Ross Solly:
So the federal government’s Budget sell continues today. I noticed Jim Chalmers is popping up all over the place convincing people that the Budget has the best interests of all Australians at heart. Andrew Leigh is the Member for Fenner, also the Assistant Minister for Productivity, Competition, Charities and Treasury, and joins us this morning.
Dr Andrew Leigh, good morning to you.
Andrew Leigh:
Good morning Ross, great to be with you.
Solly:
Good to have you on the show as well. So I noticed in the last 24 hours we’ve seen that house prices have gone down in Sydney, Melbourne and Canberra in the last few weeks. What do you attribute that to, Andrew Leigh, and do you think the Budget has had any impact on that?
Leigh:
I think the most interesting thing Ross, has been that first‑home buyers are starting to beat out investors at auctions, and for people who’ve struggled for years to break into the property market for the first time, that’s pretty good news.
Solly:
So this is good, this is good news that house prices are going down in Canberra?
Leigh:
Look, the correction we’ve seen is down over the recent month or 2, but up over the year. Our modelling has our policies slowing the growth in house prices, not causing house prices to fall.
Most of this of course, is about housing supply which is why we’ve got $47 billion worth of measures projected to make a difference to 420,000 new homes. But also it’s partly recalibrating the tax settings in ways that the experts have been calling on for years.
Solly:
I guess the worry is that some people might end up with negative equity though if prices drop too far, and there might be home owners this morning listening, thinking, ‘Well, I don’t want my house price to drop, I don’t want the value of my house to go any lower.’
Leigh:
Well the last numbers I looked at Ross, had house prices up about 4 per cent over the year and down about 1 per cent over the last couple of months. So that’s certainly not anything for existing homeowners to be concerned about.
What we’re doing is building more homes, but building more homes takes a while. And so, you know, for example, we’ve got the development near the Belconnen owl. Three-hundred and fifteen new units, some of them social housing – co‑funded by the federal and ACT governments. That will make a difference, and that’s part of the 1.2 million home target.
But we had 9 years in which the Coalition for much of it didn’t have a Housing Minister and wasn’t engaged in these challenges, so we are working to overcome these setbacks.
Solly:
Andrew Leigh, are you being stopped in the street by small business owners and start‑up entrepreneurs concerned that they’re not getting a fair kick out of this Budget, that they’re actually having their creativity stifled?
Leigh:
I’ve had mixed views from small business to be honest, Ross…
Solly:
Okay.
Leigh:
And some of them are very pleased that we’re putting in place these new reforms to research and development tax credit that will see them get more of the credit. They understand that the capital gains tax concessions, which are used by 9 out of 10 small business sales will still continue to exist. And then there’s a sensible conversation going on, particularly around start‑ups and capital gains, that was flagged in the Budget, and we’ll conduct those consultations respectfully…
Solly:
Do you understand why people are concerned, Andrew Leigh, do you share their concerns that maybe their creativity might be stifled here?
Leigh:
Yeah, I mean I think it’s important to remember that if you’re selling a business then you’ve got significant capital gains tax concessions if revenue’s below $2 million or assets are below $6 million, and so that certainly provides protection from capital gains tax.
Solly:
Is that enough protection, is that enough, or do we need to – because I know there’s a bit of a push on to maybe push it out from $2 million, maybe a little bit – I mean is that something the government is considering?
Leigh:
We’re certainly considering making changes to what’s announced in order to accommodate, particularly the challenge of start‑ups. The Budget really does prioritise start‑ups as a big priority in our productivity package. And that includes the changes to the research and development tax credit, more money for new firms, more money for core research and developments, and then of course we’re making the instant asset write‑off permanent and putting in place permanent loss carry back, so that’s got a significant value for start‑ups.
Solly:
Your – I mean the seat of Fenner, you’re in a safe seat but do you understand why some of your colleagues who are in marginal seats, that they might be a little bit nervous with the way the Budget’s gone over and the polling out this week which is suggesting that people are now turning to parties like One Nation, Andrew Leigh, because they feel that the government’s not there for them, that they’re not doing the job for them? Do you understand why some of your colleagues who are in marginal seats might be now starting to feel just a little bit nervous?
Leigh:
Ross, if reform was easy every government would do it. The fact that reform is hard is why some governments have hesitated in making the sorts of important changes we have. But the history of reform is that sometimes governments take a hit in the polls. The Hawke government suffered a hit in the polls when it introduced fringe benefits tax and capital gains tax back in 1986. But I don’t think anyone now says that was a mistake to put those tax bases in place.
Solly:
But the problem is it’s well and good, but come the next election, you can’t do that while you’re sitting in Opposition.
