Andrew Leigh

THE ABBOTT-HOCKEY BUDGET AND THE FAIR GO

APPROPRIATIONS DEBATE

HOUSE OF REPRESENTATIVES
26 MAY 2014

Whether you ask parents, pensioners or conservative premiers, it is pretty clear that this budget is deeply unpopular—perhaps the most unpopular budget since polling began. One of the reasons for this is that it breaks so many promises: in it, pledges of no cuts to health, no cuts to education, no cuts to pensions, no cuts to the ABC and no new taxes are smashed like plates at a Greek wedding. Broken too is the pledge not to cut more than 12,000 public servants, a broken promise which falls particularly hard on my electorate, and the promise not to make further cuts to foreign aid: now Australia will see itself doing less vaccination and building fewer sanitary projects—saving fewer lives. It appears that, when Mr Abbott was sermonising for the previous three years about the need for politicians to keep their word, he was referring to everyone but himself.

Addressing the National Press Club, I talked about a generation of rising inequality, how the Abbott Government's policies will affect inequality and the importance of maintaining Australia's egalitarian ethos (download audio; iTunes podcast):

ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION
MEMBER FOR FRASER

Battlers and Billionaires: Australian Egalitarianism Under Threat*

National Press Club Address

THURSDAY, 27 MARCH 2014

CANBERRA


In 2002, two bombs exploded in Bali nightclubs, killing and injuring hundreds of people. At the local hospital, there was a shortage of painkillers. Graeme Southwick, an Australian doctor on duty, asked patients to assess their own pain levels. He kept being told by patients in the ‘Australian’ ward that they were okay – the person next to them was suffering more.

Coming across this account, historian John Hirst was reminded of the description of injured Australians in Gallipoli nearly a century earlier. He quotes the official war historian Charles Bean, who describes the suffering and then says, ‘Yet the men never showed better than in these difficulties. The lightly hurt were full of thought for the severely wounded.’

Even in the midst of their own pain, the first instinct of many Australians was to think of those worse off than themselves.

Even the military, one of our most hierarchical institutions, is infused with the nation’s egalitarian spirit. Indeed, it has been suggested that this is one reason why our forces are such effective peacekeepers. When the United Nations intervened in Somalia in the 1990s, our troops were more inclined to go on foot patrols than the French and American forces, who tended to stay in jeeps and behind sandbags.

As a result, our troops were more likely to listen to local townspeople rather than just hearing the views of tribal leaders. This in turn made them more effective at solving local disputes. It was, as one account put it, ‘an example of the traditional Australian sympathy for the underdog being put to very good use’.

Egalitarianism goes deep in the Australian character. Most of us don’t like tipping. I’d like to think that’s our egalitarianism at work. There aren’t private areas on our beaches. Audiences don’t stand when the prime minister enters the room. We’re a country that happily dispensed with knighthoods a generation ago, and no sensible person would suggest that the land of ‘mate’ should become the kingdom of ‘sir’.

In Australia, it’s quite normal to sit in the front seat of a taxi. If the plumber drops around, we’ll offer a cuppa. One of our billionaires is ‘Twiggy’ and past Australian Reserve Bank governors include ‘Nugget’ and ‘Nobby’.

Egalitarianism is as much a part of Australia’s national identity as vegemite, Uluru and the Big Banana.

And yet that egalitarian ethos is increasingly under threat from a rise in inequality over the past generation.

Let me give you a few numbers.

I spoke in Parliament today to celebrate the arrival of the Bruce GP Super Clinic, and to ask what it is about efficient, affordable and accessible healthcare that the Government thinks is ‘nasty’?:

This week saw the opening of the GP Super Clinic in Bruce. Residents in Canberra's north now have better access to general practitioners, nurses, pathologists, dieticians, counsellors and a range of other allied health practitioners. The facility is located on the grounds of the University of Canberra, which means it can integrate teaching, training and research. There are already eight GPs treating patients in the new clinic in Bruce, and there is capacity to expand to 18 doctors and related supporting services.

The super clinic will help to meet the expected demand coming from the growth in Canberra's northern suburbs. It will provide improved access for northsiders to vital health services. I celebrated the opening of the clinic; I helped turn the first sod last year with former health minister, Tanya Plibersek, who is a passionate supporter of GP super clinics, unlike the current health minister.

My speech at the Lowy Institute looks at population size, immigration flows and refugee policy.

