Andrew Leigh

This morning I talked with David Lipson and Alan Tudge about the Abbott Government's harsh new Work for the Dole requirements (and also snuck in a plug for my new book, The Economics of Just About Everything!). Here's the transcript:

E&OE TRANSCRIPT

TELEVISION INTERVIEW

LIPSON: The Prime Minister has been pretty much universally praised for his handling of this crisis and that's been reflected today in a Galaxy Poll published in News Corporation papers which shows the vast majority of those who were asked who had shown the best leadership nominated Tony Abbott - well above Barack Obama and David Cameron. Not surprising, would you say Alan Tudge?

TUDGE: David, I don't want to comment on the polls. Tony Abbott and Julie Bishop and the leadership team have been 100 per cent focused on this particular mission, we've had very good support from the opposition as exemplified again by Andrew Leigh just now. The task at hand is to secure the remains, to support the investigation, and to bring the remains home. That is the square focus of the Prime Minister and Foreign Minister with great support from Bill Shorten.

LIPSON: Andrew Leigh, Tanya Plibersek yesterday said that the Opposition wasn't getting every briefing they had asked for. Do you know if that has been resolved to a satisfactory level?

LEIGH: I don't, David.

LIPSON: But you're still satisfied with the cooperation and bipartisanship that’s been shown?

LEIGH: In broad terms, this is an operation that enjoys bipartisan support.

LIPSON: Okay, well let's move on to another issue, the issue of asylum seekers. Today we have seen the Immigration Minister, Scott Morrison, speaking about this group of asylum seekers that has now been brought to Australian shores; in fact, to the Australian mainland. They are expected to today be interviewed by Indian consular officials, 18 of them that are being held at the Curtin detention facility in Western Australia. Scott Morrison says that India is a safe country, a vibrant democracy and as such, it seems that many of these asylum seekers will be returned to India. Andrew Leigh, is that appropriate?

LEIGH: This is a situation which could have been resolved weeks ago but for Scott Morrison's ego, David. I mean, leaving these asylum seekers - nearly 160 of them - at sea for the best part of a month is, I think, a serious mistake. They should have been brought to Christmas Island weeks ago and it worries me that we have the High Court making asylum seeker policy rather than Scott Morrison.

LIPSON: Scott Morrison disputes that. He says the High Court has nothing to do with what has ended up happening here. I suppose the question is: you're saying it should have been done earlier but you don't have a problem at all with what's actually happening in terms of the way that they are being processed?

LEIGH: I think the asylum seekers being brought to Australia makes sense, the stand-off on the high seas was turning into a farce. I think it was a dangerous situation for Australian personnel and for the asylum seekers to leave them at sea there. Labor's view on asylum seeker policy is that we ought to be able to take more refugees, and we're disappointed the government cut back the refugee by a third when they came to office. But it's absolutely important that we stop drowning’s at sea and the refugee resettlement agreement we put in place prior to the election saw a 90 per cent drop in asylum seeker boat arrivals. I don't think the sort of situation we've seen over recent weeks has helped achieve either of those two humanitarian goals, of taking more refugees and seeing fewer drowning’s.

LIPSON: Alan Tudge, quite a bit to respond to there. Perhaps starting with the delay in these asylums seekers coming to Australia. Was it acceptable for them to be floating on the high seas for so long?

TUDGE: Well, they were always under good care the entire time. I'm not going to comment on the operational matters at sea but they were under good care the entire time and they weren't in danger. Our policy has always been to ensure that boats are turned back where safe to do so, and where measures including disrupting the people smuggler's business at the point of port - in this case in India, or Indonesia or elsewhere. The very last response that we want is to allow boats to get to Australia and that's quite different to the Labor response which tends to, if you like, put out the water taxi almost straight away in order to ferry those people into Australian shores.

LIPSON: The Immigration Minister has just said they've come from this safe country and that they are essentially economic migrants. Are you confident that if they are sent back to India, they will be safe? That their safety and security will be guaranteed 

TUDGE: Well, India is a large, vibrant democracy. We have great trade relationships with them. And of course, they are our largest source of immigration these days. It is a tourist destination. Most of the people on board that boat, we believe, are Indian citizens or Indian residents. The Indian government has said that they will accept back all of the Indian citizens and indeed consider accepting the non-citizen Indian residents back to India, and we believe that they will be treated safely and with care when they are back in India. It is a safe place to go at the moment, it is a vibrant democracy and we think that they can be repatriated.

