Andrew Leigh

Why should we care about inequality?

The 2015 Economic and Social Policy Public Lecture

University of Wollongong

Dutch economist Jan Pen once suggested a simple way of visualising the extent of inequality in a society. Imagine, he suggested, a parade, in which each person’s resources were represented by their height.

Suppose we were to conduct such a parade in Australia. People of average wealth would be average height. Those with half the average wealth would be half the average height. Those with twice the average wealth would be twice the average height.

Let’s suppose the parade took an hour to pass you. What would you see?

For the first half a minute, people would be literally underground. These are the people with more debts than assets. Perhaps they are homeless, but have credit card debts. Or they are a business owner about to go bankrupt.

Then would come the little people. For the first few minutes, they are no bigger than lego figures. They might have some clothing and a television, but little else. By the ten minute mark, people are the size of a child’s doll. They might own an old car.

Twenty minutes have gone by, but still the marchers are no taller than a newborn baby. Most probably don’t have regular work – they might have odd jobs, or be reliant on the pension. Few would dream about them – or their children – breaking into the central Sydney property market.

It’s now half an hour. The watchers are getting bored. Heights aren’t rising much. Are we really only halfway through the parade?

Getting off Struggle Street - how we can tackle Australian inequality

Speech to the Financial Counselling Australia Annual Conference

Canberra

Thank you to Lauren Levin, Fiona Guthrie and all the friends at Financial Counselling Australia for inviting me to share in your conversation today. Lauren was the one who first made contact with me about this conference, and her email really grabbed me from the opening line. Never before have I received an email that began: ‘It is most unusual to be de-funded and still continue with a major conference.’ So when I received that email from Lauren, of course I couldn’t resist saying yes to speaking today.

I understand that only today there has been some good news, and FCA has now secured funding to cover your work for the next two years. The Abbott Government has made quite a habit of changing its mind recently, but I’m very glad that in this case it has had such a good outcome. I’m sure that this reversal was in no small part due to the powerful advocacy of Carmel Franklin from CARE Financial Counselling in the ACT. Those of you who know Carmel will know that she’s a strong and consistent voice speaking on behalf of your sector and the Australians you work with.  

An 'app-ier' future for our cities?

Speech to Urban Taskforce Australia

Sydney

You might not be familiar with the names Michael Nuciforo and Robert Crocitti, but they’re the kind of blokes you want to have around when you’re trying to solve a tricky problem. They’re the creators of ParkHound, an app that lets you find and hire private parking spaces in busy metropolitan areas. They decided to start the company after circling around East Melbourne on the hunt for parking near the MCG before an AFL game.

As they tell it: “We drove past parked car after parked car, after….empty space that required a parking permit. There were dozens of empty garages and driveways right near the ground. It then hit us. Wouldn't it be great if we could just knock on someone’s door and ask to park at their place for a small fee? The more we thought about it, the more it made sense. We don’t need more parking spaces, we just need to utilise the parking spaces we already have.”

ParkHound is just one of dozens of new app-based services that have sprung up recently in the so-called sharing economy. While the kinds of services offered differ, fundamentally they all link people who have surplus goods to those who can make use of them.

As the father of three young boys, the word “share!” comes out of my mouth pretty frequently. Unlike the kind of sharing I’m trying to teach them, money usually changes hands in the sharing economy. But the transaction happens directly between the provider and the consumer, with the companies themselves simply offering a platform for connecting people and collecting payments.

In thinking about the rise of services like ParkHound, AirBNB, and yes – the controversial Uber – it strikes me that the sharing economy has great potential to help us address some of the big challenges our cities face. As Australia’s cities continue to grow, issues like congestion and the use of space are becoming increasingly urgent. The mounting pressure on our built environment puts the people who live in it under pressure too – as all of you Sydneysiders would well know.

SPEECH TO THE NATIONAL DAY OF MOURNING CEREMONY

NATIONAL WORKERS MEMORIAL, CANBERRA

I acknowledge that we are meeting on the land of the Ngunnawal people, and pay respect to their elders past and present. On a beautiful, clear Canberra morning like today, you can really tell that they were on to something in making this land their home.

Thank you to the CFMEU for organising today’s ceremony and inviting me to share in today’s commemorations.

It wouldn’t be news to anyone here that the CFMEU has a reputation for toughness. You would also know that this toughness and willingness to take a stand is directed to the best possible end: protecting workers’ rights, their safety at work, and ultimately their lives.

These aren’t things that our community should compromise on, no matter how much some of those in the parliament may want us to. Thank you for always holding the line.     

On this date each year we come together to reflect on all the lives that have been lost at work, and the lives changed forever because of injuries sustained on the job.

