Economic Management

I spoke in parliament on Tuesday about the importance of good economic management.
MATTERS OF PUBLIC IMPORTANCE - Mid-Year Economic and Fiscal Outlook
22 November 2011

If I were sitting on the opposition's tactics committee, choosing an MPI for today, it certainly would not be the topic of economics. I would be thinking about dog whistles, about some sort of safe ground to talk about, but surely not the topic of economics, because those opposite have lost all credibility when it comes to economic reform. On economics, ours is the party of Hawke and Keating, theirs the party of McMahon and Fraser.

In its fundamentals, the Australian economy today is the product of economic reforms that were put in place by Labor governments and opposed by those opposite. Under the Rudd and Gillard governments, we have seen very clear contrasts. When the global financial crisis hit, it was our side of politics that put in place timely, targeted and temporary fiscal stimulus that 200,000 saved jobs. Their side of politics would have let tens of thousands of small businesses go to the wall.

When we had to deal with climate change, we listened to economists and we put in place a carbon price, a price on the negative externality that is carbon pollution. They went for command and control, a scheme which they could not find a single economist to back. With minerals prices at 140-year highs—BHP posting a record $23 billion profit and Fortescue telling the House economics committee they have never paid a cent of company tax—we on this side of the House think it might be fair to ask the mining companies to pay a bit more tax. Those on that side of the House think that mining companies are paying too much tax.

At the last election we on this side of the House went to the Australian people with costings that added up. Those on the other side of the House went with costings that were $11 billion short, done by a private accounting firm. When Treasury had the temerity to say, 'You're out by $11 billion or so', they immediately came into this place and started attacking Treasury officials. They even walked into this place and started attacking Ken Henry, the man that Peter Costello appointed in 2001 to head the Department of Treasury. As soon as they did not like what Treasury had to say, they were out there shooting the messenger.

When the member for Lyne proposed a Parliamentary Budget Office, we accepted it. We put in place a parliamentary inquiry, which reported back unanimously—including the member for Higgins—with a model for a Parliamentary Budget Office. But as soon as those opposite realised that that would mean the Australian people could actually see their costings, they moved to gut it. They walked away from the report that the member for Higgins had signed on to. At the next election those opposite will again be going to the Australian people with numbers produced by a private accounting firm.

When it came to the fuel tax reforms that Peter Costello introduced into this parliament as Treasurer in 2003, after an eight-year lead time—an implementation period unprecedented in modern policy making—those opposite said they would not support them. They were willing to back away from these reforms at the last minute. We on this side of the House believe in economic reform. In this case we believed in a Peter Costello economic reform, while those on that side of the House decided that cheap political opportunism beats consistency any day.

Recently, we have been moving to close a tax loophole on the petroleum resource rent tax, a tax loophole that the Howard government had fought against in the courts, as did we when we came to power. But those opposite have decided that they want to keep the loophole open—to the benefit of Esso and the detriment of the Australian taxpayer.

In the world of international trade, we are pursuing free trade. It is good to see the Minister for Trade here in the chamber—a passionate advocate of boosting free trade—because he knows, as do we on this side, that it is free trade that benefits Australian families. Those on that side of the House would start a trade war with New Zealand. They would support anti-dumping rules that are not World Trade Organisation compliant, anti-dumping rules that would see retaliatory tariffs hurting Australian companies.

The old party of Hewson and Costello is dead, buried and cremated. What we have instead is the Tea Party of Australian politics. You do not have to believe me on this; let us hear from some prominent Liberals about the economic policy nous of the Leader of the Opposition.

In the Costello Memoirs, the former Treasurer wrote about the Leader of the Opposition:

'Never one to be held back by the financial consequences of decisions, he had grandiose plans for public expenditure. At one point when we were in government he asked for funding to pay for telephone and electricity wires to be put underground throughout the whole of his Northern Sydney electorate to improve the amenity of the area. He also wanted the Commonwealth to take over the building of local roads and bridges in his electorate.'

That is the economic policymaking giant who is leading the current opposition. We can also hear from John Hewson, a former Leader of the Opposition, writing in the AustralianFinancial Review on 24 May 2010:

'Tony is genuinely innumerate. He has no interest in economics and he has no feeling for it.'

We on this side of the House commissioned the Henry tax review, the biggest tax review in a generation. We have set about implementing recommendations flowing out of that review, as you would expect. We are cutting the company tax rate. We are abolishing the inefficient dependent spouse tax offset with its old-fashioned notion that the bloke works and the woman stays at home. We are scrapping the environmentally disastrous fringe benefits tax rules for cars. We are getting rid of the inefficient entrepreneurs tax offset and replacing it with a more appropriate instant asset write-off for small businesses. We are introducing a minerals resource rent tax that is both efficient and fair.

