The Social Impact of the US Recession

My AFR column today summarises a handful of fascinating new papers on the US slump.
US Recession Hits Home, Australian Financial Review, 18 October 2011

Empirical economists are a perky bunch. Give us a badly-designed policy, a natural disaster or an economic calamity, and we’ll use it to learn something about human behaviour.

And so it is with the latest recession in the US. While Tea Party Republicans force America to repeat the policy mistakes that prolonged the Great Depression of the 1930s, a spate of fascinating new research papers have analysed the current slump.

Some have set about documenting the human impact of the crisis. Michael Hurd and Susann Rohwedder argue that what made this latest crisis so severe was the simultaneous shock to the sharemarket, housing market and labour market. They point out that the impact of the 1981-82 and 2001 recessions was muted by the fact that house prices still rose.

For Americans, the 2008-09 recession brought a triple-whammy. The US sharemarket almost halved in value at its worst point. Average house prices fell by more than a tenth (more than a third in California and Florida). Unemployment doubled to over 10 percent (it is now 9 percent).

The impact was particularly felt by men, who accounted for 71 percent of the job losses. This had the effect of speeding up a long trend towards the feminisation of the labour market. In late-2009, there were equal numbers of men and women in the US labour market (most likely for the first time in history). Wags call this the ‘mancession’.

But regardless of demographics, the US recession has spread its tentacles across society. Thirty-nine percent of households experienced unemployment, had negative equity in their house, or were in arrears in their house payments. Real median household income in 2010 was 6 percent lower than it had been before the crisis.

The wounds will take a long time to mend. Rajashri Chakrabarti and colleagues at the New York Federal Reserve find that a fifth of Americans withdrew money from shares when the market bottomed out, locking in their losses. And in an exhibition of Keynes’ ‘paradox of thrift’, US households are now focused on paying down mortgage debt, hampering the prospect of a consumer-led recovery.

One result of a ghastly labour market is that the average American is working 2 hours less per week than before the recession. With time use surveys, Mark Aguiar and coauthors ask the question: what did Americans do with the additional hours? They find that about one-third of the time went to household chores. More than half has gone to leisure activities, such as socialising, reading and watching television.

If you’re looking for an upside to the downturn, it’s that recessions are on average good for population health. For example, the share of Americans reporting poor health or trouble sleeping has fallen during the recession. With shorter hours and fewer jobs to go around, it’s not surprising that work-related illness has declined.

But for those handing over their house keys, it’s a different story. Combining postcode-level data on foreclosures and hospital visits, Janet Currie and Erdal Tekin show that in places where more homes are repossessed, there is a spike in suicide attempts and admissions for anxiety-related conditions such as hypertension. Given that 1 in 45 US homes received a foreclosure filing in 2010, this suggests that the housing crisis is one of the nastiest communicable diseases to hit America in a long time.

What impact has the crisis had on the attitudes of Americans? In a short paper, Betsey Stevenson and Justin Wolfers show that trust in politicians tracks the business cycle. Not surprisingly, then, a Gallup survey that has been running since 1972 shows voters’ confidence in the US Congress at an all-time low. Americans have never loved their legislators, but now they loathe them.

Finally, Angus Deaton regards the financial crisis as a chance to ‘stress test’ the idea of happiness as a measure of wellbeing. Since 2008, Gallup has been polling 1000 Americans daily. Deaton finds that happiness responds more to the state of the sharemarket than to fundamental measures such as income and unemployment. From this, he concludes that happiness is too sensitive to ‘short term ephemera’, and serves as a poor proxy for the state of the aggregate economy.

If there’s a silver lining out of the US recession, it’s that it’s raised plenty of interesting questions for academics to answer. Many economists would prefer a second fiscal stimulus package; but for now, the research findings will have to be our solace.

Andrew Leigh is the federal member for Fraser.
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Local teachers recognised at national awards

Gai Brodtmann and I congratulated some outstanding local teachers over the weekend.
Teachers and principals from the ACT have been recognised at the 2011 Australian Awards for Outstanding Teaching and School Leadership for their hard work and dedication.

Member for Fraser, Andrew Leigh, and Member for Canberra, Gai Brodtmann, today congratulated five exceptional local teachers who received recognition as territory finalists at a ceremony in Melbourne.

