One of the fun parts of this job is getting to contribute a regular column to The Chronicle. Here's my latest...
Flower power, The Chronicle, 7 October
In 1637, Dutch tulip mania was at its peak. In that year, a single bulb could trade for 10 times the average wage. History records a bulb exchanged for 12 acres of land. One unfortunate sailor was jailed when he mistook a tulip bulb for an onion and ate it.
As an economist, I can’t help thinking of this story when I walk through Floriade each year. While the Dutch tulip bubble burst after a few years, Floriade is now in its 27th year. But the same intensely coloured flower that drew speculators to part with fortunes centuries ago now draws over 400,000 people to Canberra to enjoy the Southern Hemisphere’s biggest spring festival.
The Senate Estimates process always throws up interesting tidbits. Last night we found out just how much the Australian Charities and Not-for-profits Commission saves charities each year by streamlining their regulatory and reporting requirements.
CHARITIES COMMISSION SAVES NOT-FOR-PROFITS MILLIONS
The Australian Charities and Not-for-profits Commission is saving Australian charities $120 million a year by reducing compliance costs, according to evidence given in Estimates.
During last night’s Senate Economics Committee hearings, Charities Commissioner Susan Pascoe confirmed that her organisation cuts red tape for charities, freeing up millions of donor dollars.
Ms Pascoe gave evidence that the commission achieves this by offering a one-stop-shop for registration and reporting, as well as providing a framework for harmonising charity laws across Australia.
In memorialising Gough Whitlam, I think it's important to reflect on his economic legacy as well as his political and social policy ones. In an interview for The Australian's website, I explored the key economic achievements of the Whitlam years; here's the transcript.
WEDNESDAY, 22 OCTOBER 2014
SUBJECT/S: Gough Whitlam’s economic legacy
JACKSON HEWETT: Shadow Assistant Treasurer Andrew Leigh joins us now to reflect on the economic legacy of the Whitlam Government. Andrew Leigh - one of that government's first economic decisions was to reduce tariffs, what was the impact of that?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: That 1973 tariff cut laid the groundwork for the 1988 and 1991 tariff cuts brought in by the Hawke Government. What was striking about the 1973 tariff cut is that it was so different from the bipartisan consensus on protectionism that had existed for many decades. That notion of protectionism all round, of McEwenism, really was costing Australian industry in a way that was hurting consumers but also stopping our firms from being internationally competitive. So it was a breath of fresh air, it shocked a lot of people, and it did a lot of good for the economy.
Whether it is balancing the budget or dealing with international crises like Ebola, governing is about priorities. On this week's Breaking Politics, I joined Chris Hammer and Andrew Laming to talk about how the government continues to pursue the wrong ones.
FAIRFAX BREAKING POLITICS
MONDAY, 20 OCTOBER 2014
SUBJECT/S: Dams; Australian involvement in Iraq; Ebola; Mathias Cormann’s inappropriate remarks
CHRIS HAMMER: We're joined now by Labor's Andrew Leigh and the Liberals’ Andrew Laming – good morning gentlemen. Andrew Laming – to you first, does Australia need more dams?
ANDREW LAMING, MEMBER FOR BOWMAN: It certainly does need more dams and that's the evidence from the last few years of significant weather events. Certainly in Queensland they'd be looking at flood mitigation arrangements and the use of dams, and if you look at Tasmania it's a similar story. As Barnaby Joyce said, water is money and water in a dam is a bank.
HAMMER: So the purpose of the dams is to make existing irrigation schemes more drought resistant? Or is it to open up new areas, do you think?
LAMING: Well both of those. Typically dams smooth out water availability in the context of an unstable climate.
HAMMER: Andrew Leigh, does Labor support more and better dams?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I'm a little concerned, Chris. This report seems to be overplaying what can be achieved. It suggests that we can achieve – with a single policy – flood mitigation, drought proofing and providing power. But of course, if you want to use a dam to prevent floods, then it needs to be empty. If you want to use it to protect from drought, then it needs to be full. If you want to use it for power, it has to be constantly flowing. Barnaby Joyce, as usual, is claiming an awful lot from what his policy can achieve.
