Ambitious for the Australian Economy - Transcript, Sky AM Agenda





SUBJECTS; Labor Conference, MYEFO, IPSOS poll, negative gearing, asylum seeker policy, Newstart allowance review.

LAURA JAYES: Andrew Leigh is at the Labor Conference and he joins us live here this morning. Andrew Leigh, thank you for your time. We’re yet to see these figures officially but as we know the good news is selectively leaked out ahead of the budget update today. What do you make of the figures? Halving the deficit this year and a bigger return the surplus next year, good news and who do you credit?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Laura, what you just heard from the Treasurer and the Finance Minister was a rewriting of history that would have made George Orwell proud. This is a Government which came to office in 2013 promising that there would be surpluses in their first year and every year after that. They haven’t delivered a single surplus and they’ve doubled net debt. Gross debt has now crashed through about the half a trillion dollar barrier. They castigated Wayne Swan because he promised a surplus which then didn't materialise after the economy was whacked with the biggest downturn since the Great Depression. And now they're saying they’re delivering a surplus - well, they're not. They’re promising a surplus yet again, as they did before the election. Australians will reasonably ask why is it that the Coalition will stand up for every multinational tax loophole but not support fair funding of schools? Because when you hear them talk about a higher taxing agenda-

JAYES: Let’s go back to why we are in this economic situation though, do you credit the Government with at least projecting the biggest surplus we’ve seen in ten years? As you point out, Labor did not deliver one.

LEIGH: Global growth has been strong and if you look at the budget turnaround of the $30 billion, more than $20 billion is due to increased receipts. They haven't managed to check spending in the way in which they've suggested. Most of this is due to additional global growth - things like commodity prices. I would say too, when the Government is taking credit for keeping spending in check, that’s partly because the National Disability Insurance Scheme has only got a take up of two out of three. I'm not sure the Government ought to be terribly proud of that. We do want the NDIS to cover everybody who needs it. 

JAYES: Do you credit the Government with the number of people who have moved off the dole into work, this is the lowest level in 25 years?

LEIGH: If you go to Germany, you’ve got an unemployment rate below four per cent. You go to the United States, you’ve got an unemployment rate below four per cent. That's where we ought to be aiming. Indeed, if we had German or American levels of unemployment, we’d have hundreds of thousands of more Australians in work. We can do much better than this. We're actually not far off the unemployment rate we had during the during the Global Financial Crisis. So Australia needs to be ambitious and that's one of things I’ve been struck by being at this great national conference, Laura - there is a sense of purpose and ambition from the entire Labor team. There's a sense that as the old biblical saying says, you want to set aside childish things -  the petty partisan politicking and focus instead on long term changes such as getting wage growth going again, getting unemployment down to full employment, tackling climate change, investing in schools and infrastructure. That’s been the conversations we've been having at the Labor national conference here.

JAYES: Okay Andrew Leigh, do you credit the Government with anything? You seem to be talking down the economy this morning where these budget figures are looking pretty good?

LEIGH: Laura, I’m ambitious for the Australian economy. I see these figures and I think we can do better than this. We don't have to be an economy in which productivity rises, in which profits increase but workers don't get a share of the pie. We shouldn't just say ‘oh well, that's as good as Australia can do’. We know we can do far better than that. We can create better jobs. We can boost growth. We can tackle inequality, actually become a more equal nation again. CEO pay is going up rapidly, but workers have barely gotten a pay rise under this Government. Living standards are stagnating. You look at figures like the new car sales for example and that demonstrates to you the fragility of retail spending. Getting workers a pay rise wouldn't just be good for workers - it would be good for our economy and for retail spending as well. So it's my ambition for a country that leads me to say that this isn't as good as it gets.

JAYES: Okay, well you seem to be a little bit pessimistic there.

LEIGH: Ambitious, Laura. Ambitious.

JAYES: Okay, ambitious well that’s your take, mine is a little different. But the IPSOS poll today shows that may not matter. But I guess the one vulnerability for Labor is your negative gearing policy. Now you’re an economist, what will this negative gearing policy if you know you look at the polls today, not everyone is convinced that this is a good policy to follow, could that do something negative to shape confidence?

