ABC Canberra Drive with Ross Solly - April 22 2024



ROSS SOLLY (HOST): Andrew Leigh, good afternoon to you.

ANDREW LEIGH: Good afternoon, Ross. Great to be with you.

SOLLY: And you too. Andrew Leigh, your government has picked a fight here with Elon Musk. Are you comfortable with taking him on and demanding that he remove videos from his social media platform?

LEIGH: Look, absolutely. Being a billionaire doesn't put you above the law. And in this case, X, formerly known as Twitter, is clearly in the wrong. It should abide by the decision of the eSafety Commissioner. Julie Inman Grant is somebody with immense experience in this field, and X comes to this with a very poor track record. There's a recent report by Reset Australia which looked at the ability of these platforms to spread misinformation in one particular area that was around eating disorders and found that they weren't filtering their ads and indeed they were targeting young people with information that encouraged eating disorders. We know there's political misinformation being spread on these platforms. Simply, they can't be above the law. They need to be abiding by basic standards of decency, not making fun of Australia's content standards in the wake of two terrible tragedies.

SOLLY: Where is the line on this, though? If Elon Musk says that this is attack on free speech, that it's censorship, where do we draw the line? And is it a slippery slope? Andrew Leigh, if we sit there and say, ok, you've got to remove this, where do we go next with that?

LEIGH: I remember when we were doing this in law school, Ross, one of the classic lines was that free speech doesn't extend to the right to shout fire in a crowded theatre. There's no notion that free speech is absolute. It needs to be balanced against the interests of, in this case, the victims of these terrible crimes. We also need to make sure that we're strengthening the laws here. Our government is reviewing the Online Safety Act. We want to give more powers to ACMA to scrutinise the systems and processes to make industry rules. Hopefully, the coalition will come along with us on that. They've flip flopped a bit. They need to now come on board and holding big tech to account.

Read more
1 reaction Share

Labor’s Making Merger Law Fit For A Modern Economy - Op Ed

  Labor’s Making Merger Law Fit For A Modern Economy - Op Ed

Economists know two big facts about mergers. On the upside, size can bring economies of scale. Larger firms can deploy their network to produce goods and services more efficiently.

On the downside, monopoly isn’t just an infuriating board game. When firms control a market, they tend to cut back output and raise prices. There’s a reason that much of corporate strategy is devoted to keeping competitors out: when you’re the only player, the game looks a whole lot sweeter.

Encouraging firms to enjoy economies of scale while curbing monopoly power is at the heart of merger laws. Most mergers are not anti-competitive, and can be beneficial to the economy. But some mergers deserve closer scrutiny, to ensure that they are providing real benefits.

Unfortunately, Australia’s current system for scrutinising mergers is unfit for a modern economy. Analysis from the Australian Treasury’s Competition Taskforce finds that there are around 1400 mergers taking place annually. Yet the Australian Competition and Consumer Commission only sees around 300 of these mergers. Three out of four mergers fly under the radar.

This system looks even odder in an international context. Almost every advanced country, including the United States, Japan, Canada and all European Union members, has a system that requires the compulsory notification of mergers. Australia is an outlier in not requiring merger notification. The result is that our competition watchdog is flying blind.

It’s hard to imagine anyone arguing that if we were building a merger approval system from scratch, Australia’s current system is optimal. There are no less than three pathways, which contributes to needless confusion and delays and can create an opportunity for strategic behaviour to avoid detection.  And for the most part it isn’t transparent, with only a fraction of mergers reviewed by the Australian Competition and Consumer Commission every year done so publicly. There is too little available data on mergers and acquisitions, in an age where companies themselves are relying heavily on data.

Read more
1 reaction Share

2CC Canberra With Stephen Cenatiempo - 16 April 2024



SUBJECTS: Recent stabbing attacks in Sydney, Food and Grocery Code of Conduct, merger reform, divestiture powers, competition and productivity.

STEPHEN CENATIEMPO (HOST): This morning joining us to talk all things federal politics is the Assistant Minister for Competition, Charities and Treasury, and the Member for Fenner, Andrew Leigh. Andrew, have we become unrecognizable as a country?

ANDREW LEIGH: It’s certainly two shocking tragedies, isn't it Stephen. And my heart goes out to the victims of the Bondi Junction and Wakeley incidents. I mean they're really both shocking. And, you know, in the case of the Bondi Junction one, I suppose I only take solace from the fact that there were so many ordinary Australians who ran towards danger. The bloke with the bollard, the heroic police officer who ultimately shot the offender dead, the many people who stepped in and acted as first responders, surely saving lives in the process. So you saw some of the worst of Australia and some of the best in that incident.

