ABC SYDNEY MORNINGS
THURSDAY, 28 SEPTEMBER 2017
SUBJECTS: New book Choosing Openness, Brexit and German election, migration and the US refugee resettlement deal
WENDY HARMER: We often hear about politicians that they’re not experts in the field that they end up having their portfolios in, but I don’t think you could argue with this one because my guest is Andrew Leigh. He’s the Shadow Assistant Treasurer and prior to entering the Australian Parliament in 2010, he was a professor of economics at the Australian National University. That’s not too shabby, is it? He holds a PhD in public policy from Harvard, he graduated from the University of Sydney with first class honours in law and arts and he’s a pretty prolific author as well. He has a few books – I don’t know how many altogether, but the ‘The Luck of Politics’, ‘The Economics of Just About Everything’, ‘Battlers and Billionaires: The Story of Inequity in Australia’ and ‘Disconnected’. This latest effort is a Lowy Institute paper, which is released today. It’s called ‘Choosing Openness’. So I don’t think we can complain about the lack of expertise. Hello Andrew Leigh, welcome to the program.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G’day, Wendy. Great to be with you.
HARMER: Thanks. It’s very nice to have you along. Now, as I mentioned there, it’s in the news today that former prime minister Tony Abbott is about to advise a new think tank in Britain on how to Brexit. What would you be saying? I imagine you’d be saying ‘wrong way, go back’.
LEIGH: Well, there’s nothing wrong with trying to make lemonade out of lemons, Wendy, but let’s face it – Brexit was a retreat from the global engagement that Britain had engaged in throughout that post war era. There’s now an ongoing Remain movement that’s still looking at the prospect of whether Britain might be best served by staying within the European Union and that I think has a stronger free trading bedrock than do these attempts to see how Britain can make its way outside the European Union.
HARPER: You warn against this sort of populist – you put a few of them in together, interconnected, haven’t you, these sorts of populist politics which have brought us Donald Trump and Brexit. Can you just outline your argument there of why you think that those populist decisions came about in the first place?
LEIGH: I think there’s a handful of factors that have driven populism. We’ve had some poor economic outcomes – rising inequality, there’s been an increase in the death rate among low educated whites in the United States, a pretty extraordinary development. We’ve seen very rapid technological change and I think sometimes when the world is changing fast people can feel a little adrift from their values. So things like genetic sequencing, mobile computing, artificial intelligence have given a sort of cyclone feel to what’s going on in the world. We’ve had some pretty canny political entrepreneurs who have made the most of this. You can look at Marine Le Pen in France as a good example of this and of course President Trump. Then you’ve seen a decline in traditional institutions, among them mainstream political parties whose voters have fallen by about 10 per cent right across the advanced world. Just as we’ve retreated from traditional institutions like churches and big business and trade unions, so too traditional political parties have shrunk. So all of that has made space for these right wing populist movements such as Brexit, such as the Alternative for Deutschland Party which entered the parliament in Germany on the weekend.
HARPER: But there’s an argument, isn’t there Andrew, that says populist or popular?
LEIGH: Well, indeed. The populists have become popular and part of what I’m trying to do in ‘Choosing Openness’, Wendy, is to try to explore that but also not just to do the academic analysis – also to make the case as to why Australia, amounting for some one 300th of the world’s population, does better when we engage with the world than when we hunker down and put up walls against it. And that Australia’s past prosperity has come to a large extent through these three factors of investment, trade and migration which, managed well, make us a more prosperous and decent country.
HARPER: Who do you see in Australia as pushing these ideas of looking inward perhaps?
LEIGH: There have been movements both on the left and the right, but certainly more on the right-
HARPER: Are we talking the Pauline Hanson factor, for instance?