LIPSON: Thanks for your company on AM Agenda. The government is expected to today provide details on its expanded Work for the Dole program that will see job seekers compelled to conduct up to 40 job searches a month and also work up to 25 hours in community service. I'm still joined by Andrew Leigh and Alan Tudge. Alan Tudge, first you on this, what's the need, why is this program being expanded?

TUDGE: Well, Work for the Dole can be good for the individual and good for the community. It's good for the individual because it keeps their skills high, it keeps them work ready because they're active and engaged and it means that they can go to an employer that they have in fact been working for, for up to 25 hours per week already. And it's good for the community because in return for a welfare payment, that individual can give back to the community through doing some constructive projects which all of us can benefit from. 

LIPSON: We're told that an additional $900 million will be spent over three years to actually extend the scheme. Is that money that the government would hope to get back in higher employment in the long term?

TUDGE: Well in the past, when Work for the Dole was introduced by the Howard Government, the number of long term unemployed going into employment, in fact, doubled. But Work for the Dole is only one part of the scheme. We've also got expanded opportunities; we've got mobility options whereby there are payments and incentives for people to move for a job. There's wage subsidies in place for people over 50 and for younger people. All of these schemes are put in place to ensure there's every incentive, every encouragement, every motivation for people to get a job.

LIPSON: Andrew Leigh, is this a program that will achieve its goals, that will actually benefit Australia?

LEIGH: David, I'm a data guy. So I basically look at what the evidence shows and we have one good evaluation of Work for the Dole, commissioned by Tony Abbott when he was in Employment Minister in 2003. That study compared the participants and non-participants and found that Work for the Dole increased joblessness. So it was actively doing harm.

LIPSON: So how does that work?

LEIGH: It's a perfectly reasonable question to ask. How could a Work for the Dole program actually cause problems? They found that it was causing a lock-in effect: that because people were doing Work for the Dole activities, they were spending less time looking for regular jobs. 

LIPSON: This scheme would also compel them to conduct 40 job searches a month though, would that mitigate those issues?

LEIGH: Well if it did, that would be terrific. But we need to be very careful in this space not to let ideology substitute for evidence. I think one of the standard problems as a labour economist that we strike is that there’s a lot of programs that sound good but don’t actually deliver. And when your only credible study is one commissioned by the Prime Minister that showed that the program made the problem worse, then you might want to put in place some rigorously trialled evaluations rather than simply plough on ahead where ideology demands. Sure, the early 2000’s were a decade of falling unemployment and there was long-term unemployment falling through that period. But Work for the Dole hampered that effort rather than helping it.

LIPSON: Alan, what’s your response to those claims that this is more ideology at play and that ultimately it may not work?

TUDGE: Well a couple of points on that. Firstly, the data showed that the number of long term unemployed that got work after the introduction of Work for the Dole back in the Howard era actually doubled from 20 per cent to 40 per cent of long-term unemployed. The second point I’d make is that the Labor party in government actually kept a proportion of Work for the Dole throughout their term. So, Andrew’s criticism of the Abbott would equally apply to the Rudd, Gillard, Rudd government, should they be correct.

The final point that I’d make that is that this isn’t ideology. In part, it is about individuals who are in receipt of welfare giving back to the community for that welfare. And I don’t think that there is anything wrong with that. Moreover, it keeps those peoples’ skills high because they are getting up each day having to contribute, having to go through work-like activities. So instead of sitting on the couch and becoming debilitated over time, which does occur, then they are staying active and they’re more likely to get a job subsequently.

LIPSON: Well I want to just look briefly at the New South Wales Labor conference that was held over the weekend. The opposition leader, Bill Shorten, who had just touched down after a week in the United States, delivered a rousing speech to the party faithful. He took aim, and personal aim, at the Federal treasurer Joe Hockey. Let’s take a look: 

Bill Shorten, Leader of the Opposition: This arrogant and cigar chomping treasurer, whose biography reveals that it took Tony Abbott to block him from deeper, harder cuts. Seriously? If it’s up to Tony Abbott to tell you you’ve gone too far, then you’ve well and truly gone too far.

LIPSON: Alan Tudge, he also took aim at the treasurer’s personal wealth and said that it had essentially made him out of touch with everyday Australia. What do you make of that attack?

