Andrew Leigh

Inspiring Tale Reflects Best of Canberra, The Chronicle, 2 July 2013


Soraj Habib was nine years old when the bomb he was holding exploded. He had been out with his family to a picnic at Thakhtah Safar park in Herat, a city in western Afghanistan. He had picked up the yellow can thinking it might contain food rations. It turned out to be an unexploded cluster bomb.

The blast from the bomb killed one of Soraj’s cousins and injured two others. Soraj lost one of his legs immediately, and was so badly injured that when they took him to the hospital, he was initially placed in the refrigerated morgue. His family had to wrangling with the doctor to have him moved from the cold floor to a hospital bed. Then came an eight hour operation, in which his other leg was removed.

A week later, Soraj felt swelling in his body. A piece of the bomb had been left in his body. More surgery followed, then a long stint in hospital. Part-way through his ten month stay, one of the doctors argued that Soraj shouldn’t be kept alive, telling his family ‘he’ll only ever be half a man’.

Returning home, Soraj found his family were welcoming, but his former friends were aloof. ‘Why would we play with someone who doesn’t have any legs?’, they said. When his family sought to enrol him in school again, the principal refused. Only an appeal to the education department finally saw the principal relent.

In 2011, Soraj had a chance to travel to Australia to raise awareness of the harm done by cluster munitions. He applied for refugee status, and moved to Canberra when his application was successful.

Today, Soraj is a Year 12 student at Dickson College. He plays wheelchair basketball and has friends he can trust. After graduating, he is considering a career in either IT or working with people with disabilities. Things are still hard – he misses his parents, sister, and three brothers, who he has not seen since he left Afghanistan. But for the first time in his life, Soraj tells me, he feels truly happy.

Last month, Dickson College held DesignGate, a creative market that brought together painters and sculptors, jewellers and textile designers. The event showcased a cornucopia of craftspeople, with students, teachers, parents and the local community happily mingling together.

DesignGate 2013 helped to raise money to help Soraj buy prosthetic legs (something that will hopefully be unnecessary once Labor’s DisabilityCare scheme kicks off next year). As Dickson College art teacher Nicky Mowbray told me, ‘we are all excited by the prospect of Soraj walking across the stage at his Year 12 Graduation this year to receive his certificate!’.

Soraj’s story is an extraordinary tale of grit, resilience and fortune. He has experienced more suffering in his 21 years than most of us will in our lives. We are lucky to have him as part of our community. By their generosity, the Dickson College community has shown Canberra at its very best: warmly welcoming refugees into our city, and offering them the hand of friendship.

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

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

TOPICS:                                Ministerial changes, immigration policy

Mark Parton:                      Now we obviously had a lot of changes in the ministry, the shakeup has demoted some Gillard loyalists – it’s dumped one Parliamentary Secretary altogether. We’re talking about the extremely talented Member for Fraser here in the ACT, Andrew Leigh, who joins us right now. G’day Andrew.

Andrew Leigh:                  G’day Mark.



Mark Parton:                     That was a smack in the face, wasn’t it?

Andrew Leigh:                  Well, you know, in politics you go up, you go down. This is the way that most people’s careers pan out, that’s alright. I felt as though the honourable thing to do after supporting the former Prime Minister was to say to Mr Rudd that although I was willing to serve, but that if he needed my resignation he could have it. He said he wanted me to step down, and so that’s the way it is.



Mark Parton:                     But I thought he said on the day that he took over that there was going to be no retributions, and that no one was going to be blamed for anything. It sounds to me that the only reason you’ve lost your position is your support for Julia Gillard.

Andrew Leigh:                  Mr Rudd wants to build a team around him that he’s comfortable with –



Mark Parton:                     - so is he not comfortable with you?

Andrew Leigh:                  We’ve always got on fine, so certainly on a personal level that’s fine. But he wanted to bring in terrific Parliamentary Secretaries like Ed Husic, Doug  Cameron, Allan Griffin, and they’re the people that he wanted around him. I respect that, and in offering him my resignation if he needed it, I wanted to be sure that Mr Rudd had the ability to forge a team around him that he felt was what he wanted to go to the election.



Mark Parton:                     Look, you’re a team player Andrew, and I think you’re dealing with this very well. But when you consider that Labor has a pretty low representation in parliament for a government now, that so many top line ministers have departed, that this is perhaps the shallowest talent pool of any established government in living memory for actually forming a ministry. I can’t believe that he couldn’t find a spot for someone with your skills and someone as talented as you. I think they’ve erred by leaving you out.

Andrew Leigh:                  Mark, that’s very kind but I think one of the things you do notice when you look across this line up is that Labor has a very strong caucus, and plenty of people to draw on.



Mark Parton:                     Really?

Andrew Leigh:                  You’ve got Kim Carr, who’s an experienced minister coming back. Joel Fitzgibbon has a lot of experience in the parliament. And people like that step into their ministerial roles having been former ministers, knowing what it’s like to work in a constructive, consultative cabinet way.



Mark Parton:                     Kevin Rudd has said the ministry’s been chosen on merit, as though in the past they hadn’t. I was fascinated at the way it was emphasised again and again ‘oh we’ve got all these women here, they’ve been chosen on merit this time’. What’s that all about?

Andrew Leigh:                  Well I think that was partly responding to some of the slightly odd commentary that was suggesting that if you’ve got a record number of women in the ministry, then somehow the women who were going to the ministry weren’t super talented. If you look at somebody like Melissa Parke, who I think is just a standout performer, particularly on the international aid issue she’s been given. And Julie Collins, who understands issues around status of women extremely well. No, I think Mr Rudd was just making the point that those people have been chosen for their inherent qualities, and they happen to be women.



Mark Parton:                     Ok. Let’s get rid of all the spin here. In the lead up to the leadership change last week, I think most in federal Labor had conceded that there was no possible way you could win the election under that structure. Is there a belief now that you can win, or is it more about getting closer to that other mob than you had anticipated?

Andrew Leigh:                  Mark I’ve always believed we can win –



Mark Parton:                     Oh you haven’t Andrew, come on –

Andrew Leigh:                  No, I have. Really. And that’s because you look at the two party’s policy packages. I think people have spent an awful lot of time looking at the colour of the box, but when you actually look inside the two boxes, it’s chalk and cheese. What we’re offering is track record of achievement in saving those jobs in the global downturn, of investing in the NBN for Gungahlin, the Majura Parkway taking traffic congestion off. And that’s replicated right across the nation. And the Coalition still don’t have an education policy, still don’t have a health policy, and their attempt to get cuts is just firing Canberra public servants. So when you look at it like that, looking inside the boxes, I think that’s what gives me the strong sense of confidence.



Mark Parton:                     Alright, let’s talk about the chalk and cheese. You and I have had a number of discussions about asylum seekers, and the position that Bob Carr is presenting publicly on the number of asylum seekers that are economic refugees pure and simple, and the position that you have based on conversations that we’ve had, are chalk and cheese. Are you worried about the direction your party is taking on the asylum seeker issue?

