Andrew Leigh

The Abbott Government confirmed today that it is closing the Australian Valuation Office in June. I have responded with a media release highlighting that this is a Government continually chipping away at the public service, outsourcing public services without concern for the implications for jobs, especially in regional Australia.

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

ACTING SHADOW FINANCE MINISTER

MEMBER FOR FRASER

MEDIA RELEASE

MORE JOBS LOST AS ABBOTT GOVERNMENT KILLS PUBLIC VALUATION OFFICE

The Abbott Government’s decision to axe the Australian Valuation Office jeopardises the jobs and livelihoods of almost 200 people across Canberra, Sydney, and Melbourne and in remote and regional cities.

The decision smacks of an ideological preoccupation with cutting government services without regard to their effectiveness.

The 104 year-old AVO, located in the Australian Taxation Office, has been doing an effective job. While the government refers to a projected loss in the future, it fails to point out that the AVO has consistently run a profit.

At the same time that the Minister for Social Services has announced a review of welfare spending, the Government is axing the office that conducts compliance valuations for Centrelink.

The AVO’s team of professionals provide valuation, assessment, risk management and independent advice regarding property and other assets. If the government does not know what its assets are worth, it risks making bad decisions in everything from defence to social security.

Tony Abbott gave no indication of this when in Opposition. The government has not consulted with staff before making this decision.

If there is a compelling case to axe the AVO, the government needs to make it. Scrapping a century-old institution deserves a proper report, not just a short press release from the Parliamentary Secretary to the Treasurer.

The Coalition said that they wanted more services delivered in regional Australia, but all they have done is cut jobs.

The decision comes off the back of revelations this week that the ATO plans to close regional tax compliance offices across four states.

Why is the Coalition axing jobs at a time of rising joblessness and insecurity? Is this a preview of the savage cuts to come with the Commission of Audit?

Friday, 24 January 2014

Today I issued a media release about  internal Tax Office discussions regarding the potential closure of regional office across four states. I raise doubts about the Coalition's commitment to regional jobs.

Shadow Assistant Treasurer

Media Release

WRITING APPEARS TO BE ON THE WALL FOR CLOSURE OF REGIONAL ATO CENTRES

Pressure is on the Abbott Government to explain if it's committed to regional Australia after reports that the Australian Tax Office is likely to quit 10 regional sites across Queensland, New South Wales, Victoria and Tasmania.

The ATO has flagged that it’s looking to close offices in Toowoomba, Rockhampton, Mackay,  Cairns, Port Macquarie, Grafton, Orange, Sale, Bendigo, and Launceston.

The regional centres have been run down for some years making the ATO’s decision appear a fait accompli.

Eighty staff and countless small businesses will be affected by this decision.

It’s a blow for regional communities and those families with ATO workers who face being forced to uproot and move to bigger centres or be sacked. This is no way to acknowledge hard-working regional teams.

The Acting Prime Minister Warren Truss claims to have a passion for regional Australia.  But what is the National Party getting out of the Coalition partnership if it can’t defend and keep regional services and regional jobs?

The ATO is a national organisation with national responsibilities. Does the Coalition value the ATO regional network or not?

The ATO’s Bunderberg office shut its doors earlier this month. It sets a bad trend for regional Australia amid increasing insecurity in the public service under Tony Abbott.

ENDS

Today I issued a media release urging the Government to exercise caution as the ATO advances its plans to allow large firms to use their own accountants to sign off on their tax bills.

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

ACTING SHADOW FINANCE MINISTER

MEDIA RELEASE

BIG BUSINESS LOOKING AFTER THEIR OWN TAX LIKE PUTTING A FOX IN CHARGE OF THE HEN HOUSE



“The Australian Taxation Office’s plans to allow corporate auditors, paid by large companies, to conduct assurance reviews on the ATO’s behalf is concerning,” said Shadow Assistant Treasurer, Andrew Leigh.

