Climate Change Science

I spoke in parliament yesterday, seconding a motion by John Murphy on the science of climate change.


Private Members’ Business
Climate Change
22 November 2010


‘We are playing Russian roulette with features of the planet’s atmosphere that will profoundly impact generations to come. How long are we willing to gamble?’ These are not my words but the word of David Suzuki, well-known scientist and academic. Do these words have relevance in this 43rd Parliament? That is the answer those opposite must provide, the test by which they will be measured.

The science behind climate change is not new; it has not recently emerged. It is based on a body of science over 100 years old. Governments and policymakers for the past 21 years have been provided with an assessment of the state of knowledge in global climate change science by the Intergovernmental Panel on Climate Change. The 2007 Fourth Assessment Report of the IPCC, a report based on the work of more than 1,250 scientists from 130 countries, the national academies of sciences of each of the Group of Eight countries along with those of India, Brazil and China, plus our own national Academy of Science, agree with the conclusion that global warming is likely caused by us.

Much has been made of two minor errors in the 2007 IPCC report. But these errors are minor, did not affect the overall findings and went to the effects of climate change, not whether it is occurring, which is the question we are debating today. As the Royal Society wrote:

There is no greater uncertainty about future temperature increases now than the Royal Society had previously indicated.

The science remains the same, as do the uncertainties. … There is strong evidence that changes in greenhouse gas concentrations due to human activity are the main cause of the global warming that has taken place over the past half century.

Some who do not accept the overwhelming body of science point to the uncertainties. As Professor Will Steffen has noted, climate scientists are now 100 per cent certain that the world is warming and 95 per cent sure that humans are the primary cause.

A balanced assessment of the available evidence and prior knowledge allows levels of confidence to be attached to scientific findings. Just as we know that asbestos is very likely to cause malignant mesothelioma and bad cholesterol is very likely to increase the risk of a heart attack, we know that society’s greenhouse gas emissions are very likely causing global warming. Just imagine that you had a sick child, and 95 out of 100 doctors told you that the child needed a life-saving drug. Would you really follow the advice of the other five doctors?

To those who disagree with the overwhelming scientific consensus on human induced climate change, I lay down this challenge. Today is the day for you to get on the record. When the next generation looks back to this debate, I want them to know what I stand for. And I want them to know what you stand against. In the words of Rupert Murdoch:

Climate change poses clear, catastrophic threats. We may not agree on the extent, but we certainly can’t afford the risk of inaction.

The risk of inaction is too high.

I wish to place on record my thanks to Shobaz Kandola, my adviser, for his assistance in this speech and to acknowledge the presence in the public gallery today of my friend Macgregor Duncan, who works for Better Place, an electric car company.

Climate change is a problem which has been caused by us and by our parents. It is a problem whose effects will be felt by our children and their children. It is right, it is just and it is the honourable course for us to begin to make amends for our actions. The costs should be ours to bear; the benefits reaped by our children. The science informs us that there is a problem. Scientists tell us that action must be taken. The economics makes it clear that the cost of inaction is too high. Economists advise us that the sooner we act, the less the cost.

To act on climate change is to invest for the present and for the future. We will recoup the costs. We will all prosper. To act on climate change is to act in the national interest, to invest in our prosperity, in our wellbeing and in the health of the environment. Those who stand for inaction and those who do not accept the science stand against the national interest. Let us agree to this motion in unanimity, and let those opposite join with us and with the crossbenchers in a debate about the merits of action. Our parliament is fitting of such a debate and our nation deserving of a contest of ideas to help solve a great challenge facing Australia.
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ACT Children’s Services Awards

I spoke in parliament yesterday about the ACT Children's Services Awards.


Statements by Members
ACT Children’s Services Awards 2010
22 November 2010


On the night of 29 October 2010 I had the privilege of joining Joy Burch, the ACT Minister for Children and Young People, Maureen Cane, the CEO of Communities@Work, and Lynne Harwood, CEO of Galilee, for the 2010 Children’s Services Awards night.

The event was a celebration of early and middle childhood educators and the difference which these educators make to the lives of children and families in the Canberra community. Having a one-year-old and a three-year-old who attend day care, I know firsthand the important and inspirational work early childhood workers undertake throughout our community each and every day. They light the spark of creativity and learning in our children; they help open the door to a world full of possibilities.

The awards recognised a number of individuals, as well as organisations, for their hard work in helping children and families. In total, 15 awards were presented on the night and while time does not permit me to name all the worthy recipients, I would like to conclude by mentioning that each nominee was not just supported by their organisation but by the children in their care and the children’s families.

It is clear that each and every award winner and nominee’s work was shaped by the needs of their children. We are lucky to have such excellent people working in the Canberra community to care for our young children.
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Liu Xiaobo

I spoke in Parliament yesterday, seconding Michael Danby's private members' motion on Liu Xiaobo.


