Andrew Leigh

TRANSCRIPT

2CC WITH MARK PARTON

Andrew Leigh

Member for Fraser



WEDNESDAY 17^TH JULY 2013

TOPICS:                                Austerity, changes to fringe benefits tax, live exports

Mark Parton:                     Andrew Leigh is a thinker and he’s got a piece in the Canberra Times this morning about austerity measures, and he says that when the Great Depression hit the United States, US treasury secretary Andrew Mellon famously advocated austerity.  His formula was simple – liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate – it’ll purge the rottenness out of the system. The theory behind austerity is elegant; Proponents argue that government crowds out business and the tax payers will equate spending cuts today with tax cuts tomorrow. There’ll be some short term pain as prices and wages fall, but from cuts will come growth and on the face of it, you can understand why they bought it as a concept back in the 1920s and 30s. But in its simplest form, it just doesn’t really work. Andrew Leigh joins us right now, of course, the federal member for Fraser here in the ACT. G’day Andrew

Andrew Leigh: G’day Mark

Mark Parton:                     You are obviously correct in what you say about the way that they dealt with the Depression in the 20s and 30s because it just died in the bum, it didn’t work at all did it? It extended it for such a long period of time.

Andrew Leigh:                  Yeah, all the way up until World War II in fact, Mark. I mean World War II is the only thing that eventually gets the developed world out of the Great Depression. The monetary policy makers in the era just fall apart.

Mark Parton:                     And you’ve basically suggested that the Conservative government in Britain at the moment is essentially heading down the same path.

Andrew Leigh:                  They are Mark. They’re terribly worried about debt, which is no bad thing in itself, but the consequence is that they’re cutting back so far that they’re hitting into growth. So they’re cutting back on hospital services, they’re cutting back on education services, they’re shutting down libraries. You’ve got about 10,000 more people in the UK homeless now than before. The result is that Britain’s got its slowest recovery than from any other crisis going back. Even slower, in fact, than Britain’s rate of recovery in the Great Depression itself.

Mark Parton:                     Andrew, I think that there’s truth in what you say, in that obviously austerity measures can harm. But I think that the great challenge here is finding the line that’s somewhere in the middle between reckless spending and cutting things back. There’s got to be a line in the centre somewhere doesn’t there?

Andrew Leigh:                  That’s right Mark so, you know, we made savings this week, for example, on tightening rules around fringe benefits allowances for cars.  We believe that that’s a responsible saving and I would [inaudible]…

Mark Parton:                     Do you seriously think it’s a responsible saving Andrew? Because the mail that I’ve got this morning is that Australia’s largest leasing companies have stopped deliveries of new cars, as of now, until at least next week, until they can assess the impact of the Rudd government’s overhaul of company car tax rules.

Andrew Leigh:                  Well Mark, we’ve known for a while that the fringe benefits tax arrangements were problematic from an environmental standpoint, That they were encouraging people to drive too far because they had these thresholds. What we’re saying now is that you can have your car under the log book method and you’ll get the appropriate tax rebates according to how far you drive it, but you won’t simply get a bigger tax rebate for picking out a bigger car.

Mark Parton:                     Which again, all sounds sensible but isn’t there the chance that you could do the same to the car industry, exactly the same as, for argument’s sake, what you’ve done to the live cattle industry?

Andrew Leigh:                  Well, the live cattle industry has a much better future for actually getting its supply chains right Mark, so I’d dispute you on that one. I think it was a real risk for that whole industry if we’d gone on as we were before.

Mark Parton:                     Just, I mean this Smart Salary have issued a bulletin to dealers. It went out late yesterday, ordering them to halt deliveries until further notice. This email distributed says, “due to the uncertainty, and until we have further clarification of details from the Department of Treasury, all settlements are to be suspended as of close of business today, Tuesday 16th of July.”

Andrew Leigh:                  Mark, I’m sure people want to make sure that they’re buying a car under the right arrangements and if people end up waiting a week to make sure that they’re still making the right decision on a sale that sounds pretty sensible to me. But I don’t think people ought to be worried about moving to a log book method. Certainly many firms are already using log books to assess business use. So that’s, I think, a reasonable savings measure. You know what I’m trying to do in the piece in the Canberra Times today is to contrast that with cut backs that see patients on oxygen getting fewer visits from district nurses. These sorts of across the board cuts to really vital services which seem to have driven Britain just about back into recession.

Mark Parton:                     Andrew, always good to get you on the radio. Thanks for coming along. Andrew Leigh, the federal member for Fraser.

My article in today's Canberra Times looks at the perils of austerity.

Copying UK's austerity cuts sets us on a road to ruin, Canberra Times, 17 July 2013

When the Great Depression hit the United States, US Treasury Secretary Andrew Mellon famously advocated austerity. His formula was simple: ‘Liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate…It will purge the rottenness out of the system’.

The theory behind austerity is elegant: proponents argue that government crowds out businesses, and that taxpayers will equate spending cuts today with tax cuts tomorrow. There will be some short-term pain as prices and wages fall, but from cuts will come growth. Austerity sounds great in simplistic theory. The only catch is: it doesn’t work.

Yet today, a conservative government in the UK (in partnership with the Liberal Democrats) are trying austerity. The UK government has cut spending on pension benefits and housing. Teachers, police, doctors, nurses and community workers have had their pay frozen.  Public libraries are closing, and more cuts have been foreshadowed.  Oxford’s David Stuckler and Sanjay Basu estimate that 10,000 families in the UK have become homeless as a result of the cuts.

UK Labour's financial affairs spokeswoman, Angela Eagle, has argued austerity has ‘hit the poorest hardest’. Katherine Murphy, chief executive of the UK Patients’ Association, reports that patients on oxygen due to breathing problems have seen visits from district nurses reduced, while other patients have been denied operations and painkillers due to the cost, with a nurses’ union warning that the UK  ‘is sleepwalking into a crisis’. Unemployment was 5 percent before the crisis, and is now almost 8 percent.

The double tragedy of austerity in the UK, as with every occasion it is put in place is that it has hurt the neediest, and failed to jumpstart the economy. Britain’s recovery from the Global Financial Crisis has been the slowest recovery from any recession in that country since records began: slower than the recovery from the Great Depression and slower than any other G7 country apart from Italy.

That’s because slow growth has effectively negated reductions in debt. As the International Monetary Fund’s Luc Eyraud and Anke Weber have argued, ‘fiscal tightening could raise the debt ratio in the short term, as fiscal gains are partly wiped out by the decline in output’.  The situation is akin to a plumber who sells his tools to help pay off the mortgage.

This point has been picked up by thoughtful observers. The UK Budgetary Review Office has warned that cutting will slow economic growth. IMF Chief Economist Olivier Blanchard warns that the UK would be ‘playing with fire’ if it did not do more to stimulate its economy. Princeton’s Paul Krugman likens austerity to a medieval doctor draining a patient’s blood, who, noticing the patient getting sicker, takes more blood.

The contrast with Australia is stark. We avoided recession and saved hundreds of thousands of jobs because the Australian government actively created jobs and benefitted the community through nation building projects such as a once-in-a –lifetime school building program. Australian wages are rising, and inflation remains lower than in the UK. Australia’s debt to GDP ratio is well below Britain’s. As Columbia University’s Joseph Stiglitz likes to quip, Australia’s only contribution to the global slump was the acronym ‘GFC’. As former Prime Minister John Howard remarked, ‘When the current prime minister and the Treasurer and others tell you that the Australian economy is doing better than most – they are right’.

