Mix 106.3 - 21 August 2013
This morning, Liberal candidate Zed Seselja and I spoke with hosts Rod and Biggzy on Mix 106.3. Topics included risk management, Coalition costings, the sacking of Raiders coach David Furner, and catching Biggzy's cousin on one of my phonecalls to electors. Here's a podcast.
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Public Sector Job Cuts
My letter to the Canberra Times today (with an apt heading):
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Libs vow to decimate PS
Several commentators in The Canberra Times have recently argued that Labor is ''driving down the road'' towards the Liberals' promised public service job cuts.
This misses the fact that the Liberals' policy is to cut between 12,000 and 20,000 public service jobs at the point when they are elected.
The Liberals will not undo the efficiency dividend or our targeted reduction in EL/SES positions. Their cuts will come on top of our recent decisions, not instead of them.
A vote for the Liberals on September 7 is a vote for 12,000-20,000 fewer public servants. For Canberra, that means higher unemployment, more bankruptcies, and lower house prices.
Andrew Leigh, federal member for Fraser
Talking politics with 2CC's Mark Parton - 20 August 2013
I spoke this morning on 2CC with Mark Parton. We discussed how the new UC Sports Hub will benefit Canberra and the region, and why the alternative to acquiring a modest level of debt was dire joblessness for hundreds of thousands of people. Here's a podcast.
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ABC RN Drive - 19 August 2013
On 19 August, I spoke with Waleed Aly and Arthur Sinodinos about the Coalition's paid parental leave plan. It was a thoughtful conversation as always, but I couldn't resist pointing out that the plan gives five times as much to the richest as the poorest, and is yet to be properly costed. Here's a podcast. Transcript over the fold.
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Transcript
19 August 2013
ABC Radio National Drive Interview – Waleed Aly
WALEED ALY
Will that levy hold or will it break? Senator Arthur Sinodinos and Andrew Leigh join me now, respectively Parliamentary Secretary to the Leader of the Opposition and Member for Fraser, previously Parliamentary secretary to Julia Gillard when she was PM. Gentlemen welcome.
ARTHUR SINODINOS
Thank you Waleed.
ANDREW LEIGH
Thanks Waleed.
WALEED ALY
Arthur start with you: that’s not really a good enough answer is it? Might be this, might be that, I’m not really sure.
ARTHUR SINODINOS
Well I don’t know what papers Joe had in the car with him, but I think what he was saying is that all will be revealed in due course in the sense that there is a definitive set of costings coming out, which will cover not only this, but all the other commitments we have made during this campaign. He made a reference to 50-70% of the cost of the scheme being covered by the levy and then there are offsets because the Government scheme no longer applies. States potentially make a contribution if State public servants are covered by the Federal scheme. So there are things like that which would have to be sorted.
I mean what’s definitive is that the levy would be on the bigger businesses that we’ve talked about I think before, but they will also be subject to a tax cut, so they are not worse off in that sense. They just don’t get the benefit of the tax cut in the same way smaller businesses do.
WALEED ALY
Yeah I understand that point, but a margin of error of 20% of the cost, I mean if it’s a $5 billion scheme, that’s a billion bucks.
ARTHUR SINODINOS
To be fair to Joe, I don’t think it’s right to say there is a margin of error. I mean he will give the more precise figures when all the costings come out together and as you can appreciate policies are being announced as we go and then when they’re all tallied up, you’ll have all the savings attached and then they’ll be a further contribution towards the budget bottom line.
WALEED ALY
Not a new policy though that’s been around three years. I would have thought he’d know the figure off the top of his head, unless of course the costings aren’t done yet in which case there is no way that he or your colleagues can stand before us and tell us that it’s responsible.
ARTHUR SINODINOS
No, no I think he, to be fair to Joe, all these costings will come out together in due course, by the last week of the campaign.
WALEED ALY
That’s when they come out, but he would know what the figures are.
ARTHUR SINODINOS
But I think what he is doing is, he is saving up all the stuff so you can see everything together, see the overall impacts on the budget bottom line and the impact on where we end up on the deficit and surplus for a particular year, for the budget.