Private Members’ Business
Mr Liu Xiaobo
22 November 2010


I have always viewed the challenges facing China with a sense of awe. Since the great opening of the Chinese economy in 1978, China’s economic achievements have been nothing short of remarkable. Rapid economic growth has improved the livelihoods of hundreds of millions of Chinese. According to the World Bank, China’s per person GDP rose from US$524 in 1980 to US$6,200 in 2010—a twelvefold increase. And this is in 2005 dollars, so the figures do not take account of inflation. Over the same period, the share of the Chinese population living in extreme poverty—below $1.25 a day—fell from 84 per cent to 16 per cent, while the share of the population living below $2 a day fell from 98 per cent to 36 per cent. In The End of Poverty, Jeffrey Sachs wrote:

China is likely to be the first of the great poverty-stricken countries of the twentieth century to end poverty in the twenty-first century.

He also pointed out:

By the year 2050, it is reasonable to suppose that China will reach around half of the Western European income average, restoring China’s relative position at the start of the industrial era.

In addition, the level of general education has been greatly improved since 1990. Average adult education levels were less than five years in 1982 but over seven years in 2000. In 1982, 232 million Chinese people were illiterate. In 2000, the figure was 85 million. The Chinese economic reforms have transformed lives. Men and women, farmers, factory workers and service workers all prospered in a social environment which now permitted the accumulation of individual wealth.

This brings me to Liu Xiaobo. Born on 28 December 1955 in the north-eastern city of Changchun, Liu Xiaobo has long been a passionate man of letters. He was in Beijing in 1989 when the ongoing student demonstrations of the era grew to encompass much of Beijing’s civil society. Liu has been an intellectual leader. For him, the Tiananmen Square protest and resulting crackdown was a deeply formative experience. Released from prison 20 months later, he wrote:

My eyes were opened by 4 June and the death of the martyrs and now, every time I open my mouth, I ask myself if I am worthy of them.

That was over 20 years ago. To the present day Liu has remained an unceasing advocate for democratic reform, never losing his passion for truth and justice or his demand for the state to recognise human rights. His deeply poignant writing, with its overwhelming commitment to the commonality of all humanity, must rank amongst the most heart-moving of literary protests. In spite of long periods of detention he never faltered in his humanity or love for others. His recent trial statement was dedicated to his wife, Liu Xia, while his Nobel Prize was dedicated to the ‘lost souls’ of Tiananmen Square.

As the new China emerges it desperately needs Liu Xiaobo. It needs his courage to speak truth to power; it needs his advocacy on behalf of the dispossessed; it needs him to argue for an independent legal system, freedom of association and for citizens’ rights. China is a big country, and its future is best assured by trusting and relying upon its greatest strength, its more than one billion people. China faces many tough issues, not least of which is uneven progress and rising inequality. Brave spokespeople like Nobel Prize winner Liu Xiaobo are the key to the emergence of a civil society that will only serve to strengthen China. It is a tragic mistake for the government to intimidate and attempt to silence those whose concern is to articulate the needs of the people.

Due to the great number of shared interests that China and Australia have in common I believe it is appropriate to speak to motions such as this. As I have outlined, the Chinese government has shown real commitment and real results when delivering lasting economic reform, all to the benefit of ordinary Chinese citizens. But as the case of Liu shows, there is scope for other issues of reform to be raised and aired. I fear that no-one benefits if China’s reforms stop at the economy. Speaking at Peking University in 2008, the present foreign minister said:

A true friend is one who can be a zhengyou, that is a partner who sees beyond immediate benefit to the broader and firm basis for continuing, profound and sincere friendship.

As a member of a party formed to represent the workers of Australia, I speak in the same spirit as the foreign minister spoke to Chinese students. I am proud to second this motion honouring such a courageous advocate, a man who has committed his life to improving the lot of the people of China and to doing so entirely through non-violent means.
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Australian Securities Exchange

I spoke in parliament yesterday on a private members' motion moved by Bob Katter on the ASX/SGX.


Banking Amendment (Delivering Essential Financial Services) Bill 2010
Australian Securities Exchange
22 November 2010


Australia has a strict and comprehensive regulatory process in place to ensure that decisions on proposals like this are always taken in our national interest. The government also has a strong commitment to build Australia as a finance centre and a regional hub for financial services. Of course, this means preserving the market integrity of the ASX and continuing to boost Australia’s reputation as one of the most attractive investment destinations in the world.

A proposal of this type is subject to extensive regulatory consideration under both Australia’s foreign investment policy and the Corporations Act. Australia applies a rigorous national interest test to all proposals for foreign government investment and significant foreign private investment. This particularly applies to a transaction of this scale and importance. The screening process to consider the proposal will be undertaken by the Foreign Investment Review Board in the normal way. FIRB will seek advice from other government agencies, including ASIC and the Reserve Bank, on whether the proposal is contrary to the national interest. The government always has taken—and always will take—these decisions in Australia’s national interest. This is the overriding consideration for foreign investment proposals.

As members may be aware, on 1 August 2010 the government transferred supervision of Australia’s financial markets to ASIC. These reforms will enhance the integrity of Australia’s financial markets and help promote Australia as a financial services hub in our region. Australia’s financial regulators put their world-class reputation beyond doubt during the crisis. Our financial system came through with flying colours. Australia’s financial system has performed better than any other during the global financial crisis and these reforms will ensure that Australia’s regulatory arrangements remain among the best in the world. The ASX is an important part of financial system’s architecture. The government will continue to consider all transactions with an objective of carefully and methodically building Australia’s reputation as a financial services hub in the national interest.

Australia’s foreign investment framework is longstanding and reflects strong bipartisan support over a number of decades. It balances the need to ensure Australia’s economy can benefit from foreign investment with the need to ensure that investment is in the national interest. The government examines all foreign government investment proposals and significant private investment proposals on a case-by-case basis to ensure they are in the national interest. This means assessing the impact on the economy, the community, national security and revenue.

But federal Labor has also made important improvements to the foreign investment framework. We released national interest principles to improve transparency around how the national interest test is applied. In June of this year we released the easy-to-read version of the policy to further improve transparency of the regime. Our approach maximises investment flows, grows regional communities and creates job opportunities right across Australia, while protecting our national interests.

In conclusion, I draw the House’s attention to the findings of the Johnson report earlier this year, which noted that economic research demonstrates a well-established causal link between financial sector development and economic growth. Having an open, efficient, well-regulated and competitive financial sector is thus in the interests of all Australians.
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Early Childhood Intervention

I spoke in Parliament yesterday about early childhood intervention (my first chance to fulfill the promise I made in my maiden speech to mention randomised policy trials on a regular basis!).


Main Committee
ADJOURNMENT
Early Childhood Intervention
18 Nov 2010


Dr LEIGH (Fraser) (12:38 PM) —On 1 November I visited UnitingCare Kippax in West Belconnen and was shown around by Gordon Ramsey and Uniting Care national director, Lin Hatfield Dodds. It was at this time that I was able to familiarise myself with NEWPIN, the New Parent Infant Network, which is a program that aims to increase children’s safety, wellbeing and life opportunities through early intervention. NEWPIN has received considerable praise since its introduction to Australia. I was similarly impressed by the potential of the program to break the transmission of intergenerational disadvantage through the positive construction of social networks and community based involvement.

NEWPIN is a program targeted at disadvantaged families most in need and facing child protection issues. In UnitingCare Kippax, NEWPIN takes place in a setting that aims to mimic a comfortable lounge room and kitchen. The program aims to foster healthy internal relationships by teaching skills such as how to cook a meal with three cranky kids around your feet. It aims to alleviate financial and emotional stress on families and to encourage both cognitive and noncognitive development. At UnitingCare Kippax I was informed that 30 per cent of families served by the centre were Indigenous. Gordon Ramsay told me that their work was ‘fundamentally about hope and reconciliation’. It is also the case that former users of the program in Australia are also being employed by NEWPIN.

We know relatively little about intergenerational patterns of poverty, but we do know that a son whose father is out of work for six months has triple the odds of being long-term unemployed when he grows up and a boy who witnesses parental violence in childhood is six times as likely to hit his spouse in later life. Correlation is not causation, but early experiences seem to matter.

In Australia, our early childhood programs owe a great deal to randomised evaluations of high-impact early childhood intervention programs carried out in the US. There, careful economic evaluations based on randomised trials from the Abecedarian, Perry Preschool and Early Training projects have shown that providing intensive assistance to disadvantaged children and their parents is not just morally right; it can be wildly cost-effective too.

These programs admitted children into preschool at an early age, sometimes as young as four months, and focused on developing cognitive, language and social skills. The target population was extremely disadvantaged. From a young age their IQ scores were below the US average. In the Perry Preschool program, two-thirds of girls in the control group had fallen pregnant in their teens, while more than half the boys had been arrested.

When researchers followed both the treatment groups and the control groups they found that those who received early childhood intervention were doing better on most measures than those in the control group. The programs cost, in Australian dollars, about $15,000 to $50,000 per child, yet they easily paid for themselves in reduced welfare spending, higher tax revenues and less crime. Set against sometimes disappointing results from other antipoverty programs, early childhood interventions look even better.

A program like NEWPIN appears to follow very much in the vein of the Abecedarian, Perry Preschool and Early Training projects. Because it is targeted at a very disadvantaged population, it is potentially extremely cost-effective. For this reason, it would be useful to have a randomised evaluation of an Australian program like NEWPIN. In Australia there have been two small-scale evaluations of NEWPIN but neither—to the best of my knowledge—used random assignment.

This is not because random assignment is impossible. A handful of randomised trials of small early intervention programs have been run by researchers at the University of Queensland, while major early childhood programs are currently undergoing randomised evaluation thanks to researchers at the University of Chicago, Geary Institute at University College Dublin and other institutions.