CENATIEMPO: The difference between the two incidences, we’re led to believe that there were mental health issues with the stabbings in Bondi Junction. Given that there were obviously communication issues between Queensland and New South Wales, we’re led to believe that this bloke was from Queensland and had moved to New South Wales, do we need to take a Federal approach to the way we handle mental health and reporting of these kinds of things. Because we seem to see too many things fall through the cracks between, and I know we're a federation, but you'd like to think that it was a bit more cohesion.

LEIGH: Yeah, I mean there will certainly be full inquiries, and which will go to issues such as the one you've raised Stephen. I know there's considerable engagement between the New South Wales Police, who have the chief responsibility, and also the Australian Federal Police. But I'm sure questions such as management of mental health cases, will be part of how the Minns government looks into the inquiry.

CENATIEMPO: Now, competition is one of your portfolio responsibilities. We've been talking quite a bit about that in recent times, particularly with the supermarkets. The Food and Grocery code of conduct, last week we had the interim report handed down. So explain to us what we're going to do here to try and create more competition in the grocery, Food and Grocery sector.

LEIGH: Right now, Stephen, there's a voluntary code which governs relationships between the supermarkets and their suppliers. That means that it's a code without teeth, which can't be enforced by the competition watchdog. The proposal from Craig Emerson, who’s the independent reviewer, is that it be made mandatory. And that would be the most significant change to the code since the Coalition put a voluntary code in place in 2015. It then means that we've got better checks and balances on how the supermarkets engage with suppliers, and that reflects their considerable market power. Australia's supermarket sector is one of the most concentrated in the world. We want to make sure that farmers and shoppers get a fair deal.

CENATIEMPO: So, when you talk about having teeth, and you're effectively talking punishment, what sort of penalties can be handed down here? Because the reality is that the major supermarkets are already signed up to this code of practice. Now, as you say, it's voluntary, I understand that, but is the code of practice in and of itself going to change?

LEIGH: Craig Emerson is also looking at those questions. But you asked about penalties directly there, Stephen, if you brought it straight into the Competition Act, then the penalties there are threefold: the greater of $10 million, 10% of turnover, or three times the ill-gotten gains. Now, if you're talking about companies which have more than $50 billion turnover annually, you're talking about potentially serious penalties. Craig Emerson's final report will look at precisely how those penalties might apply.

CENATIEMPO: The other thing I want to talk about, and you and I disagree on this point, that I think we do need to have the option of divestiture powers, like other similar economies do as a, as a deterrent to monopolies or duopolies is in this case. But you've talked, there are also going to be changes to the mergers and acquisitions capabilities of these supermarkets, how will that actually work?

LEIGH: Well, mergers laws are the most important part of curbing excessive market concentration, Stephen, and our merger system just isn't fit for purpose. There's three different pathways that you can go through if you're looking at merging, and we don't require compulsory notification to the competition watchdog. And that's pretty unusual. Most other countries – United States, Canada, Japan, the European Union – require merging parties to notify the competition watchdog. But you don't have to in Australia, which means that the competition watchdog here doesn't see three out of four mergers, and you can't block what you can't see. So our proposed reforms would have a single administrative pathway, more transparent, quicker, simpler, more efficient, and allows the competition watchdog to put its energies on assessing the mergers that really matter.

CENATIEMPO: My only difficulty with this is that who is there left to merge?

LEIGH: There's always mergers going on in the economy and you've …

CENATIEMPO: I’m talking specifically in the Food and Grocery sector.

LEIGH: No, that's right. I mean, that's a sector which has aggregated through mergers under different merger laws than we have now. Coles and Woolworths started off about 20% market share between them back in the 1950s, and a series of mergers saw them grow to their current scale. You can't unscramble the egg. But what we're arguing for is a set of merger laws that would bring Australia up to international best practice, which would ensure that the competition watchdog is able to bring data to bear in a way that it just never has before.

CENATIEMPO: But you can unscramble the egg with divestiture powers.

LEIGH: These powers are very rarely used Stephen. I mean, look at the United States. You've got Standard Oil a century ago, you've got Bell Telephone 40 years ago, and then basically you don't have another serious divestiture in the last generation. The Microsoft breakup never went ahead.

CENATIEMPO: They're rarely used because they are there as a deterrent. And if you look at, and the Food and Grocery sector is a is a classic example of this, particularly if you look at, say the UK and the US, the market share of the big players over there is significantly lower than ours are. So they don't have to use them, but they're there as a deterrent.

LEIGH: I don't think they've acted as a significant deterrent. I don't know there’s much economic evidence for that. I don't see any evidence that there are countries that are breaking up supermarkets or that supermarkets in other countries are scared by the prospect of divestiture powers. They're just such a rarely used tool.

CENATIEMPO: Well the markets here would suggest otherwise.

