Where is the Government's economic plan? - ABC NewsRadio





SUBJECT/S: Malcolm Turnbull’s plan for a 15 per cent GST; ICAC; Australian economic outlook.

MARIUS BENSON: Let's go to local politics now. The federal Opposition has made an early start on the campaign trail for this election year with Labor leader Bill Shorten selling his message from Tasmania and North Queensland in recent days. At the heart of that message are economic issues with the headline concern, in the Labor view, the government’s plan to push the 10 per cent GST up to 15 per cent. For that Labor view on the economy and the election year ahead, I'm joined by the Shadow Assistant Treasurer Andrew Leigh. Andrew Leigh, good morning.


BENSON: Can I begin with the story that's broken this morning, reported in The Australian, that the Independent Commission Against Corruption in NSW has found no allegations to be pursued against Arthur Sinodinos, who nearly two years ago stood down because of the ICAC hearings. What's your view on that?

LEIGH: I haven't followed all the twists and turns of the ICAC inquiry but certainly from the outside it looks like Arthur Sinodinos – who I think of as a pretty smart bloke – did some pretty dumb things, particularly not being aware that a company he was chairing was making donations to the Liberal Party at a time when he was responsible for Liberal Party donations. But this will obviously be pleasing for Senator Sinodinos and his family. I guess what it highlights though is that Arthur Sinodinos was the first of the three Assistant Treasurers this Government has had since coming to office, along with its two Treasurers. That lack of continuity is one of the reasons why the economic strategy of the Government is so much in disarray.

BENSON: If ICAC is satisfied, is that it, or will Labor pursue Arthur Sinodinos on this issue?

LEIGH: These are only very preliminary reports at the moment, Marius, so let's not get ahead of ourselves.

BENSON: Alright, can I go to economic issues. The issue that Bill Shorten and other Labor people such as yourself have been hammering about the Government is that their tax reform plans are built principally on a 15 per cent GST. That's far from government policy at the moment, is it a fairly shaky basis for an Opposition plan?

LEIGH: Well, we've been clear in where we stand in the GST debate, Marius. It would be nice if the Government were willing to join us in that debate. Bill Shorten has asked Malcolm Turnbull to meet him at the National Press Club the day before Parliament resumes to have that debate over the GST. It's a part of the overall tax debate, where Labor has been out talking about our ideas on superannuation, on multinational taxation and also the savings that we'd make. But it's important for a government to have a clear economic strategy, to be absolutely crystal clear about what it will do to deal with risks ahead. This Government, while it promised a Tax White Paper in the first two years, hasn't delivered and now seems to be holding off tax reform until right up to the election.

BENSON: But there was a fairly substantial change in the nature and personnel of the government late last year. Is it not fair to give them a few weeks to sort out their new Tax Green Paper, White Paper, and then policy?

LEIGH: Well, it’s been more than that. I mean, the White Paper was promised in the first two years. We haven't even got the Green Paper, which precedes a White Paper, out so far. But the early signs aren't good. With Joe Hockey we had the Eeyore of Australian politics: everything was always terrible. In the case of Scott Morrison, he's built his career on articulating what he was against: asylum seekers, people on disability support. But I think he's unfamiliar on the ground of articulating what he's for. That's really important at a time when the global economy faces a set of downside risks. There’s the possibility that China’s contraction will get worse with currency and stock controls, the huge falls on stock markets – the Australian stock market has already lost $136 billion this year – the uncertainties going on around what'll happen in the global oil market, and yesterday's Westpac-Melbourne Institute consumer sentiment index falling as well. All of these things demand a Government that has a long-term economic strategy, not just for tax but also for productivity.

BENSON: But regardless of what the Australian Government strategy is, those factors you mentioned there are all outside its control: China, the international markets, oil.

LEIGH: Absolutely. That's the nature of being a Treasurer in a small open economy. It's important that you recognise that there's stimulatory factors for the Australian economy: low oil prices, historically low interest rates, a low Australian dollar, but also that you outline to the Australia people how you'll deal with challenges and how you'll build the case for productivity. Scott Morrison says that it's important to protect consumption, but then on the other hand he won't rule out raising the GST which is, of a course, a tax on consumption. You'd expect that to hit to consumption just as it did when the GST was first introduced.

BENSON:  Bill Shorten has been saying that the Government has got it wrong, that it's been thrashing the economy, slowing an economy that was already slowing. But that's an argument really with the 2014 budget of Joe Hockey and Tony Abbott. You prefer to talk about that, the nature of that Coalition, rather than the Malcolm Turnbull/Scott Morrison 2016 version.

LEIGH: Well this is the Abbott-Turnbull Government and it's important that we recognise that since the Coalition has been in office we've had steady downgrades on Australia's growth forecasts, we've had a fall in public sector construction every quarter since the so-called 'Infrastructure Government' was elected, and we've got consumer sentiment now down. So many of those economic indicators have gotten worse. Some of that is due to factors outside of the Government's control, but again, Marius, that's why the Australian people are crying out for an answer to the question: what is the Abbott-Turnbull Government's economic strategy? What is the legacy they want to leave? It's clear that on the Labor side, we've been talking about the importance of entrepreneurship and policies around entrepreneurs here; we've been talking about making sure that schools are funded on needs basis and that the university demand-driven system remains in place. All of that education investment underpins future productivity growth, but I don't hear the same story from Scott Morrison – a man who got elected promising that there would be a surplus in the first year and every year afterwards. They’re now not talking about a surplus until 2021. 

BENSON: Andrew Leigh, I'll leave it there. Thank you very much.

LEIGH: Thank you, Marius.



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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.