Andrew Leigh

The Daily Telegraph today extracts a portion of my new book, Battlers and Billionaires: The Story of Inequality in Australia.

Whiff of Inequality in the Land of the Fair Go, Daily Telegraph, 10 July 2013

In 2002, two bombs exploded in Bali night­clubs, killing and injuring hundreds of people. At the local hospital, there was a shortage of painkillers. Graeme Southwick, an Austral­ian doctor on duty, asked patients to assess their own pain levels. He kept being told by patients in the ‘Australian’ ward that they were okay – the person next to them was suffering more.

Coming across this account, the historian John Hirst was reminded of the description of injured Australians in Gallipoli nearly a century earlier. He quotes the official war historian Charles Bean, who describes the suffering and then says, ‘Yet the men never showed better than in these difficulties. The lightly hurt were full of thought for the severely wounded.’ Even in the midst of their own pain, the first instinct of many Australians was to think of those worse off than themselves.

A sceptic might suggest that Bean viewed our men’s suffering through patriotic glasses, or that the wounded soldiers of other nations behaved similarly. But Australia’s egalitarian spirit shows up in other places too. Writing in a major daily newspaper last year, the entrepreneur Christopher Joye argued that the competitive nature of sport proved Australians didn’t believe in inequality. ‘We do not handicap an athlete,’ Joye argued, ‘because they are abnormally fast.’ But it turns out that this is exactly how our sports often operate. Many Australian team sports have salary caps, while many individual sports have handicap systems. As any golfer can tell you, handi­caps make the game more fun, because they allow people of different abilities to compete with one another.

We don’t just handicap people. Australia’s favourite horse race, the Melbourne Cup, literally puts lead in the saddlebags. Horses must carry at least forty-nine kilo­grams, and racing historians celebrate Carbine, who won the 1890 Cup with a whopping sixty-six kilograms. Extra weight is put on horses that have already performed well. By contrast, America’s most famous race, the Kentucky Derby, does not add weight based on a horse’s past perfor­mance. The Melbourne Cup is a more egalitarian race than the Kentucky Derby.

Australian beliefs about ine­quality even explain why Rugby League split from Rugby Union in the early twentieth century. Because Union refused to allow player payments, it was a fine game for private schoolboys, but no way for a working-class man to make a living. For the remainder of the twentieth cen­tury, League dominated Union in the key states of New South Wales and Queensland. In the United Kingdom, a similar split occurred, but League never came to enjoy the same national success.

In the 1850s, an English gold-digger wrote home that ‘Rank and title have no charms in the Antipodes.’ In the 1880s, an essayist opined that Australia ‘is the true republic – the truest, as I take it, in the world … In England the average man feels that he is an inferior, in America that he is a superior; in Australia he feels that he is an equal. That is indeed delightful.’

The father of the Australian novel, Joseph Furphy, wrote in 1903 that human equality was ‘self-evident … and impregnable as any mathematical axiom’. Legend had it that Australia was the nation where Jack was as good as his master – if not better.

Egalitarianism has characterised the Australian national identity for well over 150 years – dating back to an era when the country was quite unequal. Similar senti­ments were being expressed in other settler societies, such as Canada and the United States, but Australia’s powerful labour movement did more to make them a reality. After becoming more unequal in the late nine­teenth and early twentieth centuries, Australia reached a turning point. From the 1920s to the 1970s, we steadily became a more equal society. But for the past thirty years, Australia has become more unequal, with the income share of the top 1 per cent doubling and that of the top 0.1 per cent tripling.

We need to stir a debate about inequality. One of my greatest fears is that we will sleep­walk into a more unequal Australia without realising what is being lost. As the social researcher Hugh Mackay put it in the late 1990s: ‘There is now a widespread belief … that both rich and poor Australians are becoming more numerous and that if the gap between them grows much wider, it may well turn out to be unbridgeable. Such a prospect is so disturbing to the Australian people – and so incompatible with their dreams – that they are reluctant to discuss it.’

We need to be careful that we do not unwittingly lose something that past generations of Australians have held sacred.

Andrew Leigh is the federal member for Fraser. This is an edited extract of Battlers and Billionaires: The Story of Inequality in Australia (Black Inc, $19.95).

On Sky AM Agenda, I spoke with host Kieran Gilbert and Liberal MP Josh Frydenberg about thoughtful asylum-seeker policy (rather than sloganeering), and reforms to make the ALP more democratic.

TRANSCRIPT – SKY AM AGENDA WITH KIERAN GILBERT
Andrew Leigh MP
Member for Fraser
9 July 2013

TOPICS:                                Polls, Labor leader election reforms, asylum seekers.

Kieran Gilbert:                   This is AM Agenda. With me now Labor MP Andrew Leigh and Liberal MP Josh Frydenberg. Josh to you in Melbourne first of all, Kevin Rudd, as I put to Penny Wong and Barnaby Joyce just a moment ago, well ahead as preferred Prime Minister, 20 points, 22 points in front, that compared to, well, Mr Abbott was 12 points in front of Julia Gillard in that last Newspoll before she was deposed.

Josh Frydenberg:             Well I’ll take you back, Kieran, to 1993 when John Hewson who was the preferred PM ended up losing that election. And then again to 1996 when Paul Keating was the preferred PM to John Howard and John Howard convincingly won the ‘96 election, so I don’t think that’s an indicator of the result. But we always knew that Kevin would have a bit of a honey moon, the polls were tight and this will be a very close race. But it’s still the old Kevin. It’s still the guy that delivered us the 45,000 unauthorised boat arrivals, the guy who was responsible for the carbon tax that we now have, the guy who was responsible for borrowing $100 million a day. That’s his record and he keeps going on about the entrails of the Labor Party. The people aren’t interested in the entrails of the Labor Party, the people are interested in what’s his plan for Australia, and the problem with Kevin is he talks more about himself than he does about the Australian people.

Kieran Gilbert:                   This was Tony Abbott asked about Kevin Rudd’s popularity since returning to the Prime Ministership, albeit before today’s Newspoll, this was Mr Abbott on the ABC last night:

[TONY ABBOTT CLIP:       Well let’s look at the people who know him well. The people who know him well are his own colleagues. The first time he was the Prime Minister he was sacked by his own Party and then when he came back again, seven Cabinet Ministers refused to serve with him. Now look, I accept that by some measures he looks very popular but in the end people will be judged by the people who know them.]

Kieran Gilbert:                   To you, Andrew Leigh, on this, I know you’ve always questioned the predictive capacity of opinion polls but in their reflective capacity this must be encouraging for the Labor Party?

Andrew Leigh:                  Kieran, I’d be a hypocrite if I said I don’t believe polls when they’re going down and I do believe them when they’re going up, but I think Josh raises a point there which is important. He talks about the 1993 election and I think Mr Abbott’s real problem is that when he was Press Secretary to John Hewson in 1993 he took away one big lesson from that and that’s ‘don’t talk about policy’. And the reason I think Australians are starting to tire of Mr Abbott now is that they understand that he is very good at delivering snappy slogans but they’re just not sure what he stands for. He doesn’t have a health policy. He doesn’t have an education policy. He has a huge costings gap because he’s made these promises to give tax cuts to big miners and big polluters. What little policy he has is to take money away from little kids on their first day of school, raising superannuation taxes on low income workers. I think Australians are looking for a positive plan from Mr Abbott. Now, I disagree with John Hewson on many things, but he delivered a positive plan in 1993 and Mr Abbott shouldn’t be so averse to coming clean with the Australian people on what he would do.

Kieran Gilbert:                   It was certainly a very extensive plan from John Hewson in 1993. Kevin Rudd has tried to end the perception of the Labor leadership being a revolving door. This was part of his news conference late yesterday.

[KEVIN RUDD CLIP:          …power will never again rest in the hands of a factional few. If you go to an election, the Labor Party has a duly elected leader and you look down the barrel of the camera to the Australian people and say, ‘vote for the Party and vote for the Government I lead’, that that is the person that is returned to them as Prime Minister for the duration of that term.]

Kieran Gilbert:                   Josh Frydenberg, if these reforms get up as they’re expected to this would see the Labor leader, arguably, more secure than the Liberal leader is.

Josh Frydenberg:             Look, this is just a defensive move against Bill Shorten. You know, we know what a premium Bill puts on loyalty and we know that he wants to be the leader of the Labor Party. So that’s what Kevin Rudd’s doing here. But again, he’s not talking about the country. He’s not talking about his policies to improve Australian standard of living, to put in place 21^st century infrastructure, new roads and new bridges and so forth. He’s not talking about how to stop the boats. We want him to come up with a plan for Australia and to be held to account for his record when he was in Government, I mean, take the pink batts scandal that you know, came back to the fore last week, he still hasn’t released all those letters of warning that he received from his own Ministers, including Peter Garrett. And, you know, that’s what’s at stake here. We’ve got a Prime Minister who was purely incompetent when he was running the country and we’ve got more than seven Cabinet Ministers who’ve decided they can’t serve under him and they gave him free character assessments. That’s what at issue here and no matter how many babies he kisses, no matter how many pictures he poses for, he’s still got that record which the Australian people remember.

Kieran Gilbert:                   Josh point to something, Andrew Leigh, which I think is a significant point and that is the naval gazing. It’s important that Labor moves on from all of this now, isn’t it? He’s done this early in the piece in his second stint as Prime Minister, but you’ve really got to move on and start talking about things that affect people and affect voters.

Andrew Leigh:                  Kieran, I think you can walk and chew gum, to coin a phrase. It’s very clear that Mr Rudd has been speaking about our infrastructure investments: the National Broadband Network, the doubling of roads spending and quadrupling of rail spending. But at the same time he wants Australians to have the certainty that if they vote for a Prime Minister, that’s the Prime Minister they’ll get. It worries me that in the last twelve years Labor’s had seven leaders, two of them twice. I think that makes it difficult to do serious, long-term reform. I think on the Coalition side, they also haven’t given their leaders a fair chance. Brendan Nelson and Malcolm Turnbull both were denied the chance to face an election. So I think if you want to do serious, real reform then you want to make it more difficult to change leaders when polls wobble around a little.

Kieran Gilbert:                   We’ve only got a couple of minutes left; I want to ask you about the asylum seeker matter. We saw a boat load of 34 asylum seekers threaten essentially self-harm and had a merchant vessel diverted back to Australia, they were going to take them back to Indonesia, but it was diverted to Australia. It should not be a situation where people can make threats to people who have come to their aid, to their rescue.

Andrew Leigh:                  Threats of violence are completely unacceptable, Kieran, but I think this does speak to the really difficult situation that we’re in here having now been blocked by the Coalition and the Greens from getting our Malaysia Agreement through. I believe that would have worked at the time because it’s part of a regional solution, working with Indonesia, not against them. The Indonesians have been-

Kieran Gilbert:                   But that’s all history. You need something now. You’ve got to do something now before the election to show people ‘we can manage this’.

Andrew Leigh:                  Absolutely and I think getting a solution with the region is important. Certainly the Prime Minister going to Indonesia was part of building that conversation. After the Vietnam War, the countries in the region got together to process asylum seekers in a collaborative way. I think that made a lot of sense. I’d like to see that happen again and I’d like to see the Coalition get on board.

Kieran Gilbert:                   Josh Frydenberg, well, Scott Morrison revived the talk of the Tampa yesterday and sending the military in, do you support that? And what about the Indonesian warnings again from President Yudhoyono last week that they don’t want to see unilateral action in this region?

Josh Frydenberg:             Well look, we need some deterrence in place and you know, Kevin Rudd is responsible for this massive policy failure. I mean, more boats have arrived in the first six days of Kevin Rudd Mark II than in the last six years of the Howard Government. That’s what’s at issue here, and we have had our third Immigration Minister in just six months. You know, the Labor Party has no solutions to this issue. We did something that worked in the past. We didn’t need Indonesia’s approval because we didn’t breach Indonesia’s territorial integrity. Turning back the boats is part of a three-pronged solution with offshore processing and temporary protection visas, neither one of those in isolation is going to provide the answer, you have to have all three of them, and we’ve done it before and we’ll do it again, Kieran.

Kieran Gilbert:                   Josh Frydenberg, Andrew Leigh, gents, good to see you, thanks very much.

Andrew Leigh:                  Thanks Kieran, thanks Josh.

TRANSCRIPT – BREAKING POLITICS WITH TIM LESTER
Andrew Leigh MP
Member for Fraser
8 July 2013

TOPICS:                                Red tape, asylum seekers, election date



Tim Lester:                          Kelly O’Dwyer, Andrew Leigh, welcome into Breaking Politics. Kelly, you’re in Sydney today doing your own Skype there. Thank you for coming on and I gather you’re there as part of the presentation of the Coalition’s ‘Red Tape’ policy. Tell us, how severe is the Government red tape problem such that it needs you and others to develop a new policy on it?

Kelly O’Dwyer:                  Well it’s incredibly severe, Tim. We have seen the Government announce that it was going to get rid of one new piece of regulation for every new piece of regulation that it brought in. In fact, it’s done the complete opposite; it’s brought in more than 21,000 new pieces of regulation since 2007. This has a very significant and severe impact not only on business but also on a lot of not-for-profit organisations. It’s making it more difficult for people to do the job that they need to do in helping grow their business and serve our community. So we’ve put together a policy document that’s going to cut a billion dollars of red tape and regulation. It’s been done in conjunction with not-for-profits and business. We’ve consulted right round the country for the last 18 months and I think you’ll be quite excited by the document we release today.

Tim Lester:                          Andrew Leigh, is there really one billion dollars a year in government red tape to-

Kelly O’Dwyer:                  One billion!

Tim Lester:                          -one billion, ‘b’ ‘n’, to be saved, and what’s that say about current government management if there really is that inefficiency in the system?

Andrew Leigh:                  Well Tim, I’m sceptical, personally, but I’m always open to new ideas. I think it’s really important in politics that you should take new ideas wherever they come from. One of the things we’ve done in government is to simplify a number of processes. So, payroll tax reporting is now standardised, we’ve worked on standardising occupational health and safety laws across states, we’ve got the Business Name Register, which ended the farcical situation where you had to register a business in every separate state and territory. But if there’s good ideas the Coalition has, then we as a Government will welcome them.

Tim Lester:                          So you say business red tape has been on the decline under Labor?

Andrew Leigh:                  We’ve worked very cooperatively with states and territories on this. Much of what you find in regulation is that different tiers of government need to work together and you also need to very careful of simplistic sloganeering around number of pieces of regulation; I don’t think anyone would say we should get rid of regulations that require pool fences, for example, good regulations that prevent corporate excess. In fact one of the arguments as to the global financial crisis was that at its heart deregulation went too far in the United States. So you want clever regulation. It’s not a question of just looking at quantities.

Tim Lester:                          Kelly O’Dwyer, do you accept that Labor has in fact made some significant gains in streamlining regulation? Or don’t you see it that way?

Kelly O’Dwyer:                  No, not at all, in fact, far from it. There has been an exponential increase of unnecessary red tape and regulation. If Labor was actually in touch with business and in touch with their not-for-profit organisations in their local communities, they would know this. They would know this because they would have heard the message that has been very strongly and loudly delivered by business and not-for-profits and it is saying that they are being strangled. The burden of red tape and regulation is coming at a serious impost on them and it is costing jobs, it is costing certainty and it is actually costing in dollar terms, which means that ultimately everybody pays the price.

Tim Lester:                          Kelly O’Dwyer, hasn’t the Indonesian President in his comments about avoiding unilateral action laid bare the fact that the Coalition’s tow-back policy either won’t work or if it will it will be a big foreign policy negative?

