Andrew Leigh

In my regular discussion on Breaking Politics with Tim Lester about issues shaping the news, I spoke about potential GST reform for online purchases and the Abbott Government's adoption of a new position on Israel at the UN. I also caution against a Grattan Institute plan to delay access to aged pensions.

TRANSCRIPT - ONLINE INTERVIEW

BREAKING POLITICS – FAIRFAX VIDEO

MONDAY, 25 NOVEMBER 2013

CANBERRA

SUBJECT/S: Israeli settlements, Age/Nielsen Poll, GST and online purchases, carbon pricing, pension age.

TIM LESTER: The Abbott government appears to have made a contentious, but largely unreported change in a critical foreign policy stance in recent days. Has it reduced Australia's opposition to some of the most contentious of Israeli activities in the West Bank, including the construction of settlements? Every Monday Breaking Politics is joined by Labor MP from Canberra, Andrew Leigh. Welcome in Andrew.

ANDREW LEIGH: Thanks Tim.

LESTER: Tell me, what worries you about Australia's foreign policy approach to Israel and the Palestinians at the moment?

LEIGH: As a good friend of Israel's, I believe Australia should be committed to a two-state solution. That means that we need to ensure that Israel maintains the adherence to international norms which are so vital in bringing about a two state solution. There's a thing called the Geneva Convention, we've had it for more than 60 years, that says that if you're an occupying power, you shouldn't deport people out of the territories you occupy or transfer new people into it. But we've seen occupied settlements going up 70 percent in the first half of this year, compared to the first half of last year. That was deplored under Labor, sitting with the vast consensus in the international community as being illegal against international law. But now the Coalition has back-flipped on that and voted with just eleven countries against 160 countries that believe that Israel should adhere to international law.

LESTER: Now we know the Jewish lobby in Australia has a deal of political influence. It works for that influence. What does this tell you about what pressure they may or may not be putting on the new Government?

LEIGH: I think this is very much about adhering to Israel's long-term interests as Ben Gurion put it, Israel can be a Jewish state, it can be a democratic state or it can be a state covering all of greater Israel, but it cannot be all three. For a two-state solution to work, Israel needs to adhere to international norms. I think Australia's position in international arenas should always be encouraging Israel to abide by international norms and looking at that two-state solution down the track.

LESTER: The state and federal treasurers meet this Wednesday and on their agenda, among other things, will be a lowering of the GST threshold well down below the $1000 for things we purchase online and whether they should attract the Goods and Services Tax. What position do you take on whether we need a far greater application of GST to what we buy online?

LEIGH: Labor's always up for a sensible conversation about tax reform, but the threshold was set at $1000 because the cost of collection for low value parcels tends to be pretty high. I think it's also vital that we don't just think about the cost of collection on the public servants collecting the tax, but also as individuals forced to inconvenience of phoning up and giving credit card details, or having to personally go in an collect a package that would otherwise have been delivered to them. If we don't put any value on that, we can end up raising taxes which are smaller than the inconvenience to which we're putting citizens. That's not good economics.

LESTER: And is that a real danger here?

LEIGH: The estimates I've seen suggest, for example, that if you lower the threshold from $1000 dollars to $500 you might increase total revenue by something in the order of $20 million. There's debates around this, but that's an estimate that doesn't even take into account the cost to the additional time wastage of you and me having to go and pick up a parcel that we might have otherwise had delivered to our home.

LESTER: What about the position of the retailers who want us to still go out and visit the shops and buy in the traditional way and are disadvantaged they feel in this regard?

LEIGH: I think the threshold is simply a function of the fact that the cost of collection to customs officials and individuals isn't zero. If there was no hassle in collecting it, well you wouldn't have a low value threshold. But the situation retailers find themselves in isn't just driven by the low value threshold, it's also driven by the high Australian dollar and by new retailers setting up online selling things, for example, like shoes which 10 years ago we would have said were the kind of thing that could never be effectively sold over the Internet.

LESTER: Okay, the post-election time is never a completely happy time for the party that lost, but today's opinion poll is surely a bit of a boost for Labor's morale?

