Op-Ed - The Mechanics of Competition - Daily Telegraph
THE MECHANICS OF COMPETITION
The Daily Telegraph, Thursday 27 April
The neighbourhood where my office is located is changing fast. A generation ago, it was filled with car dealers and mechanics. Now, because it’s close to the city, the hipsters have moved in. Give it another generation, and the only sign of the suburb’s heritage will be bars with names like ‘Grease Monkey’.
The disappearance of independent mechanics from areas like Leichhardt, Bankstown and Rozelle illustrates how Australian cities are losing an iconic part of their light-industrial identity. It also means that competition in the car service sector is shrinking, to the detriment of car owners, as large car manufacturers centralise and corporatise their service businesses.
One of the key areas making it difficult for independent service and repair businesses to compete is the limited access they are given by manufacturers to standard servicing information.
A generation and a half ago, the point of reference for servicing a car was a spanner. Now it is an iPad. Cars in 2017 are basically driveable computers. If independent mechanics can’t access the information and download error reports, it’s hard for them to offer competitive car servicing prices.
Independent car service and repair businesses claim that most manufactures are restricting access to the standard service information. This is despite the Voluntary Code of Practice-Access to Service and Repair Information for Motor Vehicles, which was released by the Federal Chamber of Automotive Industries two years ago. That voluntary code was meant to establish an information portal like those in Europe, the USA and Canada.
Alas, the key word in the above sentence is “voluntary”. Car makers can choose whether to use the portal, and among the big manufacturers, only Holden has volunteered to do the right thing. With 18 million registered vehicles in Australia, less choice among car repairers hurts most of us.
Whether you own a Toyota Corolla or a Ford Ranger, everyone should be able to choose whether to get their car serviced by the dealership or an independent mechanic.
According to Stuart Charity, executive director of the Australian Automotive Aftermarket Association, “If you want to choose who repairs your car – the dealer or a local repairer – you should buy a Holden, because every other brand finds a way to force you to go back to the dealer and this costs on average 25 per cent more than an independent repairer.”
Like most things in life, the behaviour of car manufacturers can be explained by economics. With car buyers having more information at their fingertips than ever before, the amount that dealers make on sales can be as low as $100. But parts and servicing can bring in steady revenue for years – particularly if you’re charging a quarter more than the independent mechanic down the road.
Yet while Australians overpay for their car services and local mechanics shut up shop, the Turnbull Government has been reluctant to act. Worse, government ministers have continually broken their promises to independent mechanics. First, they promised to review the voluntary code by September 2016, but failed to do so.
Next, the Turnbull Government promised to review the voluntary code by October 2016. Again, that deadline came and went. Although I’ve written directly to Treasurer Scott Morrison about this issue, getting the government going on it seems harder than starting a car without the spark plugs. Their latest wheeze has been to claim that the government doesn’t have to do anything, because the Australian Consumer and Competition Commission is looking into it.
While the government dithers, millions of Australia motorists continue to pay too much for servicing, while more and more of the nation’s 21,000 independent car repairers go to the wall. Our nation’s drivers and mechanics are rightly angry at a government that seems to be asleep at the wheel when it comes to getting them a fair deal.
If the government wants to do the right thing, it’s time to consider making it compulsory for car manufacturers to let everyone access the information on our cars’ onboard computers. That would create a level playing field for all mechanics, and fair competition for consumers. Then we can go back to enjoying those Grease Monkey burgers without feeling guilty.
This piece originally appeared in The Daily Telegraph on Thursday 27 April 2017
LABOR CALLS FOR DELAY TO GST ON LOW-VALUE IMPORTS - Media Release
CHRIS BOWEN MP
SHADOW TREASURER
MEMBER FOR MCMAHON
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
SHADOW MINISTER FOR TRADE IN SERVICES
MEMBER FOR FENNER
SENATOR CHRIS KETTER
CHAIR, SENATE ECONOMICS REFERENCES COMMITTEE
SENATOR FOR QUEENSLAND
LABOR CALLS FOR DELAY TO GST ON LOW-VALUE IMPORTS
Following revelations the proposed GST on low-value imports may be unenforceable and cause major disruptions for families and small businesses, Labor today calls on the Turnbull Government to delay its implementation for one year, until 1 July 2018.
