Andrew Leigh

E&OE
RADIO INTERVIEW
2CC CANBERRA WITH STEPHEN CENATIEMPO

TUESDAY, 16 APRIL 2024

SUBJECTS: Recent stabbing attacks in Sydney, Food and Grocery Code of Conduct, merger reform, divestiture powers, competition and productivity.

STEPHEN CENATIEMPO (HOST): This morning joining us to talk all things federal politics is the Assistant Minister for Competition, Charities and Treasury, and the Member for Fenner, Andrew Leigh. Andrew, have we become unrecognizable as a country?

ANDREW LEIGH: It’s certainly two shocking tragedies, isn't it Stephen. And my heart goes out to the victims of the Bondi Junction and Wakeley incidents. I mean they're really both shocking. And, you know, in the case of the Bondi Junction one, I suppose I only take solace from the fact that there were so many ordinary Australians who ran towards danger. The bloke with the bollard, the heroic police officer who ultimately shot the offender dead, the many people who stepped in and acted as first responders, surely saving lives in the process. So you saw some of the worst of Australia and some of the best in that incident.

CENATIEMPO: The difference between the two incidences, we’re led to believe that there were mental health issues with the stabbings in Bondi Junction. Given that there were obviously communication issues between Queensland and New South Wales, we’re led to believe that this bloke was from Queensland and had moved to New South Wales, do we need to take a Federal approach to the way we handle mental health and reporting of these kinds of things. Because we seem to see too many things fall through the cracks between, and I know we're a federation, but you'd like to think that it was a bit more cohesion.

LEIGH: Yeah, I mean there will certainly be full inquiries, and which will go to issues such as the one you've raised Stephen. I know there's considerable engagement between the New South Wales Police, who have the chief responsibility, and also the Australian Federal Police. But I'm sure questions such as management of mental health cases, will be part of how the Minns government looks into the inquiry.

CENATIEMPO: Now, competition is one of your portfolio responsibilities. We've been talking quite a bit about that in recent times, particularly with the supermarkets. The Food and Grocery code of conduct, last week we had the interim report handed down. So explain to us what we're going to do here to try and create more competition in the grocery, Food and Grocery sector.

LEIGH: Right now, Stephen, there's a voluntary code which governs relationships between the supermarkets and their suppliers. That means that it's a code without teeth, which can't be enforced by the competition watchdog. The proposal from Craig Emerson, who’s the independent reviewer, is that it be made mandatory. And that would be the most significant change to the code since the Coalition put a voluntary code in place in 2015. It then means that we've got better checks and balances on how the supermarkets engage with suppliers, and that reflects their considerable market power. Australia's supermarket sector is one of the most concentrated in the world. We want to make sure that farmers and shoppers get a fair deal.

CENATIEMPO: So, when you talk about having teeth, and you're effectively talking punishment, what sort of penalties can be handed down here? Because the reality is that the major supermarkets are already signed up to this code of practice. Now, as you say, it's voluntary, I understand that, but is the code of practice in and of itself going to change?

LEIGH: Craig Emerson is also looking at those questions. But you asked about penalties directly there, Stephen, if you brought it straight into the Competition Act, then the penalties there are threefold: the greater of $10 million, 10% of turnover, or three times the ill-gotten gains. Now, if you're talking about companies which have more than $50 billion turnover annually, you're talking about potentially serious penalties. Craig Emerson's final report will look at precisely how those penalties might apply.

CENATIEMPO: The other thing I want to talk about, and you and I disagree on this point, that I think we do need to have the option of divestiture powers, like other similar economies do as a, as a deterrent to monopolies or duopolies is in this case. But you've talked, there are also going to be changes to the mergers and acquisitions capabilities of these supermarkets, how will that actually work?

LEIGH: Well, mergers laws are the most important part of curbing excessive market concentration, Stephen, and our merger system just isn't fit for purpose. There's three different pathways that you can go through if you're looking at merging, and we don't require compulsory notification to the competition watchdog. And that's pretty unusual. Most other countries – United States, Canada, Japan, the European Union – require merging parties to notify the competition watchdog. But you don't have to in Australia, which means that the competition watchdog here doesn't see three out of four mergers, and you can't block what you can't see. So our proposed reforms would have a single administrative pathway, more transparent, quicker, simpler, more efficient, and allows the competition watchdog to put its energies on assessing the mergers that really matter.