“These finalists have made an outstanding contribution to our community by demonstrating innovation in their teaching practices and providing a positive schooling experience for local students,” Gai Brodtmann said.

“There are few jobs more important than teaching young Australians. Awards such as these help to raise the status of teachers who are delivering high-quality education for young Australians,” Andrew Leigh said.

Minister for School Education Peter Garrett presented the national winners with their awards at an event hosted by the Australian Institute for Teaching and School Leadership on Thursday 13 October 2011.

Certificates were presented to 39 state and territory finalists, from which the Minister’s

Award and four national winners were selected in the following categories:

  • Australian Primary Teacher of the Year

  • Australian Secondary Teacher of the Year

  • Australian Primary Principal of the Year

  • Australian Secondary Principal of the Year

  • Minister’s Award for Excellence in Teaching or Leadership in Aboriginal and Torres Strait Islander Education


Winners of the national award will receive a professional learning scholarship to work with recognised education experts and practitioners within Australia or overseas.

A full list of finalists in the Australian Awards for Outstanding Teaching and School Leadership is available at: www.aitsl.edu.au

ACT finalists:



































Category Nominee School
Primary Principal Liz Wallace Isabella Plains Early Childhood School
Secondary Principal Michael Lee St Mary MacKillop College, Canberra
Minister’s Award Lyle Swan Telopea Park School
Primary Teacher Glynis Steward Florey Primary School
Secondary Teacher Caitlin Hanby University of Canberra Senior Secondary College

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Mapping the Northside Media Launch

Just one sleep until we start Mapping the Northside. All welcome.
MEDIA ALERT

Event: LAUNCH OF ‘MAPPING THE NORTHSIDE’

Date: TUESDAY 18 OCTOBER 2011

Time: 9:30AM



Venue: Belconnen Arts Centre, 118 Emu Bank Belconnen

Andrew Leigh, Federal Member for Fraser and Belconnen Arts Centre join forces this October and November to create a huge interactive map of the federal electorate of Fraser. The map will be displayed in the Belconnen Arts Centre from Tuesday 18 October until Thursday 17 November, and everyone is encouraged to drop in and plot their most meaningful places onto the map.

“Mapping the Northside is an opportunity to tell everyone about your special, important places and environments and let your imagination run wild. Show everyone that the Fraser electorate is the most vibrant place in Australia,

“The Belconnen Arts Centre and I invite everyone to be a part of Mapping the Northside and learn something new about Canberra’s north,” said Andrew Leigh.

What’s your favourite place on the Northside? Is it where you live, you work, you learn or you play? Is it a tiny restaurant you love, a bike track, your local school, a tennis court, a park, an arts or community centre, a heritage site or a quiet track or place you like to walk your dog? When describing your favourite place you can draw it, photograph it, create a collage, write a story or a poem, or even create a performance work.

There will be three facilitated information sessions at Belconnen Arts Centre (11 – 1pm, 29 October), Gorman House Arts Centre (Saturday 11 – 1pm, 5 November) and Gungahlin Library (Saturday 11 – 1pm, 12 November)
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Disconnected in Brisbane

I had a very enjoyable discussion tonight with ABC Brisbane presenter Steve Austin and academic Melissa Gregg, on the topic of social capital and the impact of new communications technologies.

Perhaps ironically, a podcast is available.
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Men's Sheds

I spoke in parliament today about the Melba Men's Shed.
Melba Men's Shed
13 October 2011


On 23 September I visited the Melba Men's Shed with my staffer Damien Hickman. Members of men's sheds come from all walks of life. The bond that unites them is that they are men with time on their hands and would like something meaningful to do with that time. Men after retirement often find that once the phone stops ringing and they are no longer called on to make decisions their social networks are not as extensive as that of women.

