On 1 May, I spoke with PVO about the tricks that Joe Hockey has used to double the deficit, and the risk that his cuts will increase inequality.
PVO NEWSHOUR TRANSCRIPT, THURSDAY, 1 MAY 2014
SUBJECT/S: Commission of Audit Report; Federal budget; Programs including PPL, Disability Care and Higher Education Contribution Scheme.
PETER VAN ONSELEN: Well now it's time for the Shadow Assistant Treasurer Andrew Leigh, who joins me live from Canberra, Dr Leigh, thanks very much for being there. Straight up first question which has come from one of our Twitter followers, he says, he doesn't put 'Doctor' in but I'll pay you that respect, Dr Leigh, you were part of the circus that created this mess, is that true?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Peter, when we left office and according to the Secretaries of Treasury and Finance the budget was returning to surplus in 2016-17 and we'd applied a strict spending cap of 2 per cent. In the time since he's been in office, Joe Hockey has managed to double the deficit: pretty extraordinary effort given he's only had about half a year to do it.
VAN ONSELEN: In fairness, that's all just based on the numbers isn't it, that's based on adjustments - largely based on adjustments between expected growth and predictions in terms of growth in government spending?
LEIGH: He's done a few things. He's spent more, so there's his gold plated Parental Leave Scheme. He's fiddled the numbers as you say and Treasury was very clear that that was the Treasurer’s decision and not theirs. And then he has refused to go ahead with a whole bunch of sensible tax measures, such as fairly taxing multinational companies which foregoes three quarters of a billion dollars revenue. Put it all together and he's doubled the deficit, and then of course he turns around and says, 'woah, this is a bit of a problem'. Well frankly Joe, if you had followed through with some pretty sensible measures, such as fairly taxing high income earners' superannuation, then you wouldn't have this budget situation. It's manufactured.
VAN ONSELEN: Let's get on Dr Leigh to the Commission of Audit. It's disingenuous isn't it to try to hang the Commission of Audit on the government, their terms of reference were to find $70 billion in cuts. No one really thinks that that's what the government is going to do, this is a good thing isn't it? This Commission of Audit provides options to a government when we know what they're going to with it then we can decided whether we're going to be critical or not, that's fair?
LEIGH: Peter, I'm all for expert advice but anyone that thinks that this is the best team of experts that you could draw up to carefully think about Australian social policy, probably also thinks that rock and roll wrestling isn't staged.
VAN ONSELEN: Well take us through this. Who on the Commission of Audit do you think was a dodgy appointment?
LEIGH: Well this is a Commission which is put together by big business and it is big business writing social policy.
VAN ONSELEN: So who wouldn't you have on it?
LEIGH: I would had a much more representative Commission of Audit. I'd like to see representatives from the disabilities sector, the social sector, the trade union sector...
VAN ONSELEN: You're avoiding the question, names, I want names Dr Leigh. I want to know who you would have sacked from the Commission of Audit, that'll give me a headline.
LEIGH: Peter it is much more about making sure that there are people on that Commission of Audit battling for ordinary Australians. Let's take the issue of wages. Over the last two decades, CEO wages have gone up twice as fast as average wages and three times as fast as the minimum wage. But whose wage is the Commission of Audit concerned about? They reckon the minimum wage is far too high and it needs to be cut.
VAN ONSELEN: But what about the recommendations? I hear what you say about a broader representation, but the Commission of Audits role in terms of its terms of reference was to find cuts, you seem to be talking as though is some kind of social compact, is your point that there would have been different versions of cuts that might have been suggested by a more sort of, representative sample on the Committee?
LEIGH: Absolutely Peter, and I got into public life, as you know, to bring about good reforms, and good reforms are often fired up by great experts. But frankly, when it comes to reform, Joe Hockey couldn't go two rounds with a revolving door. He wants to manufacture a budget crisis and then he wants to cut back support to the elderly, the sick and some of the most vulnerable in the community. That's not reform, that's simply ideology.
