Andrew Leigh

MRRT Taxation - Private Member's Bill, 27 May 2013

It is worth reviewing briefly how we got to where we are today. When the mining boom hit Australia with commodity prices hitting century highs and mining profits going sky high, this government decided it would be an appropriate time to do for the mining sector what we had done in the petroleum resource sector a quarter-century earlier. That is not to use the old, outdated system of royalties to tax mining but to use a far more economically sound approach and to tax profits in the mining sector. Profits based taxation, Brown taxation, makes eminent sense. It recognises that the world price is not a price that is driven by the ingenuity of miners, ingenious as they may be, but it is a price which is driven by the demands of the world for our commodities. China and India are demanding our coal and iron ore because they need them to build skyscrapers for their industrialisation and that has driven the price through the roof. Yet until this government put in place an MRRT the Australian taxpayer did not see an extra cent when the prices went up. They got maybe a little extra for the volume but nothing for the price. So whereas at the start of the decade mining taxes were a dollar in three of company profits, by the end they had gone down to a dollar in seven.

This government decided to put in place an MRRT, a profits based mining tax, indeed the same mining approach which had been recommended to the Henry tax review by the Minerals Council of Australia. That is right: when the Henry review asked for suggestions on how to do mining taxation, the Minerals Council of Australia said, 'You ought to do it through a profits based tax.' It is not a radical suggestion. Indeed, Sarah Palin made her name in Alaska on profits based commodity taxation. So if you think that is a radical idea, I guess that means you think Sarah Palin is a moderate.

We put in place an MRRT and that MRRT is a fairer way of taxing commodity revenue. That commodity revenue is going to go up and down, but what this government has announced is that we are introducing legislation to allow the publication of revenue that reveals individual taxpayers. The bill that we are bringing before the House is a comprehensive approach. It will apply not only to the MRRT and the PRRT but also to other taxes paid by large corporations and multinationals. It is a considered, properly thought-through approach to transparency. It is not an opposition thought bubble; it does not simply attempt to grab a cheap headline. It actually takes a substantive approach to improving transparency.

What frustrates me most in this debate is hearing insinuations from those opposite that the government has been trying to hide MRRT taxation. This is information that the government did not have access to in the first quarter. The Commissioner of Taxation made a determination that under current arrangements he was legally unable to provide the data to the government or to release it publicly. That advice was not political advice, it was based on advice from the Australian Government Solicitor.

So what we really have here is those opposite cooking up a bogus debate so they can go into bat for the mining sector. The mining sector is a sector that the opposition has pledged to give a big tax cut to. When it comes to the election, those opposite will be going to the polls promising voters that they will give a tax cut to Gina Rinehart and Clive Palmer and that the tax cut will be paid for by taking money away from kids on their first day of school. That is the values, that is the priorities of those opposite. They do not believe that mining companies should pay their fair share; they believe that mining companies are paying too much tax. The repeal of the mining tax and the repeal of the carbon price are going to create a revenue shortfall of $26 billion, over $1,000 for every Australian. How do you make up for that? You either raise taxes on middle Australia or you savagely cut spending.

If those opposite are speaking about transparency then the key issue that Australians are demanding transparency on is coalition costings. Australians expect that when they go to the polls they will have the chance to make a decision between two sets of properly costed policies. Governing is about trade-offs, it is not about promising everything to every special interest that wants a tax repealed, every special interests that wants more spending.

Government is about making choices. When Australians hear those opposite say that they can deliver higher spending, lower taxes and pay down debt faster, they should know they are being told porkies. They should know that this is magic pudding economics.

We have seen some of that through independent experts, through the Parliamentary Budget Office and through Treasury, confirming that under Labor the budget will steadily improve over the coming years; independent experts who have recognised that the world economy has taken an axe to government revenues; independent experts who have also recognised that the sustainability of former Prime Minister John Howard's fiscal decisions in the early 2000s was deeply questionable. The Parliamentary Budget Office report on the structural deficit has confirmed the recent International Monetary Fund report, which found that, when you look back over Australian history back to World War II, the Howard-Costello government was the most wasteful government in Australia's history.

The opposition now are in a deep fiscal hole. They have on their own admission a $70 billion black hole, which is in the order of $3,000 per Australian, and that is before the recent significant write-downs to company revenue. They are planning on skating to the election on a mysterious commission of audit—the same commission of audit tactic that Campbell Newman attempted to use prior to the Queensland election to hide his harshest cuts from the voters. What Campbell Newman has delivered to Queenslanders is 14,000 job losses and savage attacks on health and education.

Much of the coalition's fiscal hole comes from policies like the deeply regressive paid parental leave scheme. I do not have to go about criticising that scheme, because so many of those opposite have done it for me. We have heard comments from the member for Tangney, who said:

‘Certainly I'm aware of a number of colleagues that have similar concerns on this policy. … There hasn't been a detailed policy debate on this issue in the party room, but I think that it is one that needs to be had.’

We have had the member for Mitchell, who says:

‘Most importantly for Australians, the policy does not pass the fair-go test.’

We had the member for Moore say:

‘The Labor Party scheme is quite good—‘

and questioned how the coalition scheme would improve productivity. Former Liberal Minister Peter Reith has said: 'It is obviously bad policy. I have no doubt a lot of people in the coalition are unhappy about it. It was a decision by Tony.’

The opposition have claimed that they can pay for this highly regressive, unfair paid parental leave scheme through company taxes, which all sensible-thinking economic folks know are ultimately levied on workers. So this will mean more expensive prices on groceries and driving up the cost of mortgages because it will be imposed on banks, all for a scheme which is not going to be available to those working in government. That means not only the public servants in my electorate but the teachers, the police officers, the local government childcare workers—none of these workers will have access to the paid parental leave scheme that the opposition is putting in place. It will be extremely expensive. It will hit them, but it will not help them.

I also want to note in closing some of the to and fro that has been taking place over the past week over the allegations of the member for North Sydney about government. The member for North Sydney has suggested that in some way Treasury forecasts are politicised. Treasury secretary Martin Parkinson has come back and responded to that in crystal terms. He has said:

‘Let me be very clear. Treasury does not provide the government with a range of numbers. Treasury provides its best professional estimate to the government. It is up to the government of the day - and this applies back through history - to do what it wishes with those forecasts.’

So the Treasury secretary has been crystal clear with the member for North Sydney that the forecasts produced by Treasury are a number, not a range. That has been the case under previous governments. It is the case under this government. To say otherwise is to deceive this parliament.

Same-Sex Marriage, 27 May 2013

This is the fourth occasion on which I have risen in this place to speak on the topic of same-sex marriage so I do not intend to recite the arguments and the cases that I have spoken about in previous speeches nor my respect for those who have a different viewpoint on this.

What I do want to do in the short time available to me is to broaden the philosophical basis for same-sex marriage. The case has, I believe, been made on the basis of equality—a value which many Australians hold dear and which is fundamental to our unique Antipodean notion of egalitarianism. People have spoken about same-sex marriage in the context of social justice and the recognition and protection of fundamental political and civil rights. But in my view the equality case is equally matched by a small 'l' liberal case for same-sex marriage and by a conservative case for same-sex marriage. Recently, conservative leaders in the United Kingdom and New Zealand have moved to allow conscience votes on the floors of their parliaments to take place on same-sex marriage—a marker as to how quickly attitudes are changing on this critical issue.

Prime Minister Cameron has said that he supports same-sex marriage not in spite of his conservatism but because of it. He says:

‘I think marriage is a great institution - I think it helps people to commit, it helps people to say that they're going to care and love for another person. It helps people to put aside their selfish interests and think of the union that they're forming. It's something I feel passionately about and I think if its good enough for straight people like me, its good enough for everybody and that’s why we should have gay marriage and we will.’

New Zealand conservative Prime Minister John Key said: 'My view has been that if two gay people want to get married then I can't see why it would undermine my marriage'. In New Zealand's parliamentary debate over the Marriage (Definition of Marriage) Amendment Bill earlier this year, conservative MP Maurice Williamson delivered a rousing speech that went viral on the internet. He spoke from what I would regard as a small 'l' liberal perspective when he said:

‘… all we are doing with this bill is allowing two people who love each other to have that love recognised by way of marriage. That is all we are doing. We are not declaring nuclear war on a foreign state. We are not bringing a virus in that could wipe out our agricultural sector for ever. We are allowing two people who love each other to have that recognised, and I cannot see what is wrong with that for neither love nor money. I just cannot. I cannot understand why someone would be opposed. I understand why people do not like what it is that others do. That is fine. We are all in that category.

