ABC RADIO NATIONAL BREAKFAST WITH HAMISH MACDONALD
TUESDAY, 25 JULY 2023
SUBJECTS: Cost of living, Appointment of Chris Barrett to the Productivity Commission, Randomised trials and employment services system, Review into offshore processing.
HAMISH MACDONALD (HOST): The economic storm facing Australia might be gathering pace, but right now, the budget bottom line is looking better than ever. Yesterday, the Treasurer, Jim Chalmers, revealed the surplus has gone down since the May budget - sorry, gone up to $20 billion. But despite housing being a major problem in the community and government support payments below that of the poverty line, it's unlikely that any of that money will be used to ease the cost of living pressures. Andrew Leigh is the Assistant Minister for Competition, Charities and Treasury and Employment and joins the program now. Good morning to you.
ASSISTANT MINISTER FOR EMPLOYMENT, COMPETITION, CHARITIES, AND TREASURY ANDREW LEIGH: Good morning, Hamish.
MACDONALD: The government makes the case that the cost of living measures in the federal Budget this year were not inflationary. Why can't you do more to assist with the cost of living without adding to inflation?
LEIGH: Well, Hamish, the cost of living package, which delivered in the Budget was a substantial one. Some $14.6 billion which covered cheaper childcare, cheaper medicines, and energy bill relief. It needed to be targeted relief because we don't want to put upward pressure on inflation. And indeed, as Phil Lowe said to a recent hearing, the Budget, if anything, took away from inflationary pressures. So, we've been focused on targeting that relief and ensuring that we're not making the Reserve Bank's job harder in fighting inflation.
MACDONALD: Understand that, but obviously these numbers are better then forecast. Why can't you use some of that money to provide relief to people, particularly those on JobSeeker, for example?
LEIGH: Well, it's not just about the size of the surplus. It's also about ensuring that we're not putting upward pressure on prices. And so what we've done with the cost of living relief package, was to make sure that it was carefully targeted. The last thing the economy needs right now is an unfunded cash splash, the kind that we saw in the last Coalition budgets. We need to be focused, surgical and working in concert with the Reserve Bank. That's exactly what we're doing.
MACDONALD: Again, though, this is a question about what you might be able to do now. Life is not getting easier for Australia's lowest income earners. Why couldn't you do something surgical, targeted now to assist further, given the size of this surplus?
LEIGH: Look, we're always looking at options to assist with cost of living. We've invested more in social housing. You saw that additional social housing package come at the end of June. So, as a Labor Government, we're constantly looking at what we can do to assist the most vulnerable. But at the same time, you need to make sure that fiscal and monetary policy are working together. The worst of all worlds is where governments are splashing money out and therefore putting upward pressure on prices. As I said, that's what we saw under the former government. We're determined not to repeat that mistake.
MACDONALD: Would you consider lifting the rate of JobSeeker above the poverty line a cash splash?
LEIGH: Well, we've already increased the rate of JobSeeker. We had that $50 [$40] increase in the last Budget. Every Labor budget looks carefully at the rate of JobSeeker. We're informed in this by the Economic Inclusion Advisory Committee, chaired by Jenny Macklin, which did really important work in analysing the effect of that payment and others on poverty, and recommended not just increases in the JobSeeker payment, but also careful strategies to look at other aspects of poverty and disadvantage that included more randomised trials. I'm working in the employment services space and working on the revamp of the employment services system, which will follow Julian Hill's inquiry to come down at the end of this year. Getting employment services right is really critical because with 3.5% unemployment, we've got this unprecedented opportunity to find work for people who've been out of work for years.
MACDONALD: What do you mean by getting employment services right? What does that look like?
LEIGH: Well, the employment services system has gone through a range of iterations. We had the Commonwealth Employment Services, we had the Job Network, we had jobactive, Job Services Australia, and now it's Workforce Australia. And in all of those iterations, unemployment has been higher than it is today. As we get unemployment down to three and a half percent, the caseload looks different. You've got people with many more entrenched disadvantaged factors. So, I'm interested, for example, into how we can bring social enterprises into the mix and ensure that they're able to do a better job. We also need to recognise this is a system designed in an era where most people found jobs through classified newspaper ads. These days, a job ad is LinkedIn, Seek, CareerOne, Ethical Jobs, an online finding platform, and so that again changes the way employment services work.
MACDONALD: You mentioned working in tandem with the job of the Reserve Bank, and clearly Philip Lowe has made it very clear that productivity is key to moving the Australian economy forward. Now, the Productivity Commission Report shows that productivity is slowing. You obviously would acknowledge that. One of the suggestions, though to reverse this is for the Fair Work Commission to revise minimum wage awards. What's your position on that?