LEIGH: She’s certainly been one of the more prominent and there’s been a push from people who have effectively said all of the world’s problems can solved, if only the corrupt dunderheads in charge get out of the way and make way for us to tear up the system. Part of that reflects that trade isn’t an intuitively straightforward concept. Nobel laureate Paul Samuelson once said it’s the best example of a social science that an idea that’s true and not trivial. Economists think of trade as being just an extension of what we do in the labour market. If you don’t cut your own hair, fix your own car and make your own clothes, then you benefit from specialisation in the labour market. So too Australia as a country in the world can benefit from not trying to make everything here but doing what we’re best at and then exchanging with others to raise our standard of living.
HARPER: What are we best at?
LEIGH: We’ve traditionally done very well in education, we’ve done well on mining, we’ve done well on agriculture, but we also have these ranges of niche specialisation – architecture services, legal services we’ve done well at. We’re doing very well at tourism services and these services exports reflect the fact that we’re a pretty high services economy. About four-fifths of us work in services, Wendy, including you and me.
HARPER: The interesting thing I guess here that you’re talking about is we are getting away from that dig it up, chop it down mentality into services and as you say, it does leave behind a big chunk of the workforce, I guess. A lot of people would like to work with their hands in say manufacturing and so forth and they don’t feel comfortable in the service industry. How do we solve that?
LEIGH: We’ve certainly seen significant changes and one of the things I did in ‘Choosing Openness’ was to say what are the jobs whose titles have now disappeared? In other words, so few people do them that they don’t even bother having a title. And what are the new jobs that we’ve created? So over the course of the last generation, we’ve lost railway crossing attendants, lampmen, tobacco machine attendants and lighthouse keeps. But we’ve gained people like disability liaison officers, rafting guides, bungee jump masters, baristas, electronic game developers, asbestos removers, fitness centre managers. So there’s a range of good jobs that are being developed in Australia over the course of recent decades and we’ll continue to create those well-paying jobs, so long as policy makes sure that we have the education and the strong infrastructure that we need in order to sustain new industries to emerge.
HARPER: That change that you talked about in those professions also means a change in our self-image, I guess.
LEIGH: That’s certainly right and that’s not just a mark of the last generation. Economies are constantly evolving and one of the huge changes of course in Australian history is the move from getting around on horseback to getting around in cars. There were massive job losses associated with the rise of the automobile, but over time many of the those people who worked in breeding and looking after horses were able to find new jobs in other industries, sometimes connected to the automobile, sometimes not. But we became a more prosperous nation as a result, because we had the policies in place to ensure that people had the skills to move into new jobs. But if people don’t have that bedrock of broad skills then they can really be left adrift. Which is why I believe progressives should really be in favour of openness, because it raises living standards. But if you’re in favour of openness, you also need the redistributive policies to make sure everyone benefits.
HARPER: So we’re only talking about openness here in this book in terms of trade and jobs and so forth. You’re also talking about it in terms of immigration and what’s the nub of your argument here?
LEIGH: With immigration, we need to remember we’re not just talking about more mouths to feed, but also more minds that can add to the collective intelligence of the population. Every new migrant has the potential for being the new Tan Le, Dr Karl, the next Victor Chang, the next Frank Lowy. Migrants in other countries have been shown to have higher patenting rates and indeed higher rates of winning Nobel prizes. So we need to make sure we’ve got policies to deal with population growth and the challenges of housing affordability and congestion that generates. But the best way of reducing your commuting time to work is better policies around public transport and increasing the uptake of driverless cars, not closing the door to new migrants.
HARPER: Well, I wonder what you think about the level of our engagement with our neighbours, both in the Pacific and the Asia region, Andrew?
LEIGH: It’s a great question, Wendy, and we can certainly do a lot more there. I think we ought to take more refugees but also we need to provide opportunities for temporary migrants from the Pacific, which is a program which can be better managed and provide greater social impact than some of the more ad hoc ways we’ve managed temporary migration over recent years. I know my colleague Shayne Neumann has raised concerns over the treatment of temporary migrants coming to Australia and concerns that the proper Australian labour standards aren’t being upheld there. We can do more to help neighbours and also to avoid exploitation of workers if we manage temporary migration better.
HARPER: And where does this put you, it sounds like it puts you at odds with the leadership of the Labor Party over the settlements there at Manus Island and Nauru. Does it, Andrew? Would you keep those open?
