Andrew Leigh

A new RBA paper by Mariano Kulish, Anthony Richards and Christian Gillitzer has some fascinating figures on housing. For example, did you know that the vast bulk of new housing has been created in the outer burbs?



Or that for their population, the density of Australian cities is much closer to North America than Europe?



All this, and much more, here.

I was happy to announce today additional funding under the National Rental Affordability Scheme for rental homes in north Canberra.

More affordable rental homes in North Canberra

Residents in North Canberra will have access to more affordable rental accommodation under the Gillard Government's National Rental Affordability Scheme (NRAS).

Andrew Leigh, Member for Fraser, welcomed the announcement of successful applications for NRAS round four which will deliver over 200 projects to build more than 17,000 properties for low to moderate income households to rent below market rate.

"I know the cost of rent is a real pressure for families and students in Canberra”, Andrew Leigh said.

“That’s why the Gillard Government is investing in addressing housing affordability to increase the supply of affordable rental properties. It’s important to ensure that there are affordable accommodation options for families as well as students so that living and studying in Canberra remains an attractive option.

“I am very pleased to welcome investment in these three projects. Community Housing Canberra, the United Vietnamese Buddhist Congregation and the University of Canberra have all successfully applied for funding for a range of different dwellings. Together, these projects will see the construction of more than 1500 dwellings around Canberra’s north side.

“These projects are three of many developments across the nation that will help to play a part in addressing housing affordability under NRAS.

“Before Labor came to office there were no programs aimed at improving the availability of affordable rental properties.

“I lobbied my Federal colleagues on these projects because many of my constituents have told me about their problems finding affordable rental accommodation. It’s exciting to see so many projects in Canberra’s north supported by NRAS” said Andrew Leigh.

The National Rental Affordability Scheme is about increasing supply of new affordable rental housing, reducing rental costs for low and moderate income households and encouraging investment and innovative affordable housing.

It also provides a welcome boost to the domestic construction industry where conditions remain soft due to the lingering impacts of the Global Financial Crisis and the withdrawal of stimulus.

“We provided support to domestic construction when the worst of the Global Financial Crisis hit and initiatives like NRAS continue to provide an ongoing pipeline of work for the sector” said Andrew Leigh.

NRAS offers financial incentives to the business sector and community organisations to build and rent homes to low and moderate income households.

The Gillard Government has committed to support 50,000 NRAS properties, with up to 35,000 dwellings across the country by 30 June 2014, and the remaining 15,000 by 30 June 2016.

The National Rental Affordability Scheme complements other Gillard Government initiatives to improve the community's access to affordable housing, including the $450 million Housing Affordability Fund and the $100 million Building Better Regional Cities program.

I'm participating in the government's Jobs Forum today (backing up after two very interesting days at the Tax Forum), but I can't let the chance go by to say something about the tragic passing of Steve Jobs. If there was a Nobel prize for innovation, Steve would've won it. His massive impact on the face of computing can be seen in the New York Times' graphic of some of the 317 Apple patents that list him as one of the inventors.

Even if you don't use a Mac, an iPhone or an iPad, your life has probably become better thanks to Steve Jobs, since many of his ideas diffused across to Apple's competitors. It seems appropriate that I'm typing this on an iPad, a machine that I couldn't imagine myself using when I first read about it, and one that I now can't imagine doing without (when I can prise it away from my four year-old).

Steve's last big announcement, iCloud, strikes me as something that's likely to be just as groundbreaking. His death at 56 has doubtless robbed the world of more ideas, but he created more than any other tech inventor of his generation. Steve, RIP.

In conjunction with Belconnen Arts Centre, I'm running a project called 'Mapping the Northside'. We'll be officially launching on 18 October, but here's a sneak preview.

MAPPING THE NORTHSIDE – brought to you by ANDREW LEIGH MP and BELCONNEN ARTS CENTRE
Tuesday 18 October – Thursday 17 November
What’s your favourite place? Andrew Leigh MP and Belconnen Arts Centre join to create a giant sized interactive map of the Federal electorate of Fraser on the northside of Canberra. Everyone is welcome to contribute and note their most meaningful places onto the map. This may be accompanied by a story, a photo, a poem, an artwork or performance work! Surprise us please!
More information > 6173 3300 (Belconnen Arts Centre) or 6247 4396 (Andrew Leigh MP)

This one is quite long so it's in two parts - my Sky AM Agenda appearance from yesterday with Jamie Briggs.http://www.youtube.com/embed/3hxEoPDCx2c?hl=en&fs=1

My AFR column today is on the psychology of tax reform.

The Psychology of Change, Australian Financial Review, 4 October 2011

In his book The Political Brain, psychologist Drew Westen argues that the marketplace that matters most in politics isn’t the marketplace of ideas, it’s the marketplace of emotions. Drawing on a plethora of anecdotes and research, Westen contends that reformers who trade solely on rational arguments are less likely to succeed.

So with the Tax Forum starting today, it’s worth momentarily stepping out of the enticing world of excess burden, elasticities and economic incidence; to consider how past tax reforms have drawn on emotion as well as economics.

