Andrew Leigh

E&OE TRANSCRIPT
RADIO INTERVIEW
2GB MONEY NEWS
THURSDAY, 1 AUGUST 2019

Subjects: HILDA, the Liberals’ record of stagnant wages and struggling productivity, the wage gap, Made in Australia.

ROSS GREENWOOD: One person I love to talk to about these types of things is Dr Andrew Leigh, the Shadow Assistant Minister for Treasury and also very prominent inside the economic thinking of the Labor Party as well. He’s on the line. Andrew, many thanks for your time.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY: Always a pleasure, Ross.

GREENWOOD: So off the back of some of these reports, you've done two things this week. You've written an op ed and basically looked at Australia's productivity crisis. We’ll come to that shortly, but you also gave a speech in the House of Representatives which was yesterday and that was in regards to the HILDA report, and what you see as being a widening gap between the haves and the have nots in Australia. Is it really as significant a crisis as you paint it as?

HOUSE OF REPRESENTATIVES, 31 JULY 2019

The problem of multinational profit-shifting is a massive one. Globally, around $600 billion of profits are estimated to be shifted to tax havens. That's almost 40 per cent of multinational profits.

We see in Australia significant multinational profit-shifting affecting our tax base. You can see this in a variety of different statistics. One curious figure is a new dataset released by the Australian Bureau of Statistics last year which shows the operating profits and taxable profits of multinational firms operating in Australia and in different jurisdictions. You can ask the question: what's the gap between operating profits and taxable profits for firms from different countries? If you're a typical Australian firm, the gap between operating profits and taxable profits is about 30 per cent. That's true, too, for firms in the United States, at 28 per cent, in the United Kingdom, at 27 per cent, and in Japan, at 29 per cent.

But then you get to the curious ones. Bermuda owned multinationals operating in Australia have a gap between operating profits and taxable profits of 88 per cent. Those located in the British Virgin Islands have a gap of 92 per cent. In other words, if you start with $10 of operating profit, Australian firms will report $7 of taxable profit and the same with American firms, British firms and Japanese firms. In those cases, $10 of operating profits means $7 of taxable profits. But if you're a firm located in Bermuda or the British Virgin Islands then $10 of operating profits produces just $1 of taxable profits. That could have something to do with the fact that Bermuda and the British Virgin Islands effectively have a zero corporate income tax rate, no personal income tax rate and no capital gains tax rate.

HOUSE OF REPRESENTATIVES, 31 JULY 2019

Yesterday a report came out from the Melbourne Institute: the annual HILDA Statistical Report. It ought to be a wake-up call for the Morrison government, which has been asleep at the wheel when it comes to tackling Australia's serious economic challenges. It showed that when the Liberals came to office under Tony Abbott in 2013, median household annual disposable income in Australia was $80,573. In the most recent year available in the report, 2017, median household income was $80,095. In other words, in the time that the Liberals have been in office, the median household has gotten poorer.

So when Australians ask themselves: 'am I better off or worse off under this government?' The answer is, after inflation, they're worse off.

We've seen significant falls in median household incomes, adjusting for household size, in Adelaide, in Perth, in regional Western Australia, in regional New South Wales and right here in the ACT. In the ACT, the drop in median equivalised household disposable incomes has been the largest of any region in Australia—11 per cent—a direct consequence of the decimation of the public service and the cuts in real wages for many Canberra public servants.

HOUSE OF REPRESENTATIVES, 31 JULY 2019

Thirty-year-old Cameron Van-Lane and his three housemates in Dickson have taken to putting bubble wrap on their windows in order to keep the house warm. As Mr Van-Lane told the RiotACT:

… it is an expensive heating system to run and as soon as you turn it off, the house quickly loses its heat and gets cold again.

According to a report called Baby it's cold inside: energy efficient ratings in the ACT, over two out of five rental properties have an energy efficiency rating of zero. As Joel Dignam, the executive director of Better Renting, said, seeing how poorly insulated some Canberra homes are is ‘confronting’.

The challenges of living in a city like Canberra come particularly in the middle of winter.

HOUSE OF REPRESENTATIVES, 30 JULY 2019

A zettabyte is a billion terabytes. A decade ago, global annual data generation was less than one zettabyte. When the coalition came to office in 2013, it was a few zettabytes. Now it is around 25 zettabytes and projected next year to go to 40 zettabytes. We currently produce the same amount of digital data every two days as we did in a year in 2002. The rise of the Internet of Things and wearables technologies and falling storage costs have meant that data is ubiquitous and has the potential to greatly improve the quality of social services and business productivity.

In areas such as health data, energy and social services, it is possible to get significant advantages to the benefit of all Australians, and yet Australia currently lags behind other countries when it comes to access to data. As a report from the Australian Data Archive in 2016 noted:

Australia is well behind the UK, US and most of Europe on open data. This is impacting Australia's ability to be competitive [in research] and its standing [in the Humanities, Arts and Social Sciences] discipline.

HOUSE OF REPRESENTATIVES, 29 JULY 2019

Earlier this year, Alan Krueger died. He was one of the leading labour economists of his generation, having done path-breaking research on minimum wages and employment, education, terrorism, health care, the opioid epidemic and the gig economy.

He pioneered the Great Gatsby curve and wrote Rockonomics, published posthumously.

HOUSE OF REPRESENTATIVES, 29 JULY 2019

Australians are rightly concerned about multinational tax avoidance. They want a crackdown on tax havens and profit shifting. But what do they get instead?

They get Senator Cormann, who received free flights from Helloworld, a company headed by Andrew Burnes, the former Liberal Party federal treasurer, and a company that received a contract to provide travel management services to the Commonwealth in 2015.

E&EO TRANSCRIPT
DOORSTOP
PARLIAMENT HOUSE
MONDAY, 29 JULY 2019

Subjects: The Morrison Government’s mediocre record on productivity, tax havens, Angus Taylor, the need to raise Newstart.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning. We've seen reports today that Australia's productivity performance is in the doldrums. After decades in which we had productivity growth averaging around 2 per cent, over the last couple of years we've seen it in just 0.2 per cent – a tenth of its previous level. The Productivity Commission has described productivity as being ‘troubling’ and ‘mediocre’.

We’ve got mediocre productivity performance from the mediocre Morrison Government.

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC NEWS RADIO
THURSDAY, 25 JULY 2019

SUBJECT: Superannuation.

ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: It’s a pretty extraordinary suggestion that we would take people earning under $50,000 out of the superannuation system. I don’t know why it is that when the Liberals sit down to go back to their basic philosophies, they're not talking about helping low income workers, they’re not talking about dealing with wage theft or climate change. It's all about saying ‘well I'm in a job with 15 per cent super contribution, but wouldn't be beaut if the poorest Australians didn't have anything in their super at all’.

HOST: Well, why don't you think Australians - I mean, particularly those on low incomes, like you say - why shouldn't they have the freedom to decide for themselves how to save?

LEIGH: Universal superannuation ensures that all Australians get the benefits of those compounding returns. Countries around the world look to Australia as an exemplar of a country that's managed to put in place superannuation for everyone. But the Liberals think that superannuation should only be for the rich, and they think instead the poor should be shut out of the system. It's just not the way to go. And if Scott Morrison is serious when he tells backbenchers they shouldn't be freelancing, then he'll crack down on this one.

HOUSE OF REPRESENTATIVES, 22 JULY 2019

Born in Agra and raised in Chandigarh, Deepak-Raj Gupta probably didn't imagine, when he moved to Melbourne as an international student in 1989, that one day he would be serving in the ACT Legislative Assembly. But, as a result of a number of tragedies and coincidences, he is about to join that august body.