LEIGH: Laura, I think it'll do exactly the opposite. I think for many young Australians, it'll inspire confidence, that they have a chance to make it into the housing market. It’s true we've seen a little bit of softness. Over recent years, you've seen prices go up 40 per cent and then over the past year they've fallen about 4 per cent. But house prices to  income ratios are still extraordinarily high compared to the generation ago. Young Australians are finding themselves locked out of the housing market. Our homeownership rate puts us in the bottom third of the advanced world. We can't continue as a nation which says to people on modest incomes ‘homeownership is out of reach for you’. So that's why Labour's following the advice of experts and if you ask most economists they’d agree we've got to tackle the excesses in capital gains and negative gearing. We're doing it in a grandfathered way, so if you’ve got an existing investment Laura it won't be affected by our changes. But going forward, you’ll only get the benefits of negative gearing if you add to the housing stock. And that's fair. 

JAYES: Okay, grandfathering, that’s an important part of your policy, when will that grandfathering start?

LEIGH: That’ll start from when the policy takes effect.

JAYES: Which is when?

LEIGH: As we've said, we don't yet know an election date. So once we’ve got an election date, we will give the Australian people the absolute clarity as to when the policy kicks in.

JAYES: So we know the election date is one of two weekends in May, are you really saying you’re not going to release the details of this policy because of a week’s difference?

LEIGH: Laura, you've got the details of the policy and people know if they've got an investment today, it won’t be affected. So your question went to grandfathering, your question went to ‘if I've got any investment now, will that be affected’. I can give you a cast iron guarantee that it will not. Labor is very careful about these things. We’ve worked methodically with the experts and indeed because the policy is grandfathered, the amount of revenue it delivers in the early years is fairly small. I don't know if you remember, the first critique the Government made when we announced this policy before the 2016 election was ‘well, it doesn't raise very much revenue’. And that is because we've been very careful not to shape existing investment decisions. We recognise people have made those investment decisions in good faith and we won’t be mucking with them.

JAYES: Will we know, will voters know when this policy is due to begin before the election?

LEIGH: Absolutely. 

JAYES: Okay so it will be released in the election campaign proper if not before?

LEIGH: Absolutely, that’s right Laura. And it will be released alongside a plethora of other policies - a strong energy policy, which I know business is crying out for. Our Australian Investment Guarantee, which means that businesses will go into the election facing the same company tax rate from either side, but then with Labor they also get the Australian Investment Guarantee encouraging investment. So we've got a very strong story to tell about how we boost the economy, pay down debt faster than the Coalition not just over the decade, but over the four years as well. This is the most economically responsible comprehensive plan that an opposition has put forward and it comes back to that sense of purpose and unity that you get from Bill Shorten right across the shadow ministry - Chris Bowen, Jim Chalmers - that leadership on the economic issues is what business is crying out for. Read that CEO survey in the Financial Review today, Laura, there is really a sense that the flip flopping must end.

JAYES: Let’s quickly talk about the ALP conference now, asylum seekers will be debated today. The idea of increasing the humanitarian intake, this has been pushed by the left of the party to 27,000 perhaps up to 30,000, is that likely to get up?

LEIGH: I’m no tea leaf reader on national conferences, Laura. I've been attending Labor Party conferences the state, territory and national level for 27 years, but I do know that it's going to be an important conversation. Australians are generous people. We’ve made a contribution on taking people from Syria and other regions. I'm not sure where that particular one is going to land. It’s going to be a matter for conversations between Shayne Neumann and others. But on the Labor side, you don't get the demonising of asylum seekers, you don't have the attempt to play partisan politics you get on the Coalition-

JAYES: Do you personally want to see the humanitarian intake increase?

LEIGH: Absolutely, I do. I think we can play a larger role in dealing with the world's humanitarian crisis. I think we ought to make a contribution to the UN High Commission for Refugees with their work in the region. Labor supports ending the dangerous boat journey from Indonesia to Australia, but we also believe we can do that without harming people on Manus and Nauru. Those people shouldn't still be there five years on from the refugee resettlement agreement. We need to make sure, Laura, that we send our values of compassion and egalitarianism into the world through a fair refugee policy that sees no one dying at sea, but also sees Australia doing our part to tackle the humanitarian crisis. 

JAYES: And will you be arguing for an increase in the Newstart allowance so not waiting for this 18 month review?

LEIGH: Newstart is too low, but Labor believes a review is the appropriate way of tackling that. That's what we did with the pension increase. So in 2007, we didn't go to the election promising a dollar increase in the pension. We promised to review, run by Jeff Harmer - very methodical - which delivered the biggest increase in pension in its hundred year history. And that's the sort of process we will go through in assessing what the right level of Newstart should be.

JAYES: Alright, we’ll be listening in closely to the debate today.

LEIGH: Please do, Laura!

JAYES: Andrew Leigh, thanks for your time this morning.

LEIGH: Thank you.


Authorised by Noah Carroll, ALP, Canberra.

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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.