This country's economic position is strong. You do not have to take just the Gillard government's word for this; let me quote a few overseas sources. One source said:

'Australia's economy is one of the strongest in the developed world.'

That was the Financial Times on 1 November 2011. Another source said:

'Australia's economy is booming … Even during the GFC, Australia, unlike many Western economies, registered modest growth.'

That was the International Herald Tribune on 31 May 2011. Another overseas source said:

'On the face of this comparative performance, Australia has serious bragging rights. Compared to most developed countries, our economic circumstances are enviable.'

That was a London source—here we go: the Leader of the Opposition was in London on 11 November 2011. That goes to show that you have to take the Leader of the Opposition to London before you get some economic sense out of him.

The Leader of the Opposition now promises repeal. He wants to repeal the carbon price; that means cutting pensions and raising taxes. He wants to repeal the mining tax; that will involve reversing the instant asset write-off. He wants to stop superfast broadband in its tracks. After a bit of flip-flopping, he has decided that he will not repeal this government's superannuation increase in the event he were to come into office. That superannuation increase, as members are aware, is from nine to 12 per cent, but gradually, from 2013-14 to 2019-20. At the time of the next election, superannuation will have gone up from nine to 9.25 per cent.

The Leader of the Opposition will repeal a carbon price for which future permits have been purchased and a mining tax that will have far-reaching consequences on investments, but he will let go the superannuation increase that will have only gone one-twelfth of its way. He will let it run until 2020. I think it is a good decision by the Leader of the Opposition, but it is frankly bizarre given his position on other policies. He said he is doing that because that is what the Howard government did in 1996, but it is not. They actually froze the Keating government's superannuation increases; they did not increase them as planned. Is it because the Leader of the Opposition believes in superannuation? Probably not, given that he told this place on 25 September 1995:

'Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people.'

The fact is that those opposite are against taxes and they are in favour of revenue measures. What they do not realise is that the budget has to balance. If they are repealing a law, that law should be the law of mathematics—that is the law they really need to abolish. If you are a polluter, a tobacco company, a big miner or someone who thinks they have found a loophole, the coalition will give you a hearing. Their policy is no special interest left behind.
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Minerals Resource Rent Tax

I spoke in parliament today about the government's Minerals Resource Rent Tax package.
Minerals Resource Rent Tax and Related Bills Including Superannuation Guarantee
21 November 2011

The legislation before the House today deals with the imposition of a profits-based tax on Australian minerals. In predicting the impact of this tax on the mining industry it is useful to look back into history, to the history of the Petroleum Resource Rent Tax. Back in 1987, the Hawke government proposed that the offshore oil and gas industry shift from a royalty regime to a profits-based regime. There was outrage from the industry. Industry members took out front page ads. They said a profits-based tax was anticapitalist. Predictably, those on the coalition benches supported them.

Over the last couple of decades, we have seen a boom in precisely that sector. As the economists told us, going back to the theory of Brown Taxes, a profits based tax was good for that sector. Under the old crude oil levy and royalties, the Bass Strait partners were going to shut several of their oil fields and not develop further gas fields. Under the PRRT, there is more than 20 years of oil production and 30 years of gas production remaining in Bass Strait. As the Minister for Trade, who was then an adviser to the Hawke government, has pointed out, history is now set to repeat. The coalition are railing predictably against the Minerals Resource Rent Tax.

There is another sense in which it is Groundhog Day for the coalition. The revenue from the Minerals Resource Rent Tax will go to fund an increase in superannuation. It was again a Labor government, back in 1992, who put in place the superannuation guarantee levy, guaranteeing nine per cent superannuation for all Australians, ensuring that Australians would be able to retire with dignity. What did those opposite say at the time? Well, the member for Mackellar said that there would be firings, that businesses would be regulated out of existence. But now of course we know that under compulsory superannuation Australians have more retirement savings that see them better able to face retirement.

But we on this side of the House believe that nine per cent is not enough. It is certainly not enough for new members elected in this place, who receive 15 per cent superannuation. We believe we need to increase the superannuation contribution to 12 per cent. Yet again—another Groundhog Day moment—those opposite are saying, 'No, you can't do it.' They are saying no to the profits-based tax and no to the increase in superannuation.

The Minerals Resource Rent Tax we are putting in place today is a more modest tax than the successful Petroleum Resource Rent Tax. While the PRRT has a 40 per cent rate, this one, when you take into account the automatic deduction, has a 22.5 per cent rate. It does not kick in until you make an annual profit of $50 million. So when people refer to ‘small miners’, it is worth bearing in mind that we are talking about people making some very large profits indeed.

