Inequality isn't the price of progress - Transcript, Sky News





Subjects: Innovation + Equality; gender pay gap and sexual harassment; Josh Frydenberg’s speech and making older Australians work longer.

TOM CONNELL:  Plenty of Australians do feel behind by technological advantages and advances in the economy. But there’s no reason to fear, according to Labor's Andrew Leigh, or at least if we have the policies in place. He's written the book on it, and joins me now here in the studio. Thanks for your time.


CONNELL: I'll give it a free plug, “Innovation + Equality”. So there it is. I'm curious about the title in of itself. Is there a need to write innovation and equality because it's currently unequal or because there's a perception that it's unequal?

LEIGH: It's a great question, Tom. I think some people regard inequality as just being the price of progress. They think that the gap between rich and poor has to rise if we want to have AI and smartphones. But fundamentally, Joshua Gans and I don't think that innovation is because the pot of gold at the end of the rainbow is bigger. We think the real way of getting more innovation is by encouraging more entrepreneurs from unexpected backgrounds. At the moment, only a quarter of our startups are founded by women, and men from affluent backgrounds make up a disproportionate share of entrepreneurs. So if we want to get more innovation, we need to broaden the pool from which our innovators are drawn.

CONNELL: It's interesting though, because it actually marries up beyond the perception, perhaps but there is some inequality too, with what Jim Chalmers spoke about recently. He spoke about divides from the city and the suburbs, and technology as a big divider of Australians. That wealth and job opportunities feel really great for people that are tapped into it. For those that are not, they just feel like it's this inaccessible part of the economy.

LEIGH: Absolutely. I think Jim's ‘Tale of Two Cities‘ approach really gels with what Joshua and I are saying. You look at the technological advances - AlphaGo has now been able to beat humans at Go, Pluribus Poker can now beat the best Texas Hold'em players, and the gap between the best chess computer and the best human player is about to same as the gap between the best human player and an amateur. If they were self-aware, they’d look at humans as though we were their pets. So this technology is advancing fast, but unless we have the systems in place to ensure that the gains are broadly shared, we're going to get a backlash against technology.

CONNELL: So you've delved into some of these systems. IP laws, you talk about them and there's kind of a bit each way here. You've cited the example of the man that invented the pause function basically on windscreen wipers, so instead of them going constantly they can get it sporadically, as a reason to help and protect and incentivise inventors on one hand.

LEIGH: Bob Kearns invented intermittent windscreen wipers, but Ford basically stole the invention from him and it took him decades his life to get it back. Even before that, the invention of forceps in the 1500s came before patents were broadly available. So they were kept by secrecy, and thousands of women and babies died as a result-

CONNELL: So they tried to cover up the invention, because ‘let's wait until I can make the most money out of it’ essentially?

LEIGH: Precisely. So the great thing about the intellectual property system is that you get a monopoly over a fixed period, and then the idea comes into the public domain.

CONNELL: Yet you also say not for too long, curiously citing I think it was Beyonce song?

LEIGH: Bootylicious.

CONNELL: You've put quite a long life expectancy on Beyonce, but with that life expectancy, I think the song will be trademarked or copyright for 140 years.

LEIGH: That's right. So if Beyonce lives to age 90, which I don't think is an unreasonable expectation, Bootylicious will be in copyright till 2141. We argue against further extensions of copyright, and we think it's possible to have a system which balance the needs to get more innovation but also ensures that we get that follow on innovation.

CONNELL: So where are we at right now in I guess Australia, but maybe more importantly globally, on where the line is on those two elements?

LEIGH: We don't think the copyright should be extended. Joshua and I also advocate thinking about two kinds of patents. At the moment, there's really only one kind for most inventions and you've got the same inventive step and novelty threshold. We think it might make sense to have shorter patents with less novelty and inventiveness, but then if you want to patent for 20 years, you'd need to meet a higher bar.

CONNELL: What do what do you mean by that novelty aspect? Can you explain that?

LEIGH: Well, patents have to go through various tests, the key ones which are novelty and inventiveness-

CONNELL: That it’s unique, essentially?

LEIGH: Exactly – new to the world. That's a question of gradation, and if we had two different levels, that might induce more innovation without getting the sort of blocking effect that are allowing inventions to be locked up in patents for too long-

CONNELL: The problem is any little incremental advantage, you say ‘well hang on, you haven't invented something here, you've made ABS brakes slightly better - we're not giving you a lock up patent’.

LEIGH: Absolutely. Or we get the ‘evergreening’ of pharmaceutical patents, which drives up the costs of pharmaceuticals.

CONNELL: Which is a big push from the US, right, within trade deals. This is where the rubber hits the road for Australia on this?

LEIGH: Absolutely. So Australia produces less innovation than Joshua and I believe it should. Only 8 per cent of Australian firms say that they are producing products which are new to the world, down from 11 per cent in 2013. There's a lot more we can do, particularly with the collaboration. We rank very low in the OECD for business-research collaboration. We think that if you raise that up, as well as giving more advantages to entrepreneurs on the wrong side of the tracks, we'd get a whole lot more innovation and more equality.

CONNELL: I want to run through quickly your policy prescriptions, if you like, that sort of mainly highlighted ones. Easing the process for university loans - what are we talking about there?

LEIGH: It’s an MIT press books, so we’re writing for a US audience there. We think the US student loan mess could be quite effectively solved by adopting the Australian system, so students are able to study the course that’s the best fit for them without being deterred by huge debt.

CONNELL: A generational sort of thing. Non-compete clauses in work contracts?

LEIGH: A fifth of American workers are currently barred from leaving their work and working for a competing employer-

CONNELL: How does that compare to here?

LEIGH: We don't have good figures for Australia, but anecdotally it's significant share of our labour force too. When you make it harder for workers to move jobs, you put downward pressure on wages but also on innovation. People can't leave and start up competing firms. And we know it's good for innovation because California bans the enforcement of non-compete clauses, and it's the home of Silicon Valley.

CONNELL: Reducing sexual harassment in the workplace to boost the number of women in tech - is this that big of an issue, and are you talking US or Australia here?

LEIGH: Absolutely. Sexual harassment is one of the significant drivers of the gender pay gap. It deters women from engaging in the sorts of jobs which are high pressure, high leadership environments. Sexual harassment is not only unfair, it's also bad for growth. And so there are many reasons that workplaces should be keen on stamping out sexual harassment.

CONNELL: Just finally, aging on the agenda with Josh Frydenberg. A lot of people saying the biggest issue with getting a job 65 and older is actually discrimination. Where do you sit on this?

LEIGH: I think there's certainly significant discrimination around, and Labor supported the Age Discrimination Act when it was passed. We do need to make sure that people are working longer because they want to, not because the government's pushed the pension age up too high and people with bung backs are being forced to stay in the workforce at considerable pain to themselves. Technology does offer the potential to have us enjoying longer careers.

CONNELL: But Labor did actually increase the pension age. The government tried to go further. So you’re saying 67 is the magic number. What if you don’t have a bung back? What if you’ve been able to sit in an office chair your whole life – maybe you can work a bit longer?

LEIGH: In many cases, those people will be relying on superannuation rather than the pension. We increased the pension age, along with the biggest increase in the pension level in its hundred year history. The Coalition isn't proposing to increase the level of pension, they just want to make it harder to get.

CONNELL: Andrew Leigh, thanks for your time.

LEIGH: Thank you, Tom.


Authorised by Paul Erickson, ALP, Canberra.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.