Two of the most powerful emotions – fear and hope – have been on display in many of the tax reform movements of Australian history. The expansion of federal income taxation in the early-1940s was driven partly by fear of a Japanese invasion. Similarly, the stake that was driven through the heart of inheritance taxes in the late-1970s was the result of a fear campaign, made easier by the fact that thresholds were not indexed to keep up with inflation.

Hope has played a part too. In the Eureka Rebellion, miners rose up for the hope of replacing mining licences with a tax on gold production. In the mid-1980s, the Hawke Government painted an optimistic picture of how Australia could prosper with lower income tax rates, but with a tax base expanded to encompass capital gains and fringe benefits. Tackling climate change carries a similar message of optimism: if you want to generate the clean energy jobs of the future, the country with the highest level of CO₂ per capita needs to put a price on carbon pollution.

So the next time you bump into a budding tax reformer, perhaps the first question you should ask her is: ‘Are you peddling hope or fear?’.

Another lesson from psychology is that we feel losses more keenly than gains. So it may be tough to sell a tax reform that provides diffuse benefits to many, but imposes heavy burdens on a few. This is perhaps one reason why cutting border taxes was historically such a vexed issue. When tariffs fell, hardly anyone switched their vote because the import price of school shoes had been halved, but footwear workers who would lose their jobs campaigned against trade liberalisation.

Loss aversion is further magnified in a 24-hour media cycle. Conflict makes great television, so it’s little wonder that the $14 billion pension increase in the 2009-10 budget received less media coverage than the $2 billion flood and cyclone reconstruction levy in the latest budget. To the best of my knowledge, Today Tonight is still yet to run a story on the $3900 that tariff cuts put into the pockets of the typical Australian household.

Particular features of our tax system can be traced to the power of psychology. One reason that Australian company tax rates were historically too high is that voters mistakenly thought that the burden fell only on investors. With a broad recognition that company taxes also impose an economic burden on employees and consumers, rates have steadily fallen. Similarly, the term ‘payroll tax’ sounds like something that’s paid by the boss – yet we know that payroll taxes effectively come out of workers’ pay packets.

Hypothecation is also a tribute to the psychology of tax. In principle, there is no reason to link taxes with particular spending. According to standard economics, revenue should be raised in the most equitable and efficient way, and spent on the most worthy programs. Yet as a Treasury paper by Sam Reinhardt and Lee Steel points out, hypothecated taxes date back to the 1813 promise by colonial NSW to spend customs duties on orphanages and hospitals. In 1945, part of income tax was hypothecated to social services. Since 1984, the Medicare levy has helped pay for universal health care (though it has never paid more than a portion of public health care costs). Hypothecation is rarely efficient, but it persists because it offers a clear promise: if you pay A, you will get B.

Psychologists shouldn’t be asked to design our tax system any more than economists should be deployed as therapists. But that shouldn’t stop those of us who want to improve the tax system from learning a few lessons from political psychology. Emotions, loss aversion and hypothecation are good reminders that it takes more than the left side of the brain to implement enduring tax reform.

Andrew Leigh is the federal member for Fraser. He is one of the government representatives at the Tax Forum.

I was on ABC Radio National breakfast this morning, chatting with the razor-sharp Alison Carabine about politicians' pay. The decision is in the hands of the Remuneration Tribunal, but I thought it'd be worth discussing the economic evidence, which I tried to summarise in this 2009 AFR oped.

One of the frustrations I have about this debate is that it tends to operate mostly at the level of anecdotes and cliches (eg. 'pay peanuts - get monkeys', 'bigger honeypot - more bees', 'hey, wouldn't it be cool if the PM had a 7-figure salary?'). So while it's a risky discussion for a sitting MP to enter into, I figured it was worth adding some empirical evidence into the mix.

Here's the podcast. I also did an interview with 2UE's David Oldfield on the same topic, but alas, they don't have podcasts on their website.

Update: ABC 666 and the Canberra Times have articles on the same theme.

Are you aged under 24, with a zest to represent other young Australians? Then why not apply for a position on the Youth Engagement Steering Committee for the 2012 Australian Youth Forum? Applications close 31 October 2011. Details here.

If your community group needs a marquee for a special event, you might like to borrow mine. Here it is in action at the recent "Mt Rogers explorer day".



And here's a summary of the event from the organisers:

Project Summary: Mt Rogers explorer day was developed as an information day for residents surrounding Mt Rogers to inform them of the beauty in their backyard, being Mt Rogers reserve.  Mt Rogers landcare group organised displays and giveaways, and Ginninderra Catchment Group (GCG) contributed $100 worth of plants as a lucky door prize. Mt Rogers Landcare group organised a guided walk and provided games including the horseshoe toss and egg and spoon race.

The event was well attended, with up to 60 people throughout the day. GCG provided a BBQ lunch and information about other landcare groups within the catchment.  Thank you to Andrew Leigh Federal Member for Fraser (ALP), for the use of his marquee on the day, and a huge thank you to Mt Rogers Landcare Group convener Rosemary Blemings for her organisation of the day.

For marquee bookings, just phone 6247 4396 or email andrew.leigh.mp AT aph.gov.au

The video of my appearance on the Sky AM Agenda program with my usual sparring partner Mitch Fifield. Hosted by Ashleigh Gillon.http://www.youtube.com/embed/97pYYPeH3W4?hl=en&fs=1