2CC CANBERRA LIVE
WEDNESDAY, 7 OCTOBER 2020
SUBJECTS: Federal Budget; the Morrison Government’s lack of investment in education, childcare and productivity; the University of Canberra; the Morrison Government undermining universities; tax cuts.
LEON DELANEY, HOST: Last night was budget night, as you know, and Federal Treasurer Josh Frydenberg has promised the earth - but has he delivered anything other than dirt? Well, let's find out what the opinion is of the Opposition. Joining me now Shadow Assistant Minister of Treasury and Federal Member for Fenner Dr Andrew Legh. Good afternoon.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good afternoon, Leon. Great to be with you.
DELANEY: Thanks very much for joining us today. Now, obviously, you're in the Opposition. It's your job to oppose and criticise. So let's start with asking the difficult question. Is there anything in last night's budget that you think was bang on, where they hit the nail on the head and they got an absolutely right?
LEIGH: Look, there’s a decent mental health package. I think there's sensible reforms there. There are more university places, though not as many as there should be. And we've been calling for some time for low and middle income earners to get a tax cut sooner, and so we’re pleased that the government’s heeded that call. But with a trillion dollars in debt, I don't think there's enough to show for it. You know, a trillion is a pretty massive number - one with 12 zeros after it. Australia’s never had this much debt before, and yet right across the next four years the government's projecting unemployment will be higher than it was last year. The Morrison Recession is looking like lasting a long time.
DELANEY: Is this budget overly optimistic in the idea that obviously the federal government is looking for a business led recovery, but under the current circumstances will business be in a position to create the jobs that the Treasurer is obviously looking for here? Or is it all a little bit premature? We're not out of the woods yet, from a health perspective.
LEIGH: Absolutely. Sectors such as tourism and international education will only really be able to get back on its feet once a vaccine is found. The budget projects that there will be a vaccine sometime next year - it doesn't talk about the share the population that will be vaccinated next year. But that's the end game of getting out of this. In between times, we've got a budget which is projecting the unemployment benefits to fall back down to $40 a day at the end of the year, despite the fact we'll have over a million people on unemployment benefits at that stage. You've got very little for childcare, nothing substantial for productivity, nothing substantial for schools. You don't have the sort of investments in Australia's long-term future that you’d expect for a trillion dollar debt.
DELANEY: Now, I said you'd have your opportunity to criticise and I think you've already started without me. But what do you think is the biggest missed opportunity in the budget?
LEIGH: It's really an opportunity to invest in education. I mean, this is a human capital recession. Human capital is what economists call health and education. There's been a huge hit to physical health obviously, but also to mental health. It’s been a big shock to young Australians who are at school or university. And yet, there's very little which uses this opportunity to increase the skills of the workforce. We ought to be ensuring that young Australians catch up to their more advantaged peers rather than slipping further behind. We shouldn't be taking money out of universities and making it costlier for young people to get there. We should be welcoming young people to universities. Why do we think it's a good thing to have more young people on the unemployment queues, rather than learning at university? Just as the early 1990s recession saw an increase in the school completion rate, so now we should be increasing the university attendance rate. That's how you ensure you go down the path of high wage Scandinavian countries rather than the low wage US path - by ensuring that education keeps up with technological advancement.
DELANEY: Now, you've mentioned education quite a bit there so I'm going to take you on a slight tangent. Now you might be able to clear up something for me, which has left me confused, as I admitted earlier in the program. But apparently there's been a bit of a barney between Andrew Barr and Zed Seselja about who's responsible for providing funding for the University of Canberra. Turns out apparently the ACT Government was given responsibility for that in 1997. I'm a little confused. How did that happen, and why is not the Commonwealth Government responsible for all university administration and funding?
LEIGH: There’s considerable Commonwealth responsibility for the University of Canberra. Zed’s trying to wriggle out of that one, he’s pulling your leg. The fact is the University of Canberra has always received significant Commonwealth funding. University undergraduates attend on what are called ‘Commonwealth Supported Places’. If Zed thinks that a Commonwealth Supported Place is paid for by the ACT Government, then I’ve got a bridge he might want to buy. The fact is that the University of Canberra has been hit hard by the Coalition's reinstatement of caps on universities. It's suffering from the fact that it can't accommodate as many people as the ACT needs. We've got to be raising the number of kids going to go to university, now of all times. Automation’s proceeding fast. A lot of firms are putting in new machines, new kit. The only way to maintain good jobs in a world of increasing technological advance is if we’ve got the education to keep pace.
DELANEY: Now, as I understand it, the University of Canberra Act of 1999 became an ACT act under some provision of self-government. I don't quite know how all that works. But if the Commonwealth is still responsible for the funding, what exactly is the ACT responsible for? And why is it under an ACT act? And I'm still confused.
LEIGH: The ACT has greater responsibility for the University of Canberra than it does for the Australian National University. But that's not to say the Commonwealth can just walk away and say it's not responsible for University of Canberra. There's been significant shortfalls in university funding at a time in which we ought to be expanding the sector. We have a prime minister who has a degree in economic geography who now wants to raise the price of people doing degrees like the one that he did. We know that humanities and social sciences are enormously valuable. Who can say we don't need more experts in Asian languages? That we don't need more people who understand economics at a time like this? And yet, they're the sorts of degrees that are going to become massively more expensive if Scott Morrison’s university plan passes the Senate.
DELANEY: Which it looks like it will now, because apparently the Centre Alliance representatives have struck some sort of deal. So apparently, that's just a matter of getting rubber stamped now. Obviously, there's not much more you can do about it other than jump up and down and say it’s a bad idea.
