Today I've got an opinion piece in The Australian, supporting Chris Bowen's call for the independent Parliamentary Budget Office to be tasked with preparing budget forecasts and figures.
The Coalition has already shown a worrying tendency to cook the nation's books, so it's time that power was taken out of the hands of governments altogether.
Treasurer Joe Hockey trashes economic forecasts, The Australian, 16 September
THEY called it “political monetary policy” — the tendency for interest rates to be cut in election years, fuelling a bubble that then had to be contained. In a series of important research papers in the late 1980s and early 90s, Harvard’s Alberto Alesina and co-authors showed that allowing politicians to set interest rates was causing a political business cycle.
Research such as this has underpinned the move across the developed world — including in Australia — to have interest rates set by independent central banks rather than by politicians.
Alesina argues that having an independent agency set interest rates and keep an eye on inflation brings two important benefits. First, independent central banks are less sensitive to sudden and short-term political pressures than elected governments. As a result, they tend to behave far more predictably — something that promotes economic stability. In particular, central banks have no incentive to manipulate monetary policy in the run-up to an election. They also don’t alter policy dramatically in the way that often happens after a change of government.
With news that Australian troops are headed back into Iraq, I joined Chris Hammer and Andrew Laming on Breaking Politics to talk about the humanitarian importance of their mission. Here's the transcript:
FAIRFAX BREAKING POLITICS
MONDAY, 15 SEPTEMBER 2014
SUBJECT/S: Australian military involvement in Iraq; Joe Hockey dragging his feet on multinational tax avoidance; Indigenous affairs
CHRIS HAMMER: Prime Minister Tony Abbott has announced that some 600 Australian military personnel will be deployed to the Middle East as part of a coalition combating ISIL in Iraq and Syria. Joining me to discuss that and other issues is Andrew Leigh, the Labor member for Fraser here in the ACT and also the Shadow Assistant Treasurer. And from Brisbane, Andrew Laming, the Liberal MP. Andrew Laming, where are you?
ANDREW LAMING, MEMBER FOR BOWMAN: I'm in the black swamp, the home of the famous flying foxes up here in Southeast Queensland so hopefully I won't be dodging any guano by flying foxes this morning.
HAMMER: Ok, Andrew Laming to you first: Australia is deploying troops to the Middle East, what do you understand their mission is and what do you understand the timetable is?
LAMING: Well it's very clear to everyone that ISIL is an emerging threat and that standing by and doing nothing will only guarantee the further movement of this group. I think Tony Abbott is absolutely right to commit Australia to this coalition; there is a reason for joining this coalition. We have high-level partners supporting us and finally there really are no voices proposing that we do anything else. I mean to sit by and allow what we're seeing in Northern Iraq to continue, we simply cannot contemplate that.
Despite trumpeting a newfound commitment to international banking transparency in today's papers, Joe Hockey is leaving Australia to lag behind other countries on tackling multinational tax avoidance. Here's my thoughts on what he needs to do ahead of this week's G20 Finance Ministers meeting in Cairns:
HOCKEY STILL HEDGING ON INTERNATIONAL BANK TRANSPARENCY
Treasurer Joe Hockey must clarify whether Australia is joining the Early Adopter Group of nations tackling multinational profit shifting, following news he has seen sense on signing Australia up to international bank transparency measures.
After months of stalling and pussy-footing, Mr Hockey has finally confirmed that Australia will implement the Common Reporting Standard on financial account information. The standard is an important measure for cracking down on international tax avoidance. It allows authorities to automatically exchange information about the contents of company and individual bank accounts held overseas.
Labor has repeatedly called for Australia to join a group of more than 40 Early Adopter nations which will start preparations to implement the standard in 2016.
At the moment there is a public appeal underway to raise funds for a National Peacekeeping Memorial on Anzac Parade, in my electorate of Fraser. Over the weekend I was fortunate enough to join servicemen and women from across Australia at the future site of that memorial to mark the 67th anniversary of Australian peacekeeping.
67th ANNIVERSARY OF AUSTRALIAN PEACEKEEPING
Today, Australians came together at the future site of the national Peacekeeping Memorial on Anzac Parade in Canberra to celebrate the servicemen and women who have helped foster peace and stability overseas.
14 September marks the 67th anniversary of the departure of the first contingent of Australian peacekeepers.
On this date, we pay tribute to the service of the tens of thousands of Australians who have since served overseas in fragile nations like Timor-Leste, the Solomon Islands and Sudan.
As the G20 meetings in November edge closer, it's time to get serious about Australia's response to issues like multinational tax avoidance. But so far all we've seen from Treasurer Joe Hockey is empty rhetoric. In this release I argue that it's time for the Treasurer to do more than talk:
HOCKEY MUST SIGN UP FOR MORE TAX TRANSPARENCY
Treasurer Joe Hockey is procrastinating and prevaricating on a key measure to stop multinational companies shifting profits offshore.
The Common Reporting Standard provides for the automatic exchange of financial account information between banks in different countries. It is designed to make it easier to track how money moves around the world so that governments can ensure companies pay their fair share of tax.
In August, over 40 countries joined an Early Adopters Group and committed to fast-tracking implementation of the standard from January 2016. Despite Treasurer Joe Hockey endorsing the standard after the G20 Finance Ministers meeting in February, our name was conspicuously absent from that list.
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.
A 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.
Another day, another not-for-profit group publicly telling Kevin Andrews we need to keep the Australian Charities and Not-for-profits Commission...
DOES ANYONE STILL SUPPORT KEVIN ANDREWS?
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.
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.
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:
SKY AM AGENDA
MONDAY 8 SEPTEMBER, 2014
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'.
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.
PUBLIC SERVICE ANOTHER VICTIM OF BROKEN PROMISES
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: