The 1 July Tax Switch

I spoke in parliament last night about the tax switch on 1 July, which will see taxes rise for polluters and fall for many workers. I also mentioned the Leader of the Opposition's pythonesque scare campaign.
Carbon Pricing
18 June 2012

A few years ago a Prime Minister of Australia said the following:

‘Implementing an emissions trading scheme and setting a long-term goal for reducing emissions will be the most momentous economic decisions Australia will take in the next decade. … This is a great economic challenge for Australia as well as a great environmental challenge. Significantly reducing emissions will mean higher costs for businesses and households, there is no escaping that and anyone who pretends otherwise is not a serious participant in this hugely important public policy debate. It will change the entire cost structure of the economy. We must get this right; if we get this wrong it will do enormous damage to our economy, to jobs and to the economic wellbeing of ordinary Australians, especially low-income households.’

Of course Prime Minister John Howard was just reflecting conventional economic wisdom when he said this in 2007. The first emissions trading scheme blueprints were produced in the 1990s.

On 1 July 2012, Australia will undergo a significant tax reform. Taxes on polluters will rise and taxes on all workers earning less than $80,000 a year will fall. In an article in Nature Climate Change, ANU Professor Frank Jotzo discusses some of the key features of the carbon pricing regime that Australia will adopt on 1 July. Our carbon price will cover around 60 per cent of Australia's greenhouse gas emissions. It will be a fixed price for the first three years, moving to a floating emissions trading scheme in July 2015 'with a fixed number of permits sold at auction, international trading allowed and permits bankable'. There will be 'a floor price starting at $15 a tonne and a ceiling price starting at $20 a tonne above the expected international price'. The policy foresees future linking with the European Union 'ETS and other schemes, subject to mutually acceptable mitigation commitments and compatible design'.

Professor Jotzo points out:

‘… that most lower-income households will be overcompensated for the increase in living costs, whereas households and higher-income brackets will bear most of the net costs.’

He also points out that the package involves tax reform. He says this is rare in practice, much less at this scale. He says:

‘Most cap-and-trade schemes have handed back the bulk of the revenue to emitters, missing out on the efficiency benefits from tax reform.’

Australia is not missing out on those benefits.

The impact of the carbon price will be around 0.1 percentage points per year on Australia's average income growth and, according to Treasury modelling, that will still see average incomes grow strongly under carbon pricing, increasing by about 16 per cent from current levels by 2020. Delaying global action by three years adds another 20 per cent to the first year global mitigation cost.

Meanwhile, the Leader of the Opposition has been going around the country running a scare campaign. After Norsk Hydro's announcement that it would shut down its aluminium smelter at Kurri Kurri, Mr Abbott said that this was the fault of the carbon price. After assistance, the impact of a carbon price will be about a dollar on a tonne of aluminium. Meanwhile, the world aluminium price is down $1,000.

The Leader of the Nationals told parliament in May that the cost of servicing a domestic refrigerator would go up by $300 a year. As the Minister for Climate Change has pointed out, that would involve calling technicians to the house about every five days to replace the entire refrigerant gas.

Senator Joyce has said that the carbon price will cause the price of a leg of lamb to go up to $100, to which I can only say: Pull the other one, Barnaby.

The Leader of the Opposition has said the tax is forever; the compensation is just for today. He misses the fact that there will be regular increases in payments and that pensions, allowances and family benefits are automatically increased for the impact of any future increases in the carbon price because they are indexed in line with the consumer price index.

The Leader of the Opposition has spent the last 16 months telling businesses they face electricity price rises of 25 to 30 per cent but the Chairman of the ACCC, Rod Sims, has said he cannot see any circumstances in which this would happen.

Mr Abbott is saying 'it's going to be a python squeeze rather than a cobra strike', but as the Minister for Climate Change has pointed out the only thing pythonesque about this is the Leader of the Opposition's Monty Pythonesque hyperbole. He should in fact be more worried about the dead parrot that is their Direct Action plan. As the member for Wentworth pointed out on Q&A on 25 July 2010:

‘You won’t find an economist anywhere that will tell you anything other than that the most efficient and effective way to cut emissions is by putting a price on carbon.’
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Same-Sex Marriage

I spoke in parliament tonight on same-sex marriage.

Marriage Amendment Bill 2012
18 June 2012

This is the fourth occasion on which I find myself speaking on same-sex marriage. I spoke in favour of same-sex marriage in this place on 13 February of this year, the day before Valentine's Day; on 24 August last year I reported back to parliament on the views of my constituents; and on 30 July last year I spoke to the ALP ACT national conference on the issue. So I wanted to use the opportunity today to read into Hansard some of the stories of my constituents which I have received over recent months. Daniel Edmonds writes to me:

'When I was young, I asked my grandmother what her view would be on having a gay grandchild. Her response was steadfast: "I could not support it," she said. "It would be against God, and against everything I believe in." Years later, I came out to my family before leaving home to move to university (an economics degree!). My grandmother was unsteady in the knowledge that she now had a gay grandchild, something that was seen as uncommon in North Queensland at the time.

