Patricia Karvelas:
I want to bring in Assistant Minister for Competition, Charities and Productivity, Andrew Leigh. Welcome.
Andrew Leigh:
Thanks Patricia, great to be with you.
Karvelas:
Just on the collapse there and obviously, this is a really disturbing story. The NSW Premier, Chris Minns, says the federal government's changes to tax treatments on housing have played a role in blighting the construction sector. I mean, he's a Labor Premier saying this. What's your response?
Leigh:
Well, when we look at what's happened with the Bathla Group, my heart goes out to those who are waiting for their homes to be finished and to the workers who've been stood down. We do know that this is a group that's made extensive use of private credit, and in its statement to a parliamentary committee last Friday, ASIC made clear that it was looking quite carefully at private credit markets. There's over $3 billion outstanding since it's gone into liquidation. And so, this is an issue that's clearly been one of the major factors at play.
Karvelas:
Okay. So there's lots of reasons, but do you think the role of the government's tax changes is part of the reason?
Leigh:
Well, what we've done is sought to create more opportunities for young Australians to get a home of their own. We've got house building continuing apace across the country, directly funded by us through the Housing Australia Future Fund but also turbocharged through the investments we're making into enabling infrastructure with states and territories that allows them to unlock more private sector development. My concerns clearly are with the people involved in this collapse, but I don't think you want to draw broader lessons from that.
Karvelas:
So, you don't think that there is a link?
Leigh:
I think principally what's gone on here is around private credit. We know there were some inspections that took place recently, and there's a possibility that that played a role as well.
Karvelas:
Okay. When you talk about private credit, I mean, obviously there needs to be a whole lot of work done in that area, doesn't there? It's pretty alarming!
Leigh:
That's right. ASIC flagged up this issue a year ago and have been talking about the work that they've been doing assessing private credit and ensuring that we've got greater transparency. The problem really isn't private credit in its own right, it's the opacity that can surround that and the risk that leads to problems in the system.
Karvelas:
Just moving to some other issues today. We've been talking a lot about superannuation, of course, with One Nation’s idea to deal with cost of living. Isn't the problem for the government that people are struggling so much with their cost of living that this idea that you can get 3 per cent of your super for 3 years might be very appealing to people?
Leigh:
Well Patricia, this is a retirement raid and an inflation risk. It would not only take money away from Australians in their retirement, but would also push up house prices and therefore increase inflation. What we've seen historically is that when you reduce the amount people are putting into superannuation, that costs them big time in the long run. Just to give you one example, at the average rates of return, a 20 year-old who puts $1 into superannuation sees that turn into $19 by the time they're 70. So, the cost of this would multiply over the course of people's lifetimes and would mean greater reliance on the age pension, while doing very little to improve housing affordability. In fact, probably making the problem worse.
Karvelas:
Isn't the issue though. I mean, just on a core needs level – people worry about their conditions today. They're not thinking about themselves in 20 or 30 years?
Leigh:
Universal superannuation is a Labor creation. We've had to fight against conservatives every time we've looked to increase the contribution rate, but we've now got 12 per cent contributions, which does allow more Australians to get a decent retirement, enjoying the benefits of property and share market gains. So, that is a hard one to reform. And I guess it's not surprising to see conservatives again trying to attack this.
We saw the Coalition at the last election trying to attack universal superannuation, trying to make Australians poorer in retirement. It's fundamentally misguided and it misses the huge benefits that come from compounding returns.
Karvelas:
Just on the algorithm, which the Digital Duty of Care laws will look at. Chanel Contos wants people to be able to opt-in, right? Rather than the other way around. So, you're actively deciding that you want an algorithm. Why don't you want to go down that road?
Leigh:
Well, we've had good conversations with people across the sector. We're just at the consultation phase at the moment, including with thoughtful people like Chanel. I would note though, that we're seeing significant pushback from the Coalition, who are saying they don't want any ability even to be able to opt-out. So, we have the Coalition effectively running a campaign on behalf of big tech, rather than on behalf of Australian parents who are deeply worried, Patricia, about the toxic content that is being flooded into our young people's minds through these algorithms.
Karvelas:
They haven't given it a blanket no, they've just raised some issues around the way that you're constructing it. Also, no one's seen the laws. Isn't it reasonable to raise questions about issues around freedom of speech, how it will work, all of those issues?
Leigh:
But this isn't going to affect adults’ freedom of speech. It's simply the ability to opt-out of an algorithm which we know has been polarising people. And not just polarising politics, Patricia. We've seen a significant divergence in attitudes of young men and young women on gender issues for example. With young men now having more conservative gender attitudes than my generation of Gen X. That is partly because young men and young women are now consuming very different social media compared to the days when we grew up, when people were watching the same TV and reading the same newspapers. That polarisation just isn't good for us as a community. It is eroding some of the bedrock of Australian society and that's where the Digital Duty of Care comes from.
Karvelas:
Matt Canavan says that you seem to only be interested in shutting down the right-wing algorithm. Are you worried about the left-wing algorithm too?
Leigh:
We're seeing polarisation right across the spectrum. But we do know that the angertainment model is a model which favours right-wing angry populists. We see that in terms of the leading influences on a range of these platforms. We see it in terms of individual posts. This is a platform which has been very good for the Andrew Tates of this world, at the expense of young Australians. I'm a father of 3 boys. I don't want them to grow up on a diet of toxic filth. I want them to be out engaging with their friends and seeing their friends content in their feed, which is what social media used to be before the algorithms changed to be the most addictive, angriest content on the internet today.
Karvelas:
Our kids wouldn't even remember those days though, right? I mean, that's another world. Do you really think we can just go back to that world?
Leigh:
My teens saw the algorithms change. It was led by TikTok, and then the other platforms jumped on-board and within the space of about a year, the platforms had gone from best of your friends to best of the internet. But best of the internet is most addictive, angriest, most divisive of the internet. And that's a deep problem for a society which is already seeing a decline in trust in one another and community engagement. You know, I've spent a lot of time talking about social capital as the Assistant Minister for Charities. I want to turbocharge our charities’ ability to get people engaged, whether it's on the sporting field or in environmental clean-ups. And part of that is reining in the algorithms which have been a key factor in the decline of youth mental health over recent decades.
Karvelas:
Just a final question on the tobacco excise. As someone with such a strong economics background, do you accept that the excise got so high that basically it encouraged a black market?
Leigh:
Well you could take all of the excise off, Patricia, and cigarettes would still be more expensive bought legally than bought illegally. Those illegal cigarettes have come at a much lower price, and that's a global market that we're now seeing. I don't want to see the public health gains of the last couple of decades eroded. A survey of more than 10,000 Australians last year reported a smoking rate among over 14s of just 5.6 per cent compared to 19.5 per cent back in 2001. We've had huge success in driving down smoking rates and nicotine addiction rates. That's saving lives across the country and having your policy run by big tobacco, as One Nation and the Coalition seem to be is deeply dangerous to the health of Australians.
Karvelas:
Will you rule out your own level of an excise cut?
Leigh:
Look, what we've said is we need to engage with law enforcement. We've given some $360 million to additional law enforcement. We're seeing more busts, we're seeing more crackdowns, we're seeing more of these illegal stores closed. That's the way to tackle illegal tobacco, not by waving the white flag and allowing more people to die from tobacco-related illnesses.
Karvelas:
Andrew Leigh, it's always good to have you on. Thank you.
Leigh:
Thanks Patricia.
Karvelas:
That was Assistant Competition and Productivity Minister, Leigh discussing a range of issues there, including One Nation's superannuation plan and that tobacco excise.