We should also be reluctant to dismiss randomised trials on the basis that no potentially worthy program should ever be denied to someone. The very reason that a randomised trial denies treatment to those in the control group is that we do not know whether or not the program works. Indeed, anyone concerned about the ethics of random assignment need only look to the NRMA CareFlight team, led by Alan Garner, which has been running the head injury retrieval trial, a randomised evaluation of use of the NRMA CareFlight helicopter.

I commend the hard work of those at Uniting Care Kippax and the promising developments being undertaken through programs such as NEWPIN. I hope that through them we will continue to improve the evidence base around early childhood programs. There is no contradiction between rigorous evaluation and a great sense of hope and optimism about our ability to break the intergenerational poverty cycle once and for all.
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Learning Behind Bars

I spoke in Parliament yesterday about the issue of education programs in prisons. I'm grateful to Emily Murray, a volunteer in my office who helped with the speech.


ADJOURNMENT
Prison Education Programs
17 November 2010


Dr LEIGH (Fraser) (7:35 PM) —I rise tonight to acknowledge the importance of prison education programs for both prisoner rehabilitation and the welfare of Australian society. I commend the efforts of prison staff, justice staff, volunteers and detainees, who are working together to develop and implement prison education programs across Australia. The current incarceration rate in Australia today is 175 prisoners per 100,000 adults, up from 112 prisoners per 100,000 adults in 1990. For the most part, the growth in Australia’s prison population has been driven not by a rise in crime but by law changes, such as tougher bail conditions and mandatory non-parole periods.

On 2 November 2010, I spent a morning behind bars at the Alexander Maconochie Centre, Australia’s first ‘human rights jail’. The jail operates in compliance with the ACT Human Rights Act as well as with the World Health Organisation’s Healthy Prison concept. The concept provides that everyone within a prison must feel safe, be treated with respect, have opportunities for self-improvement, have the chance to maintain contact with their families and be prepared for release. However, despite the dedication of Australia’s corrections officers and corrections management departments, some prisoners lose trust in the officers’ capacity to protect them and uphold their basic rights. Some prisoners do not believe that the officers believe that the prisoners can make a positive contribution to society. Such prisoners have a real prospect of losing all respect for the Australian community and legal system, and of losing all fear of breaking the law.

The Alexander Maconochie Centre aims to rehabilitate prisoners. However, such reformation cannot occur without intervention in the prison culture—the mentality and the way of life that may protect the inmates while they are detained but that presents real dangers both to Australian society and to the inmates themselves once they are released.

Many prisoners have not completed high school. Research by David Deming of Carnegie Mellon University in Pennsylvania indicates that formal education drastically reduces the arrest rate among adolescents that are most at risk of committing crimes. Work for the Australian Institute of Criminology by Jason Payne and Jeremy Prichard has found that prisoners with lower educational attainment are more likely to reoffend. Increasing the educational opportunities available to people at risk of reoffending would reap huge rewards for the community. After all, the costs of repeated incarceration and of future crimes are far higher than the cost of better education programs.

Prison education programs, when well designed and implemented, can reveal to prisoners the possibility of an alternative mindset to the prison culture. Prisoners are encouraged to realise that the prison culture need not define or limit them. Education programs offer the detainees an insight into the world, their community and the people who work to improve it. Prison education programs are run by prison staff or independent teachers, often on a volunteer basis, and vary in content across different prisons. Detainees may commence or resume their schooling, covering any topic from initial literacy and numeracy skills to the qualification requirements for secondary or tertiary graduation, or trades such as welding or carpentry. The programs may be aimed at re-educating sex offenders, alcohol or drug addicts, violent offenders or prisoners with behavioural disorders. Prisoners may be offered financial planning advice or legal literacy education to help them understand their rights and responsibilities within the prison and the wider community.

Ultimately, prisoners are offered an alternative perspective on the world and aided to understand how their behaviour sits in the context of the wider community. By facilitating contact within the prison population and the wider community, prisoners are re-engaged with society and can develop respectful relationships with people on the outside. However, education programs must be designed to target prisoners’ needs effectively: the subject matter should be applicable to prisoners and presented in a way that prisoners can understand. As a society, we need to work harder to increase the take-up of prison education programs. For example, in the case of private prisons, governments should consider writing contracts that pay providers more when they succeed in raising inmates’ education levels.

For Australia, the total cost of prisons is nearly $3 billion per year, or about $100,000 per prisoner. Yet the real cost of incarceration comes afterwards, with ex-prisoners more likely to commit further crimes and less likely to find a job. Sexual violence in prison probably is not as common as in the 1990s, when New South Wales magistrate David Heilpern estimated that one-quarter of young male prisoners were raped, but the rate is likely higher than in the outside world. It is critical that we make prisons safe if we are to make rehabilitation programs work in Australian jails. The continued success of prison education programs relies upon Australians’ support. Getting prison policy right is not easy, but if there is one country that can show the way it should be Australia: the nation that showed the world that if they’re given a chance, convicts can do just as well as anyone.
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MindMatters

I spoke in Parliament yesterday about the MindMatters program.


