Andrew Leigh

HIPSTER HEAVEN – COMPETITION AND INNOVATION IN WESTERN AUSTRALIA

The West Australian, 15 June 2017

Hipsters play an underappreciated role in competition policy. The reason for this is simple. Hipsters don’t like the mainstream. They’re not happy unless their clothes are vintage, their bikes are fixies, and their flat whites are served in avocados. If it is mass-produced by a multinational, they won’t touch it.

Indeed, hipsters are the reason we have so many choices when it comes to which alleyway speakeasy to drink in. Across our inner cities, hipsters are the reason why mechanics and car dealers are giving way to cocktail bars and edgy restaurants. Hipsters’ desire for innovation, difference and choice boosts competition.

According to the New York Times, Perth is ‘Hipster Heaven’. So the forces of hipsters should be stronger than ever.

Yet even here, there are signs that competitive pressures aren’t as strong as they should be. On one metric, over half of Australia’s industries are overly concentrated markets. That includes plenty of industries that are important to Western Australia, among them telecommunications, credit unions, cinemas, liquor retailing, pharmacies, hardware, gyms, magazines, newsagents and international airlines.

For all the talk of start-ups and innovation, the rate of new business formation is slower now than it was in the first decade of the twenty-first century. Meanwhile, the pace of mergers continues unabated. The big firms are getting bigger, but the hungry start-ups aren’t snapping at their heels the way they should be.

Megacorps find it easier to work together – and not in a good way. A recent academic study found that big data allowed Perth’s petrol retailers to coordinate the weekly price cycle, driving up margins at the bowser. The researchers concluded that this ‘tacit collusion’ cost motorists around 10 cents a litre.

PARLIAMENT HAS TO STEP IN TO FIX SLOMO’S GST PARCELS MESS

The Parliament has no choice but to step in and give the affected stakeholders, the Government and Parliament another chance to fix Scott Morrison’s mishandling of the GST Low Value Threshold legislation.

Federal Labor today flagged it will move amendments in the Senate that delay the commencement of the legislation by 12 months, while requiring the Productivity Commission conduct a short inquiry on implementation and other GST collection models, giving the Government and Parliament the opportunity to consider legislative amendments well before the new 1 July 2018 start date.

Federal Labor has expressed in-principle support for applying GST to parcels valued below $1,000 for quite some time now. It’s this context which makes the Treasurer’s mishandling of this policy matter all the more disappointing.

The Senate Economics Legislation Committee report detailed a litany of complaints and concern with everything ranging from the competence of Government consultations, the lack of a Regulatory Impact Statement, through to the low forecast compliance rates and concern with the viability of the Government’s preferred ‘vendor-based’ model.

TURNBULL GOVERNMENT MUST STOP FIGHTING AUSTRALIA’S CHARITIES 

Australia’s charity sector now fears that the Turnbull Government will back to waging war on the charity commission, with more than 100 charity heads signing an open letter to Prime Minister Turnbull.

It was only a year ago that the Coalition ended its failed five-year campaign to scrap the Australian Charities and Not for Profits Commission. Now, rookie minister Michael Sukkar has reignited concerns about the Turnbull Government’s willingness to support the commission.

We’ve seen reactionary forces in the Coalition wrest control of policies from same-sex marriage to climate change. Now, it looks like they may be attempting to take charities regulation back to the dark ages.

E&EO TRANSCRIPT

TELEVISION INTERVIEW

SKY NEWS AGENDA

MONDAY, 12 JUNE 2017

Subjects: Counterterrorism, internment of Muslims, citizenship changes, Finkel Report.