Kelly O’Dwyer:                  No, far from it. I think what we heard from the Indonesian President was that there needs to be consultation amongst the region. This was something that Alexander set up when we were in government during the previous Coalition Government – the Bali Process – that is an ongoing process. That is simply what the Indonesian President has committed to in this instance. But it is not enough to simply do that and do that alone, you need to also have a strong set of comprehensive policies to try and undo the damage that has been done by this current Government under Kevin Rudd as Prime Minister when he dismantled the very effective border protection process that was in place prior to the 2007 election.

Tim Lester:                          Andrew Leigh, why isn’t it possible to do what Scott Morrison, the Opposition Spokesperson on Immigration argues and do a tow-back that simply takes boats, incoming boats, back through international waters but not actually into Indonesian waters? What stops us from doing that?

Andrew Leigh:                  Well Tim, we know the dangers with tow-backs; they’re risky for asylum seekers who will simply scuttle their boats as Admiral Chris Barrie has pointed out; they’re risky for naval personnel whose lives would then be put at risk jumping into the sea to rescue asylum seekers; and now it’s very clear that this is a policy that is utterly unacceptable to Indonesia. I disagree with some of what Kelly had to say, but I do think she hit the nail on the head when she spoke about the regional process. That’s what we’ve worked on as co-chairs – Australia and Indonesia – of the Bali Process and that was what the Malaysian Agreement was about, unfortunately scuttled in the Parliament by the Coalition and the Greens. That the aim of the Malaysian Agreement was to have-

[Kelly O’Dwyer:                Well Andrew that’s not true. You never put it to a vote]

Andrew Leigh:                  - a regional approach starting with Malaysia, a country which said yes rather than the Coalition’s tow-back policy, to which Indonesia says no.

Tim Lester:                          Kelly O’Dwyer, you want to make a comment on what became of the so-called Malaysian solution?

Kelly O’Dwyer:                  Well I think it’s a fairly important point that Andrew does gloss over and that is that the Government never actually put the policy to the Parliament. The reason it didn’t put the policy to the Parliament is because many of its own members did not support the legislation that the Government was bringing in. Now, it is very clear that we have a very serious issue. We have more than 45,000 people who have arrived, unauthorised by boat since the Government dismantled the policy in August of 2008. Now they need to take responsibility for that. They can’t simply talk again about another talk-fest. They need to actually do the things that need to be done in order to put in place an effective policy outcome. Now we have told them consistently what needs to be done. They have refused to listen to that advice and unfortunately the boats keep coming.

Tim Lester:                          Kelly O’Dwyer and Andrew Leigh, I’d like to get before you go your latest views on our election date and when it’s going to be held. Kelly, what’s wrong with Kevin Rudd doing, as Prime Ministers except Julia Gillard have all done before him, and choosing an election date that is as late as he likes provided it’s in line with the Constitution?

Kelly O’Dwyer:                  Well look, it’s very clear that the Australian people want their say. The Australian people want certainty around the election date and business as recently as only last week have said that the instability, the uncertainty is killing confidence, it’s having a direct impact on business which has a direct impact on jobs. If Kevin Rudd was truly sincere in wanting to get Australia back on track, he would tell us when the election date was going to be. He would be able to then at that point restore some degree of confidence and the Australian people would have an opportunity to have their say.

Tim Lester:                          Andrew Leigh, isn’t there a danger that, given Australians, right or wrong, have grown so used to the idea of September 14 now right through the year, that what we’re going to have is some kind of, a bit of a backlash with Kevin Rudd seeming to fiddle with an election date for purely political ends?

Andrew Leigh:                  I don’t think so, Tim. I think you put it nicely before when you said that this is entirely in accord with the Constitution and I think Australians recognise that. I think Australians are far less concerned, quite frankly, with election dates and nasty negative politics than they are with positive solutions. If we take a bit of time to get the National Plan for School Improvement nailed down, and so we’ve got more and more states and territories on board, then we lay the foundation for Australia’s future prosperity. Because beyond the current mining boom we’re going to have to make sure we have young Australians leaving school with the skills to do jobs that don’t even exist yet. And so getting education right is fundamentally our best economic policy.

Tim Lester:                          Andrew Leigh, Kelly O’Dwyer, thank you for your time, Kelly particularly without a tripod on your Skype device. That is a tremendous effort, thank you for coming in.

Kelly O’Dwyer:                  Thanks Tim, thanks Andrew

Andrew Leigh:                  You’ll win an amateur Walkley for that Kelly

Link to video

What do Australians think about equality? Inside Story, 4 July 2013

To see whether you care about inequality, take this simple test. Would you prefer to be born into a society in which the bottom fifth of households had 1 per cent and the top fifth had 62 per cent of the wealth? Or a society in which the poor had 15 per cent and the rich had 24 per cent?

The first set of numbers is the actual distribution of wealth in Australia. When surveyed about their ideal distribution, though, the majority of respondents wanted the nation to be more egalitarian. Indeed, the second set of figures is the preference of the most affluent.

In part, this is because most people believe that our wealth distribution is considerably more equal than it turns out to be. On average, Australians think that the top fifth has 40 per cent of all wealth (actually 62 per cent), while the bottom fifth has 9 per cent (actually 1 per cent). This isn’t just a mistake that Australians make: a similar survey found that Americans also underestimated their level of wealth inequality. Shown the distributions in Sweden and the United States (without country labels), 92 per cent of US respondents preferred the former.

Earnings surveys also show a preference for greater equality. In a 2009 survey, the typical respondent thought that an unskilled factory worker should be paid $59,000 rather than $45,000. Conversely, respondents thought that a cabinet minister should be paid $208,000 rather than $235,000. In other words, cabinet ministers actually earned 420 per cent more than unskilled workers, but the typical respondent thought they should ideally earn 250 per cent more.

Other surveys have asked Australians whether they agree or disagree that “differences in income are too large.” In 2009, 74 per cent agreed, up from 66 per cent in 1994. Conversely, only 20 per cent agreed that “large differences in income are necessary for Australia’s prosperity.” Only one in ten believed that we should copy the way the United States runs its economy. Yet although many Australians are worried about inequality, we’re perhaps a little less concerned than we ought to be. Australia is more unequal than the typical developed nation, but we’re less likely than average to regard our inequality as too high. Indeed, the share of people who are concerned about the gap between rich and poor has fallen in recent years.

Another way of measuring attitudes to inequality is to show people different possible pictures of the income distribution and have them pick the one they prefer. In these exercises, only 19 per cent of respondents opt for a pyramid-shaped income distribution, with a few people at the top and everyone else below. Most people believe that a pyramid shape accurately describes Australian society today, but few regard such a distribution as ideal. Indeed, the share of people who want to live in a pyramid- type society is lower than it was in the late 1980s.

Perhaps one reason Australians like equal societies is that most of us think we’re in the middle. A miniscule 0.1 per cent of people describe themselves as “upper class,” and only 10 per cent call themselves “upper middle class.” Another Australian survey divided society into ten groups, and asked people which they put themselves into. Mathematically, a tenth of us must be in the top 10 per cent, but only 2 per cent placed themselves there.

What do people believe government should do about rising inequality? Over the past quarter-century, the Australian Election Study has been asking whether we agree that “income and wealth should be redistributed towards ordinary working people.” In 1987, the share of people who favoured redistribution was 57 per cent. This rose rapidly in the 1990s, peaking at 76 per cent in 2001. In the most recent survey, 73 per cent supported redistribution. A more specific question shows a similar trend. Asked whether the government should lower taxes or spend more on social services, only 18 per cent of people in 1987 chose the latter. But when the same question was asked most recently, 58 per cent preferred a spending increase to a tax cut.

Given that tax cuts tend to be regressive, while social services spending tends to be progressive, one interpretation of these data is that Australians are more inclined to curb inequality than they were in the 1980s. Other surveys point in the same direction. Asked whether they agree that “it is the responsibility of the government to reduce the differences in income between people with high incomes and those with low incomes,” 47 per cent agreed and 38 per cent disagreed (with 15 per cent neither agreeing or disagreeing).

