Andrew Leigh

UNSHACKLING INNOVATION: RETHINKING NON-COMPETE CLAUSES FOR A DYNAMIC ECONOMY
Address to the McKell Institute
Thursday, 4 April 2024

Non-compete clauses

As the Economist points out, when it comes to non-compete clauses ‘The clue is in the name’ (The Economist 2023). Non-compete clauses restrict an employee from working for a competitor or setting up a competing business when they leave. Non-compete clauses typically apply for a certain time, in a set geographic location, and within a defined industry. Let me provide some real examples to get things started.

Breakdancing

‘Charlotte’, a 17-year-old landed her first casual job as a dance teacher. It was her dream job, but it wasn’t perfect. Far from it – Charlotte was forced to quit after experiencing harassment.  Months later, she took a job at a different dance studio and immediately received a warning letter from her former employer. The letter said Charlotte had breached a restraint of trade clause to not work or volunteer for a competing business for 36-months within a 15-kilometre exclusion zone – noting the company had several studios. Putting her in a difficult position, Charlotte’s former employer also contacted the new dance studio.

Client disservice

‘Mia’, a disability support worker was doing what she loves – working in the community and helping people. She developed trust and rapport with her clients over many years.

Mia worked for a registered National Disability Insurance Scheme provider but wasn’t too happy about being offered a new contract with a lower hourly rate. So Mia went out on her own as an independent and later joined a rival registered provider. Without any cajoling, several former clients decided to transfer their care plans and follow her to the new provider. Mia received a letter from her former employer stating that she had breached restraint of trade clauses relating to non-competition and non-solicitation of clients.

Unbending

Patrick, a 21-year-old boilermaker, built a solid resumé and decided it was time to take his skills and pay packet to the next level. His new opportunity involved not working for a competitor but working in-house for a former client. It was a rural town and customers were hard to find so Patrick’s previous employer wasn’t pleased about losing a client.

Patrick was branded a troublemaker and was sent a letter saying he breached his post-employment obligations. The letter further applied the blowtorch by threatening court action seeking thousands of dollars in damages plus costs.

Consumers and investors have long understood that what they buy, and the investment decisions they make, have the power to influence social, economic, and environmental challenges. As far back as the 1700s, John Wesley advised his congregants against "any sinful trade". When the Methodist Church began investing in the stock market at the turn of the 20th century, it avoided companies involved in alcohol and gambling. When investors saw the destruction of the Vietnam War in the 1970s, they created the first ethical fund - the Pax World Fund - so they could avoid investing in weapons and weapons manufacturers.

Meanwhile, debate has raged about what this all means for corporations, and how they balance their responsibilities to shareholders and to the public. It's vital to create a financial system in which Environmental, Social and Governance (ESG) factors into shareholder value, as much as acquisitions or sales. Without transparency and robust public reporting, how will we know about the ESG factors faced by a company, and make decisions about where to invest our dollars accordingly?

Daniel Kahneman (1934-2024) was teaching air force flight instructors when one of them informed him that criticism worked better than praise.

Whenever they praised a successful performance, the instructor noted, the cadet pilot tended to get worse. By contrast, when instructors screamed at a pilot for a poor performance, the cadet generally improved.

Kahneman realised that the instructors were reacting to what statisticians call “regression to the mean”. Because performances are a function of both luck and skill, a lousy execution is typically followed by an improvement, while a great execution is typically followed by a deterioration.

But rather than turning the flight class into a maths lecture, Kahneman decided to illustrate the point by a simple exercise. He asked everyone to toss a coin over their shoulder towards a target. After the first attempt, people were ranked in their performance. They then tried again. As regression to the mean would predict, the best performers got worse, while the worst performers got better.

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST WITH SALLY SARA
MONDAY, 1 APRIL 2024

SUBJECTS: Divestiture powers for competition regulators, the government’s work to improve supermarket competition, Meta removing news, News Media Bargaining Code, misinformation and disinformation.

SALLY SARA, HOST: The Greens and Coalition are working separately on powers that could forcibly break up the major supermarkets, although the government isn’t backing that idea just yet. Andrew Leigh is the Assistant Minister for Competition and Treasury, and joins me now, Andrew Leigh welcome back to the program.

ANDREW LEIGH: Thanks Sally, great to be with you and your listeners.

SARA: If the ACCC recommended divestiture for the big supermarkets would you consider it or is it completely off the table?

LEIGH: Well let’s see what the ACCC come back with, but it’s certainly true Sally if you look at previous competition inquiries, the Hilmer Review didn’t recommend divestiture, the Harper Review didn’t recommend divestiture. Daniel Mulino’s House Economics Committee has just brought down a terrific 280-page report on competition, it doesn’t recommend divestiture, and that includes the Coalition members of that committee. The National Farmers Federation have argued against divestiture, and the ACTU have made the point that it could potentially hurt workers. So we’re sceptical, but of course we’ll always look to advice from agencies and we’re looking eagerly to see what the ACCC comes back with in their supermarkets inquiry.

HARNESSING THE DATA DELUGE: THE SURPRISING POWER OF BIG DATA AND ARTIFICIAL INTELLIGENCE*
Address to the 10th Annual Australian Government Data Summit
Hotel Realm, Canberra
Thursday, 28 March 2024

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

I’m pleased to join you today, in the tenth year of the annual Australian Government Data Summit. Robust, rigorous data and statistics are vital for delivering outcomes for all Australians.

