Andrew Leigh

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

MONDAY, 30 NOVEMBER 2015

SUBJECT/S: Blow-out in Budget deficit; Paris climate conference.

KIERAN GILBERT: Joining me on the program now is Shadow Assistant Treasurer Andrew Leigh. Andrew, the Deloitte Access Economics Budget Monitor has quite a dire forecast here. Chris Richardson, a respected economist, is saying the Budget bottom line will be $30 billion worse off given the softening in commodity prices and the shift in the Chinese economic trajectory. What do you make of this analysis? It is quite a worry.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Kieran, it certainly is. It points to many of the things we have been pointing to in the economy over recent years. Unemployment is now at around 6 per cent; growth is 2 per cent. That’s well below the 3 per cent that you need to start getting people into work. We have consumer confidence 8 points down from where it was at the election and, Kieran, the Deloitte report was written before last week’s atrocious capital expenditure figures came out which showed a 9 per cent drop in capital expenditure. That’s the biggest drop we have seen since 1987. So it does point to the fact that we need a clear economic plan as to where we go next.

COMPETITION INSIDE THE COALITION TORPEDOES GOOD COMPETITION POLICY

Joint Media Release with Shadow Treasurer Chris Bowen

Sooner or later Malcolm Turnbull is going to have to make a decision on the economy.

Today’s presentation by the rookie Treasurer on the Harper review and the effects test in particular, was embarrassing. [Shorter Morrison: after a two year review process, we’ve decided to have another review!]

The fact is, Malcolm Turnbull had to do deals to be elected Leader of the Liberal Party and Prime Minister and we’re seeing that play out today in the Government’s response to the Harper review.

This is Government economic policy paralysis writ large.

TURNBULL'S MOMENT OF TRUTH ON TAX TRANSPARENCY

Malcolm Turnbull has the chance to show his true colours today: is his priority tackling multinational profit shifting or helping big companies hide their tax affairs?

The Senate will today vote for a second time on the Government's multinational tax avoidance bill.

Two weeks ago, Labor and the crossbench teamed up to amend the bill to ensure private companies earning more than $100 million have to disclose how much tax they pay.

Want to help developing countries? Make it cheaper to send them money, Business Spectator, 23 November

Few things are more admirable than a worker going without so they can send money back home to their family. Chances are that within a short distance of you right now, there’s someone working long hours to send money back to relatives in Manila, Port Moresby or Mumbai. According to the World Bank, remittances to developing countries are worth half a trillion dollars annually – twice the value of foreign aid.

Yet many of those hard-earned dollars never get back home. On average, someone who tries to send $1000 to a developing country will see $77 eaten up by transaction fees and exchange rate spreads. A full-time worker who wanted to send half her salary home would be toiling away for more than a week every year just to pay financial middlemen. 

SPEECH TO THE JUSTICE CONNECTIONS CONFERENCE 2015

PRISONS DILEMMA: AN ECONOMIST’S PERSPECTIVE ON INCARCERATION

Rosie Anne Fulton is an Indigenous woman from Alice Springs who suffers Foetal Alcohol Spectrum Disorder. She has endured a lifetime of abuse and disadvantage. Far from attracting help and support from government agencies, her problems landed her in a Kalgoorlie prison.

After being caught driving without a licence and whilst intoxicated in Western Australia, Rosie Anne was incarcerated under that state’s mental impairment laws. She was detained indefinitely without any conviction and ended up serving 22 months in custody before being released thanks to the advocacy of the Aboriginal Disability Justice Campaign.

Marlon Noble’s situation is no less shocking. Charged with sexual assault when he was 19, the court quickly found him to be mentally impaired. Like Rosie Anne, it was decided Marlon was unfit to stand trial and he was instead held in custody. The Department of Public Prosecutions eventually withdrew Marlon’s charges after finding that there was little evidence to support the original allegations that had landed him behind bars. Marlon was released, but not before languishing in prison for a decade without a conviction. Marlon said of his experience: “I don’t like it in jail. Scary place. You got no families in there, no brothers or sisters to talk to. You’re on your own.”

How did Australia become a place where locking people up for long stretches is the default setting in our justice system? And how can we, in good conscience, allow this to continue as the incarceration rate skyrockets? 

Economists would be familiar with the famous thought experiment in game theory known as the ‘prisoners’ dilemma’. The nub of it is that two people, by virtue of being unable to communicate, end up making a decision that is bad for both of them.

I want to argue today that Australia’s justice policies suffer from what we might call a ‘prisons dilemma’. For want of a serious conversation about what works and what doesn’t, we’ve become stuck in a situation where we spend huge amounts on jails yet end up perpetuating cycles of disadvantage, poverty and crime. As a result, our community suffers, and so do the individuals who are incarcerated.

To turn that situation around, we need to lower Australia’s incarceration rates. Achieving that will demand a recipe of responses rather than any single solution – in my time with you today I’ll talk a bit about what I believe our priority responses should be. But to get Australia’s imprisonment rates down, and keep them down, we also need to adopt a rigorous, evidence-based mindset which evaluates all current and future policies against this objective. We already know that a lot of what we do in the justice system doesn’t ‘work’ if this is our goal, yet we continue with existing policies anyway. Putting the question: what works? at the centre of justice policymaking would be a big step forward for Australia.      

