A MORE DYNAMIC ECONOMY - FH GRUEN LECTURE
THURSDAY, 25 AUGUST 2022
I acknowledge the Ngunnawal custodians of this land, pay respects to their elders, and commit myself to the full implementation of the Uluru Statement from the Heart.
For a man I never got to meet, Fred Gruen had a remarkably large impact on my life. As a university student, his book with Michelle Grattan, Managing Government: Labor's Achievements and Failures, shaped how I thought about the economic impact of the Hawke and Keating governments. I wrote my honours thesis on Labor’s unilateral tariff cuts in 1973, 1988 and 1991, and why a social democratic government chose free trade when many other left‑wing governments favoured protectionism. I concluded that part of the answer lay in the power of ideas. Gough Whitlam’s 25 per cent tariff cut in 1973 might not have happened without the persuasive impact of Fred and other economists. Economic ideas matter. As John Maynard Keynes put it, ‘the world is ruled by little else’.
But it almost didn’t happen. Born in Vienna in 1921, Fred Gruen was sent to Australia on a ship called the Dunera in 1940. Two days after departing Liverpool, the boat was struck by a German torpedo, which did not explode. As Bruce Chapman once observed, Australia benefited greatly from the incompetent German torpedo maker, whose failure enabled the success of the ‘Dunera Boys’.Read more
MONDAY, 15 AUGUST 2022
Subjects: falling volunteer numbers; Labor’s plans to rebuild the charity sector
ANNA VIDOT: Some new data indicates that Australians are volunteering less than they were two years ago. The Australian Charities and Not-for-profits Commission estimates that the number of volunteers in Australia has dropped from 3.3 million to 2.9 million over the course of the pandemic. Now this is not necessarily surprising, I guess. But is it all about COVID? Given that we know volunteering numbers were kind of on this slide beforehand too. Is there more at play here about how connected we are and how connected we feel with the communities that we're living in? And I guess most importantly for the organisations missing out on volunteers, can we change that? Dr Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury. He’s also the local Member for Fenner here in the ACT. Andrew Leigh, thanks very much for your time this afternoon.
ANDREW LEIGH: Pleasure, Anna. Great to be with you.Read more
NEWSDAY, SKY NEWS
MONDAY, 15 AUGUST 2022
Subjects: Labor’s plans to rebuild the charity sector; Labor’s plans to make multinationals pay their fair share of tax
TOM CONNELL: We're volunteering less than we used to. So why is that the case? Joining me now is Andrew Leigh, Assistant Minister for Competition, Charities and Treasury. Thanks very much for your time. You're delving into this problem. Why do you think we're not out there volunteering, putting as many hours as we used to into the community?
ANDREW LEIGH: It's part of an overall decline that we've seen, Tom. Australians are not only less likely to volunteer, but less likely to join community organisations, to play team sports. We've got fewer friends than we did in the 1980s, and we know fewer of our neighbours. We've become disconnected. I don't think this is the fault of either side of politics, but certainly the former government's war on charities didn't help. That prompted three open letters from the sector, calling on successive Liberal Prime Ministers to back off their attacks on charities. Labor’s ended the war on charities, but I'm now reaching out to charities through these building community forums - which kicked off in Sydney today - asking for their ideas about how we can work together collaboratively. Philanthropic funders, charities and government, to build more reconnected Australia.Read more
MONDAY, 8 AUGUST 2022
Subjects: Labor’s plans to make multinationals pay their fair share of tax; ATO settlement with Rio Tinto and the use of marketing hubs; JobKeeper
LIAM BARTLETT, HOST: I wanted to talk about the world of commerce ‑ the wild, wonderful, wacky world of tax, in particular, with a revelation in the Financial Review this morning that oil and gas giant Shell has confirmed that it is selling Queensland gas to global customers via a Singapore marketing hub, which of course raises questions all over again about what they call transfer pricing to lower domestic tax payments. In other words, the price you end up selling it to is not necessarily reflected in the amount of tax you end up paying to the country that you draw that product from. It's drawn attention all over again to how the big industry players sell gas offshore. And it also comes hot on the heels, you may recall last month the decision by Rio Tinto ‑ another industry giant ‑ to pay almost a billion dollars to settle the dispute to the Australian Taxation Office over the mining company's use of a marketing hub in Singapore. These marketing hub pricing mechanisms have been around for a while. Now all this leads me sort of back to Rome, so to speak, because you might recall during the election campaign a lot was made of this from the then Labor opposition about forcing the multinationals to pay more tax. And we spoke then to the Honourable Dr Andrew Leigh, who has become now that Labor is in government the Assistant Minister for Competition, Charities and Treasury, and he joins us on the program. Andrew, good morning to you.
