Andrew Leigh

After I gave a National Press Club address on egalitarianism, a somewhat aggrieved Maurice Newman responded by throwing his dictionary of quotations at my head. Today's Australian kindly gave me space to respond.

Gap Between Haves and Have Nots Must be Narrowed, The Australian, 21 April 2014

Egalitarianism goes deep in the Australian character. Most of us don’t like tipping, and passengers tend to sit in the front seat of the taxi. There aren’t private areas on our beaches, and audiences rarely stand when the prime minister enters the room. We’re a country that happily dispensed with knighthoods decades ago, and no sensible person would suggest that the land of ‘mate’ should become the kingdom of ‘sir’.

And yet that egalitarian ethos is increasingly under threat from a rise in inequality over the past generation.

In Battlers and Billionaires, I found that since 1975, real wages for the bottom tenth have risen 15 per cent, while wages for the top tenth have risen 59 per cent.

Cumulatively, the increase in inequality over the past three decades represents a $365 billion shift from the bottom 99 per cent to the top 1 per cent.

It’s not just income that has become more unequal. By my estimate, the richest 50 people in Australia have more wealth than the bottom 2 million. The richest 3 people in Australia have more wealth than the bottom 1 million.

Rising inequality is not an inevitable feature of economic growth. Indeed, from the 1920s to the 1970s, Australia became more equal.

In June 2000, The Australian published a week-long series on inequality, with its lead editor arguing that ‘Inequality in Australia today is a serious social issue’. Over the past 14 years, the level of inequality has continued to rise. But ideologues of the right have become more dismissive of the issue. Writing in these pages, Maurice Newman demanded that equality be off the political agenda, because it impedes mobility.

The facts show precisely the opposite. The more unequal the society, the less likely it is that a poor child will make it into the middle class: a relationship that has been described as ‘the Great Gatsby curve’.

Most Australians are worried about inequality. When asked their views about wealth distribution, the vast majority have a preference for a more egalitarian society than we have today.

And yet I am concerned that the Abbott Government’s policies may leave Australia a more unequal country.

The Coalition has announced that it will abolish three payments that are targeted at low-income and middle-income families: the income support bonus, the SchoolKids bonus, and the Low-Income Superannuation Contribution.

The wealthiest Australians benefited disproportionately from the Coalition’s decision last December to abandon 55 tax measures. For example, the Coalition has decided to maintain extremely generous tax concessions to people with more than $2 million in superannuation, despite the fact that these retirees receive more government assistance than someone on the full pension.

As though it wasn’t enough to cut benefits for the most disadvantaged and cut taxes for the most affluent, the Abbott Government has gone one step further, by proposing to transform Australia’s flat-rate paid parental leave scheme into a wage replacement scheme.

The effect of this is that a high-wage family will get $75,000 when they have a child, while a low-wage family will get $16,000. As the Coalition’s policy document last year stated, ‘paid parental leave is an economic driver and should be a workforce entitlement’.

So to the most prosperous: welcome to your new age of entitlement.

Meanwhile, the Coalition’s industrial focus is on making life hard for unions. Making collective bargaining tougher will likely widen the earnings gaps in Australia. One right-wing think-tank advocates abolishing the minimum wage altogether.

A blind faith in trickle-down economics will make it harder for the Coalition to achieve other goals. While the Abbott Government may claim to have a Closing the Gap Indigenous policy, it’ll be harder to achieve if they have a Widen the Gap economic policy.

But a deeper conversation about inequality is vital for my party too.

The gap between the powerful and the powerless has grown. So more than ever, Labor must be the voice of the vulnerable. If we do not speak out for those on the margins of our society, who will?

When Labor is given the chance to govern again, we should assess policy proposals based on how they will affect the gap. With Australian inequality higher than it has been for three-quarters of a century, we must not ignore the distributional consequences of policy.

The past generation has seen great success for the Australian economy. Our nation is more productive and entrepreneurial; more open to ideas, products and people from overseas. Yet at the same time, we have become more unequal.

Too much inequality strains the social fabric, threatening to cleave us one from another. Australia is a stronger nation when we act together than when we pull apart.

Andrew Leigh is the Shadow Assistant Treasurer, and the author of Battlers and Billionaires: The Story of Inequality in Australia (Black Inc, 2013).

ANDREW LEIGH MP
ACTING SHADOW TREASURER
FEDERAL MEMBER FOR FRASER

E&OE TRANSCRIPT
DOORSTOP INTERVIEW
SATURDAY, 19 APRIL 2014
CANBERRA

SUBJECT / S: Tony Abbott breaks yet another promise on pension cuts; Kevin Rudd; Climate Change.

ANDREW LEIGH, ACTING SHADOW TREASURER: Thanks to everybody for coming to sunny Hackett on a Saturday afternoon. I wanted to make a couple of comments about the very clear statement now that the Prime Minister intends breaking his pledge to pensioners. Suggestions now that the government is going to cut into the pension will be a deep blow to Australian pensioners who had a clear promise the day before the election that there would be no cuts to pensions. Ultimately the government has found itself caught between its economic and political strategy. Joe Hockey has manufactured a budget crisis by things such as going soft on multinationals, giving $9 billion to the Reserve Bank. He's doubled the deficit and now the government has found that it can’t both deal with the situation Joe Hockey has created and also manage to keep its pledge to pensioners.  This will be a cruel blow to 2.3 million Australians who rely so heavily on the pension and who expect that they had a Prime Minster who could keep his world. Happy to take questions.

