The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING, WITH PATRICIA KARVELAS
FRIDAY, 16 OCTOBER 2026
SUBJECTS: Australia-Europe free trade agreement; Trusts
PATRICIA KARVELAS: For a view from the government, I want to bring in the Assistant Productivity Minister, Andrew Leigh. Andrew Leigh, welcome.
ANDREW LEIGH: Thanks Patricia, great to be with you.
PATRICIA KARVELAS: Where do you go from here now that the Coalition seems to be opposing this with a lot of, you know, strong words? Does it mean it's dead or do you have to pursue trying to convince The Greens?
ANDREW LEIGH: Patricia, it's worth remembering that negotiations kicked off under the Coalition, with Malcolm Turnbull describing it as a great day and then Trade Minister Steve Ciobo saying it would be good for growth and for jobs. This is an agreement with our third biggest two-way trading partner, which secures tens of thousands more tonnes of exported beef and sheep meat.
It is a deal which is terrific for the Australian economy, and I'm still confident of its passage. We've already had a couple of Liberal Senators on background saying to the ABC that they don't agree with Senator Matt Canavan's position. Matt Canavan, of course, is a protectionist. When he became leader of the Nationals, he talked about the virtue of tariffs. That's the old Blackjack McEwen ‘protection all round’ approach from the Nationals. It's not suitable for a modern economy. It's not the road to prosperity. Tariffs are a tax on Australians and Matt Canavan's idea of permanent tariffs for Australia is as daft as his notion that we ought to block a trade deal with our third biggest trading partner.
PATRICIA KARVELAS: Well, he's warning that it will destroy the dairy industry, lead to a flood of goods coming in, and also that Australians haven't got enough of a good deal themselves, that, you know, because clearly we didn't get everything we wanted in this deal. Is your entire strategy now just peeling off any Liberal you can get?
ANDREW LEIGH: No negotiation ever leaves both parties 100 per cent satisfied. But in this case, 98 per cent of our exports to the European Union will be tariff-free. We're going to see more than $10 million of reduced tariffs for our wine sector. That's why this agreement is backed by 17 business groups, including the Business Council of Australia, ACCI and the Australian Industry Group. It is an agreement which is unambiguously good for Australia and there is no prospect of renegotiation. The EU Ambassador to Australia has made that clear.
So, yes, I'm hopeful that many Liberals will take that small-L liberal approach which characterised the Howard-Costello Governments and the approach that former Prime Ministers Tony Abbott, Malcolm Turnbull and Scott Morrison took to trade negotiations, including this one. We need the Liberals to act in Australia's national interest and back a big trade deal which would be good for our economy as we engage with an economy of 450 million people and 27 countries in the European Union.
PATRICIA KARVELAS: But you've got to be realistic, right? Looks like this could be dead on arrival?
ANDREW LEIGH: We need this agreement to be scrutinised by the Treaties Committee. That is the commitment that the Coalition originally made before Matt Canavan went off freelancing. It took eight years to negotiate, and it seems to have taken a mere eight minutes for Matt Canavan to decide he's a protectionist. Well, just because he thinks we should put up the tariff walls doesn't mean the entire Coalition should give away its principles. They are once more taking a ‘closed Australia’ approach, being led by the nose by One Nation. We've seen it with migration. We're seeing it now with trade – both deeply damaging to Australia's future prosperity.
Australia chose openness because it's good for our nation, because it means more jobs and better pay for Australians. It means cheaper products for Australian consumers and more opportunities for Australian workers.
This trade deal is squarely in the national interest. Our government would not have signed up to it if it wasn't. And I'm very hopeful that Coalition Senators will see the light.
PATRICIA KARVELAS: We have just heard from the Council of Small Business. They signed this letter to a series of government ministers, including obviously the Treasurer, who say that the Albanese Government's consultation process with business is not going well. And the reason you're seeing the backlash you're seeing is because you didn't do the work of consulting. That's pretty strong rebuke from a number of pretty significant business groups. Will you listen to this?
ANDREW LEIGH: Patricia, I'm constantly engaging with business and I had a wide range of business meetings just this week in Parliament. We are reforming the trust system because it is important that Australia's progressive tax approach holds for a small business as it does for a nurse or a teacher or a firefighter. Nurses, teachers and firefighters can't decide who in their family gets their salary and yet discretionary trusts enable just that approach. Treasury analysis suggests that those with discretionary trusts pay about 4 percentage points less tax than those who are receiving a salary income. 95 per cent of Australians don't get trust income. Nine out of ten small businesses don't operate through a trust. This is a very targeted reform with a long lead-in period. It doesn't kick in until 2028 to allow people plenty of time to rearrange their tax affairs.
PATRICIA KARVELAS: But we just spoke to Skye Cappuccio, who talked about the businesses that do use it. She said micro businesses, they're making less than $2 million a year, that one of the strategies for them is to restructure. That could cost them $50,000. It's an expensive thing to do. Why force them to do that?
ANDREW LEIGH: Well, this is about the integrity of the system. If small businesses want to restructure to a fixed distribution, they're able to do so, and we've got rollover relief built into the bill. But Patricia, we are strongly engaged in working with small business. I've got a lot of respect for Skye who I've met with, and we are keen to work with them on measures such as the instant asset write-off, which we've got at $20,000 and now a permanent measure in the budget.
There are a range of reforms we're working on in the competition space which are good for small business and enable and empower start-ups. The work we've done with reforming research and development tax credits is all focused on small business growth and our National Competition Policy agenda is about ensuring that small businesses compete on a level playing field. So right across the board, we've got the back of small businesses and we're looking to ensure that they can thrive in the economy.
PATRICIA KARVELAS: One of the issues that The Greens have raised, and let's be honest here, that's the only way you can get this thing passed because the Coalition is steadfast against this change to the taxation arrangement, is on the trusts' ability to pay private school fees. Is that something that you will address?
ANDREW LEIGH: Look, we already have anti-avoidance rules which prevent that behaviour. They're not changing under these reforms. My read of the evidence is that it isn't possible currently to use trust income to pay private school fees and it won't be as a result of the reforms.
PATRICIA KARVELAS: Okay. They argue something different to that. So, will you address their concerns? Because they say that they do fear you can do this with the arrangement?
ANDREW LEIGH: We will certainly engage with The Greens. My understanding at the moment is it is not possible to pay school fees out of trust income. That that would be taxed at the top marginal tax rate if you're receiving a direct benefit. Now, I distinguish that from making a donation to a school building fund or a donation to other charities. But if you're getting a benefit from it, such as private school fees would require, then that's taxed at the top marginal tax rate and that approach continues under our reforms.
PATRICIA KARVELAS: Andrew Leigh, it's always good to have you on the show. Thank you so much for joining us.
ANDREW LEIGH: Thanks Patricia.
ENDS