Andrew Leigh

Yesterday the new Assistant Treasurer, Josh Frydenberg, indicated that the government is working on yet another round of cuts for the upcoming May budget. Don't these people have any other ideas for managing the budget?

MEDIA RELEASE

ABBOTT GOVERNMENT’S ANSWER TO EVERYTHING: JUST CUT

The Abbott Government has today confirmed that its only economic strategy is to cut and keep cutting.

New Assistant Treasurer Josh Frydenberg has flagged a fresh round of cuts in the upcoming May Budget.

His comments come just a month after Treasurer Joe Hockey promised the Government wouldn’t keep cutting.

The Abbott Government’s first Budget ripped $80 billion from schools and hospitals, $23 billion from pensions, $5 billion from universities and $3 billion from Medicare.

As an economist, it's been fascinating to me to see how little impact competition from the Canberra Airport petrol stations is having on the rest of the market.

Here's a screenshot from PetrolSpy, a handy iPhone app that tracks petrol prices. Right now, the best price in Braddon is 125.9 cents per litre, compared with 98.7 cents per litre at the airport.

Let's put that into perspective. If you're filling up with 50 litres, a 27.2 cent/litre price difference translates into a $13.60 difference in the final bill. 

Now, suppose you had to drive the 16 kilometre round-trip from Braddon to the airport. Even in a car with average fuel economy (say 10 litres per 100km), you'd spend just $1.60 on the fuel to get there. That leaves the question of whether the net $12 saving in is worth the time taken to make the trip.

The fact that a large price gap persists suggests to me that either people don't know about cheap petrol at the airport (which would be surprising, since it's on the front page of today's Canberra Times). Or maybe Canberrans just aren't that price-sensitive (I don't use a fuel card, but I expect there are quite a lot of people who do). Or perhaps the law of one price will eventually kick in - it'll just take a month or two.

Any other theories?

With the news today that ANZ has thrown its support behind Labor's Future of Financial Advice reforms, the Abbott Government is looking increasingly isolated in its attempts to water down consumer protections.

MEDIA RELEASE

CONSUMER GROUPS, BANKS AND THE SENATE SUPPORT FOFA - WILL ABBOTT?

One of Australia’s largest banks has added its voice to the chorus of support for Labor’s Future of Financial Advice reforms, proving the Abbott Government’s plans to water them down go too far.

In a submission to the Senate Economics Committee, the ANZ bank has stated:

“ANZ believes the current regulatory framework, including the recent Future of Finance Advice changes, will improve the quality of advice and has put in place a framework to protect consumers from poor advice.”

- ANZ Submission to Scrutiny of Financial Advice inquiry     

In backing Labor’s reforms, the bank joins many other major organisations which have warned that rolling back the FoFA package will put Australians’ retirement savings at risk.

Canberrans and progressives around Australia were saddened last week to hear of the passing of Kep Enderby. In a piece for CityNews, I've reflected on the significance of his life and contribution.

Vale Kep Enderby, CityNews, 12 January

Jonathan Swift once said that ‘vision is the art of seeing the invisible’.

The ability to see through the fog of the present to the clarity of tomorrow exemplifies the great progressives of our time. From early on in his life and legal career it was clear that Keppel (Kep) Enderby was something of a master in this art. 

Initially drawn to a young and burgeoning Canberra in the early 1960s to lecture in Law at Australia’s new National University, Kep wasted no time making his presence felt in the Bush Capital. By 1970 he had secured Labor pre-selection for the Australian Capital Territory electorate, and entered Parliament that same year. 

My parents knew him through a mutual friend, and recall him as a whirlwind of ideas. Apparently, I stayed at his home in 1972. (It was a few months before I was born, so my memory is a little hazy.)

When then Attorney-General Lionel Murphy was appointed to the High Court in February 1975, Enderby went to Gough Whitlam with a forceful case for replacing him in the role. In an exchange characteristic of the period, Enderby went down to the Prime Minister’s office and told him: ‘oh come off it, I think I deserve it’. To which Whitlam reportedly replied: ‘all right, you bastard’. 

E&OE TRANSCRIPT

DOORSTOP INTERVIEW

PARLIAMENT HOUSE, CANBERRA

FRIDAY, 9 JANUARY 2015

SUBJECT/S: Coalition campaign to raise the GST; foreign fighters; Kep Enderby

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well the worst-kept secret in Australia is now out in the open, with Andrew Robb firmly declaring that he's in the camp for increasing the GST. This is, of course, a campaign which has been running as a guerrilla campaign for the first part of the year. Dan Tehan, Dean Smith, Ian McDonald – these are just some of the many members in the Coalition party room who want to increase the GST. With issues like this you've got to look to history. Labor introduced Medicare, so you should always think that we're looking for ways to expand and improve it. The Coalition introduced the GST, so you should always suspect that they'll be looking for ways to increase it. But fundamentally, expanding the GST would be bad for Australian families. And while Tony Abbott might appreciate Andrew Robb's effort today, Australian families aren't going to appreciate having GST put on their school fees, their healthcare costs and their fresh food. Happy to take questions.

First it was the WA Liberal Premier. Then it was a bunch of backbenchers. Now one of the Abbott Government's most senior Cabinet Ministers is calling for an increase in the GST. Looks like Tony Abbott's first broken promise for 2015 isn't far away.

 MEDIA RELEASE

ROBB BLOWS THE WHISTLE ON GST

The worst kept secret in Australia has been blown today, with senior Cabinet Minister Andrew Robb publically calling for the GST to be added to fresh food, health and education.

Minister Robb has today outed himself in The Australian Financial Review as the ringleader of the campaign within the Liberal Party to increase the GST.

