Monday Breaking Politics - 25 November 2013

In my regular discussion on Breaking Politics with Tim Lester about issues shaping the news, I spoke about potential GST reform for online purchases and the Abbott Government's adoption of a new position on Israel at the UN. I also caution against a Grattan Institute plan to delay access to aged pensions.




SUBJECT/S: Israeli settlements, Age/Nielsen Poll, GST and online purchases, carbon pricing, pension age.

TIM LESTER: The Abbott government appears to have made a contentious, but largely unreported change in a critical foreign policy stance in recent days. Has it reduced Australia's opposition to some of the most contentious of Israeli activities in the West Bank, including the construction of settlements? Every Monday Breaking Politics is joined by Labor MP from Canberra, Andrew Leigh. Welcome in Andrew.


LESTER: Tell me, what worries you about Australia's foreign policy approach to Israel and the Palestinians at the moment?

LEIGH: As a good friend of Israel's, I believe Australia should be committed to a two-state solution. That means that we need to ensure that Israel maintains the adherence to international norms which are so vital in bringing about a two state solution. There's a thing called the Geneva Convention, we've had it for more than 60 years, that says that if you're an occupying power, you shouldn't deport people out of the territories you occupy or transfer new people into it. But we've seen occupied settlements going up 70 percent in the first half of this year, compared to the first half of last year. That was deplored under Labor, sitting with the vast consensus in the international community as being illegal against international law. But now the Coalition has back-flipped on that and voted with just eleven countries against 160 countries that believe that Israel should adhere to international law.

LESTER: Now we know the Jewish lobby in Australia has a deal of political influence. It works for that influence. What does this tell you about what pressure they may or may not be putting on the new Government?

LEIGH: I think this is very much about adhering to Israel's long-term interests as Ben Gurion put it, Israel can be a Jewish state, it can be a democratic state or it can be a state covering all of greater Israel, but it cannot be all three. For a two-state solution to work, Israel needs to adhere to international norms. I think Australia's position in international arenas should always be encouraging Israel to abide by international norms and looking at that two-state solution down the track.

LESTER: The state and federal treasurers meet this Wednesday and on their agenda, among other things, will be a lowering of the GST threshold well down below the $1000 for things we purchase online and whether they should attract the Goods and Services Tax. What position do you take on whether we need a far greater application of GST to what we buy online?

LEIGH: Labor's always up for a sensible conversation about tax reform, but the threshold was set at $1000 because the cost of collection for low value parcels tends to be pretty high. I think it's also vital that we don't just think about the cost of collection on the public servants collecting the tax, but also as individuals forced to inconvenience of phoning up and giving credit card details, or having to personally go in an collect a package that would otherwise have been delivered to them. If we don't put any value on that, we can end up raising taxes which are smaller than the inconvenience to which we're putting citizens. That's not good economics.

LESTER: And is that a real danger here?

LEIGH: The estimates I've seen suggest, for example, that if you lower the threshold from $1000 dollars to $500 you might increase total revenue by something in the order of $20 million. There's debates around this, but that's an estimate that doesn't even take into account the cost to the additional time wastage of you and me having to go and pick up a parcel that we might have otherwise had delivered to our home.

LESTER: What about the position of the retailers who want us to still go out and visit the shops and buy in the traditional way and are disadvantaged they feel in this regard?

LEIGH: I think the threshold is simply a function of the fact that the cost of collection to customs officials and individuals isn't zero. If there was no hassle in collecting it, well you wouldn't have a low value threshold. But the situation retailers find themselves in isn't just driven by the low value threshold, it's also driven by the high Australian dollar and by new retailers setting up online selling things, for example, like shoes which 10 years ago we would have said were the kind of thing that could never be effectively sold over the Internet.

LESTER: Okay, the post-election time is never a completely happy time for the party that lost, but today's opinion poll is surely a bit of a boost for Labor's morale?

LEIGH: I've got to say Tim, there's days when I'm tempted to breach my regular rule of saying that opinion polls don't have much predictive power, but I should hold fast to what I believe which is that good parliamentarians spend their time talking about issues, not about polls. A bit like a first Ashes win in a five game series, this is a bit of a fillip to the team, but it's a long series we're playing and certainly we will need to maintain that sense of discipline that we've had over the last few weeks. It's entirely possible the government will get its act together, will manage to repair the problems in the relationship with Indonesia, will find somebody better suited to run the immigration portfolio, will begin to lift the veil of secrecy. They've had, let's be honest, a lot of stumbles over these last few weeks, but Tony Abbott's a formidable parliamentarian and could easily right his ship.

