Education Funding

I spoke in Parliament yesterday on education funding, opposing a motion put by the Coalition's education spokesperson, Christopher Pyne (the member for Sturt).
Education Funding, 4 July 2011

I rise to speak against the motion moved by the member for Sturt. The member for Sturt is continuing a tradition, one that we have seen all too often in this House, of those opposite running a mobile scare campaign. We have seen this strongly in the carbon pricing debate with the Leader of the Opposition trawling the country and coming into this parliament arguing that petrol prices were going to go up under an emissions trading scheme. It is simply not true. The Leader of the Opposition has misled parliament over this issue. We now have the member for Sturt moving a motion on funding for non-government schools which seeks to spread fear and misinformation.

It is important to return to the basic facts. The Gillard government is committed to delivering a quality education to every student in Australia. Those of us on this side of the House believe that the public versus private debate is one that can be put to rest. What is important is focusing on students and student needs, not trying to reopen ideological wars which are done and dusted.

In my electorate there are many non-government schools of which I am extremely proud. I spoke recently at the opening of a new school building as part of Burgmann Anglican College, a low-fee school that serves the area of Gungahlin. At that opening the students expressed a great sense of pride in Bishop Ernest Burgmann, who the school is named after and who carried on a great tradition of social justice. I spoke at that opening of the work that Bishop Burgmann did throughout the community, work which was really critical to building a stronger community in the post-war decades, work that I am glad to say has been carried on by his granddaughters, Margaret Watt and Meredith Burgmann, among others. I am also proud to have visited Holy Spirit Primary School, a non-government school that shares playing fields with Gold Creek public school and whose teachers on duty in the playgrounds have decided, much in the spirit of doing away with unnecessary public-private divides, that children should be encouraged to play sport, that every time there is a sporting team it should not be Gold Creek versus Holy Spirit and that any sporting games that are played at recess or lunch need to have mixed teams involving some Holy Spirit kids and some Gold Creek kids on each side. They are showing how you can break down these artificial public-private divides, much as it would be nice to see those in the House doing the same.

Merici College, in my electorate, is involved in a trades training centre, ensuring that students have the opportunity to begin trades training before they finish their school education. Merici is working with a group of non-government schools to ensure that students have the chance to get trades training. These are, perhaps, students who would otherwise have left school a few years earlier and now stay on and get that essential trades training. Through these important non-government schools, as through the many government schools in the Fraser electorate, quality education is being delivered day in and day out. I pay tribute to the great principals, teachers and administrative staff who are involved in that effort. Much of their work often goes unthanked but certainly should be recognised here in this House.

As part of the government's commitment to recognising that the divide between government and non-government schools should be broken down whenever possible, we have put in place a low SES national partnership and we have put in place an improving teacher quality national partnership. Part of those national partnerships are being delivered through non-government schools. For example, the Charnwood-Dunlop government school in Charnwood receives assistance through the low SES national partnership and the St Thomas Aquinas Primary School in Charnwood receives assistance through the literacy and numeracy national partnership. These partnerships recognise that we need to focus on need and not simply focus on the system that runs the school.

We are a government which has delivered $64 billion worth of investment and reform in Australia's schools. That is almost double what was delivered by those opposite in the last four years of the Howard government. This investment has been delivered, in large part, through a historic nation-building school infrastructure program.

Often, when I visit schools and have the great opportunity to open new school infrastructure, principals and members of the school community say, 'This really is historic, isn't it? It is hard for me to ever have imagined in my working life that we would see a federal government that would have the vision and the foresight to invest in the school infrastructure of the future.' And they speak to me about the impact the new school infrastructure is making on the educational achievements of their schools. There are schools like Amaroo School which is now able to engage in team teaching thanks to newly designed rooms with walls that open up between the classrooms. For example, a teacher who is a superstar in literacy and one who is doing great work in numeracy might be placed in classrooms side-by-side so that they learn from each other in a team teaching environment.

