2GB Money News with Luke Grant - Transcript
2GB MONEY NEWS WITH LUKE GRANT
THURSDAY, 20 OCTOBER 2022
SUBJECTS: BUDGET, STAGE THREE, MULTINATIONAL TAX MINIMISATION, APEC FINANCE MINISTERS’ MEETING, EMPLOYMENT RATE
LUKE GRANT: But still five days to go until the budget is delivered and a whole lot of promises still to come. Something that was outlined as part of the election commitments was the move to limit tax avoidance by multinational companies. One of those government members driving that campaign is Andrew Leigh, who is the Assistant Minister for Competition, Charities and Treasury, and I'm delighted to say he's on the line. Now, before we get to budget matters, I saw a piece he wrote about multinationals paying their fair share of corporate tax in Australia. And I want to get to that as well, but there's so much to talk about, Andrew. But employment, according to the ABS, with employment increasing slightly by around 1000 people, the number of unemployed increasing by about 9000 people. This is from their statement today, the unemployment rate rose by less than 0.1% remained at 3.5 in a rounded term. Do you reckon we've reached the point where the rate now might head the other way? What's your feeling about this?
ASSISTANT MINISTER FOR COMPETITION, CHARIRTIES, AND TREASURY DR ANDREW LEIGH: Well, I'm really hopeful we're going to keep the unemployment rate low. Because full employment really does help to drive wage growth and to ensure that people get jobs who wouldn't have otherwise get a look in. We know that it's only in full employment that people who have unconventional CVs, who are minorities, finally get a chance to get jobs. So we need to spread the benefits of economic growth and low unemployment is a great way of doing that. It's why full employment was such a big priority at our Jobs and Skills Summit that we held recently. Because Labor knows how much it matters for Australians.Read more
2022 APEC Finance Ministers’ Meeting - Media Release
This week I will be representing the Treasurer at the Asia-Pacific Economic Cooperation (APEC) Finance Ministers’ Meeting in Bangkok, Thailand.
These meetings are an opportunity, ahead of next month’s APEC Leaders’ Meeting in Thailand, for APEC economies to discuss fiscal and monetary interventions and key risks. This is especially timely given the highly uncertain global outlook and the fact that many APEC economies are currently dealing with similar challenges to Australia, including high inflation, skills shortages, energy transitions, and increased public sector borrowing costs.
At the APEC Finance Ministers’ Meeting, we will affirm the importance of sustainable finance in curbing carbon emissions, and digitalisation in making growth more inclusive. We will also collaborate on areas which require collective action including climate change, sustainable development, and digital connectivity.
In addition to the Finance Ministers’ Meetings, I will also meet bilaterally with senior economic policymakers from other nations to discuss looming challenges in the global economy. A key emphasis for me will be discussing initiatives to promote economic dynamism in the Asia-Pacific region, including greater engagement on competition policy.
A Zippier Economy: Lessons from the 1992 Hilmer Competition Reforms - Speech - Sydney Ideas
A Zippier Economy: Lessons from the 1992 Hilmer Competition Reforms
University of Sydney
Monday, 17 October 2022
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I acknowledge the Gadigal people, traditional custodians of the land on which we gather today, and pay my respects to their Elders past and present.
Thank you to Sydney Ideas, the University of Sydney’s flagship public talks program, for hosting me today. I welcome the students, members of staff and alumni attending this afternoon. Having spent six years earning a couple of degrees here, including a year editing Honi Soit, it’s good to be back.
Given the topic of today’s presentation – lessons from the 1993 Hilmer Review and the subsequent National Competition Policy reforms – it’s also my pleasure to acknowledge Professor Fred Hilmer, who has joined us today. It’s both exciting and daunting to have the subject of today’s talk in the audience.
As Professor Hilmer told me recently, the National Competition Policy reforms were big, bold and far-reaching.
He’s right in every respect – they’re regarded as among the most significant economic reforms in Australia’s history.
And we’re still talking about them 30 years later because they provide a powerful lesson for building a zippier economy.
Successful reform often looks deceptively easy afterwards.Read more
Australia signs Tax Treaty with Iceland
The Albanese Government has signed a new tax treaty with Iceland, the first of its kind between the two nations. Once in force, the treaty will facilitate cross-border trade and investment and enhance the economic relationship between Australia and Iceland.
The treaty will make it easier for Australian companies to access capital and export to Iceland through reduced withholding tax rates.
By giving effect to the G20/OECD Base Erosion and Profit Shifting recommendations, the treaty is a demonstration of the Albanese Government’s commitment to tax integrity.