There are many men's sheds across Australia for which 'first bloke' Tim Matheson is a patron. They provide a place for men to meet and socialise. If you look inside one you might see a number of men restoring furniture or restoring bikes for a local school, and a few young men working with older men, learning new skills and maybe something about life. The Melba Men's Shed has grown from six to 10 people, to 25 to 30 people. I would like to thank Stuart Allan the President of the Melba Men's Shed.
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Tax Forum

I spoke to parliament on both Wednesday and Thursday about the Tax Forum, and also about the challenge of ongoing tax reform to support the kinds of social policies society is increasingly demanding.
Statements - Taxation
12 October 2011


It was my pleasure last week to participate in the Australian government's tax forum, a forum designed to continue the important conversation about how to build a better taxation system in Australia. This forum, of course, does not sit in isolation. This government commissioned a once in a generation taxation report in 2009. The Henry review reported back with a range of important recommendations which this government is pursuing. In my own submission to the tax forum, I argued that among the core principles for tax reform should be the following: taxes should be shifted from mobile tax bases to immobile tax bases, taxation of savings should be more neutral and sustainable, polluters should internalise the social cost of environmental damage, disincentives to labour force participation should be reduced, and the tax system should be as simple as possible.

The Gillard government is delivering on each of these priorities. We are cutting business investment taxes and introducing a mining tax. We are increasing the compulsory superannuation contribution rate. We are putting in place a carbon price with the historic vote in the House of Representatives today, and we are reforming the fringe benefits tax regime on cars to remove the incentive to drive excess kilometres. We are reducing disincentives to labour force participation by phasing out the dependent spouse tax offset and simplifying the tax system by tripling the tax-free threshold—taking one million people out of the tax filing system—and replacing the ineffective entrepreneurs tax offset with more straightforward measures, such as an improved instant asset write-off.

There was a serious and substantive discussion of tax reform at the forum—not including the sorts of comments that we heard from the member for Bradfield, who claimed that Australia is a heavily taxed nation. That is an odd contribution for two reasons. The first is that the tax take has fallen over recent years. The second is that, even when it was higher than it currently is under the former Howard-Costello government, the then Treasurer, Peter Costello, was reported as saying that Australia was a lightly taxed country, one of the most lightly taxed countries in the OECD. So it is clear that whether or not Australia is a heavily or lightly taxed country for those opposite depends more on which party is in power than actually looking at the hard statistics.

There was a range of issues canvassed at the forum. There was discussion over who bears the corporate income tax. Ken Henry persuasively argued, along with Greg Smith, another member of the Henry review panel, that ultimately the burden of the corporate income tax in a small open economy like Australia's falls on labour. There was a discussion of the treatment of losses and potentially a shift towards an allowance for corporate equity. A working group that will look into that issue has come out of the forum. There was discussion of federal-state tax reform and many of the inefficiencies caused, particularly in an economy in which we want to encourage workers to move to the most productive industries and regions, and the discouragement to mobility caused by state and territory stamp duty. There was discussion about the challenges in Australia in which people face volatile shocks caused by natural disasters or changes in circumstances and the fact that state and territory insurance taxes discourage people from taking up insurance.

There was also a discussion about the importance of simplifying the personal tax system, an issue I have written on as an ANU professor: arguing that the government should do everything it can to try and ensure that to the largest extent possible we take people out of the system. It should not be the case that three-quarters of Australians require professional help to file their return. The government's tripling of the tax-free threshold, moving a million people out of the tax-filing system, is critically important. I also commend the decision to fund an independent Tax Studies Institute and would encourage people to donate to the institute.

Finally, I would like to pay particular tribute to the academics who attended the tax forum. Many others who were representing interests were being paid for so doing. That was not the case for the academics and tax experts. I would like to pay particular tribute to Sue Richardson, Saul Eslake, Nicholas Gruen, Harry Clarke, Alan Duncan, John Freebairn, Deborah Cobb-Clark, Chris Evans, Peter Whiteford, Frank Stillwell, Dale Pinto, Ric Simes, Judy Yates, Flavio Menezes, Kerrie Sadiq, Richard Eccleston, Paul Gerrans, Robert Carling, Ross Garnaut, Ian Winter, Bruce Cohen, Graeme Cooper, Richard Highfield, Ann O'Connell, Miranda Stewart and Neil Warren for their participation in the forum.

