Public Sector Superannuation

I spoke last week on some useful reforms to public sector superannuation.
Governance of Australian Government Superannuation Schemes Bill 2011
15 June 2011

The bills before us concern the retirement savings of people who serve our nation. The good men and women of our military, as well as those in our public service, many of whom reside in the ACT in my electorate of Fraser or in the neighbouring electorate of my good friend and colleague the member for Canberra, will benefit from the changes in this legislation. The bills seek to consolidate the main civilian and military superannuation schemes under a single trustee. The merger will see the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme, the Military Superannuation and Benefits Scheme, the Defence Force Retirement and Death Benefits Scheme and the Defence Force Retirement and Benefit Scheme all administered by a single trustee, the Commonwealth Superannuation Corporation, or CSC. The CSC will be a statutory agency, as will ComSuper.

The consolidation of these schemes will help modernise the governance arrangements. The outdated position of Commissioner for Superannuation will be replaced by a chief executive officer. A board of 11 directors will govern the CSC. The governance model is in keeping with a common model used right across the broader superannuation industry. The CSC board composition will reflect member interests as well as employer interests. There will be three nominees from the ACTU, two nominees from the Chief of the Defence Force. and five nominees from the Minister for Finance and Deregulation with input from the Minister for Defence. The government will also appoint the chair.

I note in passing that those opposite have raised the bogeyman of the ACTU having representation on the CSC board. It is sort of odd, is it not? They are quite happy to have their positions on health dictated by British American Tobacco and they are quite happy to have their positions on the mining tax dictated by a few mining magnates, but they are not happy to have workers representatives—representatives of millions of Australian workers—on a superannuation board.

I note that some in the community, particularly the ex-service person community, have raised concerns that amalgamated trustee arrangements might not recognise the uniqueness of military service. This concern was raised about the original 2010 bill. Submissions to the Senate Finance and Public Administration Legislation Committee raised this issue of ensuring that ADF personnel were adequately recompensed for the unique role they play in the defence of our nation. It is important to note that the bills before the House do not disturb, and the previous incarnations of these bills did not ever disturb, members' entitlements or benefits. No existing features or benefits of military schemes are disturbed. There is no change to scheme entitlements for ADF personnel and there is no change to scheme entitlements for Commonwealth public servants. The 2010 bill recognised the uniqueness of military service, something noted by the Senate committee report's citation of the joint submission by the departments of finance and defence. That submission concluded:

Overall, the Bills seek to recognise the special nature of military service (noting that this principle is relevant to all aspects of military conditions of service) without taking away from a superannuation trustee's essential function of managing the superannuation schemes for which it is responsible on behalf of all scheme members and safeguarding members' benefit until they retire.

The submission of the Defence Force Retirement and Death Benefits Scheme Authority, or the DFRDB Authority, to the Senate committee acknowledged that the uniqueness of military service was recognised by the relevant scheme rules and not by the composition of the board. The DFRDB Authority concluded:

In the context of the above, the DFRDB Authority accepts the assurances of the Australian Government that the interests of the DFRB and DFRDB members will appropriately represented by the CSC. Therefore it is the view of the DFRDB Authority that it is not necessary to retain a separate board to administer the military superannuation schemes.

The government recognises the unique nature of military service. I recognise that too. One of the great privileges of this job is having the opportunity to honour those who have sacrificed their lives for our freedoms and to acknowledge the work that many of our service people make on our behalf. It was never the intent to dispel this recognition with these administrative changes.

Recognising the concern, the government engaged with our military community on the proposed administrative changes. These consultations have led to changes to make clear the uniqueness of military service. The bills before the House require the CSC board to have regard to that uniqueness, as provided for in the schemes established by the relevant military superannuation acts, when acting under such legislation. Further, when the board is making decisions concerning matters solely related to the military schemes, at least one director appointed by the Chief of the Defence Force must be present. As I outlined previously, the CDF will appoint two representatives to the board and the appointment of the employer representatives by the finance minister will be in consultation with the defence minister. The bills also provide for the establishment of the Defence Force Case Assessment Panel within the single trustee model. The panel will undertake functions currently performed by the DFRDB. We will also review the arrangements after the first five years to ensure that the changes have been effective.