STATEMENTS BY MEMBERS
MindMatters Inaugural School Recognition Event
17 Nov 2010

Dr LEIGH (Fraser) (1:55 PM) —On 4 November I represented the Minister for Mental Health and Ageing, Mark Butler, at the MindMatters inaugural school recognition event at the Canberra Business Events Centre, Regatta Point. MindMatters is a national mental health initiative funded by the federal government and implemented by Principals Australia, which promotes a whole-school approach to mental health and wellbeing in Australian secondary schools.

I proudly presented awards to an outstanding group of students, teachers and principals from all across Australia. The 16 schools and colleges included Mount Barker College in Western Australia, Adelaide Secondary School of English, Taminmin College in the Northern Territory and Canberra’s very own Marist College. I would also like to acknowledge Sheree Vertigan and Heather Parkes, from Principals Australia.

Research has shown that many mental health problems among adults had their origins in childhood. We know that 14 per cent of young Australians aged between four and 17 have mental health problems, while only one out of four of those will receive professional health care. These children may face increased difficulty forming and maintaining positive relationships and engaging in schooling. The mental health of Australian children directly impacts Australia’s social and economic wellbeing.

I thank MindMatters and all participants for an outstanding awards event that celebrated not only their hard work and commitment but also the wealth of vital knowledge that is gained from delivering mental health education in Australian schools.
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Reforming the World Bank

I spoke in Parliament yesterday on reforming the World Bank.


International Financial Institutions Legislation Amendment Bill 2010 
Second Reading
17 Nov 2010


Dr Leigh (Fraser) (10:04 AM) —According to the World Bank, there are currently around 900 million people in the world living on less than a dollar a day. The World Bank calls this extreme poverty. That means there are 900 million people who woke up today to try to feed a family on approximately what many of us in the room would have spent on our morning coffee.

Oxford development economist Paul Collier, who is visiting Australia next week, has referred to this challenge as that of lifting what he calls the ‘bottom billion’ out of poverty. These are the people living in countries that have experienced stagnant growth rates and where flows of aid in the past have frankly not done what we hoped they would. On balance, aid has raised living standards but we know that mistakes have been made. We know that foreign aid requires more than good intentions.

Effective development economics requires an ongoing assessment of what we do and a critical focus to balance the optimism and the best of intentions that go with our aid programs. I very much appreciated having the opportunity to speak with various groups in my electorate about these challenges we face in overseas aid—groups such as Micah Challenge, World Vision and Oxfam.

Essential to what Australia does in the foreign aid portfolio is the modernisation of the multilateral banks. These institutions have been critical in the fight against global poverty and it is important we make sure that we as Australians do what we can to make sure that the multilateral banks continue to respond to new challenges. Australia’s engagement with multilateral organisations extends the reach and scope of Australia’s country and regional aid programs.

The World Bank is one of the central partners in Australia’s aid program. Its convening power allows it to lead donor coordination at a country level and a sectoral level. In days like these it is worth mentioning that the World Bank is a bank that we can be proud of.

The International Financial Institutions Legislation Amendment Bill 2010 will do two things. Firstly, it will give effect to Australia’s G20 commitments to ensure that the multilateral banks have sufficient capital to be as responsive and flexible as possible in the environment that follows the global financial crisis. Secondly, the bill will also allow Australia to adopt a proposed amendment to the articles of agreement to the International Finance Corporation—the IFC—and four amendments to the Multilateral Investment Guarantee Agency Convention that have recently been adopted by that agency’s council of governors.

Australia’s increased investment will also allow the World Bank to provide lending to middle income countries, such as Indonesia and China, to support their recovery. The investment will provide greater resources for those in the ‘bottom billion’ and will also allow for more rigorous evaluation of what works in increasing living standards and what does not work.

Growth in developing countries during the period of the global financial crisis fell from an average of about seven per cent in the preceding five years before the GFC to just 1.6 per cent in 2009. That has meant that an additional 64 million people around the world have been thrown into extreme poverty—the equivalent of feeding a family on less than the price of a cup of Australian coffee.

World Bank lending is playing a critical role in supporting recovery in developing economies and therefore supporting recovery in the global economy. Some developing countries are doing well—China of course comes to mind—but the crisis is going to have significant lasting impacts by increasing the poverty of the most vulnerable people in the world.

The World Bank and the IMF played a key role in the crisis. Indeed, I cannot resist pointing out on this occasion that when the IMF looked at Australia’s policy response, it was one of the international organisations—though by no means the only one—that noted that Australia’s fiscal stimulus was timely and appropriate to the needs of the crisis. Direct responses included US$750 billion by the IMF and US$235 billion by the World Bank. In its recent meetings, the G20 has committed to achieving an extra $US350 billion in capital increases for the World Bank, which will allow the World Bank to nearly double its lending.