Why does the difference between Australia and the UK matter? Because if the Opposition win government later this year, Britain’s past may be Australia’s future.

In recent months, Tony Abbott has acknowledged ‘The Coalition obviously is looking for significant expenditure reductions.’, and admits that these will be ‘painful decisions’. Queenslanders know what he’s talking about. The savage program of cuts by the LNP government in the midst of an overblown fear campaign about public debt also led to increased unemployment in that state.

Britain’s experience warns us that you cannot cut a nation to prosperity at the expense of the young, the elderly, the disabled and the infirm. If you care about reducing the debt to GDP ratio – as I do – then you need to worry not only about paying down debt, but also about increasing GDP. On economic policy, this election sees Australia at a fork in the road. Coalition austerity would be a rocky path indeed.

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

On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal Senator Scott Ryan about why an emissions trading scheme is the most efficient way of dealing with dangerous climate change, and how the Rudd Government is working with neighbours such as Indonesia and PNG to find a regional solution to the challenge of asylum seeker flows.

One of the risks of hiring great staff is that other employers will offer them even better opportunities, and I'm afraid to report that my media adviser, Courtney Sloane, is the 6th staffer of mine who has been snaffled up by a minister's office (in Courtney's case, Human Services Minister Jan McLucas). At this rate, future reunions of Leigh alumni will empty the ministerial wing of Parliament House.

So as a result, I'm looking for a new media adviser. In the past, I've advertised in newspapers and on seek.com.au, but the best applications have invariably been the ones who came across the ad on my blog or twitter feed. So this time, I'm simply going to rely on word of mouth. If you know of someone suitable, please let them know.

What does the job involve? In a high-level sense, helping me do a better job of publicly communicating on issues of public policy. I have a pretty broad range of ways through which I engage on policy issues - from books to speeches to interviews to op-eds to tweets. My media adviser helps draft, coordinate, and project those ideas. This involves lots of typing transcripts, sending out media releases, and chatting with journalists. The hours tend to exceed 40 hours a week, and can be unpredictable - for which there's an overtime allowance.

The salary range is $77,155 to $92,772, which includes an overtime/on call allowance.

If you're interested, please send a CV with a covering email to andrew.leigh.mp<asperand>aph.gov.au. Applications close Friday 19 July.

Oh, and if you're interested in my views on engaging with the media in the current environment, have a read of my speech The Naked Truth? Media and Politics in the Digital Age.

TRANSCRIPT – 2CC WITH MARK PARTON
Andrew Leigh MP
Member for Fraser
10 July 2013

TOPICS:                      Battlers and Billionaires, election date, polls

Mark Parton:           We had Andrew Leigh, the federal member for Fraser on the program recently and this is after the whole leadership change with federal Labor. It’s worked out really badly for Andrew that his new book’s been released at the time that all this stuff’s been going down. It’s the book called Battlers and Billionaires. He writes really well does Andrew and the book is basically about you know egalitarianism in Australia and whether or not things are as equal as they should be.  Now look, I disagree with a number of things that Andrew puts forward in the book, but gee it’s a good read. I haven’t read it all I’ve just read some extracts from it. I’ve got Andrew on the line right now.

Morning Andrew.



Andrew Leigh: Good morning Mark.

Mark Parton:           Among the things that I’ve read are the extract that appeared in the daily telegraph which quoted well what went on immediately following the Bali night club bombings and how the Australians just show this amazing spirit in times of drama like that.



Andrew Leigh: It’s a great story. So the story is that in the ‘Australian ward’ in Bali, doctors are going bed to bed asking the patients whether they need painkillers, and constantly the response comes back ‘I’m alright, it’s the person in the next bed who’s doing worse.’ And this reminds the historian John Hirst who’s writing about it of Clive Bean in WWI. He goes back to the old Clive Bean diaries and he finds exactly the same thing from Aussie soldiers in WWI. They’re all saying ‘No no, I’m alright, look after the bloke in the next bed. He’s worse off than me.’ So there’s a sense that there’s this kind of looking after your fellow Aussie spirit that’s been there for a hundred years.

Mark Parton:           And we get that, but I just reckon when you try and scope that out into every aspect of community it doesn’t work. That everyone can’t be equal because so many examples I mean Venezuela for arguments sake shows that it doesn’t work. You know that mad bloke who’s now passed on took over and decided he was going to share the wealth evenly with everybody. The place doesn’t even have toilet paper anymore.



Andrew Leigh: You’re completely right Mark. I mean perfect equality is as awful as perfect inequality. We don’t want to have the same amount of money, we don’t want one person to have all the money. So the right answer is somewhere in between. And what I do in Battlers and Billionaires is talk a little bit about the costs and benefits of inequality and whether maybe we’re starting to get to an Australia where inequality is getting out of touch with the sort of egalitarian spirit that we see in those hospitals after the Bali bombings, or that we see in see in a lot of our kind of much more egalitarian sporting codes.

Mark Parton:           See it’s interesting when you bring up sport because one of the examples that you’ve given is the Melbourne Cup v. the Kentucky derby in America that the Melbourne cup is a more egalitarian race because it’s a handicap. Now I’ve got to tell you, as a racing purist, obviously I get into the Melbourne cup because it’s a race that stops the nation.  But give me the cox plate any day. Give me the cox plate any day, this wait for age race where it’s basically the best horses in Australia taking on each other with nothing to mar the result, the best horse wins.



Andrew Leigh: So horses for courses Mark, but certainly I think there is some lesson that we can take from the fact that our favourite horse race is a handicap and American’s favourite horserace isn’t.  Or from the fact that the Brits’ favourite sporting code, English Premier League, is an amazingly unequal sport in which Manchester United has won twelve out of the last twenty seasons because the best teams get to keep all of the TV revenue. Whereas one of our favourite sports, AFL, no team has won more than three out of the last twenty seasons because you have revenue sharing, salary caps, player drafts. That makes AFL more equal, and they do that in order to make AFL a more interesting game than EPL.

Mark Parton:           Alright, when you get together with other Labor MPs on July 22, what election date will you be voting for Andrew?



Andrew Leigh: That’s a beautiful question Mark. I think the election date is going to be one of those things as in previous years be known by about ten people before it is finally announced and I can confidently tell you I won’t be one of those ten people and that would have been true last time around. These things are kept fairly close to the chest as Prime Minister Howard did before or Prime Minister Keating did before him.

Mark Parton:           But if you had a say in it, what would you be going with? Would you be going early rather than late?



Andrew Leigh: I’m certainly relaxed, I think we’ve got a good story to tell and I certainly never tire of talking about the investments that Labor has made through Canberra and anyone who doubts that just needs to go to their local primary school and ask them about the quality of their buildings five years ago compared to now. But you know if the Prime Minister wants to go early or if he wants to go later I think that’s fine. The only advantage of going late would be we might actually get some policies out of the Opposition.  They’re being a little coy on the policy front you got to say.

Mark Parton:            Alright it’s interesting that we’ve got the polling out at the moment which shows that it’s basically neck and neck at this stage of the game. But if you go to the betting agencies around the place, they’ve still got the coalition as a very, very clear favour and I think the latest markets I’ve seen are about a dollar twenty-five for a Coalition victory.



Andrew Leigh: We’re definitely the underdog Mark and I think that reflects the simple reality that Mr Abbott has done a good political job of attacking the government over recent years.

Mark Parton:           There has been a shift actually; Coalition has blown out to a dollar thirty-five on Centre Bet so it’s moved out ten cents since that polling came out yesterday. There’s movement at the station Andrew.