TUDGE: I think it was just some good old-fashioned class warfare coming from an Opposition Leader who thinks he’s still a union leader rather than a leader of Australia. I would simply request that he should stop the class war rhetoric and focus on the interest of all Australians. The thing I’d say is that I never heard him make these comments in relation to Prime Minster Rudd, who was a multi-millionaire. He didn’t make those comments then and I don’t think he should be making the comments about Joe Hockey. 

LIPSON: Andrew Leigh, as you pointed out, you are a numbers man and you don’t often play the man. What do you make of your leader, Bill Shorten, doing just that?

LEIGH: I’m always surprised, David, that it’s class warfare when you refer to a budget that takes away one-tenth of the income of the poorest single parents. The act of putting together that budget, apparently that’s not class warfare, it’s alright to take away one buck out of 10 for the poorest sole parent. But it is class warfare when you criticise those who implement it for being out of touch and for being unable, or unwilling, to put themselves in the shoes of what it’s like for a sole parent to make ends meet.

LIPSON: But to say that he is out of touch, and link that to his personal wealth –

LEIGH: I just don’t see how somebody who had been willing to walk in the shoes of poor single parents could think it was reasonable to take away a tenth of their income, as this budget has done. It’s a budget which has not only taken away from the bottom, but has also given more to the top through additional superannuation tax breaks, and a billion dollars for multinationals to profit shift. So it’s a fair critique for us to then say, well where are your values? What are the values in which a budget like that could possibly be grounded?

LIPSON: The budget pain, it seems Alan Tudge, is still very much in place according to this Galaxy Poll out today. It shows that the Prime Minister is trailing Bill Shorten as preferred Prime Minister and the Coalition is trailing Labor as well in terms of the two-party preferred vote.

TUDGE: Well, in part it’s because we’re delivering a tough budget, and we acknowledge that. The reason we’re doing this David, and we’ve said this before repeatedly on this program, is because Labor left the finances in an absolute mess with the sixth biggest budget deficit in Australian political history and deficits as far as the eye could see. We’re trying to take some responsible measures to bring the budget back into surplus. We’re not rushing this; it’s actually coming down back into surplus over time. But if we don’t do that, the debt will continue to rise year on, year round all the way out to almost $700 billion. That means that should there be another international shock, then we would be in serious risk. Now, Andrew Leigh and his party, the Labor Party, used to believe that having a surplus was important, they never delivered it but at least their rhetoric was the case. But now they seem to have abandoned it all together, they seem to have abandoned any sense of responsibility to try and support the budget get back into balance. So I ask Andrew Leigh, who is the Assistant Treasurer, where are your plans to get the budget back into balance? Because all they are doing now is saying no to every single measure including might I add, to the savings measures which they themselves put up.

LIPSON: Okay, I’ll give you a chance to respond to that but I did just want to mention that a lot of the criticism towards Joe Hockey last week was in relation to this new book that he has given full cooperation to. Greg Combet is also releasing a somewhat controversial book this week and Andrew Leigh you yourself are releasing a book, today I think it is? The Economics of Just About Everything, any mud-slinging going on in this?

LEIGH: It’s funny, David - my seven year old son said “well, it’s the economics of just about everything so surely, you’ve got the economics of dragons in there”. The answer is no, no economics of dragons and no economics of leadership either. But love, sports, bit of art, bit of music. Essentially, the message is that economics has not only something useful to say about politics and the sorts of issues that Alan and I are enjoying debating this morning. But is also a tool for helping us make better decisions in life, whether that’s in dating, in trying to lose weight, in trying to quit smoking or in trying to stop ourselves procrastinating. 

TUDGE: I think in Andrew’s last book he actually advocated for a Medicare co-payment and was just wondering whether this book includes such measures?

LEIGH: I love it, Alan! Unfortunately that was an opinion piece written over a decade ago, but I will get you up to speed by giving you a copy when parliament next sits. I’ll forgive you too for referring to me as the Assistant Treasurer rather than the Shadow Assistant Treasurer, given the country hasn’t had an Assistant Treasurer since last December.

LIPSON: Okay well we’re out of time Alan Tudge, Andrew Leigh. Thank you both very much for joining us. We’ll have more on AM Agenda coming up after this.

ENDS

MEDIA CONTACT: JENNIFER RAYNER 0428 214 856