“Putting big business in charge of their own affairs creates a conflict of interest.

“It appears the ATO is being forced down this path by the Abbott Government cutting public service jobs.

“Why should families have their tax audited by the ATO but big business are given the option of using their own accountants to sign off on their tax bills.”

“This is likely to result in less tax revenue being collected,” Dr Leigh said.

“That means Australian families will need to pay more to make up the difference.”

“The Government needs to explain why the ATO is looking to allow companies to decide how much tax they pay.

“Secrecy and backscratching are becoming hallmarks of this Government. This follows the Assistant Treasurer’s comments that the Government may not go ahead with Labor’s reform to publish the amount of tax paid by Australia’s biggest 200 public companies.

“Australians appreciate that Tax Office staff assess individual and company tax compliance with no personal or special interest in the outcome. The ATO is valued for its independence and should be properly resourced.

“In December the ATO met with major private accounting firms and law firms to develop the pilot, in a sign that it’s keen to get the scheme going as soon as possible.

“But I urge the Government to exercise caution and to weigh up the public interest,” Dr Leigh added.



THURSDAY, 16 JANUARY 2014

Today The Guardian published my opinion piece on reform Labor is proud of that defines and broadens the meaning of charity and charitable purpose.

The Abbott government shouldn't drag charity back to the 17th century

This year the Charities Act, championed by federal Labor, will modernise our country's definition of charity. Social services minister Kevin Andrews' efforts to halt it should be scrutinised

The Abbott government has so far been in the business of looking in the rear view mirror rather than ahead. On everything from the national school curriculum to mining taxation and emissions trading, this is a government which is busy undoing, rather than doing. Another reform the Coalition has recently tried to sneakily unpick is Labor’s reforms to bring Australian charities law into the modern age.

People have always grappled with the meaning of charity and the practice of it. The concept – taken from the Latin and Greek to mean "unlimited loving-kindness to all others" - was linked to hope and faith by the Apostle Paul in the first century; it is also one of the five pillars of Islam. Philosophers and the laity have long tussled with what it means to be charitable; a common image of the practice of charity is of grey soup kitchens in the Dickensian era offering emergency relief for those beaten by hunger. But that image is now dated.

Australian governments have also had to grapple with the meaning of charity, because generous tax concessions are applied to organisations deemed to do charitable work. To decide which ones are eligible, governments in the past have relied on 400 years of case law to define a charity. It has resulted in confusion and costly court cases aimed at getting clarity about the meaning of modern-day charity and charitable purpose.

From the start of this year the Charities Act, championed by federal Labor, came into effect to change all that. It sets out in statute, a historic and uniform definition of "charity" to avoid the ambiguity of the past and to recognise the diversity and vibrancy of a sector that employs more than a million people. It is a sensible development, and the result of years of genuine consultation. Governments, regulators and the broader community will find it easier to define when a charity is a charity and when it is not. The Charities Act clarifies that to be a recognised as a charity, an organisation must be not-for-profit, have only charitable purposes that are for the public benefit, not have a disqualifying purpose and not be an individual, a political party or a government agency.

Modern Australian charities see the need and the cause, and so seek to build capacity and change systems that create disadvantage. The Act restates the existing (judge-made) law in plain English and also recognises charitable purposes such as the protection of human rights, the promotion of reconciliation and tolerance, and by recognising that many modern charities advance causes by preventing, educating, researching and raising awareness. In consultations, many charitable organisations have welcomed the Act’s broad support of advocacy.

Organisations that promote philanthropy say the reform will generate a new era of strong growth for charitable giving in Australia. The money foundations spend on legal advice to work out what they can legitimately fund can now be better spent on organisations doing good and lasting work, including action for the environment and human rights.

