Andrew Leigh

TRANSCRIPT – 2CC with Mark Parton
Andrew Leigh MP
Parliamentary Secretary to the Prime Minister
Member for Fraser
6 May 2013

TOPICS:                                Inequality, Australian egalitarianism, Liberal Party advertising

MARK PARTON:                What is the definition of rich in 2013? To some extent the definition of rich I don’t think ever changes. Anyone who earns about three times as much as you do is rich, that perception applies to pretty much every one. Andrew Leigh’s got some more specific figures for us though, in 2013 in Australia, to be ultra-rich you need $210,000 a year; that sounds pretty fair. Now there’s even a filthy rich figure, Mark Sullivan are you listening? The uber-rich figure is $688,700. Can you imagine the changes that it would make in your life, not even if you were on that salary all the time, but just if you had it for a year, just if you get three quarters of a million dollars in salary for a year. Now Andrew Leigh’s calculated the new cut off points as part of his research for his coming book on inequality in Australia which is titled Battlers and Billionaires, this is research that he started years and years ago when he was a professor of economics at the Australian National University, he’s updated the calculations using tax office data from 2010-11 from the financial year and these are figures released last week and I’ll get him to explain. Andrew good morning,

ANDREW LEIGH: G’day Mark how are you?

MARK PARTON:                Not bad, how do you determine who’s ultra-rich and I’ve used the term filthy rich, I don’t think you have.



ANDREW LEIGH: I haven’t used any of these terms at all Mark, I think they’re… they all seem to be political dynamite. So my study with Tony Atkinson simply looked at what it takes to be in the top 1% of the top 0.1%, so as you said, $210,000 takes you into the top 1%, that’s the individual income and over $690,000 takes you into the top 0.1%; the richest 1/1000th of income earners.

MARK PARTON:                Okay, what this data has shown is that there is a growing gap between the rich and poor.



ANDREW LEIGH: That’s right, so if we go… if we take say the top 1% share; that’s doubled over the last generation, that’s about 1980 or so. Take the top 0.1%, they’ve tripled their share of national income over that period, and it’s a pattern which you see in other English-speaking countries as well; US, UK, New Zealand, Canada.

MARK PARTON:                It’s a fascinating thing that when you start having a conversation about it, and you find out what peoples definition of rich is, aside from the actual dollar value, because to me the definition of rich is being able to pay all of your bills-without stress, eating good food, and having a holiday every now and then. As far as I’m concerned, you got that, you’re rich.



ANDREW LEIGH: But of course Mark you could always have bills that exceed your income, any of us, regardless of our income, you know, you take that three-quarters of a million, I’m sure you could rack up enough bills that that salary wouldn’t cover it.

MARK PARTON:                And that goes back to that original definition that I said right at the start of the interview and I think it pretty much always applies; the definition of rich for most people is anyone who earns about three times as much as you do.



ANDREW LEIGH: Exactly, exactly, so it’s very much from the perspective you’re looking from and you know; I think in some sense, the bill thing comes back to that old Dickens’ quote that if your income is 19 shillings and your expenditure is 20 shillings, you’ll be miserable, if your income is 19 shillings and your spend is 18 shillings then you’ll be happy.

MARK PARTON:                Okay, what evil policy directions do you think you could come up with out of these figures, Andrew?



ANDREW LEIGH: Well, this is really just describing the world. Tony Atkinson and I did the original study a decade ago and each year as the tax data comes out I update it. I’m really keen as to see if we can have more of a discussion around inequality,

MARK PARTON:                Yep



ANDREW LEIGH: I think talking about how much the gap between rich and poor we want is pretty fundamental to the kind of nation we want to live in.

MARK PARTON:                Is it a bit silly though talking about equality, I mean, no-one’s ever going to have the same, there’s always going to be people who have more than others, there are going to be people who are luckier than others, or have worked harder than others, you know, what’s the point in talking about equality?



ANDREW LEIGH: Well of course we’re never going to have perfect equality Mark,

MARK PARTON:                That would be a complete communist structure wouldn’t it?



ANDREW LEIGH: Exactly, and we have good evidence as to what a disaster that would be, but just because we don’t want everyone to have exactly the same incomes doesn’t mean we can’t have a conversation about how the gap between rich and poor has grown over recent  years. We’re still a much more equal country than say the United States, but inequality has risen a lot over the course of my life time and I think having a national conversation about that is a productive use of time.

MARK PARTON:                You seen the headless chook ad, Andrew?



ANDREW LEIGH: I haven’t Mark, no.

MARK PARTON:                Look irrespective of the political message, and I know you won’t agree with me on this; it’s as funny as hell.



ANDREW LEIGH: Well humour is sadly lacking in politics Mark so maybe that’s the only reason to like it. But I tend to think there’s enough nastiness around in modern-day politics.