Andrew Leigh

I was astounded today when the opposition voted against my motion recognising the strong Australian economy and requesting we put facts before fear in economic debates.

My media release on it is as follows:

Dr Andrew Leigh MP
Member for Fraser

MEDIA RELEASE

16 August 2012

Tony Abbott opposed to using facts in economic debates

The House of Representatives today passed a Private Member’s Motion moved by Member for Fraser, Dr Andrew Leigh. The Private Member’s Motion recognised the strength of the Australian economy and called upon all Members to approach economic debates with facts rather than fear.

Tony Abbott and the opposition voted against the motion.

“It appears that Tony Abbott and the opposition are either opposed to the facts of the strong Australian economy, or alternatively they’re opposed to using facts in economic debates,” said Dr Leigh.

“As an economist I’m astounded by the level of economic ignorance displayed by Tony Abbott and the opposition. Deliberately misleading the Australian public and our international trading partners by refusing to use facts in a debate is reckless and dangerous.”

ENDS

Text of Private Member’s Motion:

A Strong Australian Economy

I move: That this House:
(1) notes that:
(a) by historical standards, unemployment, inflation and interest rates are at very low levels;
(b) for the first time in Australian history, Australia has a AAA rating from all three major credit rating agencies;
(c) Australia’s debt levels, despite the hit to revenues from the global financial crisis, are around one tenth the level of major advanced economies;
(d) OECD Economic Outlook 91 confirms that the Australian economy will significantly outperform OECD economies as a whole over this year and next; and
(e) the IMF has said of Australia: ‘we welcome the authorities’ commitment to return to a budget surplus by 2012-13 to rebuild fiscal buffers, putting Commonwealth government finances in a stronger position’; and
(2) calls upon all Members to approach economic debates with facts rather than fear, and to put the national interest first when discussing the strong Australian economy.

Next Monday, parliament will be debating my motion to apologise to the late Peter Norman, whose courageous stance for racial equality got him blocked from competing in subsequent Olympics. Here’s the motion:

DR LEIGH: To move—That this House:

(1) recognises the extraordinary athletic achievements of the late Peter Norman, who won the silver medal in the 200 metres sprint running event at the 1968 Mexico City Olympics, in a time of 20.06 seconds, which still stands as the Australian record;

(2) acknowledges the bravery of Peter Norman in donning an Olympic Project for Human Rights badge on the podium, in solidarity with African-American athletes Tommie Smith and John Carlos, who gave the ‘black power’ salute;

(3) apologises to Peter Norman for the wrong done by Australia in failing to send him to the 1972 Munich Olympics, despite repeatedly qualifying; and

(4) belatedly recognises the powerful role that Peter Norman played in furthering racial equality.

I spoke in parliament yesterday about supermarket competition, the importance of standing on the side of consumers, and why I'm proud to be a practitioner of the 'dismal science'.

Matter of Public Importance, 15 August 2012

I rise to speak on this matter of public importance relating to supermarket competition, with a particular focus on the importance of maintaining lower prices for consumers. Much of Australia's economic history in the post-war decades is characterised by a somewhat unholy alliance across the major parties to protect producer interests at the expense of consumer interests. So much of the ‘protection all-round’ that prevailed in the 1950s and 1960s meant that Australians paid high prices and that there was less foreign investment. We were less exposed to trade. Our firms were less competitive and our consumers suffered for that. One of the great achievements of the last generation of economic policy makers, thanks to people on both sides of the House, is that we have put the consumer first.

On the issue of food prices, I want to draw the House's attention to rates of food inflation. As it turns out, the series starts in 1974, when the member for Kennedy first entered politics. I note that in that year the rate of annual food price inflation was 20 per cent, and throughout the ensuing decades it has never been that high. Rising food prices have never been a worse problem for Australia than they were at the time that the member for Kennedy began his political career as a National Party member in the Queensland parliament. Indeed, if we look over the series of figures we can see that in the last two quarters—the March 2012 and June 2012 quarters—food price inflation has been negative. This means that Australians are paying less for the same food items than they were paying a year before. We should be celebrating this fact—it is a huge win for Australian consumers. We do not only see this with food prices; the past 20 years have seen real prices for imported furniture, handbags, clothing, shoes and medical products roughly halved, and prices of computers, telephones and other electrical goods have fallen by about two-thirds. To a large extent it is the opening-up of the market that has kept prices low across the board. Inflation was 6.7 per cent in the 1950 to 1985 period; since then, it has averaged just 3.7 per cent. The rise of China has been a major dampening force on global price inflation.