As Parliament gets underway for another two weeks of sittings, I joined Sky's AM Agenda to talk about Australia's relationship with Indonesia under new President Joko Widodo and Australian commandos getting the green light to begin training missions in Iraq.
SKY AM AGENDA
MONDAY, 20 OCTOBER 2014
SUBJECT/S: burqa ban at Parliament House; inauguration of Joko Widodo; Australian commandos authorised to enter Iraq; Mathias Cormann’s remarks.
KIERAN GILBERT: This is AM Agenda, thanks for your company. This morning we've got the Shadow Assistant treasurer Andrew Leigh and Liberal Senator Zed Seselja – good morning. The burqa ban has finally been overturned, the Speaker has agreed to the Prime Minister's request. Not much of a surprise but they took their time didn't they?
ZED SESELJA, SENATOR FOR THE ACT: It's not a surprise and these were interim measures. I think they've landed in a better place in terms of the arrangements. I think what's most important is that we have proper security arrangements in Parliament House. That shouldn't be about religion, it should be about ensuring that we can protect key buildings and key assets and if that involves people having to be identified then we need to take the best security advice on that. So I think we've landed in a good place. If there are adjustments needed down the track I suppose they can be looked at but they were interim measures and it seems now we're in a firmer place.
GILBERT: That all sounds fairly reasonable?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: I think Zed has hit the nail on the head there, Kieran. I'm just wondering why it took the Government so long to make this back-down. We wrote to them on the day these measures were introduced two weeks ago and said that they were ill-considered. You know, you've even got someone like George Christensen, who has fairly extreme views within his party but who didn't support this ban on the burqa. Sending people wearing burqas up into the kids gallery I think was just entirely...
The Irish Government is making great progress in tackling multinational tax avoidance; isn't it time our government did the same?
IRELAND ACTS ON MULTINATIONAL TAX LOOPHOLES - WILL AUSTRALIA?
Joe Hockey’s inaction on corporate tax avoidance has been thrown into sharp relief by the Irish Government’s announcement that it is phasing out that country’s most notorious tax loophole.
This week Irish Finance Minister Michael Noonan announced that Ireland would put a stop to ‘Double Irish Dutch sandwich’ tax arrangements.
These complex arrangements involve companies transferring money between subsidiaries registered in Ireland and European Union countries such as the Netherlands.
Multinational companies have taken a big bite out of the Double Irish Dutch sandwich in the past, with one major technology firm alone reportedly using the loophole to avoid $3.4 billion in tax since 2007.
One of the hottest topics in my shadow portfolios at the moment is the Harper review of competition policy. It's the first time Australia has taken an in-depth look at competition issues since the Hilmer review of the 1980s, and the recently-released interim report has a lot of interesting things to say about how we can make competition work for Australian consumers.I've jotted down some thoughts on what the report's strengths and weaknesses are in an opinion piece for Business Spectator.
Harper review sets the right course, Business Spectator, 16 October
When the Whitlam Labor government introduced the Trade Practices Act in 1974, it chose to do something rather novel for the time. It put consumers front and centre in the discussion.
Whitlam and his Attorney-General, Lionel Murphy, believed that the ultimate goal of competition was to make goods and services more accessible for Australian consumers. The old days of regulation as a protection racket for inefficient firms and near-monopolies were over
Through further competition reforms under the Hawke and Keating governments, the first question and fundamental test remained the same: how can policy reform help families doing their weekly grocery shop or paying their utility bills get a better deal?
This emphasis on consumers is a welcome feature of the interim report from the Competition Policy Review panel led by Professor Ian Harper. The panel has taken the view that competition policy should strive to make markets work in the long-term interests of Australia’s shoppers, users and buyers.
During the last sitting of Parliament, the Senate voted to establish an inquiry into corporate tax avoidance and multinational profit shifting. The Senate's Economics Committee has now kicked off work on this; you can make a submission any time until 2 February 2015.
CORPORATE TAX INQUIRY GETS UNDERWAY
The Senate inquiry into corporate tax avoidance has kicked off today by asking 40 ASX-listed companies to explain the taxes they pay.
