MONDAY, 27 JUNE 2016
SUBJECT/S: Brexit; Labor’s positive plans for the budget.
PETER VAN ONSELEN, HOST: Thanks very much for your company. As promised, I'm joined now by the Shadow Assistant Treasurer, Andrew Leigh, live from the nation's capital. Thanks for your company.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Peter, great to be with you.
VAN ONSELEN: Let me ask you, before we get to domestic matters, the once great Britain, what does this exit vote mean for the island nation?
LEIGH: Peter, it is pretty bleak for the European Union and for Britain itself. Britain is a sixth of the European Union so this is as if Florida and California had just voted to leave the United States. It will leave Britain focused much more inward and the risk for Australia is rising tendencies towards populism and protectionism on both sides of the Atlantic now. You look over at the United States and the Republican frontrunner there looks quite similar in some ways to the person who might well become the next Prime Minister of Great Britain. Both of whom have more than a passing similarity to Australia's Deputy Prime Minister.
I think that's worrying as an internationalist, as someone who believes we need to be more engaged with the world, who believes that trade is a good thing and that open markets tend to bring prosperity. Britons, according to the British Treasury, are going to be $7,000 per head worse off as a result of the exit vote. So that's going to be a big challenge for them. And as you saw from the 3 per cent fall in our stock market on Friday, a real challenge for us. Labor is confident that we have the answers to a challenging global period of instability. We were after all in Government when Australia faced the biggest global downturn since the Great Depression. We are confident that a united Labor team can carry Australia through these significant global challenges.
VAN ONSELEN: Let me go to the Labor costings that were announced yesterday in terms of your plan if you are to get into Government. You spoke to our own Kieran Gilbert a little earlier today on Sky News, can I just clarify, you said that Labor's full hospital funding has been included in the 10 year estimates that have been included in those costings. Is that right?
LEIGH: Well Peter let's be clear about what happens with hospital funding. It's negotiated through a COAG process which sets four-year timetables. Labor has promised additional money but obviously these funding agreements are worked out at COAG and just as the Coalition we have a COAG agreement that runs for four years.
VAN ONSELEN: So how does that then work though beyond the four years when you put out ten-year costings. What do you factor in as the growth rate in spending on things like health or for that matter, education because of those COAG arrangements that still need to be determined?
LEIGH: On education, we've been clear that we would support the full Gonski needs-based model. Peter, we believe that Australian schools need to be funded based on the needs of the child, not the affluence of the parents. We shouldn't have a 'postcode lottery' if we're to make the most of the human capital potential of young Australians.
VAN ONSELEN: But what about in terms of health, those six years beyond the forward estimates where we already know what has been promised. It was Bill Shorten that promised that he would put back the money in the health area I think on 12 June that was taken out by the Abbott Government and I believe, correct me if I am wrong, but I believe that is what you've done across the forward estimates. What about the next six years? Is there any increase that is factored in there? Albeit waiting for COAG agreements or is there no increase which means that we'll find out what the extra amounts are to get tacked onto the bottom line?
LEIGH: Peter, we're committed to undoing the damage to health that has been done by the Abbott-Turnbull Government. You go back to 2013 when they were pledging 'no cuts to health' and you see how that has turned out for the system. This GP freeze in place for six years is effectively a backdoor GP tax. That makes it harder for people to see the doctor which of course puts more pressure onto the hospital system. Elective and emergency wait times are blowing out and the Australian Medical Association has warned that our hospital system is under threat.
VAN ONSELEN: Sure, but just going to the numbers though. I don't know the answer to the question I am asking. What happens over those six years once you get past the forward estimates? Is there an assumed percentage increase year on year, is there no increase and it just gets added on once those agreements are struck? What's the methodology?
LEIGH: At the moment our estimates sit in line with the Government's for that latter period -- for the specific area of hospitals -- because that's to be negotiated with the states and territories. But we're committed to repairing damage done by the Abbott-Turnbull Government. That's been damage that anyone who has sat in a hospital emergency waiting room would have felt. It is damage that people would have felt if they've gone to the doctor and found those out of pocket costs rising and rising.