Tax Laws Amendment (2011 Measures No. 7) Bill 2011
13 October 2011


Last week I had the pleasure of attending the Australian government's two-day tax forum. When I mentioned to a couple of friends that I had been spending two days talking about tax, they rolled their eyes. To many of us, I think, the tax system is something that is too complicated, too tricky to understand, too involved with interest groups and too detailed. But every now and then we need to step back from the minutiae of the tax system and remind ourselves of the simple maxim that with taxes we build society. I was reminded of that this morning in speaking with Ken Neilson, who I am pleased to say is here in the gallery. Ken was a good friend of my paternal grandfather, Keith Leigh. Keith passed away the year before I was born. Through Ken I have had the privilege of getting a bit of an insight into what my paternal grandfather was like and into the values that drove him—of Methodism, of a fair go and of making sure that Australia was a generous country with a social safety net that befits our affluent society. I was reminded of the same values this morning while attending the Every Australian Counts morning tea in support of a national disability insurance scheme, speaking there with Estelle Baines and her daughter Scarlett about the challenges that children with disabilities, adults with disabilities and their carers face under the current system.

It is important for us all to recognise that we need a strong tax system to fund the social services that Australians demand. At the same time, that tax system should not take in more revenue than it needs to do its job. This year the tax share is expected to be 21.8 per cent of GDP, less than the 23.5 per cent we inherited. That is not a bad thing. Those of us on this side of the House do not strive to increase the tax take for its own sake. Our aim is to keep taxes as low as they need to be to fund the social services that we support.

As part of the Tax Forum there was a broad discussion of how Australia's tax system can be improved and a broad recognition that it is important to move from mobile tax bases to immobile tax bases. That is why this government is working to bring down the rate on company taxes. We recognise that, in a world of mobile capital, if we have high company tax rates our companies will not get the investment that they need to grow employment and boost wages. That is why we are putting in place a minerals resource rent tax, recognising that, by their very definition, Australia's minerals cannot travel, they will always stay here, and that Australians should get a fair share for the minerals that are their birthright.

We recognise that taxes can be used to bring about better environmental outcomes. That is why we put in place reforms to put a price on carbon pollution and reforms to change the old fringe benefits tax system, which created perverse incentives to get a bigger car and drive it further. We have recognised that complexity is a major challenge in the tax system. As part of that, we are raising the tax-free threshold, tripling it from $6,000 to $18,200. Phasing down the low-income tax offset is the right thing to do. We recognise, through that, that we should have people filing a tax return as seldom as is absolutely necessary. My constituents, I can assure you, do not enjoy filing their tax returns. They are not alone in that. I have been suffering through my own over this past weekend. Anything we can do to take complexity out of the system and ensure that fewer people have to file is a good thing.

We also use the tax system to implement important social policies, like the Higher Education Contribution Scheme and the arrangements put in place under the Hawke government for the collection of child support obligations. Our tax system is also used to collect compulsory superannuation contributions. In a week in which we have heard those opposite say that people's eyebrows will fall off when the carbon price comes in, it is important to recognise that many of those opposite said similar things when universal super was put in place by the Keating government in 1992. But of course universal superannuation was a great boon to the dignified retirement of many Australians. Universal superannuation is not something which any party now goes to an election claiming to abolish. It will be the same with putting a price on carbon pollution. Indeed, this government is now committed to raising the universal superannuation contribution rates. We are doing so within a context in which the Australian retirement savings system is recognised to be one of the best in the world. A recent report from the 2011 Melbourne Mercer Global Pension Index rated Australia's retirement system as being the second best in the world, after only the Netherlands. The Mercer report noted that there is no perfect retirement system, but it said that the Australian system did particularly well, due in large part to universal superannuation. The Mercer report did, though, note that raising the level of mandatory contributions would be an important way of improving Australia's overall index value. And that is exactly what this government is doing in moving the universal superannuation contribution rate from nine per cent to 12 per cent.

The Tax Laws Amendment (2011 Measures No. 7) Bill 2011 puts in place a number of important amendments. The removal of income tax impediments affecting special disability trusts means that now the trustee of a special disability trust can sell the primary residence of a person with a disability without incurring CGT. As a result, that provides more money to assist in the future care of a family member with a disability.

We are reducing the marginal tax rate of Pacific seasonal workers, recognising as we do that the sensitivity to marginal tax rates is particularly high for low-wage workers. Just as we have sought to reduce effective marginal tax rates by lowering benefit withdrawals, this is a reform in the same spirit. We are dropping the marginal tax rate for participants in the Pacific Seasonal Worker Pilot Scheme from 29 per cent to 15 per cent.

