This morning I spoke to Marius Benson about what Treasurer Joe Hockey has signalled; a further increase in the pension age and more means testing of welfare.
INTERVIEW, ABC NEWSRADIO
FRIDAY, 11 APRIL 2014
SUBJECT/S: Tony Abbott’s broken promise on the Age Pension; Free trade agreements; Unemployment; WA Senate; Australian Labor Party.
MARIUS BENSON, PRESENTER: Andrew Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Morning Marius.
BENSON: The economic outlook, certainly the employment outlook, did brighten noticeably yesterday.
LEIGH: Marius, there’s two ways of bringing down the unemployment rate. You can either have a whole lot of people find jobs or you can have a whole lot of people cease looking for jobs. Economists call the latter the ‘discouraged worker effect’ and given that the participation rate went down yesterday I think what we’re seeing is mostly people giving up unfortunately, rather than people moving from unemployment into employment.
BENSON: The unemployment figures are more complex than they look on the surface, but it did seem to cheer, at least, the Australian dollar. But everything connects, the dollar rose yesterday that makes life harder for our exporters who were thinking life might get easier as the result of a couple of free trade agreements over the past week or so. How important do you think those free trade agreements are when you look at the dollar going up a couple of cents?
LEIGH: A multilateral free trade agreement always beats a bilateral free trade agreement, so we’re in the world of the second-best once we’re striking country-to-country deals. This one seems to have attracted an unusual amount of criticism from agricultural groups: the National Farmer’s Federation saying that it falls short of the mark, cane growers saying that it’s a kick in the guts, Cattle Council disappointed, the Australia Pork Limited describing it as ‘a missed opportunity’. So that’s a surprising amount of critique from the agricultural sector about a deal which is principally on agriculture for Australian exporters.
This morning I joined host Kieran Gilbert and Liberal Senator Mitch Fifield to discuss the WA Senate re-run, free trade and security deals with Japan, and Labor’s ongoing commitment to democratic reform. Here’s the full transcript:
SKY AM AGENDA
MONDAY, 7 APRIL 2014
SUBJECT/S: WA Senate election; Free trade and security discussions with Japan; Clive Palmer and campaign financing; ALP reform.
KIERAN GILBERT: With me on the program this morning, the Shadow Assistant Treasurer, Andrew Leigh and also the Assistant Minister for Social Services, Mitch Fifield. Gentleman, good morning to you both. Mitch Fifield, first to you on this Japanese arrangement, obviously the free trade agreement looking good and the Prime Minister hopeful but he’s also looking to secure closer defence ties. This comes just a couple of days out from his visit to Beijing, there could be a few sensitivities to smooth out when he arrives in China, just a couple of days from now?
MITCH FIFIELD: Well Kieran, in 2007 John Howard entered into a security agreement with Japan, a statement that we were looking to have closer defence relationship. What the Prime Minister is working on is building upon that. We’re looking to enter a closer relationship in defence, science and material. Australia is very supportive of Japan adopting a more normal security posture. They have been an exemplary international citizen for the past 50 years so I think what we’re seeing is just a natural evolution.
GILBERT: Andrew Leigh, is it fair enough for the PM to be pursuing this? He is going to be the first foreign leader to address a security council meeting of the Japanese security council. Is that going too far in your view or is what Mitch Fifield and the Prime Minster saying correct, can you nurture one friendship while not alienating someone else?
ANDREW LEIGH: Mitch I think reflects the fact that much of this is bipartisan policy Kieran, and certainly the security ties were something worked on during the Labor time as indeed was the trade deal. I remember visiting Tokyo last year and in senior government meetings pushing the case for a trade deal. We need to be careful on both fronts. Labor won’t be backing a trade deal at all costs and in the area of security, we need to make sure that we’re sensitive to the impacts on our Chinese friends. I think Rory Medcalf’s piece this morning was good on this in terms of recognising that Australia needs to be playing a sophisticated game in Asia.
This morning I spoke with Fairfax Media’s Tim Lester about what’s making news, notably developments that highlight the Abbott Government’s aggressively marketed asylum seeker policy is shambolic. Here’s the full transcript:
MONDAY, 11 NOVEMBER 2013
Subjects: Asylum seeker stand-off with Indonesia, Warsaw Climate Change Conference, Grain Corp takeover.
TIM LESTER: There is debate about how many times it has happened in recent days but no debate over the fact that it is happening. Indonesia is turning back asylum boats that the Abbott Government would like our near neighbour to take. What does this say about the Abbott Government’s asylum policy going forward? Every Monday Breaking Politics is joined by the Labor MP in Fraser, Andrew Leigh. Welcome in Andrew.