'It was years before she was able to bring it up in conversation with me. However, when she finally did, it really moved me. "I want you to know that I will always support you, and love you, no matter who you love." Ever since, she has met my partners, opened her arms to them as part of the family, and consoled me when those relationships didn't last. I am very lucky to still have my grandmother, but I only regret that in all likelihood my grandmother will not be able to attend my wedding day. I appreciate you fighting for the right of future grandmothers, grandfathers, mothers, fathers, aunts, uncles, brothers and sisters to be able to attend the wedding days of their beloved family members.'

Ian Brown wrote to me:

'My partner, Roger, and I have been together for (gulp) 40 years and were 'civilly united' in 2006 under UK law, as he holds a UK passport.

'We had our ceremony in the British consulate in Sydney—they said we could have a maximum of six guests so naturally we invited 30!

'It was one of the most exciting days of my life and I will always remember my late mother's tears of joy on our finally being 'married' after a 34 year 'engagement'!'

Another constituent, Bill, from Ainslie, wrote to tell me of his experience watching an interview with Bishop Pat Power on 7.30 last Friday. In that interview Bishop Power said:

'... where two people have that definite commitment to each other and if they make the decision before God well I would say that their blessed in that life that they're living and they do that with honour and respect for one another ... I would want those people to feel at home within the life of the church.'

Bill had written to me previously to say that he did not support same-sex marriage. He wrote to me after seeing that interview and said:

'Good Morning Andrew,

'For what it's worth and just to let you know, after hearing Bishop Power speak and having met and spoken to several Gay people myself I have now changed my mind and support Gay marriage.

'I felt that you treated my position then with respect and I appreciated that. I'm sure there are many others in the community who are wrestling with this issue and who will, with time and reflection, come to see the justice of the homosexual case.'

There are many people of faith who have taken the view that we should support same-sex marriage. Writing in the National Times, the Reverend Harry Herbert, the Executive Director of UnitingCare NSW.ACT, refers to the fact that in the latter part of the 19th century there was a campaign to remove from marriage acts the restriction that a man could not marry a sister of his deceased wife. When it was proposed by colonial governments in Australia to remove the restriction, churches led the charge against it. Reverend Herbert quotes the Reverend Adam Cairns, who at the time described the proposed change as a 'deliberate treachery to the cause of truth' and said, 'By the unchangeable word of God such marriage is incestuous.' Reverend Herbert points out that this seems to be a selective reading of the Bible because the Book of Deuteronomy in fact enjoins a man to marry his deceased wife's sister. But the broader point that the Reverend Herbert makes is that churches should not impose on nonbelievers a vision based on faith.

In his I have a dream speech, Reverend Martin Luther King spoke of the promissory note that African-Americans were bringing to be cashed. In that speech he said that America had defaulted on her promissory note as far as her citizens of colour were concerned but that they did not believe that the 'bank of justice is bankrupt'. The same principles bring gay and lesbian Australians to this House to call for us to support same-sex marriage laws. I do so with a respect for those who disagree but with a passionate belief in the justice of this cause.
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Alan Saunders

I spoke in Parliament today about the late ABC journalist Alan Saunders, a polymath of the airwaves. My radio listening will be poorer for his passing.
Alan Saunders
18 June 2012

ABC's Radio National is one of Australia's great public institutions, and I rise to speak about the late Alan Saunders, who died unexpectedly last Friday. Alan Saunders spent 25 years with Radio National. He moved to Australia in 1981 to pursue research at the Australian National University's History of Ideas unit, where he received a PhD. He received the Pascall Prize for critical writing and broadcasting in 1992. He contributed to programs about food, design and philosophy. As Amanda Armstrong put it:

‘He was equally at home talking about Plato, the role of vampires in popular culture or the history of the restaurant. He wrote like an angel, and had a deep knowledge of music, among many other areas, including philosophy, gastronomy, architecture, design and film.’

I knew Alan Saunders mostly as a listener - delighting particularly in the By Design program - although I did get a chance to speak with him on Australia Day last year about social capital and some of the ideas in Disconnected. The topics to which Alan contributed are important. Others, such as Elizabeth Farrelly and Tim Soutphommasane, discuss design and philosophy, but none so gracefully as Alan. He will be greatly missed.
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Putting Facts Before Fear in Economic Debates

I moved a private member's motion in the House of Representatives today on the strength of the Australian economy, and the need to approach economic debates with facts rather than fear (avoiding phobophobia).