‘But I give a promise to those people who are opposed to this bill right now. I give you a watertight guaranteed promise. The sun will still rise tomorrow. Your teenage daughter will still argue back to you as if she knows everything. Your mortgage will not grow. You will not have skin diseases or rashes, or toads in your bed. The world will just carry on. This bill is fantastic for the people it affects, but for the rest of us, life will go on. So do not make this into a big deal. This bill is fantastic for the people it affects, but for the rest of us, life will go on.’

That is a beautiful exposition of the small 'l' liberal case for same-sex marriage.

I want to speak briefly about the personal experience of Reverend Janis R Huggett, a constituent of mine who wrote to me last year and said:

‘I am a retired Uniting Church ordained minister who would certainly have experienced both personal joy and legal benefit from being able to marry my partner before she died three years ago. Instead, I had to cope with her brother challenging her will and being forced to continue to declare my legal as 'never married' rather than 'widowed'. After all our years together, that is so unjust. The church has been much more supportive than the government, in case you are wondering about Christian views on this subject.’

I would like to recognise many of those on the other side of the house who would like to vote for same-sex marriage if a conscience vote were allowed, including the member for Longman, the member for Higgins, the member for Wentworth, Senator Sue Boyce, Senator Simon Birmingham, and New South Wales Premier Barry O'Farrell.

I come to this from a perspective of equality. I acknowledge the hard work of Rainbow Labor, of activists such as Matthew Donovan, who worked as an intern in my office and helped prepare these remarks. But I hope that others will recognise that there are many good philosophical bases on which to ground same-sex marriage. It is not a battle between gay and straight, conservative and progressive, or left and right. It is an issue which ought to allow all of us to speak for our own electorates, and I hope the Leader of the Opposition will allow his party to do just that—a value that is in the spirit of his party.

Innovation in Canberra, 27 March 2013

Last Wednesday, I attended the launch of Entry 29, a co-working innovation space located just on the edge of the ANU campus in Acton. The name Entry 29 has a terrific connection to Canberra's history. In the federal capital design competition to design Canberra, 137 entries were submitted and the winner was the 29th entrant. In memory of Canberra's history and with an eye to Canberra's future, the Canberra community decided to call this innovation space Entry 29.

Entry 29 is a community-driven, not-for-profit company, whose aim is to provide a social and inspiring work space, where entrepreneurs can connect, create and collaborate on new and exciting opportunities. It also offers meeting facilities, access to mentors and service providers, including access to business advisers and financiers. Entry 29 has been driven by Canberra's start-up community in direct response to the need for affordable, collaborative accommodation for entrepreneurs and start-ups. It adds significantly to Canberra's track record as Australia's ideas capital—and we need to turn these ideas into business ventures. This is where Australia has great potential but has historically been weak.

Canberra has a wonderful record of innovation: Wi-Fi from the CSIRO; Nobel Prize winner Brian Schmidt's work on the expanding universe at ANU; and the great public policy entrepreneurs who populate the Australian Public Service. But the success of Entry 29 will be when one sees the office spaces around the ANU precinct being taken up by new business innovators, as one sees around the campuses of MIT and Stanford in the United States.

The hard work of volunteers from this community has gotten the facility ready for business. I want to thank Rory Ford, Nick McNaughton, Marcus Dawes, Craig Thomler, Anna Pino, Mick Cardew-Hall from the ANU, Peter Davison as well as my friend Andrew Barr, the Minister for Economic Development, for the ACT government's support for this vital innovation space.

I have spoken many times in this parliament about the need to support innovation. It was my pleasure last year to participate in a roundtable at Government House, along with Senator Sinodinos, entrepreneurs and venture capitalists. The roundtable was organised by Brian Schmidt in order to boost innovation in Australia. I regularly hold breakfast meetings for social entrepreneurs in my electorate because I believe we need to do more to encourage start-ups in the not-for-profit space. Entry 29 adds to that. It fills the gap that Australia has between the creation of ideas and the commercialisation of them. I wish the team at Entry 29 every success.

Here’s the fiscal challenge for the Coalition

Budget seasons is a time for parties to elevate debate above political point scoring and sloganeering, and to outline to the Australian people their respective visions for our future and their agendas for government. For this reason, it’s probably Tony Abbott’s least favourite time of year.

Instead of howling ‘no’ at every policy put forward by the government, Mr Abbott needed to step up as Leader of the Opposition and present an alternative. Instead of using nominal figures and juvenile scare-mongering on the state of the economy, Mr Abbott’s own policies – assuming he has any – will have to undergo scrutiny from the Parliamentary Budget Office and then the Australian public.

Tony Abbott is taking it for granted that he will become Australia’s next Prime Minister in September. This misguided sense of entitlement has distracted him from his current job. It’s simply not good enough for him to persist with catch phrases; he must come clean with the Australian people on his plan to fund his laundry list of bizarre policies.

As Treasury Secretary Martin Parkinson has pointed out, if the Pre-Election Fiscal and Economic Outlook (PEFO) had been released last week, it would have contained precisely the figures that were in the budget. This means that Tony Abbott knows the numbers. The election is now less than four months away, so he must have some idea what his policies are. The Parliamentary Budget Office is standing ready to cost the Opposition’s policies. The time for bluster is over; the time for details has arrived.

The fact is that Australia is facing a significant budgetary challenge, with the high dollar weighing heavily on government revenues. The amount of tax revenue that the Government has collected this year is $17 billion less than was forecast in our Budget last year.

Labor has made the tough decisions to accompany our spending with structural saves; for example by means-testing the private health insurance rebate. This is a structural save which generates more money in the longer term and can be used to support important priorities like DisabilityCare.

Only Labor has put forward a plan to make sure no Australian will be left behind, through introducing initiatives such as DisabilityCare, the National Plan for School Improvement and increases to pensions and superannuation. We know these are important investments in Australia’s future and we know the value of achieving these reforms now. The Coalition does not share this vision. It persists with their policy of giving tax cuts to big miners and big polluters, which must ultimately be paid for by middle Australia.

The Opposition doesn’t want to take these tough decisions before the election, because they know that Australians will be concerned with their plans to drastically cut spending. If Mr Abbott wants to be taken seriously as a manager of the economy, he should have used his budget reply to outline the tough decisions he will take and the details of how he will fund his policies. Unfortunately, he spent too much time talking the Australian economy down, and not enough time outlining the cuts he will need to make. Mr Abbott has demonstrated time and again that he does not take the task of managing the economic future of this country seriously.

This article originally appeared in Inside Canberra Vol. 66, No. 17

TRANSCRIPT – CAPITAL HILL
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
22 May 2013

E&OE



TOPICS:                Coalition costings.

Lyndal Curtis:                     Being Shadow Treasurer in budget week can be a little like being the understudy. You get to help prosecute your side’s case in the media, but the glory of the parliamentary reply goes to the Opposition Leader. It may be a little under a week since the formal budget reply, but Joe Hockey got his day in the spotlight today with the now traditional Shadow Treasurer’s post-budget address to the National Press Club. The government was calling on Mr Hockey to reveal the Coalition’s policy and costings – he didn’t do that, but he did make one or two announcements. Joining me this evening is the Shadow Small Business Minister Bruce Billson, and Labor Parliamentary Secretary Andrew Leigh. Welcome to you both. We’ll start this evening with Mr Hockey’s explanation of why, when the Coalition says there’s a budget emergency, it’s still electing to keep the carbon price compensation by way of tax cuts and pension rises.

