The case for randomised trials in policy development

One of the more exciting new developments in Australian media has been the launch of The Mandarin - a news service dedicated to in-depth coverage of the Australian public sector and policy making. I recently sat down with one of their reporters, David Donaldson, for a chat about using randomised trials to help guide better policy development. Here's a summary:

The case for randomised trials in policy development, The Mandarin, 10 September

Governments should use more randomised trials in policy development, according to federal Labor frontbencher and former economics professor Andrew Leigh.

Randomised trials are used extensively in the private sector — “you are having randomised trials done on you every time you enter a supermarket or every time you use Google”, Leigh told The Mandarin at his Parliament House office recently.New South Wales has been conducting randomised trials with letters asking people to pay fines and tax, among other things, building on the work of the British government’s Behavioural Insights Unit.

recent NSW trial found the number of citizens paying overdue land tax jumped from 27% to 39% by introducing greater personalisation and a statement that “8/10 people pay their land tax on time” in legal notices. Other trials have included six or eight possible alternatives in the layout of websites, for example, allowing exact measurements of how customers responded to the inclusion of a photo, a logo or different text. 

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Does anyone still support Kevin Andrews?

Another day, another not-for-profit group publicly telling Kevin Andrews we need to keep the Australian Charities and Not-for-profits Commission...



Social Services Minister Kevin Andrews is becoming increasingly isolated in his crusade to abolish the Australian Charities and Not-for-profits Commission, with a key representative of the Catholic church rejecting plans to scrap it.  

In an opinion piece today the General Secretary of the Australian Catholic Bishops Conference, Rev Brian Lucas, has argued for constructive modifications to the commission while endorsing many of its key functions.     

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Why did the NRL get tough on footy fights?

Here's one for all the fans of football and behavioural economics: Guardian Australia is featuring a piece I've written looking at why professional sports have become less violent in recent decades. This is an excerpt from my new book 'The Economics of Just About Everything':

How the cost of injured players ensured fewer fights, The Guardian, 10 September

In the 54th minute of the second game of the 2013 Rugby League State of Origin series, a fight broke out. Annoyed at Paul Gallen’s slowness to get off Jonathan Thurston, Queenslander Brent Tate pushed him away. New South Wales player Trent Merrin punched Tate, Queenslander Justin Hodges hit Merrin from behind, and New South Welshman Greg Bird joined in. What was surprising about the event wasn’t that a fight broke out, but that it was relatively mild. Of the four players sent off, two claimed not to have thrown a punch.  

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Iraq, Ashby and the Abbott Government's first year - Sky AM Agenda, 8 September

This morning's Sky AM Agenda spot was dominated by discussion about the Abbott Government's first year - mostly because it takes a lot of time to list off all the promises they've broken to the Australian people. Here's the video and transcript:





SUBJECT/S: Australian military involvement in Iraq; James Ashby allegations; Tony Abbott’s unfair budget

KIERAN GILBERT: With me on the program this morning is the Shadow Assistant Treasurer, Andrew Leigh, and the Parliamentary Secretary for Communications, Paul Fletcher. Paul Fletcher, first to you: I guess the Foreign Minister is stating the obvious in many respects, that battling the ideology of a group such as ISIS is a lot tougher than winning militarily?

PAUL FLETCHER, PARLIAMENTARY SECRETARY FOR COMMUNICATIONS: Well look, that's right. Foreign Minister Julie Bishop has spoken about the scale of the challenge and the fact that there's an ideology there as well as its physical manifestation in the form of this appalling terrorist organisation ISIS or ISIL. Obviously we are working with other western nations, led by the US, but we need to be realistic and I think Julie Bishop's comments have been directed towards advising the Australian population about the scale of the challenge, what can be realistically achieved. Of course we are focused on protecting Australia against the terrorist challenge posed by those who might return from fighting in the Middle East with terrorist groups like ISIS and ISIL. But also doing our part, along with other nations, to seek to protect the innocent, protect civilians in Iraq, and stand up for our values. 

GILBERT: Andrew Leigh, Australia at the weekend was announced as part of that core Coalition. The US President detailed that at the NATO summit over recent days, and this is very much where it has been heading for some time.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, I think having a broad coalition is really important in this issue. President Obama spoke about the importance of involving regional partners, and particularly about getting Sunni-majority nations involved as well. For me, I spoke last week in the parliament about the tests that ought to apply to Australia's involvement. Gareth Evans laid out what I thought was quite a nice six-point test, of which the three most important notions were: whether it is a just cause, which I think it clearly is; whether we have a reasonable prospect of success in carrying out the arms drops; and whether we have legitimate authority. For me, those tests being passed, what the government is doing does fall within what Gareth Evans has called 'a responsibility to protect'. 

