Andrew Leigh

WHO GOT SCOMO TO DROP TAX LOOPHOLE ACTION?

This morning’s revelations in The Australian that at the last minute Scott Morrison backed away from plans to effectively address tax avoidance by multinational companies have raised further awkward questions about his budget for big business. Why did Scott Morrison get cold feet, and who bullied him into backing down?

 Prior to his first budget speech, the Treasurer’s Office was briefing journalists that the Government would be reduce the so-called “safe harbour” level in thin capitalisation rules from 60 per cent of total assets to 50 per cent to cut the amount of debt multinational companies can load into their Australian subsidiaries. In fact, a definition of “thin capitalisation law” still sits abandoned in the glossary of terms for the 2016 budget, published online by Treasury.

E&OE TRANSCRIPT

TV INTERVIEW

CNBC SQUAWK BOX

TUESDAY, 3 MAY 2016

SUBJECT/S: 2016 Budget; Company tax cuts; Labor’s plan to clamp down on multinationals; Reserve bank meeting.

MATTHEW TAYLOR: Welcome back to the show, coming to you live from Canberra. Today of course we are counting down to the Federal Budget that will be handed down at 7:30 AEST tonight. It is the first Budget for Treasurer Scott Morrison and Prime Minister Malcolm Turnbull in their respective new capacities. In terms of what's coming out in the Budget, not a lot of detail ahead of time, we do know that the Budget will be centred on small and medium size business with company tax cuts for small and medium enterprise. The definition or the classification of small business is going to change as well, those with a turnover of $5 million or less are going to be included so the net is really being widened on these tax concessions that are going to come through for small business reduced to about 27.5 per cent. We also know there are going to be tax cuts for income earners over $80,000 that is of course to stave off bracket creep, scrapping the budget repair levy, taxes on superannuation contribution for high income earners, an increase in the tobacco excise and also multinational tax avoidance. 

But let's get a bit of a look ahead to what the opposition is thinking may or may not be in the budget and some reaction to those early leaks. I am joined by Andrew Leigh, the Shadow Assistant Treasurer out here on the lawn this morning. Andrew, pleasure to see you thanks very much for chatting to us. I want to kick off on the company tax side point of view, what is the Opposition's response to that? Because broadening the definition of small business so a greater number of small and medium sized organisations going to benefit from a lower tax rate has got to be positive?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Matt, we'll wait and see exactly what the Government is proposing but the other dimension to this Budget is that it comes down at a time when Australian living standards have fallen and our debt position has worsened. Since the Government came to office, Australian net debt has increased by about $100 billion. Labor's concerned that a company tax cut that was purely funded by increased borrowing could well have an impact on Australia's creditworthiness. We believe it's absolutely critical to maintain Australia's three AAA credit ratings - not just for households but of course for businesses who'd see their interest bills rise under a credit downgrade scenario.

CANBERRA RUNNERS

At 71 years old, Dick Telford tells me that he ‘only’ runs twice a day. Whippet-thin and fluid in his movements, Telford’s sport career started playing AFL for Collingwood and Fitzroy. When he switched to running, he realised he was pretty good at it. He’s run a marathon in 2 hours 27 minutes, and helped train Rob de Castella, Lisa Ondieki, Martin Dent and Carolyn Schuwalow through the Australian Institute of Sport.

There are few better cities for runners than Canberra. Loping around Lake Burley-Griffin, you might see the sun rise, and watch the kayakers spreading ripples across the smooth surface. On the dirt trails of Mount Ainslie, you’ll dodge kangaroos and test your muscles against the hills. Local ovals are perfect for beginners just starting jogging, or sprinters keen to feel the wind in their ears.

With three young boys and an unpredictable job, I find there’s nothing better than running to clear the cobwebs and keep the mind in perspective.  It’s also a great way to get to know the active and unpretentious running community. For an energetic start to the weekend, try the Saturday morning 5 kilometre Parkrun events organised every weekend at Gungahlin, Belconnen and Tuggeranong. If you want a bit more of a challenge, sign up for the YMCA’s Half Marathon on 22 May. Most of us won’t run as far or fast as Dick Telford. But with a runners’ paradise on our doorstep, why not take the chance to check it out?