The matter of public importance today looks in particular at the role of supermarket competition and its price impacts. On this question it is worth referring to the ACCC's inquiry of July 2008 into the competitiveness of retail prices for standard groceries. The report notes, as the member for Kennedy has pointed out, that Coles and Woolworths account for approximately 70 per cent of packaged grocery sales in Australia and approximately 50 per cent of fresh product sales of goods such as meat, fruit and vegetables. But the report also notes:

'There is little evidence to suggest that Coles and Woolworths have simply ‘bought out’ the competition.

'Millions of Australian consumers shop at Coles and Woolworths in preference or addition to a number of alternatives—the local independent, the specialty bread shop, the Saturday market and/or the corner shop. High concentration levels alone do not dictate the nature of competition. There are other markets internationally that are more concentrated but appear to be more competitive.'

It goes on to say:

'... ALDI has been a significant influence on Australian grocery retailing. ALDI has forced Coles and Woolworths to react by reducing prices—specifically in States and localities where ALDI is present. Even if a customer does not shop at ALDI, they obtain significant benefits from having an ALDI in their local area or state, as the Coles and Woolworths stores price more keenly.'

ALDI has now opened more than 250 stores across Australia. Costco has committed $140 million to ramp up its Australian operations. The government recognises that competition in the grocery retail sector is absolutely critical to making sure that Australians have a good range and cheap prices when they shop in their stores. It is important to constantly return to the facts when we are speaking about prices, not just of food and groceries but also of items across the board. Those opposite have been banging the cost-of-living drum but are unwilling to level with the Australian people about the fact that the inflation rate is the lowest it has been in the decade.

I am pleased in my own electorate to have opened the Bonner Woolworths, which is one of the smallest stores in Australia, and the Canberra Airport Woolworths, which is one of the largest stores in Australia. The Canberra Airport Woolworths will go head-to-head with Costco. It will have some of the cheapest prices available to consumers, and that means that Canberra families will find their household dollar going further. In Dickson, where there is now a Woolworths, there will soon be an ALDI, and the ACT government has opened up a space for a third supermarket to be determined in February next year.

We are introducing additional measures to bring more competition to the grocery retailing industry and to reduce barriers to entry; we are extending the timeframe for the development of vacant commercial land from 12 months to five years to bring new competitors into the market; we are clarifying the predatory pricing and misuse of market power provisions in the Competition and Consumer Act 2010; we are clarifying the operations of the mergers and acquisitions provisions in the act on creeping acquisitions; and we are introducing a mandatory, nationally-consistent unit pricing regime, because we recognise that unit pricing allows Australians to shop around.

There are two schools of thought in this parliament on economic policy. There are those who largely support the market-oriented, liberalising economic reforms of past decades, and there are those who are willing to go for the populist grab every chance they get. When the member for Kennedy left the National Party in 2001, it was the National Party of Tim Fischer and Mark Vaile, which was committed to these liberalising market reforms. We now see a struggle for the soul of the National Party, and frankly I think that the National Party is coming back after the member for Kennedy. We hear quotes from Senator Joyce that, for example, the carbon price would raise the cost of a leg of lamb to $100. This is the same Senator Joyce who gets his millions and billions mixed up; the same Senator Joyce who, as the member for Blair has pointed out, is in direct contradiction of the Leader of The Nationals on the issue of comparing farm-gate and retail prices for major grocery items.