The new school infrastructure allows investment such as in Black Mountain School where, for the first time, a student in a wheelchair who is receiving an award does not have to stay in front of the stage to receive the award, but can go onto the stage and receive the award just like the students who are able to walk onto the stage. It is a simple piece of infrastructure that provides dignity to the school and to the school community.

The member for Sturt has really become increasingly hysterical over the school funding issue. It is another scare campaign and it is a divisive and inflammatory scare campaign. It is not something that, sadly, we should be surprised about from the current opposition which is opposing absolutely everything that is put forward. The member for Sturt is at odds with his former Liberal Party colleague Brendon Nelson who has acknowledged that the system needs reform and that the funding maintenance was a transitional measure put in place a decade ago.

The member for Sturt is, of course, committed to the Gonski review, but is also committed to continuing the current SES funding model. It is a particularly confused approach that the member for Sturt is pursuing. The Gonski review is a once in a generation chance and an opportunity to really think hard about the best school funding model for the future. That is what a responsible government does. We pursue policies aimed at the long game, policies aimed at getting school funding right for all students. The government has provided some certainty in the parameters that sit around this review. We have said that no school will lose a dollar of funding as a result of the review. We said that current funding arrangements for non-government schools will be extended to the end of 2013 and to the end of 2014 for capital funding. The panel has been asked to provide advice on appropriate transitional arrangements to help schools move easily and fairly to any new funding arrangements. As I noted earlier, the Gillard government has made record investments in these schools. These schools have benefited to a large extent through the record investments made under this government.

The Smarter Schools National Partnership is yet another form of investment that has been put in place. In the ACT schools national partnerships for low SES school communities and improving teacher quality have led to more than $500,000 in facilitation funding. On 28 June more than $1.9 million in reward funding was provided to the ACT for its progress in achieving the targets set under the National Partnership on Literacy and Numeracy. I am particularly proud to serve in a government which has invested so much in public and in private schools across the board.

Unfortunately, the coalition has continued its scare campaign. The member for Sturt told the House of Representatives on 3 March of this year that:

'It has long been the coalition's policy to maintain the existing SES funding model ...'

Yet, he said to the Christian Schools National Policy Forum on 23 May:

'This review process is welcome and needed. ...'

So, it is very hard to see where the member for Sturt sits on this issue. Of course, we in the Gillard government will continue the long work of reforming and investing in our schools because we know that a great education is great economic policy, great social policy and, of course, great education policy.
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Indigenous Education

I spoke in parliament yesterday about Indigenous education.
Indigenous Education (Targeted Assistance) Bill, 4 July 2011

The 13th of February 2008 was a historic day for Australia. On that day, for the first time, an Australian Prime Minister, Kevin Rudd, officially apologised to the stolen generations. This was a historic moment for Australia—a moment when we acknowledged the tragedies of the past and looked with a fresh eye to the future, a future in which there is no gap between Indigenous and non-Indigenous Australians in life expectancy, educational achievement or economic opportunity.

When the Labor government took office in 2007, we inherited an appalling legacy of Aboriginal and Torres Strait Islander inequalities. In the areas of housing, poverty and health, large gaps persisted under the Howard government. We know that Indigenous Australians have a substantially shorter life expectancy. When a young Indigenous baby is born, he or she can expect to live a decade or two fewer than a non-Indigenous baby. It should be simply unacceptable to all of us in this place. It is something that must change—something that will be changed.

Another main issue is improving the educational levels of Aboriginal and Torres Strait Islander communities. Improving education is fundamental to improving welfare and improving living standards. This government has set out to close the gaps in Indigenous disadvantage. We have set out to close the life expectancy gaps, to close the child mortality gaps, to close the gaps in employment opportunities and to close the gaps in access to early childhood education and educational attainment.

Horace Mann, the early 19th century US congressman and education reformer, whose personal political persuasions were actually more closely akin to those of members opposite, once stated:

'Education … beyond all other devices of human origin, is a great equalizer of conditions of men—the balance wheel of the social machinery.'

This Labor government shares those sentiments, regardless of the political alignment of their initial spokesperson. The importance of education extends well beyond partisan politics.

