2SM MARCUS PAUL IN THE MORNING
TUESDAY, 4 MAY 2021
SUBJECTS: Housing affordability; Morrison Government’s failure to seek JobKeeper repayments; Multinational tax avoidance; Australians stranded in India; Morrison Government’s quarantine failures; Port of Darwin
MARCUS PAUL, HOST: 40 years ago the average house cost around twice the annual average income. Now, it is seven times and growing. We’ve got to stop blaming young Australians. They aren’t lazy, and they’re not eating too many smashed avocados. Homes are just way more expensive than a generation ago. If we don’t address this many young Australians will be permanently locked out of housing market.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: If only getting a real house was this easy. Sadly, this may be as close as some Australians ever get.
Australia’s home ownership rate is now at a 60-year low, and that’s no surprise when you look at how much it costs to get on to the property ladder. In 1980, average house prices were twice average incomes. Now, houses cost more than seven times average income.
Too many young families-
PAUL: Oh, OK, I don’t know why it stopped there. Anyway, we’ll probably come back to that if we can. Anyway, 13 12 69 the open line number.
That, of course, was delivered by our #JobKeeperWarrior, Andrew Leigh. Morning, Andrew. How are you, mate?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Marcus. Sounds like the video stopped, just like many young Australian's hopes of breaking into the property market.
PAUL: I think so. Look - I've got it back. Oh, no, I haven’t. Oh, anyway, I'll come back to it later. We'll put it on a card or something. Not to worry.
Look, a couple of things to talk about with you this morning. First of all: congratulations! Solomon Lew has decided to play ball with the tax man and will return the millions upon millions of dollars in JobKeeper from Premier Investments.
LEIGH: Well, half a cheer to Solomon Lew for returning $15 million of JobKeeper, but it's still a small fraction of what he received from Australian taxpayers. Premier Investments hasn't disclosed precisely what it got, but on one estimate it could be as high as $110 million. This is a company which set a record profit last year, paid $2.5 million to its CEO as an executive bonus and paid out a stonking dividend to shareholders. They don't need a cent of corporate welfare, and they should pay back the full amount of JobKeeper they received.
PAUL: Now, Netflix, I stream, I love the service. I pay my dues each and every month to Netflix but apparently they've got a bit of an offshore subsidiary that allows them to well dodge, is it their fair share or any tax at all in Australia?
LEIGH: They’ve set up a bit of a house of cards. They earned about a billion dollars of revenue from Australians, and yet they've paid only $550,000 in tax.
To put that into perspective, the highly paid CEO of Premier Investments probably paid more tax than the entire company of Netflix in Australia. That means that small Australian businesses end up having to foot the bill, end up having to pay more. When multinationals dodge tax the burden falls on the rest of us.
We know that Netflix has been using these artificial structures, as you said, routing its Australian revenue through the Netherlands in a way that your local corner store can't. These sort of lurks and perks just aren't available to a regular Aussie small business in the way in which they're being used by Netflix.
PAUL: I like your play on words with this, too: "It is time that Netflix chilled on tax avoidance and started streaming their fair share of revenue to Australia." I like that.
LEIGH: It would be about time, Marcus. Australians really enjoy Netflix. We appreciate our streaming services. Many of us have turned to them during the pandemic. Netflix has done well. It’s share price is up. But just because you're doing well doesn't give you a license to dodge tax.
We know that two dollars in five of multinational profits are now being routed through tax havens and low-tax jurisdictions. If we don't do something about this then there's a risk that the entire corporate tax system collapses, that we end up in a race to the bottom. To his credit, Joe Biden's tackling this in a big way, talking about raising the US corporate rates but also putting a floor under what the US will allow companies to deduct from other countries, effectively saying there's going to be a limit as to how low countries can cut their company tax rates and expect reciprocity from America.
PAUL: Yeah, why can't we do something similar? Well, probably because of who we have in government at the moment. I mean they like supporting big business and certainly like all those punishing small mum and dad operations. I can't believe it - $550,000 in tax by using a Netherlands subsidiary, that's how much Netflix paid in total in the last financial year, and as you rightly point out probably their highest paid executives are paying more in personal tax.
LEIGH: It's pretty cute isn't it, Marcus? Getting away with paying these tiny little tax bills at a time in which their revenue is absolutely exploding. We could do something about it. The OECD, the think-tank based in Paris, has been doing careful work with a whole lot of countries about how we manage to get global uniformity around company tax. Their Pillar Two reforms would see tens of billions of dollars returned to advanced countries. Australia should be championing those sort of reforms. We ought to be right at the forefront of that. If Josh Frydenberg is serious about budget repair being fair, rather than trying to balance the budget on the backs of NDIS recipients, then we've got to look at things like fairness in multinational tax.