WALEED ALY
Allright, Dr Andrew Leigh, I might get your reflection on this. If there is a productivity case to be made here that a Paid Parental Leave Scheme like this is a productivity measure, not a welfare measure, doesn’t this show that the Government is really behind on this, that it doesn’t have, at least there is a blind spot here in the way in which it’s approaching productivity.
ANDREW LEIGH
Well if that were the case Waleed then that might be true, but I am not aware of any serious economist who argues that the Coalition’s Parental Leave Scheme would boost productivity or participation relative to the existing scheme, which has already benefited around 300 thousand Australian parents.
The thing about the Coalition’s scheme is that it gives the most to those who have the most and in that sense it is completely at odds with the way in which the Australian social safety net has always worked. Ours has been a very targeted social safety net, that’s why it’s done so much to reduce inequality, this scheme will dramatically increase inequality and it’s very unclear where the money is coming from. I can just imagine what Arthur would have told John Howard when he was working as his Chief of Staff, if Labor’s Shadow’s Parliamentary Spokesperson had said that they didn’t know what a policy would cost, whether it would cover 100 or 50% of the cost. My back of the envelope says that the Company Tax increases raise 2.3 billion, the policy cost 5.5 billion a year so it only covers 42% of the cost.
WALEED ALY
Well ok that’s 5.5 but then there’s your policy as it stands currently costs about what? 2 point something? So you take that off the 5.5, because that 5.5 is not net. That 5.5 is for the whole program, but if that applies then the ones that currently apply don’t need to…
ANDREW LEIGH
And this is the thing Waleed, if we had what we had from the Coalition in 2010 and certainly from Labor in Opposition in 2007, costings policy by policy, then we’d be able to go through this. The real concern with the way the Coalition are doing costings this time around is they’re not producing costings for every policy, as Oppositions in all past elections have done. And so it’s left to the rest of Australia to worry where the rest of the money is coming from.
WALEED ALY
Well hang on, before that though, you can’t go too hard on that point. I mean they’re going to release costings in the last week of the election campaign. By all indications they’re going to release with a lot more time for public and for media to digest than you did in 2010 or in 2007.
ANDREW LEIGH
That’s simply not right Waleed. What we did in 2007, was each time we released a policy, we described precisely how that policy would be funded. Then at the very end, in the last couple of days in the campaign it was clear how all of those things added up.
The coalition are taking a different step, they are not announcing policy by policy how things will be funded, so their Company Tax cut had no supporting documentation as to how the policy would be funded. They haven’t even met their own, fairly low standard from 2010, an election we subsequently they had an $11 billion costings gap and the accountants who’d done the costings were fined for breaching professional standards. That’s deeply concerning I think and it does raise the spectre of hidden cuts to pay for these policies.
WALEED ALY
They’re not doing that this year, they’re going by the budgetary office, which they’re perfectly entitled to do. The same kind of people with the same sorts of qualifications as Treasury. But isn’t part of the problem with asking the Opposition to put costings up that the system’s rigged against them, because they submit their policies and then the boffins look at it and cost it and release it straight to the public instead of going back to them in the kind of iterative process that happens with costings for a Government, so the Opposition only gets stung by doing this.
ANDREW LEIGH
Well you can do it either way, you can put your costings up before then election period and then they are yours privately to release as you wish, or you can do them during the election campaign and they get released as you say but this is not Labor’s costings process, by and large the Charter of Budget Honesty is a creation of Peter Costello and John Howard.
WALEED ALY
As amended by Labor..Yeah.
ANDREW LEIGH
Well we’ve provided more transparency and accountability around it but I’ll give Arthur his due, I’m sure he was involved in the production of the Charter of Budget Honesty in its inception, it is a very good charter and I just wish that the Coalition were adhering to it better in this election.
ARTHUR SINODINOS
Waleed, can I just comment, in 2010, the Government seemed to send all its costings to Treasury and Finance, at the end of the last week of the campaign, so there was very little time to adequately scrutinise them now that’s a Government, presumably, that would have had the benefit of doing some of these costings while they were in Government, using the resources and incumbency to do that.