In the House of Representatives Standing Committee on Economics inquiry into this package of bills, the representatives from the Council of Small Business Australia made it quite clear that $50 million in profit was well above what their members would expect to earn. It has been the product of a careful consultation process, including a Policy Transition Group—led by Don Argus and the Minister for Resources and Energy —and the Resource Tax Implementation Group.

It is important to recognise the context in which we are implementing this reform. Before the last mining boom, Australians got one dollar in every three dollars of mining profits, through royalties and resource charges. By the end of that boom, it was down to one dollar in seven. Profits were over $80 billion higher in 2008-09 than they had been in 1999-2000, yet the government only collected an additional $9 billion in revenue.

A profits-based tax is a fair tax. Because it is a rent tax, it ensures that the burden does not fall on workers or communities. It falls instead on the owners of the mining companies. The incidence of a minerals tax is different from the incidence of a company tax.

Many international policymakers understand this. In fact, it is not just those of us on the progressive side of politics who get it. I draw the House's attention to Sarah Palin's time as Governor of Alaska. During that period, Sarah Palin introduced a Petroleum Profits Tax. It is unusual that those on the opposite side of the House are further to the right of Sarah Palin. Sarah Palin wants a profits-based tax; those on the other side of the House want to stick with the old, outdated, unfair royalties regime.

The Minerals Council of Australia get this. In their November 2008 submission to the Henry tax review, they argued for a shift from a royalty-based system to a profits-based system. They did so because they knew that would be a more efficient way of taxing the minerals that are the birthright of all Australians. That has been widely recognised across the political spectrum up until this nay-saying Leader of the Opposition came in.

A profits-based tax is the right thing to do. It is an equitable tax, but it is also a more efficient tax. The revenue from this tax will go to fund important investments for all Australians. It will fund a company tax cut for all companies, down to 29 per cent; a new tax break for small businesses; investment into the regions, through the Regional Infrastructure Fund and the Regional Development Australia Fund.

It will simplify the personal tax system with a standard deduction of $500, increasing to $1,000 from 2013. It will support a boost to superannuation for 8.4 million Australians. It will support expanded superannuation concessions for 3½ million low-income earners. So all of this revenue is going to put in place the building blocks for Australia's future prosperity, but we know that being 'Mr No', the Leader of the Opposition will set in place repealing it. He has already said to the Australian people he will repeal the carbon price. He said he will repeal the Minerals Resource Rent Tax. He said he will stop the NBN and he said he is going to stop these because it is absolutely critical to stop them.

It is difficult to see how some of these reforms can be undone, but what is curious over recent weeks is there is one reform that the Leader of the Opposition will not repeal, and that reform is the increase in the superannuation co-contribution from nine to 12 per cent. It is a particularly surprising reform to be saying that you are not going to repeal, given that the rate is increasing gradually from now until 2020. But the Leader of the Opposition has said, 'I'll vote against it in this place but, if I'm elected in 2013, I'll support all of the incremental increases up to 2020.'

It is good that the Leader of the Opposition has come to his senses on at least one Labor policy reform. But the problem for him is that he now has to pay for that reform. We know the opposition have some serious financial problems. They went to the last election $11 billion short in their costings—they are now $70 billion short in their costings. That means when Australians are looking at what the Leader of the Opposition has on the table, they should be aware that there is $70 billion worth of slash and burn still sitting secret. They should be aware that there is $70 billion worth of additional savings the coalition has to find. That is on top of the 12,000 public sector jobs which are going to be slashed out of towns like Canberra, Darwin and Townsville.

If the Leader of the Opposition is going to repeal any law, the one that he really needs to repeal is the law of mathematics—the law that says that he has to make his books balance, the law that says that if he is going to support a spending measure, he needs a tax measure to back that up. But of course he is unwilling to do that. The only bit of this package that he says he will support if elected is the spending measure, the superannuation side of it; not the taxing measure, the Minerals Resource Rent Tax. We know why the opposition are in such a deep hole. They are no to reform, no to economists. If they do not like what economists have to say, they go out and attack them. But they are yes to special interests. There is no special interest that fails to get a hearing from the opposition. If you are willing to make a case for cutting a hole out of a piece of legislation, the opposition would be happy to bring your case to the parliament. Theirs is a policy of ‘no special interest left behind’.