VAN ONSELEN: Is there anything in there that Labor likes? I mean you've had a chance to look at it today. I'm not asking for you to commit to it obviously. You'll want more time to do that, but is there anything in there that that you like the look of, that you hadn't thought of, by way of stabilising the budget?
LEIGH: I'm certainly pleased to see that the Commission of Audit along with the Liberal backbench is critical of Tony Abbott's Parental Leave Scheme. It's a scheme which is the opposite of means testing...
VAN ONSELEN: Alright, I'll give you that one, I'll give you a second one, is there a second thing that you like the look of?
LEIGH: Peter, I've had this report for a couple of hours, the government has had it for months...
VAN ONSELEN: But you must have some highlighted sections that you though were perhaps worthy of consideration, what are they?
LEIGH: Peter, what I see out of this Commission of Audit, is a pathway that leads us much more down the American road. When Australians go overseas, so often we'll run into Americans, and will chuckle at their system that spends far more and gets far worse results. But if you're saying that our system, our health system ought to be Americanised, well that's not evidence-based policy. Again that's just pure ideology, and if you're doing it because you can't get tough with multinational firms, if you're doing it because you can't fairly tax the superannuation of people with more than $2 million in their superannuation accounts, then that's pretty tough to people with disabilities getting one shower a week, being told by the Commission of Audit: you're going to have to wait a little bit longer before Disability Care comes to you.
VAN ONSELEN: Alright I want to ask you about, well I want to ask you about HECS firstly. Do you take the view that I do, this wasn't in the Commission of Audit, that HECS payments should be paid back in full by people that go on to earn higher wages because of their education, rather than just the current component of HECS which is only a percentage of the costs of their university studies?
LEIGH: So, you're arguing Peter that full costs of the education should be paid back? At the moment you pay about half back.
VAN ONSELEN: Well you get a law degree, the state pays roughly half of it, you pay for the other half via HECS. But if you go on to earn half a million, a million dollars a year, don't you think that you should have the pay the whole thing back?
LEIGH: Well I guess the principle behind this is that there is private benefit to education, and there's a public benefit to education, and the current split seems pretty fair to me. By getting an education, we know that you are more productive, your co-workers benefit, you're more likely to pay higher taxes...
VAN ONSELEN: But why should the plumber down the road pay for the lawyer to get their law degree, via their taxes, it should just be a user pays system, up the income scales. But if you decide to go work for example for the legal aid commission, you're doing a community service. Your salary never rises to that of a corporate lawyer, then fine, you don't pay all the way up the HECS. This is my idea of course it's not in the Commission of Audit, but it seem fair to me.
LEIGH: Look Peter I think it's an interesting argument. The reason that I disagree with it is that I do believe that there's a public good element to education, even from my old profession of corporate law. And I think that the reason why we, why a Labor government, under Bob Hawke, said people ought to contribute something, it's fair to contribute something, but the taxpayer ought to chip in too. Because we're all better off from a better educated society.
VAN ONSELEN: Alright, I've got to be super quick here, because I'm over time and I'm being told to wrap it up, but I've got to get your views on the Paid Parental Leave Scheme, with it being adjusted down it's in line The Greens package. It's also in line with what Unions New South Wales advocated for back in 2008. Why can't Labor get on board?
LEIGH: Peter, again, we've got the Government doing deals with the Greens, they did the deal with The Greens to have unlimited debt, and now apparently doing a deal with the Greens...
VAN ONSELEN: But Unions New South Wales as well is Labor affiliated?
LEIGH: I don't know what they have argued for but I will tell you that this Parental Leave scheme runs against the fabric of the Australian social safety net, which is always said payments should be flat rate or else giving more to the most disadvantaged. But why should a baby that's born into an affluent family attract three, four, five, times as much money as a baby that's born into a low income family? Why does it cost more to raise a baby in an affluent household? It's not the way we've always done things in Australia, and it gives the lie to the so called 'budget crisis'. If there's a budget crisis, why the gold-plated, diamond-encrusted Parental Leave scheme?