We also see a struggle for the soul of the National Party in the current debate over foreign investment. I will be clear: I support foreign investment. It increases the number of jobs and increases wages in the Australian agricultural sector. I pay tribute to some of those opposite, who have been willing to be very clear about the facts in this debate. Former Treasurer Costello even has an opinion piece in the Sydney Morning Herald today making the case for foreign investment.

If all Australia's foreign investors were to pull out tomorrow, we would lose one in eight jobs—one in eight workers are directly employed by a foreign-owned firm.

So it is important to realise the fire the coalition are playing with as the Nationals return to the party of economic populism, rather than being the party of national interest as they were under Mark Vaile and Tim Fisher. The Leader of the Opposition seems to be flirting with the same tendencies. He said:

'I have never been as excited about economics as some of my colleagues; you know, I find economics is not for nothing known as the dismal science.'

Let me be clear why economics is known as ‘the dismal science’. The ‘dismal science’ was the tag that Thomas Carlyle gave to economics because it held what he thought was the ‘dismal’ notion of racial equality. Frankly, I am happy to hold to the notion of racial equality, I am happy to be a practitioner of the ‘dismal science’ and I am happy to be standing on the side of consumers today.

More on Labor's tradition of supporting consumers here.

A couple of interesting pieces in the press recently on Labor futures:

• Dennis Altman in Inside Story


• Nick Bryant in the Global Mail

I spoke in parliament yesterday about a valuable roundtable on boosting innovation.

Innovation Roundtable, 14 August 2012

This morning it was my pleasure to attend a roundtable discussion at Government House on the topic 'A National Conversation on Capturing the Benefits of Basic Research in Australia'. The event was organised by recent Nobel Laureate Brian Schmidt and moderated by Ken Henry. It operated under the Chatham House Rule so I will not list all 26 participants, but they included heads of research bodies, senior government officials, business leaders and the Governor-General herself. The very thoughtful Senator Arthur Sinodinos represented the coalition.

The discussion occurred in a context where the government is thinking hard about innovation and has commissioned a number of important reports. We are also making record levels of investment. Only yesterday I represented the Minister for Health when opening stage 3 of the John Curtin School of Medical Research, which will house a new neuroscience wing. Innovation is an important priority for the government. Australia's gross spending on R&D as a share of GDP is at about the OECD average, but commercialisation has long been recognised as a challenge. If we are to boost traditionally sluggish productivity growth rates, one way is to increase innovation.

Australia has had commercialisation successes. CSIRO developed fast wireless, extended wear contact lenses and GM cotton strains that are insecticide resistant and herbicide tolerant and are now used in 95 per cent of the Australian market. In each of these cases there was a clear focus on the market and there was an international vision from the outset. There are other elements that separate these case studies. In the case of wi-fi, the CSIRO was unable to get industry buy-in for much of the research phase and patented their work in order to get investors on board. There is also a certain degree of serendipity, even in the commercialisation stage. It is said that in the case of extended wear contact lenses the optometrists only got talking to the polymer chemists when they sat next to one another at a conference dinner.

One of the participants described what was called a 'valley of death' in commercialising innovations. The notion was that an innovator often needs to pay the cost of patenting before they are able to attract external investment. An important part of boosting innovation is encouraging interactions—interactions across institutions, across different sectors and often within the same institution. It can be that the brilliant bench scientist is not going to be the one who works an innovation through to the commercialisation phase. Taking an innovation to market can take 20 to 25 years, so teaming great scientists with great appliers can be valuable.

The Productivity Commission has argued that there are two strong rationales for public funding of science and innovation. One is that better funded R&D is important for innovation in government functions, such as health, education and environmental goods. The other is that there are innovation spillovers, which are not captured by private returns. As one participant pointed out, we also need to remember that the benefits of basic research go well beyond the commercial spinoffs. There is a large consumer surplus even if we do not get the producer surplus.

