Andrew Leigh

With taxes, we build society

Speech to the Deloitte Tax Symposium

Eight score years ago, about 45 kilometres south-west of where we meet today, people gathered for a conversation about tax. Many of the features of that conversation would be familiar to us here today. Fairness was a key theme, passions were running hot and the debate was political at its core. Not everything was the same though, at the end of my remarks we’ll conduct a civil question session, and have a chat over pastries and coffee. The earlier conversation ended quite differently, with gunfire, bayonets and the death of at least 27 people.

I’m talking of course of the Eureka Rebellion of 1854, the ground zero of Australian tax debate. The source of the anger that led to the Eureka Rebellion was the taxation of miners through a licence, levied regardless of the profitability of a claim. The licence fees were collected by an often corrupt and brutal police force, representing a government that in the view of the miners was failing to provide the infrastructure to support a booming population.

So while I’m sure that Deloitte probably had the boutique spas, fine restaurants and local wines more at the top of mind when they chose Daylesford for this conference, it is apt that we’re meeting here in the heart of the Victorian goldfields for the Deloitte tax symposium.

We’re often tempted into lazy nostalgia for an era of easy reform in Australia that never was—a wonk arcadia where tax policy is made with bipartisan support and electoral glee. It’s good to remind ourselves that tax has always been controversial and that while the dispassionate practitioners in this room might wish it were different, tax is political.

I’d like to speak briefly today about where I think tax reform is up to currently in Australia, my views on ways forward and finally an update on the opposition’s tax policy process. I’m going to keep my remarks relatively free of political commentary, but tax is inherently political. I trust you’ll understand if at times I sound a little less like the economics professor I once was, and a little more like Labor’s Shadow Assistant Treasurer.

Remarks to the 2015 NATSEM Post-Budget Forum

Parliament House, Canberra

It's a real pleasure to be here with some of my favourite economics thinkers – Michelle Grattan, Saul Eslake, Ben Phillips and Arthur Sinodinos - and at an event organised by NATSEM at the University of Canberra. Some of you may know that last year, perhaps due to an unfortunate printing error, the Family Impact Statement was left out of the Budget. That meant that we couldn't observe some of the analysis that had been possible going back to Peter Costello’s era. Fortunately, Australia had NATSEM and they were able to conduct some vital analysis on the distributional impacts of last year's budget which made up for the accidental printing error, and helped spark a national debate around fairness.

I wanted to speak firstly today about the things I like in the Budget. Given that there's no person I like more on the Coalition side than Arthur Sinodinos, it seems churlish to start a conversation about the Budget without talking about the things that I think are good in the package. There is the National Disability Insurance Scheme IT upgrade. There’s investment in the Australian Bureau of Statistics which will be going towards an IT upgrade there as well. So long as that isn't accompanied with cuts to the bureau's surveys, that will be important too. I also like the instant asset write-off. It's a policy that aims to encourage investment, recognising that what you want to do with tax cut that change behaviour is to work on the margin. We had an instant asset write-off under the previous government which was scrapped for by this government. My only concern about the new one is that it's only there for two years. What will happen when it suddenly finishes?

Why should we care about inequality?

The 2015 Economic and Social Policy Public Lecture

University of Wollongong

Dutch economist Jan Pen once suggested a simple way of visualising the extent of inequality in a society. Imagine, he suggested, a parade, in which each person’s resources were represented by their height.

Suppose we were to conduct such a parade in Australia. People of average wealth would be average height. Those with half the average wealth would be half the average height. Those with twice the average wealth would be twice the average height.

Let’s suppose the parade took an hour to pass you. What would you see?

For the first half a minute, people would be literally underground. These are the people with more debts than assets. Perhaps they are homeless, but have credit card debts. Or they are a business owner about to go bankrupt.

Then would come the little people. For the first few minutes, they are no bigger than lego figures. They might have some clothing and a television, but little else. By the ten minute mark, people are the size of a child’s doll. They might own an old car.