So, you know, really in a sense we’ve got to get on and look beyond the current debate on costings, judge what the Coalition will put out in the last week of the campaign and there will be time for people to adequately scrutinise what is put out and I think it is good to end the campaign with having a debate around costings as a basis for discussing economic policy options. Beacuse I think the major issue we face as a country is our budgetary options going forward. There’s no two ways about it and it’s actually good to end the campaign with a debate about economic management.
WALEED ALY
Ok and I want to come to some of the substantive questions about the policy in a second, but you’ve got to admit that they are a lot of people who are perfectly entitled to look at this and say there is a lot of money, a lot of spending promises coming out of the Coalition. A side of politics that has run almost entirely on fiscal restraint over the last 3 years and none of it is being explained. Exactly how it’s going to be paid for.
ARTHUR SINODINOS
Well look Waleed, this is a real dilemma for the Coalition, because if we run on a complete policy of fiscal restraint then Labor would be saying they have no agenda, they have no priorities…
WALEED ALY
But you’ve running on that Policy…
ARTHUR SINODINOS
…then when you put out your spending priorities, people say well you’re spending money on this, you’re spending money on that, but if we can demonstrate that we are spending money on X, Y & Z this is how we pay for it, this is how we make a contribution to reducing the pressure on the budget bottom line then I think we’ve done our job.
WALEED ALY
All right, we’ll come back to it, [inaudible] get a chance for costings, I just want to ask you though, Arthur Sinodinos, what exactly is the productivity case for this, because this is what Tony Abbott says but it’s unclear exactly how forceful the argument is that a Paid Parental Scheme of this scale aids productivity.
ARTHUR SINODINOS
Well one aspect of this is what the Productivity Commission noted in one of its enquiries around Paid Parental Leave, which was the health gains, which not only benefits families, but society at large. Lower long term health costs, the likely long run productivity benefits from kids getting a minimum period of exclusive care and breastfeeding…
WALEED ALY
That’s highly speculative isn’t it?
ARTHUR SINODINOS
Well they were consistent with the recommendations of both the Australian National Health and Medical Research Council and the World Health Organisation in terms of the minimum period that’s good for both mothers and kids.
WALEED ALY
Well that’s fine but that’s different from saying that there’s a productivity gain by funding woman to breast feed their kids more down the track because they were breastfed longer they will more productive.
ARTHUR SINODINOS
And I said there were aspects to this and the second aspect of this is to extent that it is maintaining attachment to the Labor force at various levels up the chain of jobs if you like, right, promoting labor force participation, particularly in a context where we have an ageing population, I think there is a major productivity benefit in an generic sense. Using productivity in its broadest interpretation if you like.
WALEED ALY
It doesn’t quite sound like the big winning argument that Tony Abbott is presenting as though it’s a productivity gain, it sounds like, it’s very watery I have to say.
ARTHUR SINODINOS
Well, he’s talked about it in generic terms I’ve given you some specificity and granularity
WALEED ALY
Ok…
ANDREW LEIGH
Can I just respond on those..
WALEED ALY
That was almost Rudd-esque
WALEED ALY
Yes you can.
ANDREW LEIGH
Just a , you know, there’s always a risk when three blokes sit around and talk about parental leave but I mean Arthur’s suggestion is first of all that there will be a productivity increase through children, I mean that may be the case but if you’re born in 2013, we won’t see that until at least the 2030’s when you’re entering, when that child enters the Labor force. And if there is a benefit in terms of participation, my read of the evidence is that attachment to the labour force is most fragile at the bottom of the income spectrum, rather than the top of the wage distribution. It’s early childhood workers who are wondering whether or not it’s worth their while to stay attached to the labour force, less so accountants and lawyers…
ARTHUR SINODINOS
Well can I just give a quick comment on that Waleed, because someone on average earnings will get I think $21,000 more under the Coalition scheme than they will under the Government scheme so for someone on average full time earnings, which admittedly may be be higher than that of childcare workers and there are actions being taken on that front, will get that $21,000 extra, so in fact it is very supportive of those who have a wage above the actual minimum wage.