Labor has supported the removal of GST on low-value imports with a feasible model, and remains supportive in principle. The bipartisan hand has always been extended to the Government to work constructively on this measure.
But today’s hearing found the Turnbull Government has botched its implementation, with Treasury admitting the lack of a Regulation Impact Statement was in breach of the Office of Best Practice Guidelines.
The Australian Taxation Office, lumbered with a vague plan by the Government, were left to explain that jurisdictions like the USA and China will not enforce the measure on their behalf. Platform compliance is largely reliant on the goodwill of overseas operators.
eBay claimed that Treasury officials had told them they expect a 25-30% compliance rate.
Affected retailers raised questions on how platforms (and the independent sellers who use them) would interpret Australia’s unique GST regime and its exemptions.
When asked by Senator Chris Ketter about economic modelling and consultations on alternative models, Treasury and Australian Tax Office officials were left in the awkward position of defending the Scott Morrison’s decision to legislate the ‘vendor-based’ model.
Treasury officials declined to answer questions about whether alternative start dates had been modelled. The measure is due to take effect in just over two months’ time. Yet witnesses – from the Australian Taxation Office to online retailers – all raised more questions than answers on how the measure will be implemented and enforced in overseas jurisdictions.
Both the Conference of Asia Pacific Express Carriers and the Freight and Trade Alliance called for a 12-month delay.
Today’s public hearings clearly show that Scott Morrison has failed to properly consult with stakeholders and develop a workable model for taxing low-value imports.
Scott Morrison likes to talk about reducing the impact of red tape, yet in this case he has failed to produce a Regulation Impact Statement, as the Office of Best Practice Regulation guidelines recommends.
As such, Labor is calling on the Government to:
- Delay the start date to 1 July 2018
- Engage with all stakeholders and review alternative models
- Deliver a Regulation Impact Statement to assure small businesses and consumers that the measure will operate as intended.
Applying GST to imports valued at less than $1,000 has Labor’s in principle support. But Scott Morrison must show that his preferred model is workable and enforceable.
Too many stakeholders now have concerns about the Treasurer’s ability to implement this measure without it severely disrupting this important and fast-growing part of our economy.
FRIDAY, 21 APRIL 2017
SPEECH - HOW CAN WE REDUCE INEQUALITY? - ANU CRAWFORD SCHOOL OF PUBLIC POLICY
How Can We Reduce Inequality?*
‘Just Ideas’ Talk #3
Andrew Leigh
Shadow Assistant Treasurer
Federal Member for Fenner
www.andrewleigh.com
Crawford School of Public Policy
Australian National University
20 April 2017
This talk is dedicated to Tony Atkinson
On Sunday 9 April, a handful of well-heeled passengers boarded an eight-seater Cessna Citation Sovereign business jet.[1] Arriving at Chicago’s smaller Midway airport a few minutes before departure, they were whisked onto the tarmac and slipped into their leather seats. After take-off, the passengers on flight EJA342 tucked into their customised meals, along with wines chosen with help from Wine Spectator’s experts. Less than two hours later – quicker than a commercial flight – the twin-engine jet had touched down in Boston.
On the other side of the city, a doctor from Kentucky was sitting on board a plane at Chicago’s largest airport, O’Hare. The airport is one of the busiest in the world, and more than one quarter of all flights are delayed. After everyone had boarded United flight 3411, a flight attendant announced that four passengers would have to get off, to make room for airline employees. The airline initially offered $800 flight vouchers, then when no-one accepted, they announced that they would pick four passengers at random. Three of the passengers left the plane voluntarily. The doctor, David Dao, refused, saying that he had to see patients in Louisville the next morning. United Airlines staff called aviation security officers, who dragged him off the plane.