Australians don’t tend to think that the rich are undeserving, but as a practical matter almost half think that they pay too little tax. Asked specifically about taxes for those with high incomes, only 21 per cent said they are too high, while 33 per cent said they are about right, and 47 per cent said they are too low.

Views about inequality have a political dimension. Indeed, the political philosopher Norberto Bobbio famously argued that if you want one principle to divide left from right, it is inequality. Those on the conservative/libertarian side of politics, he argued, are heirs to Friedrich Nietzsche, who believed that all were born unequal and that this was a good thing. By contrast, those on the progressive/social democratic side are heirs to Jean-Jacques Rousseau, who believed that all were born equal and that many of the inequalities we observe come from social institutions. In other words, the left condemns social inequality because of a belief in natural equality, while the right condemns social equality because of a belief in natural inequality.

In saying this, Bobbio wasn’t arguing that people on the right of politics will always defend inequality, or that people on the left will always strive for perfect equality. In Australia, his point simply translates into saying that your attitudes to inequality are a pretty good predictor of whether you’ll vote for Labor or the Coalition.

The statistical evidence supports this point. In the broader electorate, 65 per cent of Labor voters told the Australian Election Study they believe that income and wealth should be redistributed; in contrast to only 38 per cent of Coalition voters. The difference is even greater among politicians. An anonymous survey of federal parliamentary candidates found that 67 per cent of Labor candidates agreed that income and wealth should be redistributed, compared with just 16 per cent of Coalition candidates.

Anecdotal evidence backs this up. The [former] treasurer, Wayne Swan, has said, “like most Labor activists, tackling rising inequality was one of the tasks that called me into politics.” Inequality has been a regular theme in writings by other senior Labor figures, such as Craig Emerson and Lindsay Tanner. By contrast, the former Liberal prime minister, John Howard, was more sanguine about inequality. He once commented, “It’s very important to get this income distribution thing in perspective. To the extent that any gaps have widened, it has been that people at the top – there are more of them, and they’re doing better.” The present Liberal leader, Tony Abbott, takes the view that “in the end we have to be a productive and competitive society and greater inequality might be inevitable.” Malcolm Turnbull has shown interest in this topic, but a recent profile of him suggests that “the kind of equality he is most attracted to is not so much greater equality of outcome or even opportunity but… the ‘equality of manners.’”

Political debates about inequality in Australia display both a partisan pattern and a secular trend. To see this more precisely, I searched the federal parliamentary debates and recorded the number of times the word “inequality” has been mentioned in either the House of Representatives or the Senate since Federation. The word has appeared over 2000 times (although not all of these mentions relate to economic inequality). To make a comparison over time, I adjusted according to the amount of time parliament sat each year.

The frequency of inequality debates declined during the first two decades after Federation (perhaps because the focus was on establishing Commonwealth institutions, and then dealing with the first world war). Inequality was often talked about during the Great Depression of the 1930s, but then little debated in the postwar decades. From the 1970s onwards, inequality has been mentioned more often in parliament, although there was a modest decline in the late 1980s, followed by a sharp rise that coincided with the early 1990s recession. In the past four decades, there have been some partisan patterns. Inequality was discussed more in parliament just before and during the period of the Whitlam Labor government (1972–75), and during the Howard Liberal–National government (1996–2007).

These trends are not specific to politicians; they also reflect shifts in the national mood. It was not until the 1970s that concern about inequality returned to the level it had been in 1901. Over the past two decades, as the income share of the top 1 per cent has risen, disquiet about inequality (as expressed in federal political speeches) has reached unprecedented levels.

Partisan differences have also been expressed over the question of restricting access to government payments to those with incomes (and sometimes assets) below a given threshold. In general, Labor governments have favoured targeting welfare payments towards the poor, while Coalition governments have typically preferred universal payments. While targeted welfare is generally regarded by economists of all political hues as being more equitable and more efficient, it involves denying some voters payments. Episodes of means-testing have therefore seen governments criticised heavily by their opponents.

For example, when Bob Hawke’s Labor government sought to reintroduce the pension assets test in the 1980s, the opposition leader Andrew Peacock described assets testing as a “callous and cynical grab for funds” that was one of “the assaults the government has made on the elderly.” His shadow minister for social security said that an assets test was “penalising thrift.” Under John Howard’s Coalition government, the trend was in the opposite direction. Near-universal family payments were expanded. Universal payments such as the First Home Owner Grant, the Baby Bonus and the Private Health Insurance Rebate were introduced.

In recent years, means-testing under the Rudd and Gillard Labor governments has been met with criticism from the Coalition. When the government means-tested the Baby Bonus to exclude the top 6 per cent of families, Malcolm Turnbull called it “an appeal to Labor’s divisive envy politics.” After Labor froze indexation on a Family Tax Benefit supplement and scaled back the Dependent Spouse Tax Offset, the Coalition Treasury spokesperson, Joe Hockey, said, “I despise this envy; this envy and this jealousy.” When the Baby Bonus was scaled back for second and subsequent children, the opposition frontbencher Christopher Pyne called the decision “vicious and savage” while Hockey compared it to China’s one child policy. The practical politics of reducing inequality are not straightforward.

My review of public opinion data demonstrates that a large majority of Australians believe that differences in income are too large. Respondents would prefer a more equal distribution of earnings, and even the affluent would prefer a less skewed wealth distribution. Three-quarters think that government has a role to play, and that income and wealth should be redistributed to ordinary working people. •

This is an edited extract from Battlers and Billionaires: The Story of Inequality in Australia by Andrew Leigh, RRP $19.99, published by Black Inc. Available as a print and ebook.

- See more at: http://inside.org.au/what-do-australians-think-about-equality/#sthash.VtpcHRRU.dpuf

My Chronicle column this month tells the story of Soraj Habib.

Inspiring Tale Reflects Best of Canberra, The Chronicle, 2 July 2013


Soraj Habib was nine years old when the bomb he was holding exploded. He had been out with his family to a picnic at Thakhtah Safar park in Herat, a city in western Afghanistan. He had picked up the yellow can thinking it might contain food rations. It turned out to be an unexploded cluster bomb.

The blast from the bomb killed one of Soraj’s cousins and injured two others. Soraj lost one of his legs immediately, and was so badly injured that when they took him to the hospital, he was initially placed in the refrigerated morgue. His family had to wrangling with the doctor to have him moved from the cold floor to a hospital bed. Then came an eight hour operation, in which his other leg was removed.

A week later, Soraj felt swelling in his body. A piece of the bomb had been left in his body. More surgery followed, then a long stint in hospital. Part-way through his ten month stay, one of the doctors argued that Soraj shouldn’t be kept alive, telling his family ‘he’ll only ever be half a man’.

Returning home, Soraj found his family were welcoming, but his former friends were aloof. ‘Why would we play with someone who doesn’t have any legs?’, they said. When his family sought to enrol him in school again, the principal refused. Only an appeal to the education department finally saw the principal relent.

In 2011, Soraj had a chance to travel to Australia to raise awareness of the harm done by cluster munitions. He applied for refugee status, and moved to Canberra when his application was successful.

Today, Soraj is a Year 12 student at Dickson College. He plays wheelchair basketball and has friends he can trust. After graduating, he is considering a career in either IT or working with people with disabilities. Things are still hard – he misses his parents, sister, and three brothers, who he has not seen since he left Afghanistan. But for the first time in his life, Soraj tells me, he feels truly happy.

Last month, Dickson College held DesignGate, a creative market that brought together painters and sculptors, jewellers and textile designers. The event showcased a cornucopia of craftspeople, with students, teachers, parents and the local community happily mingling together.

DesignGate 2013 helped to raise money to help Soraj buy prosthetic legs (something that will hopefully be unnecessary once Labor’s DisabilityCare scheme kicks off next year). As Dickson College art teacher Nicky Mowbray told me, ‘we are all excited by the prospect of Soraj walking across the stage at his Year 12 Graduation this year to receive his certificate!’.