LEIGH: I've got to say Tim, there's days when I'm tempted to breach my regular rule of saying that opinion polls don't have much predictive power, but I should hold fast to what I believe which is that good parliamentarians spend their time talking about issues, not about polls. A bit like a first Ashes win in a five game series, this is a bit of a fillip to the team, but it's a long series we're playing and certainly we will need to maintain that sense of discipline that we've had over the last few weeks. It's entirely possible the government will get its act together, will manage to repair the problems in the relationship with Indonesia, will find somebody better suited to run the immigration portfolio, will begin to lift the veil of secrecy. They've had, let's be honest, a lot of stumbles over these last few weeks, but Tony Abbott's a formidable parliamentarian and could easily right his ship.

LESTER: Okay, what does this say for Bill Shorten and the early indications on how the public are going to take him as a leader and a potential prime minister?

LEIGH: I think Mr Shorten is engaging very effectively with Australians, talking about the issues that matter not just in the here and now, but for the long term. The debate we have around carbon pricing for example saw Bill talking in the House of Representatives about getting this issue right for our children. I think that's the sort of leader he is. I think he's somebody who thinks long-term, who wants to engage with people effectively and somebody who I think enjoys a lot of respect, not just from Labor people, but in the broader community.

LESTER: The poll tells us that the public believes Labor ought to get out of the way in terms of the carbon tax, and allow the government to rescind it.

LEIGH: But as you, yourself pointed out, talking on NewsRadio this morning Tim, there are swings and roundabouts in that poll. There's certainly a recognition among Australians that we need to take serious action on climate change and acceptance that Mr Abbott's soil magic scheme just won't cut it, that what we need is the most effective and efficient way of dealing with climate change and that's an Emissions Trading Scheme. That's why you've got the Australian Industry Group backing an Emissions Trading Scheme, thirty countries around the world, California moving to emissions trading. Even the Chinese, a nominally Communist country, are more in favour of using the market to tackle climate change than the nominally free-market Liberal and National parties.

LESTER: And you remain quite firm, quite convinced that Labor will hold to its line of a price on carbon and not back the scrapping of the scheme in total?

LEIGH: It just wouldn't make any sense to do that Tim. It wouldn't be in the interests of this generation, and certainly not the interests of future generations who'll pay a higher cost if Australia doesn't do anything now on emissions. It' s pretty embarrassing to me to see our negotiators playing a blocking role in the international debates, where previously they played a positive, constructive role. It's a ‘little Australia’ vision that I think the Abbott government is projecting to the world with cuts to the refugee intakes, the cuts to foreign aid, the boat turn back policy and the shutting down of climate change talks. I don't think it's in accord with the big heart of Australia that Mr Abbott should represent.

LESTER: Andrew Leigh, this possibility of shifting the retirement and superannuation eligibility ages out to maybe 70 or even beyond, do we really need to work till we're 70 plus?

LEIGH: One of the things that surprised me Tim about the Productivity Commission report on the pension age was how little attention it gave to the fact that the poor live for fewer years than the rich. Some of the work when I was an academic economist I did with Philip Clarke estimated that the richest fifth of the population lives six years longer than the poorest fifth. So that means if you push out the pension age to 70, effectively you're telling poor people that they can get the pension later, knowing full well that they're going to die earlier. As Paul Krugman put this in the context of the US social security debate, it's a bit like telling janitors they have to wait till 70 to get the pension because lawyers are living longer. We have to recognize the equity issues inherent in this, and I'm frankly surprised that a high calibre institution like the Productivity Commission hasn't focused on that aspect.

LESTER: They've botched this, in a sense, if they didn't factor in that difference have they?

LEIGH: That's too hard a critique. Our Productivity Commission is a high calibre outfit, and I've got great respect for the lead author on this project. But I do think that if you miss the equity dimension on this, then fundamentally you're not doing your constituents a good service. If there is a six year difference in life expectancy between the rich and the poor then taking the safety net and moving it up three years just doesn't make a whole lot of sense, particularly in a world in which the superannuation preservation age is stuck at 60.

LESTER: So does the retirement age need to stay put? Stay where it is?

LEIGH: I think that would be the sensible proposal Tim. I think 67 for the social safety net makes a lot of sense. You know, if you're a lawyer and you're going to live a long life, then your job isn't particularly physically demanding, maybe you might retire at 70 but if you've been working as a cleaner doing back-breaking work, then telling you that you have to continue to do that job until 70, knowing that on average you'll die at a younger age, doesn't seem good policy to me.

LESTER: Andrew Leigh, thank you for coming into Breaking Politics today.