LEIGH: Not in the least. Bill Shorten and Shayne Neumann have been very strong in saying we need to close down those centres, that they were never intended to be long term places of detention. We do also need to make sure we engage with the world. Indeed, I’m bringing out this book in a week in which Bill Shorten and Penny Wong are visiting South Korea and Japan, in which Chris Bowen and Penny Wong and Matt Thistlethwaite will be bringing out an important report on Friday looking at Labor’s Asian engagement strategy. So that tradition of open engagement has a long bedrock in the Labor party, from people like Lindsay Tanner, who wrote ‘Open Australia’ nearly two decades ago, Bob Hawke, Paul Keating, Gough Whitlam – all leaders who brought down Australia’s tariff barriers not in order to get something from another country but because they realised, as the economist Joan Robinson put it, you should take the rocks out of your harbours even if your trading partners don’t take the rocks of their harbours.
HARPER: Getting back to those asylum seekers, of course, you say that the Labor Party has a policy of closing those centres. That is used as a wedge against you, I guess, that it will have the effect of restarting the flow of asylum seekers to Australia. Just outline for me again your policy on what replaces those centres.
LEIGH: We believe that those people should be resettled in third countries and that it could have been done well before now. The government’s had all its eggs in one basket with this deal with the United States. Labor certainly welcomes the 50 people that have gone to the United States, but we need these people to be moved out quicker. The mental health problems we’re seeing among the detainees on Manus and Nauru – and I’ve got terrific people in my electorate who are providing direct help to some of the men on Manus – I’m acutely aware of what those people are going through. But no one wants to see the deaths at sea resume.
HARPER: We don’t want to see those deaths at sea resume, but then what is the answer, do you think?
LEIGH: We don’t need to keep people on Manus and Nauru in order to provide a deterrent. The refugee resettlement agreement from 2013 said if you come by boat you won’t be settled in Australia. But it didn’t say that therefore you must remain detained in Manus and Nauru indefinitely. These places were never designed as places of indefinite detention. We can also work better with the UNHCR, Wendy. Labor’s said that we should provide more assistance to the UN High Commissioner on Refugees, that we can provide greater transparency for offshore detention, that we can also ensure that we take more refugees over the long term. All of these things are consistent with a policy of better openness and engagement with the globe.
HARPER: Why is it important for you to write this message about openness now? Why is it the word you wanted to concentrate on?
LEIGH: I do worry Wendy that we might be at a point like we saw in 1914, where as John Maynard Keynes put it, the world was extraordinarily open and then the doors closed for another three decades. We’ve seen trade, investment and migration fall since just before the global financial crisis. The rise of right wing populism has much in common across countries. So many of these populists want to close off trade, migration and investment. They think that the secret is to put up the walls and to hunker down into our shells like turtles. I want to make the case for global engagement in Australia and how we can set up the social policies to make openness work.
HARPER: Thank you very much for joining us today. What do you hope the government will pick up out of your book, if anything? If there were to be one thing when Malcom Turnbull sat down and read this tome of yours and had an a-ha moment, what would it be?
LEIGH: There’s arrange of specific policy proposals, Wendy –
HARPER: What about your favourite?
LEIGH: I think I’d pick out the way in which we practise politics. I think angry, shouty politics is uniquely conducive to the growth of right wing populism. Nasty right wing populism thrives in a hothouse, so we’ve got to move away from the insults, the slogans, the idea that our opponents don’t merely think differently but that they’re bad people. If Malcolm Turnbull can begin to contribute to a more constructive conversation about how we engage in politics, then that’s not only good in itself but I think also creates conditions in which it’s harder for the extremists to thrive. It’s an effective counter radicalisation strategy.
HARPER: Good luck with your book and I hope it gets well read. Congratulations.
LEIGH: Thank you.
HARPER: Thank you. Dr Andrew Leigh – he’s the Shadow Assistant Treasurer and federal Member for Fenner in Canberra.