2SER THE WIRE
THURSDAY, 8 OCTOBER 2020
SUBJECTS: The Federal Budget leaving behind women, older workers, the homeless and those in insecure housing; tax cuts; population.
ROD CHAMBERS, HOST: I asked the Shadow Assistant Minister for Treasury Dr Andrew Leigh what were his first impressions of this big spending budget.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: My overall perspective on the budget, Rod, is it is a human capital recession that we've suffered and the budget doesn't really invest in the drivers of human capital. There's not enough investment in health, we still don't have an Australian Centre for Disease Control unlike every other advanced country. There's barely any investment in education, in schools and vocational training and universities, which is the sort of human capital investment you would expect at a time when we're facing such a substantial human capital crisis.
CHAMBERS: Certainly, the tax cuts seem to be the main tools to provide stimulus. Do you think this is going to be effective?
LEIGH: I think it'll have some impact. But fundamentally, we have some deep-seated economic challenges. We know that productivity was going backwards last year, that wage growth was in the doldrums, retail spending was down. A Morrison Stagnation predated the Morrison Recession. So really, what we need at the moment is reforms that go to the underlying structural weaknesses in the economy and seek to not only give the economy a sugar hit, but provide lasting economic growth.
CHAMBERS: Of course, you're going to benefit from a tax cut if you're earning a reasonable salary and your business is going to benefit from a tax cut if it's profitable. But in this pandemic, maybe these aren't the people that need assistance from the government the most?
LEIGH: Yes, there's always a risk and it’s one of the concerns that Labor's had about some of the high end tax cuts - that if you're providing a tax cut to somebody on $200,000, that's very unlikely to bring down the unemployment rate. Relatively few people are choosing between being unemployed and taking a $200,000 a year job. So you want to be very targeted with this spending. From a government that's given us Sports Rorts, Reef Rorts, Paladin, WaterGate - we know that this government has the capacity to waste taxpayers’ funds, and that's why Labor’s been very carefully scrutinising the measures in the budget.
CHAMBERS: Anthony Albanese said there hasn't been enough in the budget for women. What measures apart from childcare do you think would be beneficial?
LEIGH: We know that women have been hardest hit by job losses through the downturn and also make up a significant share of people in aged care. So that'll be a couple of important areas to go to. Programs to encourage firms to hold onto workers are really important. But if you're a woman who's aged 36 or older, then you're outside the wage subsidies scheme once JobKeeper ends next year. We also know that one of the fastest growing groups at risk of homelessness is older women, and so investing in social housing doesn't just create construction jobs now but also helps a predominantly female cohort down the line.
CHAMBERS: Yes, I was going to mention public housing. There was really nothing in the budget for that, was there?
LEIGH: No, and it’s very disappointing. We know it makes a big difference to stability. I just finished reading Matthew Desmond's book Evicted, which is an excoriating look at life on the low end of the US housing market, and a real reminder that housing can form an anchor for a family that's experiencing a lot of the vicissitudes of life, whether that's substance abuse, family breakdown, job loss. Having a stable home is just so important to our sense of who we are and our stability within a community. So we do need to build more housing in Australia.
CHAMBERS: And the government's putting a lot of emphasis on infrastructure. Helping those that are in the construction sector is one of the reasons for doing that, and the regions, but a lot of the expenditure seems to be aimed at bringing forward existing programs. Are there any big national nation building projects that the ALP would love to see in the space?
LEIGH: We've been talking about a range of productivity measures and certainly the yardstick there needs to be Infrastructure Australia. Australia can't afford to be wasting money on bad infrastructure projects right now. We need to be following up on those that have the greatest productivity gains. So urban public transport has certainly been one of the important areas, addressing congestion in major cities. But we need to be really astute with our spend on this, Rod. Australia has the lowest third lowest population density in the world, so if we just try to spray money everywhere, we're going to end up building a whole lot of roads to nowhere. The government also has form on making announcements but then not following through, and consistently underspending its infrastructure budget over the years.
CHAMBERS: You mentioned population. Now with the halt of immigration, I think the estimates were at something like 890,000 people were going to be missing from where our projections we're going to be. What sort of hit do you think this is going to take on future budgets and the economy?
LEIGH: It's going to be a big hit, and I think it's the right question to ask because population has driven two-thirds of the economic growth over recent years. Australia has been increasing in the number of people and not increasing anywhere near as rapidly in the amount of income per person. So our productivity, as I mentioned before, has been going backwards and that's something we really need to focus on right now. They say it’s only when the tide goes out that you find out who's been swimming naked. Now that the tide has gone out on population, it's pretty clear that the economic policies of the government aren't wearing many clothes.
CHAMBERS: When you were talking earlier about the people over 36, they're not particularly well served in this budget either. I remember in my family, my great grandfather worked at Cockatoo Island during the Depression and he never worked again when he got put off. Are we going to find a generation of people, of older people who finish their working lives on the dole, do you think?
LEIGH: Yeah, it's a real danger, isn't it? We recently lost one of the great anti-discrimination campaigners in this country, Susan Ryan, who worked initially on sex discrimination but then also on disability and age discrimination. I know Susan would right now be urging us to make sure that we don't see an uptick in discrimination against older Australians, particularly driven by a clear incentive to employers to hire younger workers.
CHAMBERS:Jim Chalmers says that you'll be supporting the tax cut package through the parliament. What measures won't you support?
LEIGH: We’ll be steadily working through measures. This isn’t the 2014 budget with its horror show of nasties. The government has missed opportunities rather than put in place the sorts of savage cuts that we saw in 2014. But we'll work through all of that very methodically. In some cases, we haven't seen the detail or the underlying legislation. We owe it to the public to make sure that we're actually carefully scrutinising those bills, which is what you'd expect a responsible party of government to do.
CHAMBERS: Shadow Assistant Minister for Treasury Dr Andrew Leigh, giving us Labor’s perspective ahead of Anthony Albanese’s budget reply tonight.
Authorised by Paul Erickson, ALP, Canberra.