LEIGH: Yeah, I mean, we certainly have a highly concentrated sector in supermarkets, but the United States economy has become more concentrated over the course of the last generation, despite the presence of divestiture powers. Which is why they too, like us, are looking at serious competition reforms. And ultimately, Stephen, this is all about turbocharging productivity, which was languishing under the former Coalition government when productivity languished and living standards languished. So if we want to boost wages and boost household incomes, competition is a big part of that.

CENATIEMPO: Andrew, I always appreciate your time. We'll talk again in a couple of weeks.

LEIGH: Likewise, thanks Stephen.

1 reaction Share

Unenforceable And Unnecessary Non-Competes Hold Us Back - Opinion Piece

Unenforceable And Unnecessary Non-Competes Hold Us Back - Opinion Piece

Seventeen-year-old Charlotte landed her first casual job as a dance teacher. It was her dream job, but she was forced to quit after experiencing harassment.

So she took a job at a different dance studio. Suddenly, a letter arrived in the mail. Charlotte's contract with the first employer had a non-compete clause, which prevented her from working at a competing dance studio within 15km for three years after her employment stopped. The old employer told her she had to quit her new job.

One in five Australian workers now has a non-compete clause in their employment contract. We're not just talking about senior managers. Non-competes are showing up in the employment agreements of boilermakers and disability support workers. When chief executives are forced to take a break between jobs, we call it gardening leave. Now, even gardeners are being compelled to take gardening leave.

Businesses legitimately want to protect their trade secrets and confidential information, as well as their customer lists. But doing so with a non-compete clause is deploying the bluntest tool in the shed.

It stops a worker from moving to any competing business, or from starting a new one. A growing body of evidence suggests the use of non-compete clauses is harming job mobility, innovation and wage growth.

Job-switching is a sign of a dynamic and healthy economy.

For businesses, it means improved productivity as they can attract the talent and skills they need. This is especially important for startups and firms looking to expand.

For workers, it means job satisfaction and higher wages as they move to more productive firms. Research from the e61 Institute finds that younger job switchers can earn on average $7500 more per year than job stayers. Yet despite these benefits, Australia has seen a general decline in job mobility during the past 30 years, part of a broader fall in dynamism since the early 2000s.

Given that, it makes sense to carefully assess any barriers that may be limiting people from moving jobs, limiting businesses from expanding and limiting the flow of innovation in the economy.

Under common law, many non-compete clauses are probably unenforceable. But that's not much help to the typical employee.

Workers may be too afraid to face the risk of a bout of unemployment or a court dispute, so don't move to a better-paying job or start a new business.

It's not as though employers are powerless to prevent their secrets walking out the door. Businesses can use the Corporations Act, which bans employees during or after employment from improperly using a company's information for personal gain, third-party gain, or to cause detriment to the company.

Around the world, many jurisdictions have either banned or restricted the use of non-compete clauses. In the US, five States have bans in place, including California, the home of Silicon Valley. The Albanese Government established the competition task force last year to examine whether Australia's competition laws, policies and institutions remain fit for purpose.

Now, the task force has launched its issues paper Non-Competes and Other Restraints: Understanding the Impacts on Jobs, Business, and Productivity. The issues paper is an open invitation for everyone - businesses, employees, academics, think-tanks - to provide their views.

Already, we know that millions of Australian workers don't have the freedom to quit their jobs and immediately move to a better job.

We know that these restraint clauses don't just apply to the boardroom. They apply to workers in the mail room too.

They are just as likely to apply to the person guarding the carpark as they are to the person guarding trade secrets.

Taking a hard look at non-compete clauses is just one step in our efforts to build a more competitive and dynamic economy.

Originally published in the West Australian on 16 April 2024.

1 reaction Share

Harnessing the Data Deluge: The Surprising Power of Big Data and Artificial Intelligence - Opinion Piece

Recent years have seen an explosion in interest in artificial intelligence and big data. The technology is promising, but its use in government rightly makes people nervous. If RoboCop hadn’t persuaded you that letting machines run amok was a bad idea, the Coalition’s Robodebt scandal proved it once and for all.

Yet it’s useful to see areas where artificial intelligence and big data have helped produce better outcomes for citizens, without undermining key ethical values of transparency, privacy and human oversight.

Read more
1 reaction Share

Competition Drives Innovation - Speech


Closing Remarks to the Australian Auto Aftermarket Innovation Awards Breakfast
Melbourne, Thursday 11 April 2024

In the 1950s, Sweden’s national electricity company noticed something curious. Although they managed a network of high-voltage cables, the biggest risk of death didn’t come from electricity. Instead, the greatest danger came when their employees were driving. At the time, cars either had no seat belts, or simple lap belts. If they crashed, deaths were common – even at low speeds.

So the company did something remarkable. Two safety engineers, Bengt Odelgard and Per-Olof Weman, developed the three-point lap-sash belt. Swedish inventor Nils Bohlin developed it for Volvo. In 1959, three-point seatbelts were installed in all Volvo cars.