Education's place in helping to overcome inequality and disadvantage was reinforced for me when I visited Cape York last year and earlier this year, travelling with the House Standing Committee on Economics. Our task was to consider Indigenous economic development, so I used the chance to ask some of the witnesses about the local schools. It was an issue that had come up when we were chatting outside during the coffee break but which did not seem to be getting air time inside the room. Phyllis Yunkaporta, a witness appearing before the committee, told me:

'The education system, as I knew it before, has been of low standard. The curriculum in the past, as it is in all cape Aboriginal communities, has been of very low standard. By the time our children go out to mainstream schools they are hardly there—a child in grade 8 still has the understanding of a child in grade 1. Speaking for Aurukun, I was one of the persons who were invited to the States last October; I went to New York and Los Angeles visiting African-American schools. What we have brought back to Aurukun is a new kind of teaching method and we are having that implemented in the school. Of course it took time. At the beginning it pretty much had been, in my words, chaos before that. Since having this new program come in, if you come to the classrooms in Aurukun the kids are fully focused. This new method of teaching has got them going. The teacher is full-on with the tasks given and you cannot believe it when you enter those classrooms—it is as if some of those kids are play-acting. They are not; they are just full-on, focused. I guess in time we have to have expectations for our children to be educated in a way where they have to balance both worlds—the Western world and the traditional way. Of course we want them to hang onto the traditional way because that is where they are going to be identifying themselves for the future. And with them having to venture out into mainstream, we want them to compete. It is a competitive world out there. We want our black little kids to start taking on the world. That is the aim of all this.'

No words could be closer to the truth. In work that I did as a professor of economics at ANU with Xiaodong Gong, which was published in Education Economics, we looked at the educational attainment gap in Australian schools. We found that when Indigenous children first enter school they are about a year of educational achievement behind their non-Indigenous peers. We also found that by the time Indigenous children have got to the end of primary school the gap has widened—it is then about two years of educational attainment. Our view is that, perversely, that is something to be optimistic about, because there is something going on in the school system—a system which I think government policies are far more amenable to fixing than would have been the case had we discovered that, for example, the gap was already there when the children first entered school. So that work gives me optimism; it gives me a sense that we can do something about closing the gaps between the performance of Indigenous and non-Indigenous children.

But those gaps, make no mistake, are substantial. In 2006, 58 per cent of Indigenous children were rated by their teachers as having low academic performance. In contrast, only 19 per cent of non-Indigenous students were rated as having low academic performance. Of those who started year 11, only 22 per cent of Indigenous students went on to complete the year 12 certificate, compared to 62 per cent of non-Indigenous students. These figures provide some sense of the magnitude of the task faced by this Labor government in addressing the gross inequality in educational attainment in Australia.

Since 2008, the Gillard government has invested over $51 million in Indigenous literacy and numeracy projects. Over 20,000 Aboriginal and Torres Strait Islander students in over 670 schools across the nation have benefited directly from this assistance. Over the 2009-12 period this government has invested $56.4 million nationally to expand literacy and numeracy programs for Indigenous students. We have provided professional support to assist teachers to develop personalised learning plans for their students. We now have 200 additional teachers in the Northern Territory. The $2½ billion Smarter Schools National Partnerships, which holds Aboriginal and Torres Strait Islander education as a key focus, has been introduced to target disadvantage and to contribute to improving literacy and numeracy outcomes. We have also approved more than $25 million for 17 projects, over 2011-12, to continue these efforts.

We have seen the early results of such initiatives. The share of Aboriginal and Torres Strait Islanders obtaining year 10 and year 12 certificates has gradually grown, as has the number of Indigenous students undertaking university education and achieving bachelor degrees. It is important that we continue to track these measures and hold our higher education institutions to account to ensure that the educational outcome that we want—boosting bachelor graduation—is actually achieved. It is my view that we should ask universities to publish as much data as they can not only on the number of Indigenous students who are accepted into the institutions but also on the persistence of those students through the system; the ability of our universities to hold on to Indigenous university students at the same rate as they hold on to non-Indigenous university students. Improving the standard of education among Indigenous communities is at the heart of this government's endeavours to affect broad social and cultural change and break the cycle of disadvantage that plagues these communities.