JOURNALIST: You’ve mentioned breaking an election promise, the latest speculation is that any change won’t be part of this four year term and therefore the government will be taking it to the people at the next election. What do you say to that?

LEIGH: The Prime Minister’s promise to the Australian people was not qualified; it was an absolutely clear promise. It was as close as you could get to what the Prime Minister would call prepared, scripted remarks. The Australian people were entitled to think that they could take him at his world and there would indeed be no cuts to pensions.

JOURNALIST: It looks like we’ve got two plans on the table. One is a change in 2029 the other is following Labor’s current rate rise of six months per year which would see the retirement age hit 70 by 2034. Is either one of those a better option?

LEIGH: Labor will be holding Prime Minister Abbott to account; this is after all a Prime Minister who has spent the last three years criss-crossing the country talking about comments that Julia Gillard made the day before the 2010 election. Now Labor is holding him to his word on comments he made the day before the 2013 election. He said no cuts to pensions; we believe he should be held to his word.

JOURNALIST: Do you rule out any bipartisan support for raising the pension age?

LEIGH: Prime Minister Abbott has been very clear that there would be no cuts to pensions and let’s be clear this is a payment of around $20,000 that goes to some of the lowest income Australians. By contrast the Prime Minster wants to give $75,000 to some of the most affluent Australian families when they have a child and wants to give a large tax break back to mining billionaires.

JOURNALIST: Why won’t you cooperate to help the government get the budget back to surplus?

LEIGH: Labor believes that the government should be held to account, to its promises. There was a plan to return to surplus prior to the changes Joe Hockey made which doubled the deficit. If Joe Hockey is going to go soft on multinationals so he can go hard on pensioners and break his word, the Australian people will take a pretty dim view of that.

JOURNALIST: Isn’t it a bit rich that Labor’s saying that this government’s going to break a promise?

LEIGH: Mr Abbott is simply being held to his word –

JOURNALIST: But Labor broke promises in government.

LEIGH: We are holding Mr Abbott to account who said prior to the election that he thought it would be very hard to foresee circumstances in which it would be appropriate for a politician to break their word and he appears to be doing exactly that relating to a payment which goes to the most vulnerable. A payment which is designed to reduce poverty among the elderly now looks likely to be changed in a way that will probably increase poverty among the elderly.

JOURNALIST: The government says that people are living longer and that‘s why a policy like this is needed. Would you encourage them too, if they’re going to push ahead with this, also bring in measures to assist older people to get back into the workforce, to get more hours in the workforce, to decrease age discrimination in the workforce?

LEIGH: This is a core equity issue. We know that for people in white collar jobs it might well be possible to work until 70 but if you’re a bricklayer and we’re asking you to work to age 70 that’s going to be pretty tough on your body. Added to that, that we know low income Australians die six years earlier than high income Australians. This is a policy which really seems to be saying because lawyers are living longer, we should make cleaners work for longer.

JOURNALIST: Would Kevin Rudd make a good Secretary-General to the UN?

LEIGH: I just read these reports like everyone else, and have little to go on. Kevin Rudd I thought did an excellent job as Australian foreign minister.

JOURNALIST: In his autobiography, his biography by Robert Macklin he said that he saw the Prime Ministership of Australia as a stepping stone to the UN General-Secretary job. Did he ever mention anything like that to you?

LEIGH: I’ve never spoke with Kevin Rudd about his desires for international positions.

JOURNALIST: Adam Bandt has described or equated carbon, coal mining as the new asbestos, what have you got to say about that?

LEIGH: I don’t think overblown rhetoric does anyone much good on an important issue like climate change.  What we need is clear headed bipartisanship in order to take the moderate steps that are required in order to decouple economic growth from carbon pollution.

JOURNALIST: Isn’t it a little insensitive from people who are dying from asbestos cancer?

LEIGH: I certainly don’t support intemperate rhetoric from either side of the carbon price debate. Certainly the language used by Prime Minister Abbott describing the science of climate change as ‘absolute crap’ was unhelpful and we need the sensible centre to come together to support a price on carbon, a consensus that we had for the best part of a decade before it was wrecked by Tony Abbott. Thanks everyone.

ENDS

E&OE TRANSCRIPT

PRESS CONFERENCE
CANBERRA
WEDNESDAY, 16 APRIL 2014

SUBJECT/S: ACT Government working with the Australian Charities and Not for Profits Commission to help charities.

FEDERAL ASSISTANT SHADOW TREASURER, ANDREW LEIGH: Thank you everyone for coming along. I’m Andrew Leigh, the Shadow Assistant Treasurer, and I’m here with ACT Treasurer Andrew Barr, Mike Zissler from Lifeline, and Lyn Harwood from Communities@Work. We are here at [Lifeline shopfront] Hipsley Lane to talk about the importance of Canberra charities and the importance of reducing the paper work burden. When Labor was in government we put in place in 2012 the Australian Charities and Not for Profits Commission. One of the aims of that Commission was to reduce reporting duplication that charities face; to allow those charities to spend less time doing paperwork and more time helping the vulnerable. We've now found that as a result of the ACT ceding its reporting requirements to the ACNC, Canberra charities could save $2 million dollars. So, I'm calling on the Abbott Government to back the ACNC, to support Canberra charities and to get out of the way and reduce the paper work on our great Canberra charities. I'll hand over to Andrew [Barr].