Twenty minutes have gone by, but still the marchers are no taller than a newborn baby. Most probably don’t have regular work – they might have odd jobs, or be reliant on the pension. Few would dream about them – or their children – breaking into the central Sydney property market.

It’s now half an hour. The watchers are getting bored. Heights aren’t rising much. Are we really only halfway through the parade?

E&EO TRANSCRIPT

DOORSTOP INTERVIEW

UNIVERSITY OF WOOLONGONG

WEDNESDAY, 20 MAY 2015

SHADOW ASSISTANT TREASURER ANDREW LEIGH: I'm here with my colleagues Stephen Jones and Sharon Bird, and we've just been touring the iAccelerate building at the University of Wollongong. Learning about their programs to encourage women entrepreneurs; engaging with companies producing 3D printers and pop-up ergonomic desks and potentially game-changing medical technology. It's really impressive to see the range of technologies and the extent to which firms are looking towards the future. It's exactly that future that Bill Shorten was looking to build towards with Labor's announcements in the budget reply about investment in science, technology, engineering and maths, and supporting Australian students to learn coding. I might just throw now to my colleague Sharon Bird to make a couple more quick comments.

MEDIA RELEASE

VISIONLESS ABBOTT VACATES THE FIELD ON SHARING ECONOMY

The Abbott Government is ducking responsibility for leading a serious conversation about the sharing economy.

Today’s ruling by the Australian Tax Office shows the Government is leaving it up to line agencies to drive national policymaking on services like Uber.                

These are not the actions of a future-focused government.

Internationally, some authorities have ruled that sharing economy apps represent a different type of service which requires a distinct regulatory approach. But the Abbott Government has been slow to recognise that new technologies may require the rules to be updated.

Getting off Struggle Street - how we can tackle Australian inequality

Speech to the Financial Counselling Australia Annual Conference

Canberra

Thank you to Lauren Levin, Fiona Guthrie and all the friends at Financial Counselling Australia for inviting me to share in your conversation today. Lauren was the one who first made contact with me about this conference, and her email really grabbed me from the opening line. Never before have I received an email that began: ‘It is most unusual to be de-funded and still continue with a major conference.’ So when I received that email from Lauren, of course I couldn’t resist saying yes to speaking today.

I understand that only today there has been some good news, and FCA has now secured funding to cover your work for the next two years. The Abbott Government has made quite a habit of changing its mind recently, but I’m very glad that in this case it has had such a good outcome. I’m sure that this reversal was in no small part due to the powerful advocacy of Carmel Franklin from CARE Financial Counselling in the ACT. Those of you who know Carmel will know that she’s a strong and consistent voice speaking on behalf of your sector and the Australians you work with.  

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

MONDAY, 18 MAY 2015

SUBJECT/S: Budget 2015; paid parental leave; Renewable Energy Target; iron ore inquiry

KIERAN GILBERT: This is AM Agenda. With me now the Shadow Assistant Treasurer, Andrew Leigh and the Assistant Social Services Minister, Mitch Fifield. Gentlemen, good morning to you. Senator Fifield first to you on the polling: I know you don't want to get into too much commentary but I guess it's got to feel a lot better this year than it did last year in terms of how this has been received, the second Hockey budget?

ASSISTANT SOCIAL SERVICES MINISTER MITCH FIFIELD: Kieran, we've been working to a plan to get the budget back on a path to being on balance, to creating an environment that's conducive to growth and the creation of jobs. It would probably be fair to say that the plan we have is better understood at this point than it might have been at the same time last year, but we're focused on that plan, on delivering it. You're right, we will leave it to others to commentate on the polls but I think you'll find that all of my colleagues are out this week and the weeks ahead, explaining the good news that is in the budget; the good news for small business, the good news for families.

GILBERT: And the Shadow Assistant Treasurer, Mr Leigh, famously – or infamously as far as I'm concerned – never comments on the polls at all. But this budget comparison, it's pretty stark and I guess it's understandable given that this is a much more generous budget than last year.