Andrew Leigh:                  I don’t think they are, Mark. I think Mr Carr is pointing out that there are people who make the same decision that you or I would well make if we were in a country looking at the potential of getting to Australia. We might well say that even if we didn’t have a fear of persecution, there was still a much better life to be had in Australia for us and our families. We might then take the risk to travel by boat to Australia. That doesn’t mean that those people aren’t worthy and decent people, but it does mean that they don’t qualify for refugee under the Convention. So we need to be fairly rigorous in our refugee screening, which I think was all Mr Carr was saying. We’ve sent a lot of refugees back to Sri Lanka recently – sorry, people who have come by boat who were found not to be refugees.



Mark Parton:                     In that particular interview in the day of the long knives, he was signalling a change. He was basically saying that we would make a change to the rules that determine who is a refugee and who wasn’t.

Andrew Leigh:                  We’ve always applied the Refugee Convention rules, and as I understand it Mr Carr was simply indicating to the public the reality that we’ve known from looking at refugee flows, that many people who come to Australia are refugees, some aren’t. And that’s important to take into account in working out who we take. And this challenge that the more people who we take who arrive by boat, the fewer people we’re able to take through offshore processing camps where we work with the United Nations to choose people who have been living in camps for sometimes over a decade.



Mark Parton:                     Andrew, thanks for your time this morning, we appreciate it.

Andrew Leigh:                  Thank you Mark, likewise.

TRANSCRIPT – ABC NEWS RADIO WITH MARIUS BENSON
Andrew Leigh MP
Member for Fraser
2 July 2013

Topics:                         Ministerial changes, ‘Battlers and Billionaires’.

Announcer:                        There were winners and losers when Kevin Rudd announced Labor’s latest ministerial line up yesterday, although mainly winners, as many of the Gillard old guard had already resigned their posts. One loser was Andrew Leigh, who lost his position as a parliamentary secretary. But it’s not likely to be the last that’s heard from the active Andrew Leigh, who was a professor of economics before entering parliament. He’s also the author of several book. The latest, Battlers and Billionaires, looks at a widening economic divide. Andrew Leigh is speaking to Marius Benson.

Marius Benson:                Andrew Leigh, you must feel a little disappointed today, you lost the position of parliamentary secretary yesterday, is that just the price you pay for backing the wrong horse in a two horse race?

Andrew Leigh:                  Well naturally I’m disappointed, but I took the view that after supporting the former Prime Minister that the honourable thing to do was to tell Mr Rudd that while I was willing to serve, I was also willing to stand down if he wanted me to. So he’s asked me to stand down from that role, and to offer him advice on economic issues, which I’m happy to do.



Marius Benson:                Ok, if you’re not in that role, you’re busy enough anyway because you are a fairly prolific author. Your latest book is Battlers and Billionaires, and the basic thesis is you see increasing economic inequity in Australia in recent decades.

Andrew Leigh:                  That’s right. Battlers and Billionaires tells the story of inequality in Australia over the last two and a quarter centuries, going from quite egalitarian beginnings in the end of the 18^th century, to a pretty unequal society around the time of World War I. And then we saw a great compression, a period in which Australia became much more equal, right up until the 1970s. And the last generation, as you say, has been a story of increasing inequality. We’ve seen the top 1 per cent double, we’ve seen about $400 billion shifted from the bottom 99 per cent to the top 1 per cent. CEO salaries have gone from an average of $1 million to $3 million in the top hundred firms, and we’ve seen stratospheric increase in consumption in the things the super-rich enjoy, like waterfront homes, Porches, Maseratis, even cocaine.



Marius Benson:                Are those statistics, are they arguable? Because I saw Mark Latham, in his quarterly essay a little while back, was talking about Australia certainly doing better than America in terms of equity, but actually doing quite well. The worst off were seeing their income rise at a rate that was at least comparable with other groups of demographics.

Andrew Leigh:                  It’s certainly true that Australia is a more equal than the United States, but it’s not true that we’ve remained just as equal over the last generation. I’ve got a footnote in the book where I explain the error in using the particular study that Mark place da lot of emphasis on. But really, the picture you get right across a range of studies is of a rising gap between rich and poor over the past generation.



Marius Benson:                Well if you look at that past generation, and that rising gap, just looking at it in political terms, during that time, Labor was in power for at least 50 per cent of that time, and Labor is the party of equity. Is that just empty rhetoric?

Andrew Leigh:                  The sort of factors that drive inequality are very much factors that hit Australia regardless of which party is in power. Technology and globalisation act as a wedge to drive the income distribution apart. We also see significant impacts from tax changes, which Australia implemented largely in order to match other countries and because there was, I think, some recognised economic wisdom that a top tax rate of 70 per cent was too high. We’ve also seen the decline in unions, driven largely by structural change in the economy, rather than by laws affecting unions’ ability to organise. Unions are a powerful equalising force in society, so their decline has been one of the factors that has made Australia more unequal.



Marius Benson:                So does government…If Labor hasn’t made any difference, is it largely a powerless observer from the sidelines on these big changes?

Andrew Leigh:                  No, I think government can play  an important role, and I talk in the book about some of the things we can do if we want to ensure that Australia’s strong egalitarian ethos doesn’t get lost. We’re a country where we call one another ‘mate’ and rarely use the word ‘sir’, where tipping is something most of us don’t like, we sit in the front seat of taxis. But if we’re to maintain that I think we need a government that has means-tested social security, that invests disproportionately in improving the education of the most disadvantaged, and which rigorously tests social programs – in my view, using randomised trials, rather than just say-so and ideology.



Marius Benson:                If the gap has been widening since the 70s, is there any evidence of any return to equity, any return to that pattern of compression that you saw between the wars?

Andrew Leigh:                  The last 5 years or so we’re seeing fairly stable inequality in Australia and a large part of that is the global financial crisis, which had big impacts on the top in Australia. But I do worry that we’re getting out of touch with our sort of egalitarian spirit, and I use the analogy in Battlers and Billionaires of AFL and English Premier League. English Premier League is a deathly boring game to watch now, because Manchester United has won 12 of the last 20 seasons. It does that because it’s an incredibly unequal game. In AFL, no team has won more than 3 of the past 20 seasons, and the reason for that is we’ve got a salary cap, we share out the TV royalties, we have a draft system at the end of the season. All egalitarian measures that make the game more interesting, and the question for Australia is whether we want a society that looks more like the English Premier League, or one that looks like the AFL.



Marius Benson:                Andrew Leigh, thank you very much.

Andrew Leigh:                  Thank you Marius.

TRANSCRIPT – ABC RN DRIVE WITH JONATHAN GREEN
Andrew Leigh MP
Member for Fraser
1 July 2013

Topics:                         Ministerial changes, ‘Battlers and Billionaires’.

Jonathan Green:              Still on politics, and one of the losers from the events of last week in Canberra is Dr Andrew Leigh; without doubt one of the sharpest minds in the parliament, but left out of the new expanded Rudd ministry. He was the Parliamentary Secretary to the former Prime Minister Julia Gillard, but that job now goes to Ed Husic. So what does the future hold for this former professor of economics. He joins us now, Dr Leigh, good evening.

Andrew Leigh:                  Good evening Jonathan.



Jonathan Green:              Did you resign, or were you pushed?