We are putting in place technical amendments regarding the taxation of financial arrangements and pay-as-you-go instalments. There are similarly uncontroversial amendments regarding the commissioner's discretion to extend the notification time for taxation of financial arrangements and farm management deposits.

We are extending by three months the temporary loss relief for merging superannuation funds. That is being done in recognition of some of the ongoing difficulties certain funds are facing. We are also introducing a variation on penalty notices, in response to an adverse New South Wales Court of Appeal decision in the case of Deputy Commissioner v Soong. Another reform is the improvement in the integrity of public ancillary funds. Finally, we are putting in place reforms to the film tax offset, amending the location offset in such a way as to increase the incentive to invest in films in Australia.

I end where I began with an acknowledgement of Ken Neilson and my late grandfather Keith Leigh, who I believe would be proud of the work this government is doing to put in place a tax system that is efficient, equitable and simple and that raises the revenue we need in order to put in place the social programs that Australians deserve. I commend the bill to the House.

Update: Here's Saul Eslake's take on the Tax Forum, with plenty of useful observations.
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Occupational Health and Safety

I spoke to parliament this week on the topic of work health and safety. Due to the intervention of a quorum call and members' statements, the speech was broken into three parts, but I've sewn them back together in what follows.
Work Health and Safety Bill 2011
25 August & 12 October 2011


I rise to speak in the debate on the Work Health and Safety Bill 2011.

Five workers die aboard an unseaworthy vessel in the Torres Strait. Six motorcycles used for work are found to be unroadworthy in the Northern Territory. Camp food containing peanuts is fed to a camp attendee with a severe peanut allergy in Victoria. Two members of the public die on a rail access road and bridge in South Australia. The thing that each of these situations has in common: they are all part of the Commonwealth's health and safety jurisdiction—the Department of Immigration and Citizenship, Australia Post, the Department of Defence and the Australian Rail Track Corporation, respectively.

It is far too easy to cast the Commonwealth health and safety jurisdiction as one populated by Canberra public servants working at their desks day in, day out. But the truth of the matter is that there are a diverse range of jobs undertaken by Commonwealth public servants and in the Commonwealth's health and safety jurisdiction. The Commonwealth jurisdiction is unusual. It is not geographic. Commonwealth public servants perform important work all across Australia. They perform their work, in many cases, side by side with people covered by state and territory health and safety laws. The way that Australia's health and safety laws operate now makes things confusing for workers and for businesses. What laws apply when? Who is covered? Who is owed an obligation?

The Gillard government is moving towards a harmonised system of health and safety legislation and regulation to remove the duplication and confusion that exist when there are 10 separate pieces of health and safety legislation.

The Gillard government has been able to work productively with the states and territories, employer and employee representatives to achieve historic reform in working towards a seamless national economy. The Work Health and Safety Bill 2011 and associated legislation that we are debating today ensures that the Commonwealth sticks to the agreement that it has made with the states and territories. This bill honours that deal.

As a Labor government committed to reform that is in the interest of the entire nation, employee and employer representatives have been involved in the process throughout. I am excited that workers moving between the ACT Public Service and the Commonwealth Public Service or between the private sector and the Commonwealth public sector will now be able to expect the same standards of work health and safety in their workplaces.

I particularly support this bill because of the additional protections that it provides for workers who are performing work for the Commonwealth. Many of my constituents in the electorate of Fraser work for the Commonwealth, whether as an employee, a contractor or in another type of arrangement. This bill introduces rights for workers in the Commonwealth jurisdiction that have never existed as an entitlement under Commonwealth health and safety laws before. For example, union officials are now able to enter Commonwealth workplaces to speak with workers about health and safety matters.

The Work Health and Safety Bill significantly increases the penalties and the penalty regime for breaches of duty of care. The bill removes Crown immunity. It extends the requirement to consult with workers. It changes the person to whom a duty is owed from an 'employee' to a 'worker'—encompassing a broader type of working arrangement and type of person that might be in a workplace. All workers will have the right to cease unsafe work. It was a Labor government that first provided statutory health and safety protections for its own workers and it is a Labor government that continues this legacy. It continues the tradition of Labor being the party that cares for employees in the Commonwealth public sector.

