Andrew Leigh

Race against the machine or race with the machine?

Laying the foundations for an innovative, productive and equitable Australia

Speech - Corrs Chambers Westgarth
Perth

10 March 2015

Nearly five years ago, I made the switch from professor to politician. I’ve never regretted the transition, but it continues to surprise me how different the two occupations are.

In academia, specialisation is valued – you want to pick an area so narrow that you can know more about it than anyone else in the world.

Politics is a generalist occupation – in a typical day, I’d go from talking superannuation to local jobs, from family counselling programs to Free Trade Agreements.

University economics departments value sharp distinctions, and blunt critiques. Politics is a team sport, so you need to build consensus to bring about reform.

One of the really noticeable things about politics is how the language of economics gets used. Terms like human capital, comparative advantage and public goods might be fine for the lecture theatre, but they have a tendency to leave people cold.

When we fail to engage, to explain, and to connect, there is a risk that people go along with economic changes not because they understand them, but because they feel they have no other choice.

Nowhere is this truer than in the case of productivity.

Appropriation Bill (no. 3) 2014-2015

3 March 2015

On 6 August 2013 the member for North Sydney, now the Treasurer, said:

I'm not afraid to accept responsibility and I am not afraid to be accountable. We will own it from day one … We will be responsible for the Australian economy.

What Australian economy was it that the government inherited? That is outlined in the Pre-Election Economic and Fiscal Outlook. The Pre-Election Economic and Fiscal Outlook is not a creature of the Labor Party. It is indeed a creation of Peter Costello, through the Charter of Budget Honesty. It ensures that governments can no longer pretend when they win office that they were unaware of the state of the books. Prepared independently by the secretaries of Treasury and Finance, it makes absolutely clear the state of the books when a government takes office. The member for Cook understands this. He said at the despatch box opposite that the Pre-Election Economic and Fiscal Outlook reflects the true state of the economy when the government takes over. Perhaps that is why so many pundits are suggesting that the member for Cook will be Treasurer before the year is out.

Constituency Statement 

5 March 2015

This year marks the 40th anniversary of the founding of Beryl Women's Refuge in Canberra. It was founded in 1975 as only the second women's refuge to be opened in Australia; a safe place women could go to when they experienced domestic violence. Family violence is still too prevalent in Australia. The Australian Bureau of Statistics Personal Safety Survey 2012 found that, after the age of 15, 34 per cent of women had experienced physical violence and 19 per cent of women had experienced sexual violence. The one bright light in those chilling statistics is that the survey also asked about violence in the previous 12 months and on both measures—physical and sexual violence—the share of women who had suffered declined from 1996 to 2012. But one woman feeling unsafe in her own home is one woman too many.

Matter of Public Importance debate

The Abbott Government's politicisation of the Intergenerational Report

5 March, 2015

Egalitarianism is a great Australian value and over the last generation inequality in Australia has been rising. The 2010 Intergenerational Report had an in-depth section on disadvantage and on the rising gap between rich and poor, but this Intergenerational Report does not contain the word 'inequality.'

Now why would that be? Perhaps it is because this is a government that has cut the wages of the cleaners who clean their offices while it is sending a billion dollars offshore. Since coming to office, this government has given a billion-dollar handout to multibillion dollar firms who need a tax break like Prince Phillip needs a knighthood. This is a government that likes channelling Robert Menzies to split Australia into 'leaners' and 'lifters.' In Britain the Tories are doing the same—they are talking about 'strivers' and 'skivers'. But it is all of a piece. It is the idea of 'us and them'. This is a government that wants us to be split into two Australias. This government's idea of fairness is sending the under-9s up against the Hawks.

This Treasurer is a Treasurer of, by and for the top one per cent. The figures in table A3 of this Intergenerational Report show that age and service pensions, as a share of GDP, are going to be down and that education spending will be halved. This is a government that is raising superannuation taxes on the poor and cutting superannuation taxes on the rich. This is government is so unfair that the Sheriff of Nottingham would be voting Palmer in the Senate.

These are insecure times and Australia needs a Treasurer who will instill confidence, not the sort of Treasurer who is likely to tweet: 'Hey gang, what do you think the deficit should be?' before the next ERC. This is a Treasurer who has run a million-dollar advertising campaign to sell his Intergenerational Report. That is enough to make you fall off your chair.