We see the opposition coming into this place and making the sovereign risk argument. I am reminded of the old rule in high school debating, which is that when you have got two teams, the first team to mention the Nazis automatically loses. There are some arguments in high school debating that, when they come out of your mouth, we know you have run out of any sensible argument to make. That is true of the sovereign risk argument as well. Those opposite cannot work out a good reason for opposing a profits-based tax. They know the PRRT model has worked well. They know there is no rational reason for opposing this tax, so they reach deep down and pull out the sovereign risk argument. They say that doom and disaster will rain down upon Australia if we are to tax mining on a profits basis rather than a royalty basis.

You can tell the lie from that simply by looking at minerals investment in Australia. It has never been higher. Investment in this sector is at record highs but, for those opposite, no scare campaign should be left unturned. They are willing to run any scare campaign no matter how unbelievable.

Those opposite are the Colonel de Groot of Australian politics: they are willing to slash, wreck and break. They are willing to come in here and do anything they can in order to break down good constructive reform. We saw this last week during the visit of the President of the United States. There was brief moment where the Leader of the Opposition had a chance to look prime ministerial, but he was not able to take it. He was not able to step out of his day-to-day attack, attack, attack mode and just for a moment focus on what is in the interests of Australia.

The Leader of the Opposition is always more interested in tearing down the Labor Party than he is in building up Australia. His political interests are what get him out of bed each morning. There used to be a proud tradition in the Liberal and National Parties of Australia of noblesse oblige but today the coalition are all noblesse and no oblige. They are willing to back away from reforms that will help low-income earners in Australia; reforms that will help small businesses in Australia; and reforms that will put fair taxation in place for the minerals that are the birthright of all Australians. That revenue will ensure that older Australians can retire in dignity, that they can retire with 12 per cent superannuation which will ensure that they are able to do the things they have wanted to spend their lives doing. They will be able to enjoy taking that grey nomad trip around Australia. They will be able to enjoy appropriate living standards.

We are going to be funding this out of an extremely efficient tax—a tax which, contrary to what some came before our House Economics Committee and argued, will be paid overwhelmingly by large miners. That is what Treasury said to us. That is what the Minerals Council of Australia said to us. Those opposite are willing to believe the claims of Fortescue, a company that has never paid a cent of company tax, has changed its position on the Minerals Resource Rent Tax and been willing to run arguments in its self-interest rather than in the national interest.

Those opposite should be very careful of this sort of special interest pleading. They should be aware that Australians have a long memory, that Australians are watching to see which political parties make decisions based on the long-term interest of Australians and which political parties focus on the right thing to do—that is, moving to a profits based mining tax, boosting the retirement incomes of Australians and cutting the company tax rate. I commend this package of bills to the House.
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White Ribbon Day

I spoke today about White Ribbon Day, and the issue of violence against women.
White Ribbon Day
21 November 2011

In 1991 a small group of Canadian men started the White Ribbon campaign. Tragically, the inspiration for the first White Ribbon Day was the second anniversary of the Montreal massacre, a massacre in which a gunman at a university killed 14 women and injured 10 others. A small group of Canadian citizens believed that as men they had a responsibility to speak out against violence against women. To symbolise men's opposition to violence against women they chose to wear a white ribbon. Eight years later the United Nations General Assembly declared 25 November International Day for the Elimination of Violence against Women and adopted the white ribbon as its symbol.

One reason I became an ambassador is that White Ribbon Day promotes change by highlighting the positive role that men can play. It encourages all men across the world to take an active stance against violence against women. This Friday, 25 November, is White Ribbon Day, a day when men say it is not okay to use violence against women, when men speak out to change the attitudes and behaviours which allow violence against women to occur and when taking action to address violence against women is celebrated, supported and encouraged.

The global statistics on the abuse of women and girls can be mind numbing. In their book Half the Sky Sheryl WuDunn and Nicholas Kristof report that more girls have been killed in the last 50 years simply because they were girls than all the men killed in the battles of the 20th century. Thanks to White Ribbon Day, high-profile ambassadors, such as comedian Wil Anderson, Indigenous AFL player Adam Goodes, NRL point-scoring record holder Hazem El Masri and our own foreign minister, Kevin Rudd, have signed the oath “never to commit, excuse or remain silent about violence against women”. But it is through all men, among each other, letting it be known that violence against women is unacceptable that the greatest change occurs. Fathers, sons, brothers, uncles, team mates and colleagues—every effort and every conversation makes a difference.

I am sometimes asked by men why the focus is on violence in the home that is directed towards women. The answer comes clearly out of the statistics. According to the latest Recorded Crime publication of the Australian Bureau of Statistics, men are most likely to be assaulted by a stranger, followed by a non-family member, followed by a family member, but for women the reverse is true. Women are most likely to be assaulted by a family member. That is why it is so important we speak out about violence against women.