I know that many would not consider the work of your typical public servant to be particularly risky. But there are many workers performing all sorts of different work for the Commonwealth in all sorts of different workplaces. Take, for example, the situation that workers at Centrelink or the Child Support Agency may find themselves in with an aggrieved or upset customer. Similarly, public servants working for the Department of Defence, for Customs, for immigration or for the Australian Federal Police might find themselves in high-risk situations.

The Commonwealth also has the unusual situation where many employees in this jurisdiction may be working outside of Australia. These workers may be in the Australian Antarctic Territory, or a foreign embassy. The bill ensures that work health and safety duties continue to be owed to these workers. Just because they might be performing work in some other place, it does not follow that health and safety duties are no longer owed.

These reforms stand in stark contrast to the actions of opposition who seek to remove the protections and rights of workers at every turn. The opposition consistently talk about red tape and regulation, ignoring the records of countries with lax attitudes to health and safety and the dangers posed to workers with underregulated health and safety systems. It was the Liberal Party under John Howard who encouraged employers to move into the Comcare self-insurance scheme, placing pressure on the stretched resources of the hard-working people at Comcare and not properly resourcing areas for high-risk work. There were simply not enough inspectors to make sure that work was performed safely.

The laws that had previously developed for the Commonwealth jurisdiction were simply not equipped to cover high-risk industries. This meant that the Liberal Party put pressure not only on the workers who were forced into a new health and safety scheme but also on the public sector employees forced to cope with the additional pressure placed on an ill-equipped system.

The Liberal Party's expansion of the Comcare system also made things more confusing and less streamlined for employers and employees alike. The push to get employers to opt out of state and territory laws led to confusing situations with workers in the same workplace working side-by-side under different health and safety systems. It was a thinly disguised attempt to get more and more employers away from the state and territory systems and their well-developed involvement of unions in health and safety. All of this was because of their ideological opposition to worker representatives playing an active role in the development and enforcement of health and safety arrangements and their ideological opposition to union members being able to have an advocate to help them with a safety concern on short notice.

The Liberal Party cannot even stand by their claim to be operating in the interests of employers when it comes to health and safety. Their reforms increased confusion and made compliance more difficult, particularly in those high-risk industries that they had fought so hard to get away from state and territory schemes. Their industrial relations record also reduced the health and safety protections for workers. Meetings with unions to discuss genuine health and safety concerns became banned in agreements under Work Choices. The relationship with the Work Choices regime also meant that workers feared for their ongoing employment if they dared stop unsafe work. These reforms were all part of the extreme, ideologically-driven workplace agenda of the coalition.

We have seen evidence that the opposition continues in their ideologically-driven campaign against cooperation in the Australian workplace. The member for Bennelong recently said:

'We have many examples in our region of coffee shops and the like not trading on weekends because of penalty rates.

'It is something that must be addressed and it must be addressed without the position of the worker is king and must be given these rights.'

The member for Bennelong is only concerned with the rights of businesses and employers. He has absolutely no regard for workers and no regard for the careful balancing act that is health and safety—that is, good industrial relations. The Leader of the Opposition has done absolutely nothing to silence those extreme voices in his own party demanding a return to the Work Choices era. Some of the main champions of Work Choices sit inside his own shadow cabinet. It demonstrates the Leader of the Opposition's commitment to continued ideologically-driven extremism within the Liberal Party, a tendency we see on every issue in modern politics from the mining tax to climate change.

The Labor Party has long known the confusion that arises when workers and employers need to get across 10 separate pieces of legislation. It is a confusion that it is all too evident in a place like the ACT, where a move from working in Queanbeyan or a switch between the private and the public systems might mean an entirely different health and safety system. A business operating out of the ACT but also servicing Queanbeyan has to be aware of compliance with two separate pieces of occupational health and safety legislation. These complexities add to the paperwork and costs for thousands of Australian businesses that operate across state and territory boundaries. This legislation is a historic change, supported by unions and employer organisations and which has had their input the whole way through the process. It has delivered a reform that the coalition was desperate to achieve but unable to do because of their extreme attempt to shut down unions and keep them away from members.

The Prime Minister has said time and time again that the Labor Party is the party of work and the party of workers. We have the interests of those workers in the forefront of our minds in everything we do. Whether it is protecting jobs, introducing paid parental leave, reinstating workplace rights or, in this case, guaranteeing safety in the workplace, the Gillard government has time and time again demonstrated its commitment to workers.