There are three initiatives that I am particularly proud of in my electorate of Fraser—Learning Journeys, the Indigenous Youth Leadership Program and the Indigenous Youth Mobility Program. Learning Journeys, which is administered by the Northside Community Service, is a $359,000 program which started in May 2010 and is expected to finish at the end of June 2012. It focuses on the development and implementation of creative and innovative approaches to improving educational outcomes for young Indigenous people as well as on improving parental engagement in schools and with education providers and on the engagement of parents with children's education at home. The project focuses on motivating and encouraging adults within families to play an active role in their children's learning journey. This is the kind of active role that we know is so important to educational success. It aims to strengthen the capacity of communities to become active in the school community and to feel respected and empowered to comment on and contribute to the development of schools. It has been a little over 12 months since the program's commencement but already we can point towards a number of outcomes: 82 per cent of parents involved have reported a greater engagement with the local schools; 76 per cent of parents have reported increased presence in the local school community; and 58 per cent of parents say they attended extracurricular events at their school.

The Indigenous Youth Leadership Program likewise is helping to close the gap in Indigenous education disadvantage through support for disadvantaged Indigenous students, mostly from remote and regional areas. There are now six tertiary education students studying in my electorate of Fraser with the support of an Indigenous Youth Leadership Program scholarship. I would like to pay tribute to those students and wish them all the best in their continued studies.

Thirdly, the Indigenous Youth Mobility Program supports young Aboriginal and Torres Strait Islander students aged 16 to 24. This program is administered in the ACT by Auswide Projects, which was originally assisting around 16 participants and due to an increase in demand has now increased its number of places to 24 participants within the ACT.

It is absolutely imperative to the welfare and the quality of life of Indigenous communities that we maintain these efforts. The Indigenous Education (Targeted Assistance) Bill will ensure the government's good work to date will continue. The current Indigenous Education (Targeted Assistance) Act provides funding over the 2009-12 period and this bill will extend the current quadrennium to incorporate the 2013 calendar, bringing it into line with the recently extended Schools Assistance Act. This will coincide with the timing of the review of funding for schooling, allowing the government to consider the findings of that report and determine the future structure of funding run under that program.

By re-aligning the legislation to reflect the Schools Assistance Act, we can make sure that Aboriginal and Torres Strait Islander education programs are afforded the attention they deserve. It allows us to engage in close consultation with Indigenous communities and create a cooperative and inclusive learning environment. Such a learning environment has been brought home to me in my own electorate of Fraser, which includes the Jervis Bay Territory. In May I visited Jervis Bay Primary, a school for the children of Defence Force personnel serving at HMAS Creswell and the children of the Wreck Bay Indigenous community. The school has the lowest ICSEA score of any school in my electorate but, when you do a like-schools comparison—as is possible under the government's terrific MySchool website—you actually see that on a like-schools basis Jervis Bay Primary is one of the top performing schools in the ACT system on pretty much every measure you look at.

Jervis Bay Primary is also one of the most beautiful schools in the electorate of Fraser. The oval looks out across the kangaroos to the Pacific Ocean. You get a real sense that this natural environment is part of what builds a strong sense of community in the local school. There are only 84 students, 63 per cent of whom are Indigenous, but everyone seems to know everyone else. As I walked through the K-2 room with two women from the P&C, I heard behind me one of the boys say, 'What are you doing here, Mum?'

I would like to pay tribute to the principal, Bob Pastor, who coordinated a Learning 4 Life meeting, a really valuable initiative which brings together representatives from the local school community as well as Vincentia High School, the main school into which Jervis Bay Primary feeds, the University of Wollongong, Noah's Ark, Booderee National Park, and local preschools and childcare centres. The group promotes the value of education to Indigenous parents and students, with involvement right through the education spectrum from early childhood right up to TAFE and university. It is that lifelong learning philosophy that pervades the bill that is before us today.