ACT TREASURER AND COMMUNITY SERVICE MINISTER, ANDREW BARR: Thanks Andrew. It's very important that this reform process and reduction of red tape for the charities and not for profits sector continue and it's a high priority for the ACT Government. That's why we are one of the first jurisdictions to sign over a lot of reporting responsibility and accountability responsibilities to the ACNC because we saw the considerable benefit, not only for the sector but also for the territory government in being able to part of a nationally recognised and nationally consistent series of arrangements around the regulation of this sector. We all recognise the considerable importance of the sector here in Canberra and around the nation. So, common sense says let's work with the sector to reduce red tape to allow so many organisations to focus their efforts on their core reason for being, not filing reports to different levels of government. So, that's why we so strongly supported the ACNC and why we believe this is the right way forward and why we argue very strongly that other jurisdictions should also sign up and that the Commonwealth should leave this mechanism in place.

COMMUNITUES@WORK CEO, LYNNE HARDWOOD: Certainly from a large community provider perspective, the less paperwork the better. [The ACNC provides] more ability to have one funnelled form of reporting and a greater ability to ensure that we never become at the behest of the different layers of government. So, from our point of view a one-stop shop is the ideal and a one-stop shop that really is as efficient and effective as possible would make our lives easier, and so anything that creates that we certainly support.

LIFELINE CANBERRA CEO, MIKE ZISSLER: I think it's safe to say that for a smaller organisation like Lifeline Canberra reduction of red tape is important but for us also, it's about having transparency. Having a one-stop shop for people to be able to look at charities and make sure that they are spending their money wisely and appropriately. It allows people to look at various charities, how they work. So, we believe that single lodgement, one report that's common, allows us to be compared. For Lifeline Canberra it's absolutely vital that every dollar that's donated to us through the work we do goes straight to our core business. We can demonstrate that through our reporting. We'd like to see that transparency and commonality. We applaud the ACT Government which has worked hard on red tape. There's more they can do. The ACNC still has work to do and we'd like see them continue and refine their offering aswell.

LEIGH: Thanks Mike. Happy to take questions.

REPORTER: At this point, the federal government has said it's going to get rid of the charities commission. When do you think that will go ahead?

LEIGH: I hope it won't go ahead. We've got a survey showing that four out five charities around Australia want to keep the charities commission and we had an open letter signed by more than 40 charities – including World Vision, Lifeline and the RSCPA - all saying that they want to keep the charities commission. So, I hope the Abbott Government sees sense on this. And if they really want to reduce the paperwork burden on charities, to encourage other states and territories to follow the lead of the ACT and not to kill the charities commission and to get out of the way so it can do it's job of reducing the paperwork burden on Australian charities.

REPORTER: At this stage by removing the charities commission, will they be saving much money?

LEIGH: There's little saving in removing the charities commission. The work would then have to go back to the Australian Tax Office and if you ask charities if they want to see that happen, only 6 per cent say they'd like charities regulation to return to the tax office.

JOURNALIST: Does this mean the credibility of charities will be diminished because there is not a one-stop-shop for them?

LEIGH: There is certainly that risk. One of the important roles the ACNC plays, as Mike was highlighting, is that of transparency. Scams by charities are thankfully rare but it's important that people have a complaints body that's overseeing charities just as it's important for corporate investors to have ASIC in place to give them confidence in companies.

JOURNALIST: So if those rare scams happened who would people complaint to if there was no charities commission?

LEIGH: It's quite unclear what would happen in that situation.

JOURNALIST: For you Andrew, the other Andrew, in terms of charities having to work with multiple jurisdictions, does it increase your workload?

BARR: It certainly would, we've gone through a process of wanting to streamline, to cut red tape, to deregulate effectively and to ensure there aren't multiple layers of accountability and requiring organisations just to report in one place. Our reform process has focused also on ensuring that there's consistency in the information that's sought from charities and not-for-profits so that we're not asking different questions and requiring different sets of data. Requiring organisations that operate on limited administration budgets to spend a considerable amount of time filing reports to different levels of government. So the great advantage here was that we could have an appropriate level of regulation and oversight but do it in a streamlined way. So it's a fantastic thing for the sector and also reduce red tape and that is apparently a priority of the Commonwealth government, that they do want to work with states and territories to reduce red tape. A very clear way that they could see this reform agenda through is to maintain the ACNC and in fact to encourage the other states and territories, who haven't signed up, to do so. So that we have a national system that was simpler and more effective by way of regulation. I think that's a good goal to aim for.

JOURNALIST: I might just talk to you, Mike, about the importance of the commission and what your main concerns are.