The consolidation of these government super schemes into a single trustee arrangement is not occurring in isolation. There has been a trend in our local superannuation industry towards consolidation. In 2006, the merger of the Australian Retirement Fund, the Superannuation Trust of Australia and Finsuper created AustralianSuper, one of our largest industry super funds. This was followed in 2008 by the creation of Media Super from the merger of Print Super and JustSuper. In 2009, the Stevedoring Employees Retirement Fund and the Seafarers Retirement Fund consolidated into Maritime Super. Consolidation, particularly for smaller funds, allows the benefits of economies of scale, economies which some fund managers believe necessitate funds having at least $5 billion under management to survive effectively.

The advantage of scale is backed by studies and the experience of funds not only here but also overseas. A study by the Australian Prudential Regulatory Authority, APRA, found that large funds outperform medium and smaller funds by at least half a per cent and in some cases by a full percentage point. The APRA study, based on data over a 10-year period, was consistent with studies overseas. For example, a US study of pension fund data showed larger funds outperformed smaller funds by over four percentage points.

Scale has the potential not only to deliver higher investment returns but also to reduce administration costs. A 2009 study by Deloitte Actuaries and Consultants examined the public disclosure statements of 60 industry superannuation funds. That study found that:

operational costs, which largely relate to the number of fund members, in a fund with more than 500,000 members can be reduced by about 32% when compared with a fund of between 100,000 and 500,000 members. These costs are reduced even further (about 44%) when compared with a fund of between 50,000 to 100,000 members; and

investment fees as a percentage of total fund assets, using the default investment option, were 0.57% in a fund with over $10 billion in assets, compared with the higher 0.76% in a fund with between $1 billion and $2.5 billion in assets.

In investigating the net benefit of consolidation, the Department of Finance and Deregulation's actuary, Mercer, calculated that based on the 2008 figures net investment returns had the potential to be $10 million better in 2008, $15 million better in 2018 and $19 million better in 2028.

The bulk of the potential return of $10 million in 2008 would have benefited the military schemes as $7 million of the net return is related to those schemes.

While all funds in a consolidation benefit, it is the smaller funds that achieve the greatest benefits. There is a future risk that, without this consolidation, the military schemes could become smaller relative to other funds and then have problems obtaining good investment returns.

The larger the fund the greater the ability of a trustee to pool funds and thereby lower investment costs and drive higher returns. This is because a merger sees a better spread of age profile of members amongst all the schemes. That allows a better spread of assets across age bands and risk categories. The practical implications for fund members will be an increase in the super savings of over 90 per cent of our current serving personnel. Just a 0.5 percentage point increase in the net return of a cadet who joins the RAAF and retires as a group captain will be $95,000 if that person serves a full career or $41,000 if they serve for a decade. The benefits, though smaller, will also flow through to the government's main civilian superannuation schemes.

It is easy to forget that if those opposite had their way we would not be talking about administrative changes to strengthen investment returns for those who serve our nation. Those opposite have always stood against superannuation reforms. I would like to draw the House's attention to a terrific after dinner speech delivered last night in Parliament House by the Assistant Treasurer—who I am pleased to see in this place—in which he took the audience through the history of superannuation and pointed out that when Bob Hawke took office in 1983 just 40 per cent of the workplace had super cover and that by 1991, after the Hawke Labor government's major superannuation reforms, 72 per cent of the workforce had superannuation cover.

But the Assistant Treasurer also pointed out some of the statements of those opposite when Labor under the Keating government moved to introduce a superannuation guarantee levy. The Assistant Treasurer said:

… Wilson Tuckey drew on his 'long history in the racing industry' to compare the legislation to the 'worst type of jockey … both stupid and dishonest.'

Wilson Tuckey continued:

'When the poor old employer levy gets to 12 per cent, what will it deliver? Luckily, it might deliver an overseas holiday and a few presents for the kids, but it will not deliver a retirement income at the inflated costs of those days.'

As the Assistant Treasurer pointed out, a 12 per cent super guarantee will provide a worker now aged 30 on average full-time wages with a real retirement benefit of over $553,000 at age pension age. That is certainly more than 'an overseas holiday and a few presents for the kids.'

These sorts of statements of doom and gloom at the introduction of compulsory superannuation were not restricted to members who have left this place. Then Senator Bronwyn Bishop told the Senate at the time of a conversation that she had had with a small business person. That small business person had told Senator Bishop:

But now that this compulsory superannuation payment has gone through, yesterday I had to sack a part-time employee and turn a full-time employee into a part-time employee.