LEIGH: Thank you Tim.

This morning I spoke with Mark Parton about the impact of DFAT's takeover of AusAID and the prospect of the Abbott Government having to compensate ditched and devastated public service graduates. We also discussed carbon policy with the Coalition's repeal package due for defeat in the Senate. Here's the 2CC audio.

2cc Breakfast 22 Nov 2013

I spoke in parliament in the final few minutes of the House debate over repealing the carbon price.

It is my pleasure to follow the member for Dawson in this debate—somebody who I think exposes the real truth at the heart of the coalition's opposition to an emissions trading scheme. That opposition is not because they accept the science and dispute the economics. It is fundamentally because those opposite do not accept the science of climate change. The member for Dawson has been very clear about that. He thinks that 97 per cent of the world's scientists are wrong and he, instead, has the truth. I argued with the member for Canning on Twitter but eventually, about 20 tweets in, I just had to let him go because—

Mr Christiansen intervening -

I stopped the Twitter battle with the member for Canning at a certain point when I finally got bored, but he was taking on the Bureau of Meteorology. They are now, of course, responsible for the Bureau of Meteorology, but the member for Canning disputes the bureau's finding that Australia has just experienced the hottest summer on record, the hottest winter on record and is on track to experience the hottest year on record.

The time for political games is gone. If this House does not take serious action on climate change we are kicking it off to future generations, and those generations will pay a higher cost than we will today. Future generations will look very dimly upon this government that took away an effective, efficient way of reducing Australia's emissions and replaced it with an expensive, ineffective hodgepodge of measures. Ross Garnaut was asked about this on Lateline the other night. He said of direct action that it would be considerably more expensive and that getting rid of the carbon price has a significant negative impact on the budget. The impact on the budget of getting rid of the mining tax and the carbon price is, between them, $17 billion, which must be paid by higher taxes on workers. That is what those opposite believe. They believe the tax burden on polluters and mining billionaires should be lower and the tax burden on workers should be higher.

I was listening before to the member for Eden-Monaro with his economic views and I have to say I was thinking at the time of that great Chris Caton quote when a range of eminent Australian economists were asked their view on carbon pricing and 86 per cent strongly supported carbon pricing over direct action. As Chris Caton said, anyone who believes direct action is economically more sensible 'should hand his degree back'.

When the Leader of the Opposition was confronted with similar evidence—a survey of the Australian Conference of Economists showing a vast majority of economists in favour of carbon pricing—he said that maybe that was a comment on the 'quality of our economists' rather than on the quality of our policy, to which Joshua Gans responded that maybe it just said something about the quality of the Leader of the Opposition.

Mr Hunt interjecting—

We have the honourable member interjecting here, who wrote his very thesis on a tax to make the polluter pay but has been willing to throw good economics out the window to score political point! This is no small issue for this parliament. The cost of dealing with climate change will only rise. As the developed country with the highest level of per capita emissions, that cost will fall on future generations. This government is doing deep, deep damage to the country by getting rid of an emissions trading scheme and replacing it with a scheme which we know to be far more expensive.

We have had those opposite making claims that they have Nobel laureates supporting them. The member for Flinders named a series of Nobel laureates who supported direct action, but of course when contacted, those Nobel laureates had no support for the member for Flinders. Why? Because Nobel laureates like other economists recognise that a pricing system is the best way of dealing with climate change. There are plenty of economists who support climate change, but no credible economists that support direct action. It is more expensive, less effective and a punishment to future generations who will pay the price of this government's short-sighted decisions.

I spoke in the House of Representatives today about Australia's ties with Indonesia - discussing the three years I lived there, and some of the great Australians who helped shape the relationship.

SPEECH



ADJOURNMENT DEBATE

THURSDAY, 21 NOVEMBER 2013

PARLIAMENT HOUSE, CANBERRA



The Importance of Indonesia to Australia, House of Representatives, 21 November 2013

Last night in the House the Leader of the Opposition spoke about the importance of 'team Australia' in our engagement with Indonesia. It is a phrase which the late great Senator Peter Cook used to use often. I wish to speak today about the personal value I place on that relationship.

