IF WE WANT TO HELP FARMERS AND SMALL BUSINESSES, WE MUST GIVE THE COMPETITION WATCHDOG MORE TEETH, Huffington Post, 4 November 2016
This week, the Australian Competition and Consumer Commission's found that there's too much bull in the cattle industry. Buyers colluding to keep prices down, saleyards altering cattle weights, agents who act for both buyers and sellers.
The report discusses bid-rigging, physical intimidation and intense social pressure on rural families. The competition watchdog is so concerned that it is now undertaking multiple investigations of cartel conduct in the industry: an offence which carries a potential jail term.
The Australian cattle and beef industry is vital to our economy and our society. It contributes $11 billion a year to the Australian economy. It is the largest contributor to the Australian agricultural sector. Half of our 123,000 farms are engaged in cattle production. In the list of industries you want to make sure are functioning well, Australia's cattle industry is surely near the top.
WHEN BUSINESS DOESN'T PAY ITS BILLS, The Daily Telegraph, 3 November 2016
Yesterday, I rang my supermarket. It was just a courtesy call, letting them know that from now on I would be paying for my groceries 60 days after scanning them at the checkout. I assured them it was nothing personal – simply a matter of improving my cash flow.
Alright, I’m pulling your leg. But you can only imagine a company’s reaction to getting such a call from a regular consumer. Yet this is exactly what many large Australian companies are doing to their suppliers right now.
Earlier this year Rio Tinto told many of its suppliers that, with no compensation, it would now pay its bills after 90 days instead of 45 days (in 2014 it was 30 days). This followed BHP’s decision last year to pay its suppliers after 60 days instead of 30 days. Woolworths is also reportedly increasing its payment terms from 30 days to 60 days. Mars, Kellogg, Procter & Gamble and Heinz are also pushing for more generous payment terms. In April, Murray Goulburn retrospectively cut the price it paid to farmers, then asked them to pay back the difference.Read more
Weaker competition widening the wealth gap, The Australian, 21 October 2016
Paying more for your pint? You’re not alone. Lately, beer prices have risen significantly faster than most other prices. Over the past decade, the cost of a beer has gone up 42 percent, meaning we’re paying as much for a middy today as a schooner ten years ago.
So naturally my ears pricked-up when I recently heard of a merger between the company that makes Carlton, Fat Yak and VB (SABMiller) and the company that makes Corona, Budweiser and Stella Artois (Anheuser-Busch InBev). If it goes ahead, the merger will create the world’s largest beer manufacturer.
There are many reasons why beer might have become more expensive, including taxes, the rise of craft brewing, and an increased appetite for premium beers. But one factor could be a lack of competition. Beer is one of the most concentrated markets in Australia. The four largest beer manufacturers control a whopping 90 per cent of the market. This has increased significantly over the last decade when the largest manufacturer (SABMiller) bought Fosters in 2011 and the second largest manufacturer (Lion) bought James Boag in 2007.
Wait, I hear you shout. Having fewer competitors doesn’t necessarily mean reduced competition. True, but it certainly doesn’t help, either. As any economics textbook will show, reduced competition means higher prices, less production, less innovation and ultimately less growth and fewer jobs. It might also be worsening inequality.Read more
The Age of Ambition, New Matilda, 20 October 2016
Globally, these are tough times to be a social democrat. The cumulative social democratic vote share in Western Europe has fallen by one-third, to its lowest in 70 years. Angry politics is alive and well in the person of Trump and Le Pen, Farage and Wilders. It’s a politics that emphasises differences within the community, and urges citizens to jump at the shadows of trade, immigration and foreign investment.
Amidst secular stagnation, fear of terrorism, and a hate-filled politics, a message of inclusion, egalitarianism and multiculturalism doesn’t always resonate. In that environment, what is the best approach for the left’s party of government, the Australian Labor Party?
Labor is now in our 125th year – the seventh age for Australia’s oldest political party. Some have argued that we need to defend the status quo, and tweak our way to a better world. There’s nothing inherently wrong with any of this. Indeed, there’s a bit of me that’s temperamentally technocratic – desiring to defend against cuts, and fight for better indexation.
But it’s not a whole program. Labor’s story has always had a touch of élan, a bit of vision, a sense of excitement. Ours has always been the party of ambition.Read more
Brian Mitchell & Andrew Leigh, "Aussie Economy Starting to Look Like a Game Show", Hobart Mercury, 19 October 2016
Growing up, we were both fans of the television show Sale of the Century. Throughout the 1980s and 1990s, millions of Australians tuned in to the quiz show, to see contestants try their hand at winning cars, holidays and cash. Guided by hosts like Tony Barber, Glenn Ridge, Delvene Delaney and Jo Bailey, some contestants won big. In 1992, Robert Kusmierski took home cash and prizes worth $676,790. But most who chanced their hand went home with next to nothing.
