Choosing openness in the international economy
The Lowy Institute, 2 May 2023
The Covid pandemic was good for isolationists and xenophobes, and bad for globalisers and internationalists. Yet since the agricultural revolution, one of the keys to prosperity has been specialisation. None of us make our own running shoes, fix our own teeth, or build our own cars. We gain from living in societies where people specialise in what they do best, and work together to produce complex goods and services.
So too it makes sense for countries to specialise and encourage global commerce. The free flow of goods and services has the potential to make people around the world healthier, wealthier and wiser.
For medium-sized economies the benefits of specialisation are all around us. Hospitals are packed with imported products, from machines to vaccines. Much of what is sold in modern supermarkets comes from overseas. Trade brings new ideas and challenges local firms to serve their customers well.Read more
Choosing Openness: How Regional Partnerships Boost Economic Dynamism
Yonsei University, Seoul
Tuesday, 2 May 2023
Thank you to the Institute of East and West Studies at Yonsei University for inviting me to speak here today.
And to all attending students, thank you for coming along to listen.
I am honoured to be representing the Treasurer as Australia’s Governor to the Asian Development Bank for its 56th annual meeting of the Board of Governors.
It is a pleasure to be making my first visit to the Republic of Korea. Not just because my wife and I compulsively watched Squid Game. And not only because our three boys hope that their dad will return from South Korea fully ‘Gangnam Style’. They’re also hoping I’ll snap a selfie with NewJeans – whose performance at the Asian Development Bank reception will show the VIPs who the real VIPs are. OMG indeed.
In Australia, the cultural influence of the Korean Wave (Hallyu) is phenomenal.
In fact, South Korea’s cultural importance is on par with its economic importance to Australia.
Our bilateral relationship is underpinned by a shared vision for an open, prosperous and resilient Asia-Pacific region.
South Korea is Australia's fourth-largest two-way trading partner and third-largest export market (DFAT 2023).
Growing our economic, trade and investment ties with South Korea is a key priority for the Australian Government.
We operate under a free trade agreement, which I will discuss later in more detail.
We also benefit from the Australia–Korea Comprehensive Strategic Partnership, which is a program of enhanced bilateral cooperation under three pillars – strategic and security; economic, innovation and technology; and people-to-people exchange.Read more
ASIAN DEVELOPMENT BANK MEETING IN REPUBLIC OF KOREA
I leave today for the Annual Meeting of the Asian Development Bank in Incheon, Republic of Korea.
It is vital that Australia is well represented at this important meeting for the Asia-Pacific region as we prepare to hand down the Budget next week.
Economic conditions are challenging throughout the world, including here in our own neighbourhood. Russia’s illegal and immoral invasion of Ukraine, a worsening food crisis and extreme weather events all threaten the region’s post-COVID recovery.Read more
ABC CANBERRA WITH ADAM SHIRLEY
FRIDAY, 28 APRIL 2023
SUBJECTS: Establishing a centralized evaluation unit, Stage 3 tax cuts, JobSeeker.
ADAM SHIRLEY (HOST): I wonder whether at work you’ve had a consultant come in before, whether you are a consultant yourself? Because often when things could be improved, when there’s a problem or whether organisations, large and small, are looking to sharpen, sharpen up what it is they do, consultants come in. It’s been a part of the landscape in federal government for many a year, to quite a tune as well, tens of millions of dollars can be paid to the big boys and girls from places like PwC, EY and others, McKinsey, to name a few. And the current federal government reckons that there’s a bit too much money historically that’s been going to those consultants.
Dr Andrew Leigh is Assistant Minister for Treasury and the Member for Fenner here in the ACT, and he’s talking about a new Treasury evaluation unit which is aiming, amongst other things, to identify all the consultants and maybe cut back on the spending on them. Dr Leigh, good morning to you.
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Good morning, Adam. Glad to be with you.Read more
ABC MELBOURNE WITH RAF EPSTEIN
MONDAY, 24 APRIL 2023
SUBJECTS: RBA Review, Medicare, Stage 3 tax cuts, Home buyer grant, Monopsony, JobKeeper.
