Andrew Leigh

I spoke in parliament yesterday about the 'Big Bang Ballers' program, working with disadvantaged youth in Australia and overseas.

Big Bang Ballers, 16 August 2012

Last Saturday night it was my pleasure to attend the Gunners versus Bandits game at the ACT Basketball Centre, part of the South East Australian Basketball League competition. I was invited there as a guest of Tony Jackson, the CEO of Basketball ACT, because it was a special evening with all proceeds going to the Big Bang Ballers campaign to use basketball to fight youth poverty and social disadvantage around the world. In Afghanistan the Big Bang Ballers are currently providing basketball courts to young Afghani girls who until recently could not even consider sport, let alone play it.

I was speaking there at the game with Mark White, the coach of the Gunners, and he talked about the concept of shorter basketball players needing to ‘play above their height’. To me it is a great metaphor for the way in which all of us should be trying to play a little above our height. I pay tribute to Pierre Johannessen, the CEO of the Big Bang Ballers, for all that he has done not just in developing countries but also in Australia. Natalie Porter, the former Olympian, was assisting a group of young Canberrans in Night Hoops. Night Hoops is aimed at at-risk Canberrans, some of them recent migrants from Sudan, providing them with an opportunity to learn valuable basketball skills and leadership skills and to get a good meal at the same time.

Keiran Gilbert hosted Josh Frydenberg and me on the Sky AM Agenda program this morning. We discussed the Gillard Government's approach to asylum seekers and preventing further tragic drownings.

http://www.youtube.com/embed/BqzzGAxV1x4

I spoke in parliament yesterday about the late Robert Hughes. Others had refelcted on his life more broadly, so I focused particularly on his contribution to art criticism. (Delayed by another event, I nearly didn't make it into the chamber on time, since I was running with American Visions in one hand.)

Robert Hughes, 15 August 2012

Robert Hughes's life is a difficult one to sum up: 74 years, 15 books, multiple TV series, three wives. The member for Wentworth yesterday in the chamber spoke on Robert Hughes's passing with wonderful eloquence, as he so often does. I suggested to him afterwards we should create a post of parliamentary eulogist and make it his in permanence.

So many aspects of Robert Hughes's life could attract mention today: The Fatal Shore, inspired by EP Thompson's The Making of the English Working Class, or his tome on Barcelona, which was an extraordinary piece of work. But I want to focus today on his role as an art critic—I think the leading art critic of a generation—because it was in that capacity that he so much inspired me. It has been noted that Robert Hughes became an art critic by accident. In 1958 he was working as a cartoonist in Sydney for the fortnightly magazine the Observer, then edited by Donald Horne. He recounted that Horne had sacked the magazine's art critic and snapped at Hughes, 'You're the cartoonist—you ought to know something about art.' And so a career began.

Robert Hughes was himself an artist, not of the ranks of those whose work he analysed but enough to know something of the craft. In an interview with Peter Craven, Craven described Robert Hughes's own creative work in the following words:

'He's pleased that he knows enough about making things to appreciate greatness when he sees it, and to understand the sheer difficulty of creating something that looks simple.'

He left Australia in the 1960s. His friend the writer Alan Moorehead counselled: 'If you stay here another 10 years, Australia will still be a very interesting place, but you will have become a bore, a village explainer.' So off he headed, first to Europe and then to the United States.

His tongue could be sharp. American Visions, I think possibly his greatest work, contains some examples of where he could take on those who displeased him. In writing of the work of Barnett Newman, he said the following:

'At one point Newman said, with a straight face, 'I thought our quarrel was with Michelangelo.''

Hughes's deadpan reply:

'It was not a quarrel anyone could win with a stripe.'

Speaking of Julian Schnabel, one of his great nemeses, Hughes described him as:

‘a roundly self-admiring painter who once compared himself to Duccio, Giotto and van Gogh. Not very close, and no cigar. Schnabel was a perfect painter for a culture of replays.’

But for those whose work he loved he wrote in glowing terms. Writing of Lucian Freud, he said:

'Every inch of the surface has to be won, must be argued through, bears the traces of curiosity and inquisition — above all, takes nothing for granted and demands active engagement from the viewer as its right.'

Of Goya he wrote his genius lay in his 'vast breadth of curiosity about the human animal and the depth of his appalled sympathy for it'. Of Caravaggio he wrote:

'Caravaggio was one of the hinges of Art History. There was Art before him, and Art after him, but they were not the same.'

Sebastian Smee, the Pulitzer Prize winning expatriate Australian who is now the art critic for the Boston Globe and perhaps one of those who will pick up Hughes's mantle, wrote:

'Robert Hughes, more than any other critic, played an enormous role in converting people to take pleasure in it and to be discerning about it, rather than to feel that sense of suspicion.'

Sebastian Smee pointed out that Hughes helped to create a sense of enjoyment of modern art, to make many of us feel that we could approach it and like it and, most importantly, not like it.

As the National Gallery of Australia director, Ron Radford, said:

'I had known Robert Hughes since the mid-70s and will miss his eloquent, thought-provoking writing and commentary on Australian art in a national and international context.'

He touched so many Australians through his writing. His great work, particularly on the fine arts, will live on for decades and perhaps centuries to come.

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