I have spoken previously in parliament about some of the great Australians who helped to forge the bond with Indonesia in the 1950s. Jamie Mackie, who worked in the state planning bureau in Jakarta, lectured in economic history at Gadjah Mada University and eventually formed a group at the Monash University Centre of Southeast Asian Studies, which earned the title of 'a second Cornell' in recognition of its engagement with Indonesian issues. I have spoken too about Herb Feith, who was instrumental in setting up the Australian volunteering program, having written to the Australian Prime Minister and the Indonesian President—Menzies and Sukarno—when he was aged 22. Herb's work in building the relationship with Indonesia was absolutely vital. As Herb wrote in 1954 of Australian volunteers in Indonesia:

‘… these young people assert by the way they live, that racial equality is real. By having natural and friendly relations with Indonesians on the basis of mutual respect.’

Herb dedicated his PhD thesis on Indonesia to his friend Djaelani, a servant in Jakarta who lived in one of the city's many slums. Herb’s life is well detailed in Jemma Purdey's excellent biography.

Both Herb and Jamie were instrumental not only in assisting Indonesia but in changing Australian policies. Those policies were at times pretty awful. Labor immigration minister Arthur Calwell was shocked when the High Court ruled that he could not deport an Indonesian woman who at the time had six children with her Australian husband. We are very glad that times have changed in this regard.

Dr Boediono recently received an honorary degree from the ANU. When I was speaking with Terry Hull on the weekend, he was recounting the importance of the ANU's engagement with Indonesia on both an academic and a personal level. Dr Boediono in his speech said, 'There in the Indonesia Project I learned more about the working of the Indonesian economy than anywhere else and anytime before.' His time working in the Research School of Pacific and Asian Studies was vital, and it has led to a 40-year relationship.

My own childhood included three years living in Indonesia, a period which was important for my own personal development. We lived in Jakarta and in Banda Aceh. I fondly remember exploring among the tea plantations and down the river with my Indonesian friend Niko Zainal, who was a great companion in exploring Indonesia. I continued to do a little work on Indonesia as an academic, publishing a paper with Pierre van der Eng titled 'Inequality in Indonesia: what can we learn from top incomes?' Also, both my parents, as Indonesia scholars, have maintained a close engagement. We very much enjoyed having Chusnal Mariyah, now a senior Indonesian academic, living with us while she did her PhD—not, as it turned out, on Indonesian politics but in fact on internal Australian politics, looking at property approvals in the Balmain council, episodes well documented in the Rats in the Ranks documentary.

The development of Indonesia's anti-poverty program has been vital, and Australia has paid played a key role in that. My predecessor, Bob McMullan, often spoke about his pride in the way in which Australian aid had helped to build schools in Indonesia.

I will close with a quote from Tony Reid on Jamie Mackie. He said:

‘Jamie Mackie epitomized the best in the reformist enthusiasm of post-war Australia to open out to its region. For him as for many of that generation, Indonesia pre-eminently represented the Australian ‘other’, the Asia with which Australia had to come to terms. Because he was himself very much an Australian of that era—warm, open, maverick, visionary, irreverent, unpretentious—he understood better than most how exciting and challenging, but painfully difficult, a prospect it was to get that relationship right.’

The same challenge faces us today.

In my capacity as Shadow Assistant Treasuer I issued a media release today expressing Labor's disappointment and concern that the Abbott Government will abolish the Australian Charities and Not-for-Profits Commission. Charities across Australia with services and programs spanning all aspects of community life including  health, education, housing and homelessness will no longer have an independent national regulator to enhance public trust and confidence in the sector and reduce red tape.

MEDIA RELEASE



ABBOTT GOVERNMENT’S CUTS TO HIT AUSTRALIAN CHARITIES

The Shadow Assistant Treasurer, Andrew Leigh, has condemned the Abbott Government’s plans to abolish the Australian Charities and Not-for-Profits Commission (ACNC).

“The ACNC is a one-stop shop, aiming to be a single clearinghouse for all interactions charities have with government. The ACNC is an essential reform to strengthen the sector’s transparency and governance and remove unnecessary red tape,” Dr Leigh said.

“The Abbott Government says it's open for business but is forcing charities to spend less time getting on with the job and more time on paperwork.

“The Government needs to explain to our tireless charity workers why they should spend more time complying with government regulations, and less time helping vulnerable people in Australia and overseas.”

There are 58,000 charities currently registered with the ACNC.