ANDREW LEIGH, ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY: Good morning, Liam. Great to be back with you.Read more
MONDAY, 8 AUGUST 2022
Subjects: Labor’s plans to make multinationals pay their fair share of tax; ATO settlement with Rio Tinto and the use of marketing hubs; international agreements on multinational tax avoidance; windfall tax; competition
PATRICIA KARVELAS, HOST: By now, most Australians would be feeling the effects of record inflation and rising interest rates, even if you don't have a mortgage. But high commodity prices, which is one of the drivers of that inflation, are also delivering a $27 billion boost to the budget bottom line. And that's, of course, welcome news for the Treasurer as he prepares to hand down his first budget in October. We get two budgets this year with a change of government. And with budget repair a priority, the government has multinationals like Google and Facebook in its sights, canvassing a range of measures to force them to pay more tax. Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury, and our guest this morning. Welcome back to Breakfast, Andrew Leigh.
ANDREW LEIGH, ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY: Thanks, Patricia. Great to be with you.Read more
KEEPING TABS ON PRICES HAS NEVER BEEN MORE IMPORTANT
The Canberra Times, 18 August 2022
Twelve dollars for an iceberg lettuce. Eleven dollars for a punnet of strawberries. Cooking oil prices boiling over. KFC putting cabbage in its burgers. After decades of stable food prices, suddenly inflation is on the front page of the paper.
Addressing price rises involves government working with industry to fix supply chain issues, reducing the backlog in visa processing for skilled migrants, and pressing the Fair Work Commission for a pay rise for minimum-wage workers and aged care workers. The independent Reserve Bank has also raised rates to contain the demand-side pressures. Both the Reserve Bank and Treasury are currently forecasting that inflation will be back inside the target band of 2 to 3 per cent by 2024.
But if we’re to address inflation, it’s vital to understand it. In most countries, inflation is reported monthly, providing a regular update on price pressures. Of the 20 largest economies that make up the G20, Australia is the only one that doesn’t produce monthly inflation estimates. Instead, Australia produces inflation figures every three months.Read more
CASE OF CAUSE AND EFFECT
The Daily Telegraph, 17 August 2022
In recent weeks, we’ve learned two troubling facts about young Australians: the prevalence of mental disorders has hit a new high, and the rate of volunteering has plumbed a new low.
According to the surveys, young Australians are more likely to be experiencing anxiety or depression. At the same time, this cohort is less likely to be joining with others to help their local community. With charities in desperate need of new helpers, many are pulling back from the civic work that is so vital to a strong society.
To get a sense of the scale of the problem, let’s look at the numbers.
Among young women, an extraordinary 47 per cent have experienced a mental disorder in the previous year – up from 30 per cent in 2007. Among young men, the rate of mental disorders has grown from 23 per cent to 31 per cent. Among young people, rates of depression have doubled, rates of social phobia have tripled, and rates of panic disorder have increased nearly four‑fold.
In terms of community involvement among 18‑24 year olds, the volunteering rate is now 25 per cent, down from 30 per cent in 2006. Many remarkable young Australians still give their time and energy to help out in their local community, but the net effect is that for every five young volunteers today, we would have had six young volunteers if the rate had remained as high as in 2006.Read more
POLICY BANNING UNFAIR CONTRACTS WILL SHIELD SMES FROM EXPLOITATION
Joint opinion piece with
Julie Collins MP
Minister for Housing
Minister for Homelessness
Minister for Small Business
The Australian, 9 August 2022
The cleaning companies were multi‑billion‑dollar firms, but most of their customers were small businesses. So the big firms wrote contracts that allowed them to increase their prices. To make things worse, the contract said that if the small businesses didn’t like the price rises, they had to pay huge penalties to cancel the contract.
Small companies often lack the resources and bargaining power to negotiate terms in standard form contracts. Existing laws haven’t stopped the use of unfair terms, which are hurting small businesses across Australia.
Right now, contract terms found by a court to be unfair are unenforceable, but they’re not illegal. That’s why we’ve announced that the Albanese Government will outlaw unfair contract terms. If companies put unfair terms in their contracts and a court finds they are unfair, then they can cop a penalty from the court.Read more
LABOR WANTS TO WORK WITH BUSINESS IN A RACE TO THE TOP
Australian Financial Review, 9 August 2022
With an area of around 700 square kilometres, Singapore is about 1/10,000th the size of Australia. Not surprisingly, it doesn’t have much of a mining industry. But starting around 2006, Singapore suddenly began to play a key role in Australian commodities exports. From 2006 to 2014, BHP sold $US210 billion worth of resources to its Singapore subsidiary. They then marked it up by 10 per cent and sold it on. The iron ore never went near Singapore – it was shipped out of Western Australia to the final buyers in Korea, China, India and Japan. Yet somehow a chunk of the profits landed in Singapore.
The creation of Singapore marketing hubs isn’t the fault of the Singaporean government, which has a long and distinguished tradition of welcoming traders and financiers from around the world. It arose because some clever accountants at BHP and Rio decided to play a thimble-and-pea trick with their profits. Some called it ‘the Singapore Sling’, but while the cocktail is a deliciously sweet gin drink, these tax tactics left a sour taste in the mouth of Australian taxpayers.Read more
Work underway on crypto asset reforms
The Albanese Government will improve the way Australia’s regulatory system manages crypto assets, to keep up with developments and provide greater protections for consumers.
Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector.
The Australian Taxation Office estimates that more than one million taxpayers have interacted with the crypto asset ecosystem since 2018.