KIERAN GILBERT: With me now Shadow Assistant Treasurer Andrew Leigh. Let's look at the internment debate first of all. Ken Wyatt, a Liberal Minister, says he's open to the idea as a last resort. What do you make of where this argument is at, given the community concerns about safety and the terrorist threat?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I thought that internment was a shorthand way of referring to the problems of the past. Don't forget that after the United States interned more than 100,000 people, it paid reparations and issued an apology. And I don’t think people look back to our internment of Japanese Australians in the 1940s as the way forward. What is critical, in countering Islamic extremism, that we recognise the vast majority of Australian Muslims are of good faith. There's half a million Muslims in Australia, contributing strongly to our multiethnic, multiracial society  and, as David Irvine pointed out in his outgoing address as head of ASIO, they shouldn't be made to pay for the sins of a couple of hundred of aberrant souls.

GILBERT: But you can understand why people are very worried right now, given the events around the world and even in our own city, in Melbourne. You can understand why people are very worried that a mass scale attack is possible, if not likely?

LEIGH: Absolutely, Kieran. But -

GILBERT: But further to that, in terms of internment, the debate, while that might not be the language to use, is it possible to go further in monitoring individuals who are under watch?

LEIGH: We have given our support to changes in bail laws and parole laws which have been pushed forward at COAG. But we also need to recognise that a great strength of Australia is our moderate Muslim community, who are the eyes and ears of countering violent extremism. We need to work with them, not turn them away. For that's exactly what groups like al-Qaeda and ISIS want to do, is to turn against moderate Muslims and that makes Australia not only a less tolerant place but also a more dangerous place.

WILL CANBERRA LOSE THE SHRINKING AUSTRALIAN INSTITUTE OF SPORT FOR GOOD?

The Canberra Times, 9 June 2017

One-hundred-and-eighty athletes represented Australia at the 1976 Montreal Olympics. Not one of them returned with a gold medal. It was the first time in 40 years Australia had failed to top the world in a single sporting contest.

Even before the Olympics ended, athletes were blaming the government. When prime minister Malcolm Fraser visited the Montreal Olympic village, team members told him "they were unable to keep up with the rest of the world because of poor facilities, a shortage of qualified coaches and inadequate administration". As our Olympians returned, the front page of The Canberra Times bemoaned "Short-sighted sport attitudes".

From humiliation on the world stage, a national institution was born. The Australian Institute of Sport opened its doors in 1981. Among the athletes that benefited from its elite sporting preparation are Petria Thomas, Anna Meares and Michael Milton. When Australia ranked fourth on the medal tally in the Sydney Olympics, many felt the institute deserved a share of the credit.

Yet the institute now faces a crisis of neglect. Over the past decade, the number of Canberra-based staff fell from 173 to 140. The number of athletes in residence dropped from 237 to 140.

THE FUTURE WON’T WAIT FOR MALCOLM TURNBULL’S COPPER

The RiotAct, 8 June 2017

Optic fibre is a beautiful communications medium.

The light beams glow down the fibres, and it is almost infinitely upgradeable. As compression algorithms are refined and improved, information can be carried faster and more cheaply.

When Federal Labor announced the National Broadband Network, our plan was to connect fibre directly to more than nine out of ten premises. In our view, fibre was the world’s best technology – so it was only just good enough for Australians.

Copper is… less attractive. It is a dull red-brown. The physics of copper mean that the technology is not infinitely upgradeable.

But a copper connection to their home from the node at the end of their street – whose defining feature will be an inferior, limited signal – is all Malcolm Turnbull has promised the Australian people. As theshovel.com.au has noted, ‘Nothing evokes the concept of speed quite like five hundred meters of copper wire connected to your home.’

On this website last year, I noted that under the Liberals, Australia has fallen from 30th to 60th in the global internet speed rankings. I pointed out that copper is to fibre as dirt roads are to concrete highways.

E&EO TRANSCRIPT

RADIO INTERVIEW

ABC 720

THURSDAY, 8 JUNE 2017

Subjects: Competition law, wage growth

PETER BELL: So you're at the Bottle-O and you're having a look at the huge number of beers that are on display and you decide, you know what? I'm going to support the little guy. I'm going to choose the craft beer over there with the curious label and I'm going to do my bit and support someone who's trying to make their way in business. Well credit to you for making that decision, but just bear in mind that there isn't much choice at all when it comes to beer, apparently. Ninety percent of the market is controlled by just four companies. Have a think about that for a moment - 90 percent controlled by just four companies. And it begs the question, are too many of Australia's industries controlled by too few?