Labor acted on a Productivity Commission recommendation that the ACNC be established to regulate the sector and support its effectiveness.  Established in 2012 under the ACNC Bill, the ACNC offers charities greater public exposure, streamlines charities’ fundraising work and reduces their administrative costs. It offers a ‘report-once, use-often’ reporting framework.

“The Abbott Government is flicking new issues to the Productivity Commission on a regular basis. Yet here is an issue where they are ignoring the Productivity Commission.

“For too long charities that work across multiple states and territories have had to register and report to those jurisdictions as well as work through complex funding contracts and processes that the ACNC helps simplify.

“Australian charities are on the front line of making Christmas a happier one for disadvantaged Australians. Many of our agencies, supported by public donations, are right now responding to emergencies including communities devastated by Super Typhoon Haiyan in the Philippines.  This is important work made harder because of the Abbott Government’s short-sighted and regressive announcement.

“Labor supported the establishment of ACNC after years of advocacy by the not-for-profit sector which employs more than a million people and contributes more than $43 billion to GDP. It’s disappointing that the Government is deaf to this important sector,” said Dr Leigh.

Minister Kevin Andrews has indicated he will return charities to the old system of state and Australian Tax Office regulation.

“Charities have complained about the fact that the Australian Tax Office was their default regulator. The complexity and size of the not-for-profit sector demands a resourced, national and clear approach,” Dr Leigh said.

THURSDAY, 21 NOVEMBER 2013

My letter to the Australian Financial Review published today is in response to Treasurer Joe Hockey's claim that Labor hid public service staff cuts.

Australian Financial Review

Letter to the Editor

21 November 2103

If you were to list the qualities of Treasurer Joe Hockey, it’s unlikely that ‘attention to detail’ would feature high on the list. So the Treasurer’s claim of a ‘secret Labor plan’ to cut public service jobs ("The real scope of Labor's deceit coming to light', AFR, 20 November) should raise an eyebrow or two.

Before the election, Mr Hockey was claiming that Labor had left Australia with a bloated public service. Misleadingly, he alleged that the public service had grown by 20,000, when in fact the real figure was closer to 8,000. In terms of public servants per head of population, our public service is about the same size today as it was in 2007.

Yet now that he is in office, Mr Hockey has changed his tune, implausibly claiming that Labor’s 2.25 per cent efficiency dividend (saving $1.8 billion) would have cost more jobs than his own policy to directly get rid of 12,000 jobs (projected to save $5.2 billion).

Labor has consistently said before the election that the Coalition’s pledge to cut 12,000 jobs was savage and short sighted, particularly when coupled with the Coalition’s promise to raise the efficiency dividend to 2.5 per cent.

Labor’s efficiency dividend approach targets non-staff savings first, focusing instead on areas such as travel and procurement. The Coalition approach takes the power away from the hands of senior public service managers, and instead demands forced redundancies.

Australia needs a little less hyperventilating hyperbole from its Treasurer. It’s time he stopped blaming others and started taking responsibility for his actions. He could start by saying that he was wrong about public service numbers, and formally dumping his pledge to cut 12,000 jobs.

(The AFR published an abridged version)

I spoke in parliament today about the need to retain the Mineral Resource Rent Tax (MRRT) as Labor is committed to spreading the benefits of the mining boom. I look back at the history of taxing resources and its broad support across many and perhaps surprising quarters.

It is my pleasure to rise on the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, which repeals a profits based mining tax in Australia. It is useful to step through some of the history as to how Australia came to this point. In the late 1980s a profits based petroleum resource rent tax was put in place. It was criticised by many of the same voices that criticise this mining tax on the grounds that it did not raise very much revenue in the early years, but the petroleum resource rent tax has now raised billions of dollars and is an established part of the Australian taxation system.

When the Henry review called for submissions it was the Minerals Council of Australia that put forward a submission to the Henry review arguing in favour of a profits based mining tax. The Minerals Council of Australia did so because profits based taxation is just a more efficient way of taxing resources. If we compare the early part to the late part of the mining boom—say, 2000 to 2007—we will see that the Australian taxpayer in the early period was getting one dollar in three in taxes from mining and in the late period was getting one dollar in seven. That is because, under a royalties regime, when the world price goes up taxpayers get none of that benefit. They get the volume effect but not the price effect. If the increase in that world price was somehow due to the ingenuity of Australia's miners then that might be defensible, but it turns out that world prices are out of the hands of our miners. They are ingenious in many ways but they do not control the world price.