Andrew Leigh:                  Well, I thought in the circumstances of last week, after supporting the incumbent Prime Minister, that I should tell Kevin Rudd that while I was willing to continue to serve, I was also willing to tender my resignation if he wanted it. And he accepted the resignation and said that he wanted me to continue to offer advice to him on international economic issues, which I’m very happy to do.



Jonathan Green:              Tony Burke did the same thing, but kept the ministry.

Andrew Leigh:                  Look these things are never straightforward, Prime Ministers always have more good people than they have slots for, and when I look around the Labor caucus room I can see why Mr Rudd felt himself spoiled for choice. There’s lots of very talented people and I think that Ed Husic will do a terrific job in his new role, as well as being a great advocate for broadband.



Jonathan Green:              Will you work harder, Andrew Leigh, at factional plays from this point forward?

Andrew Leigh:                  I don’t think it’s about the internal factional issues, I think it’s just different Prime Ministers have different teams they want to assemble around them. My own view was that genuinely I wanted to give Mr Rudd the flexibility to forge the team around him that he thought was best able to help win the next election. There’s so much at stake at the next election. This isn’t about personalities, this is about maintaining the reforms of the last two terms and making sure that a Labor government can do more in the next term.



Jonathan Green:              The ministry, though, is batting down reasonably deep. Take for example Jacinta Collins: anti-gay, anti-abortion, anti-same sex marriage, with the strong backing of the Shop Distributive and Allied Employees' Association, and now looking after mental health. That’s an interesting call.

Andrew Leigh:                  I think that that’s an unfair characterisation of Jacinta Collins’ views, to be frank. I’ve never seen her being ‘anti-gay’, as you’ve described it. She has a different view from me on same sex marriage, but frankly, so do many people in the community and that’s a debate on which the community is split. It’s a debate on which we recognise it’s important that people can hold different views.



Jonathan Green:              Let’s look to your immediate future – work advising the PM around economics, international economics in particularly. Can you walk us through what you’ll be doing there?

Andrew Leigh:                  The Prime Minister has recognised that with the economy in transition, it’s important for us to be mapping out where the jobs of the future will be coming from. The Australia in the Asian Century white paper, I think, did that very effectively, in talking about the new role Australian firms will play in providing financial services, architectural services, education services to countries in our region. But that also involves a set of reforms, it’s really vital that we have the human capital that allows us to step up and play a role in Asia. It’s important too that we have an eye to what’s happening with commodity prices and the Australian dollar, because that effects the sort of industry restructuring in which we engage in over the coming decades.



Jonathan Green:              Other international matters of course at top of mind this week with the PM off to Jakarta. Expectations of that visit?

Andrew Leigh:                  I think the relationship with Indonesia is an enormously important one. As a child I lived in Indonesia for 3 years, 1 in Jakarta and 2 in Banda Aceh. I really had a sense growing up that Australians weren’t focused enough on this extraordinarily interesting and diverse country – the largest Muslim country in the world, nearly 300 million people – lying just a short distance to our north. So a better and deeper engagement with Indonesia is absolutely vital. You see that with Kevin Rudd picking up work that he had in train as Prime Minister and as Foreign Minister, and it’s in contrast, to be frank, with Mr Abbott in attempting to engage in conflict with Indonesia through his wacky ‘turn the boats back’ policy that the Indonesian government has flat out rejected.



Jonathan Green:              So you’d stand by the Rudd line that that’s courting conflict?

Andrew Leigh:                  I think that it’s a deeply destructive policy that the Opposition are engaged in. It is really dangerous for asylum seekers, because boats may sink. It’s dangerous for our naval personnel, because their lives are put at risk. You’ve heard Admiral Chris Barry speaking about the problems of boat turn backs. And it’s appalling diplomacy, to snub this huge and important country in Indonesia, a country whose relationship we need to be strengthening, not jeopardising.



Jonathan Green:              The polls already, Andrew Leigh, showing a bit of a turnaround in ALP fortunes, with the new Rudd Prime Ministership. As a Gillard supporter, does that surprise you?

Andrew Leigh:                  I pay little attention to polls, whether they’re going up or whether they’re going down.



Jonathan Green:              Don’t tell me that there’s only one that matters.

Andrew Leigh:                  It’s true, but I’ll refrain from saying it. My view is simply that good policy is good politics – that if you want to have the privilege of being re-elected by the Australian people, you need to make sure you’re putting in place important reforms. I think, when I got around my own electorate for example, there’re lots of people who tell me they’d like to get the National Broadband Network sooner. I’m yet to meet anyone who says they don’t want to get the National Broadband Network. So that’s a reform that we’re putting in place, because we recognise that superfast broadband is like the highway network of the 21^st century. Reforms like that are the things we have to be focusing on as a government, and which you’ve seen Kevin Rudd talking about over the past few days.



Jonathan Green:              Despite the toughness of last week, there must be a bit of a spring in the step for your colleagues in caucus.

Andrew Leigh:                  I think that there’s a real sense of unity and purpose. It’s really vital that we preserve the reforms of the past two Labor terms, but also that we are able to continue those into a third term. You look at these school reforms, for example, replacing a broken down, worn out school funding system – which has the very strange feature that when state conservative governments cut funding, the federal funding mechanically falls – with something that’s up to date, that recognises need and increase funding for all schools. That’s a vital economic reform, a social reform, and of course education reform that we’ll be looking for a mandate to pursue in the next term.



Jonathan Green:              Now Andrew Leigh, you may have lost touch with the Cabinet room, but you have gained a book. You have a new book out today, Battlers and Billionaires: the story of inequality in Australia, tell us briefly in closing the thesis there?

Andrew Leigh:                  So the story behind Battlers and Billionaires is the story of Australian inequality over the past two and a quarter centuries. Inequality was quite low in the late 18^th century, rose quite significantly to the 1920s gilded age, and then fell from the ‘20s to the ‘70s. Over the past generation we’ve seen significant increases in inequality, with the top 1 per cent gaining an additional $400 billion, compared to where they would have been if we’d had the equality levels of the last 1970s. I think inequality is a problem because it strains the social fabric, because we know the simple fact that a dollar brings more happiness to a pauper than to a millionaire. So I want to prompt more of a discussion about inequality, and whether the economic inequality we have is getting out of step with Australia’s natural egalitarian spirit. We’re a nation that sits in the front seat of taxis, that doesn’t like tipping, calls one another ‘mate’, and has had central bank managers called ‘Nugget’ and ‘Nobby’. That egalitarian spirit still burns strong, and yet the economic reality of stratospheric increases in CEO pay seems to be at odds with where I believe many Australians would like our nation to go.



Jonathan Green:              Is that an interests that’s best pursued inside or outside of the parliament? What does your future hold there?

Andrew Leigh:                  My own view, Jonathan, is that I’d really like to combine the both. One of my role models is the professor turned politician Daniel Patrick Moynihan, who managed to produced books right over his Senate career after stepping down as a professor at Harvard. This is the second book I’ve written in the parliamentary term – the last one was Disconnected, looking at our community life. And I really feel like the role of a parliamentarian is not to simply help enact laws, but also to speak to deeper discussions about the kind of nation we are and the kind we’d like to be in the future.