Does Size Matter? An Economic Perspective on the Population Debate*

Lowy Institute
13 March 2014

Andrew Leigh
Shadow Assistant Treasurer
Federal Member for Fraser
www.andrewleigh.com

I’ve wanted to say something about this rather controversial topic for a long time. Now that I take to the podium, I can’t help thinking of an epitaph Dorothy Parker penned for her gravestone: ‘Wherever she went, including here, it was against her better judgment.’

A great epitaph for a writer. Perhaps not so much for a politician. Nevertheless, I hope what follows shows that my belief in evidence is stronger than my desire to avoid tough questions.

If there’s one thing that’s really big in the population size debate, it’s the size of the scare campaigns made by both sides.

A big Australia, one side tells us, is a ‘catastrophe’[1] that ‘risks destroying our traditions and even our common language’.[2] Immigration has ‘undermined our higher education system, [and] put intolerable pressure on an overstretched health and transport system’.[3] Some go further, blaming ‘limp-wristed citizenship requirements’ for ‘ethnic crime waves sweeping across our nation, where samurai swords and machetes have become part of the media lexicon’.[4]

Not to be outdone, the other side of the debate argue that: ‘Putting caps on growth would turn Australia into a stagnant, ageing and inward-looking country – a basket case to rival the declining states of Europe.’[5] Some have warned that if population growth is too slow, the share market would stagnate, small businesses would be unable to fund their ventures, taxes would rise, and debt would balloon.[6]

And just in case overheated claims didn’t make the discussion difficult enough, each side delight in building straw men. Perhaps it makes people feel better when they take a stand against ‘unchecked population growth’ or ‘zero population growth’. But in reality, hardly anyone publicly advocates uncapped immigration, and few population commentators argue for zero immigration. The serious conversation is whether we want our population to grow modestly or significantly. But it risks being derailed by those who caricature their opponents to score a cheap point.

Perhaps one reason the Australian population debate is so odd is that because – from a population standpoint – Australia is an odd country.

I gave the inaugural 'Challenge Your Mind' lecture at the University of Canberra today, speaking on the topic of the media and politics.


The Naked Truth? Media and Politics in the Digital Age*

Andrew Leigh MP
Federal Member for Fraser
www.andrewleigh.com

‘Challenge Your Mind’ University of Canberra Public Lecture Series
1 August 2012

The Truth, Naked

At the end of 1992, a team of us got together at Sydney University to run for the student newspaper, Honi Soit. We needed a name with a hint of journalistic credibility and a bucketload of electoral appeal, and so we opted to call ourselves ‘The Naked Truth’.

We threw ourselves into the campaign with the kind of frisky eagerness only a dozen 20 year-olds can muster. By day we sang our campaign song to bemused classes, removing much of our clothing to reinforce the team name. By night we put up posters and chalked ‘The Naked Truth’ around the campus. One of our team, Verity Firth, even brought along her younger brother Charles to help out. A class of medical students promised to vote for us en bloc if a member of the Naked Truth team would streak through their lecture hall. One of us obliged.

And so my year as a journalist began. I interviewed Andrew Denton, Henri Szeps and Dorothy McRae-McMahon, went inside Long Bay jail and a submarine, spoke to a magician, a monk and a basketball commentator, and wrote about child sponsorship, biblical literalism and virtual reality machines. In a display of youthful chutzpah, I also reviewed a handful of sports cars, making me (I hope) the only motoring writer in the history of student journalism. When the 1993 election came around, I managed to get Keating and Hewson to answer twenty questions apiece.[1] The year even got me my first article in the Sydney Morning Herald, on illegal street racing.

I loved journalism, but even at the level of student journalism I found it hard. Pitching stories. Separating beef from bulldust. Staying objective. Since writing for Honi, I’ve written hundreds of thousands of words in newspapers: all of them opinion.

Because of that, I approach the topic of journalism with a modicum of trepidation. Plus, because I’m a politician, you should probably regard my views on journalists as akin to the views that a kangaroo has about gun ownership.

I spoke today at the McKell Institute in Sydney on Australian economic history, with some ideas for the future. The speech is below.

What Do We Eat After the Low-Hanging Fruit? A Brief Economic History of Australia, With Some Lessons for the Future*

Andrew Leigh MP
Federal Member for Fraser
www.andrewleigh.com
[email protected]

18 May 2012
McKell Institute, Sydney

In the Pacific Ocean, off the west coast of South America, sit the Galapagos Islands. Although they straddle the equator, the pattern of ocean currents have a cooling effect, making them an ideal breeding ground for tortoises, iguanas, penguins, finches, albatrosses, gulls, and pelicans.