SHADOW ASSISTANT TREASURER ANDREW LEIGH: Kieran, I do appreciate that my unwillingness to commentate on polls is an enduring source of frustration for a Monday morning regular. But I do think that the number that really counts is not the polling number but the 80,000 mums who are finding out that they won't be eligible for parental leave under the Government's policies. This is a budget which still has so much of the unfairness from the last one but doubles the deficit. Not on Labor's numbers, but on the Government's own number, the deficit has doubled over the course of the year. And it lacks that plan to invest in the future which is why Bill Shorten spent so much time on Thursday night laying out an alternative Labor plan for investing in the future.

A Big Man Named Mack and What May Have Been But for War, The Chronicle, 5 May 2015

When World War I began, Malcolm Southwell was working as a forester, planting pines on the slopes of Mount Stromlo. Nearly 6 feet, he was tall for the era, with brown hair and brown eyes. Everyone called him ‘Mack’. He enlisted in 1915 – 100 years ago.

An 'app-ier' future for our cities?

Speech to Urban Taskforce Australia

Sydney

You might not be familiar with the names Michael Nuciforo and Robert Crocitti, but they’re the kind of blokes you want to have around when you’re trying to solve a tricky problem. They’re the creators of ParkHound, an app that lets you find and hire private parking spaces in busy metropolitan areas. They decided to start the company after circling around East Melbourne on the hunt for parking near the MCG before an AFL game.

As they tell it: “We drove past parked car after parked car, after….empty space that required a parking permit. There were dozens of empty garages and driveways right near the ground. It then hit us. Wouldn't it be great if we could just knock on someone’s door and ask to park at their place for a small fee? The more we thought about it, the more it made sense. We don’t need more parking spaces, we just need to utilise the parking spaces we already have.”

ParkHound is just one of dozens of new app-based services that have sprung up recently in the so-called sharing economy. While the kinds of services offered differ, fundamentally they all link people who have surplus goods to those who can make use of them.

As the father of three young boys, the word “share!” comes out of my mouth pretty frequently. Unlike the kind of sharing I’m trying to teach them, money usually changes hands in the sharing economy. But the transaction happens directly between the provider and the consumer, with the companies themselves simply offering a platform for connecting people and collecting payments.

In thinking about the rise of services like ParkHound, AirBNB, and yes – the controversial Uber – it strikes me that the sharing economy has great potential to help us address some of the big challenges our cities face. As Australia’s cities continue to grow, issues like congestion and the use of space are becoming increasingly urgent. The mounting pressure on our built environment puts the people who live in it under pressure too – as all of you Sydneysiders would well know.

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC NEWSRADIO

FRIDAY, 15 MAY 2015

SUBJECT/S: Labor’s Budget alternative; small business tax cut; paid parental leave

MARIUS BENSON: Andrew Leigh, one of the centrepieces of Bill Shorten's policy speech last night was a 5 per cent cut to tax on small business. He's proposing working with the government to achieve that cut, to cut the company tax for small business from 30 per cent to 25 per cent. He said to Tony Abbott: let's work together. A bit disingenuous, isn't it? This is not a government of national unity; oppositions don't get to join the Government at the Cabinet table to work out economic policy.

SHADOW ASSISTANT TREASURER ANDREW LEIGH: Marius, I believe Australians very much want their parliamentarians to work together. We always have to be putting the national interest before partisan interest. What Bill Shorten did yesterday was to reach across the table in the Parliament and say to Tony Abbott that if he, too, believes in giving small businesses a better deal, then Labor is happy to work together to try and boost growth in that vital sector of the economy.

BENSON: Has Labor ever invited the Opposition, when it has been in government, to join it at the Cabinet table to work out policy like that?

LEIGH: We've certainly cooperated with the Coalition on a range of things. Whether they're in Government and we're in Opposition, or the other way around.

BENSON: What would a 5 per cent cut to the company tax on small business cost?

LEIGH: We'll work through the costings with the government. Certainly that'd be an important matter to be considered.