RAFAEL EPSTEIN (HOST): Andrew Leigh, thanks for joining us.
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Real pleasure, Raf. Great to be with you and your listeners.
EPSTEIN: You're an ambitious man. You understand the economy. Are you frustrated that the government isn't as ambitious as you are?
LEIGH: This is an ambitious government moving quickly on reforms. People will see the cheaper childcare reforms taking effect in the middle of the year. Cheaper medicine is already in effect. We've got the Safeguards Mechanism as a core part of our climate policy, and we’re getting our renewable share up from a third up to four fifths of the electricity grid. We're setting big targets for electric vehicles and today we brought down the Defence Strategic Review, which is the biggest review of our Defence posture in the postwar era. There is nothing small-target about what we're doing, Raf. We're a great reforming government in the Labor tradition.Read more
2GB AUSTRALIA OVERNIGHTS WITH CLINTON MAYNARD
SUNDAY, 23 APRIL 2023
SUBJECTS: Reserve Bank of Australia Review, Monetary policy, Reducing government debt, GST, multinational tax reform.
CLINTON MAYNARD (HOST): The review into the Reserve Bank and the review has been scathing. It makes more than 50 recommendations for change that the new Federal Government, I shouldn't say new, they’ve been in power since May, but they are accepting. Andrew Leigh is the Assistant Minister for Competition, Charities but critically, Treasury. He joins us on the program. Andrew, thank you for your time.
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Real pleasure.
MAYNARD: Thanks for your time, this is a very complex issue. It's the most comprehensive review of the RBA in decades and about time. But just to, I guess, almost dumb it down for our audience to simplify it, how is this and the changes that your government is going to adopt, how is it going to make it better for people who have a mortgage or loans and are subject to interest rates?
LEIGH: Well, the first thing is to note that the review has been conducted at a time at which the Reserve Bank is under intense pressure. There's been a lot of attention paid to their decisions made around interest rates, not only in the current period where they'd forecast that interest rates wouldn't be rising until 2024, but then needed to raise interest rates; but also in the period 2016 to 2019. So, the review goes into some detail over the question as to whether rates could indeed have been lower over that period, 2016 to 2019, and whether you might have gotten better employment outcomes of that period. And really where it lands, Clinton is in saying that the decisions of the Governor weren't really challenged by the board and that by having an expert board, people who understand monetary policy, understand the macroeconomic models that are being brought to bear on the problem, then you might get a more contestation of the decision. And I think that's true anytime you're making a complicated decision. If you're running a trucking company, you'd want a board with trucking experts around the room who are able to really test the decisions being made by management. That's the model that exists for a lot of other central banks around the world, but we haven't tended to have that. We've tended to have this model of a board for the Reserve Bank that's talented generalists rather than monetary policy specialists. And the review says it's time that changed.Read more
AMP Foundation 30th Anniversary
Art Gallery of NSW
Thursday, 13 April 2023
Thank you for that generous introduction. I acknowledge the Gadigal people of the Eora nation, pay my respects to their elders and commit myself as a member of the Albanese government to the implementation in full of the Uluru Statement From the Heart.
I also acknowledge Alexis George, the CEO of AMP, Nicola Stokes, the general manager of the AMP Foundation, Professor Peter Shergold the chair of the AMP Foundation, and all of you for being here tonight.