ANDREW LEIGH: Thanks Tim.
LESTER: First, does Indonesia’s stance on tow-backs surprise you?
LEIGH: Not in the least Tim. This is what Labor has said for upwards of a year would happen. The Indonesian Government has been firm and consistent in their position on Mr Abbott’s tow-back policies. That’s why before the election he conspicuously failed to raise it with our Indonesian colleagues. I think calling the Government’s asylum seeker policy ‘shambolic’ is probably being too generous. We’re now learning more about what Australian navy vessels are doing through the Jakarta Post than we are through the official briefing from Mr Morrison. It appears now that the reason he wants a General to stand next to him is so that he can shield behind that General and refuse to answer questions. And, as to the ‘buy-back the boats’ policy, we’ve heard precious little of that in recent times. It’s really disappointing Tim. This is a vital relationship for Australia. We must treat our Indonesia colleagues with respect. They are the fourth-largest country in the world; a very important relationship for Australia being dealt tremendous blows by the toing and froing, the back and forth that is this Government’s asylum seeker policy.
On 4 Nov, I joined host Kieran Gilbert and Liberal Senator Mitch Fifield to discuss the Western Australian election, Mr Abbott’s selective appeal to mandate theory, Labor’s democratic process for choosing a leader, and the split between the Liberal Party and the National Party over foreign investment.
This morning I joined Tim Lester for my weekly conversation on Breaking Politics. I welcomed the new Labor leader, Bill Shorten, and discussed foreign investment and concern over the looming prospect of a U.S. Government deficit default. The full transcript is below and the video here.
HOST TIM LESTER: So, Labor has a new cabinet and with Bill Shorten in the position of Opposition leader, the team can now take its places. We will learn this week, not only who is on the front bench but what roles they will have and one of the names kicking around is Andrew Leigh, the Labor MP in the electorate of Fraser, a regular on Breaking Politics. Welcome back Andrew.
ANDREW LEIGH: Thanks Tim.
LESTER: Tell us, what are your hopes for a frontbench spot?
LEIGH: Caucus will make that decision, now that we’ve changed the rules to allow democracy to flow through the party and I think that’s a great thing. We’re seeing a whole lot of opening up in the Labor Party, opening up of the selection of the leader to the membership which has been so warmly welcomed and now, going back to the system of the caucus choosing the frontbench. We’re fortunate to have an array of talent comfortably fill two high-quality frontbenches, so it’s going to be a tough decision for us collectively to make today.
On Sky AM Agenda, I spoke with host Laura Jayes and Liberal minister Mitch Fifield about the Coalition’s odd policy of liberalising trade and restricting foreign investment, and about the four cabinet members who have claimed travel allowance to attend weddings.
On 1 October, I joined host Laura Jayes and Liberal MP Alan Tudge to discuss Prime Minister Tony Abbott’s attempts to persuade Indonesia to accept boat buybacks and towbacks, and the importance of maintaining ethical standards if Australia is to continue to have a viable live animal export trade.
In the latest issue of the Journal of Economic Literature, I review Ian McLean’s terrific book on Australian economic history.
Review of Ian McLean, Why Australia Prospered: The Shifting Sources of Economic Growth
Journal of Economic Literature, 2013
In the 1990s, Polish journalist Ryszard Kapuściński was asked by his fellow citizens: ‘You’ve been all over the world. Isn’t there a country somewhere that has found a middle way – where market forces rule, but where the government looks after the kids and the old and the sick and the poor? Somewhere where the bosses give the workers a reasonable deal? Somewhere where people help each other instead of just looking after themselves?’ And Kapuściński told them: ‘Yes, it’s called Australia.’ (quoted in Knightley, 2001, 31)
In the scheme of things, Australia has fared pretty well. In the late-nineteenth century, it had the highest per-capita incomes in the world. In the early-twentieth century, it was the first country to allow women to both stand for office and vote (and can on this basis lay claim to have been the world’s first democracy). In recent years, it has defied the global slump, keeping unemployment below 6 percent and growing 14 percent since the end of 2007. In 2013, the OECD’s Better Life Index gave Australia top spot for the third year in a row.
My op-ed in today’s AFR looks at the prospects for jumpstarting Japan’s ailing economy.
Three Arrows on Their Way, Australian Financial Review, 4 June 2013
In the mid-1930s, John Maynard Keynes coined the phrase ‘animal spirits’ to sum up the impact of a country’s mood on its economic environment. When nations get stuck in a funk, it’s hard to escape. Conversely, when growth gets going, exuberance builds on exuberance (sometimes to the point of creating a bubble). Either way, the sentiments of consumers and businesses can build on one another.