CENATIEMPO: My only difficulty with this is that who is there left to merge?

LEIGH: There's always mergers going on in the economy and you've …

CENATIEMPO: I’m talking specifically in the Food and Grocery sector.

LEIGH: No, that's right. I mean, that's a sector which has aggregated through mergers under different merger laws than we have now. Coles and Woolworths started off about 20% market share between them back in the 1950s, and a series of mergers saw them grow to their current scale. You can't unscramble the egg. But what we're arguing for is a set of merger laws that would bring Australia up to international best practice, which would ensure that the competition watchdog is able to bring data to bear in a way that it just never has before.

CENATIEMPO: But you can unscramble the egg with divestiture powers.

LEIGH: These powers are very rarely used Stephen. I mean, look at the United States. You've got Standard Oil a century ago, you've got Bell Telephone 40 years ago, and then basically you don't have another serious divestiture in the last generation. The Microsoft breakup never went ahead.

CENATIEMPO: They're rarely used because they are there as a deterrent. And if you look at, and the Food and Grocery sector is a is a classic example of this, particularly if you look at, say the UK and the US, the market share of the big players over there is significantly lower than ours are. So they don't have to use them, but they're there as a deterrent.

LEIGH: I don't think they've acted as a significant deterrent. I don't know there’s much economic evidence for that. I don't see any evidence that there are countries that are breaking up supermarkets or that supermarkets in other countries are scared by the prospect of divestiture powers. They're just such a rarely used tool.

CENATIEMPO: Well the markets here would suggest otherwise.

LEIGH: Yeah, I mean, we certainly have a highly concentrated sector in supermarkets, but the United States economy has become more concentrated over the course of the last generation, despite the presence of divestiture powers. Which is why they too, like us, are looking at serious competition reforms. And ultimately, Stephen, this is all about turbocharging productivity, which was languishing under the former Coalition government when productivity languished and living standards languished. So if we want to boost wages and boost household incomes, competition is a big part of that.

CENATIEMPO: Andrew, I always appreciate your time. We'll talk again in a couple of weeks.

LEIGH: Likewise, thanks Stephen.

Unenforceable And Unnecessary Non-Competes Hold Us Back - Opinion Piece

Seventeen-year-old Charlotte landed her first casual job as a dance teacher. It was her dream job, but she was forced to quit after experiencing harassment.

So she took a job at a different dance studio. Suddenly, a letter arrived in the mail. Charlotte's contract with the first employer had a non-compete clause, which prevented her from working at a competing dance studio within 15km for three years after her employment stopped. The old employer told her she had to quit her new job.

One in five Australian workers now has a non-compete clause in their employment contract. We're not just talking about senior managers. Non-competes are showing up in the employment agreements of boilermakers and disability support workers. When chief executives are forced to take a break between jobs, we call it gardening leave. Now, even gardeners are being compelled to take gardening leave.

Businesses legitimately want to protect their trade secrets and confidential information, as well as their customer lists. But doing so with a non-compete clause is deploying the bluntest tool in the shed.

It stops a worker from moving to any competing business, or from starting a new one. A growing body of evidence suggests the use of non-compete clauses is harming job mobility, innovation and wage growth.

Job-switching is a sign of a dynamic and healthy economy.

For businesses, it means improved productivity as they can attract the talent and skills they need. This is especially important for startups and firms looking to expand.

For workers, it means job satisfaction and higher wages as they move to more productive firms. Research from the e61 Institute finds that younger job switchers can earn on average $7500 more per year than job stayers. Yet despite these benefits, Australia has seen a general decline in job mobility during the past 30 years, part of a broader fall in dynamism since the early 2000s.

Given that, it makes sense to carefully assess any barriers that may be limiting people from moving jobs, limiting businesses from expanding and limiting the flow of innovation in the economy.

Under common law, many non-compete clauses are probably unenforceable. But that's not much help to the typical employee.

Workers may be too afraid to face the risk of a bout of unemployment or a court dispute, so don't move to a better-paying job or start a new business.