Because the islands are volcanic, what’s striking about animal life on the Galapagos Islands is that all of it came originally by flying or floating nearly 1000 kilometres from Ecuador. And yet for the species that survived, life on the Galapagos Islands was perfect. Migrating birds lucky enough to be blown off course found an environment with few natural predators. Tortoises that floated here found beaches perfectly suited to their breeding environments. Life flourished.

Looking back across Australian economic history, I am often struck by the extent to which luck has similarly played a part in our success. Politicians are sometimes reluctant to talk about luck – preferring to focus on the things we can control than those we can’t. It is true that ‘chance favours the prepared mind’. But I think it’s still worth talking about the role that luck has played, if only to help understand what preparations we should be making. If we don’t do that, we’re like the Galapagos tortoise, which must have thought itself the luckiest species on earth, until British sailors discovered the islands in the late-eighteenth century, and ate them in their thousands.

Over the 2¼ centuries since European settlement, there have been half a dozen strokes of luck, each of which has tangibly boosted average living standards.[1] Let me take a moment to talk about them in turn.

I spoke tonight at the Sydney Institute on the topic of inequality. The embedded video is a short version, and the long-play version of my speech is below.

(See also reports in the SMH and Canberra Times, and an op-ed version in the National Times.)

Why Inequality Matters, and What We Should Do About It*

Andrew Leigh MP
Federal Member for Fraser
www.andrewleigh.com

Sydney Institute
May Day 2012

Introduction

Imagine a ladder, in which each rung represents a million dollars of wealth.[1] Imagine the Australian population spread out along this ladder, with their distance from the ground reflecting their household wealth.

On this ladder, half of all households are closer to the ground than they are to the first rung.

The typical Australian household is halfway to the first rung.

Someone in the top 10 percent is at least 1½ rungs up.

A household in the top 1 percent is at least 5 rungs up.

Gina Rinehart is 5½ kilometres off the ground.

‘The rich are different from you and me’, wrote an awestruck F. Scott Fitzgerald.[2]

‘Yes’, wrote the laconic Hemingway. ‘they have more money.’

But why should we care about the gap between rich and poor? Shouldn’t we focus on raising the bottom, rather than how much wealthier the top are than the rest? Aren’t discussions of inequality merely – shudder - ‘the politics of envy’?

Certainly, there are eminent economists who have taken this position. The University of Chicago’s Robert Lucas has argued that ‘of all the tendencies that are harmful to sound economics, the most seductive, and in my opinion, the most poisonous, is to focus on questions of distribution’. Harvard’s Martin Feldstein says ‘there is nothing wrong with an increase in well-being of the wealthy or with an increase in inequality that results [solely] from a rise in high incomes’.[3]

Contrary to Lucas and Feldstein, I want to persuade you that inequality matters, that the gap between rich and poor really is an important public policy issue, even apart from the question of poverty. Inequality has costs and benefits, and policymakers need to think hard about the right level of inequality. This is an issue that Wayne Swan has put squarely on the national agenda, and I commend his article in The Monthly to you.[4]

To begin, let me take a moment to review what we know about inequality in Australia. There are many measures of inequality, but I’m going to focus on top income inequality, because it allows me to look at a much longer period, and because it’s very clear that when we’re talking about top incomes, the topic is inequality rather than poverty.[5]

I gave a speech to a group of Sydney University students this morning on ‘Five Science Breakthroughs That Could Change Politics’. The text is below.

‘Five Science Breakthroughs That Could Change Politics’*

Andrew Leigh MP
Federal Member for Fraser
www.andrewleigh.com

Talented Students Program Breakfast
Sydney University
18 April 2012

Introduction

In 1910, Alexander Graham Bell, inventor of the telephone, was visiting Australia. In Melbourne, he gave evidence to a parliamentary committee on communications.[1] He told them his ‘dream’ was that ‘a man will be able to talk with any other in any part of the United States’. Bell criticised our use of single-wire telephones, and encouraged Australia to install two-wire circuits to avoid ‘cross talk’. And he praised the quality of Australian electrical engineers. But even the great Bell didn’t get everything right. Asked about mobile telephones, he said that wireless telephony was unlikely to compete, due to the difficulty of securing privacy.

Reading Bell’s evidence a century on, I am struck by the sense of optimism and possibility, and my predecessors’ deep interest in one of the scientific breakthroughs that would shape the modern age.

There are three reasons I wanted to speak with you about science breakthroughs. First, I don’t think it’s a topic that politicians spend enough time on. For example, a survey published in 2010 of federal politicians’ reading habits found only one respondent reading a book about science.[2] And as the climate change debate showed, even findings that are broadly accepted by scientists can be described by certain politicians as ‘absolute crap’.