The reform also resolves a number of anomalies which stymied particular charities. For instance, the definition of disaster relief has been expanded to enable charities to go beyond the relief of individual distress after a disaster, by including rebuilding, repairing or securing not-for-profit community assets after a disaster. The legislation retains the flexibility inherent in the common law that enables the courts, as well as parliament, to continue to develop and extend the definition to other charitable purposes judged beneficial to Australians over time.

Disappointingly, last year social services minister Kevin Andrews hurriedly sought, without consultation, to delay the introduction of the Charities Act until September 2014, stealthily inserting an amendment to an omnibus bill that would have scuttled the change were it not for the Opposition and minor parties in the Senate.

The sector fought hard for the Charities Bill 2013 and was conceivably alarmed that Andrews sought to delay the new definition and keep charities stuck in the 17th century. During a committee hearing late last year World Vision Australia CEO and Community Council of Australia chair Tim Costello gave evidence that the sector was very surprised by the government’s attempt to take Australian charities back four centuries. “This new definition is extraordinarily important for all of us. With the consultations and over 200 submissions made, I have not heard of anyone in the sector who was troubled by this definition,” Costello said.

And yet the reform is not out of trouble. Andrews may well seek to again scrap or amend the charity definition when the new Senate is in place after 1 July 2014. Perhaps this shouldn’t surprise us, given his determination to abolish many Australian charities amid a raft of repeals (environment advocacy charities especially appear to be in his sights).

We hope the government does not take us back to Howard-era gag clauses. Andrews appears deaf to the sector’s aspirations and hopes of making a difference with a regulatory framework that supports them.

http://www.theguardian.com/commentisfree/2014/jan/14/the-abbott-government-shouldnt-drag-charity-back-to-the-17th-century

I was delighted to appear today on Artsound Canberra (92.7 FM), to spend half an hour talking with presenter Jim Mooney about the role of classical music in a well-balanced life. Jim invited me to choose a few of my favourite tracks, so here's what I opted for:

1. Shostakovich’s 10^th Symphony (Allegro) - his great musical denunciation of the craziness of Stalin's era


2. Leoncavallo, Pagliacci, ‘Vesti la guibba’ - I chose the 1902 Caruso recording, which is scratchy, but magnificent nonetheless


3. Wagner, Tannhauser, ‘Wie Todesahnung’ - I used to take singing lessons for fun, and this is one I enjoyed singing


4. Carl Vine, 5^th Symphony, Part II (Tarantella) - a slightly crazed movement from the unique Australian composer

Here's a photo afterwards, with ArtSound general manager Chris Deacon (on the left) and Jim Mooney (on the right).

This month over a million Australian families will receive Labor's SchoolKids Bonus which helps low and middle income families meet the costs of school expenses. The payment will cease if the Abbott Government gets its way. Today, I issued a joint media release about this with my Federal ACT colleagues.

MEDIA RELEASE

SCHOOLKIDS BONUS COULD BE THE LAST FOR 12,800 FAMILIES IN THE ACT





If the Abbott Government gets its way, more than a million families will find it much more difficult to pay for school books and uniforms from next year.

This January, 1.3 million Australian families will be receiving the SchoolKids Bonus, a payment of $410 for every primary school child and $820 for every secondary school child.

The payment, developed by Labor when it was in Government, is made at the start of Terms One and Three to help cover the cost of items such as stationery, textbooks, software, laptops, bags, uniforms and shoes.

The SchoolKids Bonus also can help cover the cost of school camps, excursions and extracurricular activities such as music lessons.

However, the Abbott Government has introduced legislation to scrap the SchoolKids Bonus, which will affect 12,812 families in the ACT.

If this legislation passes the Senate, the January SchoolKids Bonus payment will be their last.

Federal Labor representatives in the ACT, Andrew Leigh, Gai Brodtmann and Kate Lundy say that since 2012 the SchoolKids Bonus has delivered much needed relief for low and middle income families struggling to meet the costs of their kids’ education.

Every one of these families will be worse off when the SchoolKids Bonus is scrapped.

