TRANSCRIPT – CAPITAL HILL
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
22 May 2013
TOPICS: Coalition costings.
Lyndal Curtis: Being Shadow Treasurer in budget week can be a little like being the understudy. You get to help prosecute your side’s case in the media, but the glory of the parliamentary reply goes to the Opposition Leader. It may be a little under a week since the formal budget reply, but Joe Hockey got his day in the spotlight today with the now traditional Shadow Treasurer’s post-budget address to the National Press Club. The government was calling on Mr Hockey to reveal the Coalition’s policy and costings – he didn’t do that, but he did make one or two announcements. Joining me this evening is the Shadow Small Business Minister Bruce Billson, and Labor Parliamentary Secretary Andrew Leigh. Welcome to you both. We’ll start this evening with Mr Hockey’s explanation of why, when the Coalition says there’s a budget emergency, it’s still electing to keep the carbon price compensation by way of tax cuts and pension rises.
Joe Hockey: …We make no apologies for delivering tax cuts, I think it was every year for our last five or six years. And in fact Labor were so impressed with that that they went on to deliver our tax cuts when they got into government – and thank you for that. I think the challenge going forward is to have stability in tax. Now, we do not apologise for tax cuts that involve the abolition of the carbon tax and the mining tax, because they are a handbrake. Those two taxes are a handbrake on the Australian economy, and I think, if there is a change of government on the 14th of September, there will be a surge of confidence. I believe that in my heart, and it’s true. And if that is the case, then part of that will be about the fact that the mining industry is not going to have a mining tax, and every household is going to be liberated from additional costs associated with the carbon tax. So we make no apologies for those.
Lyndal Curtis: Bruce, does it seem a bit odd that if you declare a budget emergency, and then you don’t elect to take $4 billion of savings you could have had by pulling back the carbon price compensation, which I assume you’d think would be needed because there’s no carbon price?
Bruce Billson: Well, Lyndal it’s not just the Commonwealth government that has a budget emergency because of the reckless spending and waste of the Labor government, it’s households as well. Households have budget emergencies, you’ve seen figures released this week about the pressure in household rising right across Australia. Cost of living pressures keep coming at them, very little opportunity for discretionary expenditure, real concern about paying the bills at the end of each month. And that’s something that we recognise; Australian’s want to get ahead, it’s a country that’s built a reputation of getting ahead from one generation to the next. That’s not what the Australian people feel night now, and our approach to remove the cost of living keeps those income tax and pension payments is about releasing the budget crisis in many Australian households.
Lyndal Curtis: But you doing it effectively twice over? You say the price of electricity and gas goes down if you remove the carbon price, that cost of living pressure is presumably eased if that happens. And then you relieve it again, by keeping the tax cuts and pension rises.
Bruce Billson: Well, an excellent account about how positive this is for the households, Lyndal. Removing the cost pressures that are created by a carbon tax that’s way out of step with anything that’s going on in the rest of the world, putting upward pressure not only on the costs of households face but Australian businesses face as they seek to compete internationally and seek to secure markets. And some opportunity to relieve the budget pressures in those households, with the tax cuts and also the additional pension payments paid fortnightly.
Lyndal Curtis: We might go now to some of the announcements in Joe Hockey’s speech. Andrew, it seemed like a pitch to small business to make the Tax Office nicer, to make it more accountable, have the Tax Commissioner appear as the Reserve Bank governor does before a parliamentary committee, have an inquiry into the structure of the tax office, and perhaps even break it up into administrative and policing functions. Do you believe that there’s anything wrong with what Joe Hockey proposed?
Andrew Leigh: Well Lyndal, I look at this as a federal representative for the ACT, and it’s pretty strange here when you see that the Coalition’s promise is to get rid of 20 000 Canberra public servants –
Lyndal Curtis: I think they’ve only actually said 12 –
Andrew Leigh: Mr Hockey has repeatedly referred to there being 20 000 more public servants than there were, and the need to cut back. I think that it is pretty clear that he is moving up –
Bruce Billson: It’s 12.
Andrew Leigh: - from 12 to 20. But regardless, there will be a big hit on the ACT economy and as a result to that, many small businesses will be sent into a tailspin. And yet at the same time that he wants to get rid of 20 000 hard-working public servants, Mr Hockey wants to add more senior public servants into the Tax Office. I mean, the first policy position Mr Hockey comes up with that is actually consistent will be his first. There is nothing for ACT small businesses in Mr Hockey’s smash-and-grab plans, and small businesses across the nation are going to be hard hit by the tough austerity that the Coalition has in promise. What we’re going to see if Mr Abbott is elected is similar to what the United Kingdom has seen, where David Cameron’s brutal austerity is closing libraries, and sending that economy back into recession. That’s clearly their textbook.
Lyndal Curtis: If we could just stay on the Tax Office for a minute – Bruce, if the Tax Office is split into two, isn’t that effectively creating a second bureaucracy?
Bruce Billson: My head is still spinning after Andrew Leigh, he must be on that Labor kool-aid, hardly anything that he said was actually grounded in facts, but let’s try and bring it back to what Joe was actually saying. He was saying the Tax Office has been particularly insensitive to the real life and commercial realities that small businesses are facing. He pointed to a potential conflict where the agency has its administrative function – the day to day work of collecting taxes that are needed to fund the important work and services of the Commonwealth provides – sitting alongside those that are in a prosecution role. And we’ve seen for instance the number of garnishees issued against small business up by about 450%. I get reports every day, every day about an insensitivity to the pressures that small businesses are facing, that there are assumptions of profitability that lead to claims of tax avoidance when the reality is margins are very thin, things are very tough out there, this ongoing attack against independent contractors. And those extra bureaucrats that Andrew is talking about are actually second commissioners with business experience out in the real economy making sure that the executive group in the Tax Office has a reality check about what is going on in the real economy, and that people have an opportunity to be treated with respect whilst adhering to their lawful obligations to pay tax. And that’s perfectly reasonable, perfectly adult, perfectly sensible.
