Electoral Reform

I spoke in parliament this week about electoral reform.
Electoral and Referendum Amendment (Improving Electoral Procedure) Bill, 22 August 2012

When I last spoke in the parliament supporting electoral reform, I noted my genuine delight in welcoming new Fraser residents onto the electoral roll. I spoke of how each month it is my pleasure to send enrolment forms and letters to potential and newly enrolled electors. But if we are to ensure we increase democratic participation we must also make it easier to vote. For the Labor Party, franchise and participation have always been important. Having as many votes as possible count in the next federal election matters to me and that is why this bill is important.

Since the introduction of compulsory voting in 1924, Australian citizens have had a responsibility to elect their state and federal representatives. Voting powerfully symbolises what it is to be part of the democratic process. While the majority of voters still cast their vote in person at a polling booth, more and more are choosing to cast a postal vote. That means we need to make it easier to apply for and process postal votes. In the 2010 election there were over 800,000 postal votes cast. That is in comparison with around 700,000 in 2007; 600,000 in 2004; and about 100,000 in 2001. The same trend can be seen in my electorate of Fraser. The number of postal votes increased by almost 60 per cent since the 2001 election from 3,293 in 2001 to 5,176 in 2010. As more people choose the option of postal voting, we need a more effective and efficient system for processing postal votes. We need to make sure that postal voting is a more accessible option and has minimal hassle while ensuring the safeguards that are critical in the electoral process.

The progressive side of politics has a long history of wanting to expand the franchise to ensure as many people as possible can vote and that voting is as straightforward as possible. In his book Australia's Democracy: a Short History, John Hirst wrote, 'In 1850 Australia did not look like a country that would rapidly become democratic.' He notes that there was a small band of dedicated democrats who called for a widening of the franchise—albeit that they were then looking at male franchise. He notes that in the space of just six years, 1850 to 1856, the share of adult males in Sydney who could vote rose from 34 per cent to 95 per cent. So in this six-year period in the middle of the 19th century we saw the franchise go from just a third of men to essentially all men.

Amusingly, Hirst then relates William Wentworth's reaction to the widening of the male franchise. A member of the New South Wales parliament, Wentworth was a conservative landowner who, along with his friends, was appalled at the success of democrats in expanding the franchise. When he ran for the seat of Sydney after a new rule had been introduced where you needed £10 of property to vote, Hirst writes: ‘he boldly told the new ten pound that he would never have given them the vote’. He only just scraped in. There were three members elected for Sydney and he came third.

The conservative aversion to expanding the franchise in the 19th century is something that we have sadly seen at other moments in history. We saw it with the Eureka Stockade, a powerful movement to which the expansion of electoral rights was central—the fight for the democratic principle of having parliament be representative of the people. And while the miners may have lost the fight on 3 December 1854, they continued to fight for the expansion of the franchise. In 1856 the Victorian parliament mandated white male suffrage. Peter Lalor went on to become the first member of the Legislative Council for the seat of Ballarat in 1855.

Thanks to those efforts, Australia led the world in expanding the franchise. Women received the vote in in Australia from 1902. Indigenous Australians gained the unqualified right to vote in federal elections in 1962. Queensland was the last jurisdiction to permit equal Indigenous voting rights in 1965.

This bill sits in that proud tradition of expanding the franchise and making it easier to vote. It amends the Commonwealth Electoral Act 1918 and the Referendum (Machinery Provisions) Act 1984 to facilitate online applications and ensure that the Electoral Commissioner may use an automated system to receive and process applications for postal votes. In my last speech on electoral reform, I spoke about improving voter participation through making it easier to be on the electoral roll. This bill takes increasing voter participation another step forward. It will ensure that the Australian Electoral Commission can use automated systems to deal with applications for postal voting as quickly as possible.