The Coalition promised to increase employment and cut living costs. Instead, Canberrans are seeing employment cuts and increases in living costs.

The average family with two kids will be $1,230 worse off every year and $15,000 worse-off over the life of their children’s education.

This is a savage cut from a Government that clearly doesn’t care about Australian families or our kids’ education. The Abbott Government’s priorities are all wrong.

My Chronicle column this month is on the tension between the online and offline world.

Real world has warm people with offline lives, The Chronicle, 7 January 2014

In an article for the Weekly Standard last year, Matt Labash launched a broadside against social media, arguing that sites like Facebook, Pintrest and Twitter were turning our society into a "Twidiocracy". Labash bemoaned the fact that so many of us incessantly check our mobile phones for updates, rather than engaging with those around us.

As a pretty regular user of social media, I read Labash's column with a red face. If I'm catching a bus or plane, I'm much more likely to be plugged into a device than chatting with the person next to me. My wife Gweneth took a photo that makes me cringe, showing me at our kitchen counter, answering constituent email on the laptop while our boys (aged 1, 4 and 6) played under my feet.

Social media is terrific for staying in touch with friends on the other side of the world, or for linking up people with disparate interests. A year ago, I tweeted that I was looking for a researcher to collaborate on looking at long run trends in CEO pay. Melbourne economic historian Mike Pottenger got in touch, and we'd written an article together before we even met face to face.

But like lottery tickets, online technologies such as email, Facebook and Twitter work off what the psychologists call "variable interval reinforcement schedule". In other words, most of the time you get nothing, but occasionally a nice payoff comes along, in the form of a message from a long-lost friend, or praise for your work. It turns out that humans are particularly vulnerable to this kind of unpredictable reward, and are more likely to become addicted to it. If you've ever checked email more than once a minute, you know what I mean.

And then there's the negativity. Study after study has shown that people are more likely to say unnecessarily harsh things about one another on electronic media. There's something about impersonal technologies that have the potential to bring out our catty side. Read to the end of almost any long comments thread, and you'll find people duking it out.

So how can we capture the manifest benefits of email and social media without becoming slaves to the machine? Surprisingly, Silicon Valley may have some lessons. Some technology firms are now identifying times in each day when employees are not expected to reply to email. For example, 9-11am might be designated as time to think, write or code. I've started (with limited success, I admit) trying something similar in my own office.

Indeed, once you recognise that the technology has an addictive bent and a negative bias, it becomes a smidgin easier not to check in as often, and not to take criticism so seriously. Perhaps taking the kids to the pool might be a better use of time than responding to that twit-crit? Could a phone call to a lonely aunt be more valuable to the world than a Facebook status update?

More radically, I've been trying lately to implement "inbox zero"- the strategy of answering, filing or deleting all email immediately. It's hard at the outset, but does seem to help reduce the time you spend looking at the same message, deciding how best to answer it.

So if you can manage it this summer, check to see if you've got the balance right between the online and offline world. Because there are some terrific books and BBQs, parks and pools just waiting for your attention.

Andrew Leigh is the federal member for Fraser and the Shadow Assistant Treasurer.

This morning I spoke to 2CC Summer Breakfast host, Chris Mac, about the importance of the universal service provided by Australia Post. The sale of Commonwealth-owned assets is being publically canvassed with a national review of competition law now underway and the National Commission of Audit due to report at the end of January. The full transcript is below.

E&OE TRANSCRIPT

RADIO INTERVIEW

2CC WITH SUMMER BREAKFAST HOST CHRIS MAC

TUESDAY, 7 JANUARY 2014

SUBJECT/S: Australia Post, Medibank Private, Cory Bernardi and abortion, the regulation of Australian charities, Japanese whaling, asylum seekers and Abbott Government broken promises

CHRIS MAC: The Member for Fraser is Andrew Leigh. Andrew, a very good morning. You're talking to one of your constituents.

ANDREW LEIGH: G'day Chris. Good to chat with you.