This isn’t a guerrilla campaign being run by Liberal MPs – Australians now know the Liberal Party’s campaign to increase the GST goes right to the Cabinet table.

The Liberal Party has been running an orchestrated campaign to increase the GST for weeks now.

On 27 January I'll be speaking at the McKell Institute on multinational tax and inclusive growth. If you'd like to come along, you can RSVP to [email protected]

Following my op-ed in today's Daily Tele about the opportunities and benefits of the sharing economy, I joined Simon Marnie on ABC 702 Sydney to talk about how my colleagues and I in parliaments around Australia might tackle the regulatory issues raised by services like Uber and AirBnB. Here's the transcript:

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC 702 SYDNEY

TUESDAY, 6 JANUARY 2015

SUBJECT/S: opportunities in the sharing economy; cost of living

SIMON MARNIE: It's called the sharing economy. Basically, it's making an extra buck from what you already have: renting out a spare room, giving a ride to someone heading in your direction. But not everyone is a fan, mainly because of the legislative and regulatory sides that come into it. Federal MP Andrew Leigh reckons that the sharing economy could not only ease the cost of living, but could even make things like home ownership easier for Australians. He joins me on the line, good morning to you.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Simon, how are you?

MARNIE: I'm well. Now, I must say that I've been using UberX and I've been quite impressed with its ease and with its inexpensive nature. But it is, at its heart, still an illegal thing, isn't it?

LEIGH: That's right. Illegal for drivers, as I understand it, in most situations. The only exception that I know of in Australia right now is that the South Australian Government is allowing hire car drivers to pick up passengers using Uber Black. So that's once they've passed the regular hire car checks. 

MARNIE: So with your background in economics, why have you got such high hopes for services like this and the idea of the sharing economy?

LEIGH: Well Simon, if you think about the two big challenges for an extraordinary city like Sydney, high on your list would have to be housing affordability. The average house used to be three times median incomes, now it's seven times median incomes. And commuting times would be the other one, with the roads gridlocked as you've been speaking about this morning. The potential, I think, to make better use of our housing stock through services like AirBnB is really important. We've got nine million unused bedrooms in Australia at the moment, and yet we've got this housing affordability crisis going on. We've got gridlock choking the streets of our major cities, and yet potentially there's these ways of linking up people who need a ride with people who have a spare seat. 

With more Liberal MPs out promoting the idea of slapping the GST on fresh food, I joined Chris Mac on 2CC Canberra to talk about why the government shouldn't break its promise on changing this tax. Here's the transcript:

E&OE TRANSCRIPT

RADIO INTERVIEW

2CC CANBERRA

TUESDAY, 6 JANUARY 2015

SUBJECT/S: Liberals’ plans to put GST on fresh food

CHRIS MAC: Well, Dan Tehan, the federal member for the seat of Wannon has launched into a little bit of kite-flying, I think you'd have to say, on behalf of his Coalition colleagues. That was to suggest that it was time to look at the GST and look at either increasing its rate or broadening its base. Currently the GST doesn't apply to fresh food, doesn't apply to much of the education area, nor does it apply to health care. It's these areas where the base may well be broadened and you and I could be paying a whole lot more, 10 per cent more, for a whole lot of things. Andrew Leigh is the Shadow Assistant Treasurer in the federal Opposition. He's also the federal Member for Fraser here in the ACT and he joins us on the line. Andrew Leigh, a very good morning to you.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning to you, Chris.

MAC: Well, let's have a look at this. It's an interesting one, and you know that I'll ask you the question about what you'd do in a moment. But here we have Dan Tehan getting the kite out and giving it a bit of a fly on the GST.

LEIGH: It's pretty extraordinary stuff, isn't it Chris? I mean, this is a government that came to office after saying more than 30 times that they wouldn't increase the GST, and now they're sending out their Committee Chairs and junior ministers to float increases to the GST. Josh Frydenberg, I noticed, is out there too, and you just feel that with this Government, keeping promises is something for other people. They're above the whole business of keeping promises and having said something more than 30 times before the election doesn't mean they won't break that promise now.

MAC: Alright. When you look at this situation, the Prime Minister and Greg Hunt, the Environment Minister, and others in the government have all trumpeted the Treasury modelling which suggested the repeal of the carbon tax was going to save the average family some $550 or $10 or $11 a week. But if you put the GST on fresh food, on education - schoolbooks and other items related to education for kids and tertiary students - and also on services in the healthcare sector, what would that mean in terms of increased costs to regular Australians?

LEIGH: Well certainly, my back-of-the-envelope calculation says that you get a bigger price effect than the carbon price did. And of course with the carbon price you got the benefit of a cleaner environment. We saw the biggest drop in carbon emissions in a quarter of a century after the carbon price was put in place. But with this, Australians will be thinking, well, why should I be paying 10 per cent more for my apples, why should I be paying 10 per cent more for private school fees, why should I be paying 10 per cent more for health costs? Those will be huge concerns for Australians who are struggling under cost of living pressures.

As someone who is interested in how we can make more efficient use of existing assets and help families with their cost of living, I'm excited by the potential posed by the emerging 'sharing economy'. In this op-ed for the Daily Telegraph, I've explained how I reckon services like AirBnB can help make a difference.

Nine million empty bedrooms a waste, Daily Telegraph, Tuesday 6 January

How many bedrooms would you say are going spare right now across Australia? How many perfectly good rooms are being used for storing disused dumb-bells and dusty DVDs?

The latest Census says the answer is about nine million more than one for every three Australians.

That's nine million spare rooms which could be put to productive use if only there was some way to match people who own rooms with people who'd like to stay in them.

As it turns out, there is. AirBnB is one of a host of new "sharing economy'' services linking people who own stuff they're not using with those willing to pay to do so.