Andrew Leigh: There is indeed Mark and you know if the Coalition wants to peg it back I think all they need to do is to reveal to the Australian people that actually the policy sitting in their top drawer is good policy rather than bad policy. Because I think Australians are asking now: ‘If it was so good for me, why would it be sitting in Tony Abbott’s top drawer rather than being out on the evening news?’

Mark Parton:           And Kevin’s got to work out what the greatest moral challenge of our time is this particular year.



Andrew Leigh:        I think Mr Rudd will be campaigning strongly on carbon pricing as he should be, Mark.

Mark Parton:           Andrew thanks for your time this morning.



Andrew Leigh:        Thankyou Mark.

Mark Parton: Battlers and billionaires if you want to check out Andrews’s book.

TRANSCRIPT – TRIPLE J HACK WITH TOM TILLEY
Andrew Leigh MP
Member for Fraser
9 July 2013

TOPICS:                                Polls, Labor leader election reforms, young Australian political participation and enrolling.

Tom Tilley:                          In the Hack studio we have a Labor MP Andrew Leigh and he was voted in to the Canberra seat of Fraser at the last election and Andrew I’d love to know what you think of these reform ideas, thanks for joining us.



Andrew Leigh:                  Pleasure, Tom.

Tom Tilley:                          Do you think it will actually make a difference, because a lot of people are wondering that it’ll actually do if it does get through the caucus Andrew, what difference does it make to have half of the votes for the leader coming from normal Labor party members rather than just coming from the caucus?



Andrew Leigh:                  Well I think it does two important things, Tom; first of all I think it means that the contest for leader becomes a much more public contest, and one in which the candidates for leader are reaching out to the party membership. British Labour had a terrific leadership contest between David Miliband and Ed Miliband a couple of years ago, which Paul Howes alluded to in his comments before and that was one in which both of the candidates for leader spoke about the kind of party they wanted British Labour to be.

Tom Tilley:                          It’s very interesting, it does sound like it goes to the point of our text to Luke from Bondi, who said ‘is this part of an intraparty presidential style system of government?’, is it moving in that direction?



Andrew Leigh:                  Well, I think the leader is an important figure and probably increasingly so–

Tom Tilley:                          Well it seems like it if you look at the polling for Labor at the moment.



Andrew Leigh:                  Well you certainly see a rising role for the leader over time, But the other thing is it just reduces the rate of leader turn-over which I think has increased not just in federal Labor which has had seven leaders in the last 12 years; but also in the Coalition - Brendan Nelson and Malcolm Turnbull both turfed out without getting to face the voters. And also in state and territory parties. I think the reason for that, Tom, is that increasingly leaders are facing more and more polls, and that’s making it harder and harder to do big, important reforms. And what this reform I think will mean is that leaders have that security of knowing that they can make a tough decision, that has some short term discomfort, but a long term payoff, and that won’t immediately cost them their job.

Tom Tilley:                          Andrew, let’s have a quick look back through history, if these reforms had existed when Rudd was knifed the first time, do you think it would’ve happened?



Andrew Leigh:                  I don’t think that many of our past leadership changes would’ve happened but for this–

Tom Tilley:                          Why is that? Because there’s a different mood inside the caucus than there is amongst the members?



Andrew Leigh:                  Well I think that the requirement to have a ballot of the members certainly slows things down, provides a little bit of stability in the system. You probably wouldn’t of seen the transition from Bob Hawke to Paul Keating under the current system either, but you need to recognise that if we want leaders to be able to look to the future, to be able to make tough long-term decisions then you’ve got to work against the instability which I think is increasingly generated by a faster pace media cycle, and by polls whose frequency is increasing. I mean, Gallup’s polling in the US on a daily basis now, that’s pretty de-stabilising for leaders, and so this is a check against those changes.

Tom Tilley:                          Matt’s just texted in he says ‘He’s just turning into a popularity contest to suit himself (Rudd)’. Now Andrew Leigh, it’s well known that you were quite close to Julia Gillard; do you think Rudd’s move is about, you know genuine necessary reform or do you think it’s about revenge, or is it about distancing Labor from those knife wounds, from the stabbings?



Andrew Leigh:                  I think this is a really important reform, Tom, and many of us have been talking about these sorts of reforms, about the British Labour model, the challenge with the Democrats’ model (which I think had the problem that Natasha Stott-Despoja highlighted; that there was no say for the elected representatives). I think this one gets the balance right, it provides more stability in the system, and it guarantees Australians that if they vote for a Prime Minister, in the election this year, that’s the Prime Minister they will get serving the full election term.

Tom Tilley:                          Have you chatted to many of your colleagues, will they be going for it when you meet in caucus in a couple of weeks?



Andrew Leigh:                  I have, and there’s broad support for these reforms–

Tom Tilley:                          Well Rudd has them backed into a corner, doesn’t he? Because it would be pretty ugly if people stood up to him right now.



Andrew Leigh:                  I think there’s a broad recognition, Tom, that this is a reform whose time has come, many of us have looked to the British Labour model as something which provides a sense of stability in the system, but also says to members of the Labor party who are out there letterboxing for us, working on our street stalls, door knocking with me, it says to them: you guys get a say as well. So, to any of you listeners who are wondering about joining the Labor party, I’d say there’s never been a better time, because this is going to give you more say under these reforms in choosing the party leader and ours is also a party which will hopefully be conducting a set of rank and file pre-selections for open seats this time around, so people get a say in electing their local Labor candidate, as well as for the Federal leader.

Tom Tilley:                          Alright you are listening to Triple J’s Hack program, and you just heard a valiant pitch for you to join to Labor party from Labor MP Andrew Leigh, and we would love to let Tony Abbott make that same pitch to you sometime, and we have been inviting him to come on the show, hopefully that will happen very soon.

Shane’s called in, Shane what do you think about Rudd’s reform ideas for the Labor leadership?

Caller:                                   Yeah look I’m definitely for it, I kinda vote for who’s going to lead our country as a whole–

Tom Tilley:                          Right, so you don’t vote for your local MP?

Caller:                                   well, not really, I look as a whole who’s actually going to be running our country and the face of our country, and when Rudd was knifed the first time I didn’t vote for that, for Gillard to come in and do that without asking us as a country, I thought that was pretty weak, so to have something like this a sort of guarantee that that’s your person for that time, and if he stuffs up then, well you know, hope that someone next year step up and take over etc.

Tom Tilley:                          Alright, thanks for your thoughts there, Shane. Someone’s texted in saying ‘Rudd is definitely safeguarding his own job, but that doesn’t mean it isn’t great reform’. That’s come from Annie, and that’s very interesting the point that Shane brought up there, Andrew Leigh; that, you know, he’s voting for a leader and not his local MP because we have some new research to reveal right now on Hack and it’s come exclusively from the Australian Institute for Hack, and it basically revealed that 68% of young people 17 to 25, the people that responded to this survey, don’t know who their local MP is. And I’d love to hear from you about that, do you know who your local MP is? And are you voting for that MP, or are you really voting for the Labor, you know, basically, the leader of the Labor party? Give me a call.

Let’s have a closer look at this research, Sarah McVeigh gives you the rundown on a survey of 800 people aged 17 to 25.

Here’s the research from the Australian Institute:

Sarah McVeigh:                ‘Don’t care about voting? Well, you should.’ That’s the message from the Executive Director of the Australia Institute, Dr Richard Denniss “the squeaky wheel gets the oil in politics” His research for Hack shows 17% of young people aren’t enrolled to vote and another 6% aren’t sure whether they are or not. Of those who aren’t enrolled 59% don’t intend to vote. So why is that?

