The question is whether Australia's made the right calls to boost growth - AM Agenda




MONDAY, 25 JULY 2016

SUBJECT/S: Shadow Ministerial reshuffle; G20; global growth; Trans-Pacific Partnership; public infrastructure investment; Canberra’s livability.

KIERAN GILBERT: With me now, the Shadow Assistant Treasurer Andrew Leigh, and a few other jobs now as well after the reshuffle but less pay!

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Who’s to worry about what you get paid when you're in the top couple of percent of the income distribution? Whether you're in the top 1% or the top 2%, frankly the great honour is to be serving your friends and your neighbours in the federal parliament and to have the opportunity to be on the front bench. I'm really honoured that Bill Shorten and the caucus have allowed me the privilege of serving again on the front bench.

GILBERT: But do you see why some people – I know that's a magnanimous way to look at it from your perspective to your colleagues, but the fact that you’re an independent within your party, you're not aligned to a faction – that people would see it with a bit of cynicism when you look at that, in the way that someone who's maybe much less productive than you or as effective as you, remains upon a higher salary because they just happen to be in a faction, whereas you're not?

LEIGH: Kieran, with all respect, it’s just not worth worrying about. There's kids who slept homeless last night in Australia, there's people in northern Tasmania struggling to find a job, there’s people at risk of family violence. There are way bigger problems in Australia right now, than how much a politician is paid.

GILBERT: Absolutely, I agree with you. But with the factions dictating this, people would see this a bit cynically, wouldn't they?

LEIGH: If you'd come to me at age 15 and you'd said, "When you grow up you will not only get to serve in the federal parliament but to serve on a Labor frontbench" I would have thought I was still dreaming. I feel extraordinarily fortunate to have the chance to do the job that I do, and there's not a day goes by that I don't think of the many other people who would have loved to do this job but who don't have the opportunity.

GILBERT: Let's look at some other news around. On the economic front, you heard me talking to Angus Taylor about the Treasurer’s comments out of the G20 in China – the mood in the room apparently towards ongoing reform in terms of investment in productive infrastructure, but also terms of trade. All of this being done though with a backdrop of some very interesting rhetoric in the United States right now, mostly coming from Donald Trump?

LEIGH: They're definitely challenging global times, the question is whether Australia's made the right calls to get that growth boost. It's clear the promises Joe Hockey made on growth a couple of years ago are not going to come true. It's also clear that Australian living standards have fallen since the Coalition came to office. When the Economics Society of Australia polled its top members on what is the best way of tackling that – is it cut the company tax rate, or is it to invest in schools? 2 out of 3 of them said let's invest in schools. So if we want to spur growth, education's got to be a part of that. Not ripping money out of schools.

GILBERT: Sure. But in terms of the short term, they’ve fallen well short, the G20. Not just Australia but across the board. That’s enormous deficit in terms of what they've planned and what they've promised to deliver ­– a $6 trillion dollar short fall.

LEIGH: Absolutely. And part of that is the ongoing challenge we face around the world at the moment of keeping the forces of populism at bay. Maintaining the notion that Australia is at our strongest when we believe in markets and multiculturalism. When we engage with the world. When we have the good trade deals – not just press conference trade deals, but actually really deep multilateral trade deals. There's a lot of fear about in the world at the moment Kieran, and I think that's an economic risk as much as it is a threat to the social fabric.                                                                                            

GILBERT: But part of that relates to trade and the fear of free trade. And we've seen that from both supporters of Bernie Sanders and Trump. What's your take on all of that, in terms of the prospects of the TPP being ratified by the US within the next period before the next President is sworn in. Because this is really seen as the last window. And this was a key Labor initiative. Julia Gillard was very forceful in getting it under way. What's your take on this – whether it’s likely to get through and ratified by the Congress in time?                                                                                                                          

LEIGH: Trade is good for living standards and bringing down trade barriers has put a lot of money into the pockets of Australian households. But we do need to make sure that whatever trade deals we're doing are deals which make it easier for people to do commerce across boundaries.

GILBERT: You don't think the TPP does that?

LEIGH: The thing about the TPP is that it has a lot of intellectual property in it. To use the jargon ­– there's too much IP in the TPP. There's also the ability for American companies to sue the Australian Government if they're not happy - those investor-state dispute clauses have been something that Labor has argued against in the past. We managed to get the Howard Government not to include one in the US Free Trade Agreement. We need to make sure we do this thing right, because open markets are fundamental to the prosperity of a medium-sized economy like Australia's.

GILBERT: But Labor still supports the TPP?

LEIGH: We're working through the detail. We're supportive of open markets. But it is the challenges of what this does to our pharmaceuticals scheme, and what it does to Australia as a nation which depends on having the right balance of intellectual property. And for us Kieran, that's not necessarily going to be the set of intellectual property laws that the US most wants.

GILBERT: So it's not a fait accompli that Labor will continue to support the Trans-Pacific Partnership as put? Because, as I say, this is something that Labor, when in government, was very supportive of.

LEIGH: We've kicked off the agreement, that's because Labor has the strongest open markets tradition of any political party in the Parliament. Just because we believe in broad-based trade deals, doesn't mean we support any trade deal. We have to make sure that we scrutinise these things carefully. The devil is always in the detail when it comes to trade agreements. We need to make sure this is as high-a-quality trade agreement as it can be.

GILBERT: The focus on infrastructure that Angus Taylor was arguing earlier, that all makes a lot of sense – I know Anthony Albanese has made this case quite a lot in recent years – but this is even more pertinent isn't it, given how sluggish the rest of the economy is, that the Government does invest in this, both in the short term, but in the medium to longer term for productivity?

LEIGH: Yes, and if only Coalition members' speeches about infrastructure actually created jobs the way real infrastructure projects do. We've seen a one-fifth fall in public infrastructure investment spending since the Coalition came to office in 2013. Part of that was Tony Abbott's decision not to invest in urban public transport, part of it too, though, was the Coalition's decision to go on a ribbon-cutting spree, re-announcing Labor projects rather than thinking strategically about how to do the new ones. We have got to get Infrastructure Australia at the heart of this Kieran. I know we have spoken about it before, but making sure we have cost-benefit analysis driving decisions rather than pork-barrelling is really fundamental. I worry too that much of the National Party tail is wagging the Coalition dog when it comes to infrastructure spending. That can mean we make mistakes and focus on the wrong projects with low payoffs for the community.

GILBERT: Because, just finally, as a member for a Canberra-based seat, this is all in the context of – as Mr Taylor put it – people struggling to get to work and so on, and in that context last week we saw Canberra rated first in terms of liveability in a recent global survey, I guess largely because of that lack of traffic problems.

LEIGH: Yet again Canberra comes as out as the best city in Australia, no great surprise to those of us who live here. It's a fabulous place. And part of it is that we do tackle congestion better than the rest of the country. The investment, for example, in the Majura Parkway was a project which had a high benefit-cost pay-off – three-to-one as I recall – but one which would have never been funded by a Coalition Government because it passed through a Labor seat. So that sort of strategic decision is absolutely critical if we're to maintain the ability of Australians to work and spend time with their friends and family, not to spend time sitting in traffic.

GILBERT: Indeed. Shadow Assistant Treasurer Andrew Leigh, appreciate your time this morning and we'll talk to you soon.

LEIGH: Thank you, Kieran.



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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.