Jonathan Green:              Might be a couple of other parliamentarians with books on hold, after the events of the past few days. But congratulations on yours.

Andrew Leigh;                  Thank you Jonathan.

TRANSCRIPT – ABC 666 AFTERNOONS WITH ALEX SLOAN
Andrew Leigh MP
Member for Fraser
1 July 2013

TOPICS:                                Battlers and Billionaires, Cabinet reshuffle

Alex Sloan:                          Joining me in the studio is Andrew Leigh who of course is the Parliamentary Member for Fraser, the Labor Member for Fraser  and he has launched his book today which is called ‘Battlers and Billionaires: The Story of Inequality in Australia’. Andrew Leigh lovely to see you.

Andrew Leigh:                  Likewise Alex.



Alex Sloan:                          Now first of all just on the politics and it is reported that you have been, I will just read it now, Kate Lundy is disappointed to lose the Sports portfolio while Andrew Leigh has been dropped all together.

Andrew Leigh:                  After supporting the former Prime Minister in the caucus ballot last week, Alex, I thought it was the honourable thing to do to tell Kevin Rudd I was willing to serve but that I was also willing to step down if he wanted me to do that, and so he’s asked me to step down but has asked me to advise him on economic issues which I am certainly happy to do.



Alex Sloan:                          So it is Ed Husic and Allan Griffin from Melbourne go into your position. Is that correct?

Andrew Leigh:                  Absolutely and Doug Cameron is also stepping up as a Parliamentary Secretary. There is just a range of talented people across the Labor caucus. I mean, it’s a real privilege to sit there are look at the quality that Kevin wants to draw on–



Alex Sloan:                          Tony Abbott is calling it the ‘C Team’.

Andrew Leigh:                  I think this is a fabulous team of Ministers that are going forward; I look at somebody like Melissa Parke that understands international economic issues deeply, people like Kim Carr, Jacinta Collins, Julie Collins moving into Cabinet. These are seriously impressive people who will hit the ground running.



Alex Sloan:                          Andrew Leigh good to see you. Now let’s get onto your book and of course you are former economics professor from the ANU and this book ‘Battlers and Billionaires: The Story of Inequality in Australia’ – how long have you been writing this for? And it will be launched tonight actually by Professor Bob Gregory

Andrew Leigh:                  It will and – well it is a funny question Alex, I guess a lot of my research was on inequality at ANU so in some sense the ideas have been percolating in my head for a decade but the real writing has been done mostly in the last couple of years. My last book came out in 2010 just after the election, so it’s since then that I have been working on Battlers and Billionaires.



Alex Sloane:                       We have a bit of a theme, I’ve talking with Bernard Salt about the middle class but you say in the book that our language has egalitarian cues, the word mate is a universal leveller – and I’ll say thanks mate to a Cabinet Minister and a bus driver sometimes in the same day.

Andrew Leigh:                  Indeed, Australians don’t much like tipping, we sit in the front seat of taxis, we don’t stand up when the Prime Minister enters the room by in large and we’ve got former central bank governors called ‘nugget’ and ‘nobby’. So there is a sense in which Australians don’t like to take class differences too seriously.



Alex Sloan:                          But they are there because you then write the egalitarian spirit is no guarantee of true equality.

Andrew Leigh:                  That’s the concern Alex that those egalitarian ideals don’t necessarily lock in an even distribution of income. Obviously, you don’t want perfect equality but we’ve seen a big rise in the gap between rich and poor over recent decades, so if you are in the bottom 10 per cent of the labour market then your incomes have gone up 15 per cent after inflation since the mid-70s. If you are in the top 10 per cent your income’s gone up by 59 per cent after inflation, so the gap in the labour market’s increased, we’ve seen an increase share in the top 1 per cent, the top 0.1 per cent, indeed we’ve even seen an increased wealth share of the top 0.001 per cent which is basically those in the BRW magazine. CEO salaries are rising, the top 100 CEOs in the mid-90s earned around a million dollars, now they earn around 3 million dollars and you’ve seen –



Alex Sloan:                          And that hits the political spotlight every now and then, the CEO salary issue –

Andrew Leigh:                  It does indeed and so, you know, we’ve looked –



Alex Sloan:                          Should it? Is it –

Andrew Leigh:                  It’s a function, Alex, of the fact that in early 90s we began to carry out international CEO searches, so before that a big Australian company would look for the best Australian to do the job. Now they do a global search and they pay a global salary. I don’t think we ought to cap CEO salaries but I think it is important to give shareholders more say over CEO salaries and the executive remuneration reforms that the government’s put in place hopefully provide a better check and balance for shareholders on excessive executive remuneration.



Alex Sloan:                          When it comes to wealth equality around the Western world how does Australia shape up?

Andrew Leigh:                  So Australia is in about the top third of the OECD pack of developed countries. We’re about where you would expect us to be at as an English speaking country. The US, Chile are towards the top, the Scandinavian countries are among the most equal. Interestingly that’s if we take national inequality, if we take inequality by state and territory, Western Australia has a US level of inequality, the ACT has a Swedish level of inequality – we are the most equal jurisdiction in Australia.



Alex Sloan:                          (laughing )I’ve heard that before – so when it comes to, I believe, female heads of departments and things like that, we’re not doing so well in the ACT. Is that right?

Andrew Leigh:                  I haven’t looked at the gender stats. But, yeah I’d-



Alex Sloan:                          I think this a fairly shocking stat because yes we were described on one hand as the ACT being the Sweden of Australia but then there is inequities when it comes to, I think, female employment, as I understand it, was some NATSEM figures that I was attending a function at and I meant to write them down

Andrew Leigh:                  There you go – No, no, no; if it is ACT public service heads then I don’t have the numbers in front of me.



Alex Sloan:                          I think it was just across the board but I wish I had written it down. But moving on-

Andrew Leigh:                  Well the two intersect. You are quite right to raise it because I think one of the reasons why the gender pay gap stubbornly failed to close is because inequality has risen. More women tend to be in the bottom end of the labour distribution, so you increase inequality and that widens the gender pay gaps the two are intertwined.



Alex Sloan:                          Andrew Leigh is with me and Andrew Leigh is, of course, the Member for Fraser, the Labor Member for Fraser and as he opened when I asked him how long he has been writing this book, probably his whole economics life, called Battlers and Billionaires: The Story of Inequality in Australia. Actually, I love the story, Andrew Leigh, the anecdote about the POW, Japanese prisoner of war camp because I suppose if we do say, oh we’re the land of the ‘fair go’ and we have this kind of egalitarian kind of look at life. Just tell me that little story and what you think that illustrates. First of all, tell us-

Andrew Leigh:                  In WWII in the Japanese prisoner of war camp, The Japanese provided rations more generously to the officers than the enlisted me. They provided fewer tents than there were people to go around. And the British dealt with that by allowing the officers to eat more and have the best tents. The Australians pooled everything and made sure those who were unwell good a little more thanks to the leadership of Weary Dunlop. As Tom Uren said in his first speech to Parliament, only a creek separated the two camps but on the British side the law of the jungle prevailed and on the Australian side, egalitarianism was the order of the day. The British saw only about 25 of the 400 men walk out because cholera ripped through the camps and killed so many of their troops. The Australian egalitarian ethos held the men together and allowed so many more of them to survive.