It's not as though employers are powerless to prevent their secrets walking out the door. Businesses can use the Corporations Act, which bans employees during or after employment from improperly using a company's information for personal gain, third-party gain, or to cause detriment to the company.

Around the world, many jurisdictions have either banned or restricted the use of non-compete clauses. In the US, five States have bans in place, including California, the home of Silicon Valley. The Albanese Government established the competition task force last year to examine whether Australia's competition laws, policies and institutions remain fit for purpose.

Now, the task force has launched its issues paper Non-Competes and Other Restraints: Understanding the Impacts on Jobs, Business, and Productivity. The issues paper is an open invitation for everyone - businesses, employees, academics, think-tanks - to provide their views.

Already, we know that millions of Australian workers don't have the freedom to quit their jobs and immediately move to a better job.

We know that these restraint clauses don't just apply to the boardroom. They apply to workers in the mail room too.

They are just as likely to apply to the person guarding the carpark as they are to the person guarding trade secrets.

Taking a hard look at non-compete clauses is just one step in our efforts to build a more competitive and dynamic economy.

Originally published in the West Australian on 16 April 2024.

Recent years have seen an explosion in interest in artificial intelligence and big data. The technology is promising, but its use in government rightly makes people nervous. If RoboCop hadn’t persuaded you that letting machines run amok was a bad idea, the Coalition’s Robodebt scandal proved it once and for all.

Yet it’s useful to see areas where artificial intelligence and big data have helped produce better outcomes for citizens, without undermining key ethical values of transparency, privacy and human oversight.

COMPETITION DRIVES INNOVATION *

Closing Remarks to the Australian Auto Aftermarket Innovation Awards Breakfast

Melbourne, Thursday 11 April 2024

In the 1950s, Sweden’s national electricity company noticed something curious. Although they managed a network of high-voltage cables, the biggest risk of death didn’t come from electricity. Instead, the greatest danger came when their employees were driving. At the time, cars either had no seat belts, or simple lap belts. If they crashed, deaths were common – even at low speeds.

So the company did something remarkable. Two safety engineers, Bengt Odelgard and Per-Olof Weman, developed the three-point lap-sash belt. Swedish inventor Nils Bohlin developed it for Volvo. In 1959, three-point seatbelts were installed in all Volvo cars.

Then Volvo did something remarkable too. It allowed any car company in the world to use its patent. Where lap belts had done little to save lives, lap-sash belts turned out to be the best piece of safety equipment ever installed in a car.

Just over a decade later, in 1970, the state of Victoria became the first place in the world to enact compulsory seat belt laws; after a trial of seat belts in police cars proved their effectiveness. In the 65 years since three-point seat belts were patented, they have saved over a million lives (O’Grady 2009).

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO CANBERRA DRIVE WITH ROSS SOLLY
WEDNESDAY, 10 APRIL 2024

SUBJECTS: Palestinian statehood, merger reforms, competition policy, Australia’s Indigenous history, British influence and multicultural story.

ROSS SOLLY: Great to have you on the show, Dr. Leigh.

ASSISTANT MINISTER, ANDREW LEIGH: Great to be back with you, Ross.

SOLLY: Just before we talk about this, can I get your thoughts on what Penny Wong had to say last night? About the only way to work towards a long-term peace prospect in the Middle-East is that maybe we should recognise Palestine as a state. What are your thoughts?

LEIGH: Well, I think everyone recognises that the two-state solution is the only lasting way of achieving peace. And this is about building the pathways out of an endless cycle of violence. You only get security and prosperity for both Israelis and Palestinians with a two-state solution. So, while Australia is a respected voice, we're not a central player in the Middle East. Our role is to argue for a humanitarian ceasefire, return of hostages, the protection of civilians, but also to give our support to what the international community has broadly recognised. A two-state solution.

HEALTHY SURPRISES: HOW RANDOMISED TRIALS CAN CHALLENGE CONVENTIONAL WISDOM AND DEBUNK DOGMA*

Danks “Leaders in Science” Seminar

Murdoch Children's Research Institute, Melbourne

Tuesday, 9 April 2024

I acknowledge the Wurundjeri people of the Kulin nation, the traditional owners of these lands, and pay respects to all First Nations people present.

