Labor's long term plan for budget repair - 3AW Mornings with Neil Mitchell





SUBJECT/S: Tampon tax; penalty rates; budget deficits; 10-year plan projections

NEIL MITCHELL: The Shadow Assistant Treasurer is on the line with us. Andrew Leigh, Good morning. 


MITCHELL: I'm okay. I think it is coming down to something about trust here – why the total backflip on the tampon tax?

LEIGH: We have always been open to making changes on the tampon tax. But as we have been very clear, it needs agreement from states and territories. In the last meeting of the Council of Australian Governments, New South Wales and Western Australia strongly opposed the change. 

MITCHELL: Bill Shorten said last night that “we can't afford it, and we won't do it.” You’ve been running websites saying how misogynist it is. I mean, how do people look at that? We're only talking about $40 million a year.

LEIGH: Neil, we are open to the change, we have always been open to the change. 

MITCHELL: Sorry, what does that mean? 

LEIGH: It means that if we can identify an alternative revenue source, like the Government's Netflix tax, and we can get agreement from all jurisdictions, we would be very happy to remove the GST from sanitary items. 

MITCHELL: So in your policy, is the GST on the sanitary items, or off it?

LEIGH: We have always argued that state and territory leaders should have removed the GST from tampons. But as you know Neil, this is a change that requires the agreement of states and territories – that's the way John Howard set up the GST. 

MITCHELL: Do you want to take it off or not?

LEIGH: We do, but we need the agreement of states and territories to make that change. 

MITCHELL: But listen to what Bill Shorten said last night about this:


JOURNALIST: If elected, will you drop the tax on tampons?

SHORTEN: The GST you mean. No – and I've got to say, I'm not going to make a promise that I can't keep..


And we can't afford. So which is it?

LEIGH: Neil, this reflects again the need to achieve agreement. Bill made the simple point that a federal government can't unilaterally make this change, that it needs agreement from states and territories. 

MITCHELL: He says we can't afford it because it's foregone revenue. Which is it?

LEIGH: We said that if there is an alternative revenue source – the government's Netflix tax is potentially one – then we will work with the states and territories. But what Bill is responding to is a particular question about whether the federal government can go it alone...

MITCHELL: No he's not. He was asked about the tax. That's not what he was asked at all. He was asked about the tax, and he said, "we can't afford it – it would be foregone revenue.” 

LEIGH: I am making clear to you Labor's position on this. If we can find a way through with the agreements of states and territories, we are happy to do it. But we can't go it alone. 

MITCHELL: Okay, but that's not what your leader said last night. The other thing – penalty rates. What do you stand on penalty rates? Are you going to accept the Fair Work Australia decision on weekend penalty rates or not?

LEIGH: We’ll respect the decisions of independent arbiters. We are not like the Coalition who will go ahead and try and scrap a body if they don’t agree with a particular decision.

MITCHELL: But your document yesterday says you support weekend penalty rates. Is that just theoretical support?

LEIGH: No, we are absolutely strong supporters of weekend penalty rates and in fact I reckon around Australia you’d be hard pressed to find a stronger supporter of weekend penalty rates than Bill Shorten. Labor took the unusual position of making a submission to the independent arbitrator on penalty-rates. And that’s because penalty-rates don’t just support the wages of low-wage workers, they’re not just a bulwark against inequality, they also protect the weekend. They make it more likely that people can get together on Saturdays and Sundays and send the kids off to the footy.

MITCHELL: So if Fair Work Australia says ok, no more weekend penalty rates, you’d just cop it?

LEIGH: We’ll be arguing very strongly that they shouldn’t make that decision.

MITCHELL: Yeah, but if they do, what happens?

LEIGH: Well ultimately, good political parties need to recognise the framework of laws in which we operate, and the constitutional limitations that are placed upon us.

MITCHELL: So what does that mean?

LEIGH: We are very strong advocates of penalty rates. That’s true throughout the history of the Labor Party, going back some 120-odd years.

MITCHELL: I understand. So if Fair Work Australia says no more Sunday penalty-rates, what do you do? Do you accept it?

LEIGH: Well we’d certainly look at all of the options we’d have there. But we don’t behave like the Liberals and try to shut down independent bodies that we don’t agree with.

MITCHELL: But what do you mean you will look at the options, what does that mean?

LEIGH: Well, we’ve certainly made strong submissions. We’ve certainly argued that the independent arbitrator shouldn’t make this decision because low and middle-income households depend on penalty-rates. Bill Shorten has been a strong advocate for penalty rates, but also, believes in the importance of institutions, something that conservatives of yore used to believe in, but we don’t see very much of that from the current group of conservatives.

MITCHELL: I understand all of that, but there is every possibility that this institution will say no more penalty-rates or change them. What do you do? What do you do if you are in government?  

LEIGH: The work we've done as an opposition is in making clear submissions to the independent arbitrator.

MITCHELL: Mr Leigh I understand that. I understand that, but I'm saying there's a possibility you'll be elected to government where you'll have this position on penalty rates – you've expressed it to the independent umpire – if the umpire rejects your view you say you'll explore options. What are those options?

LEIGH: You look at the suite of things that you are able to do in the legislation.

MITCHELL: And what are they?

LEIGH: You are able to make submissions. You are able to look at certain cases where there’s legislation that applies. 