The existing range of programs funded under the Indigenous Education (Targeted Assistance) Act are aimed at improving educational outcomes for Indigenous people, taking a well-rounded approach to improving education outcomes and life opportunities for Indigenous students. The programs are designed to build strong relationships between Indigenous communities—children, parents and teachers—and the government to ensure that specific needs are met with targeted and effective attention. Such programs include the Sporting Chance Program, the Indigenous Youth Leadership Program, the Indigenous Youth Mobility Program, and the Parental and Community Engagement Program. These programs that are delivered under the act are complementary to mainstream schooling activities. The extension of funding for such programs until the end of 2013 will ensure providers, as well as the Indigenous communities, have certainty of continued program operation. I would like to use this opportunity to commend the bill to the House and extend my praise to all those who have worked in its drafting.
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What I'm Reading

It's been over a month since I last posted about the things I've been reading. But while I can't promise that these articles appeared yesterday, I can attest to the freshness of their ideas:

On the topic of academia, I've been amused to discover how long the tail of academic publishing is. Although I resigned as an ANU economics professor a year ago, I've still got forthcoming papers in Economics Letters, Economic Papers and the Oxford Bulletin of Economics & Statistics, as well as revise-and-resubmits being considered by the Economic Record, The BE Journal of Macro, Review of Income and Wealth and the Economics of Education Review.
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I'm Hiring

Due to recent events, I’ve now found myself looking for another staff member. The job ad is below. Please note that it’s only a 6 month stint. Applications close 15 July.

Office of Andrew Leigh
Member for Fraser

Applications are invited for the above position based in Canberra.

The duties of the positions include: community engagement, liaising with government departments, preparing responses to constituent inquires, organising events and meetings.

For more information about the work of the office, please see

Applicants should possess the following skills and experience:

  • Passionate about community engagement

  • Hard working and enthusiastic about addressing local issues

  • Excellent oral and written communication skills

  • Well developed office IT skills

  • Ability to work with a diverse team in a fast-paced environment

A commencing salary of up to $51,352 will be paid (plus allowances).

The position will be for a duration of 6 months, and a probationary period of 3 months will apply.

Applications setting out details of experience and the names of two referees should be forwarded to: <asperand>

Applications close on 15 July 2011. For further information please contact Louise Crossman, Chief of Staff, on 02 6247 4396.
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National Capital Authority on Campbell & Memorials

On 22 June, the Joint Parliamentary National Capital & External Territories Committee heard evidence from the National Capital Authority's Don Aitken and Gary Rake recently. I asked them about some concerns that have been raised with me about development in the suburb of Campbell and some proposed memorials for World Wars I and II. Here are some snippets from the transcript.
Campbell Residents

Dr LEIGH: I draw your attention to the suburb of Campbell and a letter that I understand a group of Campbell residents have written to the NCA. Can you clarify for me the role that the NCA has in regard to Campbell?

Prof. Aitken: We both responded within 24 hours, I think, to that letter from the residents of Campbell. We are proposing a taskforce of the ACT government and the NCA to look at those issues. They are serious and proper issues and somebody needs to do something about it reasonably quickly. They are proposing a master planbut the problem with that is that if it is done well it takes a long time and the residents want fairly quickly some clear sense of what is likely to happen. So we thought a taskforce was the better way to go. We have had discussions already with the ACT government about that. I hope that we will be able to say something positive very soon.

Mr Rake: As to our particular role, the NCA has the planning approval power for most of the land surrounding Campbell. Of particular interest, the NCA controls planning along Constitution Avenue, which is a major road to the south of Campbell. Within the last decade we have proposed and proceeded with a major amendment to the National Capital Plan that would allow for major redevelopment and a larger scale of development along Constitution Avenue. So, one of the issues that the residents of Campbell are interested in is what that will mean for traffic movement and parking in their suburb.