A Strong Australian Economy
18 June 2012

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.

Economic reform in Australia has never been easy. In the postwar decades, the conservatives built up a tariff wall that helped make Australian industry uncompetitive and kept consumer prices high. In 1973, Gough Whitlam began the long process of breaking down Australia's tariff walls—the 25 per cent across-the-board tariff cuts.

What did those opposite do? They came into this place and attacked him for it. Ralph Hunt, Michael MacKellar, Ian Sinclair and others criticised it. Victorian Chamber of Manufactures condemned it. Yet nearly 40 years on, no-one is arguing for the tariff wall to be rebuilt.

This, in a nutshell, is the story of economic reform in Australia—argued by Labor, often opposed by the conservatives and in the end becoming a part of the Australian social fabric. The result of reform is the prosperity that Australians now enjoy: four per cent growth rates, five per cent unemployment, two per cent inflation and the RBA cash rate of 3½ per cent—economic circumstances the rest of the world would give their eye teeth for.

The Opposition

But when those opposite speak about the economy there is only one place where they seem to be willing to tell the truth and that is London. When the opposition leader was in London recently he said:

‘… Australia has serious bragging rights. Compared to most developed countries, our economic circumstances are enviable.’

When the member for North Sydney went to London he referred to the fact that Hong Kong, where debt levels are twice Australia's, had moderate government debt. He was certainly telling the truth and this clearly indicates his belief that Australia has low government debt. It is passing strange that it is only when they go to London—when they are in the 'mother country'—that those opposite can tell the truth about the Australian economy. It makes you wonder what is going through their heads. I think it could be something like, 'I did but see her passing by; I cannot tell an economic lie.'

It would be easy to spend 10 minutes talking about the protectionism of Barnaby Joyce, the DLP-style intervention of Tony Abbott, the backflips of Joe Hockey on the Parliamentary Budget Office and the opportunism around the debt ceiling. Those opposite would not know a Pigouvian tax if they tripped over one and they are the only ones in Australia who seem to think that royalties are better than a profits based tax for taxation of mining.

Back when they were introducing the GST, the coalition liked to point out that almost every OECD country had a GST. By 2015 there will be national or subnational emissions trading schemes in every OECD country but one; but now coalition MPs have changed their arguments. They say we should be lone wolves rather than running with the pack. Yet, as George Megalogenis reminds us in his most recent book, here is John Howard on 3 June 2007 promising:

‘This will be a world-class emissions trading system more comprehensive, more rigorously grounded in economics, and with better governance than anything in Europe. Implementing an emissions trading scheme and setting a long-term goal for reducing emissions will be the most momentous economic decision Australia will take in the next decade.’

Similarly, a profits based mining tax is no more a left-wing idea than a good one. It was the Hawke government which introduced the petroleum resource rent tax and a profits based tax on uranium but it was conservative Sarah Palin who put a profits based tax on petroleum when she was governor of Alaska. It was the Northern Territory conservatives who were responsible for the profits based mining taxes that have worked so well in the NT. Profits based taxes are just a smarter way of taxing mining. They make sure that when world prices rise taxpayers share in the windfall.

The current Liberal Party leadership has more in common with the DLP than the market oriented party of John Howard, Brendan Nelson and the member for Wentworth, Malcolm Turnbull. The current National Party leadership has more in common with the all-round protectionism of Black Jack McEwen than the reforming party of Tim Fischer and Mark Vaile.

Economic Challenges

But, rather than dwell on the coalition's economic illiteracy, I want to talk about the challenges and opportunities for Australia. With the rise of China, Australia sees great opportunities for our exports not only of goods but also of services. Australian finance and architecture firms are engaged with the Chinese boom. As we move to a more open economy we need to make sure that we keep investing in infrastructure and education. We know that boosting the quality and quantity of Australian education is absolutely essential as we move to a more open and technologically savvy world. We need to boost productivity. There was some reference last week to the Productivity Commission ‘to do’ list. Lost in that debate was the fact that on that list are things such as efficient water pricing, harmonised building codes and quicker processing of applications for major resource projects—all of which the government is pursuing. We also need to make sure that we help build an entrepreneurial culture. I pay tribute to Australia's latest Nobel laureate, Brian Schmidt, for his enthusiasm in making sure we develop more scientists and researchers.

