SKY AM AGENDA
TUESDAY, 5 JULY 2016
SUBJECT/S: 2016 election; AAA credit rating; Labor’s positive plans for the economy.
KIERAN GILBERT: This is AM Agenda, with me now is Labor Frontbencher, Andrew Leigh. Andrew Leigh thanks for your time. Do you think Labor is still a chance of forming Government here?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Absolutely, Kieran. Still the underdogs, still a longshot but you can see us coming home in a Leicester City finish here.
GILBERT: Did it frustrate you though that there was talk of Labor leadership on the Sunday? Clearly Mr Albanese was asked yesterday do you intend to challenge and he said no. So it has been shut down now, but the fact that that emerged on Sunday must have been frustrating given how Bill Shorten has proved so many people wrong in his performance in this election?
LEIGH: Kieran I think the only problem that Bill Shorten is going to have when he walks into the next room of Labor supporters is getting the applause to die down so he can speak. He has performed an extraordinary feat. It's like landing Juno on Jupiter what he has managed to pull off over the last three years. Getting us to work as a united team, putting the positive policies up and showing that what Australians really want is a political party with a plan rather than with a three word slogan.
GILBERT: Well a lot of people underestimated his performance, including myself ahead of the election. I think it's also true to say that some of your senior colleagues might have underestimated him as well?
LEIGH: I think people who didn't know Bill well enough might well have made that judgement. I've always thought that his core leadership strength was his emotional intelligence, his ability to bring together groups of diverse people. I've seen Bill engage with people with disabilities, with a guy washing dishes in the corner of a restaurant. I've seen him touch base with building workers and I've seen him engage confidently with CEO's. He is somebody who has that emotional intelligence and self-confidence to be able to work across -
GILBERT: But he's still Opposition Leader isn't he and most likely to be? The most likely scenario is now that Malcolm Turnbull is still Prime Minister come next week and Bill Shorten for all the good performance is still the Opposition Leader, that's the bottom line?
LEIGH: That's the most likely scenario, you're quite right Kieran. We are trying to pull off something that hasn't been done in 85 years in Australia, not since 1931 has a first term Federal Government been knocked off. We're still a chance of doing that and that comes down in large measure to Bill Shorten’s leadership.
GILBERT: As an economist, are you worried about the impact of this uncertainty on our economy? What's your take on where we're at from the view of an economist.
LEIGH: The uncertainty is never good. But there are plenty of developed countries in the world in which coalition governments are the norm. What's concerning is the -
GILBERT: The limbo now that we're in right now in terms of this period even before the Government has formed?
LEIGH: My real concern, Kieran is that we might well see a Turnbull Government re-elected who's long-term economic plan really blows the budget out. The $50 billion tax cut to big business is the biggest single threat to the AAA credit rating.
GILBERT: It's not going to get through now is it?
LEIGH: Who's to know -
GILBERT: At best it looks like they'll get through something in the order of $50 million to $100 million turnover but given Nick Xenophon's support for local manufacturers, you can see him going to that point but I don't see anyone on that crossbench going to the top end. Certainly in the Senate as well, getting it all through?
LEIGH: Let's wait and see. The thing about this Australian election, Brexit, the Queensland State Election and the last Victorian State Election is that pundits ought to have a little bit more modesty now than maybe a few years ago.
GILBERT: That's true. That's very true, no argument there. In terms of where we go to from here on the economy, once there is a Government in place, are you confident regardless of who is in office despite your reservations about the tax plan that things are still fundamentally strong?
LEIGH: Yeah look I think we've got some big challenges, Kieran. GDP has grown but that's partly because GDP isn't divided by population. We have a fast growing population. Living standards per person have been falling for the last few years. Inequality is at a 75 year high, wage growth at a 35 year low, home ownership at a 60 year low. There's a range of economic indicators in Australia that do trouble me. And I think require bipartisan efforts in order to address them
GILBERT: OK in terms of, pundits need to have a new level of modesty, what about the ratings agencies because they stuffed it up right royally during the GFC and that period but we still invest so much credibility on their AAA rating don't we? Should we be taking a reality check on them as well.
LEIGH: Ratings agencies are what they are. It was under Labor that we first got those three AAA credit ratings and were we to see a downgrade that would probably flow through to raise the cost of credit not just for the Government but also for businesses and home owners. So those ratings are important. It was Chris Bowen that first flagged the concern about the potential Moody's downgrade and that's why Labor had those 10 year numbers out there. To be absolutely clear that while we would invest in schools and hospitals, we also had a clear plan for long term budget repair. We led on cigarette excise and superannuation where the Government eventually came on board in a fashion, but then we also think the Government needs to address the issue of negative gearing and capital gains tax. It doesn't make any sense to have some of the biggest -
GILBERT: Just on that then, do you think there is a window here for greater cooperation across the aisle given the hung parliament? Given the disparate nature of the upper house that is might be time that the two major parties actually cooperate on some of this tax stuff, climate change even?
LEIGH: I'd really like to see it, Kieran. In some sense what you're asking for there is a call for the Malcolm Turnbull of old. But does Malcolm Turnbull now have the political authority in order to continue to stay Prime Minister?
GILBERT: Andrew Leigh, thanks for your time.
LEIGH: Thank you, Kieran.
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