The late Senator Peter Cook, for whom I had the privilege to once work, interjected very speedily and said that, given that the law had not yet come into effect, it was difficult to see how small business people would have been affected by it. But Senator Bishop was as unmoved then, as she is now, by the facts. She finished the 1992 debate as follows:

I heard Senator McMullan said, 'The difference between our systems on superannuation is that ours is compulsory and theirs is voluntary.' That is very true. That is an essential difference. Our policy is designed to make it attractive for people to provide for themselves in later life whereas this Government's is designed to penalise business, to regulate it out of existence.

Of course, that is what those opposite have often thought about compulsory superannuation—that it is an imposition.

The Leader of the Opposition once called Labor's superannuation guarantee 'a con job'. Those opposite have been fundamentally uninterested in superannuation. Perhaps the reason for that is that it is so far in the future. When you are just focused on getting your face on the evening news, why should you be thinking about things that are going to happen a couple of decades hence? No, you want to focus on the here and now, the latest poll and the latest snappy grab.

But superannuation is about much more than that. Superannuation is about ensuring that Australians enjoy dignity in retirement. Because of the lag in investment accumulation, the decisions we are making now are going to affect people like my one- and four-year-old sons, who will enter the labour market possibly around 2030 and continue in it possibly as late as 2080. My little boys are among those who will benefit from having a good superannuation scheme. It is those long-run reforms—that many of us will not be around to see—which lie at the heart of superannuation reform. It can sometimes look like a technical detail but, let me tell you, it is anything but. It is about securing dignity in retirement and ensuring that Australians are able to enjoy their retirement, comfortable in not having to worry about being able to pay the bills. I commend the bills to the House.

(Update: The bills passed both houses on 21 June.)
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Sky AM Agenda 20 June 2011 with Andrew Leigh and Mitch Fifield

Transcript – Sky News AM Agenda – 6 June 2011


E & OE 

Subjects: Carbon pricing, live exports, immigration


Welcome back to AM Agenda. With me now is Liberal frontbencher Senator Mitch Fifield and Labor MP Andrew Leigh. Gentlemen, good morning to you both. Andrew first to you. Why not give the people a say with a plebiscite as Mr Abbott is proposing?


Well Kieran we had an election last year, and it was very clear that the majority of Australians voted for Parties that wanted to put a price on carbon. We’ve seen that of course in the 2007 election as well when both major political parties went to the election saying we should put a price on carbon. Tony Abbott, of course, is running more stunts than Jim Rose. He wants to do anything he can to distract himself from serious policy. He doesn’t want to talk about the different plans that are on the table. And there are two very different plans on the table.


Why is a plebiscite a stunt, necessarily? You would think that giving the people a say on the specific issue - the Government didn’t say it would bring in a carbon tax before the poll, in fact Julia Gillard explicitly rejected the idea.


Well Kieran, the differences between a carbon tax and an ETS are miniscule…


Tell that to the punters!


…compared to the differences between pricing carbon and not pricing carbon. I mean, the real difference here is, are you going to use a market-based mechanism - the most efficient way of dealing with climate change. Tony Abbott during the period immediately after the election was asked by the independents whether he wanted another poll, and he said no, he didn’t. But of course, when things didn’t go his way, he’s now like a spoiled kid in the school yard trying everything he can to run a nasty, negative campaign to try and distract attention from the big economic reform, which is…


What’s nasty about a plebiscite?


Senator Fifield, Senator Brown said this morning effectively what Andrew has said here – that Tony Abbott didn’t get what he wanted, ie Government, and now he wants to sideline Government with taxpayer’s money. This could cost tens of millions of dollars – this plebiscite.


We’re not wanting to revisit the last election, we’re not wanting to re-prosecute that. We just want to give the Australian people a say, for the first time, on this issue. Andrew and Julia Gillard are in denial and in a parallel universe. Julia Gillard went to the election - she said, “there will be no carbon tax under a Government I lead.” She lied. She also said before the election that she would seek a community consensus before seeking to price carbon. That was the whole genesis of the “people’s assembly.” She hasn’t sought a community consensus. She’s lied to the Australian people. They deserve to have a say. We’re not saying that the Government definitely has to have an election. We think that would be the right thing to do – to seek a mandate at the polls – but if they aren’t prepared to do that, then the right thing to do is to seek the people’s view through a plebiscite.


Are you trying to get this through before the Greens take the balance of the power in the Senate as of July the first?


We’re seeking to expedite this through the Senate.


Through the Senate that’s going to allow it through?


