On 17 Dec 2013, I spoke with 2CC’s Luke Bona about Joe Hockey’s budget update, and the series of broken promises by the Abbott Government. Here’s a podcast.
Archive for the ‘Macroeconomics’ Category.
On Sky News Showdown, I discussed the Abbott Government’s first budget update, showing a significant deterioration in public finances, a significant potion of which is due to decisions made by the government.
My op-ed in the SMH Online today looks at Joe Hockey’s attempt to find someone else to blame for his decisions.
Joe Hockey, it’s your economy now, Sydney Morning Herald, 17 December 2013
As a very junior lawyer, I once worked on a case representing a restaurant owner, who had sold his business. The new owners complained that they could not make as much money as he had done. When we looked into it, the reasons quickly became apparent. They had taken on their relatives as staff, fired the chef, and allowed grime to accumulate in the kitchen. They claimed that our client had misrepresented the true state of the restaurant when it was sold. But as the judge found, it was the new buyer’s shabby management that led to the losses.
Today, Joe Hockey is trying a similar trick. It’s been 101 days since the election, but rather than acting as the Treasurer of Australia, he’s frozen in Opposition mode, looking for someone to blame.
On Sky AM Agenda, I joined host Kieran Gilbert and Liberal Senator Mitch Fifield to discuss the Coalition’s excuses for blowing out the budget, and whether Liberal Party MPs will be given the freedom to vote their conscience on same-sex marriage.
SKY AM AGENDA WITH KIERAN GILBERT
MONDAY, 16 DECEMBER 2013
SUBJECT/S: Budget Update, DisabilityCare, Same-Sex Marriage
My short review of Ross Garnaut’s new book appears in this month’s AFR Boss magazine.
Review of Ross Garnaut, Dog Days: Australia After the Boom, Australian Financial Review, Boss Magazine, 6 December 2013
When judging a batsman in cricket, we often forget to account for the ground. We all know the Adelaide Oval has even bounce and short square boundaries compared to the MCG. But we still mistakenly think a batsman is doing better when he’s wielding the willow in Adelaide.
The same goes for economic policymakers. In the ‘salad days’ of the early-2000s, argues Ross Garnaut, ordinary policy looked celestial. In the ‘dog days’ of the post-GFC era, celestial economic policy could look ordinary. Poor decision-making in Mining Boom Mark I went unnoticed. In Mining Boom Mark II, everyone was a critic.
I spoke on ABC RN Drive tonight with Arthur Sinodinos and Waleed Aly. We discussed debt, school funding and consistency in politics. Here’s a podcast.
I spoke in parliament yesterday in honour of two great Australian economists – Steve Dowrick and Paul Miller – who I worked with, and who died much too young this year.
Steve Dowrick and Paul Miller, 2 December 2013
I rise this evening to speak about the passing of two great Australian economists, Steve Dowrick and Paul Miller. Steve Dowrick was born on 7 May 1953 in Dublin, Ireland, and passed away in August of this year. His life and his contributions to the economic profession have been beautifully laid out in an obituary for the Canberra Times by Bruce Chapman and Maria Racionero. I will draw on that obituary in some of my comments today.
On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal MP Josh Frydenberg about the Coalition’s broken promise on school funding, protectionist decision on foreign investment, and problematic calls in foreign policy.
On Sky AM Agenda, I joined Liberal MP Steve Ciobo and host Kieran Gilbert to discuss Mr Hockey’s request for a no-doc $500B loan, Mr Abbott’s curious statements on human rights in Sri Lanka, and the emerging split in the Coalition over foreign investment.
