Super deal was not sustainable
SHADOW Finance Minister Andrew Leigh admits changes made to superannuation by former Coalition Treasurer Peter Costello mean he and his brother will eventually do very well from their father's estate.
His father, an academic who also worked for AusAid principally in Malaysia and Indonesia when he was a boy, and his mother both recycled their salaries tax-free into super after Mr Costello - flush with the benefits flowing from mining royalties - took the brakes off limits imposed when Labor's Paul Keating first introduced universal super.
Mr Leigh said the consequence of Costello's largesse was to see superannuation - whose purpose had been to reduce age pension reliance - become a vehicle for estate planning purposes.
He said the taxpayer didn't get a deal from the benefits some like his family were able to receive and which would flow to he and his brother. Mr Leigh said Labor didn't think the Costello changes were fair or sustainable and had attacked them at the time.
"With Scott Morrison's latest budget the Coalition has acted in a ham-fisted way with messy retrospectivity," he said.
"But the tax breaks can't continue."
Mr Leigh said retirees should be drawing down on their capital over time rather than it to be used as inheritance to pass down by those who had been subsidised well beyond the pension.
He said it had been Labor, in 2009, who had introduced the biggest single increase in history to the single pension rate which had stagnated to the point it could no longer sustain recipients.
Mr Leigh, who on Monday night addressed a large audience at Maleny Community Centre said the Sunshine Coast's biggest challenge was that it was seen as safe by the LNP and as such had been taken for granted.
He came with no infrastructure promises for the region but said the endorsed Labor Fisher candidate Bill Gissane was going to fight for every vote.
"With Bill as member both the Liberals and Labor will take this place seriously,'' Mr Leigh said.
Mr Leigh took aim at the Coalition's budget cuts to company tax rates saying every economist acknowledged the first beneficiary would be foreign shareholders.
He said the first order effect of the Turnbull Government's plan to wind company tax back to 25% was money would be shifted off-shore to shareholders with the hope over time those funds would be attracted back by the lower rates as new investment.
"The reality is the ultimate benefit to household income will be in the order of only 0.1%," Mr Leigh said.
"The GDP effect will be bigger in part because it would be recapturing of money already produced here.
"Multi-national tax is a complicated area but Josh Frydenberg (Coalition Rseources and Energy Minister and Minister for Northern Australia) has made clear he wants to stick up for the loopholes.
"The Turnbull Government takes the side of lurks and loopholes which make it harder to get revenue from big firms.
"The benefits of the government's tax cuts will go 94% to 1% of Australians.
"This has been a good generation for them where the 1% have doubled their income share while wage growth for workers has been the slowest in 30 years."
Mr Leigh said recovery from the Global Financial Crisis was being hampered by a handful of risks including the US Republican front-runner, the chance Britain may exit the Euro on June 23, the greatest aggregation of power by a Chinese leader since Mao and uncertainty about how the Syrian crisis will be resolved with the possibility the end game could be worse than what has already occurred.
He believes technological advances are the key to economic growth but cautions they will demand a smarter workforce than our education system is producing.
Education was critically important to deliver a smart workforce but in every subject in every test in recent years Australia has gone backwards.
Mr Leigh said the solution was in teacher quality, for the system to produce great teachers and keep the best.
An economist, academic and former solicitor Mr Leigh gained a Masters of Public Administration at Harvard University's Kennedy School of Government also achieving a Doctorate of Philosophy and worked as a research fellow with the Progressive Policy Institute in Washington.
He said the reason behind the rise of Donald Trump could be found in the huge pool of unskilled men who have been left behind by the loss of manufacturing jobs.