Sure, the Senate changes in composition, but we don’t know whether this Senate will allow the plebiscite bill through. We hope that it will. We’ll be making the case to the independents, we’ll be making the case to the minor parties. Who knows, maybe the Greens might suddenly embrace the concept of democracy and want to seek the people’s will on this. We’ll wait and see. There’s absolutely no reason why Julia Gillard shouldn’t support a plebiscite.


Is the Government confident that they’ve got the numbers in the lower house with Andrew Wilkie and Mr Windsor, Mr Oakeshott and co?


Well Kieran we’re obviously working it through the multi-party committee on climate change. There’s good faith negotiations occurring there…


Andrew Wilkie’s not involved in that though, so are you confident that he will back you on this vote?


Greg Combet and the Prime Minister are very actively involved in talking to all the independents. And of course we would be happy to talk to any member of the Coalition who is prepared to accept that climate change is real and we need to look at the most efficient way of dealing with…


But Andrew, what about talking to the Australian people? Forget the multi-party committee, have a plebiscite.


Let’s look at what we’re doing, we’re backing the scientists based on the best science, and we’re backing the economists, who almost to a person say the most efficient way of tackling dangerous climate change…


It must be very tough to hold your nerve though – for the Prime Minister and the Government to hold its nerve given the polls are so bad and given the polls show almost unanimously that people don’t back a carbon tax.


Not at all Kieran, and let me give you the opposite argument. The opposite is – can you imagine if the Government looked at the front of the paper, saw that some poll had given some particular number, we walked away from good policy and went straight for populism? That’s not the Labor way. That’s not our tradition.


The Labor way is to lie to the Australian people – that’s the Labor way. That’s what Julia Gillard has done.


We have backed putting a price on carbon, and I can go directly to what Mitch has said with the analogy the Prime Minister herself has used. If you find yourself driving home and your way is blocked, do you sit there at the roadblock? No. You drive around and you find another way home. And that’s exactly what we’re doing here. The fixed carbon price period will last three to five years and then we’ll move into an ETS. That’s the goal we’ve always sought, and the reason we’re doing that is the reason the British conservatives, the New Zealand conservatives, a whole host of sensible governments around the world support pricing carbon.


Including the New Zealand leader who’s here today to address the Parliament, who does, as Andrew said, back a similar initiative.


John Key is responsible to the Parliament and people of New Zealand. Julia Gillard is responsible to the Parliament and people of Australia. Andy was talking about the multi-party climate committee – how many people are on that? Eight or ten? They’re giving eight or ten people a say. What about giving the Australian people a say for the very first time? The Australian people have not had the chance to have a say on a carbon tax. Julia Gillard said, no, she wasn’t going to introduce one. The Government’s explanation is, ‘well, we’re driving a different way.’ That’s just garbage! You can’t fib, fudge and slide.


Mitch, you’re a sensible conservative, so I’m sure it pains you to come out with lines like these.


It doesn’t pain me at all.


You must know that in 2007 all major parties went to the election supporting a price on carbon. You must know that the consensus across all serious economists is that pricing carbon is more efficient. You must also know that your policy is going to extremely inefficient. Direct action is…


Senator Fifield…


Just on that point, all bar two or three serving members of the Australian House of Representatives went to the election vowing not to introduce a carbon tax. We certainly weren’t going to introduce a carbon tax. We said we weren’t, the Labor Party said they weren’t. So, the majority of people in the Australian Parliament are there on the basis of not introducing a carbon tax.


OK, I’ve got to move on. I want to talk about the Labor Party at the moment. Friday is the anniversary of Kevin Rudd being ousted. Andrew, the former Prime Minister has had to delay, postpone a party he was going to have with former staff because it begun a media circus apparently – that was the message from his wife. Peter Beattie has urged Kevin Rudd to bury the hatchet and in fact to leave Parliament. It’s pretty messy at the moment.


Well Kieran this party really characterises some of the sideshow nature of some of the commentary on this. I mean, you see column inches being spilt on this, but frankly, that’s not what this Government is about. When I speak to caucus colleagues and Ministerial colleagues, they’re focused on the big reforms. Reforms like helping disabled kids in schools, reforms like trying to close the gaps, making sure the Australian economy has the productive capacity to compete in a new economy…


Can Julia Gillard convince people to listen to her once again? When you look at the number in the Nielsen poll on Saturday, over 60% believing that Kevin Rudd should be leader, compared to 30% for Julia Gillard.