Richard Denniss:               Our research shows that 47% of young people, around 1.2 million people think that no political party actually represents them and their concerns.

Sarah McVeigh:                So why should they care then? Why should they vote?

Richard Denniss:               Whether you vote or not, Parliament will sit, Parliament will collect taxes and Parliament will spend money on something, and if loud groups who enrol to vote put good pressure on politicians, then they’ll see a big return from that.

Sarah McVeigh:                The survey shows only 2% of us are actually a member of a political party, and only 1% are in a union. It also shows that most of us are a little confused about how the voting system actually works.

Richard Denniss:               Our survey suggests that 68% of young people don’t know who their local MP is, so around 1.7 million 17 to 25 year olds aren’t sure and that, I think suggests that young people aren’t as engaged in politics as they might be, but it also highlights how important the role of the political leader has become in  Australia, we have what we call a very presidential approach these days. Even though at a federal election, all you do is elect your local member of parliament, and a senator for your state, the ways the parties behave is to suggest that you’re actually voting for Kevin Rudd or Tony Abbott.

Sarah McVeigh:                Do you think Kevin Rudd’s party reforms will make a difference to young voters?

Richard Denniss:               Look, I think they will, I think there’s no doubt that Kevin Rudd has brought a breath of fresh air back into these debates, and talking about being closer to the people, talking about listening to the membership when it comes to selecting a leader, rather than a lot of political machinations around factions is certainly the sort of thing that likely to attract both more people to the Labor party, and more people to the political process itself.

Sarah McVeigh:                So, who is most likely to influence your vote?

Richard Denniss:               People said that the media and political advertising is pretty much as important as what your parents think when it comes to choosing a political party. So, you know most people say they don’t trust the media or political ads but they seem to trust their parents even less.

Tom Tilley:                          Richard Denniss from the Australia Institute there, bringing us some new research about what 17 to 25 year olds think about their politicians and some very interesting stats there about the number of people who know who their local MP is, and also about the people who aren’t interested in enrolling to vote and if you aren’t enrolled to vote and you want to, this is how you do it; you can do it online, you go to aec.gov.au/enrol and one person has texted in saying ‘the Australian people are sick of hearing about fools that run this country, how about instead of saving his job he starts running the country’ Pat from Victoria. And that’s a point that a lot of people share, now David’s called in from Brisbane, now David, you’re enrolled in Wayne Swan’s seat but you still vote based on the leader, that’s interesting given what’s happened in the last few weeks

Caller:                                   Yeah, I just take the view that Wayne Swan, former treasurer both under Rudd and under Gillard, I didn’t see him do anything in the electorate that wasn’t under the mandate of the leader of the party, it had very little to do with what–

Tom Tilley:                          But David there is the argument that if you have an MP who is quite powerful within the party, he will be able to sway what happens in the party room, and therefore those broad policies will play out well for you and your electorate if he has your best interests at heart.

Caller:                                   Yeah, and to be honest that was my hope going into it but it isn’t necessarily the experience that I had.

Tom Tilley:                          Alright, very interesting to hear your experience. Brendan from Canberra called in, Brendan you think the only time you ever see your MP is leading up to the election.

Caller:                                   Yeah I wouldn’t even have a clue who they were. And then all of a sudden they just pop out of nowhere, just wanting your votes, it’s just ridiculous.

Tom Tilley:                          Getting up in your grill for your vote, I mean what do you think about that, do you think that’s fair enough, and we should just focus on the leader or do you think it’s a bit of a shame that we don’t have a closer connection to our local MP, given that’s who we vote for?

Caller:                                   I think it’s a bit of a shame, like I’d be nice to know what they actually do for us. Like, the bigger picture is like obviously the leader, but you know we’re also putting votes for them down, so I’d like to see them around.

Tom Tilley:                          has your vote changed? In the last few weeks given the change of leadership in the Labor party? Or your voting intentions?

Caller:                                   I don’t like Abbott at all. Umm and I hated Gillard, but I think it’s a whole publicity stunt, this whole Gillard/Rudd thing, the change, I think it’s just I don’t know who to vote for anymore, I just don’t know who to vote for now.

Tom Tilley:                          Yeah you’re a bit lost, like a lot of people, but what do you think of what Rudd’s come out and said in the last 24 hours? That he wants to make it a lot harder to change the Labor leader?

Caller:                                   Well I think it’s good because, like I think one of the other blokes said before; I didn’t want Julia to come in, but all of a sudden she did and we had no say with it, the leader, now we have a bit of a say.

Tom Tilley:                          Alright thanks so much for your call Brendan.

Caller:                                   No Worries, thank you.

Tom Tilley:                          Cameron from Brisbane has called in, Cameron you’re actually in Kevin Rudd’s seat, will you be more likely to vote for him as leader or when he was a backbencher?

Caller:                                   Well when he was a backbencher he actually did a lot of positive work in the community, he actually saved some of the bus routes that were around here that were looking at being cancelled, So he did good work as a backbencher and I’m more inclined to vote for him now as leader because I, I was a fan of him when he was leader first time around, and I think his policies are good, so he’s shown that he can do the work for the community as a backbencher when he’s not at the front of the political party and now it’s even better, he’s leading the party and I think it’s a positive thing.

Tom Tilley:                          Alright, well yeah good to hear your opinion there Cameron, thanks for the call. Let’s go back to Andrew Leigh, who is a Labor MP. Now Andrew, what do you make of this debate that people are raising, they don’t know their local MPs, they feel a bit disengaged on that local level, is that a negative thing for Australian politics?



Andrew Leigh:                  It’s always a hard one Tom, I wrote my first book on trust and politicians a bit over a decade ago, and the publishers thought the problem then was so bad that they put a picture on the cover of one dog sniffing another dog’s backside. People hold their politicians in low regard and knowledge about politics is lower than we would like it to be. I find as a federal member of Parliament with the largest number of electors in the country, 133,000, that I can be out doing street stalls every week, door knocking, telephoning, but still I will get to the next election, not having met as many of my constituents as I want to.

Tom Tilley:                          The other thing that jumped out, Andrew, of that study from the Australian Institute was that of the nearly 1 in 5 voters who are not enrolled, 59% of them don’t plan to enrol. As a Labor party MP you’ve been there for the past 10 years, you’ve overseen, not overseen but been a part of one leadership change, do you take some responsibility for that disengagement that you know, 59% of people don’t want to enrol, given how much scrapping and turmoil there’s been in the Australian Labor party?



Andrew Leigh:                  I think civility in politics is a challenge and that’s something that all of us need to work on improving, Tom. The other thing is it’s been harder than it needs to be to enrol in the past so we–

Tom Tilley:                          So you’re blaming the technology?



Andrew Leigh:                  We’ll we’ve finally got online enrolment up. Until a couple of months ago, we had what some people would call ‘online enrolment’ which meant you could download the form from the internet, print it off and put it in the mail. Now you can actually do the whole process online, and our hope is that we’re going to be able to increase, particularly the number of 18 year olds for whom only about half are currently enrolled.

Tom Tilley:                          That must be good news for Labor right, because traditionally Labor polls better with younger people.



