Andrew Leigh

On Friday 8 November, I joined my friend Craig Emerson on his seventh 'Emmo Forum' to discuss what it means to be an economist and a progressive.

You can watch it on YouTube below, or download the podcast here.

I spoke today on ABC666 with host Adam Shirley about job losses at CSIRO, the organisation who helped invent wi-fi. The shift from natural attrition to voluntary redundancies represents a clear breach of the Liberals' pre-election pledge to only reduce jobs through natural attrition.

Here's a podcast.

Media Release

7 November 2013

COALITION SHOWING ITS TRUE COLOURS

Labor's Shadow Assistant Treasurer, Andrew Leigh, says he is alarmed by the skewed priorities of the Abbott Government that slug the poor and favour the rich.

Assistant Treasurer, Arthur Sinodinos, said today "We need cuts across the board that reflect our policy priorities and by that I mean more focus on infrastructure spending as opposed to recurrent spending."

"So far cuts across the board has meant abandoning a tax break for low-income superannuants, cutting the School Kids bonus, reducing income support and slashing jobs in the public service,” said Dr Leigh.

“But cuts across the board exempts mining billionaires, millionaire parents and tax breaks for those with more than $2 million in their superannuation accounts.

"Labor does not object to governments doing a stock take. What we do have a problem with is the values and priorities of the Abbott Government which indicate that it is comfortable with taking from the poor and giving to the rich.

"As the saying goes, if you’re not at the table, you’re on the menu. The only ones on the Coalition chopping board are low and middle Australia," Dr Leigh said.

"Prime Minister Abbott said on taking office that he will not let down ‘the forgotten families of Australia’. But he seems to have forgotten that they will bear the brunt of the government’s cuts across the board.

"The Treasurer and Assistant Treasurer must know that their policies will lead to greater inequality. I urge the Abbott Government to rethink their cuts across the board."

JOINT MEDIA RELEASE

Gai Brodtmann

Andrew Leigh

Kate Lundy

6 November 2013



ACT FEDERAL LABOR REPRESENTATIVES CALL ON ZED TO COME CLEAN AS GOVERNMENT'S NATURAL ATTRITION LINE COMES UNSTUCK

Member for Canberra Gai Brodtmann, Member for Fraser Andrew Leigh and Senator for the ACT Kate Lundy have called on ACT Liberal Senator Zed Seselja to admit that he has broken his natural attrition promise.

The three say that Senator Seselja’s pre-election promise that planned public service job cuts would be made through natural attrition alone is looking increasingly feeble, with the Canberra Times reporting this week that several departments have already offered post-election redundancies.

Senator Zed Seselja repeated throughout the 2013 election campaign that the Coalition would only cut jobs from the public service through natural attrition, not through redundancies:

[The Coalition has] “been good enough to put their policies on the table and that policy is to, across Australia, reduce the size of the public service by 12,000 through natural attrition. Now, my job should I be elected to the Senate will of course be to hold the Coalition to that promise that it will occur through natural attrition.” (4 July 2013, 666 ABC’s Drive with Adam Shirley)



“the Coalition has said through attrition across Australia that they’ll reduce the size of the public service by 12,000... it would be through attrition that they would reduce the size of the public service… The Coalition has announced a plan to make savings. They’ve been very clear about that, that it will come through natural attrition…We’ve got one party, the Coalition that grows the economy, that has announced a plan through attrition.” (9 July, 666 ABC with Louise Maher)

“Our policy is stated. The policy is that the public service through natural attrition will be reduced over two years.” (5 August, 666 ABC’s Breakfast with Ross Solly)

“I think the positives about it are the natural attrition and it will be my job if I’m elected to the Senate to hold an incoming Coalition to account on that… if you’re going to make savings you should do it through attrition…” (31 August in the Canberra Times)

The Canberra Times analysis released this week shows that according to the Public Service Gazette, only 251 public servants have left their jobs since the Abbott Government was elected some two months ago, 182 of whom received a redundancy package. This is around one-sixth of the departure rate required for the Government to meet its target of 6000 job cuts by the end of June.

Natural attrition is typically achieved with retirements and resignations. As predicted public servants are holding on to their jobs in an uncertain and insecure job environment.