ZISSLER: I think it's fair to say that the ATO is a very good regulator of tax and we support the ATO in their business. But they're not a great regulator of the charities as a whole. So, while they've had that role for many years, they're the first to admit that they don't regulate charities very well, And again, acknowledging that it’s a small percentage of organisations out there, there are a number of charities whose purposes are not clear where the money is going to. I know most organisations in the ACT are honest and have absolute integrity. We want to see that money go all the way through. Without something like the ACNC that gets lost in the taxation law, that's understandable, their job is taxing.

JOURNALIST: Does this mean that less money will go to what it was raised for?

ZISSLER: Absolutely, I mean we all have an administrative burden, whether it be a small organisation or a large organisation. Currently my organisation would write four or five reports that fundamentally provide the same information but in different ways. So my finance manager will still have to prepare five separate financial accounting reports. That's five times the effort. Now, it's not a huge amount of money, but it's things she could be doing with her time elsewhere. So yes, it does cost me money. There's no doubt.

JOURNALIST: Anything else you'd like to add?

ZISSLER: I think that is all, thank you.

LEIGH: Thanks very much for coming along today, I think what is highlights is that the $2 million additional burden the Abbott Government would impose if it were to scrap the ACNC would come out of the pockets of the most vulnerable Canberrans and I think that would be a terrible shame. Could I also thank Chenoeh Miller and Matt Heffernan from Lifeline for hosting us today. I really appreciate your hospitality.

Thanks everyone.

ENDS

This morning I held a press event with ACT Treasurer, Andrew Barr, and leaders in the community sector - Lifeline Canberra CEO, Mike Zissler, and Lynne Harwood who heads Communities@Work -  to advocate to keep the charities commission and grow the benefits to charities. It's great news and proof of the potential of the ACNC that the Territory Government is ceding many of its charity reporting requirements to the ACNC in the interests of streamlining reporting and reducing costs for charities. Other states are urged to follow the ACT's lead.

ANDREW LEIGH MP, SHADOW ASSISTANT TREASURER

ANDREW BARR MLA, ACT TREASURER, COMMUNITY SERVICES MINISTER





MEDIA RELEASE

ACNC reduces costs for charities across for the Australian Capital Territory

The ACT Government is cutting red tape to save up to $2 million a year for local charities by working with the first national independent charity regulator, the Australian Charities and Not for Profits Commission (ACNC).

But ACT Treasurer and Community Services Minister Andrew Barr said that can only continue if the Commonwealth Government listens to the pleas of the charitable sector and keeps the ACNC.

“If the Commonwealth commits to keeping the ACNC, the ACT Government will legislate so that charities and other incorporated associations do not need to duplicate reporting made to the ACNC,” Minister Barr said.

“This ‘report once, use many’ principle will reduce the regulatory burden on charities.”

“Only a national regulator can provide a one-stop shop and reduce reporting duplication for charities that work and fundraise across states and territories.”

“It is impossible for one level of government by itself to reap the full savings benefit that co-operation with the ACNC promised. By working together, both regulatory red-tape and funding agency red-tape can be reduced for the sector.’

Federal Shadow Assistant Treasurer, Dr Andrew Leigh, who has portfolio responsibility for the ACNC, again called on the Abbott government to reverse its decision to abolish the regulator.

“The ACT Government’s cooperation with the ACNC demonstrates how the reporting burden can be reduced for Canberra charities – allowing them to spend more time building community and helping the vulnerable.”

“I hope it causes the Abbott Government to rethink its plan to scrap the ACNC. If the Coalition truly wants to make life easier for charities, they should encourage other states and territories to follow the ACT’s lead.”

“We know that the ACNC is enormously popular, with four out of five charities supporting it. An open letter of support was recently signed by over 40 charities, including World Vision, Lifeline, the Hillsong Church and ACOSS.”

Minister Barr and Dr Leigh joined staff today at the Braddon shopfront of Lifeline Canberra, a charity offering telephone counselling to the people of Canberra and the surrounding region.

The Senate has referred the Abbott Government’s ACNC Repeal Bill (No.1) to the Senate Economics Legislation Committee for an inquiry which will report in June.

Charities and not for profit organisations are invited to make submissions before 2 May 2014.

For submission details, see http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics

Wednesday, 16 April 2014

In my usual media spot on Mondays with the Liberal's Andrew Laming and Breaking Politics host, Chris Hammer, topics up for debate were the spectre of raising the pension age to 70 and flagged federal budget cuts to the CSIRO. Here's the full transcript:

E&OE TRANSCRIPT

TELEVISION INTERVIEW
BREAKING POLITICS - FAIRFAX MEDIA
MONDAY, 14 APRIL 2014
SUBJECT/S: Joe Hockey’s budget and cuts; Age Pension, CSIRO, the ABC and SBS; Superannuation and inequality; Unfair PPL Scheme, Trade and Foreign investment

CHRIS HAMMER: Well the budget is now less than a month away and Treasurer, Joe Hockey, is talking tough. His given the clearest signal yet that he intends to raise the pension age to 70, but perhaps not in this term of government. Joining me to discuss that and other matters, budgetary and otherwise, I'm joined by Andrew Leigh, the Federal Labor member for Fraser here in the ACT, and Andrew Laming, the Liberal member for Bowman in Queensland. Good morning. Andrew Laming, let me start with you. Should the pension age be raised to 70?