Andrew Leigh:                  I think it’s just about getting people on the roll, I want people on the roll whether they’re voting for me or not, because I think it’s a fundamental part of being an Australian citizen. And there’s some optimistic news, just last week, Tom, the typical number of people who enrol in a standard week, the AEC tell us is about 8,000, last week 22,000 people enrolled online. So that suggests that we are beginning to close that enrolment gap, but I don’t think we can rest until we’ve got 100% of Australia on the roll rather than the 91% we’ve got at the moment.

Tom Tilley:                          Alright, thanks so much Andrew for joining us.



Andrew Leigh:                  Thank you, Tom.

Tom Tilley:                          That’s Andrew Leigh who’s an MP for the seat of Fraser in Canberra.

The Daily Telegraph today extracts a portion of my new book, Battlers and Billionaires: The Story of Inequality in Australia.

Whiff of Inequality in the Land of the Fair Go, Daily Telegraph, 10 July 2013

In 2002, two bombs exploded in Bali night­clubs, killing and injuring hundreds of people. At the local hospital, there was a shortage of painkillers. Graeme Southwick, an Austral­ian doctor on duty, asked patients to assess their own pain levels. He kept being told by patients in the ‘Australian’ ward that they were okay – the person next to them was suffering more.

Coming across this account, the historian John Hirst was reminded of the description of injured Australians in Gallipoli nearly a century earlier. He quotes the official war historian Charles Bean, who describes the suffering and then says, ‘Yet the men never showed better than in these difficulties. The lightly hurt were full of thought for the severely wounded.’ Even in the midst of their own pain, the first instinct of many Australians was to think of those worse off than themselves.

A sceptic might suggest that Bean viewed our men’s suffering through patriotic glasses, or that the wounded soldiers of other nations behaved similarly. But Australia’s egalitarian spirit shows up in other places too. Writing in a major daily newspaper last year, the entrepreneur Christopher Joye argued that the competitive nature of sport proved Australians didn’t believe in inequality. ‘We do not handicap an athlete,’ Joye argued, ‘because they are abnormally fast.’ But it turns out that this is exactly how our sports often operate. Many Australian team sports have salary caps, while many individual sports have handicap systems. As any golfer can tell you, handi­caps make the game more fun, because they allow people of different abilities to compete with one another.

We don’t just handicap people. Australia’s favourite horse race, the Melbourne Cup, literally puts lead in the saddlebags. Horses must carry at least forty-nine kilo­grams, and racing historians celebrate Carbine, who won the 1890 Cup with a whopping sixty-six kilograms. Extra weight is put on horses that have already performed well. By contrast, America’s most famous race, the Kentucky Derby, does not add weight based on a horse’s past perfor­mance. The Melbourne Cup is a more egalitarian race than the Kentucky Derby.

Australian beliefs about ine­quality even explain why Rugby League split from Rugby Union in the early twentieth century. Because Union refused to allow player payments, it was a fine game for private schoolboys, but no way for a working-class man to make a living. For the remainder of the twentieth cen­tury, League dominated Union in the key states of New South Wales and Queensland. In the United Kingdom, a similar split occurred, but League never came to enjoy the same national success.

In the 1850s, an English gold-digger wrote home that ‘Rank and title have no charms in the Antipodes.’ In the 1880s, an essayist opined that Australia ‘is the true republic – the truest, as I take it, in the world … In England the average man feels that he is an inferior, in America that he is a superior; in Australia he feels that he is an equal. That is indeed delightful.’

The father of the Australian novel, Joseph Furphy, wrote in 1903 that human equality was ‘self-evident … and impregnable as any mathematical axiom’. Legend had it that Australia was the nation where Jack was as good as his master – if not better.

Egalitarianism has characterised the Australian national identity for well over 150 years – dating back to an era when the country was quite unequal. Similar senti­ments were being expressed in other settler societies, such as Canada and the United States, but Australia’s powerful labour movement did more to make them a reality. After becoming more unequal in the late nine­teenth and early twentieth centuries, Australia reached a turning point. From the 1920s to the 1970s, we steadily became a more equal society. But for the past thirty years, Australia has become more unequal, with the income share of the top 1 per cent doubling and that of the top 0.1 per cent tripling.

We need to stir a debate about inequality. One of my greatest fears is that we will sleep­walk into a more unequal Australia without realising what is being lost. As the social researcher Hugh Mackay put it in the late 1990s: ‘There is now a widespread belief … that both rich and poor Australians are becoming more numerous and that if the gap between them grows much wider, it may well turn out to be unbridgeable. Such a prospect is so disturbing to the Australian people – and so incompatible with their dreams – that they are reluctant to discuss it.’

We need to be careful that we do not unwittingly lose something that past generations of Australians have held sacred.

Andrew Leigh is the federal member for Fraser. This is an edited extract of Battlers and Billionaires: The Story of Inequality in Australia (Black Inc, $19.95).

On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal MP Josh Frydenberg about thoughtful asylum-seeker policy (rather than sloganeering), and reforms to make the ALP more democratic.

TRANSCRIPT – SKY AM AGENDA WITH KIERAN GILBERT
Andrew Leigh MP
Member for Fraser
9 July 2013

TOPICS:                                Polls, Labor leader election reforms, asylum seekers.

Kieran Gilbert:                   This is AM Agenda. With me now Labor MP Andrew Leigh and Liberal MP Josh Frydenberg. Josh to you in Melbourne first of all, Kevin Rudd, as I put to Penny Wong and Barnaby Joyce just a moment ago, well ahead as preferred Prime Minister, 20 points, 22 points in front, that compared to, well, Mr Abbott was 12 points in front of Julia Gillard in that last Newspoll before she was deposed.

Josh Frydenberg:             Well I’ll take you back, Kieran, to 1993 when John Hewson who was the preferred PM ended up losing that election. And then again to 1996 when Paul Keating was the preferred PM to John Howard and John Howard convincingly won the ‘96 election, so I don’t think that’s an indicator of the result. But we always knew that Kevin would have a bit of a honey moon, the polls were tight and this will be a very close race. But it’s still the old Kevin. It’s still the guy that delivered us the 45,000 unauthorised boat arrivals, the guy who was responsible for the carbon tax that we now have, the guy who was responsible for borrowing $100 million a day. That’s his record and he keeps going on about the entrails of the Labor Party. The people aren’t interested in the entrails of the Labor Party, the people are interested in what’s his plan for Australia, and the problem with Kevin is he talks more about himself than he does about the Australian people.

Kieran Gilbert:                   This was Tony Abbott asked about Kevin Rudd’s popularity since returning to the Prime Ministership, albeit before today’s Newspoll, this was Mr Abbott on the ABC last night:

[TONY ABBOTT CLIP:       Well let’s look at the people who know him well. The people who know him well are his own colleagues. The first time he was the Prime Minister he was sacked by his own Party and then when he came back again, seven Cabinet Ministers refused to serve with him. Now look, I accept that by some measures he looks very popular but in the end people will be judged by the people who know them.]

Kieran Gilbert:                   To you, Andrew Leigh, on this, I know you’ve always questioned the predictive capacity of opinion polls but in their reflective capacity this must be encouraging for the Labor Party?

Andrew Leigh:                  Kieran, I’d be a hypocrite if I said I don’t believe polls when they’re going down and I do believe them when they’re going up, but I think Josh raises a point there which is important. He talks about the 1993 election and I think Mr Abbott’s real problem is that when he was Press Secretary to John Hewson in 1993 he took away one big lesson from that and that’s ‘don’t talk about policy’. And the reason I think Australians are starting to tire of Mr Abbott now is that they understand that he is very good at delivering snappy slogans but they’re just not sure what he stands for. He doesn’t have a health policy. He doesn’t have an education policy. He has a huge costings gap because he’s made these promises to give tax cuts to big miners and big polluters. What little policy he has is to take money away from little kids on their first day of school, raising superannuation taxes on low income workers. I think Australians are looking for a positive plan from Mr Abbott. Now, I disagree with John Hewson on many things, but he delivered a positive plan in 1993 and Mr Abbott shouldn’t be so averse to coming clean with the Australian people on what he would do.

