SKY NEWS AM AGENDA
MONDAY, 2 DECEMBER 2019
SUBJECTS: Deloitte; multinational tax avoidance; Westpac; Morrison’s union bashing bill.
KIERAN GILBERT: Let’s return now to local politics. Joining us the Labor frontbencher, Andrew Leigh. Thanks so much for your time. Chris Richardson has done his Budget Monitor from Deloitte Access Economics, one of the most respected budget watchers in this place, in Australia. What are your thoughts on his judgments? Because some are reading it as a vindication of what the Prime Minister and the government have committed to, in terms of their fiscal restraint.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: I think that’d be a misreading of Chris Richardson's report. The Government's been claiming that the Australian economy's issues are all caused by people overseas, but indeed what Chris Richardson shows is that the iron ore price has supported the budget - iron ore numbers are better than the government anticipated in May - and also shows very clearly that wages are lacklustre and profits are going strongly. So there’s a real problem in the Australian economy with wages, that's flowing through to spending. That’s why we're seeing real problems in brick and mortar retail, why we're seeing new car sales down, why we're seeing households really doing it tough and so many retailers saying ‘this is the beginning of December, it's meant to be a big spending season, but with wages in the doldrums it may not be much good’.
ANNELISE NIELSON: What he did say though is directly countering what Labor's been saying. He says that it is a good thing to be pushing for a surplus, it will have flow on effects for the economy to have that surplus and it's not being done as a vanity project.
LEIGH: Labor supports a surplus. We went to the last election with stronger surplus numbers than the government. But we don't believe that it's appropriate for the government to be holding back on accelerated depreciation. One of the strange things we’ve got now, Annelise, is the government saying they might accelerate depreciation for firms in the May 2020 budget, which means that firms are likely to hold back investment right now in anticipation of getting a better deal in May. It's exactly the opposite of what the economy needs right now.
GILBERT: But obviously you're arguing that you can have a surplus, lift Newstart, have more stimulus. How does that all add up?
LEIGH: It's about the timing of investment projects. A lot of the investment projects the Government's got in mind, Kieran, don't kick in until the middle of next decade-
GILBERT: Bur bringing them forward, that affects the surplus.
LEIGH: But you need to get stimulus going in the economy. This is an economy which is in a very, very weak position. On a per capita basis, it’s not growing-
GILBERT: But it’s one or the other, isn’t it? You spend it on the surplus – sorry, pay down the debt and have a surplus now, or you bring forward the infrastructure spending. Plus, you want Newstart up.
LEIGH: As Chris Richardson has made clear, the iron ore price has benefited the budget bottom line, and it's possible to chew gum and walk at the same time. It's possible to have a surplus and also to ensure that the economy has the support it needs. That's critical, with monetary policy almost having reached the end of the road. Only two more rate cuts are possible. It's looking unlikely that the board will move tomorrow, and the impact of each of those rate cuts becomes smaller the closer we get to the zero lower bound. So that throws the onus back on the fiscal policy.
NIELSON: You say you went to the election with a bigger surplus promise, but that was also on the back of some big taxing issues, including franking credits that were going to be changed, negative gearing. So with the response you've had from this election result, you can't possibly say that you could have enacted a budget surplus?
LEIGH: We wanted to get tougher on multinationals. The government want to keep those multinationals-
NIELSON: How much tax would you have gotten out of multinationals, though?
LEIGH: We would have gotten billions of dollars out in the medium term. The Government want to go soft on multinationals. Labor believes they ought to be paying their fair share, and that wouldn't have hurt the growth prospects of the Australian economy. Asking the FAANGs to pay their fair share is good for equity, but it's also good for growth.
GILBERT: On to Westpac, and this whole drama last week seemed to hurt the government in its efforts to get its ensuring integrity bill through, because the crossbench used this as a cover for not supporting the government, saying that it’s double standards between the corporate and union malfeasance. But in terms of your own judgment, surely there's a point where Labor has to not just get rid of Setka from the Labor Party, but say he should be out of the union movement as well and support laws to that effect?
