Andrew Leigh

On 1 October, I joined host Laura Jayes and Liberal MP Alan Tudge to discuss Prime Minister Tony Abbott's attempts to persuade Indonesia to accept boat buybacks and towbacks, and the importance of maintaining ethical standards if Australia is to continue to have a viable live animal export trade.

My op-ed in today’s Canberra Times says a carbon price has made a real and positive difference and Tony Abbott's carbon targets fall short.

Clouds over Climate Scheme, The Canberra Times, 1 October 2013

Media magnate Rupert Murdoch recently tweeted ‘Al Gore. Pls explain record increase in Arctic ice.’ Murdoch was responding to the finding from the National Snow and Ice Data Center that the minimum extent of Arctic ice rose this year from 3.4 to 5.1 million square kilometres. Alas, the average in the 1980s and 1990s was 6.7 million square kilometres. As Greenpeace’s Ben Stewart responded to Mr Murdoch: ‘It's like your papers’ circulation. Long term downward trend with occasional spikes’.

Cherry-pick the stats all you like, but the earth is warming. Australia has just had our hottest summer and one of our warmest winters, making the past twelve months the hottest on record. Early spring brought frightening bushfires. The fifth report of the Intergovernmental Panel on Climate Change (IPCC) confirms what is well understood and focuses our attention on the challenges ahead.

It is clearer than ever that humans are responsible for emerging changes in climate in the atmosphere, ocean, ice and land. The revised projections of sea level rises are a major concern as all of Australia’s major cities except Canberra are coastal.

In announcing the draft report, the IPCC chairman Rajenda Pachauri backed financial markets as humanity’s best hope in the battle against global warming. “An extremely effective instrument would be to put a price on carbon. It is only through the market that you can get a large enough and rapid enough response.”

So, as bizarre as Mr Murdoch’s rejection of the scientific evidence is Environment Minister Greg Hunt’s rejection of the economic evidence. On 16 September, Mr Hunt told the ABC’s PM program on 16 September that the carbon price “fundamentally doesn't do its work”. And yet the introduction of the carbon price has been accompanied by a 7 percent fall in emissions in the National Electricity Market.

Our energy mix has shifted toward renewables and cleaner fuels. In South Australia one quarter of all electricity is now generated by wind power. According to a ClimateWorks Australia survey, the carbon price had a significant impact on the decision-making of four in five industrial energy users.

What's more, the nonpartisan Climate Institute believes “the carbon price has had an undetectable impact on the nation's overall economic performance”. The economy is continuing to grow. Whyalla is doing well. Lamb roasts don’t cost $100.

When Labor introduced the carbon price, our modelling predicted that the impact on prices would be 0.7 percent, less than one-third the impact of the GST. Subsequently, Westpac modelling suggested that the impact had been smaller still – around 0.5 percent. The real risk to household budgets is the government’s Direct Action plan, which could cost upwards of $1200 per household. No wonder the Coalition didn’t submit Direct Action for costing by the Parliamentary Budget Office before the election.

And yet while soil magic and a green army will drive up household costs, the biggest con in the Coalition’s climate change plan is that it only lasts to the end of this decade.

The existing legislation has put in place a mechanism to cut emissions to 80 per cent of 2000 levels by 2050. The Coalition’s plan only lasts until 2020. A seven-year plan for dealing with climate change makes the Coalition’s ‘copper to the home’ NBN proposal look positively visionary by comparison.

Mr Abbott and his team speak a lot about business certainty. They should know that the best way to give businesses certainty is to provide a long-term framework. That means a framework for several decades rather than just seven years.

Without a longer term target, it is difficult for companies to know which technologies are worth investing in and which are not.

Edmund Burke said that conservative governments should have in mind past generations, those who are living today, and those who are yet unborn. If he is truly a conservative, Prime Minister Abbott should be calm and methodical about the challenge of climate change, and listen to the experts.

The time for ‘people’s revolts’ is over. Instead, Mr Abbott should recognise that at the last election, both Labor and the Coalition campaigned on a mandate to scrap the carbon tax. This means moving to a floating carbon price – capping carbon pollution – as quickly as possible. Labor will back a floating carbon price from 1 July 2014.