Kieran Gilbert:                   It was certainly a very extensive plan from John Hewson in 1993. Kevin Rudd has tried to end the perception of the Labor leadership being a revolving door. This was part of his news conference late yesterday.

[KEVIN RUDD CLIP:          …power will never again rest in the hands of a factional few. If you go to an election, the Labor Party has a duly elected leader and you look down the barrel of the camera to the Australian people and say, ‘vote for the Party and vote for the Government I lead’, that that is the person that is returned to them as Prime Minister for the duration of that term.]

Kieran Gilbert:                   Josh Frydenberg, if these reforms get up as they’re expected to this would see the Labor leader, arguably, more secure than the Liberal leader is.

Josh Frydenberg:             Look, this is just a defensive move against Bill Shorten. You know, we know what a premium Bill puts on loyalty and we know that he wants to be the leader of the Labor Party. So that’s what Kevin Rudd’s doing here. But again, he’s not talking about the country. He’s not talking about his policies to improve Australian standard of living, to put in place 21^st century infrastructure, new roads and new bridges and so forth. He’s not talking about how to stop the boats. We want him to come up with a plan for Australia and to be held to account for his record when he was in Government, I mean, take the pink batts scandal that you know, came back to the fore last week, he still hasn’t released all those letters of warning that he received from his own Ministers, including Peter Garrett. And, you know, that’s what’s at stake here. We’ve got a Prime Minister who was purely incompetent when he was running the country and we’ve got more than seven Cabinet Ministers who’ve decided they can’t serve under him and they gave him free character assessments. That’s what at issue here and no matter how many babies he kisses, no matter how many pictures he poses for, he’s still got that record which the Australian people remember.

Kieran Gilbert:                   Josh point to something, Andrew Leigh, which I think is a significant point and that is the naval gazing. It’s important that Labor moves on from all of this now, isn’t it? He’s done this early in the piece in his second stint as Prime Minister, but you’ve really got to move on and start talking about things that affect people and affect voters.

Andrew Leigh:                  Kieran, I think you can walk and chew gum, to coin a phrase. It’s very clear that Mr Rudd has been speaking about our infrastructure investments: the National Broadband Network, the doubling of roads spending and quadrupling of rail spending. But at the same time he wants Australians to have the certainty that if they vote for a Prime Minister, that’s the Prime Minister they’ll get. It worries me that in the last twelve years Labor’s had seven leaders, two of them twice. I think that makes it difficult to do serious, long-term reform. I think on the Coalition side, they also haven’t given their leaders a fair chance. Brendan Nelson and Malcolm Turnbull both were denied the chance to face an election. So I think if you want to do serious, real reform then you want to make it more difficult to change leaders when polls wobble around a little.

Kieran Gilbert:                   We’ve only got a couple of minutes left; I want to ask you about the asylum seeker matter. We saw a boat load of 34 asylum seekers threaten essentially self-harm and had a merchant vessel diverted back to Australia, they were going to take them back to Indonesia, but it was diverted to Australia. It should not be a situation where people can make threats to people who have come to their aid, to their rescue.

Andrew Leigh:                  Threats of violence are completely unacceptable, Kieran, but I think this does speak to the really difficult situation that we’re in here having now been blocked by the Coalition and the Greens from getting our Malaysia Agreement through. I believe that would have worked at the time because it’s part of a regional solution, working with Indonesia, not against them. The Indonesians have been-

Kieran Gilbert:                   But that’s all history. You need something now. You’ve got to do something now before the election to show people ‘we can manage this’.

Andrew Leigh:                  Absolutely and I think getting a solution with the region is important. Certainly the Prime Minister going to Indonesia was part of building that conversation. After the Vietnam War, the countries in the region got together to process asylum seekers in a collaborative way. I think that made a lot of sense. I’d like to see that happen again and I’d like to see the Coalition get on board.

Kieran Gilbert:                   Josh Frydenberg, well, Scott Morrison revived the talk of the Tampa yesterday and sending the military in, do you support that? And what about the Indonesian warnings again from President Yudhoyono last week that they don’t want to see unilateral action in this region?

Josh Frydenberg:             Well look, we need some deterrence in place and you know, Kevin Rudd is responsible for this massive policy failure. I mean, more boats have arrived in the first six days of Kevin Rudd Mark II than in the last six years of the Howard Government. That’s what’s at issue here, and we have had our third Immigration Minister in just six months. You know, the Labor Party has no solutions to this issue. We did something that worked in the past. We didn’t need Indonesia’s approval because we didn’t breach Indonesia’s territorial integrity. Turning back the boats is part of a three-pronged solution with offshore processing and temporary protection visas, neither one of those in isolation is going to provide the answer, you have to have all three of them, and we’ve done it before and we’ll do it again, Kieran.

Kieran Gilbert:                   Josh Frydenberg, Andrew Leigh, gents, good to see you, thanks very much.

Andrew Leigh:                  Thanks Kieran, thanks Josh.

TRANSCRIPT – BREAKING POLITICS WITH TIM LESTER
Andrew Leigh MP
Member for Fraser
8 July 2013

TOPICS:                                Red tape, asylum seekers, election date



Tim Lester:                          Kelly O’Dwyer, Andrew Leigh, welcome into Breaking Politics. Kelly, you’re in Sydney today doing your own Skype there. Thank you for coming on and I gather you’re there as part of the presentation of the Coalition’s ‘Red Tape’ policy. Tell us, how severe is the Government red tape problem such that it needs you and others to develop a new policy on it?

Kelly O’Dwyer:                  Well it’s incredibly severe, Tim. We have seen the Government announce that it was going to get rid of one new piece of regulation for every new piece of regulation that it brought in. In fact, it’s done the complete opposite; it’s brought in more than 21,000 new pieces of regulation since 2007. This has a very significant and severe impact not only on business but also on a lot of not-for-profit organisations. It’s making it more difficult for people to do the job that they need to do in helping grow their business and serve our community. So we’ve put together a policy document that’s going to cut a billion dollars of red tape and regulation. It’s been done in conjunction with not-for-profits and business. We’ve consulted right round the country for the last 18 months and I think you’ll be quite excited by the document we release today.

Tim Lester:                          Andrew Leigh, is there really one billion dollars a year in government red tape to-

Kelly O’Dwyer:                  One billion!

Tim Lester:                          -one billion, ‘b’ ‘n’, to be saved, and what’s that say about current government management if there really is that inefficiency in the system?

Andrew Leigh:                  Well Tim, I’m sceptical, personally, but I’m always open to new ideas. I think it’s really important in politics that you should take new ideas wherever they come from. One of the things we’ve done in government is to simplify a number of processes. So, payroll tax reporting is now standardised, we’ve worked on standardising occupational health and safety laws across states, we’ve got the Business Name Register, which ended the farcical situation where you had to register a business in every separate state and territory. But if there’s good ideas the Coalition has, then we as a Government will welcome them.

Tim Lester:                          So you say business red tape has been on the decline under Labor?