VAN ONSELEN: Alright, you got the line in, Dr Leigh appreciate your company, thank you very much.
ENDS
PVO NEWSHOUR TRANSCRIPT, THURSDAY, 1 MAY 2014
SUBJECT/S: Commission of Audit Report; Federal budget; Programs including PPL, Disability Care and Higher Education Contribution Scheme.
PETER VAN ONSELEN: Well now it's time for the Shadow Assistant Treasurer Andrew Leigh, who joins me live from Canberra, Dr Leigh, thanks very much for being there. Straight up first question which has come from one of our Twitter followers, he says, he doesn't put 'Doctor' in but I'll pay you that respect, Dr Leigh, you were part of the circus that created this mess, is that true?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Peter, when we left office and according to the Secretaries of Treasury and Finance the budget was returning to surplus in 2016-17 and we'd applied a strict spending cap of 2 per cent. In the time since he's been in office, Joe Hockey has managed to double the deficit: pretty extraordinary effort given he's only had about half a year to do it.
VAN ONSELEN: In fairness, that's all just based on the numbers isn't it, that's based on adjustments - largely based on adjustments between expected growth and predictions in terms of growth in government spending?
LEIGH: He's done a few things. He's spent more, so there's his gold plated Parental Leave Scheme. He's fiddled the numbers as you say and Treasury was very clear that that was the Treasurer’s decision and not theirs. And then he has refused to go ahead with a whole bunch of sensible tax measures, such as fairly taxing multinational companies which foregoes three quarters of a billion dollars revenue. Put it all together and he's doubled the deficit, and then of course he turns around and says, 'woah, this is a bit of a problem'. Well frankly Joe, if you had followed through with some pretty sensible measures, such as fairly taxing high income earners' superannuation, then you wouldn't have this budget situation. It's manufactured.
VAN ONSELEN: Let's get on Dr Leigh to the Commission of Audit. It's disingenuous isn't it to try to hang the Commission of Audit on the government, their terms of reference were to find $70 billion in cuts. No one really thinks that that's what the government is going to do, this is a good thing isn't it? This Commission of Audit provides options to a government when we know what they're going to with it then we can decided whether we're going to be critical or not, that's fair?
LEIGH: Peter, I'm all for expert advice but anyone that thinks that this is the best team of experts that you could draw up to carefully think about Australian social policy, probably also thinks that rock and roll wrestling isn't staged.
VAN ONSELEN: Well take us through this. Who on the Commission of Audit do you think was a dodgy appointment?
LEIGH: Well this is a Commission which is put together by big business and it is big business writing social policy.
VAN ONSELEN: So who wouldn't you have on it?
LEIGH: I would had a much more representative Commission of Audit. I'd like to see representatives from the disabilities sector, the social sector, the trade union sector...
VAN ONSELEN: You're avoiding the question, names, I want names Dr Leigh. I want to know who you would have sacked from the Commission of Audit, that'll give me a headline.
LEIGH: Peter it is much more about making sure that there are people on that Commission of Audit battling for ordinary Australians. Let's take the issue of wages. Over the last two decades, CEO wages have gone up twice as fast as average wages and three times as fast as the minimum wage. But whose wage is the Commission of Audit concerned about? They reckon the minimum wage is far too high and it needs to be cut.
VAN ONSELEN: But what about the recommendations? I hear what you say about a broader representation, but the Commission of Audits role in terms of its terms of reference was to find cuts, you seem to be talking as though is some kind of social compact, is your point that there would have been different versions of cuts that might have been suggested by a more sort of, representative sample on the Committee?
LEIGH: Absolutely Peter, and I got into public life, as you know, to bring about good reforms, and good reforms are often fired up by great experts. But frankly, when it comes to reform, Joe Hockey couldn't go two rounds with a revolving door. He wants to manufacture a budget crisis and then he wants to cut back support to the elderly, the sick and some of the most vulnerable in the community. That's not reform, that's simply ideology.
