WEDNESDAY, 2 FEBRUARY 2022
SUBJECTS: Cost of living; Labor’s plans to help get wages moving; the Reserve Bank’s decision on rates; Labor’s plans to make multinationals pay their fair share.
TOM CONNELL, HOST: One of the big moments yesterday at the National Press Club was the Prime Minister being asked about a host of everyday items. Was it just a journalism gotcha, a typical Canberra bubble question? Did it show the PM is out of touch with the cost of living? It might depend, of course, on your political viewpoint on all of that, but it's become a talking point regardless. For more on this I'm joined by Labor's Shadow Assistant Minister for the Treasury, Andrew Leigh. Thanks for your time. Look, you're a deep thinking politician. I'm not being in the pejorative here, you're probably quite a sort of highbrow politician. What did you make of this question asked of the Prime Minister?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Well, it's not the most important issue in politics, Tom. But I was surprised that the Prime Minister couldn't even name the price of petrol, given that it's gone over two bucks for the first time on his watch and is now in many places sitting around $1.70. It illustrated to many people that this is a prime minister who hasn't noticed that prices are rising for many people faster than their pay packets. He's just brought down a budget which has real wages forecast to fall, and yet we've got prices of housing, childcare, basic essential items going through the roof. It's just not good enough for Scott Morrison to be saying that things are fine and dandy when so many households feel like there's always more month than money, and feeling that the squeeze that the Morrison Government is putting on their household finances is more than they can bear.
CONNELL: So Labor's spoken about wages. Cost of living, obviously that side of the equation is everyday items that we're all buying. Is there anything Labor can do about that side of things, the cost of living? Are you pledging to be able to do anything?
LEIGH: Last year Anthony Albanese introduced into parliament a bill called Same Job, Same Pay, which went to the issue that labour hire workers are increasingly finding that they're getting less than people doing precisely the same job. This is an issue in the mining industry, but it's also an issue in many retail and customer service industries - indeed, check-in staff sometimes. And our Same Job, Same Pay bill simply says what the words imply: if you're doing the same job as a permanent, you shouldn't be paid 40 per cent less, which is what many labour hire workers are currently copping. In the area of aged care, the government could support the case being brought by aged care workers with the Fair Work Commission. Rather than handing out what the union has called “trinkets”, which end on election day, they could put in place a structural solution to raise the wages of aged care workers.
CONNELL: Okay, and I'll get back to that wage issue in a moment. But I'm talking about what things cost. Is that something that you're not going to offer false hope to voters on, that things will cost essentially what they cost and you can't fix that side of things?
LEIGH: No, our climate policy is modelled by RepuTex to reduce household energy bills by $275 by 2025. So that'll be enormous relief for households, while at the same time reducing Australia's emissions and creating more than 60,000 direct jobs. That climate policy is backed in by the Business Council, by the Australian Council of Trade Unions. And it's a classic example of Labor looking to work with the business community, with the unions-
CONNELL: Energy prices in the coalition's time have come down 8 per cent, and that's over about eight years. So that's significant given where inflation is over that time, it hasn't been high, but energy prices are going the other way. That's actually not something that's going up for consumers. When we're talking about everyday items, milk and bread and so on, is it fair to say Labor can't actually do anything about that?
LEIGH: Energy prices make a big difference, and one of the reasons that other parts of the world have seen more rapid falls in energy prices is that they've jumped on the clean energy revolution sweeping the world. Offshore wind, for example, is installed in many other countries. But Australia hasn't installed offshore wind and as a result Australians are paying higher power prices. So I do think that that relief on power prices that Labor would provide would be important for ordinary households. Under Labor, your wages will go up faster. Under Labor, your energy bills will go down. And that's an important proposition for many Australian households.
CONNELL: The biggest broadest lever on general inflation is the cash rate. The RBA is resisting that. Should it be looking at this seriously and not ignoring the inflation in the economy when it's weighing up what to do?
LEIGH: It's an important question. And of course, the Reserve Bank makes its own independent decisions. But as an economist, it's important to note that the situation in Australia is quite different from what we're seeing in the United States. In the US, they're seeing price pressures and wage pressures. In Australia, we're really just seeing those price pressures, Tom. And that means that American households are seeing their pay packets go up and seeing the prices of what they pay going up. Australian households are just seeing that second effect - prices going up, but wages flatlining, going down in real terms. That's not just the legacy of COVID. That's the story of the Abbott-Turnbull-Morrison Government - a period of terrible wage stagnation, some of the slowest growth in household incomes that we've seen in Australian history. And when Australians go to the ballot box in May, they'll be asking themselves if they are better off than they were at the last election. And I don't think many Australian households will be saying that they are.
CONNELL: Just finally, the one tax change Labor's going to take, a seemingly significant one on multinational tax. So on that, how are you going to respond if those companies that you plan on taxing more, if they either threaten to leave or pass that on to consumers? That must be a very real risk?
LEIGH: We just need to make sure that we have a level playing field when it comes to taxation. If you're an Aussie business starting off and wanting to take on the big end of town, then you're not going to be looking at using a complicated structure run through the Cayman Islands. But right now two-fifths of multinational profits are going through tax havens. They're a place where multinational firms are stashing their profits, but they're at the same time a place being used by terrorists and kidnappers and drug runners. We need to shut down the use of offshore tax havens. So Labor will get tough with multinational profit shifting. We don't think it's good enough that the current arrangements prevail, and I was astonished when Michael Sukkar and Jane Hume responded to Anthony Albanese’s on multinational taxation by saying that he should be ashamed or backflip. They ought to be saying to Anthony Albanese, ‘this is a great idea, how can we move quicker?’ rather than backing in the multinational tax avoiders.
CONNELL: Alright. Andrew Leigh, do appreciate your time today. Thank you.
Authorised by Paul Erickson, ALP, Canberra.