Why has this Treasurer been late in delivering his Intergenerational Report? Why has he, as the Shadow Treasurer has pointed out, broken the Charter of Budget Honesty? Why is he in breach of the law? Maybe it is because he has been doing his own numbers rather than the budget numbers. Maybe he has been a little bit too busy updating his LinkedIn profile to put together the Intergenerational Report.

MEDIA RELEASE 

IGR = INEQUALITY GROWING, REALLY

Treasurer Joe Hockey has released an Intergenerational Report which is silent on one of the biggest challenges of our time: inequality. 

Labor’s 2010 Intergenerational Report had an in-depth section on income disadvantage which highlighted the growing gap between the rich and the rest in recent decades.

It also laid out specific steps in education, employment, childcare and health which governments should take to close that gap in the years ahead.

By contrast, the Abbott Government’s Intergenerational Report does not make a single mention of inequality, and includes just a single reference to disadvantage.

E&OE TRANSCRIPT

RADIO INTERVIEW

RADIO NATIONAL DRIVE

THURSDAY, 5 MARCH 2015

SUBJECT/S: Intergenerational Report

PATRICIA KARVELAS: To discuss today's Intergenerational Report from the Labor party's perspective, we're now joined by Dr Andrew Leigh, the Shadow Assistant Treasurer. Welcome to the program.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Patricia. Good to be with you.

KARVELAS: Now Labor says this is a political document, but isn't that the point of an Intergenerational Report, as Mathias Cormann has just explained? He said they are released by the Treasurer, and he conceded that there is an element of a political case being established about what the alternative would be if there was a different government elected. 

LEIGH: I don't think that is the purpose of the Intergenerational Report, Patricia. I certainly don't deny that there's a role for politics in some forms of public conversation. But the way in which Peter Costello – to give him his due – envisaged the Intergenerational Report was to talk about those big multi-generational challenges. There's some parts of the Intergenerational Report that I think make interesting reading. There's a useful discussion of the drivers of health spending, for example, but then there's so much of it that seems to be painfully partisan and which is misrepresenting the trajectory that Australia would have been on under Labor. The IGR has not used the independent Pre-Election Economic and Fiscal Outlook, which is the right baseline to use at the change of government, but instead used as the Labor baseline Joe Hockey's first budget update, which included the $9 billion he gave to the Reserve Bank and the $1 billion handed back to multinationals. By misrepresenting what Labor would have done, you're then having a debate which is not based on the facts but which is based on pure rhetoric. 

E&OE TRANSCRIPT

RADIO INTERVIEW

RADIO NATIONAL DRIVE

MONDAY, 02 MARCH 2015

SUBJECT/S: Labor’s multinational tax plan.

PATRICIA KARVELAS: Federal Labor today unveiled a policy to shut down legal loopholes allowing some multinational companies to send profits overseas and avoid paying taxes in Australia. But the government says the proposal will cost jobs. Joining me now is Shadow Assistant Treasurer Andrew Leigh; welcome to RN Drive.

SHADOW ASSISTANT TREASURER ANDREW LEIGH: Thanks Patricia, good to be here.

KARVELAS: Can you explain really simply how your proposal works?

LEIGH: Absolutely. Our proposal is aimed at dealing with multinationals not paying their fair share of tax using a particular instrument known as debt shifting. 

KARVELAS: Ok, well obviously on principle no-one would disagree with that, but Joe Hockey and Treasury have said that it will cost jobs. You might say that Joe Hockey has a political motive for saying it, but the Business Council of Australia also says that company tax measures you've proposed have the potential to slow economic growth and diminish competitiveness. How do you prevent that, and how do you answer their concerns?

LEIGH: Patricia, I'm not sure why it ought to cost jobs to say to firms that their debt deductions in Australia can't be bigger than their overall group owes to third parties. It seems like a reasonable rule, and certainly it's a rule that the OECD has recommended in a recent discussion paper. The G20 has talked about debt deductions, and indeed when he gave a $1.1 billion tax break back to multinationals just after coming to office, Joe Hockey promised to put in place a targeted anti-avoidance provision. Of course, he then backflipped on that. We've heard a lot of rhetoric from Joe Hockey but we haven't actually got any meat. We haven't seen any measures that add to the budget bottom line. That's why Labor has taken this very unusual step, in the first half of this parliamentary term, of putting a costed plan on the table.

E&OE TRANSCRIPT

TV INTERVIEW

SKY LUNCHTIME AGENDA

MONDAY, 2 MARCH 2015

SUBJECT/S: Labor’s multinational tax avoidance package.