This morning, in my usual slot with host Tim Lester in the Fairfax Breaking Politics studio, I discussed some of the stories making news today including the stark difference in approach between Tony Abbott and Britain’s Prime Minister David Cameron over alleged human rights abuses in Sri Lanka. Here’s the full transcript:
MONDAY, 18 NOVEMBER 2013
Subjects: Sri Lanka and human rights, child care review, shopper dockets, debt ceiling, role of the Speaker of the House of Representatives
TIM LESTER: The approach of two conservative leaders at the Commonwealth Heads of Government meeting in Sri Lanka could not have been more marked. Britain’s David Cameron visited some disaffected families in one part of the country, also upset the government by calling for a war-crimes enquiry. Australia’s Tony Abbott, well he gave the Government a couple of patrol boats to help with asylum seekers and seemed only to praise them. Which leader was right? Well, to discuss that issue and others, we’re joined on Mondays in [the] Breaking Politics studio by Andrew Leigh, Labor MP here in Canberra. Andrew, thank you for coming in.
ANDREW LEIGH: A pleasure Tim.
LESTER: Who was right in their approach to Sri Lanka, Britain’s David Cameron or our Tony Abbott?
LEIGH: I think when we go overseas Tim, we do a little part of the exercise of telling the rest of the world what Australia is – what we stand for. Through each of our statement and our actions we convey Australian values and to have Mr Abbott in Sri Lanka saying of torture, ‘I accept that sometimes in difficult circumstances difficult things happen’ was to me pretty troubling. That attitude seemed to contradict what I would have seen as a long standing principle going right back through Labor and conservative prime ministers of Australia that we would never accept that there are any difficult circumstances in which torture was acceptable. David Cameron conveyed his country’s values to the world. Mr Abbott, I think, took a domestic political agenda that was smaller than the big-hearted country he represents.
My speech in parliament on 14 Nov on the debt cap:
I think Australians are increasingly realising that the government they elected is not the government they were promised. We saw in question time today the minister for immigration refusing to answer basic questions, attempting to hide the boats. We have seen for months now the opposition hiding the ministers—ministers who were everywhere before the election are suddenly nowhere to be seen, because they cannot get permission from the Prime Minister’s office. And now we are seeing the hiding of the budget update, a budget update that yesterday the Prime Minister told the parliament sometimes under Labor came out in December. I’m afraid not. The Prime Minister was dead wrong on that. The budget update should be out now—and it should particularly be out now if you are asking for an increase in the debt limit.
The Treasurer is the only person in Australia who thinks he can ask for a doubling of his credit card limit from the bank and not give them a single piece of paper to justify it. And it is always someone else’s fault: maybe it is someone else’s debt, maybe the Greens did it, maybe ‘the dog ate my homework’. But the very fact is that this Treasurer is making decisions that are going to worsen the 2013-14 budget. He is giving a huge tax break to mining billionaires, who I noticed were very well represented in the parliament today. He is giving $700 million back to multinationals because he cannot crack down on profit shifting seriously. And he is giving $9 billion to the Reserve Bank of Australia. Now, he says he is giving $9 billion to the Reserve Bank because they so desperately need it. He says it is because Labor ‘raided’ the Reserve Bank dividends. It is just a pity we can actually go back and look at the facts. When you go back and look at the facts you see that the amount Labor took out per year by dividends was half as much in real terms as what the Howard government took out. So if we, according to the Treasurer’s statement, ‘raided’ the Reserve Bank, then the Howard government doubly raided the Reserve Bank.
During a doorstop interview with press gallery journalists this morning I urged the Abbott Government to justify to the Australian people why an increase in the debt cap from $300 billion to $500 billion is needed. I also acknowledged the extraordinary contribution of former Prime Minister Kevin Rudd who last night announced his retirement from politics.
DOORSTOP INTERVIEW PARLIAMENT HOUSE
THURSDAY, 14 NOVEMBER 2013
ANDREW LEIGH: Since it’s the first time in this new parliament doing doors, I feel as though I should acknowledge Peter Veness, whose ghost seems to still haunt politicians around this spot here. We saw the Prime Minister on 7.30 last night, very clearly saying why he needed $500 billion as the debt cap. It was because he wanted to avoid parliamentary scrutiny. There’s nothing more than that for the Government in this. They don’t need a $500 billion cap. Simply, they want it because they don’t believe that they should go back to the Parliament. It speaks to the arrogance of this Government and it speaks also to their secrecy, their unwillingness to release a budget update.