Footage of

Joe Hockey:                        …We make no apologies for delivering tax cuts, I think it was every year for our last five or six years. And in fact Labor were so impressed with that that they went on to deliver our tax cuts when they got into government – and thank you for that. I think the challenge going forward is to have stability in tax. Now, we do not apologise for tax cuts that involve the abolition of the carbon tax and the mining tax, because they are a handbrake. Those two taxes are a handbrake on the Australian economy, and I think, if there is a change of government on the 14^th of September, there will be a surge of confidence. I believe that in my heart, and it’s true. And if that is the case, then part of that will be about the fact that the mining industry is not going to have a mining tax, and every household is going to be liberated from additional costs associated with the carbon tax. So we make no apologies for those.



Lyndal Curtis:                     Bruce, does it seem a bit odd that if you declare a budget emergency, and then you don’t elect to take $4 billion of savings you could have had by pulling back the carbon price compensation, which I assume you’d think would be needed because there’s no carbon price?

Bruce Billson:                     Well, Lyndal it’s not just the Commonwealth government that has a budget emergency because of the reckless spending and waste of the Labor government, it’s households as well. Households have budget emergencies, you’ve seen figures released this week about the pressure in household rising right across Australia. Cost of living pressures keep coming at them, very little opportunity for discretionary expenditure, real concern about paying the bills at the end of each month. And that’s something that we recognise; Australian’s want to get ahead, it’s a country that’s built a reputation of getting ahead from one generation to the next. That’s not what the Australian people feel night now, and our approach to remove the cost of living keeps those income tax and pension payments is about releasing the budget crisis in many Australian households.

Lyndal Curtis:                     But you doing it effectively twice over? You say the price of electricity and gas goes down if you remove the carbon price, that cost of living pressure is presumably eased if that happens. And then you relieve it again, by keeping the tax cuts and pension rises.

Bruce Billson:                     Well, an excellent account about how positive this is for the households, Lyndal. Removing the cost pressures that are created by a carbon tax that’s way out of step with anything that’s going on in the rest of the world, putting upward pressure not only on the costs of households face but Australian businesses face as they seek to compete internationally and seek to secure markets. And some opportunity to relieve the budget pressures in those households, with the tax cuts and also the additional pension payments paid fortnightly.

Lyndal Curtis:                     We might go now to some of the announcements in Joe Hockey’s speech. Andrew, it seemed like a pitch to small business to make the Tax Office nicer, to make it more accountable, have the Tax Commissioner appear as the Reserve Bank governor does before a parliamentary committee, have an inquiry into the structure of the tax office, and perhaps even break it up into administrative and policing functions. Do you believe that there’s anything wrong with what Joe Hockey proposed?

Andrew Leigh: Well Lyndal, I look at this as a federal representative for the ACT, and it’s pretty strange here when you see that the Coalition’s promise is to get rid of 20 000 Canberra public servants –

Lyndal Curtis:                     I think they’ve only actually said 12 –

Andrew Leigh: Mr Hockey has repeatedly referred to there being 20 000 more public servants than there were, and the need to cut back. I think that it is pretty clear that he is moving up –

Bruce Billson:                     It’s 12.

Andrew Leigh: - from 12 to 20. But regardless, there will be a big hit on the ACT economy and as a result to that, many small businesses will be sent into a tailspin. And yet at the same time that he wants to get rid of 20 000 hard-working public servants, Mr Hockey wants to add more senior public servants into the Tax Office. I mean, the first policy position Mr Hockey comes up with that is actually consistent will be his first. There is nothing for ACT small businesses in Mr Hockey’s smash-and-grab plans, and small businesses across the nation are going to be hard hit by the tough austerity that the Coalition has in promise. What we’re going to see if Mr Abbott is elected is similar to what the United Kingdom has seen, where David Cameron’s brutal austerity is closing libraries, and sending that economy back into recession. That’s clearly their textbook.

Lyndal Curtis:                     If we could just stay on the Tax Office for a minute – Bruce, if the Tax Office is split into two, isn’t that effectively creating a second bureaucracy?

Bruce Billson:                     My head is still spinning after Andrew Leigh, he must be on that Labor kool-aid, hardly anything that he said was actually grounded in facts, but let’s try and bring it back to what Joe was actually saying. He was saying the Tax Office has been particularly insensitive to the real life and commercial realities that small businesses are facing. He pointed to a potential conflict where the agency has its administrative function – the day to day work of collecting taxes that are needed to fund the important work and services of the Commonwealth provides – sitting alongside those that are in a prosecution role. And we’ve seen for instance the number of garnishees issued against small business up by about 450%. I get reports every day, every day about an insensitivity to the pressures that small businesses are facing, that there are assumptions of profitability that lead to claims of tax avoidance when the reality is margins are very thin, things are very tough out there, this ongoing attack against independent contractors. And those extra bureaucrats that Andrew is talking about are actually second commissioners with business experience out in the real economy making sure that the executive group in the Tax Office has a reality check about what is going on in the real economy, and that people have an opportunity to be treated with respect whilst adhering to their lawful obligations to pay tax. And that’s perfectly reasonable, perfectly adult, perfectly sensible.

Lyndal Curtis:                     We might move on now to the bigger picture, Joe Hockey is continuing to dispute the government’s budget figures. It’s the reason he’s saying the Coalition costings can’t be released until the pre-election fiscal outlook into the election campaign. The government says a speech by the Treasury secretary yesterday shows he’s wrong.

Footage of

Penny Wong:                     …Dr Parkinson made clear that the budget numbers are the numbers, he made it clear that if the – what’s know as the PFO, the pre-election fiscal outlook – had been released on budget day, the numbers would have been the same. You know what that adds up to? It adds up to Joe Hockey’s excuse for not releasing his figures being completely destroyed, that’s what it means.



Lyndal Curtis:                     Andrew, your side of politics is continuing to pressure the Coalition to release all of its policy and costings now. But if you look at it from the Opposition’s point of view, why would they put the out before election time? It just gives you more chance to attack what you perceive to be the holes in it.

Andrew Leigh: Well the question Australian families have to ask, Lyndal, is if the Coalition’s polices were so good for families, would they really be sitting in the bottom drawer rather than being out in public view? And we have a taste of where the Coalition is going from some of the policies that they’ve announced. They’ve said, for example, that they want to give a tax cut to Gina Rinehart and Clive Palmer, and that’ll be paid for by raising superannuation taxes on low-income Australians. They want to give a tax cut to the biggest polluters in Australia, and they want to pay for it by taking away money from kids on their first day of school.

Lyndal Curtis:                     But you also had a rise in family benefits you promised at the last budget that you rescinded at this budget.

Andrew Leigh: Lyndal, we have never cut back on income support for families, unlike the Coalition who has said it is going to take away an income supplement that benefits hundreds of thousands of Australian families. They’ve said that they’re going to decrease the tax-free threshold , which means that a million more Australians are going to be filing tax returns. Every one of their policies that is out is a policy that is going to hit those at the bottom to help those at the top. It’s a standard Coalition playbook, and the cuts in the bottom drawer are, if anything, going to be worse.

Lyndal Curtis:                     Bruce, the Treasury secretary Martin Parkinson disputed things some Coalition spokespeople have said, that the Treasury gives the government a range of economic forecasts and the government gets to choose which one it wants. He says that is not true, and he also said effectively that if PFO had been released now, the figures would have been the same, that he doesn’t expect to see much difference. Why do you take him at this word and say the economic forecasts that are produced in the budget are those that come from Treasury?

Bruce Billson:                     Well the Treasury secretary is doing what he’s paid to do, and that’s to provide advice and support the government of the day. That’s perfectly reasonable and that’s the expectation of senior public servants as they work hand in glove with the government of the day. So there’re no surprises in what the Treasury secretary said. What is surprising is some of the assumptions that are embedded in that document, spectacular assumptions about the carbon price movement and what’s happening in the mining industry, about a miraculous ending to the boat arrivals and the millions of dollars that have been blown out there, about some mucking around with the rate of indexation in the rate of education. That’s what the concern was, and in relation to PFO, Lyndal, it was only a few short weeks ago that in the space of about twelve days that the supposed revenue loss went from $7 billion, to $11 billion, to $17 billion over the course of twelve days. Now there’s ten times that period of time between now and the next election, who will believe none of that will change?

Lyndal Curtis:                     But some of that was measuring MYEFO to that period, and other bits of it was measuring budget to budget, that’s why it seemed to jump so rapidly.