Lyndal Curtis: We might move on now to the bigger picture, Joe Hockey is continuing to dispute the government’s budget figures. It’s the reason he’s saying the Coalition costings can’t be released until the pre-election fiscal outlook into the election campaign. The government says a speech by the Treasury secretary yesterday shows he’s wrong.
Penny Wong: …Dr Parkinson made clear that the budget numbers are the numbers, he made it clear that if the – what’s know as the PFO, the pre-election fiscal outlook – had been released on budget day, the numbers would have been the same. You know what that adds up to? It adds up to Joe Hockey’s excuse for not releasing his figures being completely destroyed, that’s what it means.
Lyndal Curtis: Andrew, your side of politics is continuing to pressure the Coalition to release all of its policy and costings now. But if you look at it from the Opposition’s point of view, why would they put the out before election time? It just gives you more chance to attack what you perceive to be the holes in it.
Andrew Leigh: Well the question Australian families have to ask, Lyndal, is if the Coalition’s polices were so good for families, would they really be sitting in the bottom drawer rather than being out in public view? And we have a taste of where the Coalition is going from some of the policies that they’ve announced. They’ve said, for example, that they want to give a tax cut to Gina Rinehart and Clive Palmer, and that’ll be paid for by raising superannuation taxes on low-income Australians. They want to give a tax cut to the biggest polluters in Australia, and they want to pay for it by taking away money from kids on their first day of school.
Lyndal Curtis: But you also had a rise in family benefits you promised at the last budget that you rescinded at this budget.
Andrew Leigh: Lyndal, we have never cut back on income support for families, unlike the Coalition who has said it is going to take away an income supplement that benefits hundreds of thousands of Australian families. They’ve said that they’re going to decrease the tax-free threshold , which means that a million more Australians are going to be filing tax returns. Every one of their policies that is out is a policy that is going to hit those at the bottom to help those at the top. It’s a standard Coalition playbook, and the cuts in the bottom drawer are, if anything, going to be worse.
Lyndal Curtis: Bruce, the Treasury secretary Martin Parkinson disputed things some Coalition spokespeople have said, that the Treasury gives the government a range of economic forecasts and the government gets to choose which one it wants. He says that is not true, and he also said effectively that if PFO had been released now, the figures would have been the same, that he doesn’t expect to see much difference. Why do you take him at this word and say the economic forecasts that are produced in the budget are those that come from Treasury?
Bruce Billson: Well the Treasury secretary is doing what he’s paid to do, and that’s to provide advice and support the government of the day. That’s perfectly reasonable and that’s the expectation of senior public servants as they work hand in glove with the government of the day. So there’re no surprises in what the Treasury secretary said. What is surprising is some of the assumptions that are embedded in that document, spectacular assumptions about the carbon price movement and what’s happening in the mining industry, about a miraculous ending to the boat arrivals and the millions of dollars that have been blown out there, about some mucking around with the rate of indexation in the rate of education. That’s what the concern was, and in relation to PFO, Lyndal, it was only a few short weeks ago that in the space of about twelve days that the supposed revenue loss went from $7 billion, to $11 billion, to $17 billion over the course of twelve days. Now there’s ten times that period of time between now and the next election, who will believe none of that will change?
Lyndal Curtis: But some of that was measuring MYEFO to that period, and other bits of it was measuring budget to budget, that’s why it seemed to jump so rapidly.
Bruce Billson: So this is where you had the Prime Minister, the Treasurer and the Finance Minister roll out this $10 billion change in supposedly revenue lost in under a fortnight, yet we’re to believe that these numbers released recently are not going to change over 120 days? I mean, you can’t be serious about that suggestion Lyndal, there’s no evidence whatsoever under this government that they are competent and capable of nailing any of these economic forecasts and it’s perfectly reasonable for the Coalition to wait and see the last word on the state of the finances which is PFO – the pre-election fiscal outlook – before responding to this chorus call from Labor.
Lyndal Curtis: We might move on just quickly because we’ve only got a couple of minutes left. It seems that an analysis of the structural budget surplus or deficit is now the new black, we’ve had two today, one from the Parliamentary Budget Office. Bruce it does seem to suggest that the tax cuts delivered by the Coalition and then in the first in office by Labor have contributed to the structural budget deficit. It does show that decisions made have had an effect over a long period of time, doesn’t it?
Bruce Billson: Well of course decisions made have an effect Lyndal, and in terms of the budget cuts that were funded, affordable and reasonable under the Howard government – and they were thought to be so reasonable that the incoming Labor government kept them – what that structural budget outlook shows is that for every year that was analyses, that the Coalition was delivering surpluses, that there was a structural surplus. A structural surplus, so those tax cuts were responsible and measured and kept the budget in a structural surplus. Contrast that with the Labor years, every year not only is there a deficit, there is an enormous structural deficit.
Lyndal Curtis: A quick response Andrew?
Andrew Leigh: Lyndal it’s pretty clear from this analysis that what the IMF said recently holds up: that the Howard government wasted mining boom mark one. I also want to return to a point that Bruce made about forecasts. When he is attacking the integrity of the Treasury secretary, he is doing so because the Coalition want to use a dodgy private accounting firm to do their costing, rather than the experts in Treasury and the Parliamentary Budget Office.
Bruce Billson: My attacks are on a dodgy Treasurer –
Lyndal Curtis: I’m sorry Bruce, we’ve run out of time, that’s where we’ll have to leave it. Andrew Leigh, Bruce Billson, thank you very much for your time.
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