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Public service another victim of Abbott's broken promises

It has been a shocking year for the Australian Public Service under the Abbott Government. On this first anniversary of the Coalition taking government, it's worth remembering what they promised before the election, compared with what has happened since.



The Australian Public Service has just endured its toughest year since ‘Max the Axe’ rampaged through in 1996, with thousands of jobs lost and promises broken.

Before the 2013 election, Tony Abbott and Christopher Pyne both categorically promised there would be no forced sackings within the public service, and that no more than 12,000 jobs would go:

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Hockey offers nothing but hot air on global profit shifting



Treasurer Joe Hockey has revealed he has nothing but talk to offer when it comes to making multinational companies pay their fair share of tax. 

In Parliament this morning, Mr Hockey spent 15 minutes mouthing empty words about tackling base erosion and profit shifting by major global firms. But despite all his big talk, Mr Hockey failed to outline how his government will make companies that evade tax pay a single dollar more tax. 

What’s more, Mr Hockey has heaped responsibility for pursuing global tax avoidance onto the Australian Tax office, at a time when his government is axing 2100 tax experts from that agency.  

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Radio National Drive with Waleed Aly

Between the Abbott Government ditching Labor's scheduled increase to the super contributions of millions of Australians, the scrapping of the mining tax and the introduction of legislation to deregulate universities, it's been a big week in federal politics. I joined Waleed Aly on Radio National's Drive program to talk about the highs and lows:





SUBJECT/S: Tony Abbott’s broken promise on superannuation; MRRT; industrial relations changes.

WALEED ALY: Turning now to federal politics and a new battle line has been drawn in federal politics over the frighteningly exciting topic of compulsory superannuation. It is, however, very important and we've been discussing it this week on the program. Part of the federal government's deal to scrap the mining tax is that a planned increase in the employer contribution to your superannuation – from 9 per cent over time to 12 per cent – has been put on hold until 2021. How many years is that? It's a lot of years – seven or so. Labor says Australian workers will be worse off; the government says workers will be better off. So we've got a representative from each side in our regular RN smackdown: Josh Frydenberg, Parliamentary Secretary to the Prime Minister, and Andrew Leigh, Shadow Assistant Treasurer. Gents – welcome.

JOSH FRYDENBERG, PARLIAMENTARY SECRETARY TO THE PRIME MINISTER: Good to be with you, Waleed. Good to be with you, Andrew.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Likewise Josh, and thanks for having us Waleed.

ALY: Josh, I've got to ask you, in the context of a 'budget emergency', this deal that was struck with the Palmer United Party yesterday: how much is that going to cost the budget? Something like $6.5 billion, was it?

FRYDENBERG: It's actually different to that. It's going to save $50 billion over the next 10 years because the mining tax is going to be repealed, and the mining tax had $17 billion of spending attached to it, Waleed. So this is, in fact, a very prudent budgetary measure and its consistent with our election commitments. We're very pleased that we were able to negotiate with the Palmer United Party, as well as the other independents, to repeal it. 

ALY: You're talking over 10 years, I'm talking about the budget emergency that means we have to do this over the short term. We're keeping now the Schoolkids Bonus for a number of years – in fact beyond the next election; you've got the Low Income Support Bonus, the Low Income Superannuation Contribution, this is all staying now. By all the calculations I've seen in the press, over the short term this is going to cost $6.5 billion. 

FRYDENBERG: We're actually saving $10 billion over the forward estimates, over just the next few years. We are changing the means testing arrangements for the Schoolkids Bonus. But we have to deal with the Senate as it is, not as we wish it would be. We don't believe that the mining tax was a good tax – it was promised to provide $49.5 billion worth of revenue when it was first conceived. It ended up producing just $340 million, so a long way short of the Labor party's projections. As a result, we couldn't continue with the accompanying spending commitments that Labor left us. So we think this is a good outcome, but unfortunately Labor is crying foul because we've done a deal with Clive Palmer. 

ALY: Alright, Andrew Leigh I'll come to the substance of the super changes – or non-changes, as the case may be – in a moment. But your assessment of the budgetary impact?