ANDREW LAMING: Well, obviously the pension age is already changing from 65 to 67 over the next decade and Andrew Leigh has long made that very important point that with longevity in Australia that period between retirement and expected length of life only continues to increase. So this is a debate that brave politicians will continue to have. I think that the pace at which it's increasing, a couple of years per decade, is thoroughly reasonable and of course we've also got the life expectancy figures to back those calculations.

HAMMER: Whatever the merits of the policy though, this isn't going to be a quick fix for the budget, is it, because we're looking at so many years into the future?

LAMING: That's correct. So, already these increases through to 2023 are continuing at a trajectory on from that date, obviously only helps the budget in the 2020s. It doesn't help the budget right now.

HAMMER: Andrew Leigh, raising the pension to 70, is it a good idea, an inevitable idea?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well it was an idea ruled out Chris the day before the election by the Prime Minister who said 'no changes to pensions'.

HAMMER: But I think he was referring to this term of government. If he goes to the next election saying ‘this is what we intend to do’, well that would be fine, wouldn't it?

LEIGH: He certainly didn't make that clear in his unequivocal statement the day before the election Chris. But the impact of this is that a scheme which was set up to avoid poverty among the elderly is now looking at being changed in a way that would increase poverty among the elderly. Andrew is right when he says that average life expectancy is rising but the other fact to bear in mind is that workers in manual jobs like check-out operators and cleaners find it tough to work till 70 and workers in those occupations will die on average six years younger than the most affluent Australians. So on life expectancy, there's a big gap between most and least affluent and I'm really scared about what this broken promise will do to the most vulnerable Australians.

HAMMER: Andrew Laming, isn't that a good point? I mean both you gentlemen, will be able to, if you wish, to retire well before you're 70 because you had access to a good parliamentary pension scheme. I can do the same. I'm a professional. I’ll have access to superannuation. Isn't there a basic inequality here that it's a poor manual worker with a bad back who's forced to work till his 70?

LAMING: That demographic remains the challenge. Andrew Leigh is quite right that lumberjacks, fishmongers and people who work on checkouts may well have a different life-expectancy, but they always have. The whole point is that everyone is living longer including those cohorts and we have to have this discussion and we certainly don’t want to end up like parts of southern Europe where people in their mid-fifties are going onto state-sponsored pensions for life. We need to be moving with the times, moving with life expectancy, but that doesn't mean I support sudden and short notice changes now. It's all about planning for the future and the population knowing exactly when the pension ages do change at least a decade in advance.

HAMMER: Andrew Leigh, if it's going to be more restrictive for manual workers, people who rely on the pension, should a government Labor or Coalition, also look at pulling back some of the generous concessions that are given to wealthier superannuation dependents?

LEIGH: We certainly thought so when we were in government Chris. We put in place a fairly modest measure targeted at people with super balances over $2 million. They're people who get government assistance in the form of a tax break bigger than the aged pension. And we said we thought they should pay a slightly higher rate of tax. That's one of the measures that Joe Hockey scrapped upon coming to office, one of the 55 measures that he scrapped. And as best I can tell, the scrapping of all those measures all benefited the most affluent more than the most disadvantaged. Joe Hockey has doubled the deficit since he has come into office, adding $68 billion to the four-year deficit and now he's saying that he wants to break a promise on pensioners so that they should feel the budget pain. That doesn't strike me as fair or reasonable Chris.

HAMMER: Andrew Laming, in the run up to the election, in the week or two before the election, the Prime Minister repeatedly made a series of promises; they'd be no cuts to education, no cuts to health, no changes to pensions and no changes to the GST, no cuts to the ABC or SBS. Is it more important to keep those election promises or is it more important to address the problems with the budget?

LAMING: Well certainly Australian's are learning that if there is one person who is going to keep their election promises, it's Tony Abbott. So those commitments were indeed made, but that doesn't mean pre-budget that all sorts of speculation about every sector of the economy having to tighten its belt. I don't think anybody should be immune from thinking that the excesses we saw under Labor come at a price. They come at a price that has to be brokered and solved by their successors, and that’s the LNP coalition government. So of course there are tough decisions and all you can ask, I think, if you're treasurer is that the pain is evenly and fairly distributed and that's the discussion we are having at the moment. There are pre-election commitments, and after that I think it’s absolutely appropriate that every authority, every department, every service is looking for ways to deliver their services or products as efficiently as possible. We've been hearing from the ABC, we've been hearing from CSIRO, that's all the standard pre-budget speculation. In the end Joe Hockey has a very tough job to do and it's not Joe Hockey's fault. It was our predecessor government that put us in this situation in the first place.

HAMMER: Well you say, that if anyone's going to keep their election promise it's Tony Abbott. So you can guarantee no cuts to the ABC or SBS?

LAMING: Well we certainly made those commitments before the election and we'll just have to see what comes out in the budget. But I think it's absolutely appropriate. I’ve said this before, if you're a pensioner, if you're a health care card holder, if you sense that you think you are under threat during the budget it is utterly appropriate that Australian's all over the country speak about the services that they really care about they don't want touched. That’s part of democracy and I encourage it between now and early May.