PAUL: Big couple of weeks coming up with the federal government. You and I will talk at length, of course, after the federal budget to be handed down by the Treasurer, Josh Frydenberg, in under a week's time. There are many this morning suggesting that the Prime Minister has blood on his hands in relation to the Government's India ban. The PM, Scott Morrison, is speaking right now, actually, in Rockhampton, trying to deal with that issue. I'll get your thoughts on it, but look, I gotta, I know you have a bit of a sense of humour, have a listen to this email that's come through from one of my listeners in Port Macquarie:
"The solution to the Indian situation is it hand, Marcus and Andrew. Australians stranded in India will now be able to return home after the Asian nation temporarily changed its official name to Aspen, Colorado. Those returning from Aspen will not be required to quarantine. 'When there's a humanitarian crisis we like to try and help out where we can', a spokesperson for the new Aspen Government said. 'We realised the word India is a little confronting for some Australians, so we changed it to the name of a more palatable COVID disaster zone.' This strangely is a great relief to Scotty, as it absolves the Australian Government of any responsibility for meeting or not meeting its quarantine obligations. It's a win-win all round. He then goes on to say Rahul Chakrabarti, who now goes by the name Novak Djokovic, said they had no issues, passing through immigration. Mahatma Ganguly changed his name to Boris Johnson and Dutton and Payne arrange for hire car to meet him at the airport." And so it goes on.
Obviously it's a bit of a tongue in cheek look at quite a serious issue. Now, I've had a couple of stand up blues with some listeners this morning. One of the good things about our network is, and I noticed Lawsie probably had a different viewpoint to me, our afternoon guy Brent Bultitude had a different viewpoint to me, I believe we are absolutely, well, we're breaching international law on civil rights by not allowing Australian citizens to return back to their country.
LEIGH: It's pretty tough on those Australians who are over there, Marcus. I know from speaking to constituents who are regularly in touch with those in India that it's just such a frightening time, and what you'd expect at this time like this is the Australian Government would show compassion; we'd be talking about the need to manage the pandemic but also pointing to a pathway when people will be able to return in compassionate circumstances. Instead, we've got this draconian approach, which is different from what the Australian Government did when cases per person were as high in the United States and Britain as they are now in India. We've got to have consistency on those things and I don't feel as though the Federal Government has provided that level of consistency, and I don't feel like they've shown the compassion that you expect in a pandemic.
PAUL: The other issue of course is quarantine. Again, I've had stand up arguments with some who like to suggest that quarantine isn't the responsibility of the federal government. It quite clearly is.
LEIGH: It's there in black and white in the Constitution, Marcus. Section 51 sets out the powers of the federal government and one of those is quarantine. That's why they should be setting up independent quarantine stations, such as the facility that we have in the Northern Territory, but we need more of those so we can get more stranded Aussies back home. It may well be that that's also how we're going to be managing the reopening to international tourism, which is so critical to places like Cairns. If we're going to get international tourism going we've got to be able to have people flowing through Australia in a way that keeps people's faith that the quarantine system is working. Without that it's a huge hit to higher education, to international tourism, to a whole lot of sectors of the economy. We don't get a full recovery until we've got the borders reopening. We don't get the borders reopening until we get quarantine right and vaccination right. The federal government's bungling both.
PAUL: All right. Finally, one other issue, what cost sovereignty? Taxpayers would have to fork out more than $700 million to essentially buy back the Port of Darwin lease. The Prime Minister, Scott Morrison, was the bloke who signed off on this deal back in 2015 and now it's time to fix the mess. As a caller pointed out this morning, Andrew, if we're prepared to spend $20,000 a day to imprison a Tamil family of four on Christmas Island to protect our country, then surely this is equally as important. $700 million - is it worthwhile buying back the port?
LEIGH: It's classic Scotty from marketing. He said it wasn't an issue when he did it. He said it wasn't an issue when it came up again recently. It's only as the issue has now come onto the front page of the paper that Scott Morrison is willing to deal with it. Anthony Albanese, as the relevant shadow minister, expressed concerns right at the time the deal was done, and so he's been absolutely consistent through this whole process.
PAUL: Alright, good to have you on Andrew, thank you. We'll talk again next week. Appreciate it.
LEIGH: It's a real pleasure, Marcus. Thank you.
Authorised by Paul Erickson, ALP, Canberra