On breakfast radio I spoke with Mark Parton about last night's Labor leadership debate, the NBN and the folly of the Coalition's ‘direct action’ plan to tackle climate change. Here's the transcript:

TALKING POLITICS WITH 2CC’S MARK PARTON

Mark Parton: Andrew Fraser is the Labor member, Andrew Fraser (chuckle), Andrew Leigh, is the Labor member, not the first time it's been done everyone. He's the Labor member for Fraser. We've got a lot that we wanted to catch up with Andrew about, he's on the line. Morning Andrew.

Andrew Leigh: Morning Mark. How are you?

Mark Parton: Not too bad. A good little forum involving Albo and Bill last night.

Leigh: Yes, I quite enjoyed it. To me it illustrated that whichever way we end up going on the leadership we can't go wrong. We've got two strong Labor figures who are not walking away from what we did in government. The challenge I think when you lose  government is that you've got to recognise that you made mistakes, but you don't' want to take your entire six years and say, ‘well let’s throw all that out and start again from scratch’. If we did that we wouldn't be the Labor Party.

Parton: Now I'm trying to think, I’m trying to delve through my memories about comments that have been made regarding this contest I don't recognise that you've indicated publicly which way you're going have you?

Leigh: I haven't. And part of the reason, I mean I've been upfront with both candidates about who I'll support, but part of the reason that I'm being a little coy publicly is just that my branch members get to have a vote, and I think it's terrific that they can make a different decision from me.

Parton: Alright. Well let's move on and talk NBN. Of course Canberra particularly in your electorate has benefited from the rolling out of the National Broadband Network and as we're discovering it may be that the north is ahead of the south on this if Malcolm Turnbull has his way.

Leigh: It's a real worry isn't it Mark? We have the National Broadband Network rolling out across Gungahlin, fastest take-up rate anywhere in Australia; which I think reflects the fact that Gungahlin has been poorly served by internet technology in the past. And yet Malcolm Turnbull it seems is looking at trying to stop all that in its tracks. He said that if there aren't contracts in place then it's going to stop and in fact suggesting now that even if there is a contract in place if the construction hasn't started then he's going to stop it there. So that'll mean that for suburbs like Nicholls or Downer that are not in the first tranche of suburbs getting their National Broadband Network they'll miss out, and they'll have fibre to the box down the street rather than fibre coming right to the home.

Parton: See this is an interesting one the NBN cause I've spoken as I know you have and I’m sure you've spoken to more than me spoken to quite a number of Gungahlin residents who're connected to the NBN band and, look, some of them are over the moon there and others who are extremely frustrated with the time that it took and all of the delays along the way and many of whom have said to me you know what it's not really any different from what I had before. So for a lot of people it doesn't affect their lives. I've spoken to others who it's had a dramatic effect on one of them in particular it's given him the opportunity to work from home which he didn't have before. So that's going to dramatically affect his life in a very positive way but I guess my question is under Malcolm Turnbull’s proposal that particular individual would have the option to pay to get the service to his home if it was going to change his life in that way. Can you hear what I'm saying?

Leigh: I can, and I guess to me the argument sounds a lot like sitting in Sydney in the 1920s saying ‘well look we've only got 50,000 cars, maybe it'd be better off if we just built the harbor bridge one lane each way because let’s face it, we just don't have enough traffic to bother and we can always expand it later’. The thing about a National Broadband Network that takes fibre to everyone's homes is you get the network benefits of everyone having the technology. Then say if you're a government you want to roll out remote access to medical specialists you can do that because of the confidence that everyone has fibre to the home – giving a connection that has anywhere from 4-40 times faster than what Malcolm Turnbull is proposing.

Parton: Just so much money though Andrew. It's so much money.

Leigh: Either party's proposal is significant. Malcolm Turnbull’s is not costed, he hasn't costed his, but he's saying some figure around $20 billion in order to get fibre to the cabinet down the street. Labor was saying $40 billion to get fibre all the way to the home. Our view is that extra investment is worthwhile because it has a big payoff in the future and in fact that the overall benefit to the community for every dollar you spend is smaller when you do fibre to the cabinet down the street. Because you can't do a high definition video conference where it looks like you’re watching TV in the evening. I've seen Harrison School hook up with a school in Hokkaido, and have a Japanese lesson where the whole classroom can see every other kid in the classroom. It just changes the quality of the learning experience.

Parton: Yeah ok. Have you had a look at any of Christopher Pyne's comments on the way that he wants to change higher education in this country?

Leigh: I haven't, no.