Bruce Billson:                     So this is where you had the Prime Minister, the Treasurer and the Finance Minister roll out this $10 billion change in supposedly revenue lost in under a fortnight, yet we’re to believe that these numbers released recently are not going to change over 120 days? I mean, you can’t be serious about that suggestion Lyndal, there’s no evidence whatsoever under this government that they are competent and capable of nailing any of these economic forecasts and it’s perfectly reasonable for the Coalition to wait and see the last word on the state of the finances which is PFO – the pre-election fiscal outlook – before responding to this chorus call from Labor.

Lyndal Curtis:                     We might move on just quickly because we’ve only got a couple of minutes left. It seems that an analysis of the structural budget surplus or deficit is now the new black, we’ve had two today, one from the Parliamentary Budget Office. Bruce it does seem to suggest that the tax cuts delivered by the Coalition and then in the first in office by Labor have contributed to the structural budget deficit. It does show that decisions made have had an effect over a long period of time, doesn’t it?

Bruce Billson:                     Well of course decisions made have an effect Lyndal, and in terms of the budget cuts that were funded, affordable and reasonable under the Howard government – and they were thought to be so reasonable that the incoming Labor government kept them – what that structural budget outlook shows is that for every year that was analyses, that the Coalition was delivering surpluses, that there was a structural surplus. A structural surplus, so those tax cuts were responsible and measured and kept the budget in a structural surplus. Contrast that with the Labor years, every year  not only is there a deficit, there is an enormous structural deficit.

Lyndal Curtis:                     A quick response Andrew?

Andrew Leigh: Lyndal it’s pretty clear from this analysis that what the IMF said recently holds up: that the Howard government wasted mining boom mark one. I also want to return to a point that Bruce made about forecasts. When he is attacking the integrity of the Treasury secretary, he is doing so because the Coalition want to use a dodgy private accounting firm to do their costing, rather than the experts in Treasury and the Parliamentary Budget Office.

Bruce Billson:                     My attacks are on a dodgy Treasurer –

Lyndal Curtis:                     I’m sorry Bruce, we’ve run out of time, that’s where we’ll have to leave it. Andrew Leigh, Bruce Billson, thank you very much for your time.

MEDIA RELEASE

Andrew Leigh to represent the Australian Government at the 19th International Nikkei Conference on the future of Asia

Tonight, I depart Australia for Japan to represent the Australian Government at the 19^th International Nikkei Conference on the Future of Asia.

This will be my first visit to Japan as Parliamentary Secretary to the Prime Minister.

The Tokyo conference will examine the future of economic growth and development in the Asia-Pacific region, with a particular focus on Southeast Asia.

Whilst in Japan I will be meeting the Bank of Japan’s Assistant Governor, Mr Kazuo Momma to discuss ‘Abenomics’ - Japan’s new fiscal and monetary strategy under the Abe Government.

I will also be meeting with senior officials from Japan’s Ministry of Foreign Affairs, the Ministry of Finance, and the Cabinet Office.

During the Conference I will participate in a Roundtable with foreign policy and economic commentators from the University of Tokyo, Keio University and the Japan Centre for Economic Research.

This trip will be an opportunity to discuss the Australian Government’s Asian Century White Paper and to reaffirm the importance of our economic and security relationship with Japan.

Australia has an important contribution to make to the region’s economic growth and stability and I look forward to representing our country at this conference.

TRANSCRIPT – AM AGENDA WITH KIERAN GILBERT
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
21 May 2013

E&OE

TOPICS:     Equal marriage, school funding



Kieran Gilbert:   This is AM Agenda, thanks for your company. Joining me now from Melbourne, the Shadow Parliamentary Secretary for Small Business, Scott Ryan, and the Parliamentary Secretary to the Prime Minister, Andrew Leigh here in the Canberra studio. You heard what Senator Brandis had to say, Andrew Leigh, about Kevin Rudd; that this is all about him, not about same-sex marriage. What do you say to that?

Andrew Leigh: Well Kieran, it’s pretty clear that views on this issue have shifted and shifted pretty markedly. We’ve seen just over recent months same-sex marriage become law in New Zealand and Britain because Conservative leaders allowed their Party room to vote the way they wanted to. If Mr Abbott will do that in Australia, we’ll bring the vote back to the floor…[inaudible]

Kieran Gilbert:   But specifically on Kevin Rudd, that this is more about him than it is the issue?

Andrew Leigh: Ah look, Kevin is a backbencher. He’s entitled to his views and he articulated them well.

Kieran Gilbert:   Senator Ryan, on the prospect of any change, what Andrew Leigh points out there is accurate; there’s got to be a change within the Coalition formally to allow a conscience vote if there’s going to be any legislative move.

Scott Ryan:         Well, I’m not going to be lectured on a conscience vote from a member of the Labor Party. I mean, it’s a special occasion when a member of the Labor Party gets to display their own conscience. It’s something every Liberal Party member has always been able to do. We had a discussion on this issue in the Party room recently, and you know, any future decisions are a matter for a future Party room. But our view is clear. We support the Marriage Act as it currently stands.

Kieran Gilbert:   And Kevin Rudd incidentally holds a press conference at 9:30 this morning in Brisbane we’ll have that news conference for you live when it happens. On the issue of school funding, Senator Ryan, it really comes down to the projected growth rate in the indexed funding for state schools. Tell me, it’s all very complex but the Federal Government is pointing to the numbers provided to the Department and Treasury, surely we’ve got to rely on that?

Scott Ryan:         Well, no we don’t actually because we’ve learned we can’t rely on numbers in Labor Treasurer’s budgets just over the last few years. What is clear is that they have cut over $300 million from education, they’ve cut just under $3 billion dollars from higher education and they’re saying that in 2018/19 they’ll put some of it back. Now, that is up to three elections away. We can’t trust Julia Gillard’s budget, and Wayne Swan from week to week on the budget as we learned in the weeks leading up to it. You can’t take money off people in the next four years and promise to give it back them in years five and six, three elections away, and be taken seriously.

Kieran Gilbert:   Andrew Leigh, the point that Christopher Pyne made as well yesterday, was that you look at the last decade and the growth in school funding, stayed school funding, was six per cent, now, if that’s the record over the last ten years, why is there now this assumption that it will be half that figure?

Andrew Leigh: Because Kieran, state governments have changed. We now have more conservative premiers and they have a cuts agenda. They’re making big cuts to their school funding. And the way our formula works is that the Commonwealth funding is indexed to what the states spend. I don’t think that’s a particularly sensible formula which is why we put in place the Gonski reforms. It’s why we want to fix this system. But the fact is, when states and territories cut their spending, Commonwealth spending automatically comes down, and so the projections going out are not this six per cent growth, they’re now well down to four projected to fall lower still. And so this cuts agenda that is implemented at the state and territory level automatically feeds in to cut commonwealth funding unless you change the system, as we’re suggesting you should do.

Kieran Gilbert:   Senator Ryan, do you feel comfortable with the suggestion that Barry O’Farrell has been conned? A senior Liberal, one of the most senior Liberals in the country and you’ve got your colleagues saying that he’s been conned, he’s been duped?

Scott Ryan:         Well I think what’s clear is that Labor are trying to con the entire country. You know, a week after the Budget now we know that they’ve halved the indexation rate, it’s been reduced from the papers they released only six months ago, and all in an attempt to make the proposed increase outside the budget period in 2018 and 19 look bigger. Now, the Coalition’s got a track record in school funding. We funded growth in state schools. We funded growth in parental choice and gave that funding to independent and non-government schools.

Kieran Gilbert:   Well I suppose, Andrew, that’s the point that Scott Ryan, Senator Ryan pointed to there, that why’s it halved in the space of what, six months since October when the mid-year Budget update was delivered?

Andrew Leigh: Significant cut backs by state and territory governments is the simple answer to that Kieran. If you want…

Kieran Gilbert:   But are you now saying that it’s going to be the case for the next six years? It just seems to be a big, big assumption.

Andrew Leigh: Look, Scott is running here with sort of hyperventilating hyperbole which assumes there is some grand conspiracy occurring in Treasury. The Treasury officials who put together these projections are the same capable Treasury officials who worked for the Howard Government. They are putting their best estimates of what’s going to happen to funding, unless we fix this broken model, unless we put back in what will amount to about a million dollars per school.