Then Volvo did something remarkable too. It allowed any car company in the world to use its patent. Where lap belts had done little to save lives, lap-sash belts turned out to be the best piece of safety equipment ever installed in a car.

Just over a decade later, in 1970, the state of Victoria became the first place in the world to enact compulsory seat belt laws; after a trial of seat belts in police cars proved their effectiveness. In the 65 years since three-point seat belts were patented, they have saved over a million lives (O’Grady 2009).

Read more
1 reaction Share

ABC Canberra Drive with Ross Solly Wednesday 10 April 2024 - Transcript


SUBJECTS: Palestinian statehood, merger reforms, competition policy, Australia’s Indigenous history, British influence and multicultural story.

ROSS SOLLY: Great to have you on the show, Dr. Leigh.

ASSISTANT MINISTER, ANDREW LEIGH: Great to be back with you, Ross.

SOLLY: Just before we talk about this, can I get your thoughts on what Penny Wong had to say last night? About the only way to work towards a long-term peace prospect in the Middle-East is that maybe we should recognise Palestine as a state. What are your thoughts?

LEIGH: Well, I think everyone recognises that the two-state solution is the only lasting way of achieving peace. And this is about building the pathways out of an endless cycle of violence. You only get security and prosperity for both Israelis and Palestinians with a two-state solution. So, while Australia is a respected voice, we're not a central player in the Middle East. Our role is to argue for a humanitarian ceasefire, return of hostages, the protection of civilians, but also to give our support to what the international community has broadly recognised. A two-state solution.

Read more
3 reactions Share

Healthy Surprises: How Randomised Trials Can Challenge Conventional Wisdom And Debunk Dogma - Speech


Danks “Leaders in Science” Seminar
Murdoch Children's Research Institute, Melbourne
Tuesday, 9 April 2024

I acknowledge the Wurundjeri people of the Kulin nation, the traditional owners of these lands, and pay respects to all First Nations people present.

Professor Goldfeld, Murdoch Children’s Research Institute staff, and researchers across laboratory, clinical, public health, and health services: Thank you for inviting me here today.

My thanks to the Institute for what you do each day to help improve the lives of children through rigorous research. I also pay tribute to Professor David Danks (1931-2003) who established Victoria's first genetics health service, which became this Institute, after whom today’s Seminar is named. As one obituary described him, ‘David was a remarkable doctor, scientist, teacher, mentor, family man, friend, and champion of good causes’ (Choo, 2003).

My focus today is on randomised trials – a central tool in medicine, but underutilised in policy. In particular, I want to focus on the way in which randomised trials in medicine can upend conventional wisdom, producing results that improve patient outcomes and extend lifespans. You might call these ‘healthy surprises’.

Read more
1 reaction Share

Foreign investment is great, until it becomes a drain - Opinion Piece

Foreign investment is great, until it becomes a drain

A few years ago, the Australian Taxation Office won a court case against energy giant Chevron that saw the company pay an extra $10bn over the following decade.

That's equal to 10 hospitals, hundreds of schools, or thousands of kilometres of rail.

One way Chevron cut its tax bill was by lending money to itself. Interest payments are tax deductible, so by creating an internal loan from the US parent to its Australian subsidiary, Chevron reduced its taxes.

Over the past two centuries, Australia has benefited greatly from foreign investment. But multinationals still have an obligation to pay their fair share. Multinational companies benefit from Australia's infrastructure and rule of law. It's only fair that they contribute.

Read more
1 reaction Share

Afternoon Briefing with Greg Jennett 8 April 2024 - Transcript


SUBJECTS: Reforms to the Food and Grocery Code, divestiture powers, merger reforms, non-compete clauses.

GREG JENNETT, HOST: So, a mandatory code of conduct is on the way, or soon will be for Woolworths, Coles, Aldi and Metcash. That is the interim recommendation from Craig Emerson. But that represents only a part of the project the Government's doing on competition. Assistant Minister for Competition Andrew Leigh joins us in the studio now. Welcome back to the programme, Andrew. So, a firm recommendation just to clarify the status of Craig Emerson's advice in the Interim Report. He says a firm recommendation. There's no doubt, is there, that the Government will proceed with this mandatory code?

ASSISTANT MINISTER ANDREW LEIGH: Well, we clearly need to go through cabinet and caucus processes, but we're certainly looking very seriously at the important recommendations that Craig Emerson has made. And I was pleased, Greg, that you put that into context. The broader work that we're doing on competition, the ACCC's grocery review, the CHOICE price monitoring to ensure Australians can see where they can get the best deal, the first report of which will be coming out towards the end of June.

Read more
1 reaction Share

Stay in touch

Subscribe to our monthly newsletter


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.