The amendments have been written not just to take account of present technology but to allow for future technological changes. Complementary amendments increase the number of nominators for an unendorsed candidate from 50 to 100 electors. There is no change to the law with respect to endorsed candidates. This amendment seeks to strike the right balance between providing the opportunity for all eligible citizens to stand for parliament while at the same time putting in place some reasonable thresholds that candidates must meet.

And that is in order to deal with the practical issues of conducting elections. As we have seen, particularly in the New South Wales upper house, if candidate numbers are unchecked then printing the New South Wales Legislative Council ballot paper in a reasonable font size is going to become a real issue. In its submission to the Joint Standing Committee on Electoral Matters, the Australian Electoral Commission noted that the 2010 New South Wales upper house ballot paper was 1,020mm wide, listing some 84 candidates. It was that size because that was the widest ballot paper the printers could manage to cut. To fit all the candidates, the font was reduced to a size that many voters found difficult to read. In one case, a candidate's surname was split over two lines.

Ultimately when you have ballot papers that are a metre across, and candidates listed in a tiny font, you end up increasing the informal voting rate. That additional complexity acts as a hurdle and ends up making it more difficult for the opinions of the electorate to be given practical effect in the parliament. So this measure puts in place reasonable requirements that a candidate must meet, and that strikes the right balance between allowing citizens to stand for parliament and minimising the complexity.

Labor believes that everyone who is eligible to vote should vote and have their vote count. If we do not have high voter participation then we are not truly representative of our electorate. That progressive tradition of supporting democratic participation is a foundational Labor value.

My electorate of Fraser was at the last election the second most populous electorate in Australia—and it is now either the most populous or the second most populous electorate. Some 94 per cent of enrolled voters in Fraser cast a ballot in 2010. But I want that number to be higher. I want to make it easier to register and lodge a postal vote in order to make sure that every voter in Fraser has the opportunity to have their voice heard–—whether that is for me or for one of my opponents, I want them to participate in the democratic process.

My electorate has a significant proportion of residents who are younger than the national average. That is a result of the many young people who move to Canberra to study at one of the great universities here—whether that is ACU, UNSW@ADFA, the University of Canberra or the Australian National University—or to work in the Australian Public Service. The changes in this bill will make voting easier for younger voters who want to be able to cast a postal vote online. A recent intern in my office, Rebecca Mann, said the suite of electoral reforms we have introduced will make it easier for her. She also pointed out that she may well be in the middle of exams when the next election comes around, and this will make it easier for her to get onto the electoral roll without stress. I would like to thank Rebecca for her work in preparing this speech and I would also like to thank Kyneton Morris, another intern in my office, for his research and comments.

Labor wants to ensure that every Australian has a say in their future and the future of their country. In June 2010 the Leader of the Opposition attempted to block legislation that would make it easier for Australians to vote by lowering the provisional age at which young Australians can register to vote. In response to this, the Member for Eden-Monaro stated:

‘I think that Tony Abbott needs to explain to the Australian people why he does not want to make it easy for them to enrol and vote in the forthcoming election.’

The Labor Party is committed to ensuring that everyone who is eligible has a say in our nation's future. For us democracy is about inclusion and having every Australian represented. We want to make sure we protect and enhance the right of Australians to put their mark on the ballot paper. We want to make it more convenient to vote and make sure that more Australians can have their voice heard.

We want all eligible voters to take their part in the 2013 election, because that will be an important election in deciding the future direction of this nation. We want to facilitate online applications, ensure that the Electoral Commissioner can use an automated system to receive and process applications for postal votes in a timely manner. We want to expand access to elections and expand the number of voices that are heard in this great democracy that I am proud to be a representative of. I commend the bill to the House.

See also my previous speech on electoral reform, which discusses similar themes.
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MySuper & Behavioural Economics

I spoke in parliament this week about the MySuper reforms, using the insights of behavioural economics to make defaults better.
Superannuation Legislation Amendment (MySuper Core Provisions) Bill, 22 August 2012

Retiring with dignity after a lifetime's effort and contribution should not be a luxury for a few. Thanks to successive Labor governments and their vision for the future to introduce, enhance and defend the Superannuation Guarantee for all Australian workers, retiring with dignity is a right for Australians. Addressing the Australian Graduate School of Management in 1991, Paul Keating said of the Superannuation Guarantee:

‘It will make Australia a more equal place, a more egalitarian place and hence a more cohesive and happier place.’