Soraj’s story is an extraordinary tale of grit, resilience and fortune. He has experienced more suffering in his 21 years than most of us will in our lives. We are lucky to have him as part of our community. By their generosity, the Dickson College community has shown Canberra at its very best: warmly welcoming refugees into our city, and offering them the hand of friendship.

Andrew Leigh is the federal member for Fraser, and his website is www.andrewleigh.com.

On 4 July 2013, I spoke with Steve Cannane on The Drum about my new book, Battlers and Billionaires: The Story of Inequality in Australia.

TRANSCRIPT – 2CC WITH MARK PARTON
Andrew Leigh MP
Member for Fraser
2 July 2013

TOPICS:                                Ministerial changes, immigration policy

Mark Parton:                      Now we obviously had a lot of changes in the ministry, the shakeup has demoted some Gillard loyalists – it’s dumped one Parliamentary Secretary altogether. We’re talking about the extremely talented Member for Fraser here in the ACT, Andrew Leigh, who joins us right now. G’day Andrew.

Andrew Leigh:                  G’day Mark.



Mark Parton:                     That was a smack in the face, wasn’t it?

Andrew Leigh:                  Well, you know, in politics you go up, you go down. This is the way that most people’s careers pan out, that’s alright. I felt as though the honourable thing to do after supporting the former Prime Minister was to say to Mr Rudd that although I was willing to serve, but that if he needed my resignation he could have it. He said he wanted me to step down, and so that’s the way it is.



Mark Parton:                     But I thought he said on the day that he took over that there was going to be no retributions, and that no one was going to be blamed for anything. It sounds to me that the only reason you’ve lost your position is your support for Julia Gillard.

Andrew Leigh:                  Mr Rudd wants to build a team around him that he’s comfortable with –



Mark Parton:                     - so is he not comfortable with you?

Andrew Leigh:                  We’ve always got on fine, so certainly on a personal level that’s fine. But he wanted to bring in terrific Parliamentary Secretaries like Ed Husic, Doug  Cameron, Allan Griffin, and they’re the people that he wanted around him. I respect that, and in offering him my resignation if he needed it, I wanted to be sure that Mr Rudd had the ability to forge a team around him that he felt was what he wanted to go to the election.



Mark Parton:                     Look, you’re a team player Andrew, and I think you’re dealing with this very well. But when you consider that Labor has a pretty low representation in parliament for a government now, that so many top line ministers have departed, that this is perhaps the shallowest talent pool of any established government in living memory for actually forming a ministry. I can’t believe that he couldn’t find a spot for someone with your skills and someone as talented as you. I think they’ve erred by leaving you out.

Andrew Leigh:                  Mark, that’s very kind but I think one of the things you do notice when you look across this line up is that Labor has a very strong caucus, and plenty of people to draw on.



Mark Parton:                     Really?

Andrew Leigh:                  You’ve got Kim Carr, who’s an experienced minister coming back. Joel Fitzgibbon has a lot of experience in the parliament. And people like that step into their ministerial roles having been former ministers, knowing what it’s like to work in a constructive, consultative cabinet way.



Mark Parton:                     Kevin Rudd has said the ministry’s been chosen on merit, as though in the past they hadn’t. I was fascinated at the way it was emphasised again and again ‘oh we’ve got all these women here, they’ve been chosen on merit this time’. What’s that all about?

Andrew Leigh:                  Well I think that was partly responding to some of the slightly odd commentary that was suggesting that if you’ve got a record number of women in the ministry, then somehow the women who were going to the ministry weren’t super talented. If you look at somebody like Melissa Parke, who I think is just a standout performer, particularly on the international aid issue she’s been given. And Julie Collins, who understands issues around status of women extremely well. No, I think Mr Rudd was just making the point that those people have been chosen for their inherent qualities, and they happen to be women.



Mark Parton:                     Ok. Let’s get rid of all the spin here. In the lead up to the leadership change last week, I think most in federal Labor had conceded that there was no possible way you could win the election under that structure. Is there a belief now that you can win, or is it more about getting closer to that other mob than you had anticipated?

Andrew Leigh:                  Mark I’ve always believed we can win –



Mark Parton:                     Oh you haven’t Andrew, come on –

Andrew Leigh:                  No, I have. Really. And that’s because you look at the two party’s policy packages. I think people have spent an awful lot of time looking at the colour of the box, but when you actually look inside the two boxes, it’s chalk and cheese. What we’re offering is track record of achievement in saving those jobs in the global downturn, of investing in the NBN for Gungahlin, the Majura Parkway taking traffic congestion off. And that’s replicated right across the nation. And the Coalition still don’t have an education policy, still don’t have a health policy, and their attempt to get cuts is just firing Canberra public servants. So when you look at it like that, looking inside the boxes, I think that’s what gives me the strong sense of confidence.



Mark Parton:                     Alright, let’s talk about the chalk and cheese. You and I have had a number of discussions about asylum seekers, and the position that Bob Carr is presenting publicly on the number of asylum seekers that are economic refugees pure and simple, and the position that you have based on conversations that we’ve had, are chalk and cheese. Are you worried about the direction your party is taking on the asylum seeker issue?

Andrew Leigh:                  I don’t think they are, Mark. I think Mr Carr is pointing out that there are people who make the same decision that you or I would well make if we were in a country looking at the potential of getting to Australia. We might well say that even if we didn’t have a fear of persecution, there was still a much better life to be had in Australia for us and our families. We might then take the risk to travel by boat to Australia. That doesn’t mean that those people aren’t worthy and decent people, but it does mean that they don’t qualify for refugee under the Convention. So we need to be fairly rigorous in our refugee screening, which I think was all Mr Carr was saying. We’ve sent a lot of refugees back to Sri Lanka recently – sorry, people who have come by boat who were found not to be refugees.



Mark Parton:                     In that particular interview in the day of the long knives, he was signalling a change. He was basically saying that we would make a change to the rules that determine who is a refugee and who wasn’t.

Andrew Leigh:                  We’ve always applied the Refugee Convention rules, and as I understand it Mr Carr was simply indicating to the public the reality that we’ve known from looking at refugee flows, that many people who come to Australia are refugees, some aren’t. And that’s important to take into account in working out who we take. And this challenge that the more people who we take who arrive by boat, the fewer people we’re able to take through offshore processing camps where we work with the United Nations to choose people who have been living in camps for sometimes over a decade.



Mark Parton:                     Andrew, thanks for your time this morning, we appreciate it.

Andrew Leigh:                  Thank you Mark, likewise.

TRANSCRIPT – ABC NEWS RADIO WITH MARIUS BENSON
Andrew Leigh MP
Member for Fraser
2 July 2013

Topics:                         Ministerial changes, ‘Battlers and Billionaires’.

Announcer:                        There were winners and losers when Kevin Rudd announced Labor’s latest ministerial line up yesterday, although mainly winners, as many of the Gillard old guard had already resigned their posts. One loser was Andrew Leigh, who lost his position as a parliamentary secretary. But it’s not likely to be the last that’s heard from the active Andrew Leigh, who was a professor of economics before entering parliament. He’s also the author of several book. The latest, Battlers and Billionaires, looks at a widening economic divide. Andrew Leigh is speaking to Marius Benson.

Marius Benson:                Andrew Leigh, you must feel a little disappointed today, you lost the position of parliamentary secretary yesterday, is that just the price you pay for backing the wrong horse in a two horse race?

Andrew Leigh:                  Well naturally I’m disappointed, but I took the view that after supporting the former Prime Minister that the honourable thing to do was to tell Mr Rudd that while I was willing to serve, I was also willing to stand down if he wanted me to. So he’s asked me to stand down from that role, and to offer him advice on economic issues, which I’m happy to do.



Marius Benson:                Ok, if you’re not in that role, you’re busy enough anyway because you are a fairly prolific author. Your latest book is Battlers and Billionaires, and the basic thesis is you see increasing economic inequity in Australia in recent decades.