Kieran, you can look back to the media sideshow that was going on under the Hawke and Keating Governments, and there’s column inches being spilled on leadership tensions and polls. But what do we look back to? We look back to the major economic reforms of that time. The transition to a more productive economy, throwing off those shackles of tarrifs, engaging with Asia. Those big, long-run reforms were what those Governments focussed on then, and that’s what our Government is focussed on now.


Senator Fifield, given the state of the polls, it looks in that context unlikely that the Coalition will secure the support of the crossbenches. They’re not going to want to go to an election now, are they? They would get wiped out, they would lose their seats as well. So how can you get people across the line on this plebiscite, for example, when it just seems that all the politics and the polls suggest that it would be suicide to do it?


Well a plebiscite wouldn’t be suicide. We’re not expecting the independents are going to call an election or put pressure on the Government to call an election. But what we are hopeful is that they will see the plebiscite as a way of the Australian people expressing their view. The independents talk a lot about the true will of the Australian people being expressed, and I think that this is a very good way for that to happen.

I’ve got to say, just coming back to Kevin Rudd’s party, it does go to show just how fragile Julia Gillard’s leadership is. A Member of Parliament can’t even get a group of former staffers together for a party without it being seen as some direct challenge to the Prime Minister’s authority. This is extraordinary.


Everything that he’s doing at the moment is being interpreted in that context. You’re talking about that being a sideshow, but isn’t it largely being driven by a Foreign Minister who is continually popping his head up one way or another?


I’m really proud of our Foreign Minister. I think it’s terrific to have a foreign minister that sits in the Evatt/Evans tradition of being an activist, who is out there in the world’s councils. Who was, a week ago, sharing a stage with Bob Geldoff and Bill Gates at the global alliance against vaccines initiative in London, pledging that Australia would make a difference towards making the number of kids who die before their fifth birthday through preventable diseases, pledging …


Is there any chance of him making a comeback to the leadership, do you think?


Kevin Rudd’s doing a great job as Foreign Minister, and that’s what he’s going to continue to do. He will be there in the world’s councils, he’s actively engaged in Libya he’s actively engaged in the local…


So there’s no chance of return to the top job?


We’ve got a - he’s doing a terrific job as Foreign Minister, Kieran, and that is what he will continue to do. We have a mandarin speaking Foreign Minister. How good is this, for Australia in the Asian Century….


And Julia Gillard’s face lights up every time she sees Kevin on TV. I’m sure she shares your view.


Senator Fifield and Andrew Leigh, gentlemen have a great day. Thanks for that.

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Denying Reality

If you’re after some light entertainment, try asking a member of the federal opposition what they think of climate change deniers.

If you’re talking to someone in the half of the party room who voted for Tony Abbott over Malcolm Turnbull, they’ll likely try to change the subject. They know that it’s a difficult task to argue that the CSIRO, the Bureau of Meteorology, NASA and the Academy of Sciences are engaged in a vast conspiracy. But in their heart, many Coalition politicians somehow can’t come to accept the overwhelming scientific evidence in favour of climate change.

Alternatively, you might be talking to a Malcolm Turnbull supporter. They know the science is solid, but their leader believes climate change is ‘absolute crap’. So they’ll likely tell you that the Coalition is a broad church, which tolerates a variety of views.

But rejecting the science of climate change isn’t a fashion choice. It’s a fundamental question about whether you’re serious about public policy. If you believe the cranks and shonks on a matter as big as whether humans are causing climate change, why should we trust your judgement on anything else?

On some issues, we should tolerate difference. I may not like paisley shirts and ABBA, but I respect your right to love them both.

But if you can’t accept the thousands of temperature readings that show us that 2010 is one of the three hottest years on record, then you’re off with the fairies. Yes, Cori Bernadi, I’m talking about you.

If you can’t accept that every decade since the 1940s has been hotter than the preceding decade, then I have as much respect for your views as a flat-earther. Yes, Dennis Jensen, I’m talking about you.

And if you can’t cop the mainstream evidence that CO2 emissions are causing climate change, then you’ve just joined the loony right. Yes, Nick Minchin, Barnaby Joyce, Sophie Mirabella, Eric Abetz, Guy Barnett, Bronwyn Bishop, Ron Boswell and Michaelia Cash, I’m talking about you.

Australia’s conservatives didn’t always oppose mainstream science. Stanley Bruce created CSIRO.

