The Hon Andrew Leigh MP
Assistant Minister for Competition, Charities, and Treasury
Assistant Minister for Employment
E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING, WITH PATRICIA KARVELAS
THURSDAY, 10 APRIL 2025
SUBJECTS: US tariffs, the Coalition’s Regional Australia Future Fund, AUKUS; housing and negative gearing.
PATRICIA KARVELAS: Well, let's bring in someone from the government to get a response to lots of these broader issues. Andrew Leigh is the Assistant Minister for Competition and joins me now. Welcome to the program.
ANDREW LEIGH: Thanks Patricia, great to be with you.
PATRICIA KARVELAS: The Chinese Government has asked Australia to join hands with China to defend global trade in response to American trade barriers. Should we be building a stronger relationship on trade with China at this point?
ANDREW LEIGH: Well Patricia, it's not in Australia's interest to be imposing tariffs. Tariffs are basically a consumption tax on imports, and so that's why we haven't gone down the path of retaliatory tariffs. Indeed, the story of Australian trade liberalisation going back to Gough Whitlam in 1973 is largely one of unilateral trade liberalisation. We decided to take the rocks out of our harbours to benefit our consumers, and we encourage other countries to do the same to benefit their consumers.
PATRICIA KARVELAS: So, has the government strengthened the relationship with China? In the wake of all of this uncertainty, has there been any shift, or are we looking in other directions?
ANDREW LEIGH: Well certainly since we came to office, we've removed that $20 billion of trade impediments that were there left over under the former Coalition Government. We understand that there's strategic differences, but we look to cooperate where we can, and we've also been strengthening a relationship with ASEAN. Nicholas Moore's South East Asian economic strategy is an important way of engaging with the region through trade and investment and people to people links. That's really important that we diversify. Our trade with the US now is about 5 per cent of total trade, and indeed only 20 per cent of trade in the globe involves the United States. So, it's important to recognise the big value for Australian exporters of the approach this government has taken of trade diversification.
PATRICIA KARVELAS: I want to move on to some other issues. There's been a big discussion about what we need to do for, you know, future generations. The Coalition providing a bit of an answer that they say is an intergenerational paying down debt and creating a fund. But I wonder - I know you might not agree with the method of the Coalition's windfall revenue plan, but they are actually trying to make a plan around discipline on debt aren't they? By forcing themselves to put it into this fun?
ANDREW LEIGH: Patricia. I think it's no surprise this policy was announced the day after the Treasurer's debate because Angus Taylor wouldn't have wanted questions on this last night. The fact is, you don't pay down debt by taking on more debt, and this is going to be a policy which will increase gross debt if the Coalition was elected. As you made clear to Jane Hume - if his policy had been in place, the Coalition wouldn't have delivered any surpluses if they'd been in government during the last couple of years, and that would be consistent with what happened over the previous decade where they printed the mugs but never delivered the surpluses. This is a funny money fiscal illusion according to Michael Read. It's a gimmick according to Saul Eslake. It's very clear that you don't benefit future generations of Australians by getting rid of a fund which is building houses and creating a fund to be overseen by somebody who had to quit the ministry as a result of the sports rorts scandal.
PATRICIA KARVELAS: Okay, but you've got a whole bunch of funds too that you've set up. So why are the Coalition’s funds a bad idea but the funds that you have a good idea?
ANDREW LEIGH: Well, the fund that will be overseen by Bridget McKenzie is some two hundred times the size of the sports rorts fund which led to her quitting the ministry.
PATRICIA KARVELAS: I have to interrupt you, just like I did with Jane Hume. That's not the question though. You have a whole bunch of funds; housing, there are others which are on the same principle as the regional one. Why are they okay but the regional ones aren’t.
ANDREW LEIGH: Sorry Patricia, I though you were asking me to compare and contrast there. So, our funds are about building housing and about investing in manufacturing. The Coalition's fund is about going back to the days of car park rorts, sports rorts and the Better Regions Fund which saw 90% of the resources channelled towards Coalition and target seats. The Coalition have a terrible record of pork barrelling, and you're not going to benefit future generations of Australians by replacing house building with pork barrelling.
PATRICIA KARVELAS: Okay, so your premise is just that you don't trust them. It's not fundamental to the actual structure of the regional fund.
