Ten Lessons for Economic Policymakers
Economic Society of Australia Annual Dinner 2023
Commonwealth Club, Canberra
Wednesday, 1 November 2023
Introduction: The Power of Ideas
John Maynard Keynes once wrote ‘The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else.’
In academia and parliament, I've certainly found that to be true. Economics is surprisingly powerful as a tool for public policy. Those of you who are established in your careers will know well the power that economics has had in terms of shaping Australia's trajectory.
Last month, we lost Max Corden, one of Australia's great economists, and somebody who, after fleeing the Nazis in 1939, became one of the great Australian pioneers of openness. Max's work on tariff reform was used by the Tariff Board, the predecessor to what is now the Productivity Commission, to make the case for Gough Whitlam’s 1973 tariff cut, in which all tariffs were cut overnight by 25%.
Max's story was one of coming to Australia, being welcomed here and becoming a great advocate for openness. He knew my grandfather, Keith Leigh, who died two years before I was born, and would tell me about how the two of them spoke of world events at Melbourne University in the 1950s and 1960s. That intellectual curiosity and global outlook reflects the very best of Australian academia and the economics profession.
You may have heard Thomas Carlyle’s put-down of economists as being ‘the dismal science’. Perhaps you know that the reason that Carlyle described our discipline as the dismal science was that we had what was in his mind the ‘dismal’ view that all human beings – whatever their skin colour – should be regarded as equal.
In that light, I proudly wear the badge of the ‘dismal science’. It is a reminder that economics has its origins in the notion of human equality; the principle that one person's wellbeing is as valuable to society as another's.
Max Corden was also a remarkably generous soul in terms of the time he spent with others. He always seemed to have time to ask junior researchers about their work. When I visited Melbourne University in 2006, I loved the chance to engage with Max, to chat with somebody who had worked on the world stage on issues of trade liberalisation.
My speech tonight proposes ten lessons for economics policymakers. When I refer to economic policymakers, I’m drawing a broad net. I'm including people who have made a contribution in consulting, those who have worked in the public service, those who are working in journalism, and those who contribute to the public debate. I'm thinking of the policy conversation writ large, not simply some narrow slice of it.Read more
RANDOM TRIALS OF POLICY ARE JUST WHAT DOCTOR ORDERED
The Daily Telegraph, 3 November 2023
One of the Australian Government's announcements this year has been the creation of the Australian Centre for Evaluation. The Centre will conduct rigorous evaluations, including randomised trials, to figure out whether policies are effective.
But why do we need randomised trials? To answer this, it helps to turn to medicine, a field that has been transformed by randomised trials.
A major reason why medicine saves more lives today than it did in the late-19th century is that theories are put to the test using trials.
SKY NEWS AFTERNOONS WITH KIERAN GILBERT
THURSDAY 2 NOVEMBER 2023
SUBJECTS: Cost of living; Bulk billing rebate; Charity town halls; Clean energy investment; Blueprint for the future of the not-for-profit sector.
KIERAN GILBERT (HOST): Joining me live in the studio is the Assistant Minister for Competition, Charities and Treasury, Dr. Andrew Leigh.
Thanks for your time. The Prime Minister is saying cost of living is the number one game, we do know there are lots of other issues and those international headwinds, but that's the main issue dominating most people's time and focus right now in Australia.
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, TREASURY AND EMPLOYMENT ANDREW LEIGH: Well, the world's throwing a lot of price pressures at us right now, Kieran. And through oil prices, through supply chain challenges flowing out of the war in Ukraine. We know that inflation is high and we're doing all we can to work alongside the Reserve Bank in reining it in. So, you just had inflation figures coming down that showed very clearly that if it wasn't for the government's measures, childcare costs would have gone up 13 per cent. Instead they went down 6 per cent. That energy price inflation and inflation in other areas was lower than it would have been had the government not taken those responsible cost of living measures.Read more
2CC CANBERRA BREAKFAST WITH STEPHEN CENATIEMPO
THURSDAY 2 NOVEMBER 2023
SUBJECTS: Bulk billing rebate; Charity town halls; Competition Review Taskforce.