Andrew Leigh:                  That’s right. Battlers and Billionaires tells the story of inequality in Australia over the last two and a quarter centuries, going from quite egalitarian beginnings in the end of the 18^th century, to a pretty unequal society around the time of World War I. And then we saw a great compression, a period in which Australia became much more equal, right up until the 1970s. And the last generation, as you say, has been a story of increasing inequality. We’ve seen the top 1 per cent double, we’ve seen about $400 billion shifted from the bottom 99 per cent to the top 1 per cent. CEO salaries have gone from an average of $1 million to $3 million in the top hundred firms, and we’ve seen stratospheric increase in consumption in the things the super-rich enjoy, like waterfront homes, Porches, Maseratis, even cocaine.



Marius Benson:                Are those statistics, are they arguable? Because I saw Mark Latham, in his quarterly essay a little while back, was talking about Australia certainly doing better than America in terms of equity, but actually doing quite well. The worst off were seeing their income rise at a rate that was at least comparable with other groups of demographics.

Andrew Leigh:                  It’s certainly true that Australia is a more equal than the United States, but it’s not true that we’ve remained just as equal over the last generation. I’ve got a footnote in the book where I explain the error in using the particular study that Mark place da lot of emphasis on. But really, the picture you get right across a range of studies is of a rising gap between rich and poor over the past generation.



Marius Benson:                Well if you look at that past generation, and that rising gap, just looking at it in political terms, during that time, Labor was in power for at least 50 per cent of that time, and Labor is the party of equity. Is that just empty rhetoric?

Andrew Leigh:                  The sort of factors that drive inequality are very much factors that hit Australia regardless of which party is in power. Technology and globalisation act as a wedge to drive the income distribution apart. We also see significant impacts from tax changes, which Australia implemented largely in order to match other countries and because there was, I think, some recognised economic wisdom that a top tax rate of 70 per cent was too high. We’ve also seen the decline in unions, driven largely by structural change in the economy, rather than by laws affecting unions’ ability to organise. Unions are a powerful equalising force in society, so their decline has been one of the factors that has made Australia more unequal.



Marius Benson:                So does government…If Labor hasn’t made any difference, is it largely a powerless observer from the sidelines on these big changes?

Andrew Leigh:                  No, I think government can play  an important role, and I talk in the book about some of the things we can do if we want to ensure that Australia’s strong egalitarian ethos doesn’t get lost. We’re a country where we call one another ‘mate’ and rarely use the word ‘sir’, where tipping is something most of us don’t like, we sit in the front seat of taxis. But if we’re to maintain that I think we need a government that has means-tested social security, that invests disproportionately in improving the education of the most disadvantaged, and which rigorously tests social programs – in my view, using randomised trials, rather than just say-so and ideology.



Marius Benson:                If the gap has been widening since the 70s, is there any evidence of any return to equity, any return to that pattern of compression that you saw between the wars?

Andrew Leigh:                  The last 5 years or so we’re seeing fairly stable inequality in Australia and a large part of that is the global financial crisis, which had big impacts on the top in Australia. But I do worry that we’re getting out of touch with our sort of egalitarian spirit, and I use the analogy in Battlers and Billionaires of AFL and English Premier League. English Premier League is a deathly boring game to watch now, because Manchester United has won 12 of the last 20 seasons. It does that because it’s an incredibly unequal game. In AFL, no team has won more than 3 of the past 20 seasons, and the reason for that is we’ve got a salary cap, we share out the TV royalties, we have a draft system at the end of the season. All egalitarian measures that make the game more interesting, and the question for Australia is whether we want a society that looks more like the English Premier League, or one that looks like the AFL.



Marius Benson:                Andrew Leigh, thank you very much.

Andrew Leigh:                  Thank you Marius.

TRANSCRIPT – ABC RN DRIVE WITH JONATHAN GREEN
Andrew Leigh MP
Member for Fraser
1 July 2013

Topics:                         Ministerial changes, ‘Battlers and Billionaires’.

Jonathan Green:              Still on politics, and one of the losers from the events of last week in Canberra is Dr Andrew Leigh; without doubt one of the sharpest minds in the parliament, but left out of the new expanded Rudd ministry. He was the Parliamentary Secretary to the former Prime Minister Julia Gillard, but that job now goes to Ed Husic. So what does the future hold for this former professor of economics. He joins us now, Dr Leigh, good evening.

Andrew Leigh:                  Good evening Jonathan.



Jonathan Green:              Did you resign, or were you pushed?

Andrew Leigh:                  Well, I thought in the circumstances of last week, after supporting the incumbent Prime Minister, that I should tell Kevin Rudd that while I was willing to continue to serve, I was also willing to tender my resignation if he wanted it. And he accepted the resignation and said that he wanted me to continue to offer advice to him on international economic issues, which I’m very happy to do.



Jonathan Green:              Tony Burke did the same thing, but kept the ministry.

Andrew Leigh:                  Look these things are never straightforward, Prime Ministers always have more good people than they have slots for, and when I look around the Labor caucus room I can see why Mr Rudd felt himself spoiled for choice. There’s lots of very talented people and I think that Ed Husic will do a terrific job in his new role, as well as being a great advocate for broadband.



Jonathan Green:              Will you work harder, Andrew Leigh, at factional plays from this point forward?

Andrew Leigh:                  I don’t think it’s about the internal factional issues, I think it’s just different Prime Ministers have different teams they want to assemble around them. My own view was that genuinely I wanted to give Mr Rudd the flexibility to forge the team around him that he thought was best able to help win the next election. There’s so much at stake at the next election. This isn’t about personalities, this is about maintaining the reforms of the last two terms and making sure that a Labor government can do more in the next term.



Jonathan Green:              The ministry, though, is batting down reasonably deep. Take for example Jacinta Collins: anti-gay, anti-abortion, anti-same sex marriage, with the strong backing of the Shop Distributive and Allied Employees' Association, and now looking after mental health. That’s an interesting call.

Andrew Leigh:                  I think that that’s an unfair characterisation of Jacinta Collins’ views, to be frank. I’ve never seen her being ‘anti-gay’, as you’ve described it. She has a different view from me on same sex marriage, but frankly, so do many people in the community and that’s a debate on which the community is split. It’s a debate on which we recognise it’s important that people can hold different views.



Jonathan Green:              Let’s look to your immediate future – work advising the PM around economics, international economics in particularly. Can you walk us through what you’ll be doing there?

Andrew Leigh:                  The Prime Minister has recognised that with the economy in transition, it’s important for us to be mapping out where the jobs of the future will be coming from. The Australia in the Asian Century white paper, I think, did that very effectively, in talking about the new role Australian firms will play in providing financial services, architectural services, education services to countries in our region. But that also involves a set of reforms, it’s really vital that we have the human capital that allows us to step up and play a role in Asia. It’s important too that we have an eye to what’s happening with commodity prices and the Australian dollar, because that effects the sort of industry restructuring in which we engage in over the coming decades.



Jonathan Green:              Other international matters of course at top of mind this week with the PM off to Jakarta. Expectations of that visit?

Andrew Leigh:                  I think the relationship with Indonesia is an enormously important one. As a child I lived in Indonesia for 3 years, 1 in Jakarta and 2 in Banda Aceh. I really had a sense growing up that Australians weren’t focused enough on this extraordinarily interesting and diverse country – the largest Muslim country in the world, nearly 300 million people – lying just a short distance to our north. So a better and deeper engagement with Indonesia is absolutely vital. You see that with Kevin Rudd picking up work that he had in train as Prime Minister and as Foreign Minister, and it’s in contrast, to be frank, with Mr Abbott in attempting to engage in conflict with Indonesia through his wacky ‘turn the boats back’ policy that the Indonesian government has flat out rejected.



Jonathan Green:              So you’d stand by the Rudd line that that’s courting conflict?

Andrew Leigh:                  I think that it’s a deeply destructive policy that the Opposition are engaged in. It is really dangerous for asylum seekers, because boats may sink. It’s dangerous for our naval personnel, because their lives are put at risk. You’ve heard Admiral Chris Barry speaking about the problems of boat turn backs. And it’s appalling diplomacy, to snub this huge and important country in Indonesia, a country whose relationship we need to be strengthening, not jeopardising.