In my electorate of Fraser I am attending two events supporting White Ribbon Day. A barbecue breakfast is being held this Friday by the Canberra White Ribbon Day group, with the support of the Australian Federal Police, the Young Women's Christian Association, the State Emergency Service, Lifeline, the ACT government and men from across the ACT community. The other is a lunchtime event by the ACT Labor Status of Women policy committee. Both events are an opportunity for men in the electorate of Fraser to speak out against violence against women and to demonstrate the power that positive male role models can have in their local communities.

In addition to the support of colleagues and me for the prevention of violence against women, last Friday the Standing Council on Law and Justice considered draft legislation to implement a national scheme for domestic and family violence orders. Once implemented, the legislation will allow those protected by a Domestic Violence Order to move across state and territory borders and remain covered. It is an important safeguard for victims of domestic violence.

Violence against women is unacceptable. Men do have a responsibility to speak out on this, to speak with other men and to speak out in the community. Along with 16,500 Australians I have sworn “never to commit, excuse or remain silent about violence against women”. This White Ribbon Day, men will be saying it is not okay to remain silent about violence against women. It is up to men to be good role models for boys and for other men in their community. I am proud to be a White Ribbon Day ambassador in my electorate of Fraser. I encourage all men to join me in speaking out on this important cause.
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Reducing Crime and Incarceration

I moved a private members' motion in the House today on reducing crime and incarceration rates. The motion and my speech are below.
Dr LEIGH (Fraser) (11:01): I move:

That this House:

(1) recognises that:

(a) the Australian incarceration rate has risen from 117 prisoners per 100,000 adults in 1991 to 172 prisoners per 100,000 adults in 2010;

(b) since the Indigenous Deaths in Custody Report was released in 1991, the Indigenous incarceration rate has risen from 1739 prisoners per 100,000 adults to 2303 prisoners per 100,000 adults; and

(c) an increasing number of Australian children have a parent behind bars; and

(2) encourages governments at all levels to pursue innovative policies to reduce crime and incarceration rates, including:

(a) investing in early intervention programs to deter young people from crime;

(b) where appropriate, considering alternatives to incarceration such as weekend detention, periodic detention, restorative justice and drug courts;

(c) employing smart policing strategies, such as using real-time crime statistics to identify and target crime hotspots;

(d) establishing in-prison education, training and rehabilitation programs aimed at reducing recidivism and improving family relationships for prisoners with children; and

(e) implementing randomised policy trials (akin to the 1999 NSW Drug Court randomised trial) to rigorously evaluate the impact of criminal justice interventions.

When the Indigenous Deaths in Custody Report was released in 1991, there was widespread shock at the level of Indigenous incarceration in Australia, at 1,739 prisoners per 100,000 Indigenous adults. Yet over the past 20 years the Indigenous incarceration rate has increased by about 30 per cent. Today, 2,303 out of every 100,000 Indigenous adults are behind bars. By their mid-20s, 40 per cent of Indigenous men have been formally charged by police with a crime.

This reflects a general increase in incarceration in Australia, with the national imprisonment rate rising from 117 prisoners per 100,000 adults in 1991 to 172 prisoners per 100,000 adults now. For the most part, the growth in Australia's prison population has been driven not by a rise in crime but by law changes, such as tougher bail conditions and mandatory non-parole periods. These policies can sometimes cost society a lot without much changing the incentives for offenders. Increasing sentence lengths from 10 to 15 years may sound tough, but if you are dealing with someone who lives from day to day—or, in economic jargon, a person with a high discount rate—it could have no impact on crime rates. Indeed, Steven Durlauf and Daniel Nagin argue that the certainty of the punishment matters more than its size.

There are many admirable things about the United States, as President Obama reminded us in this chamber last week. But one concerning trend is increased incarceration. US jails currently hold over two million people, more than one per cent of the adult population. Among men aged 20-34 who did not complete high school, the US imprisonment rate is a jaw-dropping 12 percent for whites and 37 percent for blacks. And that is just the proportion behind bars on any given day. If you are an African-American man who does not finish high school, the odds are two in three that you will see the inside of a prison cell by the time you reach your mid-30s.

Another feature of persistently high incarceration rates is its intergenerational impact. In the US today, two per cent of white children and 11 per cent of African-American children have a parent behind bars. In the US, there are as many children with a jailed parent as there are prisoners. In Australia, the Australian Bureau of Statistics do not count the number of prisoners with children—although I think they should—but, if the US pattern holds up, that would mean that there are about 30,000 Australian children with a parent in jail today. We know that children with a parent in jail are more likely to commit crimes themselves. If you believe in family values, you should be committed to reducing Australian incarceration rates. I commend organisations such as SHINE for Kids for their work with children of prisoners.