Among the ideas mentioned were the valuable role that the medical model plays, in which patients talk to clinicians who are also themselves researchers. Innovation in the medical space does not just show up in commercialisation; it can show up in better medical outcomes, such as the supine positioning of infants to reduce SIDS. A participant suggested that perhaps we ought to foster more innovation in the defence sector, perhaps learning from the US DARPA model. Another suggestion was that there ought to be more funding of researchers to reach specified targets, thinking there about the examples of the prepurchase of malaria vaccines or the Netflix prize. It was suggested that we might encourage more international collaboration through the ARC and the NHMRC working more closely with their New Zealand counterparts. Consideration of the right level of IP to give to university researchers is appropriate, too.

We need to make sure innovation has a global mindset—the Southern Cross Venture Partners model is a valuable one, and the Israeli perspective is also useful in building Australia into a start-up nation. It was an important discussion, and I thank Professor Schmidt for facilitating it. I hope it will feed into the good work already being done by the government on innovation.

The long tail of academic publishing means that two years after leaving my professorial post at ANU, I'm still having pieces appear in the journals. In case it's of interest, here are the handful of publications that have come out in 2012.

1. ‘Does Racial and Ethnic Discrimination Vary Across Minority Groups? Evidence From a Field Experiment’ (with Alison Booth and Elena Varganova) (2012) Oxford Bulletin of Economics and Statistics


2. ‘Bargaining Over Labor: Do Patients Have Any Power?’ (with Joshua Gans) (2012) Economic Record


3. 'How Much Did the 2009 Australian Fiscal Stimulus Boost Demand? Evidence from Household-Reported Spending Effects', B.E. Journal of Macroeconomics


4. ‘How Partisan is the Press? Multiple Measures of Media Slant’ (with Joshua Gans) (2012) Economic Record


5. ‘Teacher Pay and Teacher Aptitude’ (2012) Economics of Education Review


6. ‘The Economics and Politics of Teacher Merit Pay’ (2012), CESifo Economic Studies (forthcoming)


7. ‘Intergenerational Income Mobility in Urban China’ (with Cathy Gong and Xin Meng) (2012) Review of Income and Wealth (forthcoming)


8. ‘Effects of Temporary In-Work Benefits for Welfare Recipients: Examination of the Australian Working Credit Programme’ (with Roger Wilkins) (2012), Fiscal Studies (forthcoming)
   

All my academic work - including many replication datasets - is available at www.andrewleigh.org.

I talked politics and social media with Thomas Tudehope at the Centre for Independent Studies last week. The video is now up if you want to check it out.

http://www.youtube.com/embed/AXaPEl0X9qU

I have an opinion piece in today's National Times on immigration and the mining boom: two of the intersecting challenges that Australia is going to be wrestling with over coming decades.

Boom times need not be a bust, National Times, 9 August 2012

Australia's resource boom is such a colossal shock that it can be hard to get your head around its many impacts. Try these facts, for example. In Moranbah (Qld), the average house price over the past year has risen from $459,000 to $730,000. Hundreds of Australians now work as fly-in, fly-out workers, including some who have chosen to commute from Bali. The cost of developing the Gorgon gas project will be $43 billion – about the GDP of Lebanon. Historically, Western Australia has had a similar level of inequality to other states. Now, it's the most unequal jurisdiction in the nation.

With some of my Labor colleagues, I've been spending time recently working to better understand the diverse impacts of the mining boom, and thinking about how best to spread the benefits across society. We've spoken with mining firms and construction companies, unions and social welfare groups, discussing both the upsides and the challenges.

Some current concerns mirror those from the gold rushes. In 1851, Tasmania's governor was concerned that so many labourers were leaving his state to work in the mines that there wouldn't be enough people to work on the farms. In 1852, Victoria's governor lamented that "the most extravagant rent is paid for the most indifferent accommodation". And while the Gillard government has had to fight for the Minerals Resource Rent Tax, the debate looks tame alongside the tax conflict that led to the Eureka Stockade.

Immigration was also a hot topic in the 1850s and 1860s, with sometimes shocking racism directed towards Chinese migrants (culminating in the brutal Lambing Flat Riots). Today we have a non-discriminatory migration policy, but the challenge remains of how to make sure that there are enough people to get the job done, while not displacing local workers.