We pause to think about the fathers and husbands, the sons and mates, the daughters and wives who went to work and did not come home.

One loss of life at work is too many. One broken limb or blinded eye is too many. Sadly, more than 40 Australians have already been killed in workplace accidents this year alone. Hundreds more have sustained serious injuries.

So many of you here today know someone that has been affected by a workplace tragedy. We mourn your loss and stand beside you in your grief. We also share your anger at deaths and injuries which should never have happened.

All workplace deaths are preventable.

It is of vital importance that government, unions and employers acknowledge this fact and work together to stamp out unsafe practices, minimise risks and send workers home safely. Every worker, every day.

Reckless beyond words? A data-driven look at Australian young people today 

Speech to the National Youth Conference

Canberra

Thank you to Bob Gregory for the generous introduction, and to Jordan Kerr and the conference organisers for inviting me to be part of the National Youth Conference 2015. I acknowledge that we are meeting today on the land of the Ngunnawal people, and acknowledge their elders past and present. I also acknowledge the young Ngunnawal people who make such a contribution to Canberra’s community life and ensure that this area’s Indigenous history continues to be part of our common story.

In 1950, life expectancy for an Australian bloke like me was about 67. At 42, that means back then I’d have been considered well into the later innings of my life. One of the great things about life expectancy increasing to 82 today is that I’m now probably only halfway through my life’s journey. Unfortunately, I still don’t think that lets me squeak into the category of ‘young person’ though, so thank you for making an exception and having me along today anyway.

A little while ago I came across a column in one of our major metro papers where the writer talked about his horror at the behaviour of young Australians out and about on a Saturday night. He described seeing police and other revellers ‘routinely disrespected, sworn at, made fun of, shoved, taunted and generally treated like garbage by swarms of drunken youths.'

In a report about the emergence of new social problems, I was also dismayed to read: ‘bikie gangs and overseas criminal syndicates [are] taking advantage of the highly addictive aspect of ice to actively hook thousands of young Victorians.’

Both of these stories brought to mind the former-Treasurer Peter Costello (that noted expert of youth culture). Some years ago he gave a speech stating: ‘We do not have to look far to see evidence of moral decay all around us. We can see it and hear it in entertainment like rap music, in songs that glorify violence or suicide and the exploitation of others.’    

All of this made me start to really worry about the drunken, drug addicted, depraved young people around today. So as an economist, I did what economists do: I turned to the data.

I started looking at all the indicators I could find on how young people today compare with their predecessors. We’re very fortunate in this country that the Australian Bureau of Statistics collects time series data on things like school attainment rates, drug and alcohol use, teen pregnancy and crime. So all the evidence we need of young people’s ‘moral decay’ should be right there in hard numbers.

Except it isn’t.

Innovation and reform: Labor’s multinational tax agenda 

Speech to the Minerals Council of Australia Taxation Conference

Melbourne

I’d like to thank Brendan Pearson from the Minerals Council for the invitation to be here today. I’ve known Brendan for almost two decades, since he was a scribe for the Australian Financial Review, and I worked as trade adviser to the late Western Australian Senator Peter Cook. Brendan is consummately polite, thoughtful, and willing to engage with detail. I was very pleased when Brendan became Chief Executive of the Minerals Council in December 2013, and I know he has the respect of both sides of politics. At Brendan’s invitation, I’ve been involved in a number of Minerals Council events over the past year, and look forward to continuing our conversation in the years to come.

That said, I know I wasn’t your first choice for today, and I come bearing apologies from Shadow Treasurer Chris Bowen. Chris had a pre-existing commitment representing Australia’s interests at the 2015 Boao Forum, otherwise he would have been here.  

On a visit to Perth earlier this month, I took a tour of BHP’s Integrated Remote Operations Centre. Many of you will have visited this centre – or its Rio counterpart. There’s something extraordinary about being at the heart of a network of computers that are operating one of the largest mining operations the world has ever seen. With my parliamentary colleague Alannah MacTiernan, we chatted with the rail operators, who are routing trains 1500 kilometres away; to the port team, who are monitoring dust levels in Port Hedland in real time; and to people who are operating individual machines. One man, sitting in front of half a dozen television monitors, was operating a machine to drill blast holes. He had worked for years as a drill operator, and reminded us that being in the cab is a lot tougher on your back. At its best, technology and ingenuity can boost productivity, and create better jobs.

Sharing the Future: Competition in the App Age

National Press Club
Canberra

I acknowledge the Ngunnawal people, the traditional owners of the land we meet on today, and thank the National Press Club for the invitation to speak with you. I also thank my parliamentary colleagues who have joined me, including Terri Butler, Pat Conroy, Mark Dreyfus, Ed Husic, Clare O’Neil, Melissa Parke and Tim Watts. It’s an honour to serve alongside each of you. If you’ve spoken with them, you will know that it’s impossible to come away from a conversation with any of these people and not feel optimistic about the future of the ALP.