LAURA JAYES: Today Labor has announced a new package of ideas on countering multinational profit shifting. The Shadow Assistant Treasurer Andrew Leigh joins me now – Andrew, this is something countries right around the world have been grappling with for quite some time, so why is it suddenly so simple?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Laura, it has become more complicated as firms have moved towards virtual production. Three of the five biggest companies in the world are information technology companies and for firms like that, the location of production is less clear than it was in the old agriculture and manufacturing world. So the tax laws need to keep up and when Labor was last in office we put in place a $4 billion package to tackle multinational profit shifting.

JAYES: Yes on that package, what is different from that package to what we're seeing now?

LEIGH: Well there's an element of that package which the Government chose not to proceed with. At the same time as cutting the wages of the cleaners who clean their offices, they gave a billion dollars back to multinationals.

E&OE TRANSCRIPT

ONLINE INTERVIEW

BREAKING POLITICS

MONDAY, 02 MARCH 2015

SUBJECT/S: Leadership, opinion polls, Medicare co-payment, private healthcare costs, troops to Iraq, Intergenerational report, Labor’s multinational tax package, ATO funding.

HAMMER: Andrew Laming is Liberal MP for Bowman in Queensland, Andrew Leigh is the Labor member for Fraser here in the ACT and also importantly today, the Shadow Assistant Treasurer, we'll move onto your portfolio response in a minute. But first, Andrew Laming, I must ask you about leadership, there's a new poll, a good poll for the Government. Does that show that Tony Abbott is rebounding or does it show that voters have already moved on.

ANDREW LAMING, FEDERAL MEMBER FOR BOWMAN: The different positive polls of course, the standard line is the only one that matters is election day, but I can guarantee there will be a fair bit of high-fiving in offices like mine and around the country to see improving polls. It's a positive signal and you'd always rather them going that way than the other way.

HAMMER: So is Tony Abbott completely safe at least until after the budget?

LAMING: I think, anywhere further than 50 metres from this building. I'm sure that within this building we'll still be talking about it all week, that's the nature of Parliament House.

HAMMER: But outside?

LAMING: The bigger issue now is starting to take over. You've got the intergenerational report, and Andrew's announcement makes a valuable contribution today and a whole range of other issues, from country of origin labelling to overseas deployment, need to become the issues for this week.

HAMMER: Ok, Andrew Leigh, is this the best possible result for Labor? Tony Abbott remaining in the job for the foreseeable future?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Chris, whether the polls go up, down or sideways you'll never get me saying anything other than the fact that they're not a particularly useful metric. What I do think though is that Australians, as Andrew said are focused on numbers. Numbers such as the fact that unemployment has gone up and that confidence is going down.

THE HON. BILL SHORTEN

LEADER OF THE OPPOSITION

MEMBER FOR MARIBYRNONG

 

CHRIS BOWEN MP

SHADOW TREASURER

MEMBER FOR MCMAHON

 

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION

MEMBER FOR FRASER

 

BIG MULTINATIONALS TO PAY FAIR SHARE UNDER LABOR

E&OE TRANSCRIPT

PRESS CONFERENCE

CANBERRA

MONDAY, 02 MARCH 2015

SUBJECT/S:  Multinationals to pay fair share under Labor; Liberal Party’s Unfair Budget; Foreign investment changes; Intergenerational Report; Human Rights Commission; Iraq; Polls

BILL SHORTEN, LEADER OF THE OPPOSITION: Good afternoon everybody, I'm here this afternoon with our Shadow Treasurer and Shadow Assistant Treasurer to announce Labor's plan for a level playing field for multinational companies to ensure that they pay their fair share of taxation, just like everyone else has to. The following are the principles which underpin our announcement. How can we ask Australians to work hard and pay tax if the rules aren't fair for multinationals too? How can Australian businesses compete if they pay more tax in Australia than big multinationals?

In the last Budget the Liberal Nationals handed back more than $1 billion to big multinationals, but cut the pensions at the same time. In the last Budget they reopened the door for big multinationals to avoid paying tax in this country, but they put a tax on going to see the doctor. Under the Liberals, some large multinationals pay less, while young Australians will pay more for their university degrees. Last year, one of the world's largest companies paid only $80 million in Australian tax on local revenue of just over $6 billion; this isn't good enough. I believe everyone works hard in this country, seeks to grow their businesses creating national wealth for all. That means all of us have an obligation to pay our fair share of taxation. Our tax system shouldn't get softer the higher it goes. How much tax you pay shouldn't depend upon how much you can afford to pay your tax lawyer and specialist accountants.