Ms Brodtmann, Dr Leigh and Senator Lundy have asked Senator Seselja to come clean with Canberrans by answering the following questions:

Is the Government going to stick by its promise to only cut jobs through natural attrition, even if it means not meeting job cut targets?

1. Are the redundancies currently being offered in various departments part of the Government’s plan for 6000 job cuts this financial year, or are these additional cuts?


2. Will there be any forced redundancies, including in those departments affected by Machinery of Government changes?


3. Will the Government increase its public service job cuts target or introduce forced redundancies if the Commission of Audit recommends it should?

ENDS

This afternoon I issued a media release in response to the Government's announcement today it will shy away from a package of measures to prevent multinationals taking profits offshore.



6 November 2013

MEDIA RELEASE



HOCKEY GIVES GREEN LIGHT TO BIG MULTINATIONAL TO MINIMISE TAX

Shadow Assistant Minister, Andrew Leigh, says the Government has watered down Labor’s efforts to get multinationals to pay their fair share of tax.

“Labor’s rules were designed to stop profits being shipped overseas. The Treasurer’s amendments announced today will put less pressure on multinationals and more pressure on families.

“Labor’s rules would have swollen the budget by $1.8 billion but the Coalition’s amendments will only net $1.1 billion. That means there will be $700 million less in tax revenue and a reduction in services or higher taxes.”

“After railing against a so-called budget emergency, Mr Hockey is now presiding over a budget blow-out.”

“Mr Hockey’s cave-in to multinationals means that Australian families will pay more tax or get fewer services.”

“It means the Government’s Commission of Cuts will have to deliver an even more savage blow to families.”

“Australians understand that multinationals need to pull their weight,” said Dr Leigh.

ENDS

On 4 Nov, I joined host Kieran Gilbert and Liberal Senator Mitch Fifield to discuss the Western Australian election, Mr Abbott's selective appeal to mandate theory, Labor's democratic process for choosing a leader, and the split between the Liberal Party and the National Party over foreign investment.

On 3 November, I joined Sky Viewpoint host Peter Van Onselen to discuss economics, politics and the two big policy problems that keep me awake at night.

In my weekly video discussion for Breaking Politics I talked about the respected work of the Australian Electoral Commission and an expectation that within a generation it will adopt electronic ballots. Host Tim Lester also asked about same-sex marriage, climate policy and mandate theory. Here's the full transcript:

BREAKING POLITICS

4 NOVEMBER 2013

TIM LESTER: Western Australia is on course for an historic re-run of the 2013 senate election. To help us understand what's happening there and some of the other politics of the day, our Monday regular Andrew Leigh, the Labor Member for Fraser is in, and of course also Shadow Assistant Treasurer. Thank you for coming in Andrew.

ANDREW LEIGH: Pleasure Tim.

LESTER: Is there a need for a new senate election in Western Australia?

LEIGH: It'll be a matter ultimately for the Court of Disputed Returns to determine it. But certainly I'm concerned about the over a thousand West Australian voters who appear to have disenfranchised through this process. The Australian Electoral Commission is a great national institution. It's one that I'm immensely proud of. When I lived in the U.S. for four years I thought many times, what the U.S. really needs is an institution of the calibre of the AEC. But even great institutions sometimes make mistakes and I think it's telling that the last time something like this occurred was a hundred years ago and perhaps that's the place we'll end up, ultimately having another election in W.A.

LESTER: So, how serious is this mistake, losing 1375 votes?

LEIGH: I think it's deeply concerning and certainly Ed Killesteyn, the Electoral Commissioner, has spoken of his embarrassment at the error that's taken place. I don't believe that there has been any intentional foul play that's taken place. It's simply an error by the AEC's hard working staff. The question is, what's now practically the best way of dealing with the situation we find ourselves in.

LESTER: There's also questions going forward as to the best way for us to deal, handle, so many votes. Isn't this screaming for electronic voting in some form?

LEIGH: Electronic voting has certainly got its appeal Tim, not just for making sure that we keep track of votes, the speed of recount, but also making sure that we bring down the informal rate. One of the things that troubles me is that the informal voting rate as steadily crept up in recent elections. It's harder to make a mistake, even with a large number of candidates on the ballot paper with electronic voting. In fact, you can structure the systems so it's impossible to vote informally.