LEIGH: Let's not pretend that Mr Abbott hasn't already broken promises Chris. He's broken his promise on delivering the NBN. He's broken his promise that no public servants would lose their jobs involuntarily. He's broken his promise that no one would made worse off with this superannuation changes by raising super taxes on the lower paid. And now we're looking at further broken promises. We've already seen the literal decimation of CSIRO. People would complain to the minister - if we had a science minister. And, now it looks as though there's going to be cuts to the ABC, SBS, and elderly Australians, perhaps throwing them back into poverty. All so we can pay for a $75,000 parental leave scheme for millionaires. This is a very strange set of priorities.

HAMMER: Okay, well let me ask you this question. If the budget needs repairing, where would you make spending cuts? I know you'll nominate the PPL scheme, because you've done that the past several weeks. We'll accept that as a given. Where else would you target for spending cuts?

LEIGH: Well, the Prime Minister has of course ruled out getting rid of his gold-plated, diamond-encrusted parental leave scheme, even though the Commission of Audit says he should throw it out the window. You'd look at some of those 55 tax measures Chris that the Coalition threw out the window when they came into office. They were measures like making sure that multinationals pay their fair share of tax. We know that there's an instrument that allows multinationals to shift debt overseas, costing the taxpayer about three-quarters of a billion dollars. If the Coalition hadn't left that loophole open then we'd be able to build a new hospital in Australia. We know that making superannuation taxes fairer; seeing a fairer rate of tax on people with super balances over $2 million would be a way of making sure that all Australians contributed. But that's one that the Government has ruled out. They want all the pain to fall on the lowest income Australians but all the gains are coming to the most affluent Australians through things like scrapping the mining tax and putting in place paid parental leave.

HAMMER: Andrew Laming, the Prime Minister spent last week in North-East Asia, by all accounts a very successful trip lining up new trade deals with those three countries in north east Asia; a big push to gain access for Australian agricultural produce. Does it make sense to be cutting back CSIRO Australia's premier agricultural resource institution at a time when we are trying to boost our exports to North-East Asia?

LAMING: Well, I think the big picture here is how do we boost our agricultural exports most effectively and that's certainly by embarking on these successful bilateral agreements that we've seen in the pipeline for six or eight years. I certainly saw very little progress under the former Labor Government then along comes Tony Abbott. I don’t think he's lucky. I think you've seen a change in the approach to these agreements with more to come that's going make far more, far more difference to our total exports to these larger economies than some of these other issues that you're raising. At the moment though we have a really important sale job to regional Australia. They need to be convinced of the benefits of these arrangements and I think we've seen reflected this week very, very positive and glowing reports of the trip itself. But I don’t underestimate the task we’ll have convincing regional Australia that these trade agreements are beneficial overall. As always, there is something in it for both sides we need to convince Australians and regional Australians in particular that we are going to be $40 billion better off over the next two decades with these agreements.

HAMMER: The question was: does it make sense to cut the CSIRO at this time?

LAMING: Well, the CSIRO like every other agency needs to be looking at its health, its energy, its environment, its IT, its divisions, and ask how it can operate more effectively. In the end it's one of the few areas of research in this country that isn't open to competition and to a merit-based grants process. So we have to be astutely aware of that and make sure that CSIRO is absolutely precise in its research priorities. So if CSIRO is doing that internally with its board of 10 I'd be delighted that there doing that, and responding because the last thing we want is CSIRO operating in isolation to the rest of our research agenda funded through ARC and MHARC. It's a good thing they're considering it and it's a good thing they're planning for it. I mean what actually happens is a matter for Joe Hockey at the budget.

HAMMER: Andrew Leigh?

LEIGH: Andrew Laming, like me, is a great fan of science research and I think we have to remember that CSIRO is the organisation that brought us wi-fi. They’re a great Australian institution but they've lost more than 1 in 10, literally decimated and now they are looking at a one-fifth cut in their budget, in the upcoming budget I'm really concerned about that impact that has on Australia's long-term prosperity Chris, which I think will ultimately flow from investment in skills and infrastructure. You don't cut your way to prosperity.

HAMMER: Okay, now we mentioned the trade deals with north east Asia. Are you comfortable if Chinese state-owned enterprises are governed by the same investment rules as private enterprise companies from China and indeed from other free trade partners like Japan and the United States?

LEIGH: I think our current Foreign Investment Review Board guidelines are appropriate which scrutinise the first dollar of foreign investment. When he was Opposition Leader Mr Abbott went further than that. He was against nationalisation and so he said he was therefore strongly opposed to foreign nationalised entities owning Australian business. This is a complete backflip from that position, suggesting that actually China's state owned enterprises should have a better deal in foreign investment scrutiny. As one commentator mentioned on the weekend of Mr Abbott's free trade deals, anyone can sell their house tomorrow if they don't care what the price is and who they sell it to. We need to make sure that Australia is getting the best deal in its free trade arrangements, rather than just signing on the bottom line in order to get the photo opportunity.

HAMMER: Andrew Lamming, are you concerned on relaxing foreign investment rules for Chinese state owned enterprises because I know a lot of your Coalition colleagues are.