Andrew Leigh is the shadow assistant treasurer and Member for Fraser. 

This piece was originally published in The Chronicle.

E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS - THE LATEST WITH LAURA JAYES

MONDAY, 2 MAY 2016

SUBJECT/S: 2016 Budget; Labor’s plan to clamp down on multinationals; Higher education funding.

LAURA JAYES: Andrew Leigh thanks so much for your time.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure.

JAYES: There has been a lot of talk about income tax cuts in the budget tomorrow and the talk is that it will be at a $80,000 level, will Labor support that?

LEIGH: Laura, there has been a lot of talk about a lot of things in this budget. It has had the suggestion that the Government was going to cut company taxes, remove funding to public schools, that it was going to give income tax powers to the states and raise the GST. Rather than speculating, why don't we wait and actually see what's in the budget. We do know that a tax cut which comes in at $80,000 would only go to the top quarter of Australian workers and that would be something which would see the typical Australian worker miss out.

E&OE TRANSCRIPT

ABC NEWSRADIO BREAKFAST

TUESDAY, 3 MAY 2016

SUBJECT/S: Parliamentary Budget Office policy costings, Labor’s policies, Government’s protection of the big end of town, Interest rates

MARK TAMHANE, REPORTER: Andrew Leigh, Good morning.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Mark.

TAMHANE: Treasury has found a $20 billion hole in your policy costings, is that the end of all that extra revenue Labor promised to see all the Gonski education reforms through in full if elected

LEIGH: Well Mark,  let's go back a little bit. We announced this important policy on tobacco excise, making a controversial decision, and were attacked at the time by the Government. But our numbers were determined by the Parliamentary Budget Office and we're confident that the Parliamentary Budget Office stands at arm's length from Labor. 

This is the same outfit that did the costings at the last election. The Parliamentary Budget Office works with Treasury, using their numbers, and of course Labor's numbers will be updated as we get closer to the election. But the Government's really just trying to cover up the fact they've spent months attacking Labor and they're now adopting Labor policy.

LABOR CONTINUES TO SHINE LIGHT ON THE DARK CORNERS OF MULTINATIONAL TAX

Making multinationals pay their fair share has always been a Labor agenda. In government, we closed loopholes and improved transparency, over the repeated objections of the Liberals.

From Opposition, we have led the debate, releasing strong policies to reduce excessive debt-loading and properly resource the tax office. The Government is still welcome to adopt our $7.2 billion package.

If elected to Government, Labor will introduce an additional comprehensive suite of new measures to increase transparency on the tax affairs of multinational corporations.

In Government, Labor will:

• Increase penalties for non-compliance with country-by-country reporting:

It is simply wrong that the current penalty for failing to file country-by-country reports is a mere $5400 – less than you get for streaking across the SCG. Labor will increase that penalty 50 times. Should a company continue non-compliance after the maximum fine is reached, the Commissioner of Taxation is empowered to conduct a broad review of the company’s tax affairs.

• Restore the $100 million threshold for reporting the tax affairs of large private firms bringing them back in line with public companies:

Labor’s original threshold was watered-down in a dirty deal between the Coalition and the Greens last year, with 600 companies being shielded from public scrutiny as a result.

• Obligation to disclose the beneficial ownership for Australian legal identities:

Labor will ensure that the G20 principles Australia committed to at the G20 summit in Brisbane in 2014, which are based on guidance from the Financial Action Task Force, are implemented fully and quickly to ensure that Australia cannot be used as a destination for money-laundering, tax evasion, terrorism financing or other criminal behaviour.

This will be achieved by establishing a publicly accessible central registry of the beneficial ownership of companies, trusts and other corporate structures.

AUSTRALIANS AREN’T BETTER OFF THAN AT THE LAST ELECTION

Are you better off than at the last election? If you answered no, you're in the majority. Living standards are lower today than they were in 2013.