Academic Research

When the Leader of the Opposition was asked why he could not find a single academic economist to back his command and control climate policy over Labor's market alternative, he responded by saying that this said something about 'the quality of Australia's economists'. Nothing could be further from the truth. Australian academic economics is as strong as it has ever been. Let me take a moment to note for the House some of the important research taking place. At the Australian National University, Centre for Applied Macroeconomic Analysis has established a ‘shadow Reserve Bank board’ to look at uncertainty around monetary policy. The shadow board comprises Paul Bloxham, Mark Crosby, Mardi Dungey, Saul Eslake, Bob Gregory, James Morley, Jeffrey Sheen, Mark Thirlwell, and Shaun Vahey. I acknowledge the work that Warwick McKibbin has done at the Australian National University to build CAMA into such a powerhouse.

At Deakin University, the Deakin Policy Forum is aimed at stimulating high quality discussion of economic policy. At Griffith University, the Economic Policy Analysis Program aims to foster economic research, particularly in the area of macroeconomics. Simon Ville and Glenn Withers are currently editing the Cambridge Economic History of Australia—because it is only by understanding your economic past that you can build good policies for the future. At the Melbourne Institute, the HILDA surveys facilitate hundreds of academic studies including work on employment, health, inequality, mobility, crime and happiness. Victoria University of Technology is hosting the Australian Conference of Economists from 9 to 12 July and I am looking forward to speaking and listening to some of the quality presentations at that conference. The ANU Crawford School's Economics and Environment Network was an important contributor to the development of an emissions trading scheme through its support for Professor Ross Garnaut. The Crawford School is also hosting a public policy week from 16 to 20 July, which will include a roundtable on the Henry tax review with James Mirrlees. The University of New South Wales has set up a Centre of Excellence in Population and Ageing Research involving economists and demographers. Monash University recently hosted a major development economics workshop supported by AusAID and involving Abijit Banerjee from MIT. Next month, Monash is hosting a joint conference with Warwick University on superannuation. The University of Queensland is running the 2012 Society for the Advancement of Economic Theory conference.


When Labor put an assets test on the pension in the early 1980s opposition leader Andrew Peacock called it an 'assault on the elderly' and promised to repeal it when the coalition won office. A decade after floating the dollar, the Leader of the Opposition still thought it was a bad idea.

For every reform, there will always be someone standing against it, but the thing is that history will forget the naysayers. History remembers the doers. Eventually, history will forget the doers and the parliamentarians who spoke for reform; it only remembers the things they did. The things we do in this place will outlast us. Reforms like an emissions trading scheme, a profits based mining tax, the National Disability Insurance Scheme, school infrastructure that will stand the test of generations and the National Broadband Network will be here long after those of us in this place have moved on.
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Aircraft Noise

I spoke today about the issue of aircraft noise, responding to a private member's motion moved by Judi Moylan.
Air Services (Aircraft Noise) Amendment Bill 2011
18 June 2012

I rise to speak on the Air Services (Aircraft Noise) Amendment Bill 2011 to highlight a range of government initiatives significantly improving aircraft noise management around Australia's airports. I do so as a member with the Canberra airport in my electorate. In rising, I acknowledge the hard work being done by the Canberra airport to minimise the impact of aircraft noise on the surrounding suburbs. As a father of two little boys who enjoy looking up in the sky and seeing aeroplanes flying overhead, I am aware that my views on aircraft are probably different from those of many of my constituents who, while aircraft noise is not as severe in Canberra as in other cities, do note the impact of aircraft. I am in ongoing conversations with Canberra airport to make sure the impact of aircraft noise on Canberrans is minimised.

In the aviation white paper of December 2009, the government set out a path for improving the management of aircraft noise around Australia's airports. As Australia's first ever comprehensive national aviation policy statement it identified solutions, the industry's current challenges, and aimed to guide its growth over the coming two decades. The white paper was the product of more than 18 months of consultations and there were hundreds of submissions made during that process. Prior to the release of the aviation white paper in 2009, the government released an issues paper in April 2008 and a green paper in December 2008.

Federal Labor has a strong record on aircraft noise. One of the important decisions we made since coming to office was to ban the older and noisy jet aircraft such as the hush-kitted Boeing 727s from Australia's major airports because they contributed to unacceptable levels of noise around those airports. The government gave effect for amendments to the aircraft noise regulations in May 2010. From 1 July 2010, no new services using those types of aircraft were allowed in Sydney, Brisbane, Melbourne, Perth, Adelaide, Hobart, Darwin, Cairns, Gold Coast, Essendon, Newcastle, Williamstown, Avalon and Canberra airports. From 1 September 2010 all existing services using those hush-kitted Boeing 727s ceased at Sydney, Brisbane, Melbourne and Perth.