MAC: Firstly, the ACCC, through Rod Sims, is apparently saying to the Government, if you want to make some money sell the remaining assets we have. We haven't got much left in the can to sell have we?

LEIGH: There's only a certain number of things Chris. While I certainly think you have to have a sensible conversation about these issues, I do wonder about the wisdom of selling off Australia Post. I wonder that there's not more National Party members, for example, in the bush, pointed out that their cost of getting letters around would be an awful lot higher if we let the free market rip for letter delivery.

MAC: I suppose it isn't exactly a GrainCorp issue but for the people who live in country towns it's probably as important as what happened to GrainCorp.

LEIGH: I would have thought so. I mean if you're in a small Australian country town and the postal service is an important link to the rest of the world. Australians cross-subsidise letter delivery. It's no secret that it is cheaper to deliver a letter in the centre of Sydney than it is in the back of Bourke. But we live in a country where we think it ought to cost the same amount of money to send a letter from one place to another and you shouldn't be penalised for living in a regional or rural area.

MAC: Now, while it wasn't said very loudly by the now Government, there was a suggestion they always intended to sell Medibank Private. That looks like that'll certainly be on the agenda for 2014 Andrew Leigh. But in doing that are there any legislative impediments? Do they have to get a law through or can they simply make an administrative decision to sell Medibank Private?

LEIGH: Chris, my understanding is they have to get legislation through Parliament which either means they'll be dealing with The Greens as they did in taking off the debt cap or dealing with Clive Palmer as they intend to do with their intention to abolish the mining tax. But our concern with Medibank Private is just to make sure that that doesn't drive up premiums. One of the roles that Medibank Private has been able to play is in putting a little bit of downward pressure on healthcare premiums. We've just seen the Government allow the biggest increase in premiums in a decade and in that environment they need to provide Australians with some reassurance that selling Medibank Private won't just see private health insurance go up and up and up.

MAC: If it goes up, and I don't think this is just cosmetics Andrew, if they do sell it, I wouldn't like it to still be called Medibank Private because it would give I would think a false indication that it's somehow still got that role. If it's purely out there as private, it's a bit like changing NBF changing it's name to Bupa really.

LEIGH: Well, the question then is whether you'd have to sell it at a discount. Part of the strength of Medibank Private is its brand and if the Government intends to change the name at the time then they're going to get less money for it. My guess is they're not factoring that into what they're doing. But I can see the argument you're making.

MAC: Just in terms of transparency, people say 'well you're Medibank Private'. It's like when they sold the Commonwealth Bank, I remember famously saying there's a lot of religion in the Commonwealth Bank. I tend to think there's a lot of religion in the heritage of Medibank Private. But let's move on. We're chatting to Andrew Leigh, the Member for Fraser this morning. Cory Bernardi, from your point of view Andrew is he the gift that keeps on giving?

LEIGH: Mr Bernardi is someone who is close to the Prime Minister. He was his parliamentary secretary until relatively recently and the views that he seems to be espousing are a long way out of the Australian mainstream. I think Australians pride ourselves in being a tolerant, multicultural country which recognises the fair go and doesn't rip itself to pieces over questions like abortion in the way the United States does. That's a pretty healthy characteristic and Mr Bernardi's comments, I think, would fit better in the extreme wing of U.S. politics than what aspires to be a mainstream Australia political party like the Liberal Party.

MAC: As soon as this story came up and being old enough to remember, I remember the name Bertram Wainer, who was someone trying to bring in virtually the system we have in place now to get rid of backyard abortions. He was a man who was dreadfully vilified in Victoria back in the 1970s. It just frightens me Andrew Leigh, that we have a situation here where these kinds of emotions. Now Luke Bona, our afternoons presenter here on Canberra Live between three and six, took a number of calls. There was one particular point, a lady rang and spoke to Luke and made the point that in terms of the statistics that were being offered in Cory Bernardi's book, apparently they didn't take account of the fact that there was no difference in terms of interpretation when they talk about numbers of abortions each year between those that are terminations and those that are miscarriages, which are apparently referred to, in the call that Luke took from this lady who had worked in the health profession, as being spontaneous abortions. And so, the numbers there may look higher than what they tragically are.