One way that this can occur is through temporary migration – particularly the 457 visa, which allows skilled workers to stay for up to four years. In 2010, my colleague Gary Gray chaired a committee that recommended allowing mega projects a guarantee of a certain number of temporary visas, in exchange for commitments to local employment and training. These guarantees, known as Enterprise Migration Agreements (EMAs), have generated plenty of political controversy over recent months. But judging by our consultations, most people accept that EMAs are going to be one way of making certain that major projects are delivered on time.

Indeed, once you speak with those who are directly involved, the simple dichotomy of "foreigners versus locals" quickly disappears. If a resource project cannot get off the ground without 1700 temporary overseas workers, then the jobs of the 6000 Australians who will work on that project depend on overseas migration.

Temporary migration is also an important way of transferring skills and remittances to people in developing nations. Harvard economist Dani Rodrik has argued that well-managed guest worker programs are as important for helping people in low-income nations as trade and aid. While it's vital to ensure that these programs don't undercut Australian wages and conditions, it's also worth recognising the benefits to a poor nation of having one of its engineers work for a few years in Australia before returning home.

At a time of sky-high minerals prices, companies and policymakers need to make sure that as many Australians as possible are getting a slice of the action. The young mining engineer sitting next to me on the flight from Perth to Brisbane sounded like he was enjoying his six-figure salary and the chance to use the skills he'd learnt at university. But he also told me the story of friends in his home town of Melbourne who had struggled to break into the industry. We need to do more to make mining jobs accessible to Australians in all parts of the country (for example, through job roadshows in areas of higher unemployment).

It's also vital to train the next generation. Because it's so capital-intensive, mining has typically had relatively few openings for unskilled workers. But while not everyone can drive a 300-tonne mining truck straight away, there are many opportunities for providing training and apprenticeships to people working in the mining sector. Over coming decades, we'll move from a high-price mining industry to a high-volume sector.

The effects of the mining boom on housing and employment, migration and taxation are here to stay. But by getting the policy settings right, we can ensure that the benefits of the mining boom really do spread to every corner of the nation.

Andrew Leigh is the federal member for Fraser and deputy chairman of the federal Labor Party's Spreading the Benefits of the Mining Boom subcommittee. These views are his own.

My Chronicle column this month is on volunteering, telling the tale of a Canberran who got active in her local community.

Volunteering can have a snowball effect, The Chronicle, August 2012

One of my passions in public life is revitalising Australia’s civic culture. Over the past generation, Australians have become more disconnected from one another. We’re less likely to be active members of a community group, and less likely to play an organised sport. Churches, unions and political parties are losing members. Surveys show that we have fewer close friends, and are less likely to know our neighbours.

That’s why it’s great to see individuals and organisations that are bucking the trend, and becoming more engaged. Recently, 27 year-old Julianne Livingston told me the story of how she had become more connected. Growing up in a relatively introverted household, Julianne wasn’t particularly civic-minded as a teenager, but she told me that in her mid-twenties, she had ‘began to long for a stronger sense of genuine connectedness and trust within my community’.

Over the past couple of years, Julianne has undergone her own civic renaissance. She joined the public speaking club Rostrum, has volunteered to help animals, joined her union, and has committed to donating blood regularly. She plans on holding a street party, and writes to MPs that she agrees or disagrees with.  After I gave a speech about building a stronger community, Julianne wrote to me: ‘Thank you for reminding me how important, and easy, it is to strengthen my civic connectedness.’  I expect Julianne’s next message will take issue with something I’ve said in parliament.

Civic activity fits into busy lives. For example, if you volunteer with friends, you can catch up while helping a good cause.

If this sounds overly virtuous, you’re getting the wrong picture. Julianne told me that life is more fun when you’re involved in local organisations. As a university student, she said, ‘I think I was a bit more self-centred’. Now, she said, ‘I feel more empowered. So when there’s an issue that angers me, I feel like I can shape it, rather than complaining about it.’