Alex Sloan:                          What do you think that illustrates?

Andrew Leigh:                  I think it does illustrate this powerful egalitarian sentiment, even in a very hierarchical institution like the military. Peter Cosgrove talks, even in Somalia, about the Australian willingness to carry out foot patrols contrasted with the Americans and the French sitting behind sandbags. And that meant that the Australian soldiers were out there, interacting with common folk in Somalia while the other militaries just heard the stories of the elites. And Peter Cosgrove argues that made the Australians much more effective soldiers on the ground. Then you see this egalitarianism in how we do our sport as well. The Americans’ favourite race is the Kentucky Derby. That’s a race without handicapping. Our favourite race is the Melbourne Cup. That’s a race that literally puts lead in the saddlebags of the horses, and we do that because it makes a more interesting race. The British have English Premier League in which Manchester United has won 12 out of the last 20 seasons, can you think of a more boring sport? We have AFL where no team has won more than 3 out of the last 20 seasons largely because we do a whole lot of redistribution, you know, we share out the TV revenue, we have a salary cap, we have a draft, and it ends up making the game more interesting. AFL is a more interesting game than English Premier League because it’s got more redistribution.

Alex Sloan:                          You can start calling now: 1300 681 666. Text number 0467 922 666. Andrew Leigh is with me talking about his book Battlers and Billionaires. When it comes to wealth inequality in Australia, is the starkest point with indigenous Australians?

Andrew Leigh:                  We certainly see if you look at the statistic as to where Indigenous Australians are in the income spectrum, the richest third of households, 1.7% are indigenous, the poorest third, 4.2% are indigenous. And the gaps between indigenous and non-indigenous are a reflection of the substantial inequalities that exist in Australia. That wasn’t always true. If we go back to the early days of settlement, Indigenous Australians and the English settlers were both quite equal communities both because they were so close to the poverty line. But as inequality has grown that’s been part of why the gaps have risen.

Alex Sloan:                          Andrew Leigh, the former Treasurer, Wayne Swan, he started what, you know, was a class warfare in terms of targeting billionaires like Gina Rinehart and Twiggy Forrest, what did you make of that?

Andrew Leigh:                  It’s always perplexed me that it’s a ‘class war’ when people talk about disadvantage and about the importance of making sure we operate well as a community. I actually see the language of inequality as being a recognition that Australia is at its best when we work together rather than when we operate simply as individuals. There’s nothing about the market distribution of income that’s automatically fair. I happen to be born into a society that rewards people who are able to write and speak well. But if I’d been born into a society that rewarded people for being good hunters and good fighters as has been the case for most of human history somebody with a weedy build like me would have done terribly poorly. So there’s a lot of luck in how people are placed and I think that’s why we need a society that has some redistribution in it that ensure that everybody gets a fair go.

Alex Sloan:                          Is there a central message in this, looking back at this history of Battlers and Billionaires in Australia?

Andrew Leigh:                  Australia has a powerful egalitarian ethos and we need to make sure that the economic reality doesn’t lose touch with the egalitarian spirit that we hold so dear.

Alex Sloan:                          And do you think it is?

Andrew Leigh:                  I think it’s a risk. We’ve seen inequality rising – not to US style levels – but certainly significantly from where it’s been in the past. And for so much of the twentieth century, Australia was becoming a more equal place. That turned around somewhere in the late 70s, early 1980s, and we’re now on a course to become a country with unprecedented gaps between the rich and the rest.

Alex Sloan:                          And what do you think contributes most to that?

Andrew Leigh:                  There’s technology and globalisation that play a big part, the collapse of trade union membership is important, and it’s important to recognise the role of tax changes as well in making us a more unequal society. So the factors that have driven it I think are easier to articulate than the policy prescription for what we need to do to tackle it. But all of those issues [inaudible]

Alex Sloan:                          Simon Crean in his interview this morning with John Faine and John Faine was saying that Kevin Rudd will deal with the unions and Simon Crean hit back saying it was the unions that got through a superannuation scheme and a Medicare scheme.

Andrew Leigh:                  Unions have brought us annual leave, they’ve made sure they campaign often for dollar increases rather than percentage increases which help those at the bottom of the income spectrum more and they’ve campaigned on issues like pay differentials across occupations. So there’s no stronger equalising organisation in Australian public life than unions. So unions and education I think are important. We also need to means test our social support system so it targets to those most in need. That’s the genius of the Australian social support system ever since we means tested the pension in the 1930s. Controversial but so important in making sure the public dollar goes a long way.

Alex Sloan:                          I won’t kick you a ‘Dorothy Dixer’ about Tony Abbott’s paternity leave scheme but Andrew Leigh, lovely to see you. Have fun at your book launch tonight.

Andrew Leigh:                  Thank you, Alex

Alex Sloan:                          Thanks very much. That’s Andrew Leigh, Parliamentary Member, well he is the Member for Fraser and his book Battlers and Billionaires: The Story of Inequality in Australia will be launched this evening by Professor Bob Gregory at the ANU. And tomorrow, by Father Bob

Andrew Leigh:                  Father Bob Maguire in Melbourne tomorrow, and Annabel Crabb up in Sydney on Wednesday. This is a tour. We should have t-shirts made.

Alex Sloan:                          You’re on 666.

• Talking Battlers and Billionaires with Jonathan Green on ABC Radio National (1 July)


• Talking Battlers and Billionaires with Marius Benson on ABC News Radio (2 July)


• Talking reshuffles with Mark Parton on 2cc (2 July)

TRANSCRIPT – ABC 612 WITH STEVE AUSTIN
Andrew Leigh MP
Member for Fraser
1 July 2013

Topics:                        Battlers and Billionaires



Steve Austin:           When I was presenting the evening program, I interviewed a chap by the name of Andrew Leigh. Andrew Leigh’s background is one of being a sociologist and economist. He got into federal politics, he’s now the Federal Labor Member for Fraser in New South Wales, and I interviewed him about a book he wrote then called Disconnected, and it looked at social capital and how it had weakened over the past generation - less people volunteer, less people part of community groups, church organisations, social groups and things like that. He’s changed direction this time, using his educational background, but he’s come to the conclusion that Australia is more unequal today than it was a generation ago. Andrew Leigh good morning to you.



Andrew Leigh:        Good morning Steve.

Steve Austin:           Andrew I want us to go back and look at how the people who have money are making it. How are the rich, the very rich, the stinking, filthy rich of Australia making their money.



Andrew Leigh:        Well Steve, of course governments never use words like ‘stinking’ or ‘filthy’. But if we look at the top 1% of the distribution, about half of those earnings are coming from salaries and about the other half from things like dividends and capital gains. And that’s been a big increase, so if you look back at the 1950s and 60s, the top 1% tend to be much more what the Americans derisorily call ‘coupon clippers’. Increasingly now it’s what labour economists call ‘superstars’: top accountants, top lawyers, top businesspeople, even top sports stars have seen their earnings go up, so it tends to be highly paid workers at the top of the distribution now.

Steve Austin:           Isn’t that funny, I expected you to talk about mining and resource billionaires.