LEIGH: This isn't about John Setka. This is about the impact on nurses and teachers, and the unions that support them. The last thing we need when wages are in the doldrums is yet another attack on unions. Unions haven't just brought us the eight hour day and the weekend - they've also supported workers getting their share of productivity gains.
GILBERT: But the thing is the way it was the bill went to the Parliament, the amendments of Rex Patrick, of Centre Alliance and of One Nation, meant that it had to be accompanied by conviction in the Federal Court and to be judged by the federal court or a judge to have the gravity to be deregistered. It wasn't simply a paper error and you're gone. That was a mischaracterization by the Opposition as to the bill as it went to parliament.
LEIGH: Kieran, you saw from the unionists who were in the building speaking to crossbenchers, speaking to Labor members, a strong conviction that this would've made their work harder. It would have made it more difficult for workers to ensure they got a fair share of the pie. And at the same time, we've got the government wholly standing between Westpac and public scrutiny. The government does not want Westpac to come and face the House Economics Committee. Extraordinarily, they seem to have learned nothing from the royal commission-
GILBERT: But how is it acceptable to have a thug like Setka still in that spot, in that position - a senior position as secretary of Victoria of that union.
LEIGH: He's out of the Labor Party. That's the decision that Anthony Albanese has control over, and which he is decisively made. It's up to the unions to make a decision as to who heads them. Obviously if I was voting, I would not be voting for him to stay in a leadership position there. But they will manage their own affairs, just as corporations manage theirs.
NIELSON: But he wouldn't survive in a corporation. If he'd have done the same thing when he was working for a company, he'd be gone. So why do unions get special treatment?
LEIGH: We shouldn't buy the argument that this is about John Setka. This is fundamentally about weakening the rights of unions to organise, at a time when the union membership rate is the lowest that it's been in a century. And the lower you drive the union membership rate, the harder it is for workers to get their fair share of productivity. The labour share of national income has been falling, and that goes directly Annelise to the role that unions play. They are about ensuring that everything doesn't just get sloughed off into profits, but that workers have the incentive to invest in productivity gains because they're getting their fair share-
GILBERT: But the problem Labor has is that you say it's not about Setka, it’s not about Setka, but then you use one example of Westpac – you’re happy to say one example about Westpac and Hartzer and so on in terms of their corporate and white collar performance, and yet we use an example, totemic as it is - the CFMEU secretary, a thug, convicted, and should be not in that position - and yet Labor won’t introduce or support laws to get rid of him. That says a lot about Labor's standards on this.
LEIGH: Kieran, I won’t just give you one example of banking malfeasance - I can give you 23 million from Westpac, plus the litany of scandals that led to the Royal Commission. Labor was out there calling for a royal commission into banking for 18 months before the government finally acted, and now Labor is calling for Westpac to face parliamentary scrutiny and again the Morrison Government is refusing to act. This is a government that's just temperamentally incapable of getting tough with the powerful, and instead wants to go after workers’ representatives. This isn't about an individual there - this is about the systematic attempts by Coalition governments to weaken union power. We saw this in the Howard Government, we saw it under the Abbott Government, and as you tilt that balance away from working people, you increase the profit share and decrease the wage share.
NIELSON: But even if you put all that aside, at the end of the day you've got one of the most powerful crossbenchers in the country - Jacqui Lambie - saying he's got to go. So how can this not be about John Setka?
LEIGH: If I was voting as a member of that union, I wouldn't vote for him to stay in power. It’s as simple as that-
GILBERT: But you're in the Parliament, and you can vote for rules that would get rid of him. You actually do have a vote in the parliament, and the parliament has the capacity to punt him.
LEIGH: These are rules which would weaken every union in Australia, and would hurt all 2 million union-
GILBERT: Only if that guilty of systemic breaches.
LEIGH: The reason that nurses unions, the teachers unions spoke out against these laws was because of their concern that it would make it harder for them to organise. That it would make it tougher for them to do their job every day, in supporting working people. They’re not opposing these bills because of something about John Setka. They are concerned about the impact this has on their operations.
GILBERT: Andrew Leigh, we appreciate your time.
LEIGH: Thank you.
GILBERT: See you soon.
Authorised by Paul Erickson, ALP, Canberra.