LEIGH: It'll be a matter for Tony Burke as to how he looks at some of those workplace relations issues. Certainly for Labor, the issue of productivity comes down to investing in individuals through human capital, investing in infrastructure through targeted infrastructure spending and investing in institutions. And so we get things like competition policy right. I think having Chris Barrett running the Productivity Commission is going to be critically important there. Chris's appointment has received support from right across the spectrum. Everyone from Universities Australia, to the Ai Group, to his predecessor Michael Brennan, have welcomed his appointment. Chris will bring a forensic approach to looking at productivity and also consider issues such as climate change and investing in the most disadvantaged as we look to raise productivity.
MACDONALD: His appointment hasn't been universally welcomed, though because of his relationship with Jim Chalmers, who was his boss, I understand at one time. How do you address that commentary and those criticisms?
LEIGH: Chris has been a Chief of Staff, he's been Australia's Ambassador to the OECD, he's been a senior public servant at the state level. He brings a huge amount of experience. It's a rare appointment in Australia that is welcomed by a former Secretary General of the OECD, which is welcomed by the former Head of the Prime Minister and Cabinet, Martin Parkinson, which is welcomed by both the Ai Group and the Australian Chamber of Commerce and Industry. He's a really thoughtful individual. He'll bring a lot to that role as we look to update the Productivity Commission. Again, this organisation started as the Tariff Board, then the Industries Assistance Commission, then the Industry Commission, now the Productivity Commission, and in its new era needs to be much better in using data, in engaging with international institutions, in producing timely updates which allow productivity to grow after the worst decade of productivity growth on record.
MACDONALD: What outcomes do you want to be different in terms of what the Productivity Commission delivers?
LEIGH: I'd like to see the Productivity Commission working in a way that invests in individuals and doesn't see productivity as a way of cutting. Too often when conservatives talk about productivity, it's about cutting pay, cutting conditions and a race to the bottom. I think productivity for Australia needs to be a race to the top. We need to be looking at opportunities to build high paying jobs in which that high salary is grounded on people producing a lot of value. That involves better use of technology and the use of artificial intelligence is going to be crucial across a whole range of workplaces and also involves a more competitive Australian economy. Market concentration and markups have grown over recent decades and that's meant that potentially we've have seen an ossification at the top of the Australian economy. And that's not good for productivity in the long run.
MACDONALD: Respectfully, isn't the data the data? I mean, trying to sort of engineer what the Productivity Commission does could lead to adverse outcomes, couldn't it?
LEIGH: You're absolutely right. I mean, we need to be looking carefully at the data. There's way more data available now than there was even a decade ago and the use of data is going to be fundamental. And that's one of the points that Jim Chalmers made yesterday in announcing the appointment of Chris Barrett, that the Productivity Commission needs to be a first in class user of data. There's a range of business data and data on individuals being developed, put together across the public service. David Gruen is the head of the Australian Bureau of Statistics, has been spearheading this. It's really vital that the Productivity Commission is making the very best use of the data that's available.
MACDONALD: On another matter that's making headlines in the papers today relating to Australia's offshore processing system, you've been a strong advocate for accountability in politics, transparency in the way governments spend public money. There are calls for a Royal Commission into the contracting of offshore asylum seeker processing by the Department of Home Affairs. Would you support that?
LEIGH: We're certainly open to different options here, but we know that under the former government, over 140,000 people arrived in Australia and claimed asylum onshore in the first year Peter Dutton was Home Affairs Minister, 27,000 people applied for asylum. The former Liberal government caused problems through the migration system.
MACDONALD: Respectfully, Andrew Leigh, this relates to both Coalition and Labor governments that this program was rolled out. And my question is, are you open to a Royal Commission?
LEIGH: That'll be a matter for the Prime Minister.
MACDONALD: But what's your view, though? I mean, you've made such a play of accountability and transparency throughout your career. You must be alarmed by the reporting around the way this money was spent and the way the contracts were done.
LEIGH: Look, it's certainly a matter that requires consideration. But a Royal Commission is a significant call and I certainly wouldn't want to be mouthing off on a call for a Royal Commission without having all of the evidence in front of me.
MACDONALD: I'm about to speak to the Shadow Workplace Relations Minister Michaelia Cash. Obviously, we spoke to Tony Burke yesterday on the changes to casual workers arrangements. There's been a very strong reaction from the business community. The Chamber of Commerce says that this would give the whip hand to the employee and would actually make a lot of small businesses nervous about offering flexible arrangements. Do you acknowledge the concern that there is amongst the business community to these proposals?
LEIGH: Look, this is a modest change which we took to the last election, which will help casual workers who have regular work arrangements by giving them the option to convert to permanency. No one's going to be forced to convert from casual to permanent. There's not going to be an issue of back pay here. It's simply ensuring that people who are fundamentally working as permanent employees have the right to make that conversion. It's as simple as that.
MACDONALD: Andrew Leigh, thank you very much.