The white paper also recognised airport operations have a major impact on community. Issues such as aircraft noise, traffic congestion and pressure on public transport all require cooperative management between airport operators, all levels of government and local communities. I am very much aware of that in the ACT where the federal government in the latest budget put $144 million into the Majura Parkway, an arterial road that will link up the Federal Highway to the Canberra airport thereby minimising the impact of the airport on traffic congestion. That will be the largest road building project in the ACT's history. I am pleased that the ACT government has contributed fifty-fifty to that road building project, setting, I think, a good standard for other states and territories.

There has been a positive response to the government's initiatives from the community and the aviation industry. Airservices Australia, our national air traffic services provider, and industry continue to express concerns over this private member's bill even as amended. In response to the aviation white paper, the 19 federally leased airports have established local, independently chaired Community Aviation Consultation Groups to help discuss and examine a range of community related issues, including aircraft noise. These are now underway at all 19 airports.

Local residents are represented by community members on these groups, and Airservices Australia is represented and is actively briefing all of these groups. These local groups are helping to address planning and development issues and a range of other operational matters, such as aircraft noise, allowing parties to exchange information and examine concerns raised by residents. Local residents are represented by community members on these groups, and Airservices Australia is represented on all of these groups.

Coalition members are attending these groups: the member for McPherson has attended the Gold Coast consultative group; and the member for Herbert has attended the Townsville consultative group. Of particular note for the member for Pearce, is the establishment of the Perth Community Aviation Consultation Group and the healthy engagement by a diversity of people on that committee.

Another key white paper initiative was the establishment of an Aircraft Noise Ombudsman to examine and make recommendations about noise complaint and information handling issues. The Aircraft Noise Ombudsman, respected former Deputy Commonwealth Ombudsman, Mr Ron Brent, is already making a difference. For example, the Aircraft Noise Ombudsman's 2011 report on complaints handling made 18 specific recommendations for improvement, all of which Airservices Australia is implementing. Similarly, Airservices Australia has accepted the seven recommendations made from the Aircraft Noise Ombudsman's review on noise information and complaint resolution for Perth completed in November 2011.

This government has strengthened the environmental focus of Airservices Australia. The Minister for Infrastructure and Transport has provided a strategic direction to the Airservices board last year under section 17 of the act, which requires that Airservices effectively consult with the community on any significant developments or changes to its services.

The Airservices Australia board has itself responded by setting up a dedicated board environmental subcommittee. There are also sound governance provisions in place for Airservices Australia, including corporate plan provisions requiring the board to consider the government's objectives, which include assisting the implementation of environmental initiatives in relation to aircraft noise management.

Another white paper commitment is the planning coordination forums which are underway at every major capital city passenger airport. These are the vehicle for constructive, ongoing dialogue on matters such as master plans, proposed on-airport developments, regional planning initiatives and off-airport matters.

Minimising the impact of aircraft noise is a joint responsibility of airports and local planning authorities. It matters for long-term planning in our major cities that developments do not proceed where they will lead to public safety risks or unacceptable levels of aircraft noise. That is why the government has engaged with all states and territories to develop a set of principles for safeguarding airports from inappropriate developments in surrounding areas.

We are not aiming to constrain development but to make sure that airport and government planners work together more constructively than they have in the past and, through the Community Aviation Consultation Groups, there is now an independent ombudsman to direct further difficulties to and Airservices Australia are being proactive in their engagement with communities.

It is in this context that we must question the value of the member for Pearce’s bill. Compared with ongoing government aircraft noise initiatives, the bill offers a ministerially-imposed, taxpayer-funded community adviser scheme with the potential to make community consultation more polarised. It also proposes a reopening of established safe flight paths at Perth and unwieldy and unnecessary additional consultation and reporting arrangements.

Lessons have been learnt on better consultation on complex air traffic issues, since air traffic changes were made to address emerging safety issues in 2008. These air traffic changes were approved by the Civil Aviation Safety Authority and since then Airservices Australia has carried out a post-implementation review of the changes to see where improvements can be made to assist in reducing impacts on the community.

This government has established a strong platform for better aircraft noise management and consultation arrangements at our airports.   We have put a white paper together when those opposite had over 10 years to do something. The frustrations around this bill were created a long time before we come to government, and the government's aviation white paper set out the initiatives for better consultation and better information to the community in relation to air traffic and aircraft noise management issues. This is exactly what is being delivered through the work of the Community Aviation Consultative Groups, the Aircraft Noise Ombudsman and the increased engagement of Airservices, airport and airline operators.
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Checking out the NBN Truck @ Magnet Mart Gungahlin

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ABC24 Capital Hill - 14 June 2012

With host Lyndal Curtis and Liberal Senator Gary Humphries, I spoke about the Gillard Government's creation of the world's largest network of marine parks and the issue of consistency in politics.