Andrew Leigh:                  We’ve worked very cooperatively with states and territories on this. Much of what you find in regulation is that different tiers of government need to work together and you also need to very careful of simplistic sloganeering around number of pieces of regulation; I don’t think anyone would say we should get rid of regulations that require pool fences, for example, good regulations that prevent corporate excess. In fact one of the arguments as to the global financial crisis was that at its heart deregulation went too far in the United States. So you want clever regulation. It’s not a question of just looking at quantities.

Tim Lester:                          Kelly O’Dwyer, do you accept that Labor has in fact made some significant gains in streamlining regulation? Or don’t you see it that way?

Kelly O’Dwyer:                  No, not at all, in fact, far from it. There has been an exponential increase of unnecessary red tape and regulation. If Labor was actually in touch with business and in touch with their not-for-profit organisations in their local communities, they would know this. They would know this because they would have heard the message that has been very strongly and loudly delivered by business and not-for-profits and it is saying that they are being strangled. The burden of red tape and regulation is coming at a serious impost on them and it is costing jobs, it is costing certainty and it is actually costing in dollar terms, which means that ultimately everybody pays the price.

Tim Lester:                          Kelly O’Dwyer, hasn’t the Indonesian President in his comments about avoiding unilateral action laid bare the fact that the Coalition’s tow-back policy either won’t work or if it will it will be a big foreign policy negative?

Kelly O’Dwyer:                  No, far from it. I think what we heard from the Indonesian President was that there needs to be consultation amongst the region. This was something that Alexander set up when we were in government during the previous Coalition Government – the Bali Process – that is an ongoing process. That is simply what the Indonesian President has committed to in this instance. But it is not enough to simply do that and do that alone, you need to also have a strong set of comprehensive policies to try and undo the damage that has been done by this current Government under Kevin Rudd as Prime Minister when he dismantled the very effective border protection process that was in place prior to the 2007 election.

Tim Lester:                          Andrew Leigh, why isn’t it possible to do what Scott Morrison, the Opposition Spokesperson on Immigration argues and do a tow-back that simply takes boats, incoming boats, back through international waters but not actually into Indonesian waters? What stops us from doing that?

Andrew Leigh:                  Well Tim, we know the dangers with tow-backs; they’re risky for asylum seekers who will simply scuttle their boats as Admiral Chris Barrie has pointed out; they’re risky for naval personnel whose lives would then be put at risk jumping into the sea to rescue asylum seekers; and now it’s very clear that this is a policy that is utterly unacceptable to Indonesia. I disagree with some of what Kelly had to say, but I do think she hit the nail on the head when she spoke about the regional process. That’s what we’ve worked on as co-chairs – Australia and Indonesia – of the Bali Process and that was what the Malaysian Agreement was about, unfortunately scuttled in the Parliament by the Coalition and the Greens. That the aim of the Malaysian Agreement was to have-

[Kelly O’Dwyer:                Well Andrew that’s not true. You never put it to a vote]

Andrew Leigh:                  - a regional approach starting with Malaysia, a country which said yes rather than the Coalition’s tow-back policy, to which Indonesia says no.

Tim Lester:                          Kelly O’Dwyer, you want to make a comment on what became of the so-called Malaysian solution?

Kelly O’Dwyer:                  Well I think it’s a fairly important point that Andrew does gloss over and that is that the Government never actually put the policy to the Parliament. The reason it didn’t put the policy to the Parliament is because many of its own members did not support the legislation that the Government was bringing in. Now, it is very clear that we have a very serious issue. We have more than 45,000 people who have arrived, unauthorised by boat since the Government dismantled the policy in August of 2008. Now they need to take responsibility for that. They can’t simply talk again about another talk-fest. They need to actually do the things that need to be done in order to put in place an effective policy outcome. Now we have told them consistently what needs to be done. They have refused to listen to that advice and unfortunately the boats keep coming.

Tim Lester:                          Kelly O’Dwyer and Andrew Leigh, I’d like to get before you go your latest views on our election date and when it’s going to be held. Kelly, what’s wrong with Kevin Rudd doing, as Prime Ministers except Julia Gillard have all done before him, and choosing an election date that is as late as he likes provided it’s in line with the Constitution?

Kelly O’Dwyer:                  Well look, it’s very clear that the Australian people want their say. The Australian people want certainty around the election date and business as recently as only last week have said that the instability, the uncertainty is killing confidence, it’s having a direct impact on business which has a direct impact on jobs. If Kevin Rudd was truly sincere in wanting to get Australia back on track, he would tell us when the election date was going to be. He would be able to then at that point restore some degree of confidence and the Australian people would have an opportunity to have their say.

Tim Lester:                          Andrew Leigh, isn’t there a danger that, given Australians, right or wrong, have grown so used to the idea of September 14 now right through the year, that what we’re going to have is some kind of, a bit of a backlash with Kevin Rudd seeming to fiddle with an election date for purely political ends?

Andrew Leigh:                  I don’t think so, Tim. I think you put it nicely before when you said that this is entirely in accord with the Constitution and I think Australians recognise that. I think Australians are far less concerned, quite frankly, with election dates and nasty negative politics than they are with positive solutions. If we take a bit of time to get the National Plan for School Improvement nailed down, and so we’ve got more and more states and territories on board, then we lay the foundation for Australia’s future prosperity. Because beyond the current mining boom we’re going to have to make sure we have young Australians leaving school with the skills to do jobs that don’t even exist yet. And so getting education right is fundamentally our best economic policy.

Tim Lester:                          Andrew Leigh, Kelly O’Dwyer, thank you for your time, Kelly particularly without a tripod on your Skype device. That is a tremendous effort, thank you for coming in.

Kelly O’Dwyer:                  Thanks Tim, thanks Andrew

Andrew Leigh:                  You’ll win an amateur Walkley for that Kelly

Link to video

What do Australians think about equality? Inside Story, 4 July 2013

To see whether you care about inequality, take this simple test. Would you prefer to be born into a society in which the bottom fifth of households had 1 per cent and the top fifth had 62 per cent of the wealth? Or a society in which the poor had 15 per cent and the rich had 24 per cent?

The first set of numbers is the actual distribution of wealth in Australia. When surveyed about their ideal distribution, though, the majority of respondents wanted the nation to be more egalitarian. Indeed, the second set of figures is the preference of the most affluent.

In part, this is because most people believe that our wealth distribution is considerably more equal than it turns out to be. On average, Australians think that the top fifth has 40 per cent of all wealth (actually 62 per cent), while the bottom fifth has 9 per cent (actually 1 per cent). This isn’t just a mistake that Australians make: a similar survey found that Americans also underestimated their level of wealth inequality. Shown the distributions in Sweden and the United States (without country labels), 92 per cent of US respondents preferred the former.

Earnings surveys also show a preference for greater equality. In a 2009 survey, the typical respondent thought that an unskilled factory worker should be paid $59,000 rather than $45,000. Conversely, respondents thought that a cabinet minister should be paid $208,000 rather than $235,000. In other words, cabinet ministers actually earned 420 per cent more than unskilled workers, but the typical respondent thought they should ideally earn 250 per cent more.

Other surveys have asked Australians whether they agree or disagree that “differences in income are too large.” In 2009, 74 per cent agreed, up from 66 per cent in 1994. Conversely, only 20 per cent agreed that “large differences in income are necessary for Australia’s prosperity.” Only one in ten believed that we should copy the way the United States runs its economy. Yet although many Australians are worried about inequality, we’re perhaps a little less concerned than we ought to be. Australia is more unequal than the typical developed nation, but we’re less likely than average to regard our inequality as too high. Indeed, the share of people who are concerned about the gap between rich and poor has fallen in recent years.

