Andrew Leigh

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC RADIO MELBOURNE

TUESDAY, 1 FEBRUARY 2022

SUBJECTS: Labor’s plans to make multinationals pay their fair share; the Liberals’ track record of inaction; the RBA meeting on rates and household budgets; Aged Care; billions in JobKeeper funds going to firms with rising revenue.

VIRGINIA TRIOLI, HOST: I'm always happy to talk to you, Andrew Leigh. Good morning.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Virginia. Great to be with you.

TRIOLI: Because the government is saying that Anthony Albanese is failing to rule out higher taxes, and he's going to one particular point about that, which is about the taxing on multinationals. And that actually is an area where you as opposition and government do want to see multinationals paying more taxes than they have right now. But when it comes to general taxation, and perhaps any threat of future taxation on general PAYG employees in this country, is Anthony Albanese clear? Will there be no new taxes on them?

LEIGH: We've been clear on that, that we're not going to be pursuing the measures on individual taxpayers we took to the last election. But we've got to do more on multinational taxation, Virginia. We've got two-fifths of multinational profits currently booked through tax havens. We've got some $100 billion of Australian moguls’ money sitting in tax havens - places like the Bahamas and Panama, where there are very low tax rates and where on one estimate four-fifths of the money is there in breach of other country's tax laws. Now, these aren't just tax avoidance mechanisms. These are also the places where terrorists, kidnappers, drug kingpins store their money. We have to crack down on tax havens, because they’re a cancer on the global tax system. I've found it remarkable that yesterday two of your Victorian ministers, Michael Sukkar and Jane Hume, put out a press release criticising Anthony Albanese for wanting to do more on multinational taxation. In Victoria, we had the incident a couple of years ago of the Stawell tyre dump being transferred to a company in Panama in order to avoid their clean-up obligations. Some 9 million tyres sitting at that dump and the attempt of the owners was to shift its ownership off to Panama, to a tax haven, and thereby avoid their liabilities. And it's that sort of problem that Labor wants to address.

TRIOLI: Well, indeed, it’s the government that wants to address that as well. The government has made changes to try and close loopholes when it comes to the very high profile tech companies, for example, minimising their tax here in this country. So in a sense, you both have a similar ambition there.

LEIGH: They’ve made tweaks here and there, but yesterday they very clearly showed which side they're on. Not the side of Australians - the side of multinational tax dodgers. Jane Hume and Michael Sukkar saying very clearly that anyone who is proposing to raise taxes on multinational tax dodging shouldn't be supported the next election. Labor takes the view that the international group that came together last year, more than 100 countries, to strike a deal on global taxation has made a step in the right direction. We'd like to see those measures implemented, and implemented speedily. But the coalition seems now to have walked away from the issue of multinational taxation, despite this being deeply unfair to Australian firms. If you're a new start up business, you're not stashing your money in the Bahamas. You're not looking for a lurk to run through the Cayman Islands. Instead, you're working hard to try and come up with a new business model. But right now you face the potential of being cheated by multinational firms and tax dodgers who are using tax havens. So we have to do more to create this level playing field.

TRIOLI: What's going to be the opposition's tactic, though? You've got Josh Frydenberg accusing Anthony Albanese of preparing - this is the quote – “new taxes in secret”. And it's possible now that when we get to see more details of any taxation policy that Anthony Albanese wants to take to the federal election, that that's going to be the aha moment. I mean, does this wedge you into a position where you now can't make any taxation reform? Because the country desperately needs some taxation reform.

LEIGH: Look, not at all, Virginia. We've been working on multinational tax measures, and we'll be announcing them in advance the next election. And you just need to look back at the history of this. The coalition voted against our multinational tax measures when were last in office, including one measure which recently saw Chevron paying an additional $300 million in tax. When they came to office, they abandoned multiple multinational tax measures which were slated to go, and they've been on the go-slow on multinational taxation ever since. Labor has a track record there. We will continue to focus on that issue in government, because we believe it's fundamentally one of fairness. Australian business shouldn't be disadvantaged by going up against multinational firms that are channelling their profits through tax havens.

TRIOLI: What will be any changes that you might consider making on family trusts, and any tax crackdown on family trusts?

LEIGH: We've been clear, we're not going to pursue those measures that we took to the last election. We got a clear, clear signal there, and so our focus is on multinational taxation where there's a lot to be done. People look at some of these big tech firms managing to channel profits through various places. Apple a few years ago was found by a US Senate committee to be stateless for tax purposes. In effect, it was a bit like Tom Hanks in ‘The Terminal’, sitting there without having a country of tax residence, obviously because a bunch of clever suits had decided that this was a way of minimising Apple's tax liability.