Parton: Alright, well then I'll leave that behind. Let’s talk about Tim Flannery and the Climate Commission and the Climate Council. It's been a remarkable couple of days, hasn't it?

Leigh: Pretty extraordinary. And I guess this is what you get when you have a Prime Minister who’s in the past said climate change is ‘absolute crap’. The attempts to dismantle the bodies that build consensus across the scientific community, broadsides against economists and the cheapest way of dealing with carbon pollution. The real problem is that household budgets are going to struggle to afford with Mr Abbott’s Direct Action plan, a much more expensive way of reducing carbon emissions according to every serious economist you talk to. And I know you've said in the past it's a fig leaf, he's going to take it away.

Parton: And he will.

Leigh: Ah, well, you know he seems keen to plough on with it. So you've got one choice or another…

Parton: I'll be surprised. I mean will you be surprised if they go the whole hog on this and implement it as they've outlined?

Leigh: My hope is frankly that we're able to hold the carbon price in place just for another couple of years. Then the Government comes to its senses, recognises the impact on prices has been very very small and implements a ‘no carbon tax’ promise by just moving away from the fixed price period. Once you go to the European price it's just a very small impost on budgets at the moment. The CPI went up less than half a per cent once we introduced it and once you go to the European price it’s even smaller still. So, I think you'd be nuts to get rid of that and replace it with a massively expensive command-and-control approach.

(noise of child in background)

Parton: (Laughs) I think you're required so we'll let you go, but thanks for coming on this morning

Leigh: (Laughs) Thanks Mark, always busy in the household in the morning.

Parton: Andrew Leigh, the Labor member for Fraser.

ENDS

In the latest issue of the Journal of Economic Literature, I review Ian McLean's terrific book on Australian economic history.

Review of Ian McLean, Why Australia Prospered: The Shifting Sources of Economic Growth
Journal of Economic Literature, 2013

In the 1990s, Polish journalist Ryszard Kapuściński was asked by his fellow citizens: ‘You’ve been all over the world. Isn’t there a country somewhere that has found a middle way – where market forces rule, but where the government looks after the kids and the old and the sick and the poor? Somewhere where the bosses give the workers a reasonable deal? Somewhere where people help each other instead of just looking after themselves?’ And Kapuściński told them: ‘Yes, it’s called Australia.’ (quoted in Knightley, 2001, 31)

In the scheme of things, Australia has fared pretty well. In the late-nineteenth century, it had the highest per-capita incomes in the world. In the early-twentieth century, it was the first country to allow women to both stand for office and vote (and can on this basis lay claim to have been the world’s first democracy). In recent years, it has defied the global slump, keeping unemployment below 6 percent and growing 14 percent since the end of 2007. In 2013, the OECD’s Better Life Index gave Australia top spot for the third year in a row.

Part of this success was luck. As Ian McLean points out, Australian convicts had similar education levels to the average Briton. Nineteenth century Australia benefited from two commodities – wool and gold – that required little processing and had high value for their weight. From the settlers’ viewpoint, land was free (Indigenous Australians saw the situation differently). Sheep were a self-replicating capital stock, requiring few additional inputs. Although a 13,000 mile ocean voyage separated the two countries, Australia’s economy was almost perfectly complementary to that of Britain, its colonial power.

Nineteenth century Australia also benefited from its openness to migration, which saw thousands of men travel to the antipodes to make their fortune. Because men have higher labour force participation rates than women, one driver of Australia’s affluence was surely its gender ratio. In 1890s Australia, there were 115 men for every 100 women (by contrast, China today has 106 men for every 100 women).

Then came the slump. The 1890s saw Australia hit by a severe drought. In the gold mining colony of Victoria, the housing bubble popped. As tax receipts fell, colonial governments were obliged to engage in Hooverite economics – cutting back spending in order to keep up with their debt repayments. (Painful as this was, McLean argues that it had a key advantage over the Argentinian approach of devaluation and debt restructuring, which was to maintain Australia’s creditworthiness in the eyes of the global financial markets.)

The two wars had markedly different impacts on Australia. World War I killed nearly one in 40 Australian men, and real GDP slumped by one-tenth. A nation dependent on loans and capital imports was badly damaged by the shipping restrictions of World War I. Indeed, McLean even goes so far as to speculate that the costs of World War I might have outweighed the benefits that colonial Australia had enjoyed from being part of the British empire.