Prime Minister Keating said it was the safety net most Australians would need when they retire.

The Labor tradition of looking after Australians’ retirement savings continued at the 2010 election. At that election our government made a commitment to introduce a simple cost-effective superannuation product to replace existing default superannuation products. That flowed out of the Cooper Review and the choice architecture framework in the Cooper Review. The Cooper Review was commissioned by Senator Nick Sherry, one of the greatest champions of superannuation that the parliament has ever known, on 29 May 2009 when he was then the Minister for Superannuation and Corporate Law. The review, chaired by Jeremy Cooper, noted that all members want to make choices about their superannuation. It noted that the current assumptions that underpin the superannuation system are that all members want make choices about their superannuation and all members are interested in receiving a variety of superannuation services.

But the report noted that that was not always the case. It recommended that the government introduce a new, simple low-cost default superannuation product called MySuper for those who have chosen not to have direct engagement in their superannuation decision making. The philosophy in the early 1990s was that everyone would choose the best fund and choose the best plan within that fund. But behavioural economics has taught us that that is not always the way that people approach decision making. Most people take the default fund and the default plan.

So the focus of MySuper needed to be to make sure that defaults were good plans. By having lower fees and more efficiency, we maximise members' savings. On one estimate, the movement to MySuper products with lower fees can be the equivalent of an extra one per cent of earnings going into superannuation—that is, the philosophy of MySuper underpinned by behavioural economics. Behavioural economics has come strongly into the public policy world thanks in part to the terrific book Nudge: Improving decisions about health, wealth, and happiness by Richard Thaler and Cass Sunstein. They came up with a concept they called 'libertarian paternalism' which is based on the notion that, as Milton Friedman said, people should be free to choose. Thaler and Sunstein like to say that libertarian paternalists want to make it easy for people to go their own way.

MySuper takes away no-one's freedom. What it does is recognise that in busy lives people are often attracted to default. As the Cooper Review noted, libertarian paternalism is: ‘the idea that the outcomes experienced by inert or disengaged consumers should have inbuilt settings that most closely suit those consumers' objective needs, as assessed by the expert providers of the product or service in question’. It went on to say, importantly:

‘This does not amount to a centrally determined boilerplate option for everyone, as it must at all times have regard to the collective characteristics of the particular consumers affected, any of whom can at any time opt out if they want to take more control for themselves.’

That is the philosophy: high quality defaults but choice if you want to exercise it.

A report by the Industry Super Network called Supernomics also focused on some of the new insights flowing out of behavioural economics. That report noted that only around three per cent of members switch fund every year. It noted that the majority of superannuation consumers are passive consumers, and indeed that most members who were either not aware that they had a choice or did not exercise a choice could end up being at a disadvantage. It noted the reasons for this passivity. There is myopia—a sense of focusing on the present, not on the benefits of retirement savings that will be felt in decades to come. The problem with this is that if young workers are myopic then they are making the wrong choices at the time it matters the most. Making a bad investment choice when you are at the beginning of your career means that you miss out on benefits that will continue to accumulate later.

The Supernomics report also referred to risk aversion, a shying away by young workers from investment choices, such as shares, that have a high risk but a higher long-term return. Research indicates that people place greater weight on avoiding losses than on achieving equivalents gains. We saw that, sadly, during the global financial crisis when — at the bottom of the market — a substantial number of superannuation switchers moved from shares into cash. That meant, of course, that they locked in their losses. There is a reluctance to switch funds, even when fund switching could benefit workers in the long term.