TRIOLI: I wanted to ask you some other questions while I have you here, Andrew Leigh, Shadow Assistant Minister for Treasury and Charities. If the Reserve Bank board today lifts official interest rates, which I think most analysts expect that will happen, what effect will that have on the economy and what concerns do you have about that?

LEIGH: Well, the Reserve Bank's facing a conundrum right now, because a lot of prices are going up. You know, since the start of a pandemic, beef prices are up 17 per cent, car prices up 10 per cent, childcare costs up 9 per cent. We’ve had $2 a litre fuel. And yet when people look their pay packets, they're not going up at anywhere near that rate. Pay packets are actually going backwards on the government's projections, after you account for inflation. So you're seeing the price pressures, but not the wage pressures. As someone put to me on a street stall recently, it always seems like there's more month than money. So many Australians are doing it tough right now, trying to stretch those household budgets. So the challenge will be that if the Reserve Bank responds to price inflation, that we’re in a context where we're not seeing the wage inflation, and Australian households be pushed even further -

TRIOLI: And what's the solution to that?

LEIGH: Well, the solution to that is policies that ensure that Australian workers get a fair go. So the policies we've announced around same job, same pay go to the issue of labour hire being used in order to drive down wages. We would work constructively with workers to ensure that they're getting a fair share of productivity. Last year, Australia saw the profit share in the economy go above half for the first time in half a century. So corporate profits are doing very well. Workers’ wages are not doing so well, and it's important to get that balance right. Because ultimately, the main source of economic activity is consumer spending.

TRIOLI: Do you think we're about to re-enter a period of rising and continually rising interest rates?

LEIGH: It’s clear that the interest rates can't remain at the level that they're at indefinitely, but certainly the Reserve Bank Governor is keen to make sure that he meets his mandate. So it's a challenging balance for them. We're not seeing the sorts of wage growth that they're seeing in the United States, for example. The Prime Minister's announcement on Aged Care Worker bonuses, this sort of pandemic panic buying spend is really a stopgap solution. It doesn't go to the real issue that so many Australian workers are facing, that they're seeing prices rise faster than their wages.

TRIOLI: Does Labor support the $800 bonus for aged care workers?

LEIGH: Look, we'll take that through our usual internal challenges. But you know-

TRIOLI: What does that mean?

LEIGH: We've got internal shadow cabinet and caucus processes. So we'll run a run through those-

TRIOLI: Sure, you know, you don't need those processes in order to say to me whether you think it's a good idea to give those workers $800 or not.

LEIGH: Look, I think those workers deserve more, but I think they certainly deserve more than what the Health Services Union has described as ‘trinkets’. I don't think any Australian will miss the fact that the second of these payments comes in in the month for which the election is scheduled. This is very clearly Scott Morrison panicking, trying something that he believes will get him out of a challenging situation, but not dealing with the fundamental crisis that we've got an aged care of people feeling burned out and leaving the sector. And temporary bonuses aren't going to go to fix that-

TRIOLI: Sure, but the challenge - and it loops us back to where we began here, Andrew Leigh - is that at some point, you're going to have to fund all of this. Commonwealth debt is set to blow past 1 trillion I think the last time I looked, and there's about $340 billion in cumulative federal deficits. That's forecast across the forward estimates, I don't need to tell you that. That's the reality of the empty coffers, the indebted coffers that you may inherit if you're successful. So while no one would argue about lifting their wages, that's a Commonwealth impost, and you’ll have to talk very specifically about how you fund that and not blow out those deficits further.

LEIGH: That’s right, and I'm sure that's a question that'll be put to the Prime Minister at the Press Club today-

TRIOLI: Aw come on, you guys have had a long time to think about this and to watch this, this environment of a deepening hole when it comes to the deficit. You must have turned your mind to that kind of wage reform in that sector by now.

LEIGH: We've certainly turned our mind to that, and also the way in which you had to do it-

TRIOLI: So what’s the answer to it?

LEIGH: Well, partly if you're talking about the Commonwealth budget overall, it's about getting the rorts and waste under control – the special slush funds that the government has been setting up for decisions taken but not announced, the $20 billion that they gave to firms with rising revenue through the JobKeeper program. Putting in place a Commonwealth integrity commission will also help ensure that we don't have that sort of politically driven spending, which is not in the interest of Australians. But the other big issue for aged care, as you know Virginia, is that the booster rollout didn't meet its target. A majority of the people who passed away in aged care on Sunday in New South Wales hadn't had their boosters. This booster rollout should have been done by now, but we've got some 500 facilities around the country which have not received their booster shots. That's placing an enormous human toll on the residents, but it's also part of the reason why the workers are leaving the sector in droves.

TRIOLI: We've been talking about that for a couple of days now. Andrew Leigh, good to talk to you. Thank you.

LEIGH: Likewise. Thanks, Virginia.

ENDS

Authorised by Paul Erickson, ALP, Canberra.