The Asian Century Beckons, Canberra Times, 25 April 2012
In the 21st century, we can confidently predict two trends. First, Australia will become more ethnically diverse. And second, we will become more enmeshed with Asia. The next generation of Australians will be more likely to have been born in Asia, travelled to Asia, worked in Asia, or married someone from Asia.
That's why the Asian Century White Paper which the government has commissioned from former Treasury secretary Ken Henry is so important. Rapid economic growth in China and India isn't just drawing millions of people out of poverty - it's also placing Australia closer than ever to the economic centre of gravity of the world economy. This isn't just a mining story (Australia's service exports to China exceed our coal exports), it's a story that illuminates the evolution of our national character.
We believe that the Asian Century has five big implications for Australia.Advertisement: Story continues below
First, we should focus on the opportunities, not the threats. Straightforward trade theory tells us that Australia will be most prosperous if we focus on our comparative advantage - the things we do better than other nations. This means that as the outputs of other countries change, it will invariably affect our comparative advantage. Managing industrial transformation is an important challenge for our nation. It is also important that we maintain a bipartisan discussion about how structural change is vital if we are to continue increasing living standards. Every day, thousands of Australians lose their jobs, and thousands find a new job.
No government can - or should - try to prevent every job loss. And no opposition should seek to block change by engaging in partisan politics over job churning. It is often said that Australia is ''competing'' with Asia. But in our reflections on industrial change, we must acknowledge that Asia is our most significant export destination, and that eight of our top 10 trading partners are already in the Asian region.
Demands for services like education, tourism and technical expertise, and goods like high-quality agricultural produce, will only increase as the preferences of consumers adjust to their new middle-class status. The Organisation for Economic Cooperation and Development projects that the proportion of the world's middle class residing in Asia will increase from 28 per cent in 2009 to 66 per cent by 2030. The growth of the Asian middle class means a massive increase in consumption and spending on imported goods and services, the supply of which Australia is well placed to provide.
Second, we should revitalise the push for a republic. As the only Anglo-Celtic country in the Asian region, we have an extraordinary opportunity to harness the rise of Asia. Yet there is a mentality that when we punch out at the end of our time working in or visiting China, we come safely home to the Anglosphere. For example, only 20 per cent of Australians currently working in China can speak Mandarin. Our political and cultural institutions reflect an attitude in which Australia is a dependant of the British Crown.
Despite the world's economic centre of gravity shifting towards the Asian-Pacific, the notion still persists that Australia is located far away from where the important decisions are made. We can no longer afford to think of ourselves as simply visitors to this region, when it is from this region that the future will be shaped. By becoming a republic, we would be able to stand proudly independent of Britain, and announce to our neighbours our readiness to be involved in our region.
Third, we must improve the Asia-literacy of all Australians. Increasing Australia's skill base in Asian languages must be a strategic priority. Better language capacity is crucial to trade negotiations and grasping business opportunities. Just as compelling are the social and cultural benefits of enabling people to communicate with people from other backgrounds. A strong command of language allows listeners to far better understand differences in culture; to understand not just what is said, but why. If we want Australia to have a place at the table in the Asian Century - to even understand the opportunities available - we will need to adjust our Asian language competence from a level suitable for backpackers to one that fits the boardroom.
While we agree that it would be a good thing for more Australians to speak Mandarin, Hindi or Vietnamese, it is also vital to take a hard-headed look at the reasons behind the low take-up of such languages. Such an analysis should take into account the basic economic principle that acquiring a language is not costless, and recognise that for our nation, Asian language study is an investment in a safer, affluent and more engaged nation.
Fourth, we should increase the Asia-literacy of our politicians. At the federal level, we can be proud to have some parliamentarians of Asian descent, who speak Asian languages, and who have lived in Asia. But there is more work to be done to ensure that our politicians continue to look like the electorate. Too few members of Parliament are absorbed in Asian art and literature, and too few travel regularly in our region. There are plenty of parliamentarians who follow every twist and turn of United States or British politics, and but not enough who understand party politics in India and Malaysia.
Fifth, we should engage our neighbours in trade, aid and diplomacy. As Hugh White's provocative Quarterly Essay has illustrated, the rise of China creates significant challenges for Australia. We do not believe that Australia should resile from our deeply-held support for open markets and open societies. Allowing the renminbi to rise to an appropriate level would be good for Chinese consumers, as it would increase their buying power and help to curtail domestic inflation.