STEPHEN CENATIEMPO (HOST): Andrew Leigh is the Assistant Minister for Competition Charities Treasury and the Member for Fenner. Andrew, I need a bit of common sense after that, mate.
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, TREASURY AND EMPLOYMENT ANDREW LEIGH: I'm sure you do, Stephen. Here I am.
CENATIEMPO: Thank you. Now, there's a couple of things I want to talk about this morning. The changes to the GP bulk billing rebates, just explain to us exactly what's happening here, because the headline is "tripling the bulk billing incentive", but it doesn't necessarily apply to everybody, does it?
LEIGH: So, this applies to patients who are bulk billed, which is about two-fifths of GP visits in Canberra, three-fifths nationally. And it means that for a GP who sees a bulk billed patient, the rebate they get from the government has gone up 34 per cent. That's the biggest increase in the bulk billing incentive since the inception of Medicare. It's a massive investment in Medicare and in sustaining bulk billing. That's critical for children, for pensioners, for people on those concession cards across Canberra and time of a cost of living crisis, it's absolutely critical that we put money back into people's pockets and sustaining bulk billing is one way we're doing that.Read more
ABC NEWS BREAKFAST WITH EMMA REBELLATO
THURSDAY 2 NOVEMBER 2023
SUBJECTS: IMF recommendations to reduce inflation; Government policies to respond to cost-of-living crisis; RBA decision on interest rates.
EMMA REBELLATO (HOST): Well, the International Monetary Fund has urged Australia's Reserve Bank to increase the official cash rate further citing the need to reduce inflation to the target rate of two to three per cent as soon as possible. Assistant Minister for Competition, Charities and Treasury Andrew Leigh joins us now from Parliament House in Canberra.
Good morning to you.
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, AND TREASURY ANDREW LEIGH: Morning, Emma. Great to be with you.
REBELLATO: So, are the alarm bells ringing within the government now?
LEIGH: We've been very concerned about the global inflation crisis and the effect that it's having on Australians. In the last budget, we brought down a range of cost-of-living measures designed to work in tandem with the Reserve Bank in order to bring inflation back into the target band. So, for example, just in the last quarter, you saw the Australian Bureau of Statistics reporting that if it hadn't been for our measures, then childcare costs wouldn't have gone up seven per cent. Instead they went down 13 per cent. And similarly, in the case of rents, they reported that our changes to Commonwealth Rent Assistance had put downward pressure on inflation. Likewise for energy prices with our energy bill relief package.Read more
Senator The Hon Katy Gallagher
The Hon Dr Andrew Leigh MP
David Smith MP
Alicia Payne MP
Joint Media Release
MAKING MEDICARE STRONGER FOR CANBERRANS
Today, the largest investment in bulk billing in the 40-year history of Medicare takes effect thanks to the Albanese Labor Government, with the tripling of the bulk billing incentive for local GPs.
Bulk billing is the beating heart of Medicare.
After nine years of cuts and neglect by the former government, bulk billing rates have declined sharply and it’s never been harder or more expensive for Australians to see a GP.
This historic investment means in Canberra, there will be a 34% increase in the payments to a bulk billing GP.
On top of our investment in bulk billing, we are investing in an $1.5 billion indexation boost across the board to Medicare rebates, increasing the amount that doctors receive for Medicare services and reducing pressure on GPs.
The Albanese Government is committed to making it more affordable for you and your family to get the health care you need.
Quotes attributable to Senator Katy Gallagher.
“Our historic investments into bulk billing will make a big difference in Canberra.
“Doctors’ groups have called this a “game-changer” and GPs have said this will help them maintain and even shift back to bulk billing.”
Quotes attributable to the Hon Andrew Leigh MP, Member for Fenner:
"When I speak to doctors and nurses in my electorate the need for more support for Medicare to make bulk-billing sustainable is the first thing they raise.
“Labor's always backed Medicare in and these investments are very welcome after nine years of Coalition neglect."
