Andrew Leigh

TURNBULL BACK FLIPS ON ECONOMIC POLICY WITH BAD EFFECTS

By supporting the ‘effects test’, a deeply divided Cabinet has come to a decision today that will chill innovation and investment. The only beneficiaries of this decision will be lawyers.

Malcolm Turnbull has totally capitulated on the effects test after earlier arguing against it.

Twelve months after the Harper Review was released and following a Cabinet brawl, the Government has adopted a thoroughly bad piece of economic policy.

Labor has consistently opposed an effects test, which will threaten legitimate competition and see higher consumer prices.

The Prime Minister talks a lot about innovation in the economy. Yet Australia’s largest employer, Wesfarmers, said in its response to the effects test that it is deeply concerned about the negative impact of an effects test on investment, innovation and growth.

E&OE TRANSCRIPT
ABC 24, CAPITAL HILL
PARLIAMENT HOUSE, CANBERRA
TUESDAY, 8 MARCH 2016

SUBJECT/S: Tax reform, Labor’s economic leadership, chaos in the Coalition, moving the budget for pure partisan politics, double dissolution.

GREG JENNETT: Labor's Shadow Assistant Treasurer, Andrew Leigh, joins us now.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Greg.

JENNETT: Good afternoon. Looking at the calendar and the constitution seems an odd way to be governing but that's the situation we find ourselves in at the moment. Does an early budget seem likely to you?

LEIGH: It seems now like a live option, Greg, and that is just adding one more piece of chaos to what has been a terribly scrappy start to the year for the Government. The budget process, as you well know, is one which involves a range of different interest groups with each of them having their time to feed in over an agreed timetable. Then within the departments of Treasury and Finance - I've spent time seconded in the Department of Treasury - the Budget process is a huge machine. To now say to everyone working on that process you have to move not for economic reasons but for partisan politics just seems crazy.

JENNETT: Can they respond to that in your experience, having done a bit of work around there? Can they actually meet a deadline of a week earlier?

LEIGH: I'm sure they can, but the question is will the quality of economic advice be as good as it would be if the Government stuck to the timetable we have had for the last 20 years. The answer to that is surely: no. 

E&OE TRANSCRIPT

DOORSTOP

PARLIAMENT HOUSE, CANBERRA

FRIDAY, 4 MARCH 2016

SUBJECT/S: charities commission; tax reform; economic indicators

SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Thanks everyone for coming. My name is Andrew Leigh, the Shadow Assistant Treasurer.

Over three years after the charities commission was created, the Coalition has finally decided they support it. Let's be clear: the charities commission was set up for practical reasons, and should always have enjoyed bipartisan support. The charities commission is good for charities who are able to be listed on the register setting out the charities who are doing the right thing. It's good for donors: someone turns up at your doorstep and you're wondering about whether they are legitimate, you can go to www.acnc.gov.au and check out their bona fides. And it's good for taxpayers to have the accountability of knowing there is a one-stop-shop charity register that provides everyone with the information they need to know who are the decent charities in Australia.

The charities commission came out of recommendations from numerous inquires going back to 1995. In 2006, a bipartisan Parliamentary inquiry recommend the creation of a charities commission. Malcolm Turnbull was one of the people who was on that committee, and signed of supporting the charities commission. In 2010, the Productivity Commission recommended a charities commission. 

Yet the Coalition's opposition to it has always been ideological. Under Kevin Andrews, Scott Morrison and for six months under Christian Porter, the Coalition has had its official policy: killing the charities commission. It's taken six months for Christian Porter to finally be able to say to charities commission that they get to stay. 

REINING IN TAX EXPENDITURES

Tax Institute National Convention, Melbourne 

4 MARCH 2016

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When I studied graduate public finance, one of my lecturers was Martin Feldstein. Feldstein was the chair of the Council of Economic Advisers under Ronald Reagan, and not exactly regarded as one of Harvard’s most progressive economists.

But as you know, there’s a surprising amount you can learn from someone of a different ideological persuasion. I liked Feldstein’s style – a meld of maths and war stories. Every now and then one of my classmates, Jason Furman, would get into a furious back-and-forth argument with Feldstein. At the time, it seemed a little impertinent. Less so now that Furman is serving as President Obama’s chair of the Council of Economic Advisers.

Matter of Public Importance Debate

Housing Affordability

Tuesday 1 March

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I was holding a street stall recently when a young couple came up to chat about their troubles buying a first home. She was a teacher, he was a builder, and they were thinking about having a family but they were worried that they would not be able to meet the mortgage repayments when their two incomes went down to one. Despite being in their late 20s, this couple were looking at moving back in with their in-laws. Changing nappies and juggling sleepless nights under the same roof as their in-laws was not their idea of the Australian dream. But their story is, sadly, typical.

Since the early 1980s the share of 25-34 year olds who own their own home has fallen from about 60 per cent to about 30 per cent. It used to be the case that the top fifth were just as likely to own a home as the bottom fifth but now there is a 15 percentage point gap in home ownership rates between the top and the bottom. In the early 1980s the average home loan for a first home buyer was $81,000. Now, it is $308,000. Over just the last two years we have seen house prices in Australia go up 20 per cent and yet we have got the slowest wage growth in 18 years. As the young Canberra couple said to me, 'It's hard to afford a mortgage when the prices are going up so much faster than your income.'