LEIGH: That's right. We don't split those out in those statistics. But I think the view shared by the vast majority of Australians is that abortion should be safe, legal and rare, recognising that if you try and criminalise abortion, effectively what you do is drive it underground and you end up with people engaging in what you describe as those unsafe backyard abortions in which women can end up being badly injured and can end up being infertile as a result. I think it's a pro-family policy to make sure that abortion is available as an option to women and also to make sure that counselling is there, and that kids are using contraception when they first have sex so they don't get into situation of an unwanted pregnancy in the first place.

MAC: Absolutely. Now, something that's a little more administrative but it does have some impacts here. There has been a bit of change, more than just tinkering too, changes in relation to the way we administer charities and how they are looked at particularly from a taxation perspective. What are these changes Andrew Leigh?

LEIGH: The Labor Government brought in place an Australian Charities and Not-for-Profits Commission Chris, and the aim of doing that was to simplify the red tape on charities; to make sure charities didn't have to keep on proving themselves every time they went to government. You had things like a charities passport. And getting rid of the old idea that the definition of a charity depended on laws going back to 1601 and instead bringing in a statutory definition of a charity. I'm a bit concerned as the Labor front-bencher responsible for this that the Coalition seems to be walking away from a set of reforms that were worked out with the charitable sector in order to reduce the red-tape burden on them. I don't know who has Kevin Andrews’ ear but whoever it is seems to be dragging him back to 1601 and saying you don't need to update charities' laws, you don't need a charity regulator, things are all fine as they are. It's not the message we heard when we went out and talked to the bulk of Australian charities.

MAC: Strange one. Time is starting to beat us. I want to get your views very quickly on a few things. Of course revelations of whales being caught and captured by the Japanese in the Southern Ocean Whale Sanctuary. And this other story that's emerged this morning of apparently a situation that occurred before Christmas where it's alleged but not confirmed that the Australian Navy has apparently taken control of a boat that was seeking asylum on the Ashmore Islands and given some sort assistance to the boat and turned back to Indonesian waters.

LEIGH: We know very little about what's going on with asylum seekers because of the veil of secrecy that the Government has thrown over this. But certainly I would like to know more about what's going on there. I think it's appropriate if our tax dollars are being used in a naval operation like this, that Australians know what's going on. With the whaling vessel, the clear pledge from the Government before the election was that they would be sending a boat down to monitor the whaling. We've seen that as another broken promise, joining a list of, by my count, at least a dozen broken promises by the Government. I think that people are just beginning to get that sense that maybe the Abbott Government isn't the Government they thought they were going to be before the election.

MAC: The honeymoon looks to be well and truly over. Andrew Leigh, thank you very much for your time this morning.

LEIGH: Good to chat, thank you.

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER
MEMBER FOR FRASER
MEDIA RELEASE

Coalition Helps Big Businesses Keep Taxes Secret

Australians should be very concerned about the Abbott Government's plans to allow big business to hide their tax affairs, Shadow Assistant Treasurer Andrew Leigh said today.

In today’s Australian Financial Review, Assistant Treasurer Arthur Sinodinos said: “We don’t want to get into a situation where we’re putting more and more information out there.”

"While in office, Labor put in place measures that required 200 of Australia's largest firms to disclose their total income, taxable income and tax paid," said Dr Leigh.

"We did this to make sure that big firms paid their fair share of tax.

"But as we've seen in other areas, the Coalition wants to keep the sunlight out.

"After hiding the boats and hiding the ministers, they're now hiding the tax returns of big businesses.