LAMING: I don’t have any concerns with state owned enterprises approaching Australia as long as it runs through the foreign investment review. I'm very confident that the review process is effective. I don’t want to see any foreign capital refused by Australia, so long as it is fairly assessed. We have 2.5% of the world’s capital, I don't want to be saying ‘no’ to the other 97%. I know that some state owned entities operate in a highly commercialised environment already. I’m only concerned if that state ownership can confer some unfair advantage to it, or if it is accessing something of significant national security interest. That is what FIRB is there for, they can do that job and I need to convince some of my regional colleagues of that. In the end if an Australian citizen or entity wants to put their property on the market, they don't deserve to be told that the only buyer in town is the one they cannot sell to, unless there is a very good reason of national significance.

HAMMER: You say you are happy as long as it goes through the third process. But that's the issue that the Government is considering, relaxing those restrictions so the Chinese state-owned enterprises may be able to invest perhaps up to a billion dollars without going through the third process provided they are not buying agricultural land.

LAMING: That’s right. There are two thresholds. There is the threshold which you can invest without going to FIRB, but I’m happy so long as significant acquisitions run through that investment review process and I’m very, very open minded to any international entity that wishes to put in a bid to purchase an Australian company for instance or a pastoral lease, to do that. I'm open minded to it and I think the rest of Australia should be as well.

HAMMER: Andrew Leigh, there is a limit for agricultural land purchases which is a concern for people in the bush. But that aside, are you quite happy for state owned enterprises to essentially be on an equal playing field with other enterprises?

LEIGH: Chris, I think the government has to make a pretty strong case for changing the rules, particularly as they went to he election saying they were going to tighten the rules in the opposite direction. I mean Mr Abbott has gone from attacking Chinese state enterprises in his 2012 trip to saying they should get better status than they have now in his 2014 trip. I love Andrew Laming's confidence that our Prime Minister is a man who never breaks a promise, but really the facts seem to say otherwise.

HAMMER: Ok gentleman, thanks for joining us this morning.

LEIGH: Thanks Chris. Thanks Andrew.

LAMING: Thanks Chris.

ENDS

I joined Steve Price on 2GB to discuss how Joe Hockey has doubled the deficit, by scrapping sensible tax measures - and why it would be unjust for Prime Minister Abbott to break his promise to pensioners. Here's a podcast.

I joined presenter Helen Dalley on Sky News to discuss the fact that the Abbott Government has doubled the deficit since coming to office, and now looks set to breach its pension promise.

I appeared on Network Ten's breakfast show, Wake Up, this morning to discuss Joe Hockey's anticipated budget attack on pensions. Here's the transcript:

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION

MEMBER FOR FRASER


E&OE TRANSCRIPT

TELEVISION INTERVIEW

WAKE UP – NETWORK TEN
MONDAY, 14 APRIL 2014

SUBJECT/S: Age pension and the budget; Tony Abbott’s paid parental leave scheme; and CSIRO cuts.

NATARSHA BELLING: To talk more, we are joined this morning by Shadow Assistant Treasurer, Andrew Leigh. Good morning Andrew, thanks for joining us this morning.

ANDREW LEIGH: Morning, Tarsh.

BELLING: Now, in regards to Mr Hockey's statement he claims that his generation will have to work longer because there will be serious future budgetary stresses from an ageing population. So is this something the Government needs to do?

LEIGH: Well Tarsh, the Government has said very clearly before the election there would be no cuts to pensions, so this would be a breach of that promise, and I think a very unfair one. We established the pension over a hundred years ago to deal with poverty among seniors, and to address it now in a way that increases poverty among seniors doesn't seem smart or fair.

JAMES MATHISON: You talk about smart and fair but the reality is that the population is ageing. What are you guys proposing that would be an appropriate age or an appropriate way to combat the fact that our population is getting older?

LEIGH: We did two big things in government James. We raised the pension by the largest amount since its introduction, then we phased in a rise from 65 to 67 and that will be phased in between 2017 and 2023. To go as far as 70, as your vox pop illustrated, there's a bunch of people whose bodies really struggle to get them to 70 in jobs like cleaning and check out operators. But on top of that, we know that low income Australians die about six years earlier than high income Australians, so they'll enjoy the pension for fewer years.

MATHISON: Now the PM still seems pretty committed to his paid parental leave scheme. Is this a case of robbing Peter to pay Paul? Is there a disparity at play here?

LEIGH: Certainly looks like it. I mean you put aside the broken promise and you look at cutting into a scheme that pays $20,000 a dollars a year in order to fund a scheme that gives $75,000 to the most affluent families to have a child. That strikes me as pretty unfair. In an Australia where we're told we'll all have to tighten our belts, should we really start by having a go at the pensioners first?

BELLING: Andrew, Mr Hockey has warned that times are certainly tough and this upcoming budget will be tough. What other hits do you anticipate?

LEIGH: It's pretty unclear which promises he is going to break Tarsh. But I think we can say some of them will be on the chopping board. We are seeing risks to health and to education. We're certainly seeing big cuts in our intellectual capacity: CSIRO has been literally decimated, losing 1 in 10 workers. That's coming from a Government that doesn't have a science minister so there's no one they can complain to. We don't know where their cuts are going to come but it does worry us that this Commission of Audit report is being kept secret rather than being put out in the open so we can have a transparent and honest conversation about it.