Those opposite want to pull up the ladder of opportunity on young Australians. The gap in homeownership is another part of the growth in inequality that Australia has seen over the course of the last generation, where earnings have risen three times as fast for the top 10th as for the bottom 10th, and where the wealthiest three Australians now have as much wealth as the poorest one million Australians.

Seeking Social Capital Stories, The Chronicle, 1 March

Six years ago, the year I entered parliament, I wrote a book titled Disconnected, about the collapse of community life across Australia. In the decades leading up to 2010, Australians became less likely to join community organisations – a trend that can be seen in membership data from bodies as diverse as Rotary, Lions, Scouts, Guides and Apex. We became less likely to go to church and less likely to join a union. We became less likely to know our neighbours, and the average Australian reported fewer close friends.

Since becoming a member of parliament, I’ve met hundreds of passionate social entrepreneurs, and hoped that the trends might reverse. But if anything, new data suggest that the drop is continuing. Since 2010, Australians are less likely to be involved in social groups (down from 63 to 51 percent) and political groups (down from 19 to 14 percent). We are less likely to give money to charity (down from 71 to 65 percent), play sport (down from 74 to 70 percent) or volunteer (down from 36 to 31 percent).

Hidden heroes who should be household names, Canberra Times, 1 March

The Lucky Country is fortunate to be served by so many inspiring public servants.

When Bob Stirling started working as a public servant, he probably never imagined that his skills as a dog breeder would come in handy. But thanks to him, beagles became the friendly face of Australia’s quarantine regime.

They ultimately helped him design and manage the detector dog program that put beagles as the friendly face of Australia’s quarantine regime. As Stirling once observed, ‘‘even people who are afraid of dogs are not afraid of beagles. Beagles are cute, they have a brilliant sense of smell and they are single-minded to the point of stubbornness.’’

These days, beagles have been replaced by labradors but, thanks to Stirling’s creative approach to solving a problem, Australia turned security screening into a positive public outreach effort that continues to set our airports apart today.

When you start looking, stories like Stirling’s pop up from all over the Australian Public Service

E&OE TRANSCRIPT

TELEVISION INTERVIEW
SKY NEWS TO THE POINT
MONDAY, 29 FEBRUARY 2016

SUBJECT/S: Negative gearing, multinational tax

PETER VAN ONSELEN: Thanks for your company Dr Leigh.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Peter.

VAN ONSELEN: Let me ask you straight off the top about this; are you worried about a scare campaign? As you know I've written in favour of your negative gearing policy. I take the view that it is long overdue that something gets done in that space rather than quibbling about the detail, akin to what Saul Eslake said, don't let the perfect be the enemy of the good. But what about a scare campaign, sometimes in politics they can often be effective and it looks like that's where the Government is going on your negative gearing policy?

LEIGH: Well Peter if you constantly worry about scare campaigns you never do anything in politics. Now the Prime Minister has delivered more waffles than a breakfast café. He’s unable to actually put his ideas on the table. Labor has done it. They're not universally popular but it's a set of policies which adds to the budget bottom line, which closes down some of our fastest growing tax concessions, which doesn't affect existing investments which adds to housing supply.

We know in Australia that the chance for a young person with low income buying their home is half of what it was in the early 1980s. Sydney is the second most unaffordable city in the world, just after Hong Kong, Melbourne is the fourth most unaffordable, measured on house price to income ratios. We just can't go on with an Australia where young Australians can't make their way into the housing market. Labor's plan tackles that challenge which is why it has been welcomed by everyone from Jeff Kennett to Saul Eslake and why it in fact reflects ideas that have been talked about for a decade in Australian politics but until Bill Shorten and Chris Bowen, no one had the courage to act.

LABOR CALLS FOR TOUGHER MULTINATIONAL TAX PENALTIES 

Labor has today introduced a Private Members Bill to toughen up penalties for companies that don’t comply with Australia’s new country-by-country tax reporting rules.

As of 1 January this year, companies doing business in Australia with global turnover over $1 billion must give the Australian Tax Office information about their economic activity and tax paid in every country where they operate.

These country-by-country reports will be a vital tool in helping the tax office identify profit shifting and tax minimisation strategies. They were a key recommendation of the OECD’s major Base Erosion and Profit Shifting Action Plan, released in 2015.

Yet under the Government’s current laws, the maximum penalty a firm would pay if it fails to lodge its report is $5,400. For a company with $1 billion in revenue, that represents 0.00054 per cent of their annual turnover.

Tax Laws Amendment (Tougher Penalties for Country-by-Country Reporting) Bill 2016 

HOUSE OF REPRESENTATIVES 

MONDAY, 29 FEBRUARY 2016

Dr LEIGH (Fraser) (10:38):  I move:

That this bill be now read a second time.

Picture a glorious summer's evening at the SCG: the stadium lights are blazing, the dusk is settling in, and family and friends are abuzz at the prospect of a close finish to a match that is hanging in the balance. Suddenly a naked man runs out on the pitch, screaming in front of thousands. The security detail finally tackles him after a minute of cavorting.

Incidents such as these are not uncommon. One happened late last year at a Big Bash Twenty20 match, prompting Ricky Ponting in the commentary box to say: 'Let's hope that is a $6,000 fine at least. It's disgraceful; we don't like seeing that. Some people probably do, but it's a bad look for the game.' He was certainly right that the look was bad—for the streaker as well as for the game—but unfortunately Mr. Ponting's quite reasonable minimum fine threshold was above what the real streaker would receive. The penalty for invading the pitch at the Sydney Cricket Ground is $5,500.