Robert Menzies was an original fellow of the Australian Academy of Science. Malcolm Fraser created the Australian Science, Technology and Engineering Council.

Today, every living Liberal Party leader apart from Tony Abbott accepts the science of climate change and the need to put a price on carbon. It’s time for the Opposition to recognise that if you’re not serious about climate change science, you’re not fit to govern the country.

(crossposted at the ALP blog - please comment there)
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Foreign Aid & Local Forums

'Vertical funds' are playing an increasingly important role in foreign aid these days. One of these is the Global Alliance on Vaccines and Immunisation (GAVI), which received an extra $200 million injection from Australia at a donor meeting in London a week ago. Kevin Rudd's speech received plaudits from those who attended (Bruce Boyd told me of a colleague at the meeting who said the announcement 'took people's breath away'). Given how well GAVI has performed in assessments such as the UK multilateral aid review, this is good news indeed.

Another vertical fund that Australia contributes to is the Global Fund to Fight AIDS, Tuberculosis and Malaria. The fund will be holding its fourth Partnership Forum in Sao Paulo from 28-30 June, and I'll be attending as part of a parliamentarians' event on 27 June. You can guarantee that I won't be making any spectacular pledges of Australian aid, but I am looking forward to the conversation.

Flying from Australia to Brazil is messier than you might think (I'm getting there via South Africa), so it turns out that I won't be able to return in time for the community forum that I had advertised for Saturday 2 July in Downer Community Centre. I'll post details here once I've rescheduled that event. Apologies to inner north residents for any inconvenience.
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AYCC and Carrotmob

I spoke in Parliament today about the Australian Youth Climate Coalition, as well as Canberra's first 'Carrotmob'.
Climate Change, 16 June 2011

In politics, some of the most important decisions you make are the ones that outlive you, whether it is the Menzies government's decision to expand basic research through the CSIRO, the Keating government's decision to put in place a superannuation guarantee or this government's decision to dramatically improve early childhood education. Great policy is made with the long game in mind. In the case of climate change, the decisions we make today will matter more for my sons than they will for me. It will be my little boys whose world will be most affected if sea levels continue to rise and temperatures increase. Young people in my electorate, much like their peers across Australia, want a clean energy future, a future where Australia prices carbon.

This was the message 24 enthusiastic young Canberrans brought to me last week: Claire Bailey and Laura Hyde, year 9 students from Campbell High School; Kiara Creaser from Dickson College; Fehin Coffey, Sophia Rose O'Rourke, Kirk Demant and Claire Hickstepp from Orana School; Vicki Tjandra and Andrew Lovering from the University of Canberra; and Zoe Anderson, Moira Cully, Laura Hogan, Eliza Hopkins, Lindsey Cole, Charlotte Wood, Joshua Creaser, Jonathan Rosseau, Tess Corkish, Ben Huttner-Koros, Adam Huttner-Koros, Alexandra Gill, Hayley Shone, Ben Molan and Tom Sloan from the Australian National University.

These young Canberrans presented me with a petition signed by 700 people supporting a price on carbon and investment in renewable energy. They did so under the umbrella of the Australian Youth Climate Coalition. The AYCC has been determined to see Australia act. They have been dogged in their determination and unwavering in their commitment to ensure youth throughout Australia have their voices heard. It is often said that young, progressive activists are anti-market, that they are hostile to economics. But Australia's young climate change activists show how wrong this is. The AYCC activists I met with understand there is no contradiction between economic growth and environmental preservation and that a market based mechanism is the most efficient way of tackling dangerous climate change.

Speaking of markets, I want to use this opportunity to commend the organiser of Canberra's first 'Carrotmob'. Modelled as the environmental equivalent of a flash mob, Carrotmobs attract extra shoppers in return for the store owner's commitment to spend the extra revenue on improved energy efficiency. I commend Ren Webb and the other Carrotmob organisers who helped Ainslie IGA manager Manuel Xyrakis accumulate an extra $12,000 to spend on reducing his store's carbon footprint.

Thousands of Australians, young and old, support market based mechanisms for tackling climate change. It is time for all members of parliament to get on board. We need to price carbon now.
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ACT Community Living Project

I spoke in Parliament today about the ACT Community Living Project.
ACT Community Living Project, 16 June 2011

On Monday, 13 June, I had the pleasure of attending a barbecue to raise funds and awareness for the ACT Community Living Project. CLP is a not-for-profit community organisation seeking services for people with a disability, particularly those with a moderate to severe intellectual disability, many of whom have physical or health issues. The group also includes people with autism.