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More black spots to be upgraded on ACT roads

I was delighted to announce with Gai Brodtmann this week the latest round of funding for ACT Black Spots.

One of the black spots funded in this round was nominated by a member of the public, as reported in the Canberra Times.

Don't forget you can email <@> by the end of the month to nominate an ACT Black Spot.

Anthony Albanese

Minister for Infrastructure and Transport

Leader of the House

Andrew Leigh

Member for Fraser

Gai Brodtmann

Member for Canberra

More black spots to be upgraded on ACT roads

To help make Canberra roads safer, the Federal Government is investing more than $1 million to fix eight dangerous black spots identified around the ACT.

Federal Minister for Infrastructure and Transport, Anthony Albanese, Member for Fraser, Andrew Leigh and Member for Canberra, Gai Brodtmann announced the increased funding today, which will be delivered during the course of the financial year (2012-2013).

The projects approved by a panel of independent road safety experts include:

 Section of Aikman Drive between Emu Bank and Townsend Place at Belconnen: $250,000 to signalise a pedestrian crossing.

 Intersection of Macarthur Avenue, David Street and Wattle Street at Lyneham: $187,000 to improve signals and signage, and upgrade the existing light columns to frangible type.

 Intersection of Kingsford Smith Drive and Spalding Street at Melba: $130,000 to install a lane reduction.

 Section of Challis Street between Cape Street and Morphett Street at Dickson: $96,000 to install painted turn bays, lane definition and reduce speed limit to 50km/h.

 Intersection of Sandford Street and Gungahlin Drive at Mitchell: $16,000 to install signage improvements.

 Section of Monaro Highway between Hindmarsh Drive and Lanyon Drive at Hume: $225,000 to enhance speed limit signage and install new flashing warning signs before Lanyon Drive.

 Intersection of Eggleston Crescent and Melrose Drive at Chifley: $144,000 to construct a partial closure of the median, ensuring no right turn out of Eggleston Crescent.

 Intersection of Athllon Drive and Fincham Crescent at Wanniassa: $40,000 for line of sight improvements.

Since 2007, the Federal Labor Government has allocated more than $6.9 million to fix 51 black spots across the ACT.

“This investment is helping to make our roads safer for motorists, cyclists and pedestrians,” Ms Brodtmann said.

“By identifying issues on our roads and upgrading dangerous areas and intersections we can prevent accidents.”

Dr Leigh said local drivers are best placed to identify dangerous spots on ACT roads.

“The good thing about our Black Spot program is that anyone can suggest an intersection or section of road they believe should be considered for a safety upgrade.

“To qualify for inclusion under the program, a location must have suffered at least one traffic accident,” said Dr Leigh.

Mr Albanese said an independent evaluation of the Black Spot program found it prevented at least 32 fatalities and more than 1,500 serious injuries in its first three years, underscoring its effectiveness at reducing fatal car accidents.

“That’s why nationally we’ve doubled the program’s funding to half a billion dollars – more than honouring all our election commitments,” said Mr Albanese.

This year’s Federal Budget allocated $300 million to extend the Program for a further five years until 2019, building on the record $500 million Labor had previously allocated to it. This new funding can be expected to prevent more than 2,000 accidents and the loss of 14 lives a year.

To nominate a black spot, contact your local MP. Alternatively, downloaded a nomination form at

For consideration in the 2013-14 Black Spots funding round, nominations must be sent by the end of June. Work is only funded under the program if the benefits (in reduced deaths, injuries and property damage) are at least twice as large as the costs of doing the work.

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ACT to share in $42 million for smarter energy use

Yesterday my Federal Labor colleagues and I were pleased to announce funding to assist ACT community services to improve energy efficiency.

The Commonwealth funding of $3.205m will be matched by the ACT Government, resulting in over $6.4m in total. The funding will be used to deliver energy efficient lighting, lighting control systems, mechanical upgrades and smart energy management systems for 12 community facilities.

Senator Kate Lundy

ACT Senator

Gai Brodtmann MP

Member for Canberra

Andrew Leigh MP

Member for Fraser

Wednesday 13 June 2012


Community services across the ACT are set to benefit from new lighting, heating, cooling and ventilation systems as part of a $3.2 million Federal Government grant aimed at improving energy efficiency in community buildings and facilities.

ACT Senator Kate Lundy, Member for Fraser, Andrew Leigh and Member for Canberra, Gai Brodtmann said the ACT Government would receive $3.2 million as a round one recipient of the Government’s Community Energy Efficiency Program (CEEP).

A total of $42 million will be invested in 63 organisations across the country during round one to help demonstrate and encourage the adoption of improved energy management practices in local communities.

“Improving energy efficiency is a central part of the Gillard Government’s Clean Energy Future plan,” said Senator Lundy.