There is potential for developments that we approve to have unintended negative impacts on traffic. It could block up the suburb; it could be used as a rat-run. To the extent that that happened, we control the cause but we do not control the solution. Within the suburb, planning is controlled by the ACT government and if a change were to be made to one of the roads to make it less attractive as a rat-run that would require the efforts of the ACT government. So the question the Campbell residents are asking, and it is a very good one, is: how are you two going to come together to make sure that decisions made here do not impact here and force another government to have to pick up the can? We think a taskforce would be good because we can identify issues in priority order. We should say that we think the taskforce should include Campbell residents so that they can identify the issues and help us to prioritise them.

Dr LEIGH: That is good to hear. Will that operate on an ongoing basis?

Mr Rake: I think it would be sensible. I do not know what the finish line would be, but at least until the majority of development on Constitution Avenue is complete. So I could see it being needed for the next three to five years at least.

Dr LEIGH: Would that complement public consultation processes taking place?

Mr Rake: Yes.

Prof. Aitken: It would not replace it.


Dr LEIGH: Mr Rake, can I take you back to something you said in answer to Senator Faulkner's question at a recent Senate estimates hearing on the subject of statutory NCA approval. You told Senator Faulkner there would be no issue with this approval given the recommendation the NCA had made to the Canberra National Memorials Committee. Can you take the committee through how the NCA made a recommendation to the memorials committee and what was taken into account?

Mr Rake: As I have put on public record before, there is not a clear evaluation process—there is not a detailed written evaluation of the matters considered by the board at the time, other than that they believed the site that they were recommending was appropriate, that it was consistent with the allowable uses under the National Capital Plan in that part of the national estate and that it was a proposal that the authority was happy to take ownership of once the physical form was complete. We would own the memorial and maintain it. The answer I gave Senator Faulkner was that, in recommending this proposal to the Canberra National Memorials Committee, the NCA has expressed a strong statement of in principle approval for the proposal. It is parallel to proposed works in the Parliamentary Zone where the Parliament Act has, in our view, the higher authority. Before proposals are tabled in each house of parliament the NCA expresses a view about whether it would be prepared to grant works approval. We then wait for parliament to express its view through each house and then we exercise our formal power on the instrument. The process here is parallel, although there is not any formal doctrine that says we must defer to the CNMC or the Parliament Act, but that is the practice that has emerged. So my answer to Senator Faulkner was that, by expressing our view of support, we stated that we are willing to provide works approval, subject to any technical deficiency that we find along the way. If we suddenly found that there would be an unacceptable traffic impact, that would be a technical deficiency that we would have to turn the proponents' minds back to and have them find a solution to.

Dr LEIGH: So traffic impact would be taken into account. What about impacts on views, including the views of residents in surrounding suburbs, were they taken into account?

Prof. Aitkin: Sorry, do you mean opinions or views?

Dr LEIGH: Visual views.

Mr Rake: The main visual assessment will be based on the heritage impacts. If this proposal were going to overshadow and have a very direct impact on adjoining properties, we would certainly take that into account, as we do for more major developments, but the fact that it would be within the line of sight from someone high on the hill who had a view down probably would not be a major criterion in the assessment.

Dr LEIGH: You mentioned in answer to Senator Faulkner that there was a character element. Does that require some assessment of public opinion?

Mr Rake: At the moment it does not, and that is the change I spoke about a few moments ago. Before we give future advice to the CNMC, the NCA would seek views on the character of a memorial. The process that has been used in the past is for the memorials committee to approve the commemorative intent and the location—and they do rely heavily on the advice of the NCA—but for the design or the character to be procured by design competition and for an independent jury to be used. That was certainly the case here. The Canberra National Memorials Committee are engaged in the development of the rules of the competition, the design brief that goes out, then the jury does its work, identifies a competition winner and recommends that to the Canberra National Memorials Committee for them to endorse as the final design or the character of the memorial.

Dr LEIGH: So the views of the local service community would not also have been taken into account? For example, the ACT branch of the RSL has passed a motion saying that it does not support the memorial, as I understand it.

Mr Rake: Not in a consultative manner. The then National President of the RSL was the chair of the competition jury. I guess to that extent we would expect that he would bring the views of the RSL to the table.

