Andrew Leigh

In a confused media release today, Assistant Treasury Minister Michael Sukkar suggests that we should ignore dividend imputation when discussing Australia’s company tax rate.

Dividend imputation reduces the revenue available to government. Most of the countries that the government likes to compare Australia’s company tax rate with do not have dividend imputation.

Research by Macquarie University Professor Geoffrey Kingston estimates that dividend imputation returns about one-third of the corporate tax revenue to taxpayers.

So a corporate tax rate of 30 per cent with imputation raises as much as a rate of 20 per cent without imputation.

Worryingly, Mr Sukkar seems not to understand this basic fact.

This latest gaffe comes just weeks after Mr Sukkar refused to rule out making all mortgage interest payments tax deductible, which the Grattan Institute estimates would cost the budget $19 billion a year.

With an economic team like this, it’s little wonder that Australia’s net debt will soon be twice as large as it was when the Abbott-Turnbull Government took office in 2013.

WEDNESDAY, 15 FEBRUARY 2017  

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E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS ON THE HOUR WITH TOM CONNELL

WEDNESDAY, 15 FEBRUARY 2017

SUBJECT/S: Petrol prices; Labor’s competition policies

TOM CONNELL: This won't come as a surprise to motorists. Petrol companies are effectively in cahoots on their price cycles. Hiking prices up on a set day each week. According to the University of Sydney the day of the hike used to be Thursday. But it's shifted to Tuesday. And it's when companies make an extra 50 per cent profit margin and it's costing drivers an average of nearly $5 a tank extra each time they fill up. Of course we know it all adds up. Joining me now on this is the Shadow Assistant Treasurer, Andrew Leigh. Thank you for your time, Andrew.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Tom.

CONNELL: I know Labor has a bit of a plan on this. They talk about more powers for example to the ACCC to police this type of behaviour. We're talking about tacit collusion, not phone-calls, but when everyone – sort of – follows the other. Can you really outlaw that? Would have to be a pretty broad law wouldn't it? And a dangerously broad one?

LEIGH: I think first it's useful just to step back and see what David Byrne and Nicolas de Roos have uncovered on this. This is really the econometric equivalent of an Agatha Christie novel. Whereas back in the old days firms – to collude – had to get together in smoke-filled rooms and have secret conversations, now they do it through big data. What they saw in Perth was that the dominant market player, BP, set the pattern for a price rise which originally used to occur on Thursday and then they shifted it to Tuesday. Prices would go up 15 cents and then every day they would steadily go back down. 

E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS, AM AGENDA

TUESDAY, 14 FEBRUARY 2017

SUBJECT/S: Government threatening the NDIS; Government’s $50 billion company tax cut; Government lurches closer to One Nation

LAURA JAYES:  Andrew Leigh, thanks for your time.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure Laura. Happy Valentine's Day to you and your viewers.

JAYES: Thank you. Thank you so much. First of all I wanted to ask you about this Omnibus Bill. Labor's obviously not going to vote for it. But, is there anything you can salvage out of it that hypothecating of funds to the NDIS to ensure it will go ahead and there is that funding pool there? What about things like the carbon tax energy supplement? We don't have a carbon tax, what do we need it for?

LEIGH: Laura, this is a pea and thimble trick. As you well know, the budget has a single amount of money in it. And the notion that if Labor doesn't support cuts to families the government is going to take money away from people with disabilities is profoundly offensive. The government shouldn't be playing these sorts of political games, particularly not at a time-

JAYES: They're not saying they'll take money away, they're just saying that the budget will go deeper into deficit to pay for it. 

LEIGH: No, they have been threatening the viability of the National Disability Insurance Scheme. For a sleepless mum with a child with disabilities that's the last they need to be hearing on the news. It's particularly hypocritical too, at a time when the government wants to break the budget with a $50 billion dollar company tax cut.

Dr LEIGH (Fenner) (11:14):  In 1975, Gough Whitlam announced the Order of Australia 'for the purpose of according recognition to Australian citizens and other persons for achievement or meritorious service.' In replacing the British honours system, the Orders of Australia did two things. They ensured that honours would be based on decisions of Australians, not those of the British, and they ensured that they would be made by Government House, not by parliamentarians. And, with an exception or two, that system has endured in the decades since.

The Government has lurched so far to the populist right, it has now begun defending the economic policies of Pauline Hanson’s One Nation as mature and rational.

In a radio interview this morning, Trade Minister Steve Ciobo claimed that One Nation’s approach had a certain “economic rationalism…reflective of what it is to govern Australia in a fiscally responsible way,” and that theirs was a, “mature approach to economic policy.”