LESTER: So, would you recommend we now take a serious look at electronic voting?

LEIGH: I suspect it'll be something that the Joint Standing Committee on Electoral Matters looks into when the parliament resumes. Electronic voting is something that I'm sure we will have in 50 years’ time. The question is whether we have it in five years’ time.

LESTER: Or, whether we should have had in 2013?

LEIGH: There’s challenges with electronic voting Tim. There’s questions that you don't have the paper trail in place. There is a sense of security and stability that comes with paper ballots, this recent error notwithstanding. But I certainly think that the move towards electronic voting, an inevitability within half a century, has been accelerated.

LESTER: On balance, you’re a supporter?

LEIGH: I think it's worth exploring but I think you have to absolutely have to make sure that you get the data security issues right. Everyone's worst nightmare is internal software which is somehow able to tamper with results. We need to be absolutely sure that those machines are as secure as a paper ballot popped into a box as Australians have engaged in since federation.

LESTER: Right or wrong, Labor is about to take one hell of a pounding on carbon pricing, isn't it?

LEIGH: Our view Tim is that we ought to have a position which is grounded in science and getting lowest cost approach to dealing with the scientific problem that is climate change. We don't see climate change as a political problem, which is the way Mr Abbott approaches it. For Mr Abbott, you can go to the 2007 election promising an emissions trading scheme, advocate a carbon tax on national TV, then back-flip to say you don't even accept the science of climate change because it's ‘absolute crap’, then say that maybe you should have amendments to the CPRS Bill, then oppose it all together. He’s taking every possible position on carbon pricing, as Malcolm Turnbull says, he's a weather vane on the issue.

LESTER: Which is why I guess, I said right or wrong, from here to next July 1, the coming is going to bash you guys up on carbon. Every way you turn, they're going to saying, the Australian electors told you they did not want a carbon tax, and they're going to have a point.

LEIGH: Tim, the Australian electors voted for me in good part because I supported the evidence of the scientists and the economists. That's my own electorate and I believe that I have an ethical obligation to do after the election what I said I would do before the election. If I was to behave like a weather vane with my electors, I'd be no better than Mr Abbott, swinging with the political winds. We've just had the hottest summer of record, the hottest winter on record. We have to take action of climate change and the cheapest way possible. Mr Abbott's ‘soil magic’ Direct Action plan is not a plan that any serious economist believes can deliver results and start making a difference to bring down carbon emissions that can help to save the Great Barrier Reef in the way an emissions trading system can.

LESTER: So, are there any circumstances ever where you believe an Opposition after an election ought to change its policy based on the vote of the people? Is there no place for this idea of a mandate that we have?

LEIGH: A mandate simply says Tim that you should do after the election what you said you would do before the election. So, for example, a mandate says that when Tony Abbott went to the 2007 election campaigning for an emissions trading scheme he should have voted for one on the floor of parliament. A mandate doesn't say that when Tony Abbott went to the 2010 election opposing a mining tax that he needed to vote for a mining tax after the 2010 election. Indeed, he didn't. He voted against a mining tax even though Labor clearly had won an election campaigning for a mining tax. It is entirely appropriate that we do after an election what we said we'd do in the election campaign - not back-flip, not swing in the wind, not throw the science to one side and pretend, for the sake for our children and future generations that climate change doesn't exist. History would judge us very harshly if we did that.

LESTER: Right. So it sounds like you're saying there are no circumstances in which a new government can claim a mandate to force opposition to any issue to fall into line.

LEIGH: I'm sure there are instances Tim when an Opposition may choose to change its position after the election. We'll have sensible reviews of our suite of policies and we won't take to the next election precisely the same set of policies we took to the last one. But I think Mr Abbott is engaging bully-boy tactics and indeed his own writings after the 2007 election explicitly urged the Coalition then to ignore the talk of mandates. So Mr Abbott is a weather vane even on the issue of what mandate theory means.

LESTER: Is the High Court the right place for Australia to settle the same-sex marriage issue?