LESTER: Okay, what does this say for Bill Shorten and the early indications on how the public are going to take him as a leader and a potential prime minister?

LEIGH: I think Mr Shorten is engaging very effectively with Australians, talking about the issues that matter not just in the here and now, but for the long term. The debate we have around carbon pricing for example saw Bill talking in the House of Representatives about getting this issue right for our children. I think that's the sort of leader he is. I think he's somebody who thinks long-term, who wants to engage with people effectively and somebody who I think enjoys a lot of respect, not just from Labor people, but in the broader community.

LESTER: The poll tells us that the public believes Labor ought to get out of the way in terms of the carbon tax, and allow the government to rescind it.

LEIGH: But as you, yourself pointed out, talking on NewsRadio this morning Tim, there are swings and roundabouts in that poll. There's certainly a recognition among Australians that we need to take serious action on climate change and acceptance that Mr Abbott's soil magic scheme just won't cut it, that what we need is the most effective and efficient way of dealing with climate change and that's an Emissions Trading Scheme. That's why you've got the Australian Industry Group backing an Emissions Trading Scheme, thirty countries around the world, California moving to emissions trading. Even the Chinese, a nominally Communist country, are more in favour of using the market to tackle climate change than the nominally free-market Liberal and National parties.

LESTER: And you remain quite firm, quite convinced that Labor will hold to its line of a price on carbon and not back the scrapping of the scheme in total?

LEIGH: It just wouldn't make any sense to do that Tim. It wouldn't be in the interests of this generation, and certainly not the interests of future generations who'll pay a higher cost if Australia doesn't do anything now on emissions. It' s pretty embarrassing to me to see our negotiators playing a blocking role in the international debates, where previously they played a positive, constructive role. It's a ‘little Australia’ vision that I think the Abbott government is projecting to the world with cuts to the refugee intakes, the cuts to foreign aid, the boat turn back policy and the shutting down of climate change talks. I don't think it's in accord with the big heart of Australia that Mr Abbott should represent.

LESTER: Andrew Leigh, this possibility of shifting the retirement and superannuation eligibility ages out to maybe 70 or even beyond, do we really need to work till we're 70 plus?

LEIGH: One of the things that surprised me Tim about the Productivity Commission report on the pension age was how little attention it gave to the fact that the poor live for fewer years than the rich. Some of the work when I was an academic economist I did with Philip Clarke estimated that the richest fifth of the population lives six years longer than the poorest fifth. So that means if you push out the pension age to 70, effectively you're telling poor people that they can get the pension later, knowing full well that they're going to die earlier. As Paul Krugman put this in the context of the US social security debate, it's a bit like telling janitors they have to wait till 70 to get the pension because lawyers are living longer. We have to recognize the equity issues inherent in this, and I'm frankly surprised that a high calibre institution like the Productivity Commission hasn't focused on that aspect.

LESTER: They've botched this, in a sense, if they didn't factor in that difference have they?

LEIGH: That's too hard a critique. Our Productivity Commission is a high calibre outfit, and I've got great respect for the lead author on this project. But I do think that if you miss the equity dimension on this, then fundamentally you're not doing your constituents a good service. If there is a six year difference in life expectancy between the rich and the poor then taking the safety net and moving it up three years just doesn't make a whole lot of sense, particularly in a world in which the superannuation preservation age is stuck at 60.

LESTER: So does the retirement age need to stay put? Stay where it is?

LEIGH: I think that would be the sensible proposal Tim. I think 67 for the social safety net makes a lot of sense. You know, if you're a lawyer and you're going to live a long life, then your job isn't particularly physically demanding, maybe you might retire at 70 but if you've been working as a cleaner doing back-breaking work, then telling you that you have to continue to do that job until 70, knowing that on average you'll die at a younger age, doesn't seem good policy to me.

LESTER: Andrew Leigh, thank you for coming into Breaking Politics today.

LEIGH: Thank you Tim.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.