By contrast, World War II delivered a positive shock to the Australian economy. Because more of the fighting took place in the Pacific theatre, there was a demand for Australian-made equipment such as aircraft and ammunition, boots and boats. This spurred industrialisation, with the manufacturing share of GDP rising from 19 percent in 1939 to 26 percent in 1949. Thanks to strong growth and the Lend Lease program, the government after World War II could start bringing down its debt load (which exceeded 100 percent of GDP for most of the first half of the twentieth century).

Although Australia slipped down the relative GDP ranking from the 1950s to the 1970s, McLean takes a benign view of this period. While others have suggested that underinvestment in human capital hampered growth in the post-war era, he prefers the view that other developed countries in this period were merely engaged in ‘catch-up’ growth. This strikes me as reasonable enough, yet it still leaves open the question as to why Australia fell off the international production possibility frontier. One answer to this must surely be that the ‘education revolution’ reached Australia a generation after it came to the United States.

Australia’s fortune is illustrated by the counterfactual histories that McLean briefly sketches. One is if the pastoral landowners (known as squatters) had dominated politics, entrenching a highly unequal distribution of land and restricting the franchise. A Latin American-style ‘squattocracy’ was only averted because of the influence of the British government in the Australian political system. By resisting the domination of the squatters, the colonial power effectively gave the upper hand to the liberal and democratic forces in nineteenth century Australia.

Another counterfactual history is elite domination of the mining sector. Perhaps for reasons of administrative simplicity, the colonial authorities initially chose to prescribe an extremely small claim size for goldminers: eight feet by eight feet. This spread the ‘lottery’ of gold mining across a large group of self-employed miners, who then helped spur the transition towards democracy. The alternative would have been much larger claim sizes, with mining carried out by wage labour. (In a similar vein, Acemoglu and Robinson 2013 recently contrasted Australia’s experience with that of Sierra Leone, where an elite monopoly over diamond mining set the stage for authoritarian rule after independence).

A third counterfactual is if the northern part of Queensland (Australia’s Texas) had been successful in creating another colony in the 1880s. McLean suggests that such a colony might have consisted of an aristocracy of white planters relying on indentured labour from the nearby Pacific islands. Such an experiment would have looked more like the Caribbean, or the antebellum south, and might well have produced similarly poor long-run growth outcomes. The decision by British colonial authorities to veto such a colony was regarded as a minor one at the time, but turned out to be an important turning point in Australian economic history.

McLean’s telling of Australian economic history is not only fascinating, it is also fresh. McLean dates the book’s genesis to time spent visiting the University of California Berkeley, and his analysis is thoroughly grounded in the US economic history literature. At times McLean is let down by the available data, as when he notes that estimates of the Indigenous population at the time of British settlement 1788 range from 300,000 to 1 million. And I occasionally felt that he might have pushed the available data a little further – for example, by comparing the cost advantages of Australian convict labour with estimates of the cost advantages of slave labour in the US during the same period (Fogel and Engerman 1974). But these are minor quibbles on a book that better integrates Australia’s story into mainstream economic history than any before it.

McLean also relishes critiquing some of the established historical theories about Australia’s development. He finds little evidence that the federation of the six Australian colonies in 1901 boosted economic growth, and questions the widely held view that high tariffs impeded post-war growth. Rejecting Blainey (1966), McLean argues that ‘distance was never a tyrant’ (p.250). Contrary to Kelly (1992), he contends that the economic liberalisation of the 1980s was not a dismissal of the ‘Australian settlement’ policies adopted at the start of that century, but merely an inflexion point in the arc of reform.

This is a book that should be read by any economic historian looking at Australia as a case study or a counterpoint. If it has a fault, it is that it is perhaps too kind to Australia and its policymakers. Indeed, McLean’s generosity even extends to policymakers of the late-1970s, though his argument here seems to boil down to saying that Australian economic decision-makers of that era were no more inept than others around the world.

For a policymaker like me, the subtitle to McLean’s book (‘The Shifting Sources of Economic Growth’) points to a key challenge of economic policy. For all modern economies, the sources of prosperity are in continual flux. Collier (2010, 98) likens this process to ‘running across ice floes’ – an analogy that vividly explains the economic concept, while pointing to why the politics are so difficult. When my voters ask me ‘where will the jobs of the future come from?’, I’m keenly aware that they’re unlikely to appreciate a lecture on the inaccuracy of employment forecasting models. The truth is that many of today’s school leavers will probably end their careers in jobs that do not exist today. Yet that’s probably not the reassurance most parents are looking for from their politicians.