In closing, I would like to thank Louise Crossman, who deeply understands the issues of workers' health and safety and whose work in the union sector, in the public service and now as chief of staff in my office demonstrates her lifelong commitment to a quality workplace for Australian workers.
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Brian Schmidt

On Wednesday, I spoke to parliament about Nobel laureate Brian Schmidt, now possibly the most famous person working in my electorate.
Brian Schmidt
12 October 2011


Professor Brian Schmidt's day job involves measuring the difference between exploding stars, studying dark energy and tracking the expansion rate of our universe billions of years back in time. But, after becoming Australia's newest Nobel laureate, the most important task at hand for Professor Brian Schmidt was making sure he was not late for class the next day. The Royal Swedish Academy of Sciences has recognised the incredible work of Professor Schmidt, a lecturer with the ANU's Research School of Astronomy and Astrophysics, awarding him the 2011 Nobel Prize in Physics, an award which was shared with Professor Adam Riess and Professor Saul Perlmutter, both from the United States.

After 20 years of painstaking research and observation Professor Schmidt joins the likes of Wilhelm Roentgen, who discovered X-rays, and James Chadwick, who discovered the existence of the neutron. He follows on from Australia's last winners of the Nobel Prize in Physics, father and son duo William and Lawrence Bragg, who won the prize in 1915 for their work on X-ray crystallography. Let us hope it is not another century before Australia brings home another Nobel Prize in Physics.

To have a scientist of such high calibre as Professor Schmidt teaching at the Australian National University, a university which I am proud to represent, is a great blessing. It is testament to Professor Schmidt's dedication to building the astronomers and physicists of tomorrow. Professor Schmidt's prize-winning body of work focused on the nature of the universe itself. By examining the strength of light coming from exploding stars—supernovas—Professor Schmidt and his team discovered that the universe is speeding up as it expands, rather than slowing down as had previously been thought to be the case.

Reflecting back on a lengthy period of study, Professor Schmidt said, 'What we were hoping to see was how the universe slowed down with the gravity within it over time, but what we found was the opposite: the universe was not slowing down at all; it was speeding up.' In addition to this Professor Schmidt and his team have discovered that 75 per cent of the universe is constituted by dark energy, the existence of which was previously not even known.

The study of physics was the prize area that Alfred Nobel mentioned first of all in his will. At that time, in the late 19th century, physics was regarded as the foremost field of scientific study. With Professor Schmidt's revolutionary discoveries coming to light over 100 years later, it reinforces the value of the constant pursuit of knowledge and reminds us how much we have yet to learn. This is upheld by Professor Schmidt himself, who presented his regular lecture the day after receiving his award. One of his students commented on his commitment to teaching: 'He brings it down to a level where all of us can really understand and he gets really involved in everything he is teaching us.'

Professor Schmidt credits his strong education with his success and he is passionate about ensuring his students are afforded the opportunities that were afforded to him. He said he sees his award as a positive for the broader Australian community and has expressed his hope that it will give aspiring young Australian students the inspiration to pursue a career in their area of interest. Noting the prosperity of Australia, Professor Schmidt said a strong scientific legacy will only be attainable if 'we make our citizens the best educated in the world'. He has highlighted the importance of strategic funding and the management of the Australian education system. According to Professor Schmidt, 'They say in politics that education and science do not win elections but they are what make nations rise and fall.'

Professor Schmidt has been vocal in his public advocacy since winning the Nobel Prize, speaking out, for example, in defence of the strong consensus of Australian science that the world is warming and humans are causing that warming. I had the pleasure of meeting Dr Schmidt at an ANU reception last Friday. When I went up to shake his hand, he had just been mobbed by a group of what he thought to be about 200 students. He said it was not something he ever thought would happen to him on a university campus.

I asked Professor Schmidt what he thought was most important to report back to the parliament as the member representing the Australian National University, and he made two points. First of all, he said his Nobel prize was a reminder of the fact that the Australian National University is not just another university; it is an institution that was created with the notion of furthering research boundaries. It is the nation's premier research institution. Professor Schmidt said it was only at the ANU that he felt he could have done this prize-winning work. Secondly, Professor Schmidt reminded me that it is the international outlook of Australian academia that allowed him to do the work that he did. It allowed him to collaborate with international teams in the United States and Europe. Professor Schmidt said that, while many researchers in the US are at the cutting edge, sometimes they can forget to look outside the boundaries of their own country. That is not a mistake that Australian researchers typically make.

