There's a great deal of uncertainty in the global economy right now. On ABC NewsRadio, I joined Marius Benson to talk about why it's important that Australia's government addresses this uncertainty, rather than adding to it. Here's the transcript:
THURSDAY, 12 FEBRUARY 2015
SUBJECT/S: Economic summit proposal; Global economic outlook
MARIUS BENSON: Andrew Leigh, there's been a call for a summit on Australia's economic future. That call has been backed, in part, by Tony Abbott but it came from Clive Palmer and also Rupert Murdoch. Echoes of Bob Hawke there – are you in favour of a summit?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Marius, Labor is always happy to talk economics. But you've got to worry when you hear calls for bipartisanship, because let's face it: expecting bipartisanship from Tony Abbott is like expecting humility from Malcolm Turnbull. He turned down the opportunity to be involved in the multi-party committee on climate change when Labor was in government, and he turned down the opportunity to be part of the tax forum. If this is a conversation about how we deal with the challenges of the future, including things like climate change and inequality, then we're happy to be part of that conversation. But if it's just a fig leaf to cover cuts to the most vulnerable, then Labor isn't going to support measures which harm the Australian social contract.
BENSON: But on the economy, is there substantial shared, common ground? Do you, for example, share with Joe Hockey and the Government the objective of a balanced budget and an end to the deficit?
LEIGH: Absolutely. But we also are concerned about the lack of confidence. We've now got Ian Narev adding his voice to a range of businesspeople who've raised their concerns about the fact that this government is hurting confidence. We've got the Reserve Bank saying that growth is below trend; we've got the number of hours worked per month now having barely moved in three years, despite significant population growth. People are moving from full-time into part-time work and there's a general feeling of insecurity in the community. The Government has only added to that. Universities don't know what fees they're allowed to charge, doctors don't know what's happening to their incomes, big businesses don't know if they're going to be hit with a 1.5 per cent levy for the parental leave scheme that the Prime Minister has dumped.
BENSON: You mentioned Ian Narev there, the Chief Executive of the Commonwealth Bank. He'd be a pretty happy man now since he announced yesterday a $4.62 billion interim cash profit, so things as looking good for the big four banks. But he talked about the economy more broadly, pointing to political deadlock as a problem. Is there something Labor can contribute unilaterally to end political deadlock?
LEIGH: We've supported $20 billion of savings that the Government has put through, including measures that we've said very clearly Labor wouldn't have proposed but which we're prepared to back. But we're not going to support measures such as the GP tax which ultimately will force people into hospitals if they can't see a doctor. Or measures such as the 20 per cent cut to the per-student contribution for universities, which again have the impact of eating the seed corn for our future as a clever country. I'm also worried that the Treasurer really seems out of touch with many of the challenges in Australia. He thinks fuel excise is a progressive tax, whereas in fact it is regressive. He said that his own electorate, North Sydney, has one of the highest bulk-billing rates in Australia when in fact it's got one of the lowest. And he thinks Australians are working half the year to pay tax where, as everyone knows, our overall tax to GDP ratio is about one-third.
BENSON: Australia's economy obviously operates in a global context: what impact do you think that wider world is having, or will have in the future, beyond the obvious impact of tumbling commodity prices at the moment?
LEIGH: Certainly you've got to be concerned about what's happening in China at the moment. The steady downwards revisions are having a flow-on effect to Australia, and the fall in the iron ore price is clearly an impact on Australia as well. Indeed, the challenges for European growth are palpable. The United States economy does seem to be performing well but it's a challenging time in the global economy. That insecurity is, I think, being fed rather than allayed by the Government being more concerned about Tony Abbott's personal numbers within the party room than by the overall budget numbers.
BENSON: Andrew Leigh, thank you very much.
LEIGH: Thank you, Marius.
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