ABC NEWS BREAKFAST
FRIDAY, 11 MAY 2018
SUBJECT: Labor’s Budget Reply
MICHAEL ROWLAND: Andrew Leigh is the Shadow Assistant Treasurer. He joins us now from Canberra. Andrew Leigh, Good morning to you.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Michael.
ROWLAND: We heard the challenge to the Government’s challenge there to submit the costings for those big tax cuts. Will the Opposition do that?
LEIGH: Michael. We’ve done exactly as the Treasurer did on Budget Night. The normal procedure on both sides is to release those headline costings but not the underlying documentation. You didn't see it in the Treasurer's budget on Tuesday.
ROWLAND; How can the Opposition afford to almost double that short-term tax handout to low to middle-income earners?
LEIGH: It's a great question with a simple answer. We don't give $80 billion to big companies to send off to their overseas shareholders. $17 billion of that company tax cut goes to the big banks. Bill Shorten isn't prioritising the offshore shareholders of the big banks, he's prioritizing their customers. That's why 10 million Australians will benefit from Labor's bigger, better and fairer tax cut.
ROWLAND: So, that $80 billion, that's a cost saving. You're counting that as a cost saving because you're not handing out those company tax cuts?
LEIGH: We're not and we don't believe it's appropriate to be putting in place a tax cut which, on the Government's own figures, adds 0. 1 per cent to household income in the 2030s.
ROWLAND: That $80 billion includes the already legislated tax cuts for small companies earning up to $50 million. So, based on what you've just said, they're gone.
LEIGH: Michael, we'll announce our position on the medium-sized tax cuts. We’ve said we’ll support the small company tax cuts. But the lion's share of this $80 billion is going to the largest firms.
ROWLAND: So, it’s not really $80 billion, therefore, taking into account what you say are the existing tax cuts?
LEIGH: We can slice and dice these numbers, but the fact is the bulk of that money is going to the big end of town. When you look at the job creation claims of the Government, large firms which pay a higher effective tax rate actually seem to be creating more jobs at the moment than large firms that pay a lower rate of tax. Indeed, the firms that pay an effective rate of tax below 25 per cent are on net shedding jobs. That casts significant doubt on the Government's claims that all you need is a company tax cut in order to boost jobs and growth.
ROWLAND: OK, now, the Opposition is promising, as you mentioned, nearly double that short-term handout to low to middle-income earners of close to $1,000. Still undecided, aren't you, on whether you'll support the Government's plan to eventually scrap the 37 per cent tax bracket altogether. Is that something you're at least favourably disposed to doing?
LEIGH: We'll look at the Government's numbers when they finally produce them. We haven't seen those medium costs of the Government's long-term tax plan. It is off in the never-never. You would have to re-elect Malcolm Turnbull twice before Australians would see the impact of that. And the Grattan Institute's analysis yesterday suggested that, over the long term, the Government's tax plan would be quite sharply regressive, 60 per cent of the benefits going to the top fifth of the population.
ROWLAND: Other measures announced by Bill Shorten last night, or foreshadowed, in the health area and also education, the promise to scrap up-front TAFE fees for a lot of young Australians. Why is the Opposition promising to do that?
LEIGH: In an age of roboticisation, we need lifelong learning. It's important for young Australians and older Australians to be able to access TAFE to keep up as jobs change and technology advances. If we're not investing in education, Michael, we're really going to struggle to keep up with the rest of the world in the Asian century. So, this is a critical productivity-boosting measure, and, of course, vital for equity too.
ROWLAND: On the tax front, the Opposition is still promising to slug higher-income earners 49 cents in the dollar. Why are you bringing back that two cents in the dollar so-called deficit levy, if you're going to be elected?
LEIGH: Well, the budget is still in deficit, and under the Coalition debt has doubled. We've gone from a situation in which they were doing press conferences in front of debt trucks, to a situation now where you'd need a debt road train to visualise the amount of debt this Government has-
ROWLAND: Excuse the interruption. Debt is coming down, according to the Government's very own budget documents this week?
LEIGH: Well, the Government has sent debt to record highs. And yet you only had a very brief period in which that deficit levy was in place. Let's look at the impact when Tony Abbott introduced that deficit levy. It didn't strike me we saw a massive withdrawal from the workforce from those on over $180,000. I paid that deficit levy. I would be happy to do so again. I think it's far better than the Government's approach of taking money away from pensioners.
ROWLAND: And just finally, very quickly before you go, Andrew Leigh, we've got now the budget and Bill Shorten's official reply speech. Do you expect the next election, whenever it is, to be fought around tax and who's offering the bigger tax cut is the key issue?
LEIGH: Tax will be an issue, Michael: our bigger, better, fairer tax cut will be a key centrepiece of Labor's message. It will also be about the kind of Australia we want to live in. Bill Shorten's vision is that we should have 200,000 more students attending university. More TAFE places. And more opportunities to get those life-saving scans through new MRI licences. Ours is a plan which would not only see a more egalitarian Australia, but also a more rapidly growing Australia. Because I think we actually can get the unemployment rate down. I think we can get more people into work. I'm a real optimist about the nation's future.
ROWLAND: OK, we'll leave it there. Shadow Assistant Treasurer, Andrew Leigh, thank you for joining for us Parliament House this morning.
LEIGH: Pleasure, Michael.
Authorised by Noah Carroll ALP Canberra