"Having recently reversed Labor's $700 million crackdown on offshore profit-shifting by multinationals, the Government is reversing transparency measures on the tax paid by large firms.

By allowing firms to avoid public scrutiny, Australians could miss out on millions of dollars of extra revenue.

"Every extra loophole for multinationals means a bigger tax burden on families," said Dr Leigh

My op-ed in today's Herald Sun is on the Coalition's decision to go soft on multinational profit-shifting, letting $700 million of revenue slip through their fingers.

We're Cheating Ourselves if Multinationals Don't Pay Up, Herald Sun, 2 January 2014

New York Governor Mario Cuomo once said that parties campaign in poetry, but govern in prose. In the same spirit, one Australian political party seem to think it can campaign for the middle, but govern for its base.

With the change of government, we've seen Prime Minister Tony Abbott's pre-election poetry turn into prose of a quite different character. Apparently, the secret to solving a "budget emergency" is to lower the tax burden on carbon emitters and remove a profits-based mining tax - measures that were anticipated to raise $17 billion over the next four years.

It's lucky we didn't have a 'budget catastrophe', or the government would have had to solve it by getting rid of income taxes and company taxes too.

In the meantime, Treasurer Joe Hockey has sternly told us that the "Age of Entitlement" must come to an end. So battlers are losing their income support payments, the School Kids bonus and low-income superannuation contribution.

But for billionaires, the age of entitlement will continue, with the Government keeping a tax-break for wealthy retirees, providing a tax cut to mining billionaires and hoping to give them back the private health insurance rebate.

Yet one of the most disturbing decisions of the government has been to keep a $700 million tax break to multinational companies. In government, Labor's economic team - particularly former Assistant Treasurer David Bradbury - took careful measures to ensure that multinationals paid their fair share of tax.

Given that our tax base relies more heavily on company taxes than many other nations, that is an issue that matters a great deal to Australia.

There are several tricks that multinational firms use to shift profits out of Australia and into low-tax jurisdictions. For example, they might arrange for their Bermuda arm to sell their Australian arm a paperclip at a cost of $1 million.

The Australian arm claims that as a $1 million tax deduction and the money is effectively shifted offshore.

Thankfully, that particular loophole is closed, but a similar trick can be played with debt. If the Bermuda subsidiary makes a multi-million dollar loan to the Australian arm, a million dollars a year can be shifted out of Australia in the form of interest payments.

The interest payment is a tax deduction in Australia and the profit is moved to Bermuda, where the company tax rate is considerably lower. Same thimbles, different peas. Now you see it, now you don't.

Labor believes passionately in the value of free enterprise. We support foreign investment. But we also believe in the fundamental Australian value that everyone should pay their fair share of tax.

Mr Hockey's announcement that he will forego $700 million of company tax revenue effectively means that he has to go harder on Australian households. A Treasurer who thinks it's better to take away money from children on their first day of school than ensure multinationals pay tax is one who is out of step with the Australian concept of the fair go.

The issue matters on the international stage too. Next year, the heads of the world's 20 biggest countries will come to Brisbane to talk economics. One of the big issues on the agenda will be making sure tax laws on multinational firms keep up with globalisation and technological change.

To maintain a fair tax system, we need to play a leadership role.

Under Labor, Australia was playing a strong role on making sure multinational firms paid their fair share of tax. Labor believes that all of us have a social obligation to contribute to shared services, like roads and railways, schools and public parks. More loopholes in the tax code eventually means more potholes in our roads.

One reason the issue hasn't received as much airplay as it should is that the tax arrangements for multinational firms are fiendishly complicated.

As an economist, I love the details, but I've spared you the technical terms and statutory provisions here, because they don't matter as much as the point of principle.

Unless we cut services or raise debt, every tax break to one person means a tax hike to someone else.

It's time Mr Hockey stopped getting tough with battlers and started muscling up to the billionaires.

Andrew Leigh is the Shadow Assistant Treasurer.