MITCHELL: So you might write penalty rates into legislation?

LEIGH: Neil, people say this as though it's a very simple thing to do.

MITCHELL: I'm not assessing it; I'm just asking whether you would do it. You said you would look at options on penalty rates. You now mention legislation. Would you write penalty rates into legislation?

LEIGH: It’s a good question Neil, and let's go through the risks of doing that...

MITCHELL: No, let's get an answer.

LEIGH: The risks of doing that is that potentially you're not able to cover all of the industries you can cover using the current arrangements.

MITCHELL: OK, so do you do it or not?

LEIGH: Let me give your question the detailed response that it deserves. The risk is also that a Labor Government that decided to do that might well lay the groundwork for the Coalition to take away penalty rates. We respect independent umpires but we're passionate advocates for penalty rates. We're the only political party that put in a submission to the independent umpire arguing for penalty rates. We'll continue to fight for penalty rates.

MITCHELL: So what would you do if the decision goes against you? Would you legislate or not…

LEIGH: I think are certainly risks in legislating. And that is why…

MITCHELL: You said that you hold a lot of options. What are your other options? What would you do?

LEIGH: We’ll assess all these things in government, I'm not pretending to you I’ve got the full suite of things in front of me but I am talking you through the issues about Labor's history on penalty rates, our strong defence of penalty rates in the past, and that will continue in the future.

MITCHELL: OK, we'll wait till you get to government, fine. Is there a budget emergency or not?

LEIGH: I think there is certainly an ongoing budget challenge. We've seen warnings from Moody's that the AAA credit rating is at risk from a government that said the budget would be in surplus in the first year and every year after that. They've delivered deficits as far as the eye can see. A tripling of this year's deficit...

MITCHELL: You accept that your deficits will be bigger?

LEIGH: We’ve actually said that over the medium-term we think our budget position will be better. If you’re looking over the decade.

MITCHELL: But your deficits over the forward estimates, they’ll be bigger won’t they, over the next four years?

LEIGH: Over the medium-term, over the decade, I’ll think we’ll do better.

MITCHELL: OK. What about the next four years, Mr Leigh? The usual term – the next four years. Will your budget deficits be larger than the Liberals?

LEIGH: I think it is likely, Neil that over the decade we will do better. But as you say, over the short-term the Coalition is cutting in more in fiscal cuts than we are. We don’t believe that it’s appropriate to make some of the cuts that they’re advocating.

MITCHELL: So, your deficits will be larger over the next four years, correct?

LEIGH: We will certainly be reducing the deficit in every year over the forwards, and we’ll be returning the budget to surplus in the same year as the government.

MITCHELL: Yes, I understand that. Will your deficits be larger in the next four years?

LEIGH: We'll wait and see exactly what the Government comes down with, but we don't believe it is responsible to make savage cuts in the short-term. We believe that it's really important to make long-term decisions that put the budget on the path back to structural balance.

MITCHELL: Can't we please answer that? I mean, even Bill Shorten seems to be saying that the deficits will be larger under Labor for at least the first four years, getting back to surplus at the same time. Can't we just accept that?

LEIGH: Bill is referring to what some people anticipate may happen, Neil. 

MITCHELL: So you don't think it'll happen? Will you or will you not have larger deficits than the Government?

LEIGH: Neil, I can't be sure until I see the Government's numbers which they haven't announced – their final budget bottom line hasn't come down. What we have said though is we don't think it is responsible to have a plan which might look good over four years, but looks disastrous over ten.

MITCHELL: Well, that's a good argument. Do you notice the Coalition and business groups attacking you today over the company tax cuts – they are saying that Labor is anti-business. What's your reply to that?

LEIGH: We'll work with business, but not for business. 

MITCHELL: Fair enough.

LEIGH: We've said that we believe in making decisions that are in the interests of economic growth, but if you look at the fundamental drivers of economic growth, they are around things like investing in our people and our infrastructure. So making decisions to cut back the national broadband network really hurts business.

MITCHELL: Okay, fair enough. 

LEIGH: I was in Burnie earlier this week and local businesses there find access to super-fast broadband one of their top issues.

MITCHELL: Can I just ask you – in your ten year plan, we've talked about the four year plan and the ten year plan and the deficits increasing potentially over the four year plan – do you allow for economic downturn, or do you think everything continues as it is at the moment.

LEIGH: We're basing our assessments off the forecasts for the independent Parliamentary Budget Office, but you're absolutely right to ask the question, Neil, that if there is changes off those forecasts – that affects both parties' estimates.

MITCHELL: So that means that the deficit could be longer than four years. Can you guarantee getting back to surplus in the time set?

LEIGH: Neil, we make our projections based on the numbers that are given to us by the nation's forecasters.


LEIGH: But it is one of the reasons why I think fundamentally returning back to budget balance over the decade really matters. The Coalition's plan has a time bomb waiting in it, in the form of this huge company tax cut, which then blows the budget in the later years. That means that Australia doesn't then have the fiscal firepower for the downturn that you talk about. By contrast, Labor's changes to negative gearing – because they are grandfathered – don't begin to add to budget revenue much in the early years, but then in the later years they start to make a difference to the budget.

MITCHELL: Thank you so much for your time Andrew Leigh, Shadow Assistant Treasurer. 


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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.