A careful reading of economic history points to the role that chance plays in determining nations’ economic futures. Indeed, looking at the role that good luck and sound economic management have played in Australia over the past two centuries, I would be inclined to give a modicum more credit to luck than McLean does. From good political institutions to plentiful natural resources, Australians have, in the memorable phrasing of Cowen (2011), eaten our share of low-hanging fruit. But it’s possible I’m being unfair to past generations of policymakers. After all, as any cricket fan knows, separating skill from luck in a long-running game can be frightfully difficult.

Andrew Leigh is former economics professor and a member of the House of Representatives in the Australian Parliament. His latest book is Battlers and Billionaires: The Story of Inequality in Australia (Black Inc, 2013).

References

Daron Acemoglu and James Robinson, 2013, ‘Economics versus Politics: Pitfalls of Policy Advice’, Journal of Economic Perspectives, 27(2): 173–192

Geoffrey Blainey, 1966, The Tyranny of Distance: How Distance Shaped Australia’s History, Sun Books, Melbourne.

Paul Collier, 2010, The Plundered Planet: Why We Must – and How We Can – Manage Nature for Global Prosperity, Oxford University Press, Oxford.

Tyler Cowen, 2011, The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, Kindle Edition.

Robert W. Fogel and Stanley L. Engerman, 1974, Time on the Cross: The Economics of American Negro Slavery, Little, Brown and Company, Boston.

Paul Kelly, 1992, The End of Certainty: The Story of the 1980s, Allen and Unwin, Sydney.

Phillip Knightley, 2001, Australia: A Biography of a Nation, Vintage, Sydney.

On Fairfax TV today I joined host Tim Lester to talk about some of the issues of the day - the future of the NBN, new secrecy surrounding asylum seeker arrivals, reports of the heavy hand of the Abbott Government against consumer boycotts and the Labor leadership contest. The video is here. Here's the transcript:

TIM LESTER: Fairfax Newspapers have reported that the whole board of the National Broadband Network has offered its resignation to new Communications Minister Malcolm Turnbull. What does that mean for the future of NBN and other issues related to the broadband network? Our Monday regular is Andrew Leigh - he's in the studio to discuss this and other stories that are around this morning. Andrew, thank you for your time.

ANDREW LEIGH: Pleasure Tim.

LESTER: How ominous is it that the board of the NBN would say en mass to a new minister; "we'll fall on our swords"?

LEIGH: Well it does speak to their confidence in the Coalition's NBN policy, doesn't it Tim? I mean the Coalition's NBN policy is dramatically inferior to Labor's NBN because it offers fibre to the cabinet down the street, rather than fibre to the home. That means you get about 25 megabits a second. Maybe a bit better than what some people have now, but certainly not the transformative technology you have when you get a hundred, a thousand megabits a second down the fibre cable to your home. That's when a video conference starts to look like the high definition TV picture that we see in the evening. That, for example, would make a big difference to Breaking Politics, which would then begin to not worry about whether people were on-site or off-site. But as your viewers would well know, they can easily tell when someone's using Skype on the current clunky connections, and it's not going to be much better under Malcolm Turnbull's NBN.

LESTER: What do you read, though, into the fact that the board would do this with the new Minister? Is this simply a, perhaps a matter of normal order, that they would say to a new minister "well, if you want us gone, we'll go"?

LEIGH: You know, I think it is an honourable course of action that they're pursuing, but it's a course of action they would not take in the circumstances that the Coalition had adopted Labor's NBN policy. A fibre to the Home policy which is, as best I can tell from my door-knocking, supported by everyone I spoke to in the ACT. Can't say that about any other policy frankly Tim. There's a lot of divergence on policies across the spectrum, but no one I spoke to said “the real problem with the NBN is they're bringing the fibre cable to my home, rather than stopping at the cabinet down the street".

LESTER: So does Malcolm Turnbull have to accept these resignations and put in a board that backs what he is doing, or might he say "no, press on with my plan"?

LEIGH: It's a decision for him, but I hope that he will use their wisdom and experience. I think the firings of departmental heads last week by Mr Abbott were a mistake, not just because of the fear that it spread through the public service, but also because Mr Abbott himself loses the stability of keeping on all the departmental secretaries as Labor did when we came to office in 2007.