The G20 is also committed to ensuring that developing countries increase their voting power within the World Bank. It is these voice reforms which the legislation today is going towards. It is important that Australia demonstrates commitment to the G20 agenda by ensuring prompt implementation of these reforms.

Australia has much to gain by increasing its support for the World Bank. Subscription to more shares shows Australia acting as a good international citizen, particularly in response to the global financial crisis. It is also in our national interest to live in a world with less poverty. Australians have shown through their individual contributions to non-government aid that they believe passionately that a world without poverty is a goal worth striving towards. I believe Australians want their government to work towards the same goal. The capital increase demonstrates the government’s willingness to be a global leader on issues related to development and our commitment to the World Bank. It fulfils the G20 commitment to ensure adequate capital resources. In this sense, the reforms we are speaking about today are of a piece with the review of the aid program announced by the Minister for Foreign Affairs this week.

These amendments introduce no substantial changes to Australia’s obligations to either the IFC or the MIGA. Australia’s actual shareholding will remain unchanged as a result of the increase in basic votes, while its voting share will decline marginally—and I will come to that issue in a moment.

First, I want to briefly mention what the World Bank and its various arms do. The overall goal of the World Bank is to provide financial and technical assistance to developing countries around the world, but it does that through five separate arms: (1) the International Bank for Reconstruction and Development, IBRD, is the oldest arm of the World Bank and its goal is to reduce poverty in middle-income countries and creditworthy poorer countries, operating in the traditional way that the World Bank has since its inception; (2) a newer arm of the World Bank, the International Development Association, IDA, focuses on the world’s poorest countries. Their work is complemented by that of the International Finance Corporation, IFC, the MIGA and the International Centre for Settlement of Investment Disputes; (3) the IFC contributes to the World Bank’s overall poverty reduction mandate by operating with the private sector in both middle- and low-income countries. The IFC is the largest provider of multilateral financing for the private sector in the developing world; (4) the MIGA promotes foreign investment into emerging economies by offering political risk insurance or guarantees to investors and lenders. It also provides technical assistance and advice to help developing countries attract and retain that critical foreign investment that can allow them to grow out of poverty; and finally (5) the International Centre for Settlement of Investment Disputes is an autonomous institution that supports foreign investment by providing international facilities for conciliation and arbitration of investment disputes between foreign investors and their host countries.

The World Bank’s work focuses on overcoming poverty through inclusive and sustainable globalisation. The World Bank seeks to alleviate poverty in developing countries by building the climate for investment, jobs and sustainable growth and by investing in and empowering poor people to participate in development. Participatory development is a critical arm of the new strategy to bring more people in the world out of poverty. Together, the arms of the World Bank provide low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health and public administration; infrastructure; financial and private sector development; agriculture and environment; and natural resource management.

The reforms that this bill envisages are part of a new World Bank strategy that arose in its 2010 meetings. The World Bank has set its strategic priorities as follows: to target the poor and the vulnerable, to create opportunities for growth, to promote global collective action, to strengthen governance, to manage risk and, importantly, to prepare for crises. Australia is a strong supporter of the new World Bank strategy. Australia is supporting the World Bank’s key role in promoting development. It is worth remembering that the World Bank only employs about 10,000 people—half the number of the Australian Taxation Office—and over 3,000 of those employees work in the more than 100 country offices in the developing world. Many of my friends, including Patrick Barron, have spent time working in those different World Bank offices. I have seen firsthand, in visiting the World Bank offices in Jakarta, the important work that is done in those field offices as well as in the central office in Washington, DC.

I mentioned that I would come to the issue of reduced voting power, because it is obviously an issue that raises an eyebrow to be bringing forward legislation which reduces Australia’s voting share. The first point that is worth making about this is that the reduction is very small. Australia currently holds 1.49 per cent of voting power, and this will be reduced to 1.33 per cent following the second phase of voice reforms implemented in this bill. It is a small decrease which is part of a large package of reforms, recognising that the World Bank has to keep pace with changes in the world economic environment and that, if we do not modernise the World Bank, the institution risks becoming out of date and not serving those who need it the most.

Shareholding in the World Bank, including the IBRD and the IFC, is subject to periodic capital increases. Australia last subscribed to additional shares through the International Bank for Reconstruction and Development (Share Increase) Act 1988 and the International Bank for Reconstruction and Development (General Capital Increase) Act 1989. Australia’s total shareholding in the IBRD totals 24,464 shares and in the IFC totals 47,329 shares.