MATHISON: Andrew, thanks for your time this morning, and as we saw by the people we chatted to in the street, it might be a bit of a hard sell for the Government, this plan. But I appreciate your time.

LEIGH: Pleasure, thanks.

This morning I spoke to Marius Benson about what Treasurer Joe Hockey has signalled; a further increase in the pension age and more means testing of welfare.

TRANSCRIPT

INTERVIEW, ABC NEWSRADIO

FRIDAY, 11 APRIL 2014



SUBJECT/S: Tony Abbott’s broken promise on the Age Pension; Free trade agreements; Unemployment; WA Senate; Australian Labor Party.

MARIUS BENSON, PRESENTER: Andrew Leigh, good morning.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Morning Marius.

BENSON: The economic outlook, certainly the employment outlook, did brighten noticeably yesterday.

LEIGH: Marius, there's two ways of bringing down the unemployment rate. You can either have a whole lot of people find jobs or you can have a whole lot of people cease looking for jobs. Economists call the latter the ‘discouraged worker effect’ and given that the participation rate went down yesterday I think what we're seeing is mostly people giving up unfortunately, rather than people moving from unemployment into employment.

BENSON: The unemployment figures are more complex than they look on the surface, but it did seem to cheer, at least, the Australian dollar. But everything connects, the dollar rose yesterday that makes life harder for our exporters who were thinking life might get easier as the result of a couple of free trade agreements over the past week or so. How important do you think those free trade agreements are when you look at the dollar going up a couple of cents?

LEIGH: A multilateral free trade agreement always beats a bilateral free trade agreement, so we're in the world of the second-best once we're striking country-to-country deals. This one seems to have attracted an unusual amount of criticism from agricultural groups: the National Farmer's Federation saying that it falls short of the mark, cane growers saying that it's a kick in the guts, Cattle Council disappointed, the Australia Pork Limited describing it as ‘a missed opportunity’. So that's a surprising amount of critique from the agricultural sector about a deal which is principally on agriculture for Australian exporters.

BENSON: Well the Prime Minister has been leading that trade drive in Asia and across in Washington, Joe Hockey, has been meeting and economic leaders. He's going to be chairing the G20 finance ministers' meeting over the weekend. He's spent a bit of time talking about issues that are very relevant to the budget coming down next month; he described welfare as a safety net not a cargo net. He pointed specifically at the pension; he says the increase in the cost of pensions just over the next decade will be 70 per cent. The implication obviously is – tough times, time to take tough measures. Do you believe in general terms that's the right approach?

LEIGH: Well, Joe Hockey didn’t tell his audience that since he's come to office he's increased the budget deficit by $68 billion, effectively doubling the deficit. At the same time he's introducing a scheme he’s described as an entitlement scheme, that will give five times as much to an affluent parent to have a child as the lowest income parent. So in that environment it seems pretty rough to me to cut into a scheme in the pension that was set-up to deal with elderly poverty in a way that will make it have less impact on our elderly poverty.

BENSON: Even allowing for those criticisms you just made do you believe that tightening the focus so that the pension is directed at the most needy and that presumably means a 'means' test in particular, is appropriate? Or a greater a greater 'means' test?

LEIGH: I think the proposal that is most likely to come out, Marius, is raising the pension age. That worries me for two reasons: first of all, because people in manual jobs find it harder to work until older ages. It’s pretty tough to ask a cleaner to work from ages 67 to 70. The second is that we know lower income Australian's tend to die younger. If you're in the bottom fifth of the population you die six years younger than if you're in the top fifth. That's a really cruel blow on low-income Australians to raise the pension age. At the same time when the governments just gone back on Labor's modest proposals to have fairer superannuation for people with account balances over $2 million. It's an odd set of priorities.

BENSON: Although Labor was the party that raised the pension age to age 67, although that only kicks in, in what, 2023?

LEIGH: We did, but I think there comes a certain point at which you've got to ask, is this the best way to find savings? The government’s decision to reverse our superannuation changes meant that they’re allowing tax concessions which exceed the size of the full rate pension for people with account balances over $2 million. That doesn't strike me as fair to say to a cleaner that they have to work to 70, while you're telling somebody who is getting a tax concession of twenty thousand dollars - maybe half a million in some cases - that they’re not going to do anything to rein that in.

BENSON: Just quickly Andrew Leigh, Labor did abysmally in WA six days ago in the senate election getting only one vote in five. Now the one Labor Senator who was successful, Joe Bullock, one union who backed him has called for him to stand aside. Do you think something has to be done there?

LEIGH: Joe and I come from different traditions in the Labor Party. The tradition that he comes from is one which has historically been represented in the parliament and I think we are stronger for being a diverse party. I really very much hope that Louise Pratt gets back. The Western Australian Senate result has not changed my fundamental view, which I've expressed before, that Labor ought to choose our senators based on a membership vote. I think in general if you're on the progressive side of politics, you ought to take the view that a large numbers of people make better decisions than small numbers of people.

BENSON: Andrew Leigh, thank you very much.

LEIGH: Thank you, Marius.

ENDS