You know when the Prime Minister’s pressed because he starts to mislead the House. Yesterday when he was pressed on the issue of the debt cap, he misled the House twice. First of all saying that the Liberal Party had never voted against an increase in the debt caps and of course they had. And then saying that Labor had released the MYEFO budget update in December. Which of course we never did. The Prime Minister, if he needs $500 billion for his debt cap he needs to tell us precisely why by releasing the budget update which I suspect will tell us about the deterioration of the public finances, perhaps due to things like backtracking on cracking down on multinationals’ profit-shifting and also giving a big tax cut to mining billionaires, who I understand will be well represented in the parliament today.
JOURNALIST: Just in regards to the debt ceiling, is Labor playing a dangerous game given we’ve got the deadline of mid-December for this decision to be made?
LEIGH: Labor has been absolutely clear that we will support an increase in the debt cap to $400 billion. That will be plenty to keep the Government going now and indeed right up to peak debt which let’s not forget is projected to happen after the next election. So, if any party is playing political games here, it is the Liberal Party.
I spoke in parliament tonight about the Treasurer’s attempt to raise the debt cap by $200 billion without releasing a budget update.
At the outset, I wish to register my concern about the duration of this debate. In September 2011, the coalition described as ‘ridiculous’ this House’s decision to schedule 35 hours of debate on the carbon price bills. They were bills which, according to the Climate Institute, ultimately had ‘an undetectable impact’ on the overall economy. Yet this House is now scheduling 70 minutes to debate $200 billion—that is $47 million per second of this debate. Every second of this debate that elapses, the debt limit will rise $2 for every single Australian. That is how little this government regards debate in this House.
Fundamentally, what we are debating today can be best understood through the lens of AFL. In AFL there is a tactic that teams sometimes engage in when they are getting towards the bottom of the ladder. They know the best draft picks come from being at the bottom of the ladder, so they engage in a strategy called tanking. They hope to put themselves in a better situation in the next season by doing worse in this season. In Carlton versus Melbourne 2007, fans were hanging their heads in shame. And that is what the Treasurer is attempting to do for the 2013-14 budget: the Treasurer is attempting to tank the 2013-14 budget because he wants that budget to be regarded as Labor’s budget. Of course, that is not what the Treasurer said when he was asked before the election what his attitude would be after 7 September. He said, ‘If we are to win we will own it from day one.’ But actually it appears that what he meant to say was, ‘We will own it from day 300.’ The Treasurer wants to load as much debt as possible into 2013-14 because he thinks he can blame it on someone else. He wants to tank the 2013-14 budget.
I delivered a speech in the House of Representatives today – what’s called an ‘Address in Reply’ in response to the Government’s opening speech – exploring Labor’s strong economic and policy legacy. I urged the ALP to remain the party of big ideas and one underpinned by key principles of fairness, inclusion and equality and I lamented the Abbott Government’s early and disappointing broken promises. Here’s the full text thanks to Hansard.
Can I congratulate the members for Bass and Corangamite on the passion with which they have delivered their first speeches and hope that they will serve their constituencies with the same energy and passion as their predecessors did.
I want to begin my remarks today with the stories of two constituents of mine: Carol and Denise. Denise has a 21-year-old son, Tim, with Down syndrome. She regularly has to prove his eligibility for a modest Centrelink payment and work within a system that has not been working for her and has not been working for Tim. Tim’s chromosomes are not going to change, but the old system required her to prove that. DisabilityCare will change that.
Then there is 48-year-old Carol, who works as a cleaner. Despite working on Sundays to earn some overtime she still earns less than $37,000 a year. Carol is not alone. A lot of low-income workers in cleaning, aged care, retail and hospitality are not full time and they are predominantly women. The removal of the low-income superannuation contribution will affect 3.6 million Australians and two-thirds of them are women. All of them, like Carol, work hard to make ends meet. They are the mothers who work part time because they are looking after young children. For them, saving for later in life is not a tax strategy.
