Budget 2015 - Breaking Politics





SUBJECT/S: Budget 2015

CHRIS HAMMER: Andrew Leigh is the Shadow Assistant Treasurer, good morning.


HAMMER: Now, I'm sure there's plenty in this Budget that you don't like and we'll get on to that. But is there anything in the Budget that you do like?

LEIGH: Absolutely. There's investment for the National Disability Insurance Scheme's IT system, there's a small business package that I think is to be welcomed, and there's childcare changes which I think should be looked at with a positive eye. But I'm worried that the childcare changes are contingent on families payments cuts. It doesn't help families much if you give them more money when they've got a three-year-old and then take it away when they've got a six year old.

HAMMER: So what will Labor do with those childcare measures if they remain linked to the family tax benefit cuts?

LEIGH: Chris, we can't support those family payments cuts. We've been clear about that ever since last year's unfair budget. Kids don't get any cheaper when they turn six. I've got an eight-year-old and I can assure you he is no cheaper than his two- and five-year-old brothers. 

HAMMER: Ok, a couple of other measures here. The Government has retreated – if I can characterise it like that – on the tough measures with young people and unemployment benefits, the six month wait for unemployment benefits. That's gone, it's now down to four weeks for under-25s, so that'd be something Labor welcomes?

LEIGH: Well you can still starve in four weeks. It’s a long period for a 24-year-old to be without any income or government support. We think that's a pretty unfair measure and there's a raft of unfair measures still left out there. The cuts to schools and hospitals still remain; the failure to invest in science – we've got the CSIRO still seriously debilitated and that's a part of Australia's future. So I guess, Chris, I see this Budget as having failed the Coalition's own economic test because the deficit is twice what it was in last year's budget, but also failed the Labor test of investing in the future, innovation, jobs and tackling inequality.

HAMMER: Well there is $400 million there for the Medical Research Fund that was announced in last year's budget and was supposed to be funded out of, amongst other things, the Medicare co-payment. So it must be good that the Government is still committing money to that when it doesn't have the original source of revenue?

LEIGH: I certainly welcome investment in science and research. But that investment has been considerably down since this Government has come to office. One of the big questions that all policymakers need to be able to answer is: where do the jobs of the future come from? That's got to be through investing in science and innovation, and through encouraging kids to go to university – to maybe be the first in their family to go to university. You don't do that if you've got degrees costing $100,000. Unemployment forecasts are still high going right out to the out years of the Budget, suggesting that the Government so-called ‘adrenalin charge’ for the economy has been anything but.

HAMMER: You mentioned the forecasts – do you think that the assumptions under this Budget are credible?

LEIGH: In the out years I think there is a suspiciously large jump in growth and I'm not sure we're going to see that increase. Particularly as the Government's small business package cuts out after two years.

HAMMER: So going to the last election, Labor wouldn't be basing its own spending patterns on the assumptions built into the Budget? Or is it the case that if they're the figures Treasury bring up, you've got to compare apples with apples?

LEIGH: Labor would have a set of revenue measures which don't affect growth. Things like our multinational tax package which is 60 times bigger than the Government's. Or our fair changes to superannuation; these are policies that don't detract from growth. But we'd also be thinking more about the investments in future prosperity. Not just short-term sugar hits but long-term productivity enhancing reforms.

HAMMER: You mentioned your plans to tax multinationals - the Government has made a move here. It is saying it isn't introducing any new taxes but it is going after these big 30 multinationals and it is introducing GST on digital downloads. Is this moving in the right direction?

LEIGH: Well as you say, there's 17 new taxes in the Budget so clearly the Government is committed to tax and spend. Its tax and spending figures are higher than when Labor was last in government if you look at it as a share of the economy.

HAMMER: That's an interesting critique, because the Liberal Party ethos is all about small government but that's not borne out in this Budget, is it?

LEIGH: I don't think there's many small 'l' Liberals left on the Coalition side of politics these days, Chris.

HAMMER: I'm talking more about the economic dries. They talk about having smaller government but you're saying that the government, under this budget and as a percentage of GDP, isn't so small.

LEIGH: You're quite right. And there I'm critiquing them on the test they set themselves. They said there wouldn't be new taxes; there's 17 new taxes. They said they'd get spending under control; spending as a share of the economy is up. They said they'd get the deficit down and the deficit has doubled. But then it is important to remember that most economists wouldn't characterise those as the tests for a budget. They'd say: does it lay the groundwork for future prosperity? And that's where this Budget really disappoints.

HAMMER: As I understand it, correct me if I'm wrong, but there's nothing to address bracket creep in this budget. Is that something that needs to be addressed sooner rather than later?

LEIGH: Certainly that's one of the conversations people have in the tax reform space. But I do think that we need to make sure that our tax system is fair, efficient and equitable. Labor's multinational tax package is unusual to be developed from Opposition, but it adds $7 billion to the Budget bottom line over the decade with changes which are economically rigorous, grounded in work done by the OECD, and costed by the Parliamentary Budget Office. And as I said, 60 times bigger than what the Government is doing in this space. They've got a lot of hot air, but not a lot of substance when it comes to multinational taxation.

HAMMER: Ok Andrew Leigh, thanks for your time.



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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.