That question is being contemplated by federal Shadow Assistant Treasurer, Andrew Leigh, while in Perth this week. He's using the beer sector as an example of market concentration leading to higher prices at the tap for you and for me. Andrew Leigh, good morning.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Peter, how are you?

BELL: Well, thank you. How much of a problem is market concentration in Australia?

LEIGH: Well, I think it's pretty serious and one of the examples of course is the beer industry. Western Australia has that great story of the creation of Matilda Bay, Phil Sexton taking on the big guys, who tried to squeeze him out from various pubs, eventually starting his own pub in order to sell his craft beer. But then ending up having to sell his beer off to what's now the biggest brewer in the world, Anheuser-Busch InBev. So that's just one of the craft beers that’s now owned by one of the big companies. Little Creatures, Kosciusko, Knappstein, the list goes on - faux craft beers that are actually owned by large mega-corporations.

A FEW BIG FIRMS

SIR WALTER MURDOCH SCHOOL POLICY SEMINAR

MURDOCH UNIVERSITY 

WEDNESDAY, 7 JUNE 2017

I acknowledge the traditional owners of the land, the Whadjuk people, and thank Benjamin Reilly and the Sir Walter Murdoch School of Public Policy and International Affairs for inviting me to speak here today.

It’s great to be here on the left coast of Australia – particularly now that your state’s politics and geography are once again in alignment.

And it’s terrific to be in Perth, the city that the New York Times recently called ‘Hipster Heaven’.

It’s fitting that I’m giving this speech in Hipster Heaven because, although they may not realise it, hipsters play an important but often underappreciated role in competition policy.

The reason for this is simple. Hipsters don’t like the mainstream. They’re not happy unless their clothes are vintage, their bikes are fixies, and their flat whites are served in avocados. If it is mass-produced by a multinational, they won’t touch it.

WHO SUPPORTS LABOR’S PLAN FOR A DIRECTOR IDENTIFICATION NUMBER, TO CRACK DOWN ON PHOENIX COMPANIES?

The list of organisations that support Labor’s proposed Director Identification Number continues to grow, with the Tax Justice Network signalling its support for this important measure to help catch dodgy directors of fraudulent phoenix companies. 

Supporters of a Director Identification Number now include:

• Australian Institute of Company Directors
• Australian Small Business and Family Enterprise Ombudsman
• Productivity Commission
• Tax Justice Network
• Australian Chamber of Commerce and Industry
• Master Builders Australia
• Australian Council of Trade Unions
• Australian Restructuring Insolvency and Turnaround Association
• Phoenix Project, comprising experts from Melbourne University Law School and Monash University Business School

CHINA STORY YEARBOOK LAUNCH

AUSTRALIAN NATIONAL UNIVERSITY

MONDAY, 5 JUNE 2017 

Let me start by acknowledging the Ngunnawal people, the traditional owners of the lands on which we meet today, recognising ANU’s Centre on China in the World for inviting me to speak here today, and thanking Shirley Leitch, Benjamin Penny, Jane Golley and the expert panellists for their thoughtful words.

When I look around Gerald Szeto’s beautiful China and the World building I am reminded of the explosion of modern architecture in China - or as President Xi Jinping calls them: ‘weird buildings’.

These are dotted across the country. They include the big pants, the space eggs, the big boxer shorts, the giant teapot and an assortment of buildings shaped like pianos, violins, lotus flowers, space caterpillars, doughnuts and mobile phones.

They make Canberra’s Shine Dome, Belconnen owl and Garema Place sheep look almost tame by comparison.

President Xi complained about this increase in ‘weird buildings’ in a speech not that long ago where he said that there are too many ‘big pants’ on the horizon. But funky architecture continues to proliferate, suggesting that even Xi Jinping can’t control everything.