ANDREW LEIGH: Well, additional funds aren't going to help you pay down debt. The way you pay down debt is the way that Labor's done. We've directed 70 per cent of tax upgrades towards paying down debt, compared to 40 per cent of the Morrison Government and 30 per cent under the Howard Government. So, we have a very strong record of paying down debt. We've delivered surpluses. We've delivered almost a $200 billion budget turnaround since we came to office. All of that has been done through careful fiscal management, not through that funny money fiscal illusion as one expert has called the Coalition's announcement today.
PATRICIA KARVELAS: The ASX 200 has been up today. But of course, there's been a lot of general volatility, which we know since the tariff announcements generally, are we out of the woods?
ANDREW LEIGH: I don't think so Patricia. I think we're in a world in which uncertainty is increased, and you can see that in the flight to safety from many investors. Investors need long-term certainty and this is definitely a time at which the Albanese Government is looking towards the future, towards a start. A calm, steady approach to managing the economy. We're seeking re-election, and if the Prime Minister is re-elected, he's going to be the first Prime Minister to be re-elected since John Howard. It is a time when Australians benefit from stability and certainty in our policies. We've got that track record - the Coalition, frankly, just are not ready for the serious job of governing.
PATRICIA KARVELAS: There's a story that's breaking this afternoon. Australia has been warned that Donald Trump's tariffs could actually push up the cost of submarines, which we are planning to buy in the AUKUS deal. Also, Donald Trump has asked Elon Musk's team to look at the capacity to build the boats generally. Are you worried that the AUKUS deal could end up costing us more because of tariffs?
ANDREW LEIGH: Well, there'll certainly be no tariffs on submarines coming to Australia from the US, as there are no tariffs on any goods coming to Australia from the United States.
PATRICIA KARVELAS: Well no, the steel and the components that go in, obviously it's not sort of - as we know it's a complex trade isn't it? It's not as linear as that.
ANDREW LEIGH: Absolutely, and Patricia I think your point is that the tariffs will fall mainly on US consumers and US manufacturers. That's why we consistently argue that they're not in the interest of Americans. They'll have an adverse impact on inflation, the cost of living for American consumers, and the impact that they'll have on American firms has been reflected by the stock market sell off that we saw at the beginning of the week. It's welcome news that the United States administration has scaled back some of those tariffs with a 90 day pause. There’s no immediate impact for the Australian tariffs, but of course the reduction in tariffs for other countries benefits us in the sense that it's good for global growth.
PATRICIA KARVELAS: Okay, but are we prepared to just pay more in this AUKUS deal? If you look at some of the public polling, a lot of Australians are concerned about AUKUS. Obviously, it is an enormous cost to us. Are we prepared to spend more?
ANDREW LEIGH: We've increased defense spending now going beyond two per cent of GDP, and we understand that it's important to continue engaging with the United States. The details of those costs of submarines are a matter that's a ways down the line. We're not looking at submarine delivery for some time yet, and so certainly we're not haggling over the prices, but it is a matter of concern that the US administration has gone down the tariff road. Not in their interests, and certainly not in the interest of Australia which is just point 3 per cent of the world’s population and has benefited so much from open markets and free trade. It's why we've reduced our trade barriers, but it's also as you know Patricia, why we’ve been such a strong voice of the international community for reducing tariff barriers.
PATRICIA KARVELAS: Just a final question on something that the Greens have been trying to put on the agenda. Your side of politics has put it on the agenda before and of course, has ruled it out since. But there is - if you speak to any sort of young person, there is a view that this issue around negative gearing and property should be looked at again. Isn't it worth a look Assistant Minister? I know that you have a position which is to just say no, but isn't any responsible government obliged to look at proposals if they perhaps have some merit, and if the community mood is changing?
ANDREW LEIGH: Patricia, if you ask most economists about what would make a difference in housing, they'll point you towards supply side measures. The Greens are focused almost entirely on demand size measures, and indeed they voted with the Liberals in holding up the Housing Australia Future Fund. In many cases, Greens Councillors are opposing development. We believe that supply really is the key here. We have fewer houses per person than the typical OECD country. We haven't been building homes that are sufficiently fast-paced. Part of that is modular housing, part of is the Housing Australia Future Fund, part of is the work we do in the States and Territories around planning and zoning. All of that unlocks more supply, which is the core answer on making housing more affordable.
PATRICIA KARVELAS: Thank you so much for joining us this afternoon.
ANDREW LEIGH: Thank you, Patricia.
ENDS