Sure, we keep hearing about those 25 years of uninterrupted economic growth Australia will clock up this year. But what often gets ignored is that this is based on total national output – a measure called Gross Domestic Product. It isn't adjusted for population growth, money that gets paid to overseas shareholders, or the relative prices of exports to imports.

Each of these adjustments makes a difference, but the easiest one to get a handle on is the mistake of looking at total production rather than output per person. In recent years, Australia has had one of the fastest population growth rates in the advanced world. Looking only at the total is like measuring an exercise regime by adding up all the calories burned at your gym. When another person walks in the door, they raise the total, but that doesn't mean you're any healthier.

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

MONDAY, 18 APRIL 2016

SUBJECT/S: Recall of Parliament; ABCC; ASIC; Opinion polls

KIERAN GILBERT: On the program now Shadow Assistant Treasurer, Andrew Leigh. Good to see you. In terms of substance of why we are back for this special sitting today, the Government wants the Australian Building and Construction Commission legislation through or some would argue they don't want it through and they want to trigger for the double dissolution election. Either way, it's a special sitting. Does Labor really want to be fighting an election on this particular matter?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, it's a strange set up isn't it, stopping Parliament and starting it again. Your viewers will of course know that the precedent for this goes back to King Charles recalling the English Parliament in 1640 to raise money to declare war on the Scots. Lord Wentworth then recommended it to King Charles that this would be a great idea, it turned out kind of badly for him. I suspect that Malcolm Turnbull could be going down the same path.

LABOR CALLS ON GOVERNMENT TO ACT ON TAX AVOIDANCE

Leaders around the globe have stepped up efforts to crack down on international tax avoidance by large companies and high net worth individuals in the wake of the Panama Papers leak. 

Meanwhile, the Australian Government continues its lackadaisical approach to tax avoidance.

Australians are right to ask why Mr Turnbull and his Government are refusing to take meaningful action on tax avoidance. 

 

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC NEWSRADIO

FRIDAY, 15 APRIL 2016

SUBJECT/S: Scott Morrison’s sextupled budget deficit; economic management; entitlements for Queensland Nickel workers.

MARIUS BENSON: The Federal Treasurer Scott Morrison redirected the Government's budget direction yesterday when he briefly and critically declared that the government is planning some tax increases. At least that is the general reading the Treasurer indicated yesterday when he said this. Listen closely, it is quick.

MORRISON: Of course there will be revenue measures in the Budget.

BENSON: 'Of course there will be revenue measures in the budget', said Scott Morrison. I did say it was brief. On that basis however, and subsequent briefings from the Government, there are reports that the Government is set to curb tax breaks on superannuation for the wealthiest contributors, as well as increasing cigarette excise. For a Labor view on the Budget battle – the Budget just over two weeks away now, the first Morrison-Turnbull Budget - I'm joined by the Shadow Assistant Treasurer Andrew Leigh. Andrew Leigh, good morning!

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Marius.

BENSON: Labor's principal response to the latest words on the Budget seems to be a small amount of gloating saying “Look, they're doing we said we'd do”. 

LEIGH: It is just a gentle head-shake and a smile. Let's go back through all the trial balloons that has been floated since the Turnbull-Morrison team come to office. We had a 15% GST, dealing with bracket-creep as the great moral challenge of our age. We’ve had suggestions of state income tax rises and company tax cuts. When Labor in last November unveiled our policy around cigarette excise, Kelly O'Dwyer called it ‘another tax take’ and Susan Ley called it 'a grab for money'. Now they seem to be turning around and adopting this very same approach. 

BENSON: And presumably if they do go for the cigarette excise increase and the trimming of superannuation tax breaks they will enjoy the support of Labor.

LEIGH: Well let's wait and see what they do. You'd be a fool to support any particular balloon the Government floating on any day. Because rather than laying out a clear plan and backing-in their argument in the tradition of great economic reformers in Australia, the Government always seems to go for the cheap headline rather than go for the long game reform. We have got a fresh new team in the Treasurer's office preparing their first budget. A team in the Prime Minister’s office who are coming up again to their first election. It's almost like the Government has put the training wheels back on.