This motion is not the first to recognise such a parlous state of affairs. In its report Doing Time - Time for Doing, the House of Representatives Standing Committee on Aboriginal and Torres Strait Islander Affairs described Indigenous incarceration rates as a 'shameful state of affairs', and made 40 recommendations to government for addressing the issue. I commend the chair of the committee, the member for Blair, and the members of the committee for their analysis of this issue, which was discussed at last week's meeting of Commonwealth, State and Territory Attorneys-General, the body formerly known as SCAG. The Neumann Report will be an important document in shaping this debate over years to come.

I know this is also an issue that concerns the Attorney-General personally. In his Lionel Murphy lecture at ANU in September, the Attorney referred to Lionel Murphy's great 1982 High Court judgment of Neal v R. Mr Neal, an Aboriginal man from Queensland, had been sentenced to six months hard labour for swearing and spitting at a store owner. Arguing for the conviction to be overturned, Murphy wrote, 'Mr Neal is entitled to be an agitator.' Yet, if he were alive today, Lionel Murphy would be appalled to know how much the incarceration rate has risen in the ensuing three decades.

A number of public figures have spoken on this issue, including judges Stephen Rothman, Stephen Norrish, my former employer Michael Kirby, and Western Australian MLA Paul Papalia, who promotes what he calls 'justice reinvestment'. As head of the NSW Bureau of Crime Statistics, Don Weatherburn has done a great deal to promote an evidence based debate. And while I am acknowledging people, I thank Jess Woodall, who interned in my office and is here in the gallery. She wrote the motion we are debating today. I am also very glad Jess has brought her mum Robyn Woodall along.

Over the past year, I have also appreciated the chance to visit the ACT's Alexander Maconochie Centre and Bimberi Youth Justice Centre, which struck me as very different from my visit to the old style Parramatta and Long Bay jails as a student journalist in 1993.

I have also appreciated learning about the community policing work being led by ACT Attorney-General Simon Corbell and ACT chief police officer Roman Quaedvlieg. For example, ACT policing are drawing on mental health experts and local Indigenous leaders such as Duncan Smith. They are also using case officers to work intensively with the 12 families who are responsible for a quarter of all property crimes in Canberra.

Nationwide, the total cost of Australia's prisons is nearly $3 billion a year or about $100,000 per prisoner. By spending money on addressing the underlying costs of crime, society gets to avoid the costs of both the crime and the punishment.

Criminologists describe four reasons for incarceration: retribution, deterrence, incapacitation and rehabilitation. Yet for some, the criminogenic effect of prisons outweighs any rehabilitative effect. The median sentence length in Australia is three years, so released prisoners find it hard to get a job and often discover that the only friends who have not deserted them are the ones they made inside. Sexual violence in prison probably is not as common as in the 1990s when New South Wales magistrate David Heilpern estimated that one-quarter of young male prisoners were raped, but the rate is likely higher than in the outside world.

In the short time available, it is impossible to do justice to the evidence on what works to reduce crime and incarceration, but I commend to the House a 2006 paper prepared by the Washington State Institute of Public Policy, which reviewed 571 evaluations. Among the programs that they found to have the largest effect are prevention programs such as nurse-family partnerships and high-quality early childhood programs targeted at very disadvantaged families. For juveniles, education programs and aggression replacement training were effective, while the 'Scared Straight' program actually increased offending. For adults, vocational training and programs for offenders with mental illness were particularly effective.

On this issue, as with others, we need to raise the evidence bar. To illustrate this, let me tell a story. When I was 22, I clashed with Bob Can over the issue of criminal justice. Carr, as opposition leader, had complained publicly about gangs roaming the streets of Sydney, 'their baseball caps turned back to front'. As a Labor candidate in the 1995 New South Wales election, I spoke at the New South Wales ALP conference—wearing a baseball cap turned back to front. My argument was that a tough-on-crime strategy ends up incarcerating the poor. Bob Carr's argument was that it is the poor who are most likely to be victims of crime. Both arguments are right. While we can point to examples of white-collar crime, most offences involve a low-income victim and a low-income perpetrator. If you care about reducing hard-core poverty, you should be interested in smarter criminal justice policies.

Yet it was the Carr Government who in 1999 put in place one of the most innovative criminal justice strategies—a drug court. Offenders are referred to the drug court from local or districts courts, undergo a detoxification program and are then dealt with by the drug court instead of a traditional judicial process. At the time it was established, the number of places in detoxification was limited, so participants in the evaluation were randomly assigned either to the treatment or control group. They were then matched to court records to measure reoffending rates. The evaluation found that the drug court was effective in reducing the rate of recidivism. The drug court was more expensive than the tradition judicial process, but it more than paid for itself in lower crime.