Encouraging China to deliver more of its foreign aid through multilateral institutions would help donor coordination and poverty reduction. Similarly, while the Association of South-East Asian Nations has built a strong and generally progressive community of nations, its policy of non-intervention in national affairs must not be used as an excuse for social reforms to languish. Australia must focus its diplomatic and development capacity on encouraging Asian nations to harness their growth for the benefit of their own populations, the region and the world.
Andrew Leigh is the federal member for Fraser (www.andrewleigh.com), and Lisa Singh is a Labor senator for Tasmania (www.lisasingh.com.au). This article draws on their submission to the Asian Century White Paper.
So far as I can work out, it's not online, so thanks to Leonie Doyle for scanning it, and I hope the copyright holders won't object.
And here's a short version of the speech that was published on the ABC's Drum website.
Our comments are available on FARE's website (intro, Leigh, Di Natale, Laming). Mine are also below.
Gauging Grog's Guidelines, Drink Tank Blog, 20 April 2012
According to a 2010 Roy Morgan report, people who consume more than three drinks a day account for more than half of all alcohol sales. That fact sometimes makes me pause when I’m at a liquor store. Looking across the shelves of Boags, Bundy and Bordeaux, it’s striking to think that half the contents of the store will be drunk by people who exceed the Australian Guidelines for safe alcohol consumption.
Australia has always had a complex relationship with alcohol. In the early colony, rum was so pervasive that in some circles it came to be used as currency. For Indigenous Australians, part of the damage done by white settlers was plentiful grog. As Paul Keating said in his 1992 ‘Redfern Park’ speech, ‘We took the traditional lands and smashed the traditional way of life. We brought the disasters. The alcohol.’
Yet for many Australians, alcohol is not a harmful part of everyday life. Unlike moderate smokers, the available health research does not suggest that moderate drinkers are damaging themselves. On Sunday night, I sat on my couch with an embargoed copy of FARE’s report in one hand, and a beer in the other. I did not feel like a hypocrite.
There are many fascinating facts in this provocative and engaging report. Australians are more likely to consume wine than beer. Sixteen percent of drinkers consume six or more standard drinks on a typical occasion (up from 12 percent in 2010). The same share (and hopefully many of the same people) say that someone they know has expressed concern over their drinking. The rich drink more than the poor (the opposite pattern that we see with smoking).
A worrying part of the survey is the part that tests our knowledge of the alcohol guidelines. Eighty-one percent of drinkers either did not know or underestimated the number of standard drinks in a bottle of wine. In fact, the typical bottle of wine contains 7.7 standard drinks, but the average drinker estimated that it contained just 5.9 drinks. Translated to blood alcohol limits, this implies that a person who thought she was at 0.04 percent would actually be over the legal limit – which is 0.05 percent for regular drivers.
In terms of the harms done by alcohol, it is positive to see that a large majority of people are aware of the risks that drinking poses to people under 18, to pregnant women, and to women who are breastfeeding. Yet 14 percent of respondents said that they had been the victim of alcohol-related violence. It would be valuable to see more analysis of this group, given that violence is one of the greatest social harms caused by alcohol.
Finally, I would like to see future FARE reports also ask about the benefits of alcohol consumption. As policymakers, our challenge is to do as much as we can to discourage harmful drinking while doing as little as we can to impede adults who enjoy a moderate tipple. I hope that in future years, FARE can do even more to help us get the balance right.
Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com
National Year of Reading, The Chronicle, April 2012
When Dick Adams left high school, he wasn’t able to read or write. It didn’t worry him much. As he told his local paper, ‘I was too busy playing cricket, helping my family on the farm, hunting and fishing’. But eventually, he realised that it would be hard to get far in life without reading and writing, so he found an adult literacy teacher and spent four years learning to read and write.
Today, Dick is a federal MP for the seat of Lyons in Tasmania. At Parliament House, he occupies the office two doors down from mine. He’s someone I can always trust for advice, and I know I’m not the only parliamentarian who feels that way.