“This grant will help boost productivity in our economy and move Australia, and the ACT, towards a low-carbon future.”

Ms Brodtmann said the grant would help the ACT contribute to the national effort to reduce greenhouse gas emissions.

“By improving energy efficiency in community buildings, our environment here in Canberra benefits,” said Ms Brodtmann.

Dr Leigh said the Community Energy Efficiency Program will enable the ACT Government to inform the community about the benefits of smart energy use.

“This $3.2 million grant will help the ACT Government provide the community with improved services and amenities, buildings and community facilities. It will also help to lower energy use and support local industries,” said Dr Leigh.

Applications were assessed by an independent committee on the potential to improve energy efficiency, encourage and demonstrate energy management, value for money, project management and design.

The $200 million Community Energy Efficiency Program has multiple rounds. An announcement on round two will be made later this year.

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Dumb Luck - Smart Future

In the SMH News Review section today, I've done 'The Essay' - a shorter version of my McKell Institute speech.
Dumb Luck - Smart Future, Sydney Morning Herald, 9 June 2012

In the Pacific Ocean, off the west coast of South America, sit the Galapagos Islands. Although they straddle the equator, the pattern of ocean currents has a cooling effect, making them an ideal breeding ground.

The islands are volcanic – so all animal life on the Galapagos Islands came originally by flying or floating nearly 1000 kilometres from Ecuador. And yet for the species that survived, life on the Galapagos Islands was perfect. Migrating birds lucky enough to be blown off course found an environment with few natural predators. Tortoises that floated here found beaches perfectly suited to their breeding environments. Life flourished.

Looking back across Australian economic history, I am often struck by the extent to which luck has similarly played a part in our success. Politicians are sometimes reluctant to talk about luck – preferring to focus on the things we can control than those we can’t. But I think it’s still worth talking about the role that fortune has played, if only to help understand what preparations we should be making. If we don’t do that, we’re like the Galapagos tortoise, which must have thought itself the luckiest species on earth, until British sailors discovered the islands in the late-eighteenth century, and ate them in their thousands.

Over the 2¼ centuries since European settlement, there have been half a dozen strokes of luck, each of which has tangibly boosted average living standards.

The Low-Hanging Fruit

The first was plentiful land. By stealing land from Indigenous Australians, white settlers were able to be generous in handing out land to convicts and settlers alike. To them, land was so abundant that it was virtually free. Abundant land became particularly productive with Macarthur’s introduction of Merino wool: a high-value product that could be shipped back to Britain. While Europe was land-scarce in the early-1800s, Australia was labour-scarce. That meant wages were comparatively high, and created huge economic opportunities. Samuel Terry, who was transported to Australia for stealing stockings, ended his life as the richest man in Australia.

Second came plentiful gold. When Edward Hargraves announced in 1851 that he had found gold in Bathurst, it started an avalanche. Over the next decade, the population nearly tripled and our national income almost quadrupled. The Royal Exhibition Building in Melbourne, opened in 1880, was modelled on the Duomo in Florence. By the end of the nineteenth century, Australians enjoyed the highest standard of living in the world.

Third came plentiful inventions. As US economist Tyler Cowen has argued, the first half of the twentieth century saw a massive upsurge in inventions. This era saw powerful motors and mass production, cars and airplanes, telephones and radios, fridges and washing machines, typewriters and tape recorders. The combine harvester, invented in the late-nineteenth century and widely used in the early-twentieth century, caused Australian grain production to soar.

Fourth came plentiful migrants. Prior to World War II, Australia took too few migrants. But after the war ended, the floodgates opened. At its peak, in 1949, Australia accepted 185,000 migrants into a population of 7.9 million. On today’s population, that would be equivalent to a migrant inflow of more than half a million people. Well over half of these migrants were from non-English speaking countries, and many were sent to work on the Snowy Mountains scheme, which employed 10,000 men at its peak.

The fifth form of low-hanging fruit that Australia plucked was education. Even in 1946, less than 1 in 15 young Australians completed secondary school. Today, around 80 percent of young people complete secondary school, and 35 percent get a university degree. Rising education represents low-hanging fruit because education has such a large payoff. On average, another year of education boosts earnings by 10 percent.

The sixth form of low-hanging fruit is the twenty-first century mining boom. For reasons outside the control of our miners, world commodity prices have tripled over the past decade. Urbanising China and India need steel to make their skyscrapers, and Australia happens to be the world’s biggest producer of iron ore, and a major producer of coking coal. At present, we export iron ore at the rate of 4 tonnes a second.