The Cooper review noted that members who got the default superannuation option in their fund did not have adequate protection from underperformance. They could be paying for services they did not need, did not request or did not receive. The Cooper review also noted that trustees of superannuation funds were not always focused on maximising members' retirement incomes in an efficient and cost-effective way. I commend those who worked on the super review, including Treasury executive director David Gruen—who, as it turns out, is the brother of Nicholas Gruen, possibly Australia's most passionate behavioural economist.

The solution that came out of the MySuper report is a single diversified investment strategy. It can be a life-cycle approach. Life-cycle investing is the notion that investment products should be riskier at the early stage and then move towards less volatile products as the person approaches retirement. MySuper emphasises that defaults ought to be simple and that consumers ought to be able to compare on the basis of the fees that a fund charges.

For employees who have not made a choice of fund, superannuation accumulation will be paid into MySuper. But we are not taking away choice. All members will have access to the same options, benefits and facilities. For a super fund to be named in an award, it must offer a MySuper product that is reviewed by Fair Work Australia. Funds can tailor MySuper products to employers with over 500 employees to meet the needs of their particular workplace. MySuper trustees must articulate the targeted rate of return over a rolling 10-year period, with the level of risk determined appropriate for its MySuper members. Fees are limited to the following: an administration fee; an investment fee, including a performance based fee; another exit fee, which must be limited to cost recovery; buy and sell spreads, again limited to cost recovery; and a switching fee, also limited to cost recovery. All the fees charged for a MySuper product must be able to be included under those standard descriptions. That will help members, employers and market analysts make direct comparisons—apples with apples—of MySuper products based on the actual fees paid.

The bill requires that in any performance based fee arrangement with a fund manager in respect to assets of the MySuper product, trustees have to include measurement of performance on an after-tax basis, a reduced base fee that reflects the potential gains the investment manager receives from performance based fees, and provisions for the adjustment of the performance based fee to recoup underperformance.

Trustees wanting to offer a MySuper product will be required to hold a specific licence issued by APRA. All APRA regulated funds will be required to offer life and total and permanent disability cover on an opt-out basis, and would consult on implementation. Trustees must at a minimum allow members to opt-out of life and total and permanent disability insurance within 90 days of the member joining a fund, or on each anniversary of the member joining the fund. That is important because we do know of instances in which members are being both under-insured and on occasion over-insured, by being defaulted into insurance options that they would not choose if they were not the default products. Members must be able to increase or decrease their insurance cover without having to leave MySuper product. In this sense we have unbundled the insurance and retirement adequacy components of superannuation, ensuring that individuals can make a choice of the right investment strategies and the right insurance options for them.

Those opposite, as has traditionally been the case, have taken a raft of different positions on superannuation. When Labor introduced universal superannuation in the early 1990, the opposition said it would be a bust to business. It said that businesses would never be able to sustain the cost of superannuation. That was wrong then and the coalition's opposition to superannuation is again wrong now.

The history of superannuation is that Labor universalises it and the coalition are unwilling to extend those increases. In 1996 we saw the Howard government block the planned increase of the superannuation contributions. On 23 March 2012 we saw the Leader of the Opposition say, 'Well, we strongly oppose the superannuation increase. We have always as a coalition been against compulsory superannuation increases.' The Leader of the Opposition now appears to be saying that if the coalition were to come to office they would continue the increases in superannuation. It is quite unclear what those opposite think about superannuation. But they ought to think first and foremost about the interests of retirement adequacy for Australians. Those opposite, as is the case for all members of this place elected after 2004, receive 15 per cent superannuation contributions. So, 15 per cent is appropriate for them, but somehow they believe that for their constituents nine per cent will do. We do not believe that. We believe that 12 per cent of earnings ought to be the bare minimum that Australians put into superannuation, because that is appropriate to maintain retirement adequacy.