When Julianne sees something on the news she disagrees with, she fires off an email. What’s more, she encourages others to do the same. Her volunteering has put her in contact with a more diverse range of people, in terms of age, ethnicity and social background. As a result of volunteering, Julianne finds that she is better able to appreciate the different ways that her workmates do their job.

In the last Australian Bureau of Statistics survey that asked volunteers why they gave their time, the number one reason was that someone asked them to volunteer. For every person who volunteers because of an advertisement or a media article (like this one!), seven people volunteer because of a personal request.

Julianne now finds herself encouraging friends and workmates to volunteer – a positive snowballing effect. It’s a great reminder of the fact that a civic renaissance in Australia can’t be driven by government. All of us can be a part of rebuilding community life, and volunteering is a great place to start.

Andrew Leigh is the federal member for Fraser, and the author of Disconnected (UNSW Press, 2010). His website is www.andrewleigh.com.

From Monday 3 September, Canberrans will be able to access both Medicare and Centrelink services in a single facility on Lonsdale Street, Braddon. The co-location will provide greater convenience, and will offer additional services such as a trial of Case Coordination for more complex job-seeking situations. I'm a big fan of trying new things to see what works in public policy and it's great to see this happening in my own electorate.

Despite a misleading scare campaign, it's clear that with the disabled parking spots out the front, the convenient location to Civic Bus Interchange and bus routes 7, 56 and 58 passing through Braddon, access to important services will still be easy.

More information is available in the media release below, or you can call my office on 6247 4396 or email me at Andrew.Leigh.MP {at} aph.gov.au if you have any additional queries.

MEDIA RELEASE

SENATOR KIM CARR

Minister for Human Services

DR ANDREW LEIGH MP

Member for Fraser7 August 2012

ONE-STOP-SHOP OPENS NEXT MONTH

Centrelink and Medicare services will work side-by-side under one roof for the convenience of Canberra residents as of Monday 3 September.

Minister for Human Services Senator Kim Carr and Dr Andrew Leigh announced that Canberra City residents would benefit from easier access to services at the one-stop-shop.

Member for Fraser, Dr Andrew Leigh welcomed the new centre to Braddon.

“Both Medicare and Centrelink services will be available from the Canberra City Service Centre at 13 Lonsdale Street, Monday to Friday,” Dr Leigh said.

“All staff and services currently provided by the Medicare Service Centre at Savings House, 8 Petrie Plaza will relocate to the new one-stop-shop on Lonsdale Street.

“Despite the scare campaign being run by Senator Humphries, the new facility is a benefit for the Canberra community. It will offer additional services such as electronic payment and Case Coordination. The disabled parking spots right out the front and location close to Civic will mean the facility is easily accessible.”



Dr Leigh said the one-stop-shop will offer new electronic payment options for Medicare services, in place of cash benefits.

“People can register their bank details to have their rebate deposited directly to their bank account the next business day. Alternatively they can swipe their debit card to receive their funds immediately,” said Dr Leigh.

“Registering your bank account details is easy and gives you the added option of claiming some benefits online or directly at your local doctor. Staff from the Civic Medicare Service Centre can advise which doctors in your area offer this facility.”

In addition to these services, Senator Kim Carr announced that the Canberra City Service Centre will also be introducing a trial of the Case Coordination program.

“Case Coordination is about finding tailored solutions for people with complex problems which are preventing them from realising their goals and aspirations, such as finding and keeping a job,” Senator Kim Carr said.

“Trained staff spend time one-on-one with people to better understand their circumstances.

“By getting the full picture of a person’s situation, staff can connect them with local community organisations that can provide the best individualised help.

Senator Kim Carr said the Government is expanding the number of locations across Australia where people can access Centrelink and Medicare services in one spot, as well as the number of sites offering the Case Coordination program.

"There are already more than 320 extra sites where both Medicare and Centrelink services can be accessed and there will be many more to come," Senator Kim Carr said.

“The Case Coordination program started in 2011 and is currently running at 20 sites.

“We intend to have 44 sites offering Case Coordination by 2014, so that more people around Australia can access this new way of providing services.”