The contrast between flights EJA342 and UA3411 symbolises much of what has changed in society over recent decades. Over the past decade, the private jet market has doubled, with increasing numbers of Americans (and Australians, for that matter) being willing to pay up to $8000 per hour to charter their own plane.[2] Meanwhile, the flying experience for most passengers has become worse. Most passengers don’t end up with a broken nose and missing teeth like David Dao. But legroom has shrunk, while surcharges for snacks and baggage have grown.[3]
It is doubtless a good thing that flying to new places has become cheaper and more accessible. But in the process, a gap has opened up in how we get around. At the top, private jets abound and Emirates has introduces in-flight showers for first class passengers on its A380. At the bottom, United Airlines recently announced its ‘Basic Economy’ fare, which gives passengers no choice of seating, and allows them to bring on only one small tote bag. Inequality is everywhere – even in the skies.
* * *
This is the third and final of my ‘Just Ideas’ talks on inequality. The first talk, delivered at the University of Sydney, was focused on why inequality matters. The second talk, hosted by Per Capita, sought to explain the rise in Australian inequality. Today, my focus will be on what we can do to reduce inequality. It seems fitting to do this in Canberra, and I am grateful to the Australian National University’s Crawford School of Public Policy for hosting me.
Read more"This is a government that makes Punch and Judy look like a love-in" - Sky News AM Agenda Transcript
E&OE TRANSCRIPT
TV INTERVIEW
SKY NEWS AM AGENDA
MONDAY, 17 APRIL 2017
SUBJECTS: Liberal Party’s division; wages growth stagnating; housing affordability; Adani coal mine.
KIERAN GILBERT: With me to discuss the issues of the day, the Shadow Assistant Treasurer, Andrew Leigh. Andrew, thanks for your time. Tony Abbott says all politicians are on the nose. Is he right about that?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Certainly the Liberal Party is on the nose, with this extraordinary level of in-fighting. It makes you think the only reason they went to the polls early last year was so they could get back to the main job of ripping themselves apart. This is a government that makes Punch and Judy look like a love-in. They're far more concerned with fighting one another than they are with fighting for ordinary Australians. Challenges like climate change, housing affordability, economic growth going by the wayside while the Liberal Party engages in these internal squabbles.
GILBERT: Do you see it as a return of the Rudd-type behaviour or is this just genuine policy discussion on a range of issue? Where he is talking about the need to move - in his view - on renewable energy, on reform of the Senate, and so on. Are these not realistic and viable proposals from a backbencher?
LEIGH: Tony Abbott is obviously fighting a rearguard action to return to the Prime Ministership. And clearly, a significant portion of the Liberal Party are dissatisfied. You chat to Liberal Party backbenchers and what's evident is that all they're looking for is a clear challenger to coalesce around in order to bring on the challenge to Malcolm Turnbull. The reason this has happened is that Malcolm Turnbull isn't the great centrist that he'd led people to believe but is in hock to the right wing. A man who previously said he supported our race-hate laws but is now going against them. Previously said he supported marriage equality, but now won't bring a vote to the Parliament. Previously said he supported strong action on climate change, but now doesn't even support an emissions intensity scheme that's backed by his own Chief Scientist. Previously said he supported the Safe Schools program, and yet is now trying to destroy this effective anti-bullying program in our schools.
GILBERT: One of the things that Tony Abbott also suggested is that on his pollie pedal he picked up a lack of support for Labor as well. Saying that they're certainly on the nose as well in terms of politicians more broadly being unpopular. What do you say to that?
Read moreTURNBULL GOVERNMENT FINALLY WELCOMES PC’s CONSUMER REPORT AND…THAT’S IT - Media Release
TIM HAMMOND MP
SHADOW MINISTER FOR CONSUMER AFFAIRS
SHADOW MINISTER ASSISTING FOR RESOURCES
FEDERAL MEMBER FOR PERTH
DR ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR TRADE IN SERVICES
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
MEMBER FOR FENNER
TURNBULL GOVERNMENT FINALLY WELCOMES PC’s CONSUMER REPORT AND…
THAT’S IT
The Turnbull Government is unable or unwilling to commit to protecting consumers with higher penalties for dodgy operators, despite all the positive advice it is receiving.