The event was held at Magnet Mart Gungahlin on a crisp Canberra winter's day. CLP had organised balloons and face painting for the kids, hot soup, coffee and sausage sandwiches. My four-year-old son, Sebastian, and I helped David and Kay behind the counter and then he sat and chuckled at me while I had my face painted with the CLP logo. I acknowledge CLP president, Esther Woodbury, and CLP coordinator, Allison McGregor, for their hard work in promoting CLP and pay tribute to CLP and the 350 Canberra families it supports for family members with an intellectual disability.

CLP recognises the need to provide people with an intellectual disability with a choice of accommodation, access to lifelong education, meaningful work or voluntary activities, quality health care and the chance to be socially included. I am pleased to support its work to raise funds for CLP and to raise awareness of the important issue of supporting people with an intellectual disability.
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Tim Harford’s latest book is a cracker (Adam Smith meets Malcolm Gladwell). It’s titled Adapt: Why Success Always Starts with Failure. Some choice quotes:
An enterprising civil servant… decided to bypass the regular commissioning process and order the new plane as ‘a most interesting experiment’. The plane was the Supermarine Spitfire. … it is only a small exaggeration to say that the Spitfire was the plane that saved the free world.

He studied… statistics on the death of corporate titans and compared them with half a billion years of data from the fossil record. The timescales were different, but the relationship between the size of an extinction event and its frequency proved to be exactly the same. … If companies really could plan successfully – as many of us naturally assume that they can… then the extinction signature of companies would look totally different to that of species. In reality, the signatures could hardly be more similar.

Margaret Thatcher famously declared, ‘You turn if you want to. The lady’s not for turning.’ Tony Blair was proud of the fact that he didn’t’ have a reverse gear. Nobody would buy a car that didn’t turn or go backwards, so it is unclear why we think of these as desirable qualities in Prime Ministers. … But whether we like it or not, trial and error is a tremendously powerful process for solving problems in a complex world, while expert leadership is not.

The Soviet failure revealed itself much more gradually: it was a pathological inability to experiment.

And so Mario Capecci became a street urchin at the age of four and a half. … In 2007, Mario Capecci was awarded the Nobel Prize for Medicine for this work on mouse genes. As the NIH’s expert panel had earlier admitted when agreeing to renew his funding: ‘We are glad you didn’t follow our advice.’

scientific societies shifted from chiefly awarding prizes to mostly handing out grants… Grants, unlike prizes, are a powerful tool of patronage. Prizes, in contrast, are open to anyone who produces results. That makes them intrinsically threatening to the establishment

[Archie] Cochrane … was a prisoner of war in a German camp in Salonica when the prisoners were struck by a severe outbreak of pitting oedemas – a horrible swelling up of fluid under the legs. … he improvised a trial with the only two potential treatments at his disposal: his personal store of vitamin C tablets and some Marmite… He divided twenty severe cases into two groups of ten… one young German doctor … studied the data. He was deeply impressed by the care of the clinical trial and the incontrovertible results.

evaluation experts such as Esther Duflo and Edward Miguel have criticised the evaluation of the Millennium Villages. They may be working brilliantly and they may not, but without a randomised trial it’s going to be difficult to know.

the Inland Revenue Service recently increased the rewards people could earn by reporting suspected tax evaders, and the number of tip-offs increased sixfold

The differences between a carbon permit scheme and a carbon tax are insignificant relative to the differences between having some kind of carbon price and not having one. [See also Peter Martin's column, which quotes Harford on carbon pricing.]
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My wife Gweneth is curating an exhibition at the Gallery of Australian Design in 2012 on the links between landscape architecture and public health.

If you have worked on design projects that promote healthy living (including schools, hospitals, prisons and parks), Gweneth would love to hear from you. Details here.
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Live Exports Suspension

I spoke in parliament last night on the issue of live animal exports.
Live Animal Exports, 14 June 2011

The image of our stock men and women is deeply etched on the national psyche: the laconic stockmen rocking easily in the saddle, cajoling and guiding the herd; the alert and agile stockman darting through the bush, bringing a bolter back or displaying campdrafting skills at the local rodeo.

The resourcefulness and resilience of Sara Henderson, who successfully ran Bullo River cattle station, inspired us all with her campaign against breast cancer even as she herself was dying from the disease.

