Andrew Leigh

The OECD has released an important report on action to tackle multinational profit shifting and tax avoidance. It's a welcome step forward, but now we need the Treasurer to step up and get its recommendations delivered both in Australia and around the world.

MEDIA RELEASE

OECD TAX PLAN MEANS CRUNCH TIME FOR HOCKEY

With the release overnight of a pioneering report on tackling multinational tax avoidance, it is time for Treasurer Joe Hockey to stop talking big and start taking real action.

The report outlines the first set of concrete multilateral initiatives to block base erosion and profit shifting. It has been prepared by the Organisation for Economic Co-operation and Development in consultation with representatives of more than 110 tax jurisdictions globally.

The release of these initiatives comes ahead of the G20 Finance Ministers meeting this weekend in Cairns. At that meeting Joe Hockey will have a much-needed opportunity to show he can deliver more than rhetoric when it comes to making major companies pay their fair share of tax.

To date, the Coalition’s only real actions on this have been to walk away from closing $1.1 billion in tax loopholes, and to stall on signing Australia up to new bank transparency measures.

There's been a lot of concern around recently about charity scams and 'front' not-for-profit groups which channel money to illegitimate purposes. It's a timely reminder that we need a central agency to monitor and regulate the charity sector.

Charity scammers prey on our goodwill, The Daily Telegraph, Tuesday 16 September

THE charities had weighty names such as Friends of the Disabled Children’s Task Force, Friends of the Underprivileged Children’s Task Force and the Chronic Obstructive Pulmonary Disease of Australia Incorporated. Inspired by a deep sense of generosity, Australians donated more than a million dollars to them.

But it turned out that there wasn’t much evidence of that money going to the disadvantaged or needy. These charities have since been shut down.

All scammers are dodgy, but I’ve always regarded charity scammers as a particular form of low-life. While other scammers exploit greed, lust and ignorance, charity scammers prey on our goodwill. They take the great Aussie tradition of wanting to help the vulnerable, and use it to line their own pockets.

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:

E&OE TRANSCRIPT

ONLINE INTERVIEW

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:

MEDIA RELEASE

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.

MEDIA RELEASE

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 67^th 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:

MEDIA RELEASE

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...

MEDIA RELEASE

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.