Leigh:
Well, the Hawke government was re‑elected resoundingly in 1987 after continuing the conversation with the Australian people about those reforms. We’ll do exactly the same thing this time round. And yes of course, you’ve got fear mongers on our right. You’ve got the 3 major right‑wing parties, which are really now 3 roads to the same destination. Because whether you vote for Liberal, Nationals or One Nation, you will get a coalition of those parties. Or you’ve got Labor which has put in place sensible reforms to get more young Australians into the housing market after decades in which the home‑ownership rate had been falling. Someone had to do something about this problem, and we’ve stepped up.
Solly:
Alright. And if you lose a couple of colleagues on the way, then that’s the price you have to pay?
Leigh:
Look, I don’t think that will be the case. That certainly hasn’t been the case in past reforming governments. Again, take you back to the Hawke government which was able to implement reform, have that conversation with the Australian people and be resoundingly re‑elected.
What we need to do is to continue that reform conversation and as we talk to more people about what we’re doing; the significance investments in health, in Urgent Care Clinics, the big tax cuts that are coming in a month – so, you know, almost $3,000 of tax cuts coming through, is big positive changes we’re putting in place.
Solly:
Quarter to 9 on the Breakfast Show. Just a couple of other quick issues if I can, while I have you here Andrew Leigh. This new survey that’s come out which has shown that more than half of Australia’s universities have plummeted in global rankings because of years of – they’re saying inadequate funding, the devaluation of science and education as public goods.
I mean we market ourselves. We try and tell the rest of the world that we’re the clever country but our universities are dropping down in global rankings. Why do you think it is, Dr Andrew Leigh and how are we going to address that slump?
Leigh:
Well, part of it is that other countries are stepping up. And so you’ve got over the last decade, you’ve really seen the entry of China in a big way into these rankings, and that’s inevitably going to push other countries down.
Australian universities are well funded, and we do punch above our weight in terms of global research. You look at, for example, the work that was done with the Ambitious Australia R&D report, they really pointed to Australian university research as being the jewel in the crown of what Australia does with research and development…
Solly:
But we’re dropping back. The ANU’s dropped back, Canberra Uni’s dropped – the University of Canberra, they’ve all dropped back in their rankings in the latest surveys that have come out.
Leigh:
Yeah, I mean we’re committed to universities, to strong, well‑funded universities. Australia just picked up another Nobel Prize last year, that is a mark of the great research that’s being done in Australian universities. I spend a lot of time chatting to university researchers, Vice Chancellors, professors, about the work that is being done, which is enormously valued by the government –
Solly:
So no need for recalibration then, Andrew Barr, or just to keep things going as they are, we don’t need to inject more funding into the universities, we don’t need to better restructure how the funding is being spent?
Leigh:
I love the way you mixed me up with Andrew Barr!
Solly:
Andrew Leigh, sorry, sorry!
Leigh:
That’s alright. He and I like to say that as long as it’s ‘Andrew from the Labor Party’, you’re doing fine.
Solly:
Well apparently I called Ainslie, Amy this morning so I’m having a good day. But anyway, go on.
Leigh:
Well, that’s certainly worse. Yeah, we’re strongly investing in universities. Jason Clare is passionately committed to getting more students into universities, particularly from disadvantaged backgrounds. We’ve increased the funding that’s coming from the Medical Research Future Fund in the last budget. That will be warmly welcomed by that sector and the changes to the R&D tax credit I think we’ll see more collaboration with universities.
This is a fundamental sector, whether it’s humanities, social science or hard science research, fundamental to Australia’s prosperity and the government’s strongly committed to back them in.
Solly:
Quick question from a listener. This is from Nathan, ‘Can you please ask Dr Andrew Leigh about upgrades to the NBN in West Belconnen, and what, if any action you’ve taken to bring it forward from March 2029’. Andrew Leigh?
Leigh:
Yes, we’ve given a big capital injection to NBN Co which will see fibre to the home rolled out across around 100,000 premises in the ACT. NBN Co is determining the pace of that roll‑out, doing it in the most efficient way, and so we’re able to get most fibre to –
Solly:
Is March 2029 the most efficient way? It seems like a long way away? Poor old Nathan.
Leigh:
Well, there’s 100,000 homes to be done and there’s, as you know, a shortage of construction workers in the ACT. So they’re working as quickly as they can in order to get the job done in the way in which Labor first announced.
So originally this was to be a fibre to the home NBN, we then had a big pause under the Coalition who thought fibre to a box down the street would be good enough. Now NBN Co is stepping up and getting fibre to more Canberra homes.
Solly:
Andrew Leigh, often mistaken for Andrew Barr, thank you for your time this morning, I appreciate it.
Leigh:
Thank you.
Solly:
Bye‑bye. Dr Andrew Leigh, the Member for Fenner on ABC Canberra Breakfast.