LEIGH: I don't believe so Tim. I think this is fundamentally a political issue and I think there's something cowardly in Senator Brandis running off to the High Court to attempt to strike down the ACT's same-sex marriage laws. I don't see two men or two women walking down the aisle as something which is so extraordinarily threatening to Australia that the Commonwealth needs to take the unusual action of a High Court challenge, a challenge that would normally be brought, if by anyone, by a private citizen. If he wants to challenge it on the floor of the federal parliament, he can bring such a bill. I certainly hope Malcolm Turnbull is right when he says that there would then be a conscience vote within the Liberal Party.

LESTER: Give us a quick read of what's going on politically here Andrew Leigh inside the Liberal and National parties on this issue. Where are they up to do you think?

LEIGH: Well, as I understand it, there are a number of people who support same-sex marriage within the Liberal Party party room – people like Kelly O'Dwyer, Malcolm Turnbull, Simon Birmingham – and they had their hands tied the last time the issue came before the parliament. They were forced by Mr Abbott to vote against their own conscience. The Liberal Party prides itself in being a party which allows people to vote their conscience. They ought to let people like Malcolm Turnbull vote in favour of same-sex marriage as indeed conservative leaders have done in New Zealand and in Britain over recent months on the basis that marriage is a stabilising institution which can be good for the fifth of lesbian couples who have kids in the home. We're going to have same-sex marriage in half a century's time Tim. That's an inevitability. The question is when we get to it. Mr Turnbull is clearly reflecting the position of the future. Mr Abbott the status quo of the past.

LESTER: Andrew Leigh, thank you for your time this morning.

LEIGH: Thanks Tim.

My Chronicle column this week looks at the issue of scarcity, as it applies to time, food and poverty.

Passionate About Poverty, The Chronicle, 29 October 2013

Consider three scenarios.

A busy academic misses deadlines on projects she had promised to complete months earlier. One day, she promises herself that she won’t commit to another project until the backlog is finished. The next day, she gets an offer to contribute a paper to a conference, and accepts on the spot.

A man is struggling to lose weight. He plans a low-fat diet, then joins some friends for dinner at a pub. Everyone else orders chips with their meal, so he joins them. At the end of the night, he figures the diet is ruined, so he might as well stop off at the petrol station for an ice cream.

A couple in poverty are trying to pay off their bills. They know what they should be doing: minimise expenses, pay off the high-interest loans first, and slowly get the finances under control. One month, they decide to get a payday loan to give them some breathing room. But soon the loan starts to snowball, and the debt load is bigger than ever.

In Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir make the point that time management, food management, and money management all share a common theme: when we’re facing scarcity, we sometimes make bad decisions. Drawing on a smorgasbord of research, they show that scarcity can lead us to place too much emphasis on pleasure now, even if it leads to regret tomorrow.

The solution, Mullainathan and Shafir argue, is to build a bit of ‘slack’ into our lives. They describe a hospital that was operating at full capacity, where emergency cases would throw the system into chaos – delaying scheduled procedures for hours. The solution, it turned out, was to leave one operating theatre empty, except for emergencies. This meant that emergency cases didn’t ripple through the system, and ended up increasing the number of patients treated by the hospital.

Among the problems that Scarcity explores, poverty is the one I’m most passionate about. I had it in my head when I spoke at an anti-poverty week forum organised by Kippax Uniting Church and chaired by Lin Hatfield-Dodds. Alongside the formal speakers (Andrew Barr, Richard Denniss and myself), we heard first-hand from West Belconnen residents Kyla McLean, Sienna Chalmers, Michelle Mayer and Glenn Thomson. Their stories about transport challenges, housing stress and school bullying reminded me of how complex poverty is.

As Mullainathan and Shafir point out, the difference between poverty and other problems of scarcity is that while you can take a day off from a busy job or a diet, you can’t take a day off from poverty. The answers to reducing poverty in Canberra aren’t easy, but we need to recognise that this can be a hard place to be poor. We need to tackle the challenges – such as icy winters and high house prices – with creative solutions. Because all of us are diminished by poverty in our shared community.

Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com.

I write in today's Canberra Times about the Abbott Government's planned changes to Labor's Low-Income Superannuation Scheme.