Jonathan Green:              The polls already, Andrew Leigh, showing a bit of a turnaround in ALP fortunes, with the new Rudd Prime Ministership. As a Gillard supporter, does that surprise you?

Andrew Leigh:                  I pay little attention to polls, whether they’re going up or whether they’re going down.



Jonathan Green:              Don’t tell me that there’s only one that matters.

Andrew Leigh:                  It’s true, but I’ll refrain from saying it. My view is simply that good policy is good politics – that if you want to have the privilege of being re-elected by the Australian people, you need to make sure you’re putting in place important reforms. I think, when I got around my own electorate for example, there’re lots of people who tell me they’d like to get the National Broadband Network sooner. I’m yet to meet anyone who says they don’t want to get the National Broadband Network. So that’s a reform that we’re putting in place, because we recognise that superfast broadband is like the highway network of the 21^st century. Reforms like that are the things we have to be focusing on as a government, and which you’ve seen Kevin Rudd talking about over the past few days.



Jonathan Green:              Despite the toughness of last week, there must be a bit of a spring in the step for your colleagues in caucus.

Andrew Leigh:                  I think that there’s a real sense of unity and purpose. It’s really vital that we preserve the reforms of the past two Labor terms, but also that we are able to continue those into a third term. You look at these school reforms, for example, replacing a broken down, worn out school funding system – which has the very strange feature that when state conservative governments cut funding, the federal funding mechanically falls – with something that’s up to date, that recognises need and increase funding for all schools. That’s a vital economic reform, a social reform, and of course education reform that we’ll be looking for a mandate to pursue in the next term.



Jonathan Green:              Now Andrew Leigh, you may have lost touch with the Cabinet room, but you have gained a book. You have a new book out today, Battlers and Billionaires: the story of inequality in Australia, tell us briefly in closing the thesis there?

Andrew Leigh:                  So the story behind Battlers and Billionaires is the story of Australian inequality over the past two and a quarter centuries. Inequality was quite low in the late 18^th century, rose quite significantly to the 1920s gilded age, and then fell from the ‘20s to the ‘70s. Over the past generation we’ve seen significant increases in inequality, with the top 1 per cent gaining an additional $400 billion, compared to where they would have been if we’d had the equality levels of the last 1970s. I think inequality is a problem because it strains the social fabric, because we know the simple fact that a dollar brings more happiness to a pauper than to a millionaire. So I want to prompt more of a discussion about inequality, and whether the economic inequality we have is getting out of step with Australia’s natural egalitarian spirit. We’re a nation that sits in the front seat of taxis, that doesn’t like tipping, calls one another ‘mate’, and has had central bank managers called ‘Nugget’ and ‘Nobby’. That egalitarian spirit still burns strong, and yet the economic reality of stratospheric increases in CEO pay seems to be at odds with where I believe many Australians would like our nation to go.



Jonathan Green:              Is that an interests that’s best pursued inside or outside of the parliament? What does your future hold there?

Andrew Leigh:                  My own view, Jonathan, is that I’d really like to combine the both. One of my role models is the professor turned politician Daniel Patrick Moynihan, who managed to produced books right over his Senate career after stepping down as a professor at Harvard. This is the second book I’ve written in the parliamentary term – the last one was Disconnected, looking at our community life. And I really feel like the role of a parliamentarian is not to simply help enact laws, but also to speak to deeper discussions about the kind of nation we are and the kind we’d like to be in the future.



Jonathan Green:              Might be a couple of other parliamentarians with books on hold, after the events of the past few days. But congratulations on yours.

Andrew Leigh;                  Thank you Jonathan.

TRANSCRIPT – ABC 666 AFTERNOONS WITH ALEX SLOAN
Andrew Leigh MP
Member for Fraser
1 July 2013

TOPICS:                                Battlers and Billionaires, Cabinet reshuffle

Alex Sloan:                          Joining me in the studio is Andrew Leigh who of course is the Parliamentary Member for Fraser, the Labor Member for Fraser  and he has launched his book today which is called ‘Battlers and Billionaires: The Story of Inequality in Australia’. Andrew Leigh lovely to see you.

Andrew Leigh:                  Likewise Alex.



Alex Sloan:                          Now first of all just on the politics and it is reported that you have been, I will just read it now, Kate Lundy is disappointed to lose the Sports portfolio while Andrew Leigh has been dropped all together.

Andrew Leigh:                  After supporting the former Prime Minister in the caucus ballot last week, Alex, I thought it was the honourable thing to do to tell Kevin Rudd I was willing to serve but that I was also willing to step down if he wanted me to do that, and so he’s asked me to step down but has asked me to advise him on economic issues which I am certainly happy to do.



Alex Sloan:                          So it is Ed Husic and Allan Griffin from Melbourne go into your position. Is that correct?

Andrew Leigh:                  Absolutely and Doug Cameron is also stepping up as a Parliamentary Secretary. There is just a range of talented people across the Labor caucus. I mean, it’s a real privilege to sit there are look at the quality that Kevin wants to draw on–



Alex Sloan:                          Tony Abbott is calling it the ‘C Team’.

Andrew Leigh:                  I think this is a fabulous team of Ministers that are going forward; I look at somebody like Melissa Parke that understands international economic issues deeply, people like Kim Carr, Jacinta Collins, Julie Collins moving into Cabinet. These are seriously impressive people who will hit the ground running.



Alex Sloan:                          Andrew Leigh good to see you. Now let’s get onto your book and of course you are former economics professor from the ANU and this book ‘Battlers and Billionaires: The Story of Inequality in Australia’ – how long have you been writing this for? And it will be launched tonight actually by Professor Bob Gregory

Andrew Leigh:                  It will and – well it is a funny question Alex, I guess a lot of my research was on inequality at ANU so in some sense the ideas have been percolating in my head for a decade but the real writing has been done mostly in the last couple of years. My last book came out in 2010 just after the election, so it’s since then that I have been working on Battlers and Billionaires.



Alex Sloane:                       We have a bit of a theme, I’ve talking with Bernard Salt about the middle class but you say in the book that our language has egalitarian cues, the word mate is a universal leveller – and I’ll say thanks mate to a Cabinet Minister and a bus driver sometimes in the same day.

Andrew Leigh:                  Indeed, Australians don’t much like tipping, we sit in the front seat of taxis, we don’t stand up when the Prime Minister enters the room by in large and we’ve got former central bank governors called ‘nugget’ and ‘nobby’. So there is a sense in which Australians don’t like to take class differences too seriously.



Alex Sloan:                          But they are there because you then write the egalitarian spirit is no guarantee of true equality.

Andrew Leigh:                  That’s the concern Alex that those egalitarian ideals don’t necessarily lock in an even distribution of income. Obviously, you don’t want perfect equality but we’ve seen a big rise in the gap between rich and poor over recent decades, so if you are in the bottom 10 per cent of the labour market then your incomes have gone up 15 per cent after inflation since the mid-70s. If you are in the top 10 per cent your income’s gone up by 59 per cent after inflation, so the gap in the labour market’s increased, we’ve seen an increase share in the top 1 per cent, the top 0.1 per cent, indeed we’ve even seen an increased wealth share of the top 0.001 per cent which is basically those in the BRW magazine. CEO salaries are rising, the top 100 CEOs in the mid-90s earned around a million dollars, now they earn around 3 million dollars and you’ve seen –



Alex Sloan:                          And that hits the political spotlight every now and then, the CEO salary issue –

Andrew Leigh:                  It does indeed and so, you know, we’ve looked –



Alex Sloan:                          Should it? Is it –

Andrew Leigh:                  It’s a function, Alex, of the fact that in early 90s we began to carry out international CEO searches, so before that a big Australian company would look for the best Australian to do the job. Now they do a global search and they pay a global salary. I don’t think we ought to cap CEO salaries but I think it is important to give shareholders more say over CEO salaries and the executive remuneration reforms that the government’s put in place hopefully provide a better check and balance for shareholders on excessive executive remuneration.