For Japan, the post-war decades are a story of astonishing transformation, as the country transformed itself from a developing to a developed country. By the 1980s, airport bookshelves were filled with tomes about the virtues of the Japanese economic model, with titles like Trading Places: How we are Giving Our Future to Japan and How to Reclaim It and Blindside: WhyJapan Is Still on Track to Overtake the U.S. by the Year 2000.
But the past twenty years have been a story of malaise. Hard as it is to believe, the Japanese economy – in nominal terms – is almost exactly the same size as it was twenty years ago. The deflation trap has proved devilishly hard to escape, and net government debt is now more than 140 percent of GDP, the highest in the OECD (Australia’s debt share is one of the lowest).
I recently attended the Australia-China forum in Beijing and was a part of a breakfast panel discussing various political issues. We covered off the Asian Century White Paper and optimism in Australian politics during the session. The audio from the panel is available below.
I spoke in parliament yesterday about supermarket competition, the importance of standing on the side of consumers, and why I’m proud to be a practitioner of the ‘dismal science’.
Matter of Public Importance, 15 August 2012
I rise to speak on this matter of public importance relating to supermarket competition, with a particular focus on the importance of maintaining lower prices for consumers. Much of Australia’s economic history in the post-war decades is characterised by a somewhat unholy alliance across the major parties to protect producer interests at the expense of consumer interests. So much of the ‘protection all-round’ that prevailed in the 1950s and 1960s meant that Australians paid high prices and that there was less foreign investment. We were less exposed to trade. Our firms were less competitive and our consumers suffered for that. One of the great achievements of the last generation of economic policy makers, thanks to people on both sides of the House, is that we have put the consumer first.
I spoke in parliament yesterday about getting Australians a better deal on Kindle books.
Amazon.com’s Kindle Pricing Policies
House of Representatives, 28 June 2012
Access to many and affordable books is an important component of a civilised society. It is through books that children are exposed to new ideas and it is through books that many of us as adults broaden our experience. Indeed, one of the last things I wrote while as an academic was a survey of the books that federal parliamentarians were then reading which turned into an article with my friend Macgregor Duncan. Reading opens new worlds and makes us better people. It is in that vein that I urge the House to place pressure on Amazon.com to provide better and cheaper access to books through the Amazon Kindle.
In the SMH News Review section today, I’ve done ‘The Essay’ – a shorter version of my McKell Institute speech.
Dumb Luck – Smart Future, Sydney Morning Herald, 9 June 2012
In the Pacific Ocean, off the west coast of South America, sit the Galapagos Islands. Although they straddle the equator, the pattern of ocean currents has a cooling effect, making them an ideal breeding ground.
The islands are volcanic – so all animal life on the Galapagos Islands came originally by flying or floating nearly 1000 kilometres from Ecuador. And yet for the species that survived, life on the Galapagos Islands was perfect. Migrating birds lucky enough to be blown off course found an environment with few natural predators. Tortoises that floated here found beaches perfectly suited to their breeding environments. Life flourished.
Looking back across Australian economic history, I am often struck by the extent to which luck has similarly played a part in our success. Politicians are sometimes reluctant to talk about luck – preferring to focus on the things we can control than those we can’t. But I think it’s still worth talking about the role that fortune has played, if only to help understand what preparations we should be making. If we don’t do that, we’re like the Galapagos tortoise, which must have thought itself the luckiest species on earth, until British sailors discovered the islands in the late-eighteenth century, and ate them in their thousands.
Malaysia Trade Deal: In Praise of Openness, The Drum, 29 May 2012
The rise of Asia is often seen as the rise of Asia’s big nations, like India and China. But even taking these two giants out of the equation, Asia’s share of middle class consumption is expected to outstrip that of the United States and the European Union combined by the middle of this century. A growing Asian middle class means a massive increase in consumption and spending on imported goods and services. Those goods and services include the kind of things that Australians produce and expect: a wide range of yummy food; high-quality education; and elaborately transformed manufactures.
As well as providing a market for our exports, the rise of Asia has also benefited Australian consumers. The past 20 years have seen real prices for imported furniture, handbags, clothes, shoes and medical products roughly halved. Real prices of computers, telephones and other electrical goods have fallen by about two-thirds.
In the Pacific Ocean, off the west coast of South America, sit the Galapagos Islands. Although they straddle the equator, the pattern of ocean currents have a cooling effect, making them an ideal breeding ground for tortoises, iguanas, penguins, finches, albatrosses, gulls, and pelicans.