OPINION - A superannuation blow for low-income earners

The Canberra Times

Thursday 31 October 2013

Canberra resident Carol is 48 years old. She works as a cleaner, toiling on Sundays to earn some overtime. She earns less than $37,000 a year.

It would be blow to her if Labor’s Low Income Super Contribution Scheme was axed by Tony Abbott as planned.

“They’re just grabbing from everywhere, to make themselves look better, but it’s only a short term fix, like a band-aid,” she says.   “A lot of the cleaners aren’t on great wages, and they aren’t full-time.”



In his victory speech on election night, Mr Abbott reminded us that good government is one that governs for all Australians including what he called ‘forgotten families’. “We will not leave anyone behind”.

So it’s very disappointing that his government still wants to scrap a measure that sees low-income Australians pay less tax. Axing the Low Income Superannuation Contribution will hit 3.6 million low-income workers, of which nearly two-thirds are women.

Superannuation policy must be more equitable. One of the policies to achieve this – championed by Bill Shorten – is the Low-Income Superannuation Contribution. The policy introduced last year and recommended by the Henry Tax review cuts contributions tax to zero for workers earning up to $37,000 and puts the money into their super instead.

It allows workers to better save for their retirement, providing security and dignity later on in life while also taking pressure off the aged pension. Low Income Superannuation Contribution is worth up to $500 per annum, but with compound investment returns, the effect on retirement payouts is worth far more.

Worse, under the planned changes these workers will be hit retrospectively on contributions they’ve already made.  It’s bad enough to jack up taxes on the people who can least afford it – but it’s downright cruel to make it retrospective.

Boosting superannuation for low-income workers isn’t just a good way of reducing wealth inequality; it’s also one of the most important reforms for reducing gender inequity. Although women’s wages are four-fifths of those of men, women’s superannuation payouts average one-third of men’s - a gap that particularly hurts single women.

The impact of scrapping the Low Income Superannuation Contribution will be disproportionately felt more in certain occupations; cleaning and construction, retail and hospitality, child care and aged care.

Australia’s superannuation system is both unfair and unsustainable.  It subsidises those who need it least, yet penalises low income workers building a nest egg for retirement.

Treasury has estimated that 36.1 per cent of the $14.2 billion tax concessions for superannuation contributions went to the top 10 per cent of income earners . Yet the bottom 10 per cent were actually penalised, rather than subsidised, by around $130 million in the same year.

Most Australians would agree that it’s unfair for people on low or modest incomes to have to give up more to increase their superannuation savings.  Why should people on low incomes disproportionately subsidise people on higher incomes?  In fact, it also makes little economic sense to give a bigger subsidy to high income earners who need it least because they’re going to save anyway.

Put simply, the low income earner would have to give up almost 90 per cent more after tax than a high income earner to boost their super saving by the same amount. How is that fair to forgotten families?

Indeed, while the Coalition rails against Labor for ‘class warfare’, the biggest class warrior in Australia today is Mr Abbott. He is cutting income support payments (effectively a reduction in the unemployment benefit), axing the Schoolkids Bonus (a targeted measure to help families), and talking about outsourcing DisabilityCare. Meanwhile, he wants to give a $4 billion tax cut to mining billionaires, pay millionaire families $75,000 to have a child, and give the private health insurance rebate back to those on seven-figure incomes.

Under Mr Abbott, the more you have, the more government will do for you. But the less you have, the more you’ll have to fend for yourself. Not only is this a major move away from the ‘fair go’ principle of the Labor Government, but it’s also far removed from the philosophy of past Liberal Governments. Can anyone imagine that Robert Menzies would have thought it was decent and just to reduce payments to the unemployed so he could give a tax cut to a billionaire?

Another Canberra constituent, Penelope, is a student who dips in and out of work in the hospitality and security industries. Retirement is a long way off but the prospect of losing the Low Income Superannuation Contribution is on her mind.

“I need superannuation for when I grow up so that I don’t put pressure on my kids, in regards to medical and living expenses… Cutting the policy will not be good in the long-term, because if they’re not taking care of workers now, they’re going to have to pay for it later through pensions.”