VAN ONSELEN: Is there anything in there that Labor likes? I mean you've had a chance to look at it today. I'm not asking for you to commit to it obviously. You'll want more time to do that, but is there anything in there that that you like the look of, that you hadn't thought of, by way of stabilising the budget?
LEIGH: I'm certainly pleased to see that the Commission of Audit along with the Liberal backbench is critical of Tony Abbott's Parental Leave Scheme. It's a scheme which is the opposite of means testing...
VAN ONSELEN: Alright, I'll give you that one, I'll give you a second one, is there a second thing that you like the look of?
LEIGH: Peter, I've had this report for a couple of hours, the government has had it for months...
VAN ONSELEN: But you must have some highlighted sections that you though were perhaps worthy of consideration, what are they?
LEIGH: Peter, what I see out of this Commission of Audit, is a pathway that leads us much more down the American road. When Australians go overseas, so often we'll run into Americans, and will chuckle at their system that spends far more and gets far worse results. But if you're saying that our system, our health system ought to be Americanised, well that's not evidence-based policy. Again that's just pure ideology, and if you're doing it because you can't get tough with multinational firms, if you're doing it because you can't fairly tax the superannuation of people with more than $2 million in their superannuation accounts, then that's pretty tough to people with disabilities getting one shower a week, being told by the Commission of Audit: you're going to have to wait a little bit longer before Disability Care comes to you.
VAN ONSELEN: Alright I want to ask you about, well I want to ask you about HECS firstly. Do you take the view that I do, this wasn't in the Commission of Audit, that HECS payments should be paid back in full by people that go on to earn higher wages because of their education, rather than just the current component of HECS which is only a percentage of the costs of their university studies?
LEIGH: So, you're arguing Peter that full costs of the education should be paid back? At the moment you pay about half back.
VAN ONSELEN: Well you get a law degree, the state pays roughly half of it, you pay for the other half via HECS. But if you go on to earn half a million, a million dollars a year, don't you think that you should have the pay the whole thing back?
LEIGH: Well I guess the principle behind this is that there is private benefit to education, and there's a public benefit to education, and the current split seems pretty fair to me. By getting an education, we know that you are more productive, your co-workers benefit, you're more likely to pay higher taxes...
VAN ONSELEN: But why should the plumber down the road pay for the lawyer to get their law degree, via their taxes, it should just be a user pays system, up the income scales. But if you decide to go work for example for the legal aid commission, you're doing a community service. Your salary never rises to that of a corporate lawyer, then fine, you don't pay all the way up the HECS. This is my idea of course it's not in the Commission of Audit, but it seem fair to me.
LEIGH: Look Peter I think it's an interesting argument. The reason that I disagree with it is that I do believe that there's a public good element to education, even from my old profession of corporate law. And I think that the reason why we, why a Labor government, under Bob Hawke, said people ought to contribute something, it's fair to contribute something, but the taxpayer ought to chip in too. Because we're all better off from a better educated society.
VAN ONSELEN: Alright, I've got to be super quick here, because I'm over time and I'm being told to wrap it up, but I've got to get your views on the Paid Parental Leave Scheme, with it being adjusted down it's in line The Greens package. It's also in line with what Unions New South Wales advocated for back in 2008. Why can't Labor get on board?
LEIGH: Peter, again, we've got the Government doing deals with the Greens, they did the deal with The Greens to have unlimited debt, and now apparently doing a deal with the Greens...
VAN ONSELEN: But Unions New South Wales as well is Labor affiliated?
LEIGH: I don't know what they have argued for but I will tell you that this Parental Leave scheme runs against the fabric of the Australian social safety net, which is always said payments should be flat rate or else giving more to the most disadvantaged. But why should a baby that's born into an affluent family attract three, four, five, times as much money as a baby that's born into a low income family? Why does it cost more to raise a baby in an affluent household? It's not the way we've always done things in Australia, and it gives the lie to the so called 'budget crisis'. If there's a budget crisis, why the gold-plated, diamond-encrusted Parental Leave scheme?
VAN ONSELEN: Alright, you got the line in, Dr Leigh appreciate your company, thank you very much.
ENDS
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