Because the islands are volcanic, what’s striking about animal life on the Galapagos Islands is that all of it came originally by flying or floating nearly 1000 kilometres from Ecuador. And yet for the species that survived, life on the Galapagos Islands was perfect. Migrating birds lucky enough to be blown off course found an environment with few natural predators. Tortoises that floated here found beaches perfectly suited to their breeding environments. Life flourished.
Looking back across Australian economic history, I am often struck by the extent to which luck has similarly played a part in our success. Politicians are sometimes reluctant to talk about luck – preferring to focus on the things we can control than those we can’t. It is true that ‘chance favours the prepared mind’. But I think it’s still worth talking about the role that luck has played, if only to help understand what preparations we should be making. If we don’t do that, we’re like the Galapagos tortoise, which must have thought itself the luckiest species on earth, until British sailors discovered the islands in the late-eighteenth century, and ate them in their thousands.
The Asian Century Beckons, Canberra Times, 25 April 2012
In the 21st century, we can confidently predict two trends. First, Australia will become more ethnically diverse. And second, we will become more enmeshed with Asia. The next generation of Australians will be more likely to have been born in Asia, travelled to Asia, worked in Asia, or married someone from Asia.
I spoke in parliament yesterday about trade liberalisation and anti-dumping.
Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011
28 February 2012
It is my pleasure to rise to address the Customs Amendment (Anti-dumping Improvements) Bill (No. 2) 2011, a piece of trade legislation that sits proudly in a Labor legacy of trade reform. The opening up of Australian markets which has been so much to the benefit of Australia’s workers and consumers is fundamentally a Labor story. It was Gough Whitlam in 1973 who first cut tariffs, and then Bob Hawke and Paul Keating who continued through the tariff cuts. They did so with a view that open markets would be good for Australia, but that that process of dropping the tariff walls would entail transition costs. So they put in place a car industry plan and TCF plan, recognising that industry would need time to adjust. Those changes have been enormously beneficial for Australian families. They have put on average $3,900 per annum into the pockets of Australian households according to a report by the Centre for International Economics. Open markets have also meant that Australian industry has become more competitive. That has meant more export jobs. It has meant more opportunities for Australian workers.
The last parliamentary fortnight wrapped up with a debate over a motion moved by the Liberal Party about Australia’s ‘forgotten families’. I spoke in the debate, and used it as a chance to discuss the government’s achievements and agenda, and contrast them with the relentless negativity of the Opposition Leader.
My AFR op-ed today looks at the benefits that Australia gains from playing by global trade rules.
Apple Ruling Makes Sense, Australian Financial Review, 23 August 2011
In 1995, Japan accepted imported rice for the first time. A nation whose politicians had sometimes claimed that foreign rice was unfit for Japanese consumption yielded – thanks to a World Trade Organization deal. Within a few years, Australian rice exports to Japan were worth over $200 million.
Yet today, the Liberal and National parties are calling for Australia to thumb its nose at the WTO’s finding that our apple quarantine system was not based on solid science. Rather than allowing New Zealand apple imports, the Coalition would prefer to see Australia start a trade war.
I spoke in parliament last week about the benefits of free trade to Australian consumers and businesses, and the legacy of the great Labor Senator Peter Cook.
23 June 2011
I rise to discuss the benefits of free trade to the Australian economy and the Australian consumer. Estimates from the Department of Foreign Affairs and Trade show that households have benefited by $3,900 per annum as a result of the reductions in tariffs and the elimination of export quotas over recent decades. A large part of that boost has been in the form of prices being lower for consumers than they would otherwise have been in the presence of tariffs. The real prices of heavily protected products have fallen sharply. Boys’ footwear has fallen by 50 per cent, prices of major household appliances have fallen by 47 per cent and prices of automobiles have fallen by 37 per cent. One in five Australians is now employed as a result of exports and imports. Australians working in export industries are paid 60 per cent more than other working Australians.
I spoke in parliament last night on the issue of live animal exports.
Live Animal Exports, 14 June 2011
The image of our stock men and women is deeply etched on the national psyche: the laconic stockmen rocking easily in the saddle, cajoling and guiding the herd; the alert and agile stockman darting through the bush, bringing a bolter back or displaying campdrafting skills at the local rodeo.
I’m speaking in Sydney tomorrow at the NSW Parliament House. The event is the National Economic Review 2010, being organised by Global Access Partners. I’ll be speaking on international trade – why Australia has benefited from taking rocks out of our harbours, and what the future might hold.