LESTER: Would Ziggy Switkowski make a good new point person for what the Coalition plans to do with the NBN?

LEIGH: I think it's up to Mr Turnbull who he chooses. What I would urge him to do, though, is to re-think a policy that is going to build a digital divide through Australia. It's going to see my own electorate sliced up into patches of fibre to the home and, if you want the fibre to the home, you have to pay for it. That'll mean that houses on one side of the street have a value maybe 5000 dollars higher than houses on the other side of the street. People are understandably frustrated at not being able to get what is increasingly being regarded as a standard public service.

LESTER: Another of the Coalition's early changes, it looks like, will be an effort to reduce, if you like, the coverage of the arrival of asylum boats, by saying that they'll do weekly briefings on what's going on and not announce when asylum boats arrive. How practical is that?

LEIGH: Well, it's pretty striking isn't it, Tim? We've gone from "stop the boats" to "buy the boats" to "hide the boats". I think this is ultimately a media management strategy. It was flagged by Scott Morrison during the election. What it's meant is that when what we estimate is the eighth asylum seeker boat, arrived since the election yesterday, its arrival was heralded by locals on Christmas Island. But if he's going to make this work, he has to gag everyone. He has to gag the administrator of Christmas Island, Jon Stanhope and the residents of Christmas Island, who were the ones who got the news out today.

LESTER: Is it practical?

LEIGH: I don't think it's practical at all Tim and I think it speaks, really, to the Coalition's desire to bring secrecy back to government. Remember after we won office, in the wake of the Cornelia Rau affair, we had to bring in Andrew Metcalfe to do a review of the culture of secrecy the Coalition had built within the Department of Immigration. They are also looking at getting rid of the independent review of ASIO assessments for asylum seekers, again taking us back to the bad old days of excessive secrecy. In other spaces, they are looking at bringing back gag clauses for charities. It's a worrying trend right across government.

LESTER: But they are also looking, according to one article in The Australian newspaper this morning at allowing some action against some groups that try and carry out boycotts on products on environmental grounds like GetUp! or others who might try and lead those boycotts. What do you think of that action?

LEIGH: It's extraordinary, isn't it Tim, the notion that you would prevent consumers from getting together to say that they believe for ethical reasons certain products should not be purchased. This is what we saw during the Apartheid era where consumers got together and urged a boycott of South African products. We've seen in recently when there were concerns raised over Sherrin, the football manufacturer; consumers getting together to encourage better standards. Sherrin responded. The idea that we can't together with our fellow people and talk about environmental or other ethical issues as they affect product purchases is frankly is extraordinarily heavy handed.

LESTER: Okay. The last question before we close, the Labor leadership debates that Anthony Albanese, one of the candidates is talking as about possibly having in the last few weeks of the process. How do have you have genuine, full-on political debates, without at least some animosity and some invective, if you like, coming in to play, that there's so far, the two leadership contenders have been tip toeing around. It's almost a contradiction in terms.

LEIGH: Oh, I don't know. At our best I think we have managed to do Breaking Politics in that spirit! I certainly remember discussions with Fiona Nash, recently elevated, which were very congenial.

LESTER: Without arm wrestling from the party leadership though?

LEIGH: But I think, is that the thing you have with these two contenders is, Bill and Anthony are genuinely two people who like one another, who have worked constructively in the past and have a great deal to offer the Labor Party. We just can't go wrong in this leadership contest because they are people of such high calibre with a suite of great ideas to bring to the parliament. Anthony, with his experience in managing the parliament and his extraordinary personal story of growing up in very disadvantaged circumstances. Bill, with what his done with DisabilityCare, with bringing Better Schools together and with his ideas about building a ‘good society’. This is a great contest and one which is invigorating the Labor Party branch membership.

LESTER: Andrew Leigh, we're very grateful for you coming in and I should say you've got a new sparring partner each Monday, Andrew Laming, Liberal MP from Queensland who I believe you know.

LEIGH: Indeed. Andrew went through the Harvard Kennedy School the year before me. Because we have somewhat similar names, we're both Andrew L's, I was frequently mistaken for him when I was there in the early 2000s. We disagree on almost every policy issue but we've remained good friends even after entering parliament. So, I'm looking forward to jousting with him when parliament is in session.

LESTER: We appreciate your time today. Thanks Andrew.

LEIGH: Thanks Tim.