Andrew Leigh:        There’s certainly a bit of that, so you don’t get into the top 200 - you don’t get into the pages of the BRW magazine [rich list] - without some very serious capital gains. So clearly the mining boom has had an impact over the last decade. But the story of the past sort of generation, which is really the period over which we[‘ve seen the recent rise of inequality, is one of labour incomes prevailing. And also that’s been part of the mining boom story. So WA used to be about as unequal as the typical Australian state or territory, now it’s by far our most unequal jurisdiction. The level of inequality in WA is the same as the level of inequality in the United States, which is very high. And a lot of that is because there’s a huge gap in salaries in Western Australia.

Steve Austin:           So wages have gone up for people in certain industries?



Andrew Leigh:        That’s right, and so labour economists talk about these superstar labour markets as being a function of technology. So, one of the stories I talk about in the book, is to compare an opera singer of the eighteenth century, Elizabeth Billington, with Luciano Pavarotti. Billington, the best thing she could do was to sing to full houses in Covent Garden and Drury Lane, and so she earned slightly less than $1 million dollars a year in that period (in today’s money). Pavarotti was getting at least $20 million a year because he was playing to a global audience through CD sales and music downloads.

Steve Austin:           Andrew Leigh is my guest, we’re talking about his latest book, Battlers and Billionaires: The Story of Inequality in Australia. This is 612, ABC Brisbane. So if that’s how the very rich are making their money, how are the very poor losing their money in Australia, Andrew?



Andrew Leigh:        Well the very poor aren’t going backwards in the main Steve, but their incomes aren’t keeping pace. Since the mid-1970s, if you’re in the bottom 10% of the earnings distribution, you’ve seen about a 15% increase in incomes (after inflation), if you’re in the top 10% you’ve seen a 59% increase in incomes. Put another way, if the bottom 10% had seen the same increase in incomes as the top 10% they’d be $14,000 a year better off. So you’ve seen all boats rising but the ocean liners are rising faster than the tug boats.

Steve Austin:           Why aren’t the very poor getting jobs in the mining and resource sector, I mean things, whether you can drive heavy machinery, it doesn’t require academic qualification to get a well-paying job.



Andrew Leigh:        They are to some extent, and the very low unemployment rate in Western Australia is an indication of that. Full employment is one of the best policies that you can have to benefit the whole income spectrum. But you know you also see gaps in educational attainment, and this goes back to the very beginning. So if you take a three year old from an affluent household and a toddler from a disadvantaged household, the toddler in the advantaged household has heard 30 million more words than the toddler in the disadvantaged household. So these educational gaps begin early, and that then plays into people’s ability to make the most of technology. If you’ve gone to university, you’re much more likely to benefit from technological advances than if you struggled through school and then left in year 10.

Steve Austin:           So are you telling me Andrew that you can actually tackle inequality somewhat in a poorer household by reading to your children? Or what’s the word, exposing them to reading and books as soon as possible if you’re in a low income household?



Andrew Leigh:        Absolutely, it’s not just of course about the number of books. So there’s a famously failed program by Rod Blagojevich, the disgraced governor of Illinois, who thought that he could change the outcomes of children just by posting book packs to new parents. It doesn’t have any impact because people in the affluent households read them, people in the disadvantaged households don’t read them. So there’s something happening differently in those households. It’s part of the book I found most difficult to talk about, because progressives don’t normally talk about what’s happening inside families, but you see very big differences in family structure and also in parenting style, and it’s just so strong through the research …

Steve Austin:           Which is why I like interviewing you Andrew Leigh by the way,  you do talk about what’s happening inside the family structure, which is unusual for the left of politics.



Andrew Leigh:        Yeah, you’ve nailed it there, and to give you one statistic that makes me uncomfortable, one third of Northern Territory Indigenous kids don’t have a father’s name on the birth certificate. I ‘m not sure I know how to fix that, but I do know that it’s a concern. We also know for, example, that there’s differences in parenting practices. The sociologists talk about ‘concerted cultivation’ – treating children like small adults, providing them, encouraging them to sit at the dinner table, to engage in conversation, to talk to the doctor, to basically, to feel like they have a bit of a sense of entitlement in the world. You don’t see that sort of same phenomenon going on in the most disadvantaged households according to the sociologists. How do we change it? Well that’s a hugely difficult questions, but I think it’s worthwhile people like me at least talking about this issue.

Steve Austin:           It’s unusual to hear someone from the Labor party talking about it in these terms. Andrew Leigh, is there anyone, I mean you’ve written this book more as a sociologist than a politician, is there anyone else acknowledging that in the Labor side of politics that you’re aware of?

Andrew Leigh:        I think there certainly is, and we’re very aware in the changes we’re making, making childcare more accessible for example, that that has a big impact on children’s life chances. The means-testing of social welfare which we’ve engaged in through the last two terms of government, have been very much about recognising that if you want to make sure everybody finishes the race, it’s not about putting lead in the fastest runners’ shoes, but it might be about buying a pair of runners for the person at the back who’s barefoot at the moment.

Steve Austin:           So Andrew Leigh, you’re telling me, those families that just get on with it … sorry let me rephrase my question, if you see yourself as a victim and complain about being disadvantaged and as a victim, it becomes a prophecy, a self-fulfilling prophecy in your life?



Andrew Leigh:        I’m not sure we know a great deal about that Steve. I certainly think that there is, there’s big institutional factors that affect people’s outcomes, there’s the luck of the skills that you’re born with, but there’s also the luck of the society you’re born into. So I’m a fairly lightly built guy, I don’t think I’m a particularly good fighter. So if I’d been born into the prairies, where the main activity was fighting with other people and managing to hunt down wild animals, I would have done very, very badly. So people who talk about merit – ‘well let’s just make it a meritocracy’ - forget the important role luck plays. And I think that’s why when you look at the survey evidence, most Australians prefer a more egalitarian distribution of income. Most Australians prefer a society in which we help up those most in need.

Steve Austin:           I know the billionaire Warren Buffett often puts a lot of his success down to the luck of birth, being born in the United States, which he says played the greater part in why he’s so wealthy today.



Andrew Leigh:        Warren Buffett is extremely articulate on this point, and I think it’s a really important one to recognise. And once you recognise that luck plays a role in where we end up, you realise it might not only be fairer but perhaps more interesting to have a society with a fair amount of redistribution. Let me tell that through a football analogy, that’s probably ill-suited to Queenslanders. Compare English Premier League and AFL. In English Premier League, Manchester United’s won 12 out of the last 20 season. In AFL, no team has won more than 3 out of the last 20 seasons. And that’s not an accident, AFL has a whole lot more redistribution, they have salary caps, they share the TV revenue more equitably, they have player transfers. And the effect is that the game becomes more interesting. English Premier League has become deathly boring because of the incredible inequality that’s entrenched within it.