Dick is also one of the national ambassadors for the Year of Reading 2012. The year encourages all Australians to enjoy reading as a life skill, to promote a reading culture at home, and to read to our children. Reading at home is great preparation for formal education – it’s also one of the pleasures that come from school. In the late-1980s, sitting in Judith Anderson's high school English class, I learned to treasure the insights into the human condition that come from the great storytellers - the works of William Shakespeare and Jane Austen, George Orwell and Les Murray, Leo Tolstoy and Tim Winton.
These days, I’m enjoying other classics. My two year-old son Theodore loves Maisy’s Bus by Lucy Cousins and But Not the Hippopotamus by Sandra Boynton. Five year-old Sebastian delights in The Magic Faraway Tree by Enid Blyton and James and the Giant Peach by Roald Dahl. For rhythm and rhyme, it’s tough to beat Dr Seuss’s tongue-twisters and A.A. Milne’s poems, which I love reading to my children partly because my parents read them to me.
When we talk about the aims of education in Australia, politicians like me tend to talk about the importance of making sure people have the skills for work. But a great education system will also produce a nation of book lovers. When we talk about the benefits of school building, computers in schools, more resources for the neediest students, and Trades Training Centres, it can all end up sounding a tad amorphous. But what it adds up to is a better learning environment at schools.
Finally, let’s make sure we’re talking about what we’re reading. Whether it’s at a formal book club, over a coffee with a friend, or at work during the lunch break, discussions about books offer a chance to step out of the everyday and into another world. A good book is like a travelling capsule, allowing us to experience other countries and eras. Books helps make us more imaginative, and more interesting.
So, what are you reading?
Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com. His summer reading included Ian McEwen’s Solar, Alison Booth’s The Indigo Sky, Christopher Hitchens’s Arguably, Michael Lewis’s Moneyball and Cordelia Fine’s Delusions of Gender.
I gave a speech to a group of Sydney University students this morning on ‘Five Science Breakthroughs That Could Change Politics’. The text is below.
‘Five Science Breakthroughs That Could Change Politics’*
Andrew Leigh MP
Federal Member for Fraser
Talented Students Program Breakfast
18 April 2012
In 1910, Alexander Graham Bell, inventor of the telephone, was visiting Australia. In Melbourne, he gave evidence to a parliamentary committee on communications. He told them his ‘dream’ was that ‘a man will be able to talk with any other in any part of the United States’. Bell criticised our use of single-wire telephones, and encouraged Australia to install two-wire circuits to avoid ‘cross talk’. And he praised the quality of Australian electrical engineers. But even the great Bell didn’t get everything right. Asked about mobile telephones, he said that wireless telephony was unlikely to compete, due to the difficulty of securing privacy.
Reading Bell’s evidence a century on, I am struck by the sense of optimism and possibility, and my predecessors’ deep interest in one of the scientific breakthroughs that would shape the modern age.
There are three reasons I wanted to speak with you about science breakthroughs. First, I don’t think it’s a topic that politicians spend enough time on. For example, a survey published in 2010 of federal politicians’ reading habits found only one respondent reading a book about science. And as the climate change debate showed, even findings that are broadly accepted by scientists can be described by certain politicians as ‘absolute crap’.
Second, talking about science is good for us because it engenders a sense of awe. As Monty Python once pointed out, our galaxy, one of millions in the universe, is a hundred thousand light years side to side. As the late Christopher Hitchens observed, when our sun finally gives out, the people watching it will be a higher evolutionary form of humans than us. Bryan Gaensler describes ‘Oh-my-God’ particles, which have been recorded moving through the universe at 99.9999999999999999999996% of the speed of light. Like the great arts, science can be beautiful and thrilling.
Third, I’m immensely proud of what science has achieved. The stump-jump plough transformed nineteenth century agriculture. The winged keel allowed us to end the US’s 132-year hold over the America’s Cup. Spray-on skin helped burns victims. My own electorate contains CSIRO, who invented wi-fi and ultrasound; and ANU, the workplace of Brian Schmidt, who shared the 2011 Physics Nobel Prize for his work showing that the universe is expanding at an accelerating rate.
Spoilt by choice: how data ruins decisions, Sydney Morning Herald, 13 April 2012
In a share-trading experiment, two groups of university students were pitted against one another. One team saw only share prices, while the other team could also consult experts and media reports. The result? The better-informed team ended up reacting to rumours and gossip, made too many trades, and earned half as much as their less-informed classmates.