Another Australian randomised evaluation is the trial of restorative justice conducted by John Braithwaite and Heather Strang in Canberra. Together with other international randomised trials, this has helped build the evidence that for low-level offences, restorative justice makes victims feel better and reduces overall crime levels.

As a public policy 'randomista', I firmly believe that we need more randomised evaluations of criminal justice policies if we are to figure out what works and what does not. Some of our justice policies clearly do not work—the trouble is, we are not sure which ones. We need to raise the evidence bar. Getting justice policy right is not easy, but if there is one country that can lead the way, it should be Australia: the nation that showed the world that if they are given a chance, convicts can do just as well as anyone.


Indigenous imprisonment (crude) rates, 1990-2010
Indigenous (a) Australia
Year Rate per 100,000 of adult indigenous population Rate per 100,000 of adult population
Persons Persons
1990 1638.3 111.6
1991 1738.6 117.2
1992 1497.8 118.1
1993 1438.4 119.2
1994 1617.6 125.2
1995 1681.9 127.3
1996 1576.2 130.9
1997 1625.0 137.0
1998 1663.4 139.2
1999 1864.7 145.2
2000 1664.2 150.2
2001 1777.3 153.0
2002 1727.6 150.8
2003 1807.8 155.5
2004 1835.1 157.2
2005 1999.4 162.4
2006 2096.6 163.2
2007 2215.7 169.1
2008 2171.0 168.2
2009 2309.8 174.7
2010 2302.7 172.4
(a) Aboriginal and Torres Strait Islanders.
1990-1999: ABS, Prisoners in Australia 2000, 4517.0, Table 14
2000-2010: ABS, Prisoners in Australia 2010, 4517.0, Tables 3.4 and 4.3

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Sky News AM Agenda

I was on the Sky News AM Agenda program this morning with my usual sparring partner Mitch Fifield. Topics today included fair minerals taxation, the Coalition's unfair workplace laws, the Qantas dispute and Afghanistan. Hosted by Kieran Gilbert.

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Eslake Returns to Banking

The almost peerless Saul Eslake is leaving the Grattan Institute to join Bank of America Merrill Lynch - which I regard as a gain for them, and a loss for the rest of us. Saul's contribution to the public economic debate over recent years has been extraordinarily valuable, particularly given the lack of non-aligned macroeconomists and public economists who are willing to write for the popular media and speak on TV.

If you think you might be the next Eslake, Grattan would love to hear from you.
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I wrote a column for the Chronicle newspaper recently about the proposed National Disability Insurance Scheme.
National Disability Insurance Scheme
The Chronicle

If you ever feel like you’ve had a tough week, try chatting with a parent who’s caring for a child with a profound disability. Chances are, they’ll be bleary-eyed and bone-tired. They may be struggling to make ends meet, and often contending with health issues of their own.

Like every parent, they love their children – but their parenting journey is harder than most. The regular cycle of life is that children leave home and start families of their own. But parents of children with a disability can find themselves caring for a 40 year-old with the mental abilities of a toddler. Many face a searing fear: what will happen to my child when I die?

In recent weeks, I’ve attended two events to recognise Canberrans with disabilities and the people who care for them. In Hackett, I spoke at the opening of Ross Walker lodge – a supported accommodation facility for six people with intellectual disabilities. Ross Walker preached the social gospel, and was a strong advocate for the most disadvantaged people in our community. (By coincidence, his life followed a similar trajectory to that of my paternal grandfather, who was also born in the 1920s, and entered the Methodist ministry after World War II.)

In Holt, I visited Sharing Places, one of the many organisations that care for people with a disability. Sharing Places has a focus on providing day services to adults with an intellectual disability. I met with several clients, and the people who care for them. Some had been working in the sector for decades, and found it the most rewarding activity they’d ever done.

The Sharing Places event was a DisabiliTEA morning tea, part of a campaign for a National Injury Insurance Scheme and National Disability Insurance Scheme (NDIS). An NDIS would provide better care to people with a disability. It would help resolve some of the anomalies in the current system. For example, if you become a paraplegic in a car accident, you’re more likely to get a payout than if you fall off your roof while cleaning the gutters. Under the current system, people who are born with a disability often receive insufficient care.

An NDIS isn’t cheap, and it’s not straightforward. But when the Gillard Government commissioned a report on it from the Productivity Commission, they came back with a strong recommendation that we should go ahead. So we’re working with the states and territories to build the foundations of an NDIS.

If you want more details, I’ll be holding a community forum in Belconnen at which I’ll discuss what an NDIS would mean for Australia. And if you’d like to volunteer, there are community organisations looking for people to help in the disability sector. Check out and for more details.