I was proud to stand with Bill Shorten and Chris Bowen just a few weeks ago when we announced our package for fair taxation of multinational companies – a fully costed policy package, grounded in work from the OECD, delivered in the first half of the parliamentary term. You don’t see that every day.

Our multinational tax package is about ensuring Australia’s tax system keeps pace with changing business practices in an increasingly global economy. We want to see big multinationals pay their fair share of tax. We also want to see all businesses – big and small, local and international alike – have a fair chance of succeeding because they are competing on a level playing field where the same rules apply to all. 

Race against the machine or race with the machine?

Laying the foundations for an innovative, productive and equitable Australia

Speech - Corrs Chambers Westgarth
Perth

10 March 2015

Nearly five years ago, I made the switch from professor to politician. I’ve never regretted the transition, but it continues to surprise me how different the two occupations are.

In academia, specialisation is valued – you want to pick an area so narrow that you can know more about it than anyone else in the world.

Politics is a generalist occupation – in a typical day, I’d go from talking superannuation to local jobs, from family counselling programs to Free Trade Agreements.

University economics departments value sharp distinctions, and blunt critiques. Politics is a team sport, so you need to build consensus to bring about reform.

One of the really noticeable things about politics is how the language of economics gets used. Terms like human capital, comparative advantage and public goods might be fine for the lecture theatre, but they have a tendency to leave people cold.

When we fail to engage, to explain, and to connect, there is a risk that people go along with economic changes not because they understand them, but because they feel they have no other choice.

Nowhere is this truer than in the case of productivity.

Matter of Public Importance debate

The Abbott Government's politicisation of the Intergenerational Report

5 March, 2015

Egalitarianism is a great Australian value and over the last generation inequality in Australia has been rising. The 2010 Intergenerational Report had an in-depth section on disadvantage and on the rising gap between rich and poor, but this Intergenerational Report does not contain the word 'inequality.'

Now why would that be? Perhaps it is because this is a government that has cut the wages of the cleaners who clean their offices while it is sending a billion dollars offshore. Since coming to office, this government has given a billion-dollar handout to multibillion dollar firms who need a tax break like Prince Phillip needs a knighthood. This is a government that likes channelling Robert Menzies to split Australia into 'leaners' and 'lifters.' In Britain the Tories are doing the same—they are talking about 'strivers' and 'skivers'. But it is all of a piece. It is the idea of 'us and them'. This is a government that wants us to be split into two Australias. This government's idea of fairness is sending the under-9s up against the Hawks.

This Treasurer is a Treasurer of, by and for the top one per cent. The figures in table A3 of this Intergenerational Report show that age and service pensions, as a share of GDP, are going to be down and that education spending will be halved. This is a government that is raising superannuation taxes on the poor and cutting superannuation taxes on the rich. This is government is so unfair that the Sheriff of Nottingham would be voting Palmer in the Senate.

These are insecure times and Australia needs a Treasurer who will instill confidence, not the sort of Treasurer who is likely to tweet: 'Hey gang, what do you think the deficit should be?' before the next ERC. This is a Treasurer who has run a million-dollar advertising campaign to sell his Intergenerational Report. That is enough to make you fall off your chair.

Why has this Treasurer been late in delivering his Intergenerational Report? Why has he, as the Shadow Treasurer has pointed out, broken the Charter of Budget Honesty? Why is he in breach of the law? Maybe it is because he has been doing his own numbers rather than the budget numbers. Maybe he has been a little bit too busy updating his LinkedIn profile to put together the Intergenerational Report.

ANZSOG/VPSC Victoria Lecture Series

Melbourne

19 February 2015 

In late 2001, at the age of fifty-five, the Australian journalist Elisabeth Wynhausen decided to take leave from her job and try life as a low-wage worker. Following in the footsteps of George Orwell’s Down and Out in Paris and London and Barbara Ehrenreich’s Nickel and Dimed, Wynhausen’s Dirt Cheap documents her year living in budget accommodation and working at entry-level jobs.

In one job, Wynhausen moved to a country town and worked packing eggs. She earned $14 an hour in a job that started at 6 a.m., left her body aching at the end of the day, and where the smell from the nearby chook sheds was constant. Three weeks in, the manager, a millionaire several times over, came to speak to the workers. He announced that the company was selling its egg division. ‘It’s not all doom and gloom,’ he told them – but they knew their jobs were going. Wynhausen was struck by the fact that none of the workers challenged the manager: ‘seeing them standing mute in front of the boss was like seeing them stripped of all defences’.