Steve Austin:           My guest is Andrew Leigh. Andrew Leigh is a Federal Labor Parliamentarian from NSW, he’s a sociologist and economist by training, we’re talking about his latest work, Battlers and Billionaires: The Story of Inequality in Australia. His previous book was called Disconnected, which was a personal favourite, Andrew Leigh. But I’ll keep going on this one now, can I ask you about mining billionaires, because I get the call from listeners quite often that they see a sense of illegitimacy, or ill-gotten gains from mining magnates in Australia. That, yes they’re successful, and yes they’ve done well, but there’s a sort of a … they don’t deserve it because they didn’t actually create the mineral resources they’re digging out of the ground. Now you haven’t mentioned them per se and I sort of expected you to as a Labor politician, what’s your view on the extreme wealth of Gina Rhinehart in Western Australia, Twiggy Forest over there, and say Clive Palmer here in Queensland?



Andrew Leigh:        I’m very happy to talk about it, and I think there’s certainly an element of entrepreneurialism, but there’s also an element of luck. One way in Battlers and Billionaires: The Story of Inequality in Australia that I talk about that is by comparing Gina Rinehart with her father Lang Hancock. Lang Hancock when he died was worth $150 million, Gina Rhinehart is now worth somewhere around the vicinity of $20 billion. So, either you believe that Gina Rhinehart is hundreds of times more ingenious than her father, which doesn’t seem to hold up with the way in which she describes her father. Or else you think that when the iron ore price jumped tenfold, that delivered significant windfalls to Ms Rinehart. And if you believe that there is an important component of luck, then I think that makes something like a profits-based mining tax seem like a more reasonable response to the big jump in commodity prices.Steve Austin:           So would you recommend that Kevin Rudd have another look at his MRRT tax and bring it back in, sorry his super profits tax, and bring it back in?



Andrew Leigh:        I think the Minerals Resource Rent Tax is in some sense the real world version of the Resources Super Profits Tax. That’s partly because of the political challenges of getting something like this into place. But it partly also just reflects the fact that in the design of the Resources Super Profits Tax, there hadn’t been enough account taken of how, for example, the banks would treat deductibility. But certainly I wouldn’t be advocating the removal of a profits-based mining tax and going back to the old outdated royalties regime, which is of course what the other folks on the other side of politics are suggesting.

Steve Austin:           Andrew Leigh, another point you raise in your book Battlers and Billionaires: The Story of Inequality in Australia I think is really interesting - that the poor have disengaged with politics. Now under previous, in previous times that was not the case. Particularly with previous Labor leaders, they came from you know railway clerks, and those really working class occupations that weren’t high wage levels. What happened? Why have the poor disengaged from politics when it’s their biggest defender, potentially?



Andrew Leigh:        It is striking isn’t it Steve. I mean you, you notice, for example, if you look at the share of people that have participated in a protest or a march, that that’s only 7% of low income earners, but it’s 14% of high income earners. Or people who say they’re interested in the election campaign: 75% of low income earners, 85% of high income earners. And I think that’s part of the challenge that we face in making sure we’ve got a democracy that includes everyone. On the one end, I’m concerned about the role that excessive campaign contributions might play in distorting political outcomes. On the other, I want to make sure we’ve got an Australia in which everybody feels included in the common good. And that’s at risk where you have a sort of two Australias scenario, in which you have a group of people who are so affluent that they can opt out of public schools, opt out of public hospitals, opt out of even publically provided roads and publically provided police forces, and buy all of those things privately. I think that then is a risk to the common good and I’d like to see more people recognise that challenge.

Steve Austin:           I’ll leave it there Andrew, best of luck with the book, it’s lovely speaking with you, thank you very much.



Andrew Leigh:        Thank you Steve.

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

TOPICS:                                New ministry list, Coalition cuts, Boat turn-backs, new inequality book

Tim Lester:                          Now another of our regulars on Monday on Breaking Politics, Andrew Leigh, the Labor MP here in the ACT in the electorate of Fraser. Welcome in, nice to have you in.

Andrew Leigh:                  Thanks Tim.



Tim Lester:                          Andrew, your response to the announcement of the ministry this morning. What do you think of the front bench?

Andrew Leigh:                  Kevin Rudd’s got a team around him which he feels confident with, and which will lead us strongly to the next election. It’s a team that’ll be campaigning on the big reforms of these last two terms, and talking about the importance of continuing to invest in the future. It’s also a team that can talk about the risks of a Tony Abbott-led Opposition. And we know that the British conservatives with their savage austerity have sent that economy back into recession. We know that the Coalition’s wacky ‘turn back the boats’ policy is a policy that could easily lead to conflict with Indonesia. So there’s real risks with Tony Abbott, and there’s strength of renewal and also continuity in the Labor front bench.



Tim Lester:                          And Andrew Leigh is not on the front bench. And yet some would say, you know, talented, strong background in economics, has done everything right, he should be there. Take us through your own situation.

Andrew Leigh:                  I told the Prime Minister I was willing to serve, but in the circumstances of last week, in having supported the incumbent, I felt it was ethically the right thing to do to offer my resignation. The Prime Minister has accepted that and has asked me to help advising him on issues in international economics, which I’m very happy to do and which I think are important to Australia as our economy rebalances, and commodity prices come off.



Tim Lester:                          Doesn’t that make you a case in point that division lives on within Labor? That if Labor were perfectly calm about what had happened last week, the fact that the way you voted would have been looked beyond, and your talents would have been rewarded?

Andrew Leigh:                  I don’t agree with that at all. I think that the Prime Minister has chosen the team that he feels most comfortable with, and the great thing about the Labor caucus is there’s such a depth of talent. So you look at people like Melissa Parke being promoted to a minister, she’s just going to charge into that international aid portfolio, understanding the constituent groups, understanding international development, and she’s really going to make a great contribution there.



Tim Lester:                          To be blunt, how long do you need to spend in the sin bin, Andrew Leigh? Because –

Andrew Leigh:                  - I don’t think that’s the right –



Tim Lester:                          - Because would an election win for Labor recorrect things and allow you to come back again, or are you sin binned longer term?

Andrew Leigh:                  I don’t think that’s the right way to regard it, Tim. I regard myself as a strong advocate for Labor. I will be happily campaigning on the economic issues that I worked on when I was a professor of economics at ANU, and which have been so central to what the government has done. Saving jobs in the global downturn, and now making sure we invest in skills because that’s what’s really important with an economy in transition.



Tim Lester:                          Kelly O’Dwyer says to us, look you want the real measure of Labor ministry, have a look at the fact Stephen Smith is still in Defence a few days after he told us he would be leaving the parliament and would not be contesting the election in what, weeks, certainly within a couple of months. Should we really have people who are so committed to leaving politics in such a short time serving on the front bench?

Andrew Leigh:                  It’s a ridiculous proposition that once you’ve announced you’re going to retire at the next election, you immediately have to stop doing anything in politics. There are people who have announced their retirement as members who are continuing to serve their electorates, and I think similarly a minister who has announced their retirement can easily continue to work in that portfolio. Stephen’s a passionate and hardworking Defence minister – he’s done amazing things to change the culture not just within Defence, but for women within every male-dominated organisation and he will go out with his head held high.



Tim Lester:                          12 point turnaround for Labor two party preferred in this morning’s opinion polls. Describe the feeling inside the party now that you can look at those kinds of numbers – competitive numbers in an opinion poll.