The government, those who raise the cattle and those who rely on the cattle care deeply about the welfare of these animals and ensuring they are treated humanely every step of the way.

Following evidence of animal mistreatment, the decision was made to suspend trade to Indonesia. This was not an easy decision, but it was the right decision.

The live export trade will only recommence when we are certain that the industry complies with supply chain assurances. The industry must be based on animal welfare outcomes, transparency and verification. The Australian and Indonesian governments have agreed to work together to establish a transparent, verifiable system that will account for cattle from Australia right through the supply chain.

The humane treatment of animals is a universal value that transcends international boundaries. It is the community standard. It is the government's standard. It must be the industry's standard.

Under World Trade Organisation rules, Australia has the right to take actions to ensure that Australian cattle are treated in accordance with international standards of animal welfare. I was horrified, as all Australians were, by the Four Corners footage.

We cannot turn away from this.

That is not the Labor way.

It is not the way of this government.

That is why the government is working with the industry and with animal welfare organisations to make sure that the cattle those in the industry rely on and care for are part of a supply chain that respects the animals' welfare.

Halal killing should only be done after animals are stunned. This is the best way to ensure the long-term sustainability of the industry for those that rely on meat exports for their livelihood and way of life, such as the Indigenous stockmen and their families who work in 82 Indigenous cattle stations across Northern Australia, providing economic and employment opportunities.

We know that in the short term the suspension will have an impact. The government is committed to the long-term future of the industry, an industry that is vital to many Australians and their communities.

We all identify with the spirit of our stock men and women, and the care they have for their cattle. Banjo Paterson wrote of this in his poem With the Cattle:

'The plains are all awave with grass,

The skies are deepest blue;

And leisurely the cattle pass

And feed the day long through;

But when we sight the station gate,

We make the stockwhips crack,

A welcome sound to those who wait

To greet the cattle back:'

If anyone is left in doubt as to the indelible mark left by those who work the land, look down at your feet or the person's next to you. There is a good chance they will be wearing a pair of RM Williams shoes, shoes designed by a stockman for stockmen to enable them to apply their trade in caring for their cattle.

The pundits like to find conflict in every story. In the case of live exports, the debate has been portrayed as city versus country, Bondi versus Barcaldine, naive animal lovers versus heartless farmers.

But the debate is more than that.

We are more than that.

Over the past fortnight, I have received more than 500 emails on the issue of live exports and engaged in numerous conversations with constituents here in the bush capital.

Australia is made up of urbanites proud of their cattle industry and people on the land horrified at what they saw on their TV screens.

Ours is not a country divided. Most want a strong cattle industry, but never again do we want to see cattle mistreated. I am confident that we can achieve both outcomes.
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Drug Action Week 2011

My speech at the launch of Drug Action Week 2011.
Launch of Drug Action Week 2011
(themed ‘Looking After Your Mind’)

Thank you for braving a Canberra winter morning to be at Parliament House for the launch of Drug Action Week 2011.

We weren’t taught about it in primary school, but European settlement to Australia was inextricably linked to substance abuse.

So important was rum in the early colonies that it took the place of currency.

According to Russell Ward in The Australian Legend, ‘no people on the face of the earth ever absorbed more alcohol per head of population’ than Australians in the 1800s.

Indeed, Australia’s only successful armed takeover of government is the ‘rum rebellion’ of 1808, in which William Bligh was deposed.

It says something about the place of alcohol in this country, doesn’t it?

While the British have the Magna Carta, the Irish have their Easter Rising, and the Americans have the Boston Tea Party – we have the rum rebellion.

And yet Australia hasn’t always been behind the rest of the world when it comes to drugs and alcohol.

We were one of the first countries in the world to introduce Random Breath Testing, which has saved thousands of lives over recent decades.

We were among the first to introduce a Drug Court – recognising that you’re more likely to cut crime if you treat addiction as well as punishing wrongdoing.

That pragmatic approach – let’s see what works – is the hallmark of a successful treatment strategy. And it’s sensible, evidence-based policies that we’re pursuing today.

Drug Action Week

That brings me to Drug Action Week. This year, Drug Action Week will run from Sunday 19 June to Saturday 25 June.

The Australian Government has supported this very worthwhile annual event over a number of years and we are pleased to be involved once again.

Events such as these are valuable in helping improve awareness of the harm associated with drugs and alcohol, and their effects on our