LEIGH: Yeah, there’s apparently some road project in South Australia they've struck a deal for. As a consequence, those young Australians who can't get a spot a university can maybe go and watch the road construction taking place. It seems like a pretty lousy deal for young Australians. The idea we've become a clever country by cutting university funding strikes me as utterly bizarre. And this is a sector which is really important to the ACT, as you know Leon.
LEIGH: There’s the spin off jobs - you have the cafes and the transport sector. A lot of hospitality and entertainment hangs off the university sector. There's a bunch of good jobs at universities, but there's 10,000 fewer of them than they were at the start of the year. There could be 20,000 fewer. Why were universities shut out of JobKeeper? Because the federal government deliberately decided to do it, changing the rules three times to lock them out of the wage subsidy scheme.
DELANEY: And yet, it seems that the Vice Chancellor at the ANU - Professor Brian Schmidt - is pretty happy with the $1 billion Research Fund that was announced as part of the budget, judging by his comments today. That fund will be of some help, won’t it?
LEIGH: I'm sure Brian welcomes research funding. He’s a great researcher, there's no better researcher leading an Australian university. You don't get better than a Nobel Laureate leading a university. But Brian has also had to deal with considerable cutbacks in funding from the federal government, and that's why his university has had to let go of hundreds of staff. It's a very tough time at the Australian National University right now, as a result of deliberate decisions from the federal government. Now this is a cabinet full of people who attended university who somehow want to pull up the ladder of opportunity behind them, to prevent young Australians being the first in their family to attend university with all the benefits not just for them Leon, but for the society. University graduates are less likely to be on welfare, less likely to commit crime, more likely to be productive, more likely to benefit their co-workers. These people are going to be in the workforce till maybe 2060 or 2070. Do we really imagine that that is the kind of labour market where you won’t need a university degree to do well? Surely not.
DELANEY: Now, you've already indicated that the Opposition will support and has indeed supported all along the bringing forward of those income tax cuts, the stage two income tax cuts. It was made evident last night that those income tax cuts will be bundled up with all of the other business measures in some sort of omnibus bill, and all the representatives of the Opposition were cautiously saying, ‘well, look, we're inclined to support it but let's give us a chance to have a look at the detail before we make a definite decision’. Has the Opposition had a chance now to look at that detail? And will the Opposition support that omnibus bill?
LEIGH: We’re still working through that. It’s only now about 24 hours since I first saw the budget - I was in the budget lockup yesterday - but the budget itself was only released at 7.30pm last night. So we're still in very early stages. I'm not quite sure why the government needs to play silly buggers like this. If they want to support on particular reform measures, then make them discrete. We can fast track them through, get them done very quickly. But the idea that you would try to bundle together things that you know the Opposition opposes with things you know the Opposition supports, that’s just playing games. They ought to be a bit more grown up than that.
DELANEY: Now, obviously, what do you make of the business measures at first glance? Things like the subsidy for employing people under the age of 35, the tax write off provisions for large asset purchases, and of course the carry back preserve provisions for losses, which will hopefully deliver money more quickly to businesses? Those things, they're all good things, aren’t they?
LEIGH: If you want to have growth with equity, then you've got to have education running alongside technology. What we've got here is basically nothing for education and a huge subsidy to firms to automate their workplaces. The danger of that, Leon, is that firms use this as an opportunity to shed labour and buy machines. That's particularly concerning for over 35s. For an over 35, you're seeing JobKeeper scaled back and then phased out entirely. You're seeing young workers provided with a wage subsidy, so there is now an incentive for the boss to hire young workers. And you're seeing an incentive to get more machines. We need to think about all of these as a package, and that's where I think the Government's really fallen down. They haven't thought about how all of these things interact with one another. A trillion dollars of debt, and still we've got 160,000 more people forecast to lose their jobs before the end of the year. No plan for climate change, no plan for childcare, the sort of plan for women's economic security that you'd expect from a prime minister who named his chooks after former prime ministers’ wives.
DELANEY: [laughter] The Opposition Leader Anthony Albanese will have this opportunity to deliver his budget in reply speech tomorrow evening. It's already been reported that one of the measures that Labor will propose is a free childcare, which seemed to work so well as a temporary measure thanks to COVID-19. Everybody wanted to keep it, except the Government. Is that the case? And what should we expect from the Opposition Leader tomorrow?
LEIGH: The best advice I can give to your listeners, Leon, is to be nowhere but glued to the television or radio at 7.30 tomorrow night when Anthony delivers a cracker budget reply, in which he outlines what Labor would do instead. We’ve said we think we need a Centre for Disease Control - Australia is the only advanced country without one of those. We’ve made clear that there needs to be more investment in social housing and in childcare. And childcare is both a productivity measure and an education measure. It's one of the best ways of boosting women's labour force participation, but early childhood education also sets up a child for a great life. So if we get childcare right, that's got huge benefits right across the economy.
DELANEY: Should we expect any surprises in the measures announced tomorrow?
LEIGH: Oh, look, there’ll be wit. There’ll be pathos. There'll be moments of glory and excitement where you're punching the air. There’ll be those moments where you're cheering and hugging your neighbours. It will be a great speech, a speech for the ages. And if you miss it, then in years to come, you'll be talking to your friends and they’ll ask ‘Where were you when Anthony Albanese gave that speech?’, and you’ll reply ‘Oh, I missed it’. That’s going to be pretty embarrassing in years to come, to be honest Leon.
DELANEY: You know, we're not all members of the Socialist Alliance.
LEIGH: There’s a lot of political tragics here in Canberra. I reckon I’m speaking to a few of your audience there.
DELANEY: Yes, political tragics, yes. I think that's probably about right. Thanks very much for your time today.
LEIGH: Always a pleasure, Leon. Thanks again.
DELANEY: Thank you. Dr Andrew Leigh, Shadow Assistant Minister for Treasury and Federal Member for Fenner.
Authorised by Paul Erickson, ALP, Canberra.