Kieran Gilbert:   And Senator Ryan, if the states do sign up, that does make your position a lot more difficult. Obviously it’s just one state at the moment. But if Victoria, Queensland, WA, if they eventually do sign up before the June deadline, it changes, well, it’s a game changer, isn’t it?

Scott Ryan:         We’ve said that we’ll support a national school funding model if it’s a national school funding model. And you know, you remember back in the days of the Howard Government, David Kent went to a great deal of trouble to make sure non-government schools, particularly the Catholic system, signed up to the National School Funding Model the Howard Government introduced. We’re not going to have a hodge-podge of mechanisms across the country. But Andrew Leigh there, makes what Peter Garrett did earlier, just another series of Labor excuses. You know, they’ve been caught out halving the indexation rate and of course now they’ve got to find someone to blame so they blame the state governments. These are not numbers that Australian parents can trust and they’re not numbers that we believe those who run our schools, government and non-government should trust.

Kieran Gilbert:   We’ve only got a minute left on the program. I want to look quickly at analysis in the Financial Review on the polls, the Nielson Poll, which suggests the Coalition could likely have control of the Senate after the election as well. Does, that would be a concerning prospect for you Andrew Leigh?

Andrew Leigh: Kieran, you know I pay no attention to polls and there’s good science behind that. But, Australians will have a clear choice come September. They’ll have a choice between the nation-building reforms of Labor; DisabilityCare, important schools reforms which you’ll see big increases in funding for every school, and Tony Abbott’s agenda which is savage cuts including 20,000 public servants, cutting out income support – he’s said he’s going to do that, cutting back on superannuation, reducing, probably never increasing superannuation…

Kieran Gilbert:   Scott Ryan, 20 seconds, your final thoughts on that?

Scott Ryan:         Look, polls don’t change what the Coalition’s going to do between now and September 14. We’ve got a plan to improve Australia. We know we’ve got to convince people and earn their trust so you know, the only thing Andrew and I might agree on is that the polls aren’t actually going to change what we actually do for the next 116 odd days.

Kieran Gilbert:   Gentlemen, thanks for your time…

Andrew Leigh: There’s many things we agree on Scott!

Kieran Gilbert:   I’m sure there are. We’ll get to those on another date and morning. Thanks for those gents. That’s all from AM Agenda, the latest Sky News is next.

TRANSCRIPT – 'BREAKING POLITICS' WITH TIM LESTER
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
21 May 2013

TOPICS:                Marriage Equality, baby bonus, negative gearing.

Tim Lester:          Senator Fiona Nash, Andrew Leigh, welcome back here to Breaking Politics.

Andrew Leigh: It’s good to be here.

Tim Lester:          Former Prime Minister Kevin Rudd now says he supports same sex marriage, inspired partly by an unnamed political staffer who he had coffee with and turned out to be gay, and wants to marry. Andrew Leigh, is Mr Rudd right?

Andrew Leigh: I believe he is, Tim. I understand that there are deeply held views on both sides of this debate in the community, and I’ve had hundreds of email exchanges, phone conversations, discussions in my electorate office, about the issue. But fundamentally I do believe that attitudes are shifting, and they’re shifting much faster than they did on big issues such racial equality and gender equality. Just recently we’ve seen conservative leaders in the UK and New Zealand move same sex marriage through their parliaments, not because they thought it was an issue of the left, but actually because they thought – in David Cameron’s words – that as a conservative, they should be a supporter of same sex marriage. So I think that there’s a case from liberalism and even conservatism that supports a change like this.

Tim Lester:          Fiona Nash, your views on what Kevin Rudd has had to say?

Fiona Nash:        Well it’s interesting, isn’t it, that he should change his view and make a point of it at this time of the cycle. I think that people will rightly think is it really just a straightforward change of mind or are there any other motives behind Kevin Rudd coming out and changing his view on same sex marriage. But with the Labor Government at the moment every day is a new day, you never know what is going to happen around the corner.

Tim Lester:          So what motive do you think Mr Rudd might have?

Fiona Nash:        Well look, who would know? It may be very genuine, he may have just had an epiphany of a change of mind, it may well be to raise his own profile again, who would know. He’s certainly done that in the past and maybe it is a profile raising exercise, but we’ll have to wait and see.

Tim Lester:          What about your view, Senator, on the question of same sex marriage? What do you believe should happen?

Fiona Nash:        Well I support the status quo, that marriage is obviously between a man and a woman. I certainly understand that there are many people who have a different view on this, I’ve spoken to many of them. But at the end of the day it is the Coalition’s view that marriage is between a man and a woman, and that hasn’t changed.

Tim Lester:          Kevin Rudd tells a story of a simple change of a point of view, of having a coffee with a gay man, a gay political staffer that he knows here in Canberra. Isn’t his case an argument for at least a conscience vote, or don’t you see it that way?

Fiona Nash:        Certainly within the Coalition we haven’t seen a need to date for a conscience vote, we are supportive of the current situation. Kevin Rudd is entitled to his own view, he’s entitled to change his mind on his position of course. Our view in the Coalition hasn’t changed, and that’s where we stand at this point in time.

Tim Lester:          And Andrew Leigh, your views on the fact one, no doubt you oppose the lack of a conscience vote on the Liberal side of politics. But there are plenty on your side of politics who speak exactly as Fiona Nash does on this issue, don’t they?

Andrew Leigh: Absolutely Tim. I think there are people of good heart on both sides of this debate and I would certainly include Fiona in that. I do think, though, that it’s a bit cute to overplay Kevin’s views. I think Mr Rudd could change the name of his cat and somebody would find an angle on that which would have something to do with national politics. Fundamentally this is a backbencher expressing his change in views, and I think the way that he’s found that one story has affected him reminded me of the Washington State legislator, who voted against same sex marriage and then a few years later left the parliament, and one year her daughter came home for Christmas and said that she was gay. And the legislator just broke down in tears because she knew that she had voted against her daughter being able to marry, and that she could never go back and reverse that vote.

Tim Lester:          Fiona Nash, a big search on now inside the Coalition for the cuts that would balance an Abbott government’s budget, ultimately. Has the time come to end the tax break that 1.2 million Australians claim on their investment properties, the one we know as negative gearing?

Fiona Nash:        Well, certainly we are going to have to have a look at everything from one end to the other because of the disaster financial state that Labor has got this country into. We’re now looking at $257 billion of gross debt, and the economic mismanagement is just extraordinary. So obviously if we’re fortunate enough to win government we’re going to have to look at everything. But in terms of negative gearing, in 2005 the Productivity Commission looked at this, it was determined at the time that it was appropriate for negative gearing to be part of the taxation system. Certainly within the Coalition the view has always been supportive of negative gearing, and at this stage certainly that position hasn’t changed. And interesting to know, I think it was around 1985 that Paul Keating got rid of it, rents went through the roof and I think in 1987 the Labor Party reversed that decision to get rid of negative gearing. So there are going to be a lot of things that need to be considered down the track to try and get the country back on track, out of this economic mess that the Labor government has got us into.

Tim Lester:          Ok, and you personally though support the continuation of negative gearing?

Fiona Nash:        Well at this stage I see no reason to change my mind, I have supported it in the past as the Coalition have. But as I say, we are going to have to look everything when and if we are fortunate enough to get into government, we’re going to have to try and look at everything to fix this mess so the country can actually get back on its feet. I think the Australian people understand the very dire situation that the country economically now is in.

Tim Lester:          Andrew Leigh, would it be worth the government revisiting the question of negative gearing or no?

Andrew Leigh: Well Tim, come September I think Australians are going to face a pretty clear choice. They’re going to face a choice between a Labor Party that has put responsible taxes on carbon pollution and on the mining sector, and a Coalition that has promised to rip those taxes away to give tax breaks to big miners and big polluters. And that’s the reason that we’re having this conversation over Coalition costings, not because there is a budget crisis – it’s quite clear that Australia’s debt level is at 10%, very modest by international standards, and responsible to get us through the financial crisis. But it’s also clear that because the Coalition wants to give these big tax cuts, because they want to put in place this very expensive, very unfair parental leave scheme – maybe $12 billion – that they then need to start, as Fiona has said, considering all the options. Putting everything on the table, raising GST, cutting pensions, cutting income support, getting rid of negative gearing for people who just bought a house last year and thought that that was an investment property that they could rely on. This is a scary world indeed when these Coalition cuts come into force, which they would if Mr Abbott were to become Prime Minister.