So just as the Eureka Stockade, as the member for Bass referred to, was a revolt for fairer taxation of miners, taking the view that royalties would be fairer than mining licences, so too this Labor government put in place a fairer scheme of taxing resource revenues. A profits based tax is a fairer approach than a royalties based scheme. This is not something that ought to be a Labor versus coalition divide. Indeed, Sarah Palin made her name as the Governor of Alaska championing profits based resource taxation. It is just a smarter way of taxing resources and its impact comes not only in the boom when taxpayers see a larger share of the revenue but also in the lean times when the effective burden of taxation falls.

We have seen over recent years benefits of the boom flowing to Australians. The member for Bass, the former speaker, was quite right to note that there have been benefits to Australians of the mining boom flowing through, such as cheaper prices for many of our imports, but the mining boom has also placed pressure on the Australian economy, particularly on the manufacturing sector and the higher education sector, which is the sector I worked in before coming to parliament, where a high Australian dollar has made it tough to attract international students.

It is certainly true that previous mining booms and the resource shocks of the 1950s and 1970s pretty much blew the place up. We saw high inflation and the risks of unemployment that were with that. The Australian economy did not suffer those sorts of shocks in this mining boom but it did suffer some considerable stresses and I think many Australians felt it would be fair if mining firms paid a larger share of their revenue in tax.

The House economics committee held an inquiry into the MRRT bill when it came before the parliament. As part of that inquiry we interviewed Mr Julian Tapp from Fortescue Metals Group. I asked Mr Tapp about the corporate tax paid by FMG, which was then a $20 billion company. I asked:

But, in terms of corporate tax paid, it would not be correct to describe Mr Forrest as a taxpayer, would it?

The response was:

Mr Forrest is not a company; Fortescue Metals Group is the company.

I then asked:

But, as things currently stand, it would not be correct to describe—

The reply was:

We have not cut a corporate tax cheque to date, no.

So FMG, despite describing itself as a taxpayer, was not at that point a corporate taxpayer. I think this raised a concern in the minds of many Australians as to why immensely profitable firms should not be making a contribution to the broader Australian good.

We heard, when the MRRT bill came before this parliament a little over two years ago, from the member for North Sydney. The member for North Sydney foresaw it as follows:

This is a bad tax. It will reduce investment and jobs. It will reduce the wealth and retirement incomes of everyday Australians. It will hamper Australia in global competition for scarce capital and jobs. It will reduce investment and jobs. It will reduce the wealth of retirement incomes of everyday Australians. It will hamper Australia global competition with scarce capital of jobs.

He went on to talk about everything from locusts to the plague. To assess those claims we simply have to look at the numbers. Let us look at estimates of expenditure on annual private minerals exploration: 2009-10, $5.7 billion; 2012-13, $7.8 billion. If we ask ourselves are Australians poorer now than they were when the mining tax was introduced, we find the answer again to be a resounding no. Australians' wealth levels have increased significantly.

In this debate the Treasurer would have you believe that this is the only tax whose repeal will make the public finances better off. Somehow the Treasurer has discovered magic pudding economics, through which he can repeal a tax and add money to the government coffers. The fact is the Treasury costings—this is the Treasurer, so they are effectively his costings—put the lost revenue from getting rid of a profits-based mining tax somewhere in the order of $4 billion. Now if the Treasurer wants to stand at the opposite dispatch box and disavow the costings of his own department, if he wants to say that in fact somehow this is a miraculous tax that will raise a negative amount over the forward estimates, I would be fascinated to hear that exercise. Frankly, like every other tax, if you repeal it you will leave the public finances worse off.

At the same time as the Treasurer is repealing a tax whose burden falls on some of the wealthiest shareholders in the world, he is cutting back the income support bonus, cutting away the Schoolkids Bonus, which is a means-tested program that helps Australian families with the cost of education. I agree with the member for Jagajaga on this: the government should have had the courage to introduce this bill not as the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013, but as the 'Minerals Resource Rent Tax repeal and the Schoolkids Bonus repeal and the low income superannuation contribution repeal and the hit to small business and the hit to income support bill 2013'. Were this government to honestly name its bills, then that is what it would be.