On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal Minister Mitch Fifield about the Coalition's secrecy on asylum-seeker boat arrivals, the risk of a digital divide if fibre to the home is stopped, and the Labor leadership contest.

On Thursday night, I joined host David Speers, Centre for Policy Development's Miriam Lyons, Liberal MP Alan Tudge and former Liberal MP Ross Cameron on Sky's The Nation program. We discussed gender and politics, asylum seekers and the Labor leadership.

MEDIA RELEASE

Federal Member for Fraser, Andrew Leigh, has today called on the Abbott Government to explain why it is ripping money away from early childhood workers across the ACT.

Early this year, Labor introduced a $300 million Early Years Quality Fund to be used to increase wages in the sector, recognising that awfully low pay rates have been an impediment to early childhood quality and workforce retention.

The Abbott Government has said it may not honour provisional contracts signed by directors of long-day care centres to access the fund over two years. They include early childhood centres in north Canberra.

"If the Coalition Government is going to raid the pay rises of early childhood workers to cover a mining tax cut that will benefit Gina Rinehart and Clive Palmer, their ministers needs to visit one of Canberra's centres and explain why billionaire miners need that money more than early childhood workers," said Dr Leigh.

"To justify a review of the Early Years Quality Fund, the Coalition claims the Fund was set up to boost union membership. It's nonsense. Early childhood centres need an enterprise agreement to tap into the Fund. There is no requirement that unions be involved."

“Stopping the fund could result in in many early childhood workers leaving because they will earn more elsewhere, even stacking shelves at the supermarket.”

"There is a great deal of uncertainty and frustration in the sector. Centres and parents want to urgently see that early childhood, under an Abbott Government, is a valued service that prepares children for school and lifelong learning.”

"I call on the new assistant minister for education and childcare, Sussan Ley, to join me in visiting an early childhood centre on Canberra’s northside. There, the talented early childhood workers can explain to her how the Early Years Quality Fund will directly improve the lives of Australian children," Dr Leigh said.

MEDIA RELEASE

The Abbott Government’s decision to integrate AusAID into the Department of Foreign Affairs and Trade is extremely short-sighted.

“AusAID is not an ATM for diplomats,” said Andrew Leigh, the Federal Member for Fraser in the Australian Capital Territory.

“The purpose of development assistance is fighting poverty. Absorbing AusAID into DFAT signals that fight - to save and improve the lives of the world’s absolute poor - is not valued.”

“This takes us back to 1973. Like Tony Abbott’s decision to scrap the science ministry and his choice to have only one women in a cabinet of twenty people, this shows that this is a back-to-the-future government,” said Dr Leigh.

“As a developed and wealthy nation, Australia has galvanised international efforts to meet the Millennium Development Goals. AusAID’s reduced status and capacity will undermine that work and muddy the prime objective of poverty alleviation, mixing that objective with trade and diplomatic goals.”

Shadow International Development Minister Melissa Parke has been one of the most articulate advocates of using aid to combat poverty. In a speech delivered this month, Ms Parke told her audience:

“Labor believes that helping people and nations escape from suffering and deprivation is core to our national ethos, and that creating safety, peace, wellbeing and self-sufficiency, especially in our region, is central to the Australian project.”

"Under Labor, Australian aid rose to 0.37 per cent of Gross National Income. We became one of the world's top ten donor nations. The Coalition's decision to cut $4.5 billion from the aid budget will hurt the world's poorest, so they can pay for abolishing the mining tax, to help some of the world's richest people," Dr Leigh said.

This morning I spoke to Tim Lester of Fairfax Media about the healthy contest underway for the Labor leadership and the incoming Abbott Government's cabinet which, unfortunately, looks set to promote only one woman.  Here's the transcript:

BREAKING POLITICS

FAIRFAX MEDIA VIDEO

____________________________________________________________



Subjects: Labor leadership, Coalition cabinet and ministry, gender

___________________________________________________________



TIM LESTER: A regular on Breaking Politics on Monday is the Labor MP for Fraser in the ACT, Andrew Leigh. He's actually in Sydney and he joins us via Skype. What takes you to Sydney today? What's on the agenda?

ANDREW LEIGH: Spending some time with family. One of the things about the election is, you end up drawing a lot on your family to help out and it's nice to be able to be able to give a little bit back and spend a couple of days with my parents this week.

LESTER: What do you think of the process Labor is now in to select the leader, for the first time is going to go the rank and ask for a vote on the issue.