This week, committee chairman Senator Sam Dastyari has written to a range of major firms which have been alleged to pay as little as 10 cents in the dollar on their local earnings.
They have been asked to explain why their effective tax rate is so far below the 30 per cent company tax rate paid by other Australian firms.
Shadow Assistant Treasurer Andrew Leigh said cracking down on corporate tax avoidance is fundamentally about creating a level playing field for all Australian businesses.
Equal to our core: making the case for egalitarianism as Australia’s national value
Speech at the launch of the Bachelor of Economics (Advanced)
University of Adelaide
14 October 2014
I could not be more delighted to be with you this evening on this terrific occasion, the launch of the university’s Bachelor of Economics (Advanced) degree.
I know your degree will be one of only two available in Australia – and as the other one is being offered in Melbourne, I’m serenely confident yours will be the better. When I was Parliamentary Secretary to Prime Minister Gillard, I am sure she once told me she was glad to have had the dual benefit of a Melbourne degree and an Adelaide education.
Or perhaps I made that up. Never mind. I read in the publicity that the degree will be both a “pathway” to Honours and a “springboard” into leadership…I suppose as long as there’s a “ladder of opportunity” at the end of the “pathway” providing access up to the “springboard” it’ll all work just fine.
I kicked off the week by joining Phillip Clarke and Senator Zed Seselja on 666 ABC's Political Panel. Here's the transcript:
ABC 666 CANBERRA
MONDAY, 13 OCTOBER 2014
SUBJECT/S: ACOSS poverty report; national curriculum; national security legislation
PHILIP CLARK: Welcome to our federal political panel. Senator Zed Seselja, ACT Liberal Senator joins me in the studio. Morning Zed.
ZED SESELJA, SENATOR FOR THE ACT: Good morning.
CLARK: And Andrew Leigh, the Labor member for Fraser and Shadow Assistant Treasurer here in the studio as well. How are you?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Very well.
CLARK: Just back on that ACOSS report – it’s not good news, is it? It suggests that on the trendline, poverty in Australia is increasing. Something like two-and-a-half million people, 1 in 6 children, are struggling to fulfil basic needs. One third of children in single parent households live below the poverty line, more than 600,000 children in total. We're heading, as ACOSS suggests, in the wrong direction. What are we doing wrong, Senator?
SESELJA: Well look, I'm still getting across these figures, these I think are 2012 figures. But I think it's always concerning if we're seeing Australians who are doing it tough. We want to have a range of policies that will help people to get out of poverty, help people to better themselves, give them the safety need they need. But fundamentally, to encourage people to have productive work if that's possible, and where that's not possible, to get whatever kind of assistance they can. These are challenging areas of policy; this isn't an issue for one government or one side of politics.
CLARK: Of course not, but it seems to suggest things are getting worse not better?
SESELJA: I think it often depends, and without going into all the detail that I haven't pursued yet, it often depends on exactly how you look at the various figures. I think that there's no doubt that many Australians are doing it tough. And we don't want to see that. We want to see people improving their life, we want to see people at least having the basics of life and certainly going well beyond that where it is possible.
CLARK: There seem to be two things here, Andrew Leigh: there's income support – and in that sense I mean the welfare system – and there's also the issue of whether our economy is being resilient and flexible enough to provide jobs for people. After all, for most people, a job is the difference between poverty and being able to meet your bills. Most people are a month away from poverty in that sense.
LEIGH: You're right about that Philip, it's more true in Australia than most developed countries. Unemployment is a reasonable predictor of poverty in most countries but especially so in Australia. We do a better job than many developed countries in ensuring that we don't have a working poor. Over the last generation we've seen a rising gap between battlers and billionaires and this is seen in the data on relative poverty. So just as the gap between the middle and the top distribution has increased, so the gap between the middle and the bottom distribution has increased as well. I'm really concerned about it and particularly in the context in which we've had a budget brought down which is redistributing resources from the most vulnerable to the most affluent. There’s been a whole host of cuts to supports for the vulnerable but then giveaways for those at the top, such as a gold-plated parental leave scheme. This report really comes at an important time for Australia. We’re at a crossroad on inequality, and we have to work out whether we stay true to our egalitarian traditions.