Labor presents fair budget repair - RN Breakfast

FRIDAY, 10 JUNE 2016

SUBJECT/S: Deficits; Labor’s savings; Labor’s childcare package; Labor’s plan for small business (NBN); the Redfern Statement

FRAN KELLY: Andrew Leigh is the Shadow Assistant Treasurer. Andrew Leigh welcome back to breakfast.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Fran, great to be with you. 

KELLY: So Labor is going to make these cuts and you are going to present yourself as a tough economic manager doing everything required. Doing whatever it takes basically to repair the budget. Yet at the same time you're also admitting to us that you are heading into four years of bigger deficits. How do these two match up?

LEIGH: Well Fran, we've said that over each year going out over the Labor budget the deficits will continue to get smaller. The budget will be back into surplus in the same year as the Government. We've set that over the 10 years, we're firmly confident that Labor's plan would be better for the economy than the Coalition's.

KELLY: You can say that all you like but at the same time you are acknowledging a bigger blowout in the deficit, and now you are going to give us some measures today to show how you're going to at least stop that being even bigger. Is that right?

LEIGH: Well we can't do an apples-to-apples comparison until we see both party’s numbers. You'll see that after everyone’s announced their policies. But certainly what you know from the Coalition is that they have a tax break for big business that builds over time, less than $1 billion in the first year but over $10 billion in the 10th year. By contrast, Labor has grandfathered our changes to capital gains tax and negative gearing that save less than a $1 billion in the first year but nearly $10 billion in the 10th year. So our budget savings build over time, their tax cut to big business builds over time. That's why what the Coalition's taking to the election is fiscally irresponsible.

KELLY: Well I guess the voters will make their mind up about that. But in the short term what you're going to tell the voters today is that you are backtracking on some of the measures that you've been campaigning hard for the last couple of years. We know you are going to better target some family payments – you are going to cut back on family payments – is that right? Some families are going to be worse off. 

LEIGH: You'll see the detail of the announcement later today. 

KELLY: But can you confirm that some families will be worse off by the end of today?

LEIGH: You will have to wait for the announcement there. But certainly we'll be applying the same fairness test that Bill Shorten and the team has applied right across this term. We know we have a pretty well-targeted social safety net. In fact, a dollar spent through our welfare safety net does more to reduce inequality than any other welfare safety system in the world.

KELLY: Which is why Labor has been railing against not cutting back any further for the past two years isn't it?

LEIGH: Which is why any changes to family payments are tough and need to be thought of through a Labor lens. You won't see us suggesting the savage cuts that you saw in the 2014 Budget. Those changes which would have so deeply hurt families and which led to the removal of a first term Prime Minister. What you will see from Labor is us making decisions which will allow us to put more money into Australian schools to deliver a childcare package that leaves nearly a million families better off and no families worse off.

KELLY: Let me ask you about the childcare package seeing as you raise it. Because your childcare package is a dollar value the same as the Government's proposal, the Government's doesn't kick in till 2018. But $3 billion a piece, the Government's has some real structural reform in it, Labor's basically more money for more places now and more money for higher childcare rebates – but it's not means tested. Why is that a good idea when you're looking now at cutting back some payments and you say you're going to look at this through a Labor lens of fairness. Isn't means testing all about fairness?

LEIGH: You're absolutely right to go to fairness. Labor's childcare package is in two parts. One part is to increase by 15 per cent the child care benefit which is a means-tested payment. So we're increasing a means-tested part of the system. But the other is a structural change but so many families find it deeply frustrating when they suddenly hit that $7,500 cap. Suddenly the family budget is blown out – often in March or April as you're getting towards the end of the financial year. So we want to raise that to $10,000.

KELLY: But that's not a structural change.

LEIGH: I think many of your listeners would disagree, Fran. I think many of your listeners who find themselves in the position where they were paying half the childcare costs and suddenly they find themselves paying the entire childcare bill, find that a pretty tough structural hit to the family budget. Labor is looking to take that pressure away.

KELLY: I understand that everyone would rather have more money for that ceiling but if you are a family with an income of $250,000 or above, is it fair to give it to everybody when every dollar is counting when Labor announces some more cuts?

LEIGH: The childcare rebate isn't means tested, Fran –

KELLY: No, the ceiling.

LEIGH: And we're not proposing to means test it. But the ceiling again applies across the board. The reason for that is that we're concerned about situations in which you might have a lower earnings spouse married to a higher earnings spouse, and the lower earnings spouse not being able to re-enter the workforce because the cost of childcare means that working isn't worthwhile. It's 'gender equity meets household equity' if you like and we've been firmly on the side of making sure that women aren't deterred from work.

KELLY: One of the savings a couple of the newspapers suggest Labor will be announcing today – the cutbacks – is to allow – let me put this in context, Labor’s been railing against the Government’s so-called zombie taxes. $18 billion worth of taxes or cuts that are stuck in the Senate, which Labor has opposed. One of those is a $900 million cut over four years to research and development tax concession. Now this is a business tax concession that business gets. If Labor backflips on this, and allows the Government to cut that or if you were in government and you would cut it too…this is another Labor attack on business, isn’t it?

LEIGH: You will see all the details coming out later today, but certainly we’ve been strongly in favour of Australian small business, supporting the Government’s measures for small business. We’ve also been in favour of making sure that business has the infrastructure it needs. I was down in Burnie recently where the biggest issue for business is the National Broadband Network access. Talking to small businesses all across the country, who are in need of better infrastructure. They’re in favour of Labor’s 'concrete bank', getting infrastructure financing at arm’s length from government.

KELLY: Well then why is the coalition of small business campaigning against Labor and for the Greens in some of sensitive seats in Melbourne.

LEIGH: A matter you’d have to put to them. I’m very confident though that Labor’s got stronger proposals for small business. We’re the only ones with an access-to-justice plan that helps small business take on the big guys in court without fear of an adverse cost order. We’re supporting the Government on the small business changes, and for small businesses who work in the IT sector, Fran, they don’t want to spend time waiting for a file to upload, they just want to get on and do their job. That’s why Labor’s National Broadband Network plan will be better for small business in those sectors.

KELLY: You’re listening to RN Breakfast, it’s 16 to eight. Our guest is Andrew Leigh, the Shadow Assistant Treasurer. Just finally and on another matter, Australia’s peak Indigenous organisations yesterday released something they’re calling the ‘Redfern Statement’ which calls for a complete overhaul of indigenous strategy, engagement and funding and it calls for a Department in Indigenous Affairs run by Aboriginal public servants. Have we got it wrong in recent years? The Abbott Government centralised the funding and administration of Aboriginal affairs in the Department of the Prime Minister and Cabinet. Was that a mistake? Is that something Labor’s considering?

LEIGH: Certainly we’ll look at ways of making sure Indigenous governance is done better. I’m a member for the ACT and one of the issues that I’ve pursued in recent years is the Indigenous targets across the public service, where government hasn’t done well is getting enough Indigenous public servants into departments in Canberra and into the public service across the country. Now I know Shayne Neumann has been talking to a vast range of groups across the country and we will of course benefit significantly from Linda Burney, Pat Dodson, hopefully Tammy Solonec entering the Labor caucus to give more Indigenous voices within our party room. They're hard issues, and I wouldn't want to pretend we've got all the answers today. But we're certainly listening to these peak groups. 

KELLY: Andrew Leigh, thank you very much for joining us. 

LEIGH: Thank you, Fran.


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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.