The New Productivity Agenda

So Australia picked six pieces of low-hanging fruit: plentiful land, the Gold Rush, abundant inventions, post-war migration, mass education, and the current mining boom. These weren’t all dumb luck; we also made some good policy decisions along the way. In the post-war era, Australia benefited from far-sighted economic reforms such as the scrapping of White Australia, the HECS-funded expansion of universities, floating the dollar, tearing down the tariff wall, enterprise bargaining, and replacing a patchwork of sales taxes with a GST.

To raise living standards in the future, we need to boost productivity. When I say this to my non-economist friends, many feel the hackles rise on the back of their necks. Perhaps this is because they’ve been scarred by a bad boss who said ‘you should work smarter’ when he meant ‘you should work harder’. Yet productivity simply means being able to do tasks more effectively. In this sense, we’ve all become more productive over our lives. If you’ve worked for some time, I’ll bet you make fewer mistakes now than you did in your first year.

Today, two major productivity challenges for Australia are to keep our economy open to the world, and to boost the quality of our education system.

Australia must pursue openness because our future lies in economic engagement with the world. Australia benefits when new migrants bring their ideas; and when people born in Australia spend time overseas and then return. In terms of trade, Australia needs to continue to pursue open markets internationally. Just as we benefited by taking the rocks out of our harbours, we need to encourage others to do likewise. We also need to be honest with Australians about foreign investment. Between 1984 and 2010, the area of farmland that is foreign-owned rose from 5.9 percent to 6 percent. Rural Australians enjoy more jobs and better pay as a result of foreign investment – just as they have done since CSR helped establish our sugar industry in 1855.

The other challenge is to boost the performance of Australia’s educational institutions, particularly our schools. Chris Ryan and I found that Australian numeracy scores had failed to improve from 1964 to 2003. Since then, Australia’s scores on the international PISA test have fallen. At the same time, the academic aptitude of new teachers – relative to their classmates – has declined. One possible reason for this is that Australia chose to focus on reducing class sizes rather than attracting the best teachers. Over the past quarter-century, class sizes have been cut by about 10 percent, while teacher salaries relative to other professional salaries have also fallen by about 10 percent.

I noted earlier that increasing the quantity of education was low-hanging fruit. By contrast, increasing the quality of education is fruit that’s on a higher branch. But it’s a particularly attractive goal, since raising the quality of schooling means packing more learning into every year.

If we’re learned anything from the economics of education over the past few decades, it’s that the relationship between spending and outcomes is extremely weak. More money creates the potential for improvement, but the relationship is far from automatic. Among the reforms that the Australian Government has been pursuing are principal autonomy, Trade Training Centres to teach new skills and boost retention rates, and performance pay to reward the best teachers. I have a particular interest in performance pay, having given a keynote address at an economics of education conference in Munich, in which I summarised what we know about the economics and politics of merit pay. From that, I concluded that anyone who says that merit pay ‘always works’ or ‘never works’ hasn’t spent enough time engaging with the literature. There are clearly merit pay models that are successful, and those that are unsuccessful. The challenge is to build the evidence base to the point where we can confidently tell the difference.


Writer George Megalogenis describes populist politicians who oppose economic reform as ‘playing with the kryptonite’. Both sides of Australian politics must take our share of blame for populist policies. In the 1980s and 1990s, there were those who opposed the float of the dollar. And yet without a floating dollar acting as a shock absorber to international events, it’s easy to imagine that the Asian Financial Crisis, the US tech wreck or the mining boom could have had a disastrous impact on the domestic economy.

The same can be said of Labor’s flirtation with populism in the 1990s. In the 1998 election campaign, we promised to abolish the Productivity Commission – the very same body that has now done the essential groundwork for a National Disability Insurance Scheme. In 1999, we also opposed the Goods and Services Tax, a reform that Paul Keating had supported the previous decade. I can’t imagine Labor now promising to go to an election to untax services and reinstate the patchwork of sales taxes that existed in that era.

We can also see more than a hint of populism in Tony Abbott’s campaign against market-based mechanisms such as water buybacks in the Murray-Darling Basin and a price on carbon pollution. And yet we shouldn’t be surprised that these campaigns are finding some receptive ears. In public life, it has always been easier to scare people than honestly inform them. Most of us simply choose not to walk the fear road.

Today, animal life on the Galapagos Islands is thriving again. Three decades after receiving World Heritage Listing, the World Heritage Committee has removed the Galapagos Islands from its list of precious sites endangered by environmental threats or overuse. After a lucky start, nature on the Galapagos Islands now thrives because of good management, and planning with an eye to the future. Perhaps there’s a lesson in that for the Lucky Country too.

Andrew Leigh is the Federal Member for Fraser, and his website is This is an edited extract of a speech delivered to the McKell Institute.
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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.