In fact, it was nearly 8.30pm yesterday evening before Michael McCormack, the Turnbull government’s Minister for Small Business, finally managed to welcome yesterday morning’s public release of the Productivity Commission’s Consumer Law Enforcement and Administration report.
The Turnbull government had been given the report on the 29th of March, and it made no announcements on the report’s recommendations, beyond a facile explanation of what the Productivity Commission reported.
Perhaps the Minister just missed its release?
This limp outcome is symptomatic of the Turnbull government’s refusal to take the lead on penalising shonks. With the release of Consumer Affairs Australia and New Zealand’s report into the Australian Consumer Law due next week, it is time for the government to explain what it will do to look after consumers.
We suggest that, instead of protecting multinationals, the government should listen to Labor and its own experts.
Read more"There's a value in having a national public service" - ABC Canberra Breakfast transcript
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC CANBERRA BREAKFAST WITH ADAM SHIRLEY
WEDNESDAY, 12 APRIL 2017
SUBJECTS: Decentralisation; Adani mine; jobs in the renewables sector.
ADAM SHIRLEY, PRESENTER: When a number of jobs get shipped out of the ACT for a questionable benefit, ACT residents get a little frustrated. So it has been with the Federal Government's forced relocation of the Australian Pesticides and Veterinary Medicines Authority. A controversial move that is currently the subject of a Senate inquiry. But the inquiry has shown it is not just the government that is keen to move Canberrans on. A number of Labor MPs are after some relocation action for their electorates.
Andrew Leigh is Labor's Assistant Treasury Spokesman and Member for Fenner. Dr Leigh, good morning to you on Breakfast.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good Morning Adam, how are you?
SHIRLEY: Not too bad. Have you spoken to many Labor colleagues who are keen to get Canberra public servants into their electorates?
LEIGH: Certainly none of my caucus colleagues have come up to me and said that they're keen to take policy-making roles out. Clearly there's a range of local councils – whether they be in Coalition or Labor-held areas - that have made bids under Barnaby Joyce's whacky inquiry. That's to be expected.
SHIRLEY: Would it follow they're whacky bids, Andrew Leigh, from some of your Labor colleagues?
Read morePRODUCTIVITY COMMISSION BACKS IN LABOR’S CALLS FOR INCREASED PENALTIES FOR ANTI-CONSUMER CONDUCT - Media Release
TIM HAMMOND MP
SHADOW MINISTER FOR CONSUMER AFFAIRS
SHADOW MINISTER ASSISTING FOR RESOURCES
FEDERAL MEMBER FOR PERTH
DR ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR TRADE IN SERVICES
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
MEMBER FOR FENNER
PRODUCTIVITY COMMISSION BACKS IN LABOR’S CALLS FOR INCREASED PENALTIES FOR ANTI-CONSUMER CONDUCT
The Productivity Commission has today added its voice in support of Labor’s plan to increase penalties for businesses engaging in anti-consumer conduct under the Australian Consumer Law (ACL).
The Commission’s report, Consumer Law Enforcement and Administration, found that
“Maximum financial penalties available under the ACL are small relative to the benefits that a business can accrue by breaching the ACL.” (Finding 4.5).
“There are a growing number of voices supporting Labor’s policy of a significant increase in maximum penalties under the ACL,” Mr Hammond said.
Read more"It's not too much to ask in Australia that a couple on modest incomes can afford a home" - RN Drive Transcript
RADIO INTERVIEW
SUBJECTS: Census data; Adani mine; native title changes; housing affordability
PATRICIA KARVELAS: Andrew Leigh is the Shadow Assistant Treasurer. He joins me now to talk about these issues, and no doubt a couple of others, including housing affordability. Welcome back to RN Drive.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Great to be with you, Patricia.
KARVELAS: You continue to have doubts about the quality of the census data. The ABS does assess the quality of its own data post the Census. What will you be looking for in that assessment to give you confidence that this is good data that can be used?