Senator HUMPHRIES: That is not quite true that the RSL said they do not support it. My reading is that they have adopted a neutral posture on it.

Dr LEIGH: My apologies. My advice was that the ACT branch of the RSL had discussed the issue at a council meeting in April and voted to offer no support for the—

Senator HUMPHRIES: That is right. They are not offering support but, as I understand it, they are not opposing it.

Dr LEIGH: Yes, thank you for the correction. Mr Rake, at Senate estimates you said that the NCA and the ACT government have 'inherently different interests when looking at Canberra'. Can you expand a little on what you meant by that?

Mr Rake: The question I was asked and to which I believe I gave that portion of the answer was about the elements of Canberra as a planned city and whether the NCA takes a strong view on I think environmental planning—my recollection may not be quite right there. But there are some elements that every city should take account of: sustainable design, healthy open spaces for its residents and good transport systems. They should exist in every city regardless of its size, whether it be a rural town or a national capital.

The things that the NCA are particularly interested in are those elements that are unique to Canberra, with its special role as the national capital. In trying to convey how we balance the interests of local residents and the nation as a whole, we tried to identify if there is a demonstrable national interest that is different to the interests of the local government and the local residents that requires our involvement. If there is not then we probably should not be involved in it. That is not to say that there is a deficiency in the local views, but there are some elements that are of national significance and that is where our role properly lies.
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So it seems that while some on the far right are opposed to foreigners bringing their bodies here, some on the far left are opposed to foreigners bringing their chequebooks here.

To make the case for greater investment (including foreign investment), here's an AFR article I wrote a few months ago. Remember, authors don't choose their headlines.
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A Feeder MP?

For young US lawyers, the sought-after job of clerking for a US Supreme Court judge typically only goes to those who've first clerked for a judge in a lower court. Those lower-court judges are known as 'feeder judges'.

In the same spirit, I'm proud to say that two of my staff - Alex Cubis and Shobaz Kandola - have been seconded to work for six months with Greg Combet's team. Like Rick Youssef, who moved on to Peter Garrett's office last year, I'll miss them - but am also proud of my Leigh alumni.

And to the rest of my staff, have I told you lately how much I appreciate you?
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Notes from Sao Paulo

I'm in Sao Paulo this week, attending the Partnership Forum for the Global Fund to Fight AIDS, Tuberculosis and Malaria, which is a strategy conference held every 2-3 years.

The conference is mostly implementers and NGOs, with a smattering of politicians (I've enjoyed chatting with Mark Lancaster, a moderate Tory who is the principal private secretary on international development to the Secretary of State).

Six things I've learned since I arrived:

  1. There are forms of malaria that can kill you within 24 hours of the first symptoms.

  2. After mosquitoes bite an infected person, they need to sit in a dark corner. So spraying insecticide in dark corners is surprisingly effective.

  3. There's been a lot of emphasis on preventing mother-child transmission of HIV by ensuring all HIV+ mothers are on antiretrovirals during pregnancy. But after the birth, there often isn't the money to keep up treatment. The result is that we prevent the child being born with HIV (which is terrific), but pretty much guarantee that s/he will be an orphan within a few years. Hard ethical issues.

  4. Treating regular TB costs a few dollars. Treating multi-drug resistant TB costs around $10,000.

  5. The tendency for mission creep is strong - not surprisingly, given the Global Fund has mobilised nearly $22 billion in the past decade. But it's important to keep remembering that the reason donors have been so generous is that they think they know pretty precisely what their cash is going towards. Broaden the remit, and the dollars may disappear.

  6. There's a lot of talk about reactionary government attitudes hampering the outreach efforts of HIV programs to marginalised groups such as sexworkers, men who have sex with men, and injecting drug users. But the policymakers who hold those views either aren't attending, or are staying very quiet. Instead, the atmosphere is very inclusive. My favourite moment came during a Q&A session today, when the MC said 'Everyone who has asked a question so far has been male - can I hear from a woman now?'. A voice piped up at the back of the room 'I'm transgender - does that count?'.