The treaty will also provide more certainty and reduced compliance costs for Australians and Australian businesses who earn income here and in Iceland.
Once the domestic implementation requirements have been completed the treaty will enter into force.
A summary of the main features of the new treaty is available on the Treasury website.
Quote attributable to Assistant Minister for Competition, Charities and Treasury Andrew Leigh
“This is a great step forward for Australia and Iceland’s economic relationship. It will help to build the trade and investment relationship between our nations.”
“This treaty demonstrates the commitment of the Albanese Government to enhancing tax integrity by incorporating measures to prevent international tax avoidance.”
Statement of Progress on Harmonisation of Fundraising Laws - Media Release
Joint media release with
The Hon Melissa Horne MP
Victorian Minister for Consumer Affairs
The Albanese Government is working with charities and supporting State and Territory governments to harmonise fundraising laws.
Australia’s state and territory fundraising laws were developed at a time when most fundraising was conducted in person.
Today, with most fundraising done online, the cost and complexity of complying with multiple state and territory fundraising requirements is a major issue for the charity sector.
Substantial progress has already been made on the development of a national framework for fundraising laws, with feedback from industry consultations with the charity sector in February and March 2022 used to inform this development.
The framework adopts a principles-based approach to enable charities and donors to have a clear understanding of conduct, but also allows for greater flexibility as to how charities achieve compliance.
It also broadly aligns with existing regulatory codes of conduct, minimising the impacts on fundraisers that are already members of regulatory associations such as the Fundraising Institute of Australia.
On 9 September 2022, State and Territory Consumer Ministers met in Adelaide and reaffirmed their support for the reform of outdated and inconsistent conduct obligations across state and territory fundraising laws.
A Working Group of jurisdictions is finalising a framework of nationally-consistent fundraising conduct requirements for the Council on Federal and Financial Relations to agree and release in late 2022 (subject to the agreement of all participating jurisdictions).
These Are My Favourite Running Routes In Each Australian Capital City
Men's Health, Thursday 6 October 2022
Humans evolved to run, the story goes, because it allowed us to chase big game to exhaustion on the African Savannah. It’s the simplest of sports, and despite all the technological advances in exercise science, many of us still like nothing more than lacing up our sneakers and heading out for a jog.
One of the best aspects of running is how easy it is to take it on the road with you. If you’re travelling for business or pleasure, it doesn’t take much to pack your running gear. A run is a perfect way to greet the dawn, take a midday break, or shake off the stress at the end of the day.
As a member of parliament, my job regularly takes me to different parts of Australia. Over the years, I’ve explored plenty of paths and trails. There’s lots of running routes I’m yet to try, but I’ve got my favourites for every city. My ideal route avoids traffic lights, and stays by the water.
So if you find yourself in a new city, here’s a run to get you started.Read more
Launch of Miranda Stewart's 'Tax and Government in the 21st Century' - Speech, Canberra
'Tax and Government in the 21st Century'
Parliament House, Canberra
Thursday, 6 October 2022
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One of Florence’s great city-states is the walled city of Sienna. Home to the famous Palio di Siena, an annual spectacle described as ‘the world’s most insane horse race’, its city building shows on the wall a painting known as ‘The Allegory of Good and Bad Government’. Painted by Ambrogio Lorenzetti in 1338 and 1339, it shows a well-governed society – happy people, productive enterprises, strong communities; and a badly-governed one – crime, garbage and dysfunction.
Miranda Stewart has chosen for her cover image of Tax and Government in the 21st Century a segment of Lorenzetti’s fresco depicting good government. It underpins her central message – and one that the rulers of Siena knew in medieval times – that taxation is an integral part of a good society.
Tax and Government in the 21st Century takes a broad sweep, both in time and space. It begins with the origins of modern tax systems, and the way that taxation was expanded to cover public goods. As the Bismarckian welfare state grew, so too did a need to fund unemployment insurance, health insurance and pensions. Stewart’s history is impressive, but I couldn’t help feeling that she perhaps gave too little attention to the role of war in expanding tax systems. For example, Australia’s federal income tax was introduced in 1915 (to pay for World War I) and massively increased in 1942 (to pay for World War II).
Budgeting, Miranda Stewart notes, is fundamentally an ethical exercise. She discusses the growing emphasis in government budgets on analysing the impact of taxation and spending policies on gender and inequality, and discusses the rise of green budgeting. Fittingly, as Treasurer Jim Chalmers has noted, a major focus of the October 2022 budget will be on wellbeing, and measuring what matters.