VAN ONSELEN: Okay, just because I'm trying to work this out – so in other words for those six years beyond the forward estimates – you put more into health than the Government over the four years but then both sides have the same assumptions for spending over the following six years – surely we can conclude, can't we, that Labor is the party of health and education will probably best what the Coalition is promising in those six years beyond the four years of forward estimates?
LEIGH: The health system is always better off under a Labor Government, Peter. And you know the history of Medicare as a student of political history. Every election from 1969 to 1993 was fought with the Coalition trying to destroy Medicare. When they came to office under John Howard they made changes which increased the private health share. Malcolm Turnbull himself said in 2009 that he believed it would be a good thing if everyone had private health insurance. So the great battle in Australian health care is always between Labor standing up for Medicare and the Coalition looking to chip away at it brick by brick.
VAN ONSELEN: That said, you got – you both are estimating the same amount of spending over that six years beyond the forward estimates on health.
LEIGH: Not on health, no, Peter. We are committed to undoing the Medicate rebate freeze. We'd make it easier for people to see the doctor. We are committed to investing more in primary health care and that then has a flow on impact on the hospitals. The better we can do on primary health care, the more we can keep people out of hospitals. And the thing you notice if you look across the OECD statistics is that Australia has a disproportionate share of people in hospitals. We need to do better at primary prevention. I was really disappointed when the Coalition, for example, cut back on the Preventative Health Agency, because if we can stop people smoking, if we can tackle obesity, if we can do a better job in terms of ensuring safety on our roads, then we can keep people out of hospital. But it's those preventive health measures, starting early with primary health care, that really makes a difference.
VAN ONSELEN: If you are going to try and stop people from smoking you can start by talking to my producer, see how you go there. But good luck with that. Let me ask you another one though.
LEIGH: We could do a public health advertisement on that as well!
VAN ONSELEN: Let me ask you another one. Superannuation. It looks - correct me if I'm wrong - from the costings like Labor have taken the saves of the Government's superannuation policy rather than simply your own - is that accurate?
LEIGH: What the Coalition has given us in the Budget is just a dog's breakfast. It's a policy on which they didn't consult carefully, where there's clearly retrospectivity. In order to do the consultations properly, we've come to the view that you need to do that with all the resources of government. So we've committed, if we win office, to using the resources of Treasury, consulting quickly on that, coming up with a measure which achieves the same impact on the budget bottom line, but ideally without the retrospectivity of the Government's changes.
VAN ONSELEN: OK, but isn't this – and I agree with you, you can't unscramble the egg until you get the resources of Government, it's very hard obviously to be able to unpick the various details of how costings and estimates are done by Treasury on a policy you may not entirely agree with – but isn't this exactly why these whole costings-debates and the estimates that are delivered aren't really worth the paper that they are written on. Because, you know, health spending will be different over that six years beyond the forward estimates because of whatever is negotiated between the Commonwealth and the states, super estimates will be different because your policy isn't the same as the Coalition's policy – you're going to have a review of it - this applies to both sides, but isn't the fascination in costing something that quite frankly is a bit of a waste of time b ecause there's so many assumptions that won't hold up in the long-run?
LEIGH: I don't think that's right, Peter. I think one of the things you need to look at over ten years is whether savings are building or whether costs are building. So if you contrast two of the bigger pledges in the election, we're reining in negative gearing and the capital gains tax discount, but grandfathering existing purchases. That means that that's a saving that steadily builds over time like money put away in a term deposit. The Coalition with their big business tax cut, are increasing the cost year-on-year until it's some $14 billion a year at the end. That means their policy is effectively like a stick of dynamite with a very long fuse. It's going to blow the budget in the last years, but the Coalition is trying to slide to the election without getting a ten-year cost for what they said on Budget night very proudly was a ten-year plan to cut corporate taxes. It's why we d o believe it's appropriate to look over the decade as Australian households do when they send a kid to school, when they take out a mortgage – they're not just looking over four years, they are looking beyond that.
VAN ONSELEN: Andrew Leigh, always a pleasure to have you on NewsDay. Thanks for your company, I'll probably talk to you on the other side of the election.
LEIGH: Thank you, Peter.
VAN ONSELEN: Cheers.