Tim Lester:          So you personally support the retention of negative gearing as it is?

Andrew Leigh: Negative gearing is in accord with our tax system, which allows people to deduct certain expenses when they’re claiming income. Certainly what we’ve done at the moment is to make a series of responsible savings: we’ve done things like removing the baby bonus, and that is in accord with $180 billion of savings we’ve made on payments we thought were unfair or outdated, like the dependent spouse tax offset. We get attacked on these every single time by the Coalition, but the point is when Australians go into the ballot box on September 14, they’ll be choosing between Labor’s investments and the Coalition’s cuts.

Tim Lester:          Fiona Nash, was the baby bonus good policy? And is it now good policy to get rid of it?

Fiona Nash:        Well certainly there have been discussions around the baby bonus over the years, but at this point in time the Coalition will ensure that as we go down the track towards an election people are very aware what we’re going to have in place for families. Now there’s been some discussion around the baby bonus, obviously there’ve been discussions around changes to the Family Tax Benefit Part A that the government is now talking about, but at the end of the day we are looking at an economic disaster in this nation, we’re looking at the gross debts reported in the budget going out to $370 billion over the forward estimates. We cannot let this economic situation continue, we’re now paying a billion dollars a month in interest because of this Labor government. Those are the sorts of things people in Australia want fixed, and they want us to make sure that we get this country back on track.

Tim Lester:          Ok, but under that, those tough choices that you talk about, one of them that Joe Hockey at least looks like supporting is the abolition – the total abolition – of the baby bonus. Do you back Mr Hockey doing that?

Fiona Nash:        Well look I support Joe Hockey, and what he’s trying to do to get the country back on its feet. I think there’s absolutely no doubt about that we’ve seen this Labor government just run rampant with this economy, they’ve got no idea how to manage the economy. We’ve got Australian people right across the nation trying to balance their household budgets, trying to do the right thing, and at the same time looking at a Labor government that is particularly irresponsible and looking at a gross debt at over $370 billion over the forward estimates.

Tim Lester:          What do you say to stay at home mums who look at the generosity of the Coalition’s paid parental leave scheme and the removal of a relatively small payment that would have gone to them when they had a child, how is that equitable?

Fiona Nash:        We are certainly aware of the stay at home mums and the wonderful jobs that they do, I was indeed a stay at home mum for many years. Certainly it will become very apparent in the time running up to the election that we will indeed be looking at those stay at home mums and making sure that they have the support they need.

Tim Lester:          Senator Fiona Nash we know you’ve got a plane to catch from Hobart so we’ll let you be, thank you for joining us this morning. Andrew Leigh, appreciate you coming into the studio.

Andrew Leigh: Thanks Tim, thanks Fiona.

TRANSCRIPT – RN DRIVE WITH WALEED ALY
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
20 May 2013

Topics: Federal budget, paid parental leave, GST.

Waleed Aly:        Both sides this week are assessing the impact to last week’s Budget, and the Budget Reply, as they shape their campaigns for the election that’s coming in September. Just seventeen weeks away, incidentally. We know it wasn’t a traditional pre-election budget, it wasn’t full of vote-winning spending initiatives. In fact the big surprise was that the Government is axing stuff, moving to axe the baby bonus for example. And you might be surprised to learn that that has gone down very well with voters. What will the politicians make of that, will it influence their campaigns on other issues perhaps? To discuss the politics and the policies we can expect, I’m joined now by our political panel: Senator Arthur Sinodinos, Parliamentary Secretary to the Opposition Leader and Coalition Deregulation Taskforce chairman, he was previously chief of staff to then Prime Minister John Howard; and Dr Andrew Leigh, who is now Parliamentary Secretary to the Prime Minister. Thank you gentlemen for joining us. I think I should congratulate you, Andrew Leigh – you’ve been promoted since the last time we spoke.

Andrew Leigh: Thanks Waleed. It just occurred to me that it’s almost as though we’ve got the seconds for the Prime Minister and the Leader of the Opposition. It made me think of the old way lords would resolve disputes by each choosing a knight to go forth and fight their battles for them.

Waleed Aly:        That’s a very flattering way of describing both of you, I appreciate that, the imagery is wonderful. Let’s start with this Nielsen poll, and I don’t really want to talk about the headline issue. The support for the baby bonus, or the scrapping of it, was really interesting. 68% of respondents backed the move of scrapping it, only 27% opposed. Arthur Sinodinos, does this suggest that it wasn’t really great policy to begin with?

Arthur

Sinodinos:           Firstly congratulations to Andrew on the Parliamentary Secretaryship, he richly deserves it. Look, it’s easy for us after the event to rationalise this result about the baby bonus because you think on the face of it people would favour more spending on anything. But I think the political environment has changed pretty significantly in the last few weeks, if not the last few months. And in a sense, the politicians are catching up to where the public have been for a while, where the public have raised their own savings post-GFC. Household savings are now about 10% of household income, so if we’re going out there and saying as a political class that some things are no longer affordable, or that we should borrow to have X or Y, I think it actually resonates with the public. Now some people will say that sounds a bit self-interested, but I’m willing to bet that people are saying ‘well, if the politicians are axing something because they don’t think it’s affordable, they’re telling the truth’ and it will resonate with them.

Waleed Aly:        Yeah, I just got a text though on this: ‘Baby bonus gone-ski, but why did we ever have it?’ That’s from Shane. There seems to be a feeling, not just that its time has come, but that it was always just a middle class welfare handout, that was of dubious use and benefit to the economy, that it was always just more political than policy.

Arthur

Sinodinos:           Can I just say – and I think my recollection of this will be slightly hazy – but I think that this was an alternative to having a paid parental leave scheme, from memory. It was an alternative that was put up and it was meant to be available to whoever was having a baby, whether you were in the workforce or a stay-at-home mum. But that, I think, was the context in which it originally arose. So it makes some sense that, now both sides of politics have embraced paid parental leave schemes, to review the efficacy or the need for this particular benefit.

Waleed Aly:        Sure, but that didn’t stop your side of politics opposing it when the Government tried to reduce it in previous budgets, even though a paid parental leave scheme was both parties’ policy.

Arthur

Sinodinos:           Well I think we came to the right decision on that in this context.

Waleed Aly:        Ok. Andrew Leigh, first home buyers’ grant stays though. Wouldn’t that be something that would be ripe for the chopping block, if you’re going to go down this path?

Andrew Leigh: Well I think that certainly both sides of politics have come around on the baby bonus, and it’s really interesting for me to see that greater focusing on targeting. First home buyers’ grant deals with a different challenge. But I certainly think that on this one, it was a policy that was not particularly well targeted, we means tested it down to $150 000 but that only took out the most affluent 3% of parents. So really you had a policy that wasn’t in the spirit of the highly targeted Australian social safety net. A typical developed country gives twice as much to the bottom fifth as it does to the top fifth. We give twelve times as much to the bottom fifth as the top fifth, and I think that’s the genius of the Australian income support system, that it is so powerfully targeted, through the assets and means tests on the pension, for example, in the early ‘80s, and a whole lot of means tests that surround other programs. That’s how you make a system that’s sustainable in the long run.

Waleed Aly:        And I suppose that you could say the first home buyers’ grant is in a way means tested, because it’s for first home buyers. But the effect of it hasn’t really been that helpful for first home buyers, it’s really just pushed up the prices in that sector of the market. So it makes it even harder to enter the market.

Andrew Leigh: Well, the effect of the price is going to depend – I’m just trying to do the models in my head – you want to think about the share of all buyers who are first home buyers, say that’s one in five, or one in ten. And then you want to think about what economists call the incidents, or basically the split between the buyer and the seller – say that’s half – you’re going to get something like a tenth or a twentieth of the money goes to push up house prices. So I think the effect of pushing up house prices tends to be over played on this. But yeah you’re right, it’s a benefit that’s going to all, and given that the least affluent are less likely to buy homes, then they’re less likely to claim the first home buyers’ claim.