In his opposition to compulsory superannuation, the Leader of the Opposition faces the challenge that he intends to repeal the mining tax, which funds the increase in compulsory superannuation. Yes, superannuation comes from earnings, but because it is taxed concessionally each additional percentage point of universal superannuation costs the government about a billion dollars. So, increasing compulsory superannuation does have a budgetary impact through forgone taxation, and those opposite are going to have to identify where the money is coming from if they support the increase from nine to 12 per cent, as they should.

We on this side of the House are proud to be the party of superannuation. We are proud to be the party that will see the superannuation system grow to $6 trillion by 2035. And in these reforms we are recognising the new insights in behavioural economics, which demonstrate that defaults must be great because most Australians do not spend a great deal of time focusing on their choice of fund and their choice of investment strategy.

We need higher superannuation contribution rates, from nine to 12 per cent, but, complementing that, we need a MySuper product, flowing from the work of the Cooper review, that ensures Australians get the best deal, have the lowest fees and the highest returns, because that is how we will ensure a dignified retirement.
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Local NDIS Forum with Jan McLucas and Gai Brodtmann

Today, Gai Brodtmann and I held an NDIS forum at the Griffin Centre with Parliamentary Secretary Jan McLucas. Jan had three 'asks' of attendees: sign up at www.everyaustraliancounts.com.au, join the conversation at www.ndis.gov.au, and talk with your friends about the NDIS.

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Pollie Panel with Gary Humphries

On ABC 666 Pollie Panel, I spoke with presenter Ross Solly and Liberal Senator Gary Humphries about muckraking in politics and the half-billion of planned investment in the resource sector. Podcast here.
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Increasing Australia's humanitarian intake

I recently did a survey on increasing Australia's humanitarian intake. The response was overwhelmingly in favour of Australia lifting the number of refugees we take, with 82% supporting an increase.

For responses from my electorate of Fraser (taken from postcodes supplied), this was even more encouraging with 86% in favour.

Canberrans might be interested to know the geographic breakdown of the responses. 90% of respondents from the Inner North were in favour of an increase, with 88% in Gungahlin and 80% in Belconnen / West Belconnen. There were 327 total respondents with 211 providing postcodes in the Fraser electorate.

For responses either from outside my electorate or not supplying a postcode, 76% supported an increase.

I was pleased to see today that the Prime Minister and Minister for Immigration and Citizenship announced that Australia will accept 20 000 refugees each year and that we’re accepting 400 refugees from Indonesia immediately.

I am now a Welcome to Australia ambassador and look forward to welcoming more refugees to my electorate and to Australia each year.

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Forum to discuss a National Disability Insurance Scheme

My colleague, Member for Canberra Gai Brodtmann, and I are hosting Senator the Hon Jan McLucas, Parliamentary Secretary for Disability and Carers, tomorrow afternoon to talk about a National Disability Insurance Scheme.

The forum is at the Griffin Centre in Canberra City between 2pm and 4pm. Tea and coffee will be provided.

The forum is open to the general public, so if you wanted to find out more about what a National Disability Insurance Scheme might look like, I encourage you to come along.

Please RSVP to me by 12 noon tomorrow on Andrew.Leigh.MP {at} aph.gov.au
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Indigenous Jobs in the Public Service

I spoke today about Indigenous jobs in the public service.
Indigenous Public Service Jobs, 22 August 2012

As a member representing an electorate with a large number of public servants, I rise to speak about the employment of Indigenous Australians in the Australian Public Service. The government has set a target to increase Aboriginal and Torres Strait Islander employment in the APS from 2.2 per cent in 2010 to 2.7 per cent by 2015. We are working through COAG to make sure similar goals are met in the states and territories. Disturbingly, the State of the Service Report 2010-11 noted a decrease in Indigenous employees from 3,383 to 3,236 in that financial year—a four per cent drop. That was the first fall in the number of Indigenous public servants since 2008.

I commend the Attorney-General's Department, the Department of Immigration and Citizenship, the Department of Health and Ageing, the Bureau of Meteorology and Screen Australia for their specific commitments to the COAG target of 2.7 per cent for Indigenous employment. The Department of Human Services also commits to a target for attracting and retaining employees who identify as a member of a diverse group.