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The Case Against a Sovereign Wealth Fund (for now)

My AFR column this week was on sovereign wealth funds.
Second Thoughts on Sovereign Funds, Australian Financial Review, 28 June 2011

Opened in 1880, the Melbourne Royal Exhibition Building is widely considered a national treasure. The first building in Australia to achieve World Heritage listing, it was made possible by the discovery of gold in the mid-nineteenth century. To see the legacy of the gold rush, just look at central Melbourne.

But would we have been better off if the Victorian government had saved the money rather than building infrastructure? This is effectively the argument made by those who argue that the right policy response to today’s mining boom is a sovereign wealth fund.

An Australian sovereign wealth fund has several advocates, including Malcolm Turnbull, clearly the sharpest economic mind on the opposition front bench (even if he did err in opposing the second stimulus package). In a thoughtful speech in April, Turnbull stated: ‘I believe that the time has come for Australia to create a new sovereign wealth fund’.

There are three arguments typically made by proponents of a sovereign wealth fund. First, some say that with the Australian dollar at historic highs, we should be amassing greenbacks as a form of insurance against a currency slump. Yet while a sudden fall in the Australian dollar would be a shock to the economy, it’s by no means the only one we have to guard against. Governments must also anticipate and react to natural disasters, fiscal shocks and unexpected technological change. Moreover, Australians already have substantial foreign holdings, via the $75 billion Future Fund (of which 27% is overseas equities) and $1.3 trillion in superannuation (of which 18% is overseas assets).

Second, sovereign wealth fund proponents argue that it would cure ‘Dutch Disease’, which occurs when a mining-induced currency rise hurts other export industries such as manufacturing, tourism and higher education. Most likely, saving a greater share of mining tax revenues would lead to an easing in monetary policy (and therefore a lower exchange rate). But the effect would be modest – particularly under current minerals taxation rates. If your top priority is healing Dutch Disease, a sovereign wealth fund is more of a band-aid than a vaccine.

The third argument for a sovereign wealth fund is that we need to boost national savings. This has a virtuous ring about it, but misses the fact that Australians are already saving a great deal. In 2010, our gross national savings rate was 25%, higher than Japan’s. The federal government’s fiscal consolidation is one of the fastest on record. And a significant share of government investment is a downpayment on future productivity, such as broadband, education, and transport.

So if you believe Australia needs to save more, you need to say which taxes you’d increase or which spending you’d cut. A sovereign wealth fund without deposits has all the usefulness of a pub without beer.

At its core, the debate over a sovereign wealth fund comes down to intergenerational equity. Most economists and philosophers believe that our generation has an obligation to hand on to our children at least as much wealth as we inherited. We do not need to preserve every hill and rock, but if we use up an asset, we should replace it with one at least as valuable. This affects how we think about the climate change debate. For example, since the Great Barrier Reef has an extremely high value, it merits urgent action by our generation to preserve it.

But intergenerational equity also reminds us that future generations will be richer than us, and not necessary any more public-spirited. So there is no philosophical obligation to leave our children an overstuffed piggybank rather than a good education and a well-functioning rail network. Indeed, if we were to slash spending on skills and infrastructure and save the proceeds, future generations might well condemn us as short-sighted scrooges.

To say that there isn’t a strong case for a sovereign wealth fund today is not to rule the idea out entirely. Perhaps in the future, we might want to think about a Norwegian-style fund (to build a stock of assets for the future) or a Chilean-style fund (to implement counter-cyclical fiscal policy).

But in the current economic environment, it’s hardly a high priority. If we’re concerned about future generations, let’s focus on the top priorities: a price on carbon, shifting from mining royalties to a Minerals Resource Rent Tax, and investment in skills. The notion of a sovereign wealth fund can go in the safety deposit box for now.

Andrew Leigh is the federal member for Fraser.
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Petition on Live Exports

Last week in Parliament House Tara Ward, Jess Ferry, Karen Vincent and her son Noah presented me with a petition signed by many Canberrans on live exports.
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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.