Waleed Aly:        So why not get rid of it?

Andrew Leigh: Well, all of these things need to be considered in their time. I think that, at the moment, our decision has been that the baby bonus isn’t sustainable and that comes off the back of looking at a whole range of other programs: means testing the family tax benefits, getting rid of the dependant spouse tax offset. So we’ve got a strong record of things in this area.

Waleed Aly:        Are we seeing a philosophical shift here? Is it just about the baby bonus, and parental leave, and the timing of it? Or is there something here where both parties are recognising that the era of middle class welfare should be over?

Andrew Leigh: Well I thought Arthur’s comment about the savings rate was fascinating, because Australia does – now that 10% savings rate is now higher than Japan’s, and it’s against our standard psyche, we don’t think of Australians as being more frugal than the Japanese, we think of ourselves as being as spend-thrift as the typical Anglo country. I thought it was really interesting the way Arthur characterised that, and the way it plays into political debate, but I suppose the extra thing I would add to that is that Australians also want to see income support go to the neediest, unlike say Europeans, who have this idea that when the Government spends, it ought to spend across the income spectrum. And I think that defines the difference in the two parties’ parental leave programs. I would characterise ours as being much more in the Australian spirit, because it’s the minimum wage for everyone. The Coalition’s is a much more European-style one, where it’s replacement wage, therefore it gives more to those than earn more.

Waleed Aly:        Would you like to respond to that, Arthur Sinodinos?

Arthur

Sinodinos:           A couple of comments, Waleed. On the paid parental leave plan, Tony Abbott has been pretty clear I think in that he sees it as a workforce entitlement, rather than just income support, and that’s what it’s got the payment levels we’re talking about. He wouldn’t characterise it necessarily as a European style payment, but as more of a workforce entitlement and its rationale is to keep women more in touch with the labour market during that period, so they’ve got an incentive to return. So they’ve got paid leave, they go back to their place of employment. We’re trying to find ways of encouraging labour workforce participation. We don’t want a situation where women just drop out of the workforce completely after having kids, or if they have an aspiration to have a full time job, they feel that they can only put up with a part time job, and helping women who want to move from part time to full time.

Waleed Aly:        But it’s not a workplace entitlement though. Because a workplace entitlement comes from your employer, like leave is a workplace entitlement. Your boss, or your employer, grants you leave, that isn’t a handout from the Government. So you can call it a workplace entitlement, but doesn’t that really mask what it is?

Arthur

Sinodinos:           Yes, but I mean, yep. You can go into semantics but it will be funded by companies at the big end of town, so in that sense we are matching the accountability with the responsibility for the money. Now it’s separate whether we have a modest company tax cut, and we can come back to that. But the point is, that’s the mentality that Tony is trying to emulate, the idea of a workforce or a workplace entitlement.

Waleed Aly:        But it’s more than a semantics difference isn’t it? Because the top end of town is funding this with its levy, but all employers will be passing it on. So there will be a whole lot of employers, a majority of employers, across Australia, who will not be contributing money to this –

Arthur

Sinodinos:           But recognising, Waleed, that smaller employers don’t have the same capacity to pass it on –

Waleed Aly:        Right, which is why it’s not a workplace entitlement, it’s a government handout.

Arthur

Sinodinos:           Yes, but we’re trying to entrench a certain approach to the treatment of women in the labour force, promoting that attachment to the labor force. And the second part is of course what you do to improve the affordability and access to childcare as well.

Waleed Aly:        Ok, Andrew, I want to pick up on some more points on this in a moment, but Andrew Leigh I might throw that to you. You’ve spoken a lot, and your government has spoken a lot, about wanting to keep people in work, and get people working, this sounds like the kind of thing that would lead to that. Why would you not adopt something that is as generous as this?

Andrew Leigh: Well I guess you have to look at the total government spend in order to achieve this outcome, Waleed. And we’re looking at a government spend that might well be as large as $3 billion a year, $12 billion over the forward estimates period. And then you’d have to say well, could you more effectively to boost workforce participation. And I’d say, for example, if you’re sitting down from the Coalition’s perspective, they could keep the reductions in superannuation taxes that we’ve put in place. Two thirds of those go to women, because women are disproportionately low income earners. They could, for example, support the continuation increase of the superannuation increase from 9% to 12%, because disproportionately those who are on lower superannuation contribution rates are going to be at the bottom of the income spectrum, and are therefore more likely to be women. Those retirement savings incentives are important, as is the big agenda we’ve driven through childcare – and not only improving access and quality, but increasing the rebate there. I think childcare costs are more likely to be a larger disincentive. This kind of very regressive paid parental leave scheme is, I think, unlikely to have much impact on workforce participation, and as Arthur well knows, the company tax from which is raised is ultimately a tax that is being paid by workers. We know that the company tax doesn’t get paid by the other two sources of income: land and capital. It gets paid by labour.

Waleed Aly:        Arthur Sinodinos, just to pick up on the politics of this, I mean whatever the benefits or otherwise of the parental leave scheme proposed by your side, can you stand here now, hand on heart, and tell me that this is actually going to get through the party room given that there is so much opposition within the Coalition?

Arthur

Sinodinos:           Comrade Tony Abbott is potentially taking us to an election victory. If he gets us there, this policy will stand, it will be a signature policy of his, and there would not be a reason for people to oppose it.

Waleed Aly:        But there’s such deep opposition within the party. I mean you can’t deny that.

Arthur

Sinodinos:           There’s an even deeper opposition to staying in opposition, let me put it that way.

Waleed Aly:        Well once you’re in government, you won’t be staying in opposition, so that’s the point at which you can talk about it.

Arthur

Sinodinos:           Look no, I don’t, I seriously don’t believe that a majority of people in the party room would oppose this scheme, if we get into government. If we don’t get into government, all policies get reviewed, clearly. But if we get into government and he’s promised this policy at the election, it’s a promise he’s going to have to keep. We made such a meal of Julia Gillard breaking her promise on the carbon tax eight days out from the last election, Abbott’s made it pretty clear he’s going to be judged on keeping his commitments. He’s got to keep it.

Waleed Aly:        He’s snookered the party room, I love it. That’s very good.

Arthur

Sinodinos:           No hang on Waleed, I want to say one thing on that. I know why you say that, but by the same token, it’s part of a series of measures that if we’re serious about gender diversity particularly in the workplace, we’ve got to tackle. I’ve mentioned childcare, there’s the white paper on tax reform, which is coming in the first term if we get elected. These are all areas where the tax transfer system can play its role, these are all issues that can work together when it comes to promoting workforce participation.

Waleed Aly:        Ok, fair enough, I was just being cheeky. Before I let both of you go, I do want to talk about GST. Should we increase the rate of GST, and thereby fix this structural problem in our current tax base which puts the burden overwhelmingly on the corporate sector rather than on individuals, and we end up with this structural problem in the budget whenever the profits decline. Andrew Leigh, you first?

Andrew Leigh: Waleed, I think that we’ve got the tax mix there right. I certainly don’t support increasing GST, against a tax that ends up basically falling on labour. It worries me when I hear Tony Abbott say that he’s absolutely committed to getting rid of a carbon price, and moving the profits-based mining tax back to the much less efficient royalties mining tax. Neither of those are reforms that could be supported by consensus of economists. Most economists think pricing carbon is efficient, most economist think that you ought to have a profits-based mining tax rather than a royalties-based mining tax. So Mr Abbott’s problem is that once he has made those decisions is that he has a big revenue gap, and he has to plug it by using things like the GST.

Waleed Aly:        But it’s not just Tony Abbott saying this is something he might look at, and that’s all he said, he didn’t say he’d adopt this. He just said that if you’re going to do a tax review you may as well do a review of everything and the GST is clearly part of that. And there’s a lot of the Government for leaving the GST off the table when the Henry tax review happened, and its various attempts to reform taxation policy. And the main problem, or one of the big structural problems is that we don’t tax individuals enough, and that we tax companies heaps, and then when prices go down in the mining sector, there’s a huge hole in the budget. Isn’t this in fact a really good way to fix it?