Alex Sloan:                          When it comes to wealth equality around the Western world how does Australia shape up?

Andrew Leigh:                  So Australia is in about the top third of the OECD pack of developed countries. We’re about where you would expect us to be at as an English speaking country. The US, Chile are towards the top, the Scandinavian countries are among the most equal. Interestingly that’s if we take national inequality, if we take inequality by state and territory, Western Australia has a US level of inequality, the ACT has a Swedish level of inequality – we are the most equal jurisdiction in Australia.



Alex Sloan:                          (laughing )I’ve heard that before – so when it comes to, I believe, female heads of departments and things like that, we’re not doing so well in the ACT. Is that right?

Andrew Leigh:                  I haven’t looked at the gender stats. But, yeah I’d-



Alex Sloan:                          I think this a fairly shocking stat because yes we were described on one hand as the ACT being the Sweden of Australia but then there is inequities when it comes to, I think, female employment, as I understand it, was some NATSEM figures that I was attending a function at and I meant to write them down

Andrew Leigh:                  There you go – No, no, no; if it is ACT public service heads then I don’t have the numbers in front of me.



Alex Sloan:                          I think it was just across the board but I wish I had written it down. But moving on-

Andrew Leigh:                  Well the two intersect. You are quite right to raise it because I think one of the reasons why the gender pay gap stubbornly failed to close is because inequality has risen. More women tend to be in the bottom end of the labour distribution, so you increase inequality and that widens the gender pay gaps the two are intertwined.



Alex Sloan:                          Andrew Leigh is with me and Andrew Leigh is, of course, the Member for Fraser, the Labor Member for Fraser and as he opened when I asked him how long he has been writing this book, probably his whole economics life, called Battlers and Billionaires: The Story of Inequality in Australia. Actually, I love the story, Andrew Leigh, the anecdote about the POW, Japanese prisoner of war camp because I suppose if we do say, oh we’re the land of the ‘fair go’ and we have this kind of egalitarian kind of look at life. Just tell me that little story and what you think that illustrates. First of all, tell us-

Andrew Leigh:                  In WWII in the Japanese prisoner of war camp, The Japanese provided rations more generously to the officers than the enlisted me. They provided fewer tents than there were people to go around. And the British dealt with that by allowing the officers to eat more and have the best tents. The Australians pooled everything and made sure those who were unwell good a little more thanks to the leadership of Weary Dunlop. As Tom Uren said in his first speech to Parliament, only a creek separated the two camps but on the British side the law of the jungle prevailed and on the Australian side, egalitarianism was the order of the day. The British saw only about 25 of the 400 men walk out because cholera ripped through the camps and killed so many of their troops. The Australian egalitarian ethos held the men together and allowed so many more of them to survive.

Alex Sloan:                          What do you think that illustrates?

Andrew Leigh:                  I think it does illustrate this powerful egalitarian sentiment, even in a very hierarchical institution like the military. Peter Cosgrove talks, even in Somalia, about the Australian willingness to carry out foot patrols contrasted with the Americans and the French sitting behind sandbags. And that meant that the Australian soldiers were out there, interacting with common folk in Somalia while the other militaries just heard the stories of the elites. And Peter Cosgrove argues that made the Australians much more effective soldiers on the ground. Then you see this egalitarianism in how we do our sport as well. The Americans’ favourite race is the Kentucky Derby. That’s a race without handicapping. Our favourite race is the Melbourne Cup. That’s a race that literally puts lead in the saddlebags of the horses, and we do that because it makes a more interesting race. The British have English Premier League in which Manchester United has won 12 out of the last 20 seasons, can you think of a more boring sport? We have AFL where no team has won more than 3 out of the last 20 seasons largely because we do a whole lot of redistribution, you know, we share out the TV revenue, we have a salary cap, we have a draft, and it ends up making the game more interesting. AFL is a more interesting game than English Premier League because it’s got more redistribution.

Alex Sloan:                          You can start calling now: 1300 681 666. Text number 0467 922 666. Andrew Leigh is with me talking about his book Battlers and Billionaires. When it comes to wealth inequality in Australia, is the starkest point with indigenous Australians?

Andrew Leigh:                  We certainly see if you look at the statistic as to where Indigenous Australians are in the income spectrum, the richest third of households, 1.7% are indigenous, the poorest third, 4.2% are indigenous. And the gaps between indigenous and non-indigenous are a reflection of the substantial inequalities that exist in Australia. That wasn’t always true. If we go back to the early days of settlement, Indigenous Australians and the English settlers were both quite equal communities both because they were so close to the poverty line. But as inequality has grown that’s been part of why the gaps have risen.

Alex Sloan:                          Andrew Leigh, the former Treasurer, Wayne Swan, he started what, you know, was a class warfare in terms of targeting billionaires like Gina Rinehart and Twiggy Forrest, what did you make of that?

Andrew Leigh:                  It’s always perplexed me that it’s a ‘class war’ when people talk about disadvantage and about the importance of making sure we operate well as a community. I actually see the language of inequality as being a recognition that Australia is at its best when we work together rather than when we operate simply as individuals. There’s nothing about the market distribution of income that’s automatically fair. I happen to be born into a society that rewards people who are able to write and speak well. But if I’d been born into a society that rewarded people for being good hunters and good fighters as has been the case for most of human history somebody with a weedy build like me would have done terribly poorly. So there’s a lot of luck in how people are placed and I think that’s why we need a society that has some redistribution in it that ensure that everybody gets a fair go.

Alex Sloan:                          Is there a central message in this, looking back at this history of Battlers and Billionaires in Australia?

Andrew Leigh:                  Australia has a powerful egalitarian ethos and we need to make sure that the economic reality doesn’t lose touch with the egalitarian spirit that we hold so dear.

Alex Sloan:                          And do you think it is?

Andrew Leigh:                  I think it’s a risk. We’ve seen inequality rising – not to US style levels – but certainly significantly from where it’s been in the past. And for so much of the twentieth century, Australia was becoming a more equal place. That turned around somewhere in the late 70s, early 1980s, and we’re now on a course to become a country with unprecedented gaps between the rich and the rest.

Alex Sloan:                          And what do you think contributes most to that?

Andrew Leigh:                  There’s technology and globalisation that play a big part, the collapse of trade union membership is important, and it’s important to recognise the role of tax changes as well in making us a more unequal society. So the factors that have driven it I think are easier to articulate than the policy prescription for what we need to do to tackle it. But all of those issues [inaudible]

Alex Sloan:                          Simon Crean in his interview this morning with John Faine and John Faine was saying that Kevin Rudd will deal with the unions and Simon Crean hit back saying it was the unions that got through a superannuation scheme and a Medicare scheme.

Andrew Leigh:                  Unions have brought us annual leave, they’ve made sure they campaign often for dollar increases rather than percentage increases which help those at the bottom of the income spectrum more and they’ve campaigned on issues like pay differentials across occupations. So there’s no stronger equalising organisation in Australian public life than unions. So unions and education I think are important. We also need to means test our social support system so it targets to those most in need. That’s the genius of the Australian social support system ever since we means tested the pension in the 1930s. Controversial but so important in making sure the public dollar goes a long way.

Alex Sloan:                          I won’t kick you a ‘Dorothy Dixer’ about Tony Abbott’s paternity leave scheme but Andrew Leigh, lovely to see you. Have fun at your book launch tonight.

Andrew Leigh:                  Thank you, Alex

Alex Sloan:                          Thanks very much. That’s Andrew Leigh, Parliamentary Member, well he is the Member for Fraser and his book Battlers and Billionaires: The Story of Inequality in Australia will be launched this evening by Professor Bob Gregory at the ANU. And tomorrow, by Father Bob

Andrew Leigh:                  Father Bob Maguire in Melbourne tomorrow, and Annabel Crabb up in Sydney on Wednesday. This is a tour. We should have t-shirts made.

Alex Sloan:                          You’re on 666.