In his book How We Decide, Jonah Lehrer discusses a host of situations in which too much information leads us to make worse decisions. Guidance counsellors who can only see test scores do a better job of predicting whether students will perform well at university than when they can also draw upon essays and a personal interview. In the case of back pain, doctors who obtain an MRI scan are more likely to misdiagnose the patient as having disc abnormalities, and more likely to erroneously prescribe intensive medical interventions. Doctors are now advised not to get scans done on patients with non-specific lower back pain.
In the standard economic model, more information is never a bad thing. Yet studies like these are forcing economists to now incorporate ‘cognitive costs’ in our models. Similarly, another set of experiments suggest that having more choices can make us worse off.
Psychologist Sheena Iyengar made her reputation with an experiment which found that a tasting booth showing 24 jam flavours drew more customer attention, but one with 6 varieties sold more jam.
In her book The Art of Choosing, Iyengar gives examples of shampoo and cat litter companies who increased sales by reducing their product range. With fewer choices, employees are more likely to sign up for matched savings plans. Iyengar even finds that 3 year-olds who are allowed to choose from among a hundred different toys are less happy than children who are told to play with a single toy.
One of the surprising findings in the literature on choice is that we tend to get more enjoyment out of expensive products. After buying an expensive caffeine drink, students did better on a test than if they had purchased the same drink at a lower price. When subjects were asked to drink samples of cabernet sauvignon in a brain scanner (which must rank as one of the most agreeable neuroscience experiments of all time), researchers found more activity in the prefrontal cortex when the bottle was labelled $45 than when it was labelled $5.
We also have a strong tendency to discount the future. In an auction of sports tickets, the sale price was twice as high when bidders could use a credit card than when they had to pay cash. Conversely, when employees are given the option of putting their next pay raise into savings (a program called ‘Save More Tomorrow’), many jump at the chance to bind their future selves.
So how can we use this research to make better choices? Lehrer maintains that for simple choices (e.g. which vegetable peeler to buy), we should be guided by our rational brain. Go for functionality and price, and damn the colour scheme. Conversely, he makes the case that for complex items (e.g. which car to buy), there are too many dimensions to the problem for our rational brain to cope with. In such instances, we shouldn’t be afraid to let our emotions choose.
As a person who has been completely blind since childhood, Iyengar has to rely on others for many of her aesthetic choices. She argues that we should do the same, recognising the limits to our uniqueness. Asked ‘How similar are you to others’, most of us say ‘not very’. Yet when the question is posed as ‘How similar are others to you?’, most of us say ‘very’.
Iyengar contends that we will make better decisions if we draw on the experiences of others. We might ask: do people who make this choice look to be happier and more satisfied? Whether it’s studying restaurant customer ratings, reading book reviews on Amazon.com, or asking the advice of workmates, the collective savvy of other consumers can help us make better choices.
So there you have it. Beware of excess information. Narrow down the number of choices. Don’t look at the price tag before judging quality. Pay cash if you’re worried about overspending. Use your rational brain for small choices and your emotional side for big decisions. And remember to get by with a little help from your friends.
Andrew Leigh is the federal member for Fraser.
- Sydney, 18 April, 7.30am - Sydney University Talented Students Program Breakfast on 'Five Science Breakthroughs That Will Change Politics' (not sure whether this one is public)
- Canberra, 19 April, 5.30pm - Speaking on foreign aid, at the launch of the ANU Development Policy Centre's annual report
- Sydney, 1 May, 5.30pm - Sydney Institute on 'Why inequality matters, and what we should do about it'
- Canberra, 16 May, 5.30pm - Radford Institute on 'The Economics and Politics of Teacher Merit Pay' (based on this paper)
- Sydney, 18 May, 12.30pm - McKell Institute on 'What do we eat after the low-hanging fruit? A brief economic history of Australia, with some lessons for the future'
And further down the track:
- Melbourne, 9 July, 3.45pm - Australian Conference of Economists on 'Tall Poppies in the Land of the Fair Go: Why has Australian Inequality Risen, and Does it Matter?'
- Canberra, 24 July, 12pm - Melbourne Institute on 'Australia: Still the Land of the Fair Go?'
Where I can, I'll post the speech texts on the blog.