WALEED ALY
Yeah but those who’ve got a low wage would be worse off under this scheme wouldn’t they?
ARTHUR SINODINOS
No, no they wouldn’t be, because they get their actual wage or the minimum wage whichever is the greater, from memory.
WALEED ALY
Ok, sure, just one thing I want to pick up on Andrew is the superannuation element…
ANDREW LEIGH
The Compulsory Superannuation that’s right…
WALEED ALY
The Coalition scheme includes Superannuation as part of this entitlement, Labor’s scheme doesn’t, because its not connected to work place entitlement, it’s a welfare programme effectively. Isn’t that a massive blind spot in Labor’s plan, particularly given the differential levels of Superannuation that happen at the other end for woman, in relation, compared to men.
ANDREW LEIGH
Waleed, our approach to Superannuation for low income earners is that low income earners, have traditionally been in a particularly unusual situation where their superannuation is taxed higher than their earnings, so we’ve taken away the tax on superannuation for those earning below $37,000. That’s of much greater benefit than providing superannuation for the period of Parental leave.
The Coalition may well provide Superannuation as part of Parental Leave, but they will raise the taxes on superannuation contributions for low income workers, for everyone earning under $37,000, two thirds of whom are women. So that’s I think going to be a much bigger hit to superannuation for low income earners and to the gender superannuation gap which I do think matters.
Just one other quick thing, Arthur’s claim about a Mother on average earnings being $21,000 better off, was rated mostly false by PolitiFact today and they did that on the basis that Mr Abbott appeared to have used an overly high figure for average female earnings.
ARTHUR SINODINOS
This was average salary for women who worked full time.
WALEED ALY
Indeed, so…
ARTHUR SINODINOS
That was the definition which is around $65,000. So it may be PolitiFact or whoever are looking at the average salary for women, we were looking at the average salary for women who worked full time.
ANDREW LEIGH
Indeed, and so, but Mr Abbott’s claim was the generic one, a mother on average earnings and to exclude part timers I think is a significant blind spot, particularly given that there is quite high part time participation among women. I don’t like to get into too many of these scrappy things because Arthur and I do enjoy having a consensus on most of the big questions, but I think this is an important difference.
ARTHUR SINODINOS
Well, a bit of specificity and granularity is good from time to time.
WALEED ALY
You’ve gone there twice Arthur!
ARTHUR SINODINOS
Well it’s Kevin Rudd being back as you say, it’s sort of you know, a bit of programmatic specificity
WALEED ALY
Ah it’s in the ether I, look forward to your ascension to some sort of leadership role and the various other managerial words that you can come up with Arthur, I’ll keep track of them and I’ll watch with interest.
Gentlemen we are out of time, but I look forward to us locking horns again…
ANDREW LEIGH
Thanks
ARTHUR SINODINOS
Thanks
WALEED ALY
On other issues of granularity or something, I can’t even keep track of it, Andrew Leigh, Labor MP for Fraser and Arthur Sinodinos, Liberal Senator for NSW, Parliamentary secretary for the Opposition Leader.
ENDS
ABC702 with Malcolm Turnbull & David Smith - 19 Aug 2013
On last night's ABC702 Political Forum, I joined Liberal MP Malcolm Turnbull and David Smith from the US Studies Centre in a congenial conversation with host Richard Glover about the philosophical differences between the parties (I argued Labor is the party of egalitarianism and liberalism), the Coalition's uncosted paid parental leave scheme, negative advertising, and the situation in Egypt. Here's a podcast.
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ACT Labor election launch and major investment in regional sports hub
Today I joined my parliamentary colleagues to launch our 2013 election campaign. We also announced $10 million for the second stage of the University of Canberra's Sports Hub, a new sport and health research, training and administration facility to inspire and engage young people in sport and fitness across the capital region. My thanks to our volunteers and the ACT Labor team including Chris Sant who is running for the second Senate seat and candidate for Hume Michael Pilbrow.