Another way of measuring attitudes to inequality is to show people different possible pictures of the income distribution and have them pick the one they prefer. In these exercises, only 19 per cent of respondents opt for a pyramid-shaped income distribution, with a few people at the top and everyone else below. Most people believe that a pyramid shape accurately describes Australian society today, but few regard such a distribution as ideal. Indeed, the share of people who want to live in a pyramid- type society is lower than it was in the late 1980s.

Perhaps one reason Australians like equal societies is that most of us think we’re in the middle. A miniscule 0.1 per cent of people describe themselves as “upper class,” and only 10 per cent call themselves “upper middle class.” Another Australian survey divided society into ten groups, and asked people which they put themselves into. Mathematically, a tenth of us must be in the top 10 per cent, but only 2 per cent placed themselves there.

What do people believe government should do about rising inequality? Over the past quarter-century, the Australian Election Study has been asking whether we agree that “income and wealth should be redistributed towards ordinary working people.” In 1987, the share of people who favoured redistribution was 57 per cent. This rose rapidly in the 1990s, peaking at 76 per cent in 2001. In the most recent survey, 73 per cent supported redistribution. A more specific question shows a similar trend. Asked whether the government should lower taxes or spend more on social services, only 18 per cent of people in 1987 chose the latter. But when the same question was asked most recently, 58 per cent preferred a spending increase to a tax cut.

Given that tax cuts tend to be regressive, while social services spending tends to be progressive, one interpretation of these data is that Australians are more inclined to curb inequality than they were in the 1980s. Other surveys point in the same direction. Asked whether they agree that “it is the responsibility of the government to reduce the differences in income between people with high incomes and those with low incomes,” 47 per cent agreed and 38 per cent disagreed (with 15 per cent neither agreeing or disagreeing).

Australians don’t tend to think that the rich are undeserving, but as a practical matter almost half think that they pay too little tax. Asked specifically about taxes for those with high incomes, only 21 per cent said they are too high, while 33 per cent said they are about right, and 47 per cent said they are too low.

Views about inequality have a political dimension. Indeed, the political philosopher Norberto Bobbio famously argued that if you want one principle to divide left from right, it is inequality. Those on the conservative/libertarian side of politics, he argued, are heirs to Friedrich Nietzsche, who believed that all were born unequal and that this was a good thing. By contrast, those on the progressive/social democratic side are heirs to Jean-Jacques Rousseau, who believed that all were born equal and that many of the inequalities we observe come from social institutions. In other words, the left condemns social inequality because of a belief in natural equality, while the right condemns social equality because of a belief in natural inequality.

In saying this, Bobbio wasn’t arguing that people on the right of politics will always defend inequality, or that people on the left will always strive for perfect equality. In Australia, his point simply translates into saying that your attitudes to inequality are a pretty good predictor of whether you’ll vote for Labor or the Coalition.

The statistical evidence supports this point. In the broader electorate, 65 per cent of Labor voters told the Australian Election Study they believe that income and wealth should be redistributed; in contrast to only 38 per cent of Coalition voters. The difference is even greater among politicians. An anonymous survey of federal parliamentary candidates found that 67 per cent of Labor candidates agreed that income and wealth should be redistributed, compared with just 16 per cent of Coalition candidates.

Anecdotal evidence backs this up. The [former] treasurer, Wayne Swan, has said, “like most Labor activists, tackling rising inequality was one of the tasks that called me into politics.” Inequality has been a regular theme in writings by other senior Labor figures, such as Craig Emerson and Lindsay Tanner. By contrast, the former Liberal prime minister, John Howard, was more sanguine about inequality. He once commented, “It’s very important to get this income distribution thing in perspective. To the extent that any gaps have widened, it has been that people at the top – there are more of them, and they’re doing better.” The present Liberal leader, Tony Abbott, takes the view that “in the end we have to be a productive and competitive society and greater inequality might be inevitable.” Malcolm Turnbull has shown interest in this topic, but a recent profile of him suggests that “the kind of equality he is most attracted to is not so much greater equality of outcome or even opportunity but… the ‘equality of manners.’”

Political debates about inequality in Australia display both a partisan pattern and a secular trend. To see this more precisely, I searched the federal parliamentary debates and recorded the number of times the word “inequality” has been mentioned in either the House of Representatives or the Senate since Federation. The word has appeared over 2000 times (although not all of these mentions relate to economic inequality). To make a comparison over time, I adjusted according to the amount of time parliament sat each year.

The frequency of inequality debates declined during the first two decades after Federation (perhaps because the focus was on establishing Commonwealth institutions, and then dealing with the first world war). Inequality was often talked about during the Great Depression of the 1930s, but then little debated in the postwar decades. From the 1970s onwards, inequality has been mentioned more often in parliament, although there was a modest decline in the late 1980s, followed by a sharp rise that coincided with the early 1990s recession. In the past four decades, there have been some partisan patterns. Inequality was discussed more in parliament just before and during the period of the Whitlam Labor government (1972–75), and during the Howard Liberal–National government (1996–2007).

These trends are not specific to politicians; they also reflect shifts in the national mood. It was not until the 1970s that concern about inequality returned to the level it had been in 1901. Over the past two decades, as the income share of the top 1 per cent has risen, disquiet about inequality (as expressed in federal political speeches) has reached unprecedented levels.

Partisan differences have also been expressed over the question of restricting access to government payments to those with incomes (and sometimes assets) below a given threshold. In general, Labor governments have favoured targeting welfare payments towards the poor, while Coalition governments have typically preferred universal payments. While targeted welfare is generally regarded by economists of all political hues as being more equitable and more efficient, it involves denying some voters payments. Episodes of means-testing have therefore seen governments criticised heavily by their opponents.

For example, when Bob Hawke’s Labor government sought to reintroduce the pension assets test in the 1980s, the opposition leader Andrew Peacock described assets testing as a “callous and cynical grab for funds” that was one of “the assaults the government has made on the elderly.” His shadow minister for social security said that an assets test was “penalising thrift.” Under John Howard’s Coalition government, the trend was in the opposite direction. Near-universal family payments were expanded. Universal payments such as the First Home Owner Grant, the Baby Bonus and the Private Health Insurance Rebate were introduced.

In recent years, means-testing under the Rudd and Gillard Labor governments has been met with criticism from the Coalition. When the government means-tested the Baby Bonus to exclude the top 6 per cent of families, Malcolm Turnbull called it “an appeal to Labor’s divisive envy politics.” After Labor froze indexation on a Family Tax Benefit supplement and scaled back the Dependent Spouse Tax Offset, the Coalition Treasury spokesperson, Joe Hockey, said, “I despise this envy; this envy and this jealousy.” When the Baby Bonus was scaled back for second and subsequent children, the opposition frontbencher Christopher Pyne called the decision “vicious and savage” while Hockey compared it to China’s one child policy. The practical politics of reducing inequality are not straightforward.

My review of public opinion data demonstrates that a large majority of Australians believe that differences in income are too large. Respondents would prefer a more equal distribution of earnings, and even the affluent would prefer a less skewed wealth distribution. Three-quarters think that government has a role to play, and that income and wealth should be redistributed to ordinary working people. •

This is an edited extract from Battlers and Billionaires: The Story of Inequality in Australia by Andrew Leigh, RRP $19.99, published by Black Inc. Available as a print and ebook.

- See more at: http://inside.org.au/what-do-australians-think-about-equality/#sthash.VtpcHRRU.dpuf