Before I go about prescribing policy, let’s take a step back. I first want to paint a picture of the trends in our incarceration rates, and then look at what is behind those trends. This will help us better understand the ‘prisons dilemma’ that we face in Australia today.

The future of Australia's tax system: opportunity, growth and integrity

Speech to the Corporate Tax and Transfer Pricing Summit

Sydney

It is always very gratifying, when I come to events like this, to see so many smart people coming together to work through the hard questions about what our tax system should look like for the future.

We’ve come together at a time when these questions could not be more topical, or their answers more contested. For those of us who’ve been toiling away in the tax space for some time, it has been both surprising and exciting to see usually-esoteric issues of tax system design move to the front and centre of the political debate in recent months. People care about tax at the moment; people are interested in tax at the moment, and that means there has rarely been a better time for your ideas to have an impact in the wider community. To be a tax expert today is like releasing a breakthrough pop hit after years of playing in grungy pubs – one morning you wake up, and lo and behold, the world wants to listen to you.

We’ve been hearing a lot recently about how important Australia’s tax system is – how it can support or obstruct growth; how it can encourage investment or scare it away; how it can make us an international magnet for business or see us lag behind in international competitiveness.

As the member of Labor’s shadow ministry whose primary responsibility is tax, I wholeheartedly agree that our tax settings matter. But just as the federal budget is not the entire economy, we shouldn’t confuse building an efficient and equitable tax system with the much bigger task of setting Australia up to grow and flourish.

In my time with you today I want to look at how the tax system intersects with a range of other policy settings and choices which have as much – if not more – influence over whether we can continue as a country of fair opportunity and strong growth. In looking to the global picture and questions about multinational tax policy, I’ll also argue that we should be thinking about Australia’s international competitiveness in far broader terms than how big a tax break companies can get if they do business here. 

Over the weekend I got together a group of runners to tackle Hobart's Point to Pinnacle half-marathon and raise money for World Vision. The team was named after my grandfather, Keith Leigh, who died while running up Mt Wellington in 1970. 

ABC Hobart came along to follow our progress; check out their story here...

HELPING ALL CANBERRANS HAVE A CHRISTMAS 

Today I was delighted to join UnitingCare Kippax to launch their 2015 Christmas gift drive.

The Let’s Give Everyone a Christmas initiative collects donations of gifts and hampers for Canberra families that are doing it tough and might otherwise miss out on a merry Christmas.

ROBOTS, REMUNERATION AND RESTRUCTURING: HOW DO TECHNOLOGY AND INEQUALITY SHAPE ONE ANOTHER, AND WHAT SHOULD WE DO ABOUT IT?* 

Annual Sir Leslie Melville Lecture

Australian National University

Sir Leslie Galfreid Melville was a remarkable Australian. Born the year after federation. Trained in engineering and science before wisely settling on economics. Inaugural professor of economics at Adelaide University at age 27. Founder of what would become the Reserve Bank’s research department. Leader of Australia’s delegation to Bretton Woods. ANU Vice-Chancellor for most of the 1950s. Appointed to chair the Tariff Board by McEwen, it is to Melville’s enduring credit that he quit the post rather than succumb to McEwenism. 

Having been born at the dawn of the twentieth century, Leslie Melville lived to see the start of the twenty-first. As one obituary noted, ‘there has not been another Australian economist to hold the range of jobs that Melville did’.[1]

It is virtually impossible to think about Melville’s life without being conscious of the technological changes that took place during it. The twentieth century – or the ‘Melville Era’, as Australian economists might call it – saw an explosion in technologies. In transport: planes, helicopters, mass-market cars and space shuttles. In communications, radio, television and the Internet. In health, antibiotics, sewered cities, the pill, and genetic engineering. Not to mention atomic bombs, vacuum cleaners, smartphones, radar, the bra, and plastic. And yet for most of the twentieth century, we not only saw rising living standards, but falling inequality. Melville’s working years – the 1920s to the 1970s – saw the largest reduction in inequality in Australian history. 

My focus today is on two challenges: how do we continue the pace of innovation in the twenty-first century that we saw in the twentieth? And how do we ensure that prosperity is broadly shared? By acknowledging the tendency of technological change to increase inequality, we can harness the gifts of Prometheus without suffering their destructive tendencies. As it happens, I will argue that a single policy recommendation offers the greatest promise to make us more entrepreneurial and more equal.

If an increased GST is the answer, then you're asking the wrong question

12 November 2015 

Australia faces a number of serious economic challenges right now. We have growth running below trend and recently downgraded by the OECD. Growth has been steadily downgraded in every budget since the first Abbott-Turnbull budget. We have got inequality now running at a 75-year high. We have had a generation in which earnings have risen three times as fast for the top 10th as for the bottom 10th of income earners. We have got housing affordability increasingly pushing out of reach of average Australian households, with young families in Sydney now facing the prospect of median house prices at more than $1 million. These are big challenges for Australia and the GST at 15 per cent would make all of them worse.