Another trend that Stewart notes is the rise of fiscal rules. In 1990, she notes, less than ten countries had fiscal rules. In 2021, more than one hundred countries had fiscal rules. But rule-following is imperfect, to say the least. Stewart concludes that fiscal rules are ‘frequently honoured in the breach’, such as when the 2008-2009 global recession causes many countries to breach rigid budget rules. Troublingly, she suggests that a result of this episode was less budget transparency, as some countries engaged in ‘creative accounting’ to conceal the breach.Read more
Albanese Government ends limbo for eight environmental organisations - Media Release
Joint media release with
The Hon Tanya Plibersek MP
Minister for the Environment and Water
4 October 2022
Eight organisations have been added to the Register of Environmental Organisations (REO) as the Albanese Government continues to work through the backlog of advocacy organisations left in limbo by the previous government.
Entry on the REO gives deductible gift recipient (DGR) status to organisations whose principal purpose is protection and enhancement of the natural environment, or provision of information, education or carrying on of research about the natural environment.
Taxpayers may claim a deduction for donations of $2 or more made to DGRs, helping these organisations raise funds from individuals, companies, and philanthropic foundations for their work. Without DGR status many charities and advocacy organisations would struggle to remain operational. As a result, DGR status was often delayed for organisations that advocated on issues that brought them into conflict with the Morrison Government.
The eight organisations are: Climate for Change Inc, Our Atmosphere Ltd, Veterinarians for Climate Action Ltd, Zero Emissions Noosa Inc, Climate and Environment Foundation, The Bimblebox Alliance Inc, Whitsunday Conservation Council Inc, and Australian Land Conservation Alliance Limited.Read more
Giants Must Pay Their Taxes - Op Ed - The Australian
The Australian, 3 October 2022
Last year, academics from the University at Albany and the University of Missouri published a research paper arguing that company taxes should be abolished. Part of their argument was that transfer pricing by multinationals has become so widespread that policymakers should give up on corporate taxation altogether.
It’s a stark reminder that when it comes to multinational tax reform, what’s at stake is nothing less than the future of the corporate tax itself. I believe it is good economics to save corporate tax, but it will take deft policymaking and proper tax administration to do so.
Company taxes go back a over a century. The US introduced a corporate tax in 1898, but it was over-ruled by their Supreme Court a year later. In 1913, after they had sorted out their constitutional issues, the US company tax rate was set at a measly 1 percent.
Australia introduced our company tax in 1915. Then Attorney General and future Prime Minister Billy Hughes told parliament that it was “necessary to meet the great and growing liabilities created by the war”. Hughes put the issue bluntly: “I know of no other means whereby we could raise the necessary revenue.”
Today, while the essential purpose of corporate income tax remains the same, the challenges of collecting corporate taxes have grown enormously. Part of that arises because company taxes are simpler in an economy that makes physical products. Agriculture, mining and manufacturing have clear locations of production. But if a company’s output is digital, then it’s easier to artificially shift the location of production to the place with the lowest tax rate.Read more
Money News with Luke Grant - Transcript, 2GB
2GB MONEY NEWS
THURSDAY, 29 SEPTEMBER 2022
LUKE GRANT (HOST): So back to our October budget and the balance between spending and saving. Of course, it's crucial. One man who's been a big part of the budget process unsurprisingly is the Assistant Minister for Competition Charities and Treasurer Andrew Leigh. Minister, welcome back to the show.
DR ANDREW LEIGH, ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY: Good to be with you.
GRANT: Nice to talk to you. Firstly, before we get to the budget, the government has just introduced legislation to crackdown on anti competitive behaviour and unfair contract terms. I note that the Small Business Ombudsman, Bruce Billson, has been effusive in his praise of the legislation. Can you take us through what's changing and how that's going to help small businesses operate, Minister?
LEIGH: Well, competition is a bedrock of a fair economy and we need competition to get better prices and more choice for Australian households. The government has been worried that too many big firms are starting to treat competition fines as just a cost of doing business, rather than a real deterrent to bad behaviour. So we're raising the maximum penalty from $10 million up to $50 million to make sure that big businesses do the right thing. And the other thing we're doing for small businesses is making unfair contract terms illegal. These are terms that are lopsided. So, for example, a big business might have a contract with a small supplier that says they can change the prices any time they like or they can get out of the contract anytime they like, although their smaller counterpart can't quit if they want to. So those unfair contract terms will now be illegal. There will be fines for putting those into contracts.Read more