekers coming to Australia.

LESTER: The Australian this morning reports that Cabinet has decided that there will be no new agreements for the Australian delegation going to the Warsaw climate change meeting; not allowed to enter new packs of any sort. How does that strike you?

LEIGH: It's a bit of a worry to me Tim. We are the 12th largest economy in the world. We are important nation on the world stage. Now, thanks to Labor, with a seat on the U.N. Security Council and the G20 meetings happening in Australia, we ought to be holding our heads up tall in any international negotiation - sending a delegation of appropriate seniority, which isn't happening, and treating other countries with respect and being willing to listen to their views and adapt ours in response.

LESTER: Appropriate seniority, you say, would be Greg Hunt going, the Minister, or...

LEIGH: ...I certainly believe it's either appropriate the minister or the parliamentary secretary attend these talks.

LESTER: The Minister is of course has got what he considers rather pressing matter of repealing the carbon tax this week, hasn't he?

LEIGH: Well, the Minister has gotten himself into terrible strife with his international counterparts. He's attacked the U.N.'s climate change chief, using Wikipedia has his main source to critique her and he's simply been unable take a stance which meshes with what's happening globally. Globally we're seeing over 30 countries putting in place emissions trading schemes. The Chinese city-wide emissions trading schemes are likely to be nation-wide after 2020. Australia has a system that's working to reduce carbon emissions. We're already seeing it having that effect. As the world's largest per capita emitter, why would you trash a policy that's working and go for a short-sighted policy that ends in 2020 and won't do the job.

LESTER: Because the electorate has told you do it, might be the answer from the Government and this week they introduce the legislation to scrap the carbon tax and you will sit in parliament with your Labor colleagues and effectively ignore the expressed will of the Australian people won't you?

LEIGH: Tim, I campaigned in the last election for a cap on carbon pollution and that's what I will do after the election. Mr Abbott might be prepared to behave like a weather vane to swing with whatever strategy he thinks best suits his political fortunes.

LESTER: He's swimming with the mandate isn't he? That's the point?

LEIGH: As am I Tim. I campaigned in the last election for a cap on carbon pollution and on the floor of parliament I will vote for a cap on carbon pollution. If Mr Abbott had behaved in the way I intend to behave in 2007 then in 2009 he would have voted for the same emissions trading scheme that he campaigned for in 2007. Mr Abbott's on the record of, at one stage, being correct in this debate, saying that an emissions trading scheme was a low cost way of reducing emissions. But he'll swing whichever way he thinks gets him the largest political advantage. I'll vote for what I think what's best for the Australian people and the planet.

LESTER: The Government, indeed the Federal Treasurer, has to make a decision on the potential foreign takeover of Grain Corp, the giant grain handler by December 17. Is this off/on, black/white decision?

LEIGH: It's not Tim. Foreign investment decisions are made typically with some conditions. My concern here is that having kicked the can down the road, having pushed the decision nearly to Christmas, that the Treasurer is looking now to make a decision which is going to satisfy his National Party colleagues by putting so many conditions on the sale that ultimately it's unworkable.

LESTER: Because the Nationals, of course, don't want the sale at all.

LEIGH: Well, Warren Truss has been quite clear that he thinks the Australian stock market will fall over if 0.2 per cent of it is purchased by Americans. Mr Hockey has pointed back, nobody, nobody, nobody will challenge him or bully him. So this is breaking out into a full-on war within the Cabinet. My concern is that ultimately where they land will be based more on politics than on good economics or based on making it look like Australia is open for business where in fact, putting so many conditions on the sale, that ultimately it can't go ahead.

LESTER: And what will that say if they do go down that track. What will that say about whether Australia is open for business or not?

LEIGH: Well, it would suggest that Mr Hockey was more concerned over the politics of foreign investment than making the right decision. If Mr Hockey wants to stymie this decision by placing so many constraints on it that the sale can't go ahead, then he might as well simply oppose it. But it's going to hard for him to [approve it] because his National Party colleagues, Barnaby Joyce, Warren Truss are very much in the fortress Australian mentality.

LESTER: So, to close, if you were in the Treasurer's chair and having to look at this, you'd give it a tick without conditions?

LEIGH: We'd make the decisions based on the national interest Tim. But this is a decision squarely for the Government. This isn't a decision the Opposition makes. Mr Hockey makes it and I think it's perfectly reasonable for us to talk about the pressures, challenges and the importance of him making a decision that's in the national interest.

LESTER: Andrew Leigh, welcome back to parliament this week and we'll look forward to talking to you again next Monday.

LEIGH: Thanks Tim.

Media Release

Sunday 10 November, 2013

GST HIKE ON MOBILE HOMES BAD NEWS FOR LOW INCOME AUSTRALIANS

Assistant Shadow Treasurer, Dr Andrew Leigh, has raised concern about a new draft Australian Tax Office ruling that could see thousands of mobile home owners face higher rents.

The ATO has issued a draft ruling on the Goods and Services Tax (GST) paid by park owners managing properties where mobile homes are based.

The draft ruling, now out for consultation, will mean park owners are slugged double the GST paid on leased sites.

“Labor is concerned the ATO ruling would not just lead to higher costs for park owners but that those costs will be passed on to low-income Australians who permanently live in demountable or mobile homes.”

There are at least 3,000 Australians living in mobile homes in privately run home parks.  There are many more people living long term in mobile homes in caravan parks.

“Most people living permanently in mobile homes either as a lifestyle choice or as a last resort live in very basic conditions with minimal facilities and few amenities compared to conventional forms of housing. Many are pensioners and families doing it tough,” Dr Leigh said.

“Labor MP Justine Elliot has already spoken out about the impact of this draft ruling on her constituents on the NSW north coast. But we are yet to hear boo from the Coalition.”

“I call on the Abbott Government to explain whether it supports the ATO’s ruling.

“It is a concern given the skewed values and priorities of the Abbott Government which favour the most affluent, and hurt the most disadvantaged.” Dr Leigh concluded.

ENDS