MONDAY, 1 JULY 2019
Subjects: Tax cuts, penalty rate cuts, the government’s bold economic forecasts, Christopher Pyne’s newfound camera shyness.
LAURA JAYES: Joining me now is Labor frontbencher Andrew Leigh. He's always in town because this is your hometown. Where is Labor at? What is your position on the tax cut package at the moment?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Laura, we want to make sure that more Australians get a bigger tax cut sooner. The economy needs that additional stimulus and Australians need some support after years in which wages have been flatlining. Labor is encouraging the government to bring forward the stage two tax cuts and we want to get those stage one tax cuts done as quickly as possible.
JAYES: So that a final position though or do we need to see this ratified through caucus?
LEIGH: Caucus will approve the shadow ministerial decision but our priority is making sure money flows into people's wallets. We need to make sure we support that demand, because we've got a really fragile economy right now.
JAYES: You've got a problem though because you're not in government and the government won’t split this package that was central to their pre-election promises. So how do you get around that?
LEIGH: We’re going to continue to make these strong economic arguments, Laura. We're seen the report out today from The Conversation, they’ve polled 20 leading economists - none of them say that the economy will hit the government's household spending target of 2.75 per cent. They all think the economy is weaker than the government forecast and don’t forget that those forecasts to what underlies this expensive tax cut, which sees about a third of the benefits going to those earning over a $180,000, who make up just 3 percent of taxpayers.
JAYES: But it’s all or nothing really, according to the government. So what is Labor going to do? Are you simply spectators here? Are you going to let the crossbench deal you out of relevance?
LEIGH: We’re going to make these strong arguments on behalf of the Australian economy. We need to be responsible economic managers in an environment in which the New York Fed says that there's a 29 per cent risk of recession and The Conversation’s panel put a similar figure on recession risk in Australia. We need the fiscal firepower to fight that downturn in Australia. Labor is the only political party that believes everybody should get a tax cut in this term of government. Scott Morrison has tied to bipartisan supported tax cuts his 2024 tax cuts for the simple reason that he knows if he didn't do that, that stage three alone would not pass the Parliament.
JAYES: Stage three, well Centre Alliance seems to be coming on board with stage three.
LEIGH: Others will do what they do. Labor will be arguing the opportunity cost. So if you support rising Newstart, if you believe we need to spend more on infrastructure, if you believe we need to spend more on schools and hospitals-
JAYES: That's not what Labor's arguing, Labor's arguing to bring stage one and two forward. It's not arguing that you should increase Newstart. As an economist, wouldn't that be a bigger boost to the economy?
LEIGH: Laura, I’m making a different point. I'm making the point that the opportunity cost of locking in extremely expensive tax cuts is that it becomes much more difficult to increase Newstart. Were Australia to suffer a significant downturn, we'd want to be looking at things like bringing forward infrastructure and stimulating spending. That becomes much harder-
JAYES: If government passes this entire package of tax cuts with the help of the crossbench, will Labor then walk back its commitment to increasing Newstart?
LEIGH: We've just lost an election. We will devise our policies for the next election as we come up to it. But I'm making the simple point that every time you cut taxes, something's got to give. And for those who believe that the Newstart allowance is too low, they need to recognise that there's a tradeoff and that if you provide these very expensive tax cuts then that makes it more difficult to go ahead with other policies-
JAYES: So is there a chance that you might support this tax cut package, depending on what caucus says?
LEIGH: Our focus right now is on securing our amendments. It is on making sure that more Australians get a tax cut-
JAYES: That’s not a no then?
LEIGH: We're focused on making sure that the government does the right thing. Let's not forget, Laura, today is the 1st of July. This is the day on which Scott Morrison-
JAYES: It’s not a no, Dr Leigh, is it? You could support this tax cut package.
LEIGH: This is the moment where Scott Morrison said that Australians would be getting their stage one tax cuts. We supported that on a bipartisan basis back in April. Scott Morrison waved us away, said we didn't need legislation then. It's proved wrong. And this is not only the first day of the fiscal year - it's the first broken promise from the re-elected Morrison Government, who said that people would have a tax cut flowing immediately.
JAYES: Just quickly before I let you go - Christopher Pyne. He's taken on a job with EY, formerly Ernst and Young. Do you see a problem here?
LEIGH: It certainly looks to me like it's a breach of the ministerial code of conduct and it's up to the prime minister and Christopher Pyne to explain why it's not. Both of them are typically pretty quick to front the cameras. Neither of them have been willing to front the cameras on this one. I think that if Mr Pyne doesn't stay away from engagement with his former portfolio, then members of the Morrison Government should leave him out in the sort of chill that Canberra’s experiencing right now.
JAYES: We’ll see. Dr Leigh, thanks so much.
LEIGH: Thanks Laura.
Authorised by Noah Carroll ALP Canberra.
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