DisabilityCare and the low-income superannuation contribution demonstrate how Labor take the initiative to defend those who are doing it tough. Labor are the party of ideas and we are the party of reform, the party with the courage to make the big decisions when they are needed. As the opposition leader said at this year’s Fraser lecture:
‘We’re the dreamers, doers and fighters.
‘We have ideas, and … we’re prepared to fight to make them a reality.’
I agree. Only the Labor Party is prepared to fight for a fair go for all and shoulder the responsibility for reform. Only Labor knows that reform must balance economic imperatives with social need and hope. I am sorry to say that that is in stark contrast to the approach of the Abbott government. We have already seen how quick they are to protect sympathetic vested interests and how much quicker they are to slug those doing it tough.
The Treasurer would have you believe that drastic action has to be taken because of the economic legacy left by Labor. Over the next few weeks we are doubtless going to hear, time and time again, what a terrible state the economy is in. Before the Treasurer attempts to airbrush recent history, let’s take a sober and sensible look at the economy that the government have inherited and what they have done with it so far. That look has to recognise the simple, fundamental truth. The government have inherited economic statistics and public finances that are better than those of almost any country in the developed world.
This morning, ahead of the opening of the 44th parliament, I spoke with 2CC’s Mark Parton about the comparatively strong performance of Australia’s economy and Labor’s decision to block Treasurer Joe Hockey’s push to raise the debt ceiling from $300 billion to $500 billion. Here’s the audio.
On Friday 8 November, I joined my friend Craig Emerson on his seventh ‘Emmo Forum’ to discuss what it means to be an economist and a progressive.
You can watch it on YouTube below, or download the podcast here.
On 3 November, I joined Sky Viewpoint host Peter Van Onselen to discuss economics, politics and the two big policy problems that keep me awake at night.
Published in today’s Daily Telegraph is my opinion article on how Joe Hockey is using a massive Reserve Bank capital injection in an irresponsible attempt to make his performance as Treasurer look good.
HOCKEY BORROWS COSTELLO ATTACK
The Daily Telegraph
Thursday 31 October
In the final rounds of the AFL, a team with no chance of making the finals will sometimes be tempted to play more poorly in order to get a better draft pick the next year. It’s called ‘tanking’, and it’s against the rules and spirit of the sport. When it looks like teams are deliberately underperforming – as in the famous Carlton versus Melbourne match at the end of the 2007 season – the result is frankly a bit embarrassing to watch.
And so it is with this year’s budget deficit. As anyone who’s been awake this past five years knows, the world has gone through the greatest slump since the Depression. Rather than drastically cut government spending – and damage economic growth – the federal Labor government chose to save jobs. Consequently, we have national debt equivalent to a bit over one-tenth of our annual income: one of the lowest levels in the developed world.
Yet for the past few years, the Coalition has focused its attention not on the 200,000 jobs saved when the Global Financial Crisis hit, but creating a farcical idea that Australia has a ‘problem’ with ‘debt and deficits’. Any serious economist would tell you this type of claim is just codswallop.
But from doing press conferences in front of a ‘debt truck’ to giving speeches about a ‘budget emergency’, the Coalition has left no fear campaign untested in their crusade to scare Australians about the state of the nation’s public finances.
Now that they’re in government, the game continues. Last week, Treasurer Joe Hockey provided the Reserve Bank of Australia with a cool $8.8 billion for its reserve fund with a flick of a casual afternoon press release. Justifying such a massive sum, Mr Hockey blustered ‘It’s money that should have been allocated by the Labor Party in government but they didn’t… Despite the warnings, they didn’t do it and they should have done it.’
The exact opposite is true. Six months ago, Treasury advised the Labor Government that to give the RBA a capital injection could ‘risk undermining the credibility of the RBA as an operationally independent institution’.
My op-ed in today’s Daily Telegraph discusses Mr Abbott’s three broken promises in his first three weeks in office.