LEIGH: I think it's enormously healthy that we go to our party membership on this. Looking from afar, I really enjoyed watching the contest of the British Labor leadership in 2010. I thought it was one that saw leaders talk very much of the direction they wanted British Labor to go. Theirs was a party that had been riven between the Gordon Brown and Tony Blair camps for quite a long time and all of the candidates spoke about wanting to move beyond those divisions and about the kind of party they wanted to craft. I expect we'll have a similar conversation over the next month, conducted respectfully between two outstanding candidates, who will talk about their visions for modern Labor.

LESTER: Are you being lobbied by those two outstanding candidates yet, because presumably they're out their looking for votes?

LEIGH: Yes, I've spoken to them in the past week as I have over recent years being in Parliament.  What's great about both Anthony and Bill is they're really serious about engaging with colleagues and listening to what they have to say. You see that out in the community too. I've been at road openings with Anthony where he's been keen to hear the views from the bulldozer driver. I've been at disability events with Bill where he's immediately gravitated towards somebody sitting on their own in a corner and just wanted to have a yarn with them about how their disability affects their life.

LESTER: What happens if caucus goes for one, and the rank and file go for the other? How do you resolve it?

LEIGH: Well it simply depends on the majorities in the two cases. One candidate will end up with a majority overall, and the great thing about this is that these are two candidates who are respected across the party and across the caucus. We simply can't go wrong in choosing between Bill and Anthony. We're fortunate to have Bill's passion for ideas, his deep understanding of issues of disability and economic development versus Anthony's knowledge in the transport and infrastructure portfolios and in broadband. His huge experience in a very difficult parliament, which managed to get a couple of former National Party members to back around 600 bills through the House of Reps. These are formidable parliamentarians and we're fortunate they're both putting their hands up.

LESTER: Have you decided which one you'll back yet Andrew, or not?

LEIGH: I have Tim, but my view is that I would rather not project that view out publicly. Partly, that's out of respect for my own branch members who I want to have the freedom to make the choice that they think is best. So I'm very much following in what Bill Shorten said the other day in only having positive words for my colleagues.

LESTER: We expect the new ministry to be announced today. The prime minister to give us the [inaudible] and it's almost certain that it will only be one woman in cabinet. The [inaudible] Julie Bishop and that [inaudible]. How does that strike you?

LEIGH: Well it does strike you Tim, that Tony Abbott is really putting the man back into mandate. He seems to be putting together a cabinet whose gender mix reminds you more of the 1950s than the 2010s. This is not a Cabinet that I think would pass the respect of many boardrooms, many corporate firms, and many government departments who have recognized that having a gender balance that looks like Australia is important to being able to do an effective job. I certainly think it's a pity if Mr Abbott is to go for only one out of 20 women in his cabinet.

LESTER: And also the question of finance minister. We understand from the Financial Review that Mathias Cormann is now favoured over Senator Arthur Sinodinos. You have a particular interest in that area. What do you make of that?

LEIGH: Well I think Arthur Sinodinos is one of the sharpest economic minds on the Coalition front bench. Probably the only other person who'd hold a candle to him on the area of economics would be Malcolm Turnbull.  He's somebody who I very much admire. We have a regular media slot on one of the radio stations together. We held an economic debate in the ACT during the election. Arthur's somebody who's extraordinary thoughtful about how he does policy and I think has garnered a respect right across the parliament. I think it would be a pity if he weren't to be given that key finance portfolio. It might send a message out that Mr Abbott values more highly the skills of attack than the skills of constructively managing to build.

LESTER: You've said, but I assume Malcolm Turnbull won't run [indistinct] think that two best economic minds of the opposition are going to be sidelined in terms of economics.

LEIGH: I think that's certainly a risk, and I think it would be a mistake particularly in the case of Mr Abbott, who's said in the past that he was bored by economics, who when challenged about the fact he couldn't find an economist to back his direct action plan, said well, that’s maybe that a reflection on the quality of economists rather than on the quality of the plan, and who doesn't himself, I think, have a natural affinity for markets. I think in that instance, it's all the more incumbent upon him to promote high quality economists like Arthur Sinodinos and it would be a pity if he didn't do that.

LESTER: Andrew, we're grateful for your time today. Enjoy a couple of days off.

LEIGH: Thanks Tim, good to be with you.



ENDS