Government takes debt over $1 trillion with little to show for it - Transcript, 5AA Mornings



SUBJECTS: Budget 2021.

LEON BYNER, HOST: Now on the line I have a professor of ANU economics. He's got a lot to say on budgets. His name is Dr Andrew Leigh. Andrew, it's a pleasure to talk with you.


BYNER: Now, tell me about your opinion of the budget delivered by Mr Frydenberg.

LEIGH: It's a very expensive budget. Debt goes to $1 trillion, from the party that printed those 'Back in Black' mugs a couple of years back, and there's so little to show for it, Leon. You don't have the investment in renewable energy, you don't have the investment in education, you don't have COVID vaccine rollout happening in time. Yet there's a real spendathon which is focused on the next election, and yet not focused on setting us up for the growth that we need in the decades to come.

BYNER: So in your opinion as Shadow Treasurer, what should be the three major priorities?

LEIGH: Well, Jim Chalmers as Shadow Treasurer has outlined the importance for Labor of making sure that we get quarantine and vaccination done; ensuring that we restore fairness to Australia and that we're seeing wages go up, whereas this budget has wages going down after inflation; and making sure that we make those investments to set the nation up for the future. Universities are set to lose some $20 billion over the course of the next year and that could be a permanent hit to their research capacity and their education prowess, which then means we're less productive economy in the future.

BYNER: Well, tourism are going to cop it, too, because we're not going to have too many visitors are we?

LEIGH: Sure are, Leon. I was comparing the tourism and the immigration numbers in the budget from last year to this year. They now don't have migration and tourism coming back until 2023 - the year after next. For many small businesses operators and the tourism sector, they're just gonna go to the wall. They can't wait two more years to have tourism open up again, but that's a direct result of the failure of the Government to get vaccination right. If we had the place fully vaccinated, if we had quarantine working well, we could look to open up much quicker than we'll be able to given the glacial pace of the vaccine rollout.

BYNER: Well, given that we're going to have a federal election sooner rather than later, what are you guys going to propose?

LEIGH: We'll be talking about the importance of taxing multinationals, about the waste that's in this budget - some $15-20 billion of JobKeeper went to firms with rising earnings, and there's so many rorts, the sports roads, the land rorts-

BYNER: -I want to go back to this taxing multinationals.


BYNER: That's been an issue for years.

LEIGH: Sure has. 

BYNER: For years.  

LEIGH: It's a movable feast, Leon, so as the multinationals set up new tax arrangements governments have to be smart, adapting the laws to catch them.

BYNER: Well, can't we have a law that says, and this is probably, maybe, some would argue, simplistic, if you do business here, you pay tax here? What's wrong with that?

LEIGH: We've got to make sure we're not double taxing companies and we're doing it fairly. We want to make sure that we've got the productive capacity of the economy humming and I want to make sure, like your small business caller before, that they are on a level playing field. For companies that are using tax havens, and I'm guessing your caller before wasn't routing profit through the Bahamas, we need to be pretty firm with that kind of behaviour. That undercuts Aussie businesses and it means that they're not competing on a level playing field, as well as costing the taxpayer revenue.

BYNER: So what will you do for small business?

LEIGH: For small business we certainly support stronger policies to improve demand in the economy. One of the real problems in the Australian economy is the lacklustre demand that we've seen recently. We're pleased that the Government's adopted a policy Labor's been pushing for for a long time of accelerated depreciation, allowing firms to write off assets more speedily. We think that's a much smarter way of incentivizing business investment than the headline company tax rate. We also need to deal with the skills challenge. I speak to a lot of small businesses in my electric and they talk about the challenge of getting staff. That's partly because we've had a fall in apprentices and so our own training system isn't producing, but also now with the border closure firms that are relying on temporary migrants, university students from overseas, they say they're really struggling to get things done.

BYNER: Yeah, and of course the tourism industry is really copping it.

LEIGH: I spoke to a hotel operator today, Leon, who said he could afford to offer more rooms, but he can't find enough staff to clean them. How crazy is that? And that's a result of the border closures. He typically hired students studying at the Australian National University and the University of Canberra. They're not coming to Australia any longer and so he's not able to get hold of the staff that will clean the hotels. Now, that means that domestic tourism doesn't pick up to take up the slack of international tourism.

BYNER: That's crazy. Andrew Leigh, thank you.


Authorised by Paul Erickson, 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.