It’s a pleasure to be here in the Art Gallery of NSW’s new Sydney Modern Project building. Down below our feet is an artwork by Adrian Villa Rojas called "End of Imagination". It's a remarkable room, largely dark, lit only by search lights. And the central idea of the artwork is a series of monuments to the future, which have been aged on future worlds for thousands of years. If you haven't been down, I encourage you to check it out. It is an extraordinary art work. My three boys, aged 10, 13 and 16 all enjoyed different facets of it when we visited last. But it does remind us that all of us will be gone at some points. And what lives on beyond us is the big question. "End of Imagination" reminds us of the importance of legacy. And the work the AMP Foundation does is about legacy, is about the sort of nation we can hand on to the next generations.Read more
6PR 882 AM WITH KARALEE KATSAMBANIS
WEDNESDAY, 12 APRIL 2023
SUBJECTS: SUBSCRIPTION SERVICES, COST OF LVING, COMPETITION LAWS, ECONOMIC OUTLOOK, MULTINATIONAL TAX AVOIDANCE
KARALEE KATSAMBANIS: I am delighted to welcome my next guest – Assistant Minister for Competition, Charities and Treasury, the Honourable Dr Andrew Leigh. Good evening.
ANDREW LEIGH: Good evening, Karalee. Great to be with you and your listeners.
KARALEE KATSAMBANIS: It is lovely to have you on board. Now, look, Dr Leigh, the reason why I’ve got you on this evening is you’ve recently been calling for business to get a fair go and fair competition. You recently spoke at the COSBOA National Small Business Summit, and you’ve called for the shifted narrative on, you know, unfair contract terms and trading practices in a bid to spark what we could call market stimulation and greater productivity. How is this going to have a good impact, especially here in Western Australia?
ANDREW LEIGH: Well, Karalee, any sports fan knows that fair competition is really fundamental to the game. You don’t get a good football game unless you’ve got a fair set of rules. One of the things we’ve been worried about recently as a federal government is that the economy isn’t dynamic enough because there’s not enough fair competition taking place.
There’s too many sectors where there’s just one or two big firms completely dominating things. And the small guy just doesn’t get a look in. What we want to do is ensure that there’s more start-ups and that there’s more market dynamism, more people switching jobs to get those useful pay rises and more productivity growth, which ultimately is the foundation for living standards.Read more
Unfair Practices Hurt Consumers, Businesses, Profits
The Daily Telegraph, 11 April 2023
In the economy, just as in sport, there are winners and losers. Sometimes you just play better on the day. But the rules of sport are set up to ensure fair play, and that's how the economy should function too.
When the Albanese government came to office, unfair contract terms were legal. That meant multinationals could put terms in their contracts that provided for automatic renewal, excessive exit fees and unilateral price increases.
Unfair contract terms let multinationals exploit the power balance between them and local businesses. We changed that last year by banning unfair contract terms.
Now we're turning our attention to unfair trading practices. For example, unsubscribing from a digital streaming service often involves confusing menus, skewed wording and urges to stay a bit longer.
2CC 1206 AM WITH BRIAN CARLTON
THURSDAY, 6 APRIL 2023
SUBJECTS: MULTINATIONAL TAX AVOIDANCE CRACKDOWN; NATIONAL SMALL BUSINESS SUMMIT; INLAND RAIL FIASCO; ACT UNEMPLOYMENT; ENERGY BILL RELIEF.
BRIAN CARLTON (HOST): The thing we're about to talk about is a position, Government position that came out of the last budget, and it's one of those ones that probably didn't get a lot of attention at the time, but it's a worthy issue. The issue is the large corporates, largely multinational corporates, who offset a bunch of their accounts to what you might call low‑tax jurisdictions, and they're claiming a whole bunch of things called "intangibles", and we'll find out what they are in a minute, intangibles, to reduce their overall tax bill here.
Now, the Federal Government to its credit is having a bit of a crackdown on this and has produced some draft legislation that they want some feedback on. To have a bit of a chat about exactly what that legislation contains, let me bring in here, if I can, Andrew Leigh, who is the Federal Assistant Minister for Competition, Charities and Treasury. Minister, good afternoon, how are you?
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Good afternoon, Brian. Great to be with you and your listeners.
CARLTON: I appreciate your time today. This is one that probably didn't get a lot of attention on budget day or in the reviews of budget, so to speak. The issue is largely as I've described, isn't it, they're sort of shifting their business operations around so that they can claim a whole bunch of deductions here in Australia based on activities overseas, in a nutshell?Read more