Andrew Leigh:                  Australians recognise the real risks that an Abbott government poses. And Kevin Rudd is emphasising for many voters the great Labor reforms, the Labor legacy, but also the things still to be done, the investments still to be made, and the importance of bringing something like the National Plan for School Improvement, so that every school gets more resources. Because if you want an Australia that’s ready for economic change, you want an Australia that provides a bedrock of fairness, then you’ve got to have a better school funding model than what we’ve got now.



Tim Lester:                          Ok, but the mood inside Labor at those numbers? You guys must be, to quote a term, ‘pumped’ to see that kind of a turnaround in a week on Newspoll’s numbers.

Andrew Leigh:                  Tim I’ve never paid much attention to polls, whether they’re up or down. But certainly what I see among my colleagues is a sense of unity and conviction, a sense of pride in the reforms that have been done, and a sense that it is so important that we go to the next election being clear with Australians that the choice is not one that involves personalities, but one that involves parties. And that Mr Abbott and his team lack an education policy, they lack a health policy, they have a massive costings gap which means they either have to raise taxes or cut services, and they’ve got to stop hiding behind smokescreens like a commission of cuts that they’re promising.



Tim Lester:                          Has the Prime Minister gone too far with his comments on Indonesia? Or do you share his view of the risks from an Abbott government to Indonesia being as sharp as Prime Minister Rudd suggested a few days ago?

Andrew Leigh:                  I certainly share the Prime Minister’s views on this Tim. I think he has emphasised that if you are pursuing a policy as Mr Abbott is, that is straight out rejected by Australia’s huge neighbour to our north, then you are headed to a collision course. The Indonesians could not be clearer that turning back the boats is a policy that they will not accept, and yet Mr Abbott can’t buy that, he can’t change his policy to work in with our nearest neighbour, the largest Muslim country in the world, nearly 300 million people, a country we need to be strengthening our relationship with.



Tim Lester:                          But Mr Rudd used the word ‘conflict’. Now, ‘conflict’ rings alarm bells that other language simply doesn’t, does it? I mean, that is quite an alarming description of what could happen.

Andrew Leigh:                  Well if Mr Abbott wants to avoid conflict with Indonesia, there’s a very easy way.



Tim Lester:                          Is conflict the right word?

Andrew Leigh:                  I think it is, yes.



Tim Lester:                          It’s that serious?

Andrew Leigh:                  Well Mr Abbott wants to take boats and tow them back to Indonesian waters. What happens then if Indonesian naval vessels start to tow the boat back out towards us? That’s a real potential conflict on the high seas and I just don’t think Mr Abbott has thought it through, to say nothing for the risks to asylum seekers and to naval personnel of this policy. You’ve got [Admiral] Chris Barrie saying this is an unworkable policy. Mr Abbott needs to rethink it for the sake of asylum seekers, for the sake of our naval personnel, and for the sake of our diplomatic relations.



Tim Lester:                          Now to close, we’re pretty much out of time, you’ve written a book – you might pick it up and show us.

Andrew Leigh:                  Battlers and Billionaires: The Story of Inequality in Australia.



Tim Lester:                          I’m sure it’s a fascinating tale, but can I just ask you – how does a guy like you get the time to write a book, when you’re doing the job you’re doing?

Andrew Leigh:                  I feel one of the core roles parliamentarians can play is on advancing public debate. At the beginning of this electoral term, I brought out a book on social capital called Disconnected, which looked at the change in Australian community life over recent decades. Battlers and Billionaires looks at inequality - at the gap between rich and poor - and how that has changed. And it’s an issue on which I’d like to see a stronger national conversation. Wayne Swan kicked off a bit of that conversation, and I’m looking to put some data, some numbers, and most importantly some stories behind it.



Tim Lester:                          Not letting the grass grow under your feet. Andrew Leigh thanks for coming in to talk to us.

Andrew Leigh:                  Thanks Tim.

TRANSCRIPT – ABC THE WORLD TODAY
Andrew Leigh MP
Member for Fraser
1 July 2013

TOPICS:                                Battlers and Billionaires

SCOTT BEVAN:                  As welfare groups warn of growing demands on their services, there are warnings about growing inequality in Australia. In his new book, Battlers and Billionaires, the Federal Labor MP Andrew Leigh, outlines the history of income inequality in Australia, which he notes is now approaching the highs of the 1920s. Mr Leigh says that's at odds with Australia's reputation as an egalitarian society. He's spoken to our reporter, Lexi Metherell.

LEXI METHERELL:              Andrew Leigh, in your book, you write of the Australian national character as having a peculiarly Australian quality of egalitarianism. What evidence do you have to support that?

ANDREW LEIGH:              There's lots of lovely Australian habits which have an air of egalitarianism about them. Most of us don't like tipping, we tend to sit in the front seat of the taxi and "mate" is a much more common word than "sir". We've had past central bank governors called Nugget and Nobby, which I guess reflect the larrikin spirit when it comes to the people in positions of high office. So, I think that egalitarian sprit still burns strong in Australia. The question is whether the economic reality is getting out of touch with it.

LEXI METHERELL:              As you write, the income share of the top 1 per cent has doubled over the last 30 years. Why are we seeing this growing inequality?

ANDREW LEIGH:              There's a number of big factors driving the rise in inequality: the collapse of trade unions has had a big impact. Unions had a strong, equalising influence on the work force and we've also seen globalisation and technology increase the gap between the top and the bottom. You see this particularly in the very top of the income distribution. So, since 1980, we've shifted about $400 billion from the bottom 99 per cent to the top 1 per cent.

LEXI METHERELL:              And, what are the implications of growing inequality for social fabric and for society at large?

ANDREW LEIGH:              Well, if you show people pictures of income distributions and ask them the society they'd prefer to live in, most choose the society with the more equal income distribution. I think it's because too much inequality offends our sense of fairness. If you were starting life and you didn't know which income group you'd end up in, you'd probably prefer a more equal distribution of income than a more unequal distribution.

LEXI METHERELL:              You're a big proponent of the measures included in Ken Henry's tax review of a couple of years ago - the former treasury secretary's tax review - and some of those measures are aimed at ensuring that there is better income distribution and that there isn't a growth in inequality. Is it time for the Government to look again at measures included in that review and revive some of them that seem to have been abandoned?

ANDREW LEIGH:              Well, I think what Battlers and Billionaires does is it illustrates, to some extent, why we need things like means testing, why it's really important for the educational system to be better for the most disadvantaged than it is for the most advantaged, and why we have to have that progressive taxation system and progressive expenditures, because, if we lose that, then we're really in danger of going down a track towards a society where the gap between rich and poor becomes too wide to bridge. I don't think that's happened yet, but it's certainly headed down that road with sky high executive salaries and a wealth gap that's grown significantly.

LEXI METHERELL:              How fundamental is the tax system though to addressing inequality?

ANDREW LEIGH:              Taxes are important, but so too are laws around unionisation and investment in education. Education is the greatest force that we've developed, not only for boosting productivity, but also for making Australia more equal. That's really important that we continue to have an education system that makes sure that the circumstances in which you're born don't determine the circumstances in which you die.

SCOTT BEVAN:                  Author and Labor MP, Andrew Leigh, speaking there to Lexi Metherell.