One Nation’s economic policies include:

• A flat 2% tax on every Australian.
• (But also) Exploring the removal of Federal taxation.
• Getting rid of penalty rates, ‘across the board.’
• Opposition to globalization.
• Opposition to free-trade economic policies.
• A promise to withdraw from international treaties.

Second reading speech

9 February 2017 

In my remarks today, I want to deal with the three arguments that the coalition has made for cutting the company tax rate: the first, that Labor once supported cuts to the company tax rate; the second, that other countries have lower corporate tax rates; and the third, that it will boost growth. I want to explain to the House in turn why each of these arguments is wrong.

The coalition first of all claims that Labor, in the past, has supported company tax rates. It is certainly true that Paul Keating took the approach of broadening the base so you could lower the rate. Against the opposition of Liberals and Nationals at the time, Paul Keating brought in things like capital gains tax and fringe benefits taxation. He ensured that our tax base was broader and, in so doing, was able to finance a rate cut. This broadening of the corporate tax base was the same philosophy that underpinned the Gillard government's approach, and then we said at the time we would support a modest reduction in corporate tax of one or two percentage points.

In a desperate attempt to distract attention away from their $50 billion tax cut to large companies, the Turnbull government attempted today to pretend that it is serious about reducing multinational profit-shifting.

 It is not.

 As usual with this government, you have to follow the numbers, not the spin. The Coalition’s diverted profits tax will raise just $200 million over the forward estimates.

Distracted by its own internal turmoil, the Turnbull Government’s silence in response to their latest online failures – a four day systems crash at the Australian Taxation Office - has been staggering.

The ATO's website was offline for days - and the agency can't explain why.

Australian voters are fed up with being ignored and having their time wasted by the Turnbull Government’s incompetence.

Disturbingly, no senior figure from the government has stepped forward to offer an explanation: not the Treasurer Scott Morrison or Revenue Minister Kelly O'Dwyer.

E&OE TRANSCRIPT

TV INTERVIEW

SKY NEWS, AM AGENDA

MONDAY, 6 FEBRUARY 2017

SUBJECTS: Trumbull’s year so far; Bernexit; Clean Energy Finance Corporation investing in coal.

KIERAN GILBERT: With me now is Labor frontbencher, Andrew Leigh. There were reports over the break that Cory Bernardi will be leaving the Liberals and setting up his own Australian conservative movement and now the ABC is suggesting that is going to happen within 48 hours  Your thoughts and reaction on that story?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: We thought Tony Abbott had set the benchmark for a bad start when he knighted Prince Phillip but it seems Malcolm Turnbull is able to go one better. He has had a catastrophic start to the year, Kieran. A lack of policy direction, losing his health minister and now with Cory Bernardi and George Christensen clearly off the reservation. This is a Prime Minister who isn't even able to lead his own party let alone to tell the nation where he wants to go. Nor to answer that fundamental question: what's the point of the Turnbull Government?

Competition is the best way to fuel growth and end tacit collusion, Herald Sun, 5 February 2017

Do you know which day of the week is cheapest to buy groceries? Or which day of the week is cheapest to buy whitegoods, cars and home appliances? Spoiler alert: there isn’t one! So why is there a cheap day to buy petrol? If hundreds of petrol stations really are engaged in dog-eat-dog competition, why do they all raise prices on the same day of the week?

After decades of researchers trying to understand bowsernomics, a new study may have cracked the nut.  Economists David Byrne from the University of Melbourne and Nicolas de Roos from the University of Sydney analyse nearly 2 million daily petrol prices. Alarmingly, they find that petrol retailers have been engaged in ‘tacit collusion’, resulting in coordinated prices, less competition and higher margins for retailers.

To be clear, these experts are not alleging the type of collusion that involves secret meetings, fake moustaches and disposable mobile phones. Rather, it is ‘tacit’ collusion where, through a gradual and unspoken process, firms slowly converge on the same pricing strategy so as to maximise revenues.

Sifting through the data, the researchers produce the economic equivalent of an Agatha Christie novel. They find that the dominant firm, BP, performed the role of the price leader. BP’s prices acted as a focal point for the broader market to converge on. Through a long process of trial and error, by 2010 all petrol stations had adopted the same pricing strategy.

Here’s how the game ended up being played. Every Thursday prices went up by 15-20 cents per litre. Then, for the next six days, the price fell by 2 cents each day. Like clockwork, the cycle repeats itself week after week. The only change was in 2015, when all petrol stations switched from Thursday price jumps to Tuesday price jumps.