2SM WITH MARCUS PAUL IN THE MORNING
WEDNESDAY, 28 OCTOBER 2020
SUBJECTS: ASIC; the need for a federal ICAC; the recession.
MARCUS PAUL, HOST: Andrew Leigh is the Deputy Chair of the Standing Committee on Economics in Canberra. He's been leading the charge on this issue with the Australian Securities and Investments Commission, ASIC. He’s been grilling them in a House Economics Committee hearing, and he also has a fair bit to say about the need for a federal ICAC. Is it any wonder? Andrew, good morning mate.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Marcus. Great to be with you.
PAUL: Just explain to me what's happened here. We know that Karen Chester, the acting Chair of ASIC, says it took far too long for the corporate watchdog to respond to the knowledge it had overpaid its boss and deputy nearly 200 grand.
LEIGH: Yes. Red lights should have been flashing last year when it was reported that the senior lawyer at ASIC was being paid more than the Chief Justice of Australia, once you included the relocation allowance. And it seems as though the Audit Office then came in, the Auditor General said ‘you’ve got to fix this’ and according to Karen Chester ASIC moved at a glacially slow pace. Josh Frydenberg learned about this more than a month ago, but still didn't move on it. And the fact is that the very body that caught it, the Auditor General, is having his budget cut by the Morrison Government. So the watchdog’s being punished, despite the fact that he's the one that's saving the taxpayer money.
PAUL: Well, it's a little similar to what's happening here in New South Wales - the Independent Commission Against Corruption’s also having its budget slashed. I mean, what we can't afford to do, in my opinion and probably yours Andrew, is cut budgets of watchdogs. I mean, that defeats the purpose of democracy, surely.
LEIGH: Absolutely, Marcus. And the fact is, you know, we don't have the sort of corruption where there’s a large number of politicians who are putting money into their own pockets. The sort of wrongdoing that's going on is the misuse of taxpayer dollars for political purposes. The latest budget for the Morrison Government had around $4 billion of slush funds, according to my colleague Stephen Jones, and that means that we've got to have a bit of scrutiny. A federal ICAC makes sense - we've had ICACs set up at the state level would have worked well and I just don't know for the life of me why Scott Morrison is so opposed to putting in place a federal corruption watchdog.
PAUL: [laughter] You don't know? I think we do know.
LEIGH: Well, we got a little bit of a hint earlier this year when he appointed a former Liberal staffer to the bushfire recovery agency, whose nickname was ‘Cronie’. Some things you just can't make up. Then there’s sports rorts, air rorts, water rorts, regional rorts, reef rorts, Robodebt, stacking the Administrative Appeals Tribunal - you know, they are starting to make the Rum Corps look like Mary MacKillop.
PAUL: [laughter] All right, that's gold. That's absolute gold. And sadly, it's true. That's the, you know, that's the tragedy of all of this - the misuse of public money. I despise the term slush funds. I don't have a slush fund. Do you have a slush fund?
LEIGH: Absolutely not. And the fact is that if you're running a program which is designed to help the community, that should be done regardless of how people vote. The idea that you would allocate funding in order to try and win elections or to reward your cronies is an anathema to the way in which we ought to be running those programs. Grants are going out to local community sporting groups in some cases. Most sporting groups work hard, and we want the most deserving groups to get it - the ones that are rated the highest according to the independent assessors, not the ones that have the connections or are located in convenient places.
PAUL: Well, I mean, that's what it should be all about. Being independent. I mean, it's public money. It's not the government's money to do what it chooses to do, to suit their own political benefit. I mean, it's our money. We pay a lot of taxes in this country, as you know. I sound like a broken record. All we want Andrew is transparency on where our money is going and for it to be distributed evenly.
LIEGH: That's right. And under the Howard Government, we had the rorting of the Roads to Recovery program, which was one of the things that led Anthony Albanese when he became infrastructure minister to set up Infrastructure Australia. That way you had an arm’s length body that was looking at the various roads projects and saying, ‘which one has the highest benefit cost ratio, which delivers the biggest bang for the buck?’. Then you end up building projects that are delivering $3 or $4 of public benefits for every dollar that you spend, rather than ones where the benefit to the public is smaller than the cost of building the road.
PAUL: Well, that's right. Almost negligible in some areas. What do you make of the reports this morning of an economic bounce back? Strong September quarter has effectively ended the recession. Is this spin, or is there some merit to what the Reserve is saying?
LEIGH: I certainly hope the economy recovers. The scaring effect of unemployment is just brutal - the waste of potential for particularly young people, but right across the labour market. But we know that on the government's own projections we've still got 160,000 people projected to lose their job by the end of the year. And we've got the prospect of people going back to $40 a day JobSeeker from 1 January 2021. So there's a lot of economic clouds on the horizon. I think that the rapid withdrawal of federal support in the economy could prolong the recession. That's the story, of course, of the Great Depression. The Great Depression is a hit in the early 1930s, that’s then exacerbated by governments who turned what could have been a short shock into a decade long slump.
PAUL: Yeah, ‘cause the reports this morning, the Australian economy has emerged from its first recession in 30 years, the Reserve Bank believes but it is warning the recovery will be marred by growing business failures and cash strapped households struggling to pay off their mortgages. I mean, the banks will start calling in these debts very soon and any grace that they've shown. So this is what worries me about headlines like this today in the Sydney Morning Herald - we have kind of almost misleading headlines that the recession is over. Well, then of course banks will go ‘well, okay, recessions done - it's now time to pay the piper’.
LEIGH: Yes. And the other thing Marcus is that a recession is the continuing decline of the economy. Once you fall far enough, then you're a really long way down and it’s hard to fall further. That doesn't mean you're not already in a hole. So there's a lot of climbing out still to be done. I'd like to think that as we look to rebuild the economy, we don't just aspire to the economy that we had last year, which had sluggish wage growth, not enough innovation, not enough business startups, and wasn’t dealing with the challenge of climate change. We ought to be able to have a more inclusive economy, and that's why Anthony Albanese put childcare at the centre of his budget reply, because we need to get more women into the workforce. We need to remove that disincentive to work on that the third, fourth and fifth days that so many women are facing right now.
PAUL: Alright, Andrew. Always good to catch up with you. We'll maybe talk again next week. Thank you, appreciate it.
LEIGH: I’d love that, Marcus. Thank you.
PAUL: There he is - Andrew Leigh, doing some good work in Canberra.
Authorised by Paul Erickson, ALP, Canberra.