CAMPAIGN MEDIA RELEASE
10 MILLION INVESTMENT IN REGIONAL SPORTS INFRASTRUCTURE AND HEALTH PROGRAMS
The Rudd Labor Government today announced $10 million towards the University of Canberra Sports Hub project, which will provide state-of-the-art sports facilities and community engagement programs for Canberra and the surrounding region.
The Sports Hub project includes the building of a sport and health research, training and administration facility. The project will also establish a mobile sports fitness and health clinic which will work to promote the benefits of an active lifestyle through community engagement and participation.
The UC Sports Hub project is a collaborative effort between the Rudd Labor Government, the ACT Government, the University of Canberra Union and the ACT and Southern NSW Rugby Union.
ACT Senator, Kate Lundy, Member for Fraser, Andrew Leigh MP and Member for Eden-Monaro, Mike Kelly MP made the Regional Development Australian Fund announcement today during a visit to the University of Canberra.
Senator Lundy said the Rudd Labor Government is serious about investing in Canberra to meet future challenges and opportunities.
“The Sports Hub will provide world class shared sporting and research facilities, sports testing, talent identification and coaching clinics for students and coaches in regional communities, access to research support,” said Senator Lundy.
“Establishing an internationally recognised Sports Hub will ensure the region has the expertise in the sport and fitness fields, which will in turn attract more businesses and research to the region, driving economic growth and sustainability
“This project will add to the state-of-the-art facilities that already exist at the Australian Institute of Sport and will help to further increase Canberra’s international reputation for sporting excellence and engagement,” said Senator Lundy.
Member for Eden-Monaro, Dr Mike Kelly said this project reaches out beyond Canberra’s borders and will be a massive boost for the entire region.
“The establishment of mobile sports fitness and health clinics will allow the project to deliver real benefits to a number of communities in the ACT and surrounding region,” said Dr Kelly.
“Sports clubs across the region will have the benefit of working with these clinics to boost sports participation and promote healthy and active lifestyles especially in our children.
“I commend the foresight of the project in reaching out to communities in Queanbeyan, Cooma-Monaro and down to the South Coast,” said Dr Kelly.
Member for Fraser, Andrew Leigh said the building and construction phase of the project will also provide jobs and an economic boost to the Canberra community.
“Canberra plays a significant role as a regional hub city to a broader population of around 600,000 people, and is committed to building connection, belonging and collaboration within the region,” said Dr Leigh.
“This is an investment in sports research and industry and this project will continue to give back to the community and will provide an ongoing economic benefit to the local and regional economy.
“This is another exciting project for Canberra and the region following an announcement from the ACT Brumbies and the University of Canberra to partner up to build a new $16 million ACT Brumbies' headquarters at the University of Canberra,” said Dr Leigh.
The funds for the project are from the latest round of the Regional Development Australia Fund. Funding for this project is already included in the budget
Breaking Politics with Chris Hammer - 19 August 2013
This morning, I spoke on Fairfax TV about polling, optimism and Paid Parental Leave Scheme. The Government's Paid Parental Leave scheme, which has been used by over 300,000 parents, is fair and financially sound. By contrast, the Opposition's plan is regressive and at odds with the Australian social safety net that aims to give more to those who need it most. Here's a vodcast of the conversation.
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The Challenge of Budget Honesty
My opinion piece today looks at the costings challenge for the Coalition.
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It's Time for Abbott to do the Maths on Costings Gap, The Canberra Times, The Age, 19 August 2013
Imagine if you decide one day to use a new accountant to do your taxes. He promises that everything will be done on time, and you’ll get a hefty tax refund.
You hand him the group certificate from your employer. He says the figures on it are not worth the paper they’re written on. You point out that he’ll have to use some estimate of your income. He responds, ‘don’t worry - we won’t be adding up your tax return this year’.
You ask about that promised refund. He shows you a draft of the return. It shows the same deduction claimed in two places.
As tax day approaches, the accountant keeps promising to do your return ‘plenty of time’ before it’s due. But with three weeks to go, you’re starting to fret.
If this tale sounds familiar, it’s what it would look like if Tony Abbott and Joe Hockey ran an accounting firm.