This issue received some attention at the recent ACT Labor Party conference, where delegates called on the government to provide details on progress towards the COAG targets, to ensure greater opportunities for training and development and to ensure career pathways are provided for new and existing Indigenous employees. It is also vital that pay issues be addressed and that opportunities be provided in mainstream agencies and in nonmetropolitan and remote areas.

I have written to all ministers seeking their advice on how we might together work to meet the 2015 target. I would like to thank the Community and Public Sector Union and particularly Elizabeth Hay for their work in supporting Indigenous employment in the Australian Public Service. The National Aboriginal and Torres Strait Islander Cabinet gives Aboriginal and Torres Strait Islander members, delegates and activists a strong voice in the CPSU. NATSIC is about making sure that Indigenous people have a real say in the union's agenda. In the ACT, I particularly acknowledge the work of Duncan Smith, who is a tireless advocate for the needs of Indigenous Australians. We need more Duncan Smiths in the ACT.

Indigenous Australians have made an extraordinary contribution Australia, and I hope that they will form an even larger proportion of the public service in coming years.
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Homeless Connect Day

I spoke in parliament today about Homeless Connect Day.
Homeless Connect Day, 9 August 2012

On 9 August it was my pleasure to attend Homeless Connect Day at Pilgrim House on Northbourne Avenue. Homeless Connect Day is a one-day event for homeless people, or those at risk of homelessness, to access services, support and essentials. On the day there was a range of services available to people who were homeless or at risk of homelessness: free food, clothing, haircuts, massage, personal care packs, health advice and even entertainment. I was grateful to see the folks from Canberra FM there as well, drawing public attention to one of the real challenges that Australia faces.

In Australia it is estimated that over 100,000 people are homeless on any given night. In Canberra alone that is estimated to be around 1,300 people. Homeless Connect allowed those people who were homeless to recognise that they were not alone in their plight. The theme of Homeless Persons Week is 'Homing in on the real issues of homelessness', and I pay tribute to those who were there—social workers, community sector workers, people providing entertainment and health care services—assisting on one of Australia's challenges. I pay tribute to Minister Macklin who is here in the chamber for her hard work along with the team in reducing the rate of homelessness in Australia.
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More talk of Canberra job cuts from the Coalition

It was disappointing yet unsurprising to see the Liberals talking about job cuts in Canberra again today. My Federal Labor colleagues and I put out the below media statement about this.

22 August 2012

Gai Brodtmann MP
Federal Member for Canberra

Andrew Leigh MP
Federal Member for Fraser

Senator Kate Lundy
Senator for the Australian Capital Territory


In an article in today’s Australian Financial Review, Shadow Finance Minister Andrew Robb revealed Coalition plans to “outsource” key programs to state bureaucracies.

The Coalition announced 12,000 local job cuts at the last election. Since then, we’ve seen that number rise to 20,000 job cuts.

This is nothing new for the Coalition. Before the 1996 election, the Coalition said they would cut 2500 jobs. After winning office, more than 30,000 public servants lost their jobs.

The Opposition’s new policy, revealed in the AFR, will see the Commonwealth vacating the field in important areas such as health and education.

Commonwealth public servants provide important advice on big issues affecting our whole nation. Outsourcing this advice will see an increase in confusion for businesses and families with different systems in different states.

Slashing public service jobs in Canberra will affect the entire Canberra economy. In 1996-97, the impact of the Howard Government’s job cuts was to:

• Slash $25,000 from the price of the average Canberra home (in an era when house prices were much lower than they are today);
• Increase the ACT unemployment rate by 1 percentage point; and
• Increase personal bankruptcies in the ACT by around 100 bankruptcies per year.

Unlike the Liberals, we believe that a strong public service is essential to support the community and deliver critical government programs.
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Talking with Alan Jones about Peter Norman

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.