In closing, I would like to also pay tribute to the recent Nobel laureates in economics, an area which I know a little more about than physics. The Nobel this year went for work on empirical macroeconomics and particularly the identification of low-frequency macroeconomic events. These questions are absolutely critical in considering the optimal role of fiscal policy. Thomas Sargent did his work on structural econometrics, emphasising rational expectations, which is the notion that economic decision makers do not make systematic mistakes in forecasting. It is an important framework, particularly for interpreting the inflation and unemployment experience of the 1970s and 1980s. Christopher Sims did his work around vector autoregression techniques aimed at identifying the causal impact of low-frequency events using time series data. I commend them both for their work in economics.

Thanks to Claire Daly from my office for her work on this speech.
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Australian Youth Ambassadors for Development

On Wednesday, I spoke in parliament about the terrific Australian Youth Ambassadors for Development program (if you want to be an AYAD, click here).
Australian Youth Ambassadors for Development
12 October 2011


On 28 September I had the pleasure of farewelling the Australian Youth Ambassadors for Development on behalf of the Minister for Foreign Affairs. It was the second time I have done this, and it was an honour I greatly enjoyed. By coincidence, that morning I had opened the Thailand Update conference, the 21st conference of its kind, run by Peter Warr. It is a conference that aims to deepen academic relations between Australia and Thailand.

Among the Australian Youth Ambassadors for Development were people going to Cambodia, Indonesia, Papua New Guinea and East Timor. I was there with the Cambodian ambassador Mr. Chum Sounry and both of us were impressed by the high calibre of people going overseas. I told the youth ambassadors about the late Herb Feith, Australia's first international volunteer, and the extraordinary role he played in taking the best of Australia to the developing countries that surround us.
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Women in Business

I spoke in Parliament on Wednesday about the ACT Telstra Business Women's Awards.
Telstra Business Women's Awards
12 October 2011


I was recently privileged to attend the Telstra Business Women's Awards, which recognise outstanding women and their contribution to the business community. Past winners include some of Australia's most talented business leaders, whose career paths and individual achievements continue to inspire businesspeople around the country. It is often tough being a woman in business or in other leadership roles. In her book Delusions of Gender, Cordelia Fine tells the story of botanist Jeanne Baret and mathematician Sophie Germain, who around the turn of the 19th century were forced to pretend to be men in order to excel in the world of science. Thankfully, those kinds of games are no longer necessary. But it is still true that it is tougher to be a woman in business than it is to be a man.

I want to acknowledge the Telstra ACT Business Woman of the Year, Robyn Walker, from the Department of Defence. The Commonwealth Bank Business Owner Award went to Karen Nicholas from Learning Options in Manuka. The Hudson Private and Corporate Sector Award went to Janine Yokom from Westpac in Belconnen. Janine has an extraordinary life story. A back injury forced her to close her nail technician business. That opened a new opportunity for her to become leader of a team that is now recognised as one of the best performing among its peers. Joining Westpac as a bank teller in 1997, she was appointed local bank branch manager for the Belconnen area in 2006.

I also want to acknowledge White Pages Community and Government Award winner Robyn Walker; Nokia Business Innovation Award winner Barbara Reid from the ACT government Health Directorate in Woden; and Marie Claire Young Business Women’s Award winner Julie McKay from UN Women Australia. Julie's work with UN Women reminds us that so many of the challenges that talented women face around the world are bigger still than they are in Australia: the 'missing girls' that have been documented in so many developing countries; the awful discrimination that many women suffer and violence that women face in war zones from the Congo to Afghanistan. Of course, one of the main reasons that Australia is in Afghanistan is to ensure that young women in Afghanistan have the opportunities that are rightfully theirs.

In closing, let me pay tribute to the government's decision to remove gender discrimination in our armed forces and to acknowledge that, in deciding who goes into combat operations, ability rather than gender will be the sole requirement.

Thanks to Terese Corkish for putting me onto Fine's fine book, which I'd thoroughly recommend.
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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au