Quotes attributable to Dave Smith MP, Member for Bean:
“Bulk billing is a significant issue in my community. It needs to be addressed.
“I welcome this initiative and look forward to seeing this make a real difference on the ground.”
Quotes attributable to Alicia Payne MP, Member for Canberra:
“Canberra has some of the lowest rates of bulk billing in the country, and Canberrans know how hard it can be to find a bulk billing doctor.”
“The Government’s historic investment in bulk billing means more children, families, pensioners and concession card holders in Canberra will have access to the universal, prompt and world class medical care they deserve.”
The Hon Amanda Rishworth MP
Minister for Social Services
CREATING A BETTER FUTURE FOR THE NOT-FOR-PROFIT SECTOR: HAVE YOUR
In its continued commitment to support the not-for-profit sector, the Albanese Labor Government is pleased to announce the release of an Issues Paper to start a conversation about the Not-for-Profit Sector Development Blueprint.
First announced in October 2022, the Blueprint will provide a roadmap for Government reform and sector-led initiatives to boost the sector’s capacity to support and connect Australian communities.
Minister for Social Services Amanda Rishworth said the release of the Issues Paper by the Blueprint Expert Advisory Group is central to hearing from everyone on how to strengthen the not‑for‑profit sector for consideration in developing the Blueprint.
“Australia’s not-for-profit sector contributes deeply to the social, civic, economic, cultural and environmental dimensions of life in Australia,” Minister Rishworth said.
“We thank the Blueprint Expert Advisory Group members and advisors representing the sector who are leading the development of the Blueprint.Read more
STRATEGIES FOR STRENGTHENING DEMOCRACY
ANU Crawford Leadership Forum
Australian National University, Canberra
I acknowledge the Ngunnawal people on whose lands we meet, and pay respects to all First Nations people present today.
It is a pleasure to be joining a distinguished panel, led by Professor Janine O’Flynn, and speaking alongside Dr Jeni Whalan and Ms Padma Raman.
It is only fitting that the organisers chose to hold this forum on Halloween, because the issues we face are ghoulish.
According to the Economist Intelligence Unit’s Democracy Index, the world entered a ‘democratic recession’ in 2016, and is yet to recover. Russia, Peru, Turkey and Myanmar are among the nations whose democracy scores have slumped. Pollster Afrobarometer reports that the share of Africans who prefer democracy to any other form of government has fallen from 75 percent in 2012 to 66 percent.Read more
Joint media release with
The Hon Jim Chalmers MP
APPOINTMENTS TO COMPETITION TASKFORCE ADVISORY PANEL
The Albanese Government has appointed seven experts in business, government, law and economics to advise on competition policy settings to build a more dynamic and productive economy.
Kerry Schott, John Asker, Sharon Henrick, David Gonski and John Fingleton will join Danielle Wood and Rod Sims on the expert advisory panel for the new Competition Taskforce.
The Taskforce has been established in Treasury to provide continuous advice on whether Australia’s competition policy settings are fit for purpose in the face of the big shifts underway in our economy.
Greater competition is critical for lifting dynamism, productivity and wages growth, putting downward pressure on prices and delivering more choice for Australians dealing with cost-of-living pressures.
LISTENING TO AUSTRALIA’S CHARITY SECTOR
Over the coming weeks, I will hold a series of town hall meetings to meet with charity sector representatives, and continue Australia’s largest-ever charity consultation.
The Australian Government values the expertise and the contributions of the charity and non-profit sector, which constitutes almost one-tenth of the economy, and over one-tenth of employment.
In the wake of the disconnection crisis, the pandemic and the Coalition’s war on charities, Australia’s charities and non-profits need support to continue their essential work in building stronger, fairer communities.
Shortly after the Albanese Government came to office, I conducted the largest charity consultation in Australian history, hosting town hall meetings in every state and territory capital city and online.
This year, I have held further charity sector town hall meetings in Brisbane, Perth, Adelaide and Launceston. The purpose of these meetings is to share ideas on how we can rebuild community trust and engagement, and to reinforce the Albanese Government’s commitment to partner with the sector to build a more connected Australia.Read more