In conclusion, Australia has been part of the multilateral banks since the very beginning. Indeed, you might ask why we were not there from 1944. The answer actually comes back to the history of my own party when it was first faced with the Bretton Woods agreement in 1944. In his biography of Ben Chifley, David Day points out that it was Chifley who wanted his colleagues to ratify the Bretton Woods agreement immediately in 1944. But he delayed it because he faced considerable opposition within caucus, particularly from Eddie Ward, and he eventually pushed back. As David Day writes:


Chifley had a vision of a postwar Australia that would put the 1930’s depression behind it forever. It would be an outward looking country engaged with the world through trade, diplomacy and economic aid.


After his caucus colleagues supported the Bretton Woods agreement—though only by 33 votes to 24—Chifley told this House:


Perhaps the experiment will fair. But no country which has any regard for the cause of humanity can, for some selfish reason or because some ghosts of the past happen to walk or because of fears created by their experience of a financial and economic depression, refuse to become parties to this agreement. If we have any love for mankind and desire to free future generations from the terrible happenings of the last 30 years, we must put our faith in these organisations.


Australia has done that. The ninth World Bank president—and one of its most successful—was Australian-born James Wolfensohn, who served from 1995 to 2005. More broadly, Australia as a nation has been a consistent supporter of the work of the multilateral banks. As the bank modernises, so must our policy response. We owe nothing less to the world’s poorest.
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Operation Santa


 Operation Santa


Dr Andrew Leigh, Federal Member for Fraser, today launched the 2010 UnitingCare Kippax 2010 Christmas Appeal. 

Operation Santa, a combined effort of UnitingCare and Target Australia will help bring Christmas joy to people in need throughout Australia. This year is the 19th year of the partnership between UnitingCare and Target and the partnership has helped 1.7 million Australians in this time.



“There are too many in our community who struggle in the festive season and I encourage all Canberrans to help bring a bit of Christmas cheer to those less fortunate,” said Dr Leigh.

“This year’s campaign is being launched early to ensure we can get the help of as many Canberrans as possible and get the gifts distributed in time for Christmas.

“UnitingCare is working with Anglicare, the Salvation Army and St Vincent De Paul. The appeals aren’t about any one organisation but rather it’s about the children, making sure they have a smile this festive season.

“A gift not just a gift, the experience of receiving a gift – especially from an unexpected act of generosity – has a lasting positive impact.

“I hope we all think about those less fortunate than ourselves this festive season,” concluded Dr Leigh.

Gifts can be left at any Target store in Canberra as well at UnitingCare Kippax in Luke St Holt where financial donations can also be made. 

In 2009 UnitingCare Kippax distributed over 1100 gifts which had been donated by Canberrans through the Gift Appeal. UnitingCare Kippax also provided nearly 500 Christmas gift hampers and 470 movie packs for teenagers in the Teenage Gift drive.
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Economic Reform

I spoke yesterday on the Matter of Public Importance debate - on the topic of economic reform.


Matters of Public Importance - Economy
16 November 2010


Dr Leigh (Fraser) (4:38 PM) —In rising to speak on this matter of public importance I want to make three points to the House today. Firstly, the strength of the Australian economy is testament to Labor’s good economic management. Secondly, Labor is committed to economic reform in the future. Thirdly, that those opposite have no commitment to economic reform.

Let us turn first to the strength of the Australian economy and Labor’s track record. When it came to dealing with the global downturn, Labor delivered household payments to low-income households and much-needed infrastructure to everyone. It is unclear whether the coalition would have done anything at all in response to the greatest global downturn since the Great Depression. But if they had, it probably would have been tax cuts for the rich. In contrast, Labor’s strategy was exactly what international groups such as the G20, the OECD and the IMF recommended: ‘timely, targeted and temporary’ fiscal stimulus. We should always be trying to get the level of unemployment below what it is today, but we can be proud of our successes. There would be another 200,000 unemployed Australians today were it not for the fiscal stimulus that the Labor government put in place. We did that with remarkably little debt. Australia’s net debt will peak at six per cent of GDP in 2011-12. By contrast, the average net debt of the G7 countries is expected to peak at nearly 100 per cent of GDP.

Moreover, our debt load has at least as much to do with revenue falls as it has to do with spending increases. The global financial crisis stripped $110 billion out of the budget. Anyone who argues that we should not have taken on a small amount of debt to accommodate this is effectively saying that when the global financial crisis came we should have cut spending or raised tax rates. If that is the position they are taking, it is up to them to tell us which programs they would have cut and which taxes they would have raised.

But when it comes to talking about the current state of the Australian economy, don’t just take my word for it. Let us look at the Reserve Bank minutes of 2 November, just released, which note:


The labour market remained strong.


They go on to say:


Consumer sentiment remained at a high level …


And further:


Business conditions remained generally favourable …


Or we can look at the latest OECD report on Australia, which begins with the opening paragraph:


The Australian economy has been one of the most resilient in the OECD during the global economic and financial crisis.


It then says:


The strong policy response and encouraging outlook restored confidence rapidly, and exit from the stimulus is underway.