It made for a terrific gameshow, but today, as Labor parliamentarians, we’re worried that our society is starting to look too much like a gameshow. If you compare wages in 1980 (when the first episode of Sale of the Century went to air) with today, then you see a labour market where earnings have growth three times as fast for the top tenth as for the bottom tenth. It’s been a great generation for lawyers and landlords – not so much for retail workers and renters.
To some extent, success in life is determined by hard work, but luck matters too. Billionaire Warren Buffett likes to reflect on his good fortune at being born in an era when his investing skills can be put to work. For most of human history, those skills wouldn’t have been much use. We also know that the labour market pays more to men, tall people and right-handers. That’s luck, not skill.Read more
Agile Aid For Fragile States - submission to "Australia Ahead of the Curve: An Agenda for International Development to 2025”
Andrew Leigh, Shadow Assistant Treasurer, and Senator Claire Moore, Shadow Minister for
International Development and the Pacific.
In 1970, countries from across the globe agreed to a common aid goal: that for every hundred dollars of national income, they would give 70 cents of aid to developing countries.
In almost half a century since then, Australia has repeatedly reaffirmed our commitment to the international aid target. Other nations have gotten there. Unlike Sweden, Denmark and the United Kingdom, Australia has never met the 70 cent goal.
But like any target, we can still judge Australian governments on how close or far they have come to meeting this commitment to the world's poorest.
When Labor was in government, overseas foreign aid increased from 28 cents in every hundred dollars) in 2007-08 to 37 cents in 2013-14. Had Labor been returned, aid was budgeted to rise to 50 cents in every hundred dollars in 2017-18.
Then the Coalition won office with an aid commitment that matched Labor’s, but then put us on a very different path. Today, Australia spends just 23 cents per hundred dollars on overseas aid. Under Labor, our aid contribution exceeded the average for the rich country OECD grouping (30 cents per hundred dollars). Now, we are not only below the OECD average, our aid share is the lowest since comparable records began in the 1970s. When aid was headed to 50 cents in every hundred dollars, we were on the path to meet our promised aid goal. With aid at 23 cents, we have literally shrunk from the task to which our nation once committed.Read more
The politics of hate is on the rise. A week before the Brexit vote, UK Labour MP Jo Cox was shot by a man shouting “death to traitors, freedom for Britain”. In France, Marine Le Pen draws parallels between Muslim migrants and the occupation of her country during World War II. In the US, Donald Trump wants to bring back torture, has called women “pigs” and made fun of a reporter with a disability.
In Australia, the share of voters who hate their opponents has risen from under one in six in the late 1990s to over one in four voters today. In the US, the share of people who say they would be unhappy if their child married someone from another political party has risen from 5 per cent to 41 per cent.
You can imagine the scene here in Australia. “Oh, thank goodness, sweetheart — when you said your girlfriend was a lesbian, I thought you said a Liberal.”Read more
We won't beat homelessness without tackling inequality, joint op-ed with Jan McLucas, Homelessness Australia Magazine
Glenn Tibbitts was born at 26 weeks in the back of an ambulance because his mother had endured yet another beating. Glenn’s first recollection of abuse he suffered was between the ages of one and two.
Around the age of seven his parents broke up and as Glenn describes it: ‘the door of the cage was left open and that was my opportunity to go’.
Both of us have parented seven year-olds. On a good day– with a bit of cajoling – they might eat breakfast and get themselves dressed for school. There is something horrifying about such a child having to choose homelessness in order to survive.
Glenn slept in car parks and under bushes and bridges. This was interspersed with short periods in refuges and shelters. As a child he experienced the indignity of having scraps of food thrown at him by strangers. Not given. Thrown.
As he describes it: ‘You are always constantly hungry, you are always constantly cold’. Dealing with the abuse and trauma he suffered was a constant struggle that kept him on the streets.
As heart-wrenching as Glenn’s story is, it is also a story of hope.
A true tax package would tackle profit shifting on all fronts, Australian Financial Review, Wednesday 27 May
Imagine, for a moment, that Bill Shorten had fronted up to announce Labor's multinational tax package back in March, and told the assembled media it would add a grand total of $30 million to the budget bottom line. Imagine he'd said that he hoped this figure would turn into billions, but he didn't have enough confidence in the estimates to count on more than $30 million.
If Labor had presented a package of this kind, we would have been laughed off Capital Hill, and rightly so.
Conversations About Aged Care Should Always Evolve, The Chronicle, 7 April 2015
Harry Truman lived on Spirit Lake, at the foot of Mount Saint Helens in the northwest of the United States. A former World War I pilot and bootlegger, he was 83 years old when the volcano began to rumble. Authorities tried to get him to move out, but he was worried his lodge would be vandalised. ‘If this place is gonna go’, he said, ‘I want to go with it.’ On 18 May 1980, the volcano blast covered his home beneath a massive lava flow.
In his book Being Mortal: Medicine and What Matters in the End, Atul Gawande tells the story of how modern medicine struggles to get aged care right. Nursing homes often place too much emphasis on safety and not enough on quality of life. Most people want to end their lives at home, but many end up dying in hospital. Two-thirds of doctors overestimate how long patients with terminal diseases will survive.