Professor Goldfeld, Murdoch Children’s Research Institute staff, and researchers across laboratory, clinical, public health, and health services: Thank you for inviting me here today.

My thanks to the Institute for what you do each day to help improve the lives of children through rigorous research. I also pay tribute to Professor David Danks (1931-2003) who established Victoria's first genetics health service, which became this Institute, after whom today’s Seminar is named. As one obituary described him, ‘David was a remarkable doctor, scientist, teacher, mentor, family man, friend, and champion of good causes’ (Choo, 2003).

My focus today is on randomised trials – a central tool in medicine, but underutilised in policy. In particular, I want to focus on the way in which randomised trials in medicine can upend conventional wisdom, producing results that improve patient outcomes and extend lifespans. You might call these ‘healthy surprises’.

Foreign investment is great, until it becomes a drain

A few years ago, the Australian Taxation Office won a court case against energy giant Chevron that saw the company pay an extra $10bn over the following decade.

That's equal to 10 hospitals, hundreds of schools, or thousands of kilometres of rail.

One way Chevron cut its tax bill was by lending money to itself. Interest payments are tax deductible, so by creating an internal loan from the US parent to its Australian subsidiary, Chevron reduced its taxes.

Over the past two centuries, Australia has benefited greatly from foreign investment. But multinationals still have an obligation to pay their fair share. Multinational companies benefit from Australia's infrastructure and rule of law. It's only fair that they contribute.

E&OE TRANSCRIPT
TV INTERVIEW
ABC AFTERNOON BRIEFING WITH GREG JENNETT
MONDAY, 8 APRIL 2024

SUBJECTS: Reforms to the Food and Grocery Code, divestiture powers, merger reforms, non-compete clauses.

GREG JENNETT, HOST: So, a mandatory code of conduct is on the way, or soon will be for Woolworths, Coles, Aldi and Metcash. That is the interim recommendation from Craig Emerson. But that represents only a part of the project the Government's doing on competition. Assistant Minister for Competition Andrew Leigh joins us in the studio now. Welcome back to the programme, Andrew. So, a firm recommendation just to clarify the status of Craig Emerson's advice in the Interim Report. He says a firm recommendation. There's no doubt, is there, that the Government will proceed with this mandatory code?

ASSISTANT MINISTER ANDREW LEIGH: Well, we clearly need to go through cabinet and caucus processes, but we're certainly looking very seriously at the important recommendations that Craig Emerson has made. And I was pleased, Greg, that you put that into context. The broader work that we're doing on competition, the ACCC's grocery review, the CHOICE price monitoring to ensure Australians can see where they can get the best deal, the first report of which will be coming out towards the end of June.

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO MELBOURNE WITH ALI MOORE
MONDAY, 8 APRIL 2024

SUBJECTS: Divestiture powers for competition regulators, the government’s work to improve supermarket competition.

ALI MOORE, HOST: Well, as I said, we've been talking about how to make the supermarkets play fair for a long time. Today, one recommendation, a mandatory code of conduct and you've been hearing about that during the news today with the Interim Report of the Review into the Food and Grocery Code of Conduct, which right now, of course, is not mandatory, it's voluntary.

Now, that Review also recommends hefty fines. What difference would they make? And will the government accept the recommendations? Dr Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury. Dr Leigh, welcome to Drive.

ASSISTANT MINISTER ANDREW LEIGH: Thanks, Ali. Great to be with you and your listeners.

E&OE Transcript
DOORSTOP
PARLIAMENT HOUSE, CANBERRA
MONDAY, 8 APRIL 2024

SUBJECTS: Interim report on the Food and Grocery Code, mergers process, cost of living, divestiture powers.

JIM CHALMERS, TREASURER: I wanted to thank Craig Emerson for his interim report reviewing the grocery code and I wanted to acknowledge Andrew’s work in the competition policy space as well. This interim report will help us strengthen the Food and Grocery Code for the better. This is all about a fair go for farmers and families - that's what this is all about. It recognises that by replacing a voluntary code with a mandatory code, it's easier to enforce. We can impose penalties on people who do the wrong thing, and it's also harder for people to walk away from. This is about getting a better deal for people right up and down the supply chain. This is a perennial challenge in our economy and in our markets and this interim report from Craig Emerson will help us address that.