Historically, Labor can claim credit for many of Australia’s major economic reforms. The Curtin government put in place uniform personal income taxation and laid the foundations for a post-war full employment policy. The Whitlam government implemented universal health insurance and began the process of lowering Australia’s tariff walls. Hawke floated the dollar and negotiated the accord. Keating introduced the superannuation guarantee and enterprise bargaining. It is timely to note that many of these reforms were opposed at the time by the coalition. Labor has always been committed to economic reform. This Labor government stands committed to a new wave of economic reform in the future. In her speech in Brisbane, on 12 October 2010, the Prime Minister said:


In Government, we must walk the reform road every day, and minority Government is no excuse.


The Prime Minister then went on to set out the new agenda for economic reform. She went through five important aspects of the modern economic reform agenda: the most significant fiscal consolidation in at least 50 years, with a budget back in surplus by 2013. They included:


… cutting the company tax rate to make our businesses more competitive; better sharing the benefits of our commodity boom; superannuation reform to lift national savings and support domestic investment …

… investing in roads, rail and ports, and the National Broadband Network to build productivity and economic capacity …


And then in relation to the critical reforms in education, she said, ‘Taking the market based tools that have made our financial and industrial capital so much more productive and applying them to schools, providing choice, information and incentive structures.’ She went on, ‘Our structural reforms will drive efficiency across the hospital system. Instead of states receiving block grants, hospitals will receive activity funding.’ That is fundamental economic reform in the modern age and sets the Gillard Labor government squarely in the great Labor tradition of economic reform.

Finally, it is important to refer to the position that those opposite take when it comes to economic reform. The Leader of the Opposition has been reported as saying that economics is a bore. It is as though he thinks that saving Australian jobs, improving our tax system and dealing with climate change are all sideshows to the main game: coming up with a snappy, three-word slogan for the evening news.

And, worse, the Leader of the Opposition does not even seem to have bothered to understand Economics 101. In February, he told ABC Radio National:


… in New Zealand they have tried to reform their way through the global financial crisis under the new government’s leadership and they seem to be doing pretty well.


Actually, New Zealand’s unemployment rate at the time was seven per cent compared to Australia’s five per cent. If we had had New Zealand’s unemployment rate, we would have had another 200,000 jobless. As respected economic commentator Peter Hartcher put it:


The opposition leader has shown that he can’t tell a kiwi from a kangaroo, a plus from a minus, wreckage from recovery.


There were a series of Superman comics, and one of the characters in those Superman comics was Bizarro. Bizarro was an ‘imperfect duplicate’ of the Man of Steel. His face resembled white faceted stone, and he said things like, ‘Me am going away now.’ Eventually, Bizarro settled on his own planet and peopled it with thousands of imperfect duplicates of himself, Lois Lane, and the rest of the Superman family. The Bizarro code was:


Us do the opposite of all Earthly things! Us hate beauty! Us love ugliness! Is a big crime to make anything perfect on Bizarro World!


Today, the coalition is taking us into Bizarro world economics. In Bizarro world, the party of the right does not believe in free markets. Its shadow finance minister does not like floating exchange rates, its shadow Treasurer wants to reregulate interest rates, and the opposition leader does not believe in a market mechanism to tackle climate change. It is Bizarro world all right: ‘Us hate markets. Us love regulation.’ Of course, the Leader of the Opposition has form on this. In the Adelaide Review in November 1994, he said:


The floating dollar remains an article of faith with the leadership of both main parties notwithstanding its exceedingly dubious outcome for Australia and the damning verdict of the Economist magazine … that the experiment with floating exchange rates had failed and it was time to return to pegged rates.


I have taken a keen interest in a certain aspect of the first speeches in this parliament. As an economist, I am interested in what new members of parliament have to say about economics. I could not help noticing an interesting fact, which is that the first speeches from this side of the parliament have been much more pro-market than those from the other side of the parliament. The member for Chifley referred with pride to the trade liberalisation that took place under Labor. The member for Canberra talked about the over-regulation of the Indian economy and her pride as a small-business worker. The member for Greenway referred to her background as a corporate lawyer working on telecommunications, competition and broadcasting laws.

On the other side of the House, we had a clear demonstration of what those opposite think about markets. The member for Riverina said in his first speech that Australian agriculture ‘needs protection—fair trade rather than free trade’. The member for Flynn said that the fishing industry required assistance and should not be swamped with imports. The member for Aston said that he did not believe the taxes on binge drinking, pollution or congestion had any impact on behaviour. And the member for Dawson said:


I believe income tax should go.


This is despite the fact that the income tax is generally regarded as one of our most efficient taxes. In the interests of time, I will skip over on this occasion some rather unorthodox views about economies of scale from the member for Hughes and some particularly unusual views about how capital markets work from the member for Forde.

Like the US Republicans, the Coalition are increasingly becoming a party of conservatism, not a party of liberalism. The result is that there is only one party in this House any longer committed to economic reform, and that is the Australian Labor Party.
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8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au