The story to date. In 1998, John Howard and Peter Costello came up with the notion of a ‘charter of budget honesty’. Prior to the election, Treasury would release an independent budget statement (the Pre-Election Fiscal and Economic Outlook, or PEFO) and the resources of Treasury and Finance departments (and now the Parliamentary Budget Office) would be available to all parties to cost their policies. Based on this, both Government and Opposition can produce costed policies.
Ironically, while the Charter of Budget Honesty was a Liberal invention, they failed to comply with it at the last election. Post-election analysis by Treasury uncovered an $11 billion gap in the Liberals’ costings. The Liberals had claimed in that campaign that their costings had been audited, but the firm who did the job were fined for professional misconduct.
This time around, the Liberals have a costings gap that is – on their own admission – $70 billion. They have pledged to give fringe benefits tax breaks back to people who do not use the car for business purposes, and to restore the private health insurance rebate for the richest Australians. Their proposed paid parental leave scheme offers nothing more to a worker on the minimum wage than the current scheme, but provides over $70,000 per baby to those who earn the most. Each of these policies are skewed towards the most affluent. Together, they constitute a massive cost to taxpayers.
The problem for the Liberals is that they have spent the past three years saying ‘no’ to Labor’s sensible savings measures. As a result, they are now in the position of promising to spend more, tax less, and pay down debt faster; oblivious to the fact that it isn’t mathematically possible to achieve all three.
In the first week of the campaign, Mr Abbott’s sole policy announcement of substance was a cut in the company tax rate. Spruiking it, he airily claimed that it would be paid by savings he’d already announced. Unfortunately, those savings have already been taken by the commitment to give a massive tax cut to big miners and big polluters. Once that’s paid for, Mr Abbott has nothing in the kitty.
For Australian families, Mr Abbott’s costings gap means tax increases or service cuts amounting to thousands of dollars for the typical household. Most likely, that means a reduction in the quality of schools, hospitals, and family payments.
Over recent budgets, Labor has made some tough decisions affecting the public service. Anyone who knows our federal public service is aware that any ‘fat’ is long-gone. If elected, the Liberals are likely to maintain the efficiency dividend, and to add on top of it their policy of getting rid of 12,000 to 20,000 Canberra public service job cuts. This would be devastating for our city, and yet it would be only a small fraction of the costings gap that Mr Abbott needs to make up. Even after slashing the Canberra public service, abolishing the Schoolkids Bonus and scrapping Trade Training Centres, Mr Abbott is still left without enough money to pay the bills.
So will the Liberals provide some honest answers? In July, Mr Hockey said that if the PEFO figures were the same as those in previous budget updates “PEFO won’t be worth the paper it’s written on’. Last week, he went further, saying of Treasury costings, ‘These numbers just look stupid so we won’t be adding up our policies.’
These were such extraordinary statements from a would-be Treasurer that even Mr Abbott contradicted them, saying ‘The budget bottom line will be there for everyone to see.’ Yet while Mr Abbott is promising that his full suite of policies will be out in ‘plenty of time’ before the deadline, he is increasingly looking like a teenager preparing to pull an all-nighter to get the assignment done.
And now, the jig is up. In PEFO, Treasury has confirmed what the Government has been saying for months – that the forecasts in the budget and its updates reflect the best estimates of the experts. The Liberals no longer have the excuse that they’re waiting for PEFO. Now, let’s hope they’re finally willing to level with the Australian people about their tax rises and service cuts.
Because as much as Mr Abbott likes to talk about the laws he wants to repeal, he can’t repeal the laws of mathematics.
Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com.
Addressing the National Rural Health Alliance - 14 August 2013
On 14 August, I spoke to the National Rural Health Alliance about their top three priorities for improving rural and regional health: health workforce, disability, and telehealth/NBN.http://www.youtube.com/v/6yLj_7XCytc?hl=en_US&version=3
ABC RN Drive - 15 August 2013
I appeared on ABC RN Drive with Waleed Aly and Arthur Sinodinos last night, discussing special economic zones, Coalition costings, minority government, and Waleed turning 35. Here's a podcast.
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