Andrew Leigh: Saying you’re going to review something is sort of a standard trick for pushing it off but just keeping it at arm’s length. I guess what troubles me is that Mr Abbott is not saying that he’d like to get expert opinion on the carbon price, on that he seems to be listening to the folks who, I sort of characterise, as soil magic, you know the Direct Action. On the mining tax, he doesn’t seem to be wanting to see what the experts have to say there. But on a tax that will fall heavily on Australians, and of course of all Australians it will fall disproportionately on those with lower incomes who tend to spend their entire pay check rather than saving anything, there Mr Abbott is suddenly saying he’s open to considering it. So when you say you’re open to considering the tax that has one of the most regressive impacts in the system, I begin to worry a bit. I’d be fascinated to hear Arthur’s views on this, I mean he was right next to John Howard when he introduced the GST, he’s seen this all the way through.

Waleed Aly:        Well Arthur, final word to you. It does suggest that the Coalition certainly doesn’t have a problem with regressive taxation, when you look at the GST and the parent leave scheme.

Arthur

Sinodinos:           Two comments, the first is proceeds of the tax go to the states, and what Tony has said is obviously we’re prepared to consider it but we’re not proposing anything, certainly not for this election. But we’re happy, and in a constructive spirit, to have the debate if we win the first term. So he’s really inviting people to put their views on this and other matters on the table, and as you’ve seen from some of the reports from state premiers and others, they’re willing to put stuff on the table. The other point I’d make about things like the GST is that they never happen in isolation as you would’ve seen from the new tax system in 2000. So nothing ever happens in isolation and it’s always a mistake when people try and focus on just one tax and say ‘well this tax, is this changes it is a bad thing’, you’ve got to look at the totality of what you’re doing and that was certainly the case with 2000. And Tony’s made it clear that anything that comes out of the white paper process would go to an election, so you’d be looking at systemic change rather than change focused on one or two things. I think, with respect to Wayne Swan, one of the downsides to what he did with the Henry tax review, was that he was very quick to pick and choose, rule out a whole variety of items, we never got to have a genuine dialogue on tax reform. And this goes to the process by which you make some of these reforms stick.

Waleed Aly:        Alright, well it’s a long way down the track no matter which way it goes, but we have to leave it there. Gentleman, it’s been wonderful to speak to both of you shining knights of Australian politics, I hope we can do it again sometime soon.

Arthur

Sinodinos:           I’ll get my lance.

Andrew Leigh: I’m looking forward to it, Waleed.

Response to Mark Latham’s Quarterly Essay

It’s occasionally been forgotten since he left the Labor leadership nearly a decade ago, but when he chooses to engage in policy, Mark Latham has a lot to say. He is optimistic about the intellectual and organisational future of the Labor Party, and appropriately proud of the role we have played in opening up the Australian economy in the 1980s and 1990s and dealing with climate change today.

One big question Labor thinkers are always willing to wrestle with is how the party’s guiding philosophy should evolve. Political parties invariably adapt as society changes, but Labor’s options have particularly opened up as the Coalition has shrunk into what Anthony Albanese has tagged ‘the noalition’. When Tony Abbott calls for a ‘people’s revolt’ against a market-based mechanism for dealing with climate change, it’s hard to know whether to criticise him for abandoning conservatism or trashing liberalism.

The same holds for other issues. A true Burkean conservative would acknowledge that Australia’s minerals belong as much to future generations as to ours, and that we have an obligation to our successors to tax mining profits appropriately. A true liberal would support the fuel tax reforms that were introduced by Peter Costello in 2003, rather than back-flipping at the last moment to win a tabloid headline. And it’s hard to see how either conservatism or liberalism justifies the opposition’s relentless critique of means-testing. Each time the government has reduced the welfare paid to millionaires, the Opposition has sprung to their defence.

In delivering the Deakin Lecture in 1973, Deputy Liberal Leader Phillip Lynch said ‘It is naively believed by some people that the one and only job of an Opposition is to oppose. This is a gross oversimplification. An Opposition’s function is to compose as well as to oppose; it is a constructive as well as a destructive role. An Opposition is the alternative Government and, as such, must initiate and promote positive and constructive policies if it is to be regarded as a potential Government by the electorate. No electorate can be expected to endorse a political party which has become expert at criticism at the expense of its own initiative.’

Indeed, it is Deakin himself who best pegged today’s Opposition. In 1906, he spoke of ‘a party less easy to describe or define, because, as a rule it has no positive programme of its own, adopting instead an attitude of denial and negation. This mixed body, which may fairly be termed the party of anti-liberalism, justifies its existence, not by proposing its own solution of problems, but by politically blocking all proposals of a progressive character, and putting the brakes on those it cannot block.’

A century on, there is a good case that the mantle of social liberalism, carried by Deakin in the early twentieth century, rests most easily on Labor shoulders. Latham mentions my own arguments to this effect, but he might also have noted Chris Bowen’s excellent 2008 speech to the Sydney Institute: ‘Reclaiming Liberalism for the Left’. Labor’s liberal legacy includes trade liberalisation, competition policy, carbon pricing, and the publication of test scores. These sit comfortably alongside our party’s egalitarian legacy: fiscal policy that saved jobs in the GFC, a school system that wants everyone to finish school (not just ‘the right kids’), Medicare and Disability Care to protect all Australians.

Latham is very comfortable with market liberalism, but worries that social liberalism might not be matched with appropriate responsibilities. He gives the example of multiculturalism, where he argues ‘Labor celebrates diversity for diversity’s sake’, and contends that laws to address discrimination and prejudice can harden public attitudes against the intended beneficiaries. And he goes on to argue that one of the reasons for the decline in social capital is the ‘free exercise of human rights’.

In each case, I’m not sure the evidence is as strong as Latham proposes. Multiculturalism, as philosopher Tim Soutphommasane argues, draws on both liberalism and egalitarianism. It recognises that everyone has equal rights, but also that different cultures are valued. As to the hardening of public attitudes, I’m not aware of any evidence that racism or sexism increased upon the passing of the Racial Discrimination Act 1975 or the Sex Discrimination Act 1984. And on social capital, my own exhaustive analysis (Disconnected, UNSW Press, 2010) concluded that the key drivers were changes in technologies and working patterns.

Latham worries that liberalism could undermine community values, but in some cases, it might serve to strengthen them. For example, my own support for same-sex marriage is partly grounded in my belief that the institution of marriage exerts a stabilising effect on society. Indeed, a good case for same-sex marriage can be made from the standpoint of egalitarianism, liberalism or communitarianism.

That said, the communitarian strand to Latham’s thinking is one we shouldn’t ignore. Like British parliamentarian Jon Cruddas, Latham articulately taps into the needs for modern Labor Parties to connect with strong local communities, and traditional values. This is about understanding our history, and shaping policy solutions that work for regional and outer suburban Australia, as well as the inner city.

Since Mark Latham’s piece appeared, the Labor Party has endured what Prime Minister Julia Gillard described as an ‘appalling’ week, with the loss of five frontbenchers and three whips. (As both Malcolm Turnbull and Kevin Rudd can attest, attention from the Quarterly Essay – like the appearance of oranges in a Godfather movie – is not a good omen.)

The media have picked over the minutiae of those circumstances exhaustively (and perhaps quite rightly so), while the Opposition have looked on keenly. But they have been less keen to fulfil their responsibility as the nation’s alternative government. There is no evidence that the Opposition is any closer to putting forward properly costed policies on which the Australian public could judge their credentials. Those shards of Coalition policy that get announced are frequently illiberal. From Scott Morrison’s call for ‘behavioural protocols’ for asylum-seekers to its relentless campaigning against Keynesian economics, this is a Liberal Party in name only.

In this environment, I welcome Mark Latham’s desire to drop in on the Labor family for a Christmas drink. Ideas have always been the lifeblood of Australia’s oldest political party, and his – along with many others – will help to shape Labor’s future in decades to come.

Andrew Leigh is the federal member for Fraser. His latest book is Battlers and Billionaires: The Story of Inequality in Australia (Black Inc, 2013).