LEIGH: Patricia, there's two things that are absolutely known for sure. One is that on Census Night last year, millions of Australians lost hours of their time trying to fill out the Census. And we also wasted millions of dollars in having to fix up the botched Census. As a result, rather than filling in the Census on Census Night, as has been the norm, many Australians ended up filling in the Census well afterwards. That creates the potential for duplication, which wouldn't necessarily always be picked up by the Bureau of Statistics.
KARVELAS: The ABS says that they had a very, very strong number of people who participated – what, I think it was 98 per cent? An incredibly high participation rate. Doesn't that show that despite the bungle, and no one's contesting that there was a pretty extraordinary bungle, that Australians did participate even though they were clearly grumpy about the process?
LEIGH: They've done their best to fix this bungle, but let Australians be in no doubt as to how we got to this situation. The position of Chief Statistician was left unfilled for nearly a year. There were three ministers responsible for the Census just in the year beforehand. None of them willing to take responsibility. Basic due diligence around making sure that Australians were protected against the inevitable denial of service attacks wasn't done. The government dropped the ball, and then – immediately – looked around for someone else to blame.
Read moreCENSUS DATA RELEASE A REMINDER OF ANOTHER TURNBULL GOVERNMENT DEBACLE - Media Release
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
SHADOW MINISTER FOR TRADE IN SERVICES
MEMBER FOR FENNER
THE HON ED HUSIC MP
SHADOW MINISTER FOR THE DIGITAL ECONOMY
MEMBER FOR CHIFLEY
CENSUS DATA RELEASE A REMINDER OF ANOTHER
TURNBULL GOVERNMENT DEBACLE
The Australian Bureau of Statistics today revealed the “typical Australian.” Remember when the typical Australian couldn’t even log onto the Census website?
Today’s release of the Census data is another reminder that the Turnbull government fails repeatedly when it comes to managing digital government.
When the Australian Bureau of Statistics website went down on Census night 2016, millions of Australians lost hours of their time. Everyone remembers the frustration of being told to log on at home to a website that was crashing.
Many people had completed their form, but were unable to submit it. Fixing this bungle cost millions of dollars.
After the farce of Census night the Turnbull government spent days see-sawing about whether there was a hack, a distributed denial of service attack or just a mistake that caused the site to crash.
To be clear – the Census 2016 debacle was the fault of the government, which left the post of chief statistician unfilled for nearly a year, and had three different ministers responsible for the Census in the year leading up to it.
Read more"It's about taking away a set of tax rules which are not fair to ordinary Australians" - Sky News On The Hour transcript
E&OE TRANSCRIPT
TV INTERVIEW
SKY NEWS ON THE HOUR WITH TOM CONNELL
TUESDAY, 11 APRIL 2017
SUBJECT: Housing affordability.
TOM CONNELL: There's another litany of stories about housing affordability today, with the Coalition seemingly wrestling over just what to do. We know Labor's plan – it's been settled since before the last election – they will reduce the Capital Gains Tax discount and keep negative gearing only for new homes. Of course, grandfathering both of those measures. We've seen house prices climb a lot higher since then – in Sydney, in Melbourne – is the policy still fit for purpose? Joining us now is the Shadow Assistant Treasurer, Andrew Leigh. Thanks for your time today.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Tom.
CONNELL: The plan that you've got at the moment. The intention – we're talking about stalling house prices. Do you need more than that in Sydney and Melbourne given 15-19 per cent increases? Do you need prices lower?
LEIGH: Tom, let's just look at what happened at the end of last year where house prices in Melbourne and Sydney were rising nearly ten times as fast as wage growth. So you get this phenomenon – I've struck it with young couples in my electorate – where they'll come to me and they'll say, 'I nearly had the deposit and then a few more auctions went by and suddenly I was priced out of the market.' The challenge is not driving house prices down, it's just making sure we don't continue to see this massive mismatch – terrible wages growth and house prices going gangbusters because investors are now half of the new buyers.
Read more