This bill concerns me as somebody who is pretty passionate about inequality. I believe that, as I said in my first speech in this place, too much inequality strains the social fabric and threatens to tear us one from another. That a bill which on the one hand delivers an effective cut to unemployment benefits, and on the other hand delivers a huge benefit at the same time to those at the top of the income spectrum is fundamentally against Australian values. Australians value the fair go. We believe that we are a people who ought to work together. That was the principle of the Eureka Stockade, which was invoked by the previous speaker in this debate, the member for Bass, and it is a principle which I believe runs through the Australian social compact. We are a country that does not like tipping, we sit in the front seat of taxis, we believe in the fair go, and we have a tradition of calling one another 'mate' and not calling one another 'sir'. And yet, this bill will probably do more to widen the gap between rich and poor than any bill that has been brought before the parliament over the past decade.

This is a bill which will take us backwards into a system of taxing mining and royalties, which we know not to be efficient. When Labor considered the issue of mining taxation, we listened to the experts. We looked around at best practice for tackling taxation, and it struck us that the approach taken in the PRRT, a profits-based approach, was a fair approach. That represents a rebalancing of the tax scale, and I do want to quote from an excellent new book, Ross Garnaut's Dog Days: Australia After the Boom, in which Professor Garnaut laments:

More and more of the load is carried by income taxpayers with limited opportunities for avoiding taxation, is economically distorting, unfair and probably politically unsustainable.

That is what we are seeing with this bill and with the carbon price repeal bill. Under Labor, we reduced the tax burden on workers, we increased the tax paid by polluters and we increased the tax paid in a profits-based way by mining companies. But if you are to decrease the tax rates on mining companies, if you are to decrease the tax rates on polluters, then effectively the burden will be higher upon wage earners. This is a tax shift, but it is a tax shift in the wrong direction. It is a tax shift that sees Australians pay a higher burden of income tax because if you are not going to ask big miners and big polluters to pay their fair share, then Australian households will have to pay more.

It comes in the context of a confected budget crisis. The Treasurer has come into this House with all kinds of stories about spendthrift ways and spiders—I think some days he thinks he is still over this side of the table.

But the fact is that, in the 2012-13 budget—we have seen the final budget outcome released recently—we saw a reduction in real spending of 3.2 per cent and a reduction in nominal spending of one per cent. Stephen Koukoulas has pointed out that a one per cent reduction in nominal spending has never happened before in Australia. That is an unprecedented reduction in government spending. So, when those opposite confect these budget crises—by giving $9 billion to the Reserve Bank that they do not need, by giving a tax cut to large mining companies that they do not need—they are effectively hurting future generations.

I spoke before about the politics of profits based mining taxes. I have given you an egalitarian argument for it, as I would, as a member of the Labor Party. But there is a more conservative, Burkean argument for fair mining taxation too. As Burke said, we are not just here for those generations now alive; we are informed by the generations that have gone before us and by the generations to come. If we tax mining revenue unfairly, then we short-change the generations to come and we hurt the future generations of Australians who will not have the minerals and will not have the proceeds from fair taxation. So even a Burkean should oppose the bill before the House today.

The minerals resource rent tax is a tax which I am sure could be improved. If there were reasonable proposals coming forward from the government about ways of improving the operations of the tax, we on this side of the House would be happy to have those conversations about how to better integrate state and federal regimes. But to simply abolish the tax is to throw the baby out with the bathwater. It is to leave Australia a little less fair, a little less egalitarian and a little poorer than it was before we found it.

I spoke in parliament about Canberra's strong community spirit, and the 50th birthday parties for two of my local communities - Watson and Hackett.

Suburbia is an oft maligned word in Australia, but our suburban communities here in the ACT are something to be proud of. As part of the Canberra centenary, Canberra has been celebrating the unique character, the history of our local communities. As the Parties at the Shops grouping as part of the Canberra centenary has noted, Canberra is probably the only city in the world where you have to have road signs to find the shops, secluded as they are from our leafy avenues.

I want to speak about two celebrations in my electorate. The 50th birthday of the Hackett community on 21 and 22 September was a celebration which brought out Canberra City Band's John Agnew Band, a Reminiscing Corner with early photographs, including from now closed Hackett school.