Throughout our nation’s history, Australia’s statisticians and statistical agencies have punched above their weight in this – or should I say, found themselves in the right tail of the distribution. The nation’s first statistician, George Knibbs (known to his friends as ‘The Knibb’) published papers on mathematics, geodesy, wealth, and population. He was an acting professor of physics at the University of Sydney. He published a book on the federal capital. He was a member of the British Astronomical Society. He even wrote a book of verse.

Joint media release with
Julie Collins MP
Minister for Small Business

PARLIAMENT PASSES LABOR’S DESIGNATED COMPLAINTS MEASURE – CONSULTATIONS NOW OPEN ON FURTHER DETAILS

Yesterday the Parliament passed the Competition and Consumer Amendment (Fair Go for Consumers and Small Business) Bill 2024. This reform, which forms part of the Albanese Government’s Better Competition election commitment, establishes a designated complaints function within the Australian Competition and Consumer Commission (ACCC) from July 2024.

STARTING WITH STATISTICS TO TRANSFORM DISADVANTAGE
Launch of the 2024 Child Social Exclusion Report
Parliament House, Canberra
Wednesday, 27 March 2024

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

Thank you Claerwen for the warm introduction and to Aunty Violet Sheridan for your Welcome to Country. I also acknowledge the many researchers and policy advocates here and the work you all do to create a fairer Australia.

Thank you to UnitingCare for inviting me here today to celebrate the 2024 Child Social Exclusion Index Report. The report is a collaboration between University of Canberra researchers and UnitingCare, which has worked for over 100 years to support vulnerable Australians and advocate for social justice.

Tackling disadvantage is at the heart of our Government’s vision for Australia (Albanese, 2022), and one of the most important challenges of our time.

It is a topic I have been focused on since my university days. The title of my 2004 PhD thesis was ‘Essays in Poverty and Inequality’, a set of issues that I expanded on in my 2013 book: ‘Battlers and Billionaires: The Story of Inequality in Australia’. 

Tackling inequality and exclusion must start with robust data and statistics. That is what this report does. It extends the concept of poverty to measure social and material disadvantage, and highlights the geographical areas facing high levels of child social exclusion. I congratulate you on the report, and your contribution to a long and rich tradition in the social sciences.

It is a history which says we must start with robust statistics to transform disadvantage. It shows that data-driven indices and maps can create change significant social change. It is this tradition that I am going to focus on today, and which I hope inspires you, as you consider the findings of the report.

WORLD DOWN SYNDROME DAY BREAKFAST

PARLIAMENT HOUSE, CANBERRA

THURSDAY, 21 MARCH 2024

I acknowledge the Ngunnawal people on whose lands we meet and pay respects to all First Nations people present today.

Happy World Down Syndrome Day 2024!

I am honoured to be asked to address you on this important occasion to raise awareness and celebrate the rights and inclusion of people with Down Syndrome around the world. I acknowledge my parliamentary colleagues who are here today, including Amanda Rishworth, Libby Coker and Ged Kearney. I also acknowledge the role that Down Syndrome Australia plays in supporting and advocating for people with Down Syndrome across the country.

FAIRER, CLEANER: THE TRANSPARENT INVESTMENT REVOLUTION
Climate Integrity Summit 2024, Parliament House
Wednesday, 20 March 2024

I acknowledge the Ngunnawal people on whose lands we meet and pay respects to all First Nations people present today.

Thank you to the Australia Institute for hosting this annual summit on climate integrity, and to Richard Dennis for the invitation to deliver this address today. I am delighted to be joining such a distinguished line-up of speakers, including their excellencies Mr Anote Tong, former President of the Republic of Kiribati, and Mr Enele Sopoaga, former Prime Minister of Tuvalu.

My focus this morning is on climate and tax transparency in our financial system so that we can drive down emissions and create a fairer society in the process.

Transparency at work

This time last year, news broke that global biotechnology company Amgen is being sued for hiding its $10.7 billion dollar tax bill from investors. The plaintiffs said that “Amgen’s share price fell 6.5 per cent in August 2021, and a further 4.3 per cent in April 2022, because the company waited until then to disclose its potential liabilities” (Stempel, 2023). The US Inland Revenue Service “accused Amgen of underreporting taxes from 2010-2015, mainly for attributing what should have been US taxable income to a Puerto Rico unit” (Stempel, 2023). It powerfully illustrates how shareholder value is intimately linked to what is known about a company.

Consumers and investors have long understood that what they buy, and the investment decisions they make, have the power to influence ‘grand’ social, economic, and environmental challenges. As far back as the 1700s, John Wesley advised his congregants against “any sinful trade” (Uberti, 2023). When the Methodist Church began investing in the stock market at the turn of the 20th century, they avoided companies involved in alcohol and gambling (Goff, 2006). When investors saw the destruction of the Vietnam War in the 1970s, they created the first ethical fund – the Pax World Fund – so they could avoid investing in weapons and weapons manufacturers (Uberti, 2023).

Meanwhile, debate has raged about what this all means for corporations, and how they balance their responsibilities to shareholders and to the public. We must create a financial system in which Environmental, Social and Governance (ESG) factors into shareholder value, as much as acquisitions or sales. Without transparency and robust public reporting, how will we know about the Environmental, Social and Governance factors faced by a company, and make decisions about where to invest our dollars accordingly?

The more that companies make regulatory or reputational risks they face transparent through data and metrics, the more that investors are empowered to vote with their feet on their values and make long-term, values-aligned sustainable investment decisions. With good ESG data, metrics and standards, people can move their capital with precision and thereby shape the world. “This is how values drive value”, as Mark Carney puts it (2020 & 2021).