Second, talking about science is good for us because it engenders a sense of awe. As Monty Python once pointed out, our galaxy, one of millions in the universe, is a hundred thousand light years side to side.[3] As the late Christopher Hitchens observed, when our sun finally gives out, the people watching it will be a higher evolutionary form of humans than us.[4] Bryan Gaensler describes ‘Oh-my-God’ particles, which have been recorded moving through the universe at 99.9999999999999999999996% of the speed of light.[5] Like the great arts, science can be beautiful and thrilling.

Third, I’m immensely proud of what science has achieved. The stump-jump plough transformed nineteenth century agriculture. The winged keel allowed us to end the US’s 132-year hold over the America’s Cup. Spray-on skin helped burns victims. My own electorate contains CSIRO, who invented wi-fi and ultrasound; and ANU, the workplace of Brian Schmidt, who shared the 2011 Physics Nobel Prize for his work showing that the universe is expanding at an accelerating rate.

Book Launch of Jemma Purdey, From Vienna to Yogyakarta: The Life of Herb Feith
Andrew Leigh MP
Parliament House
6 July 2011

I begin by acknowledging the traditional owners of the lands on which we meet today, and thanking those who have worked hard to organise today, particularly Louise Crossman and Nik Feith Tan.

Jemmy Purdey, family and friends of Herb, internationalists all – thank you for coming today to celebrate Herb’s life and Jemma’s fine book.

I spoke at the Lowy Institute today, suggesting a few ideas for improving Australia's aid program.

Fragile States and Agile Aid: Some Ideas for the Future of Australia’s Development Assistance Program

Andrew Leigh
Federal Member for Fraser

Lowy Institute

18 May 2011

I acknowledge the traditional Indigenous owners of the lands on which we meet today.

Aid Works

Dai Manju lived in a small village in central China. Because her parents were ill and couldn’t afford the cost of sending her to school, she dropped out. When journalist Nicholas Kristof visited in 1990, she was hanging around the school hoping to pick up bits of knowledge.[1]

After publishing a front page article about Dai in the New York Times, Kristof was chuffed to receive a donation of $10,000 from a reader. He promptly sent it on the school, which spent it on improving facilities, and provided Dai with a scholarship to stay in education so long as she passed exams. After a good amount of the money had been sent, Kristof phoned the donor to thank him for the generous gift. It was only then he realised that the man had in fact only sent $100, and the slip of a bank teller’s fingers had multiplied it one-hundredfold. Informed of their error, the bank agreed to provide the difference as a donation.

After graduating as an accountant, Dai now runs her own business employing many others, and is able to send money back to improve the lives of her parents. Because many of the other girls in her class also received ‘bank error in your favour’ scholarships, the village now has a road.

Spent wisely, foreign aid can transform lives for the better. This year, Australia’s foreign aid program will build 2000 schools in Indonesia, fund a Women’s Crisis Centre in Fiji, prevent 8000 cases of blindness in East Asia, and provide clean water to 1.2 million people in Southern Africa. World Vision CEO Tim Costello claims that this year’s aid budget will save 200,000 lives.

Yet too often, aid debates become removed from the people that they are intended to help. When aid advocates ask the public for donations, they typically ask for help to solve an immediate and practical problem – feeding a child, building a well, providing schoolbooks. To the best of my knowledge, no aid campaigner ever knocked on a door and said to the resident: ‘we’d like you to consider increasing your aid contribution to 0.5 percent of your income in 2015-16, with the ambition of going to 0.7 percent in the future’.

Don’t get me wrong: the quantum of aid is important. I recognise that Australia’s aid contribution as a share of national income still places us in the bottom third of donor countries. Scaling up our aid to half a cent in the dollar will put us at the developed-country average.[2] This is eminently sensible given that 18 of our 20 nearest neighbours are developing nations, and we sell over $90 billion worth of goods to developing countries each year. Few developed nations have as much self-interest in running a good aid program as Australia. But we should never forget that the purpose of foreign aid is to alleviate disadvantage. More aid creates the potential for reducing poverty – but it will not happen automatically.

Although the input-wallahs would occasionally have us believe otherwise, the most interesting debates in foreign aid are not about the quantum of assistance.[3] So today, I want to suggest a few ideas about how to increase the effectiveness of the Australian aid program. This is particularly important in the context of the scaling up of Australia’s aid program. Over the next four years, the Australian aid budget will almost double in nominal terms. This represents a unique opportunity to ensure that our aid is spent in a way that does as much good as possible.

For an economist like me, that means identifying Australia’s comparative advantages in foreign aid, and rigorously evaluating our aid programs. Let me deal with each in turn.