Hackett Community Association members Greg Haughey, James Walker, Bruce Smith, Terry de Luca, Kay Murphy, Lorraine Mason, Jenny Pierson, Erika Alacs, John Carty and Marian Williams should be commended for their hard work in making the Hackett celebrations such a success. As James Walker noted:

'There are still people here who moved in in 1962, '63, ' 64. We're also organising reminiscing sessions …'

He went on:

'When we were looking to buy when we moved to Canberra, as soon as we looked at Hackett we knew we wanted to be here.'

…  …  …

'The suburb was largely founded for defence people, CSIRO, ANU—so many people were ripped from their previous lives and moved here and had to sort of band together. A tradition has grown up that you know your neighbours and are aware of things happening.'

It is that community spirit in a city in which people really do know their neighbours which is one of the many reasons why I am so proud to represent the ACT.

On most measures of civic life, the ACT tops Australia and indeed postcode 2602, in which Hackett is located, is the most generous postcode in Australia according to donation statistics.

Hackett's Music in the Park organised by John and Christy Murray brings together local bands in the Bragg Street Park again building the community spirit.

Another 2602 postcode is Watson which celebrated its 50th anniversary on Saturday, 16 November. I commend the Watson Community Association, including Julie Smith, Richard Larson, John Real, Gillian Helyar, and the MC for the Watson Community Association's Great Debate, Julie Derrett.

Watson is named after the first Labor Prime Minister who regrettably only served for four months. The streets of Watson are named after lawyers, and so the Watson Community Association asked lapsed lawyers Gary Humphries and me to debate the topic: 'That Federation is a Failure, Canberra is a Catastrophe and Lawyers are Laughable'.

I drew the short straw getting the affirmative case and had to do a little nimble footwork so as not to place myself in an invidious position vis a vis my constituents.

I commend too the work of the Watson Woodlands group, which is working to preserve the local community and also Julie Smith and others who have prepared a brochure on Watson and its history, going back to the 1940s with the CSIRO Dickson Experimental Station being established for agricultural research in Watson and referring also importantly to the history of the Ngunnawal people in Watson.

I believe that better knowing your community, its history and your neighbours is fundamental to our sense of self. I think we are better versions of our selves when we are better grounded in our local communities. I commend the communities of Hackett and Watson on teaching all of us more about our local communities and giving neighbours a chance to get to know neighbours. It is a city which is a great privilege to represent.

I spoke in parliament about cuts to AusAID:

Government is about choices and those choices tell us a lot about people's values. A top priority of this government is to give a $4 billion tax cut to mining billionaires. The beneficiaries will be among the world's richest people. At the same time, this government is cutting over $4 billion from aid to the world's poorest people. That cut will affect aid workers, too. We have seen this government forcibly integrate AusAID into the Department of Foreign Affairs and Trade in a botched process with little care for the passionate development workers who have been involved. We saw a terrible initial briefing in which AusAID workers were herded like cattle into the middle of the DFAT auditorium, while those in the Department of Foreign Affairs and Trade looked down upon them from the atrium and one of the DFAT officials reportedly mimed machine-gunning the AusAID staff.

We have also seen this government breaking its pledge to new graduates who had accepted jobs with AusAID. There was an assurance from Minister Eric Abetz that, despite Public Service cuts, the government would continue to support graduate recruitment but that pledge has been broken. The government has terminated the contracts of about 20 graduates, many of whom had turned down offers from other agencies and had signed contracts with AusAID. Georgia BurnsWilliamson said:

'When I was first hired it was one of the most exciting days of my life. … AusAID was my dream job.'

She had quit her job as a tutor at the University of Melbourne and had passed the security clearance. She also said:

'It's like being told you've won the lottery and then someone saying, 'Oh sorry, we've made a mistake'.'

Darwin-born Michael Currie had accepted a job with AusAID and then rejected offers of graduate programs at two other government departments. He said:

'I thought I was doing the right thing telling them so they could give those offers out to the other candidates.'

Emily Hadgkiss, 27, had resigned as a researcher in public health at a hospital in Melbourne. She said:

It was a surprise to me that that decision was made.

She says she was 'aware there'd be changes and cuts' but that those were not supposed to affect the graduate program. As Georgia BurnsWilliamson put it:

'The bigger loss is all the people in developing countries who desperately need aid for basic services who are now going to miss out because there's been such a cut to the budget.'

This government has broken its promise to these young Australians and it is going to hurt the world's poorest in order to help some of the world's richest.