LEIGH: Again blowing out inequality, Waleed. You and I seem to talk about inequality every time we get together for one of these conversations, and the context that we're having that conversation in is that we've seen a big rise in inequality in Australia over the past generation. Billionaires have made out a whole lot better than battlers over the last 30 years. And now we've got a deal which disproportionately benefits a few billionaires at the expense of nine million battlers. Australians have a right to expect that they can retire in dignity, and they've got a right to expect that the Prime Minister will stay true to his pre-election promises not to change superannuation. This is a big adverse change and it seems as though the reflexive instinct of this government at every turn is to back the filthy rich at the expense of the most vulnerable. So when it comes to superannuation, they've scrapped our modest savings which asked people with more than $2 million in their super accounts to pay a little bit more tax, but at the same time they're slugging people earning less than $37,000 a year – two-thirds of whom are women – with higher superannuation taxes. It's a government which is constantly hurting the most vulnerable; a group of ministers who make the Addams Family look like the Brady Bunch. 

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Support for the charities commission remains resolutely strong

Pro Bono Australia has released the results of its 2014 State of the Sector survey, which shows that the vast majority of charities still back the Australian Charities and Not-for-Profits Commission despite the Abbott Government's efforts to scrap it. Here's my release with Senator Claire Moore, the Shadow Minister for Communities, calling on the government to see sense and keep the commission:



In a major survey released today, four in every five Australians working in the not-for-profit sector back the charities commission, showing the folly of the Abbott Government’s plans to abolish it.  

Pro Bono Australia's national online survey found 82 per cent of respondents believe the Australian Charities and Not-for-Profits Commission (ACNC) is important or extremely important for a thriving not-for-profit sector.

This is consistent with the 83 percent of respondents who backed the ACNC in the 2013 survey. 

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Humanitarian intervention in Iraq - Breaking Politics, Monday 1 September

With the worsening situation in Iraq prompting the Australian Government to commit resources towards international relief efforts, I joined Fairfax's Breaking Politics program to talk about humanitarian intervention and the moral case for action. Here's the transcript:





SUBJECT/S: Australian military involvement in Iraq

CHRIS HAMMER: We're joined now by Labor's Andrew Leigh and the Liberal Party's Andrew Laming to talk about Australia's renewed intervention in Iraq. Andrew Laming, I'll come to you first as a representative of the Government, why is Australia backing Iraq?

ANDREW LAMING, MEMBER FOR BOWMAN: Australia is a pluralist, democratic economy and we've long supported efforts in the Middle East to see that new democracies can thrive. What we can see here is that areas like Syria and Iraq clearly are under threat both from a humanitarian sense and a security sense. I think there's bipartisan agreement, mostly, across both chambers and on the street in my electorate for some form of intervention to support the innocent people who are caught up in this.

HAMMER: Dropping food and water to trapped civilians is one thing, giving arms to one side in a bloody civil war is another. How can that be justified?

LAMING: Well, I have no problem with supporting the Kurdish minorities. I've lived and worked in parts of Kurdish controlled Western Asia. I'm very supportive of addressing the particularly difficult situation in that area, geographically and geopolitically. I'm 100 per cent behind this type of military support, but protecting innocent people is just one part of it. The greater picture, of course, is national security.

HAMMER: In that case would you support some sort of Kurdish independence, an independent Kurdish state in the north of Iraq? 

LAMING: Well that's the next question. My work was done in Turkey itself and a long time ago, but my main concern is keeping the borders as they are. At the moment Kurds in Northern Iraq have a high level of autonomy and were actually achieving autonomy, which is a great achievement. This is all under compromise and under threat with the emergence of ISIS.

HAMMER: Okay, Andrew Leigh, why has Labor been so quick to support the Government in this?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Chris, I think Andrew has very articulately put the successes of the Kurdish community on the table and against that you have this terrifying movement in IS, a group so extreme that they were disavowed by al-Qaeda. They are carrying out something that seems to be bordering on genocide, undertaking attacks on minority religions but also killing Sunni and Shia people. They claim to do this under some sort of theocratic banner but frankly there is no religion that advocates rape, murder and pillage on the scale that IS is committing it. Providing support to vulnerable communities is, I believe, in fulfillment of the UN Genocide Convention.

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An MP Economist meets The Airport Economist

As part of launching my new book 'The Economics of Just About Everything', I sat down for an interview with my good friend Dr Tim Harcourt, also known as The Airport Economist. In this video, we to talk about the economics of dating, dieting and designing policy. Take a look: 

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