Andrew Leigh is the federal member for Fraser.
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Stimulus, Schools and Skating

I wrote a column for the Chronicle newspaper recently about the opening of the 'Belco Bowl'.
Stimulus, Schools and Skating
The Chronicle

The original skateboarders were bored California surfers – they came up with the new sport in the 1940s as a way to kill time when the waves were flat. Opening the new ‘Belco Bowl’ with Chris Bourke MLA earlier this month, I told the audience that its location couldn’t be more apt. As Canberra skaters look out over the calm waters of Lake Ginninderra, they can be reminded of how their sport started.

For anyone who hasn’t yet been to the Belco Bowl, you’re in for a treat. Now the largest skate park in the southern hemisphere, the Belco Bowl offers opportunities for expert skaters to show off their ollies, wheelies and pivots, as well as a space for first-timers to practice. For non-skaters like me, it’s a place where my wife and I can take our 2 year old and 4 year old boys, so they can watch with wide eyes as the BMX riders and skateboarders do their tricks.

The Belco Bowl upgrade was partially funded by the Australian government under the stimulus program. When the Global Financial Crisis struck in 2008, the federal government responded with household payments and infrastructure spending. We chose infrastructure projects that were both necessary and ‘shovel ready’. This included funding to upgrade Canberra’s local roads. Glebe Park also got a makeover, with a new shade sail, seating and event stage.

Every primary school received new facilities as part of the stimulus program. If you have children at school, you’ll have seen how these projects have improved their educational experience. For example, Florey Primary School has new science labs where the kids can follow in the footsteps of Howard Florey, who discovered penicillin. At Amaroo Primary School, teachers can teach in their traditional classroom, or remove the dividing walls between classrooms and teach in teams. At the Forde campus of Burgmann Anglican College, the new multipurpose hall has sharply raked seating, so all children can see the stage.

Across Australia, stimulus spending saved around 200,000 jobs, and our unemployment rate now stands at 5%, well below the jobless rate in Britain (8%) and the US (9%). Long-term unemployment can leave scars that last a lifetime. The stimulus spending not only prevented recession, it also left a valuable legacy: safer roads, better sporting facilities and revamped schools. From the Belco Bowl to Amaroo Primary, we’re investing to ensure Canberra stays the best city in Australia.

Andrew Leigh is the federal member for Fraser.
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Having been an Obama fan for quite some time, I was pretty chuffed to be able to meet him this week (as was my US-born wife, Gweneth). A few pics below.

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Superfast Broadband

I wrote a column for the Chronicle newspaper recently on the rollout of the National Broadband Network.
Superfast Broadband
The Chronicle

I was 11 years old when I bought my first computer. It was 1984, and the machine was an Aquarius. It had rubber keys, a cassette tape drive, and 3.5 kilobytes of memory. I used it to write simple programs in the BASIC language. Later that year, I upgraded to a VIC-20, with a whopping 5 kilobytes of memory. At about this time, Sydney Morning Herald computer editor Gareth Powell said that there was no advantage to any program in going beyond 16 kilobytes of memory.

The fact is, we’re not particularly good at forecasting where technology will take us. When I sent my first emails in 1996, they were text-only. In fact, most of us thought that email would be like the telegrams that previous generations had used, just faster and cheaper. Today, photos and video comprise most of the traffic flowing around the globe. Emails of 16 kilobytes or larger arrive in my inbox every few minutes.

So it’s little wonder that some critics of the National Broadband Network can’t imagine it as being anything more than a way getting faster access to YouTube and Facebook. Unfortunately, this just repeats the same mistake as previous decades: failing to imagine how a new technology will transform life and work.

The government’s current plan is to provide 93 percent of households with speeds of 100 megabytes per second. But in a recent trial of the network at Broken Hill, we saw speeds of 100 gigabytes per second: one-thousand times faster than hoped for.

But even at 100 megabytes per second, it will be possible to use the internet in fundamentally new ways. As anyone who has used Skype on a current connection will know, the jerky picture is better than nothing, but hardly ideal. The NBN will enable high-definition video-conferencing: letting patients speak with a medical specialist from home, allowing students to participate in distance learning from afar, and permitting teleworkers to participate in team meetings while working from home.

Starting in Gungahlin, the NBN will be progressively rolled out across the ACT over the next few years. We can’t predict all the ways it will transform our society for the better, but I expect that within a few decades, I’ll look back on today’s internet with the same wry amusement that I look at my old Aquarius.

Andrew Leigh is the federal member for Fraser. For more information on the timing of the NBN rollout, see
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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.