Broken promises after just three weeks in job, The Daily Telegraph, 11 October 2013
Prime Minister Tony Abbott has made a great deal of the importance of keeping his promises. A few days before the election, he said that if he became Prime Minister: ‘you should move heaven and earth to keep commitments and only if keeping commitments becomes almost impossible could you ever be justified in not keeping them. And I suspect the electorate would take a very dim view even in those circumstances.’
And yet after just three weeks in the job, Mr Abbott has broken at least three promises.
This morning I spoke with Fairfax Media’s Tim Lester for Breaking Politics, exploring news of the day. I was asked about on-going revelations Coalition MPs, including Prime Minister Tony Abbott, have repaid tax payer funded outings, the impact of the US Congress budget impasse and about the rights of West Papuans to express their concerns. Here’s the full transcript:
BREAKING POLITICS – FAIRFAX MEDIA
TIM LESTER: When is it legitimate for an MP to claim his or her travel expenses on the taxpayer? Going to weddings for example. There are some numerous and now some notorious cases out there. To help us fathom this issues and others, our regular for Monday, joining us this week on a Tuesday because of holidays is Andrew Leigh, the MP for Fraser, Labor MP. Thank you for coming in Andrew.
ANDREW LEIGH: Thanks.
LESTER: Tony Abbott attended weddings several years ago. Now, one of them was Peter Slipper’s several years ago now. He claimed the costs. The taxpayers paid for him. He’s now paid it back seven years later when the issue surfaces as contentious. Has he done the right thing or the wrong thing?
LEIGH: Mr Abbott’s seems to have a fairly expansive view of entitlements and you’re beginning to see a bit of a pattern here. Like the Howard Government which had seven ministers resign early on as a result of various scandals including travel expenses scandals. There are now four Coalition cabinet ministers, including the Prime Minister who are under investigation here. I guess what worries me is that if they’re taking that sort of approach to these cases that we know about, what approach do they take to public expenses more broadly? That plays into a broader question over schemes such as paid parental leave which I think demonstrate an even more cavalier approach to the public finances.
LESTER: So, the various cases of weddings that we’ve seen here where these MPs have gone along and claimed on the taxpayer, they should not have done that?
LEIGH: I certainly don’t believe so. I mean it’s great to see Coalition MPs going to weddings. They’re so excited by them, you wonder how they can be against same-sex marriage. But this strikes me as an entirely personal matter and I’m surprised they’ve claimed for it.
I was interviewed yesterday by the doyenne of the parliamentary press gallery, Michelle Grattan. Among other things, we discussed Labor’s future, same-sex marriage, economics, and the Greens. Here’s a podcast.
My op-ed in today’s Canberra Times says a carbon price has made a real and positive difference and Tony Abbott’s carbon targets fall short.
Clouds over Climate Scheme, The Canberra Times, 1 October 2013
Media magnate Rupert Murdoch recently tweeted ‘Al Gore. Pls explain record increase in Arctic ice.’ Murdoch was responding to the finding from the National Snow and Ice Data Center that the minimum extent of Arctic ice rose this year from 3.4 to 5.1 million square kilometres. Alas, the average in the 1980s and 1990s was 6.7 million square kilometres. As Greenpeace’s Ben Stewart responded to Mr Murdoch: ‘It’s like your papers’ circulation. Long term downward trend with occasional spikes’.
Cherry-pick the stats all you like, but the earth is warming. Australia has just had our hottest summer and one of our warmest winters, making the past twelve months the hottest on record. Early spring brought frightening bushfires. The fifth report of the Intergovernmental Panel on Climate Change (IPCC) confirms what is well understood and focuses our attention on the challenges ahead.
It is clearer than ever that humans are responsible for emerging changes in climate in the atmosphere, ocean, ice and land. The revised projections of sea level rises are a major concern as all of Australia’s major cities except Canberra are coastal.
In announcing the draft report, the IPCC chairman Rajenda Pachauri backed financial markets as humanity’s best hope in the battle against global warming. “An extremely effective instrument would be to put a price on carbon. It is only through the market that you can get a large enough and rapid enough response.”
So, as bizarre as Mr Murdoch’s rejection of the scientific evidence is Environment Minister Greg Hunt’s rejection of the economic evidence. On 16 September, Mr Hunt told the ABC’s PM program on 16 September that the carbon price “fundamentally doesn’t do its work”. And yet the introduction of the carbon price has been accompanied by a 7 percent fall in emissions in the National Electricity Market.
My op-ed in today’s SMH sets out some of the questions the incoming Prime Minister has to answer.
Ten Challenges for Tony Abbott, Sydney Morning Herald, The Age and The Canberra Times, 13 September 2013
As a poll sceptic, I’m fairly rare in Parliament House. Most of the building watches opinion polls with the eagerness of sailors looking for land. For those on the Coalition side, the fact that almost every opinion poll in the past three years has gone in their favour has given them a strong sense of confidence that they would form government at this election.
The Coalition won the election with a convincing margin, and I congratulate Mr Abbott on becoming our 28th Prime Minister. But given the length of time the Abbott Government has had to prepare for office, the real surprise is the number of major policy questions that lie unanswered. Here are ten for starters.
First, given that we know from independent experts such as the Grattan Institute that Direct Action will not meet the bipartisan target of cutting emissions by 5 percent by 2020, how does the government intend to reduce our carbon emissions? Given that Australia has just had the hottest summer on record, is it really acceptable for the developed nation with the highest emissions per person to back away from action on carbon emissions?
I did two interviews on local radio this morning about the lessons for Labor from the election loss, attempts to repeal the emissions trading scheme, how Canberra will fare amidst job-shedding, questions Mr Abbott needs to be asked (such as the impact on Indigenous incarceration of cutting Aboriginal Legal Aid), and the achievements of the ALP over the past six years:
On 26 August 2013, Bill Shorten delivered the 13th Fraser Lecture on the topic “The Battle of Ideas and the Good Society”. The video begins with an introduction from me, and concludes with Bill taking questions. A full transcript of the speech is over the fold.
On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal Senator Mitch Fifield. I outlined Labor’s positive plan for education and infrastructure, and noted the Coalition’s $30B of regressive spending – in the form of their $22B unfair parental leave scheme and their $8B restoration of the private health insurance rebate for higher income earners. I also discussed the impact that tens of billions in Coalition cuts would have on health, education and jobs. A transcript is over the fold.
This morning, Liberal candidate Zed Seselja and I spoke with hosts Rod and Biggzy on Mix 106.3. Topics included risk management, Coalition costings, the sacking of Raiders coach David Furner, and catching Biggzy’s cousin on one of my phonecalls to electors. Here’s a podcast.
I spoke this morning on 2CC with Mark Parton. We discussed how the new UC Sports Hub will benefit Canberra and the region, and why the alternative to acquiring a modest level of debt was dire joblessness for hundreds of thousands of people. Here’s a podcast.
I spoke with Tim Lester on Breaking Politics today. A transcript is below.
TRANSCRIPT OF ANDREW LEIGH MP
‘BREAKING POLITICS’ WITH TIM LESTER
12 AUGUST 2013
E & O E – PROOF ONLY
Subjects: Election campaign, First debate, NBN, Costings, Peter Beattie.
TIM LESTER: Andrew Leigh, welcome into Breaking Politics.
ANDREW LEIGH: Thanks Tim.
TIM LESTER: How’s the campaign going?
ANDREW LEIGH: I’m loving it. I was out in Amaroo, in my electorate, yesterday – door-knocking, talking to people about the National Broadband Network. One bloke said he’d just gotten it hooked up, and he was enjoying using it to have better conversations with relatives overseas. Gotta say Tim, no-one came up to me and said “the real problem with the National Broadband Network is they’ve brought the fibre all the way to my home, and I wish they’d stopped it in the cabinet down the street,” but maybe Mr Turnbull meets people like that when he doorknocks.
After the first election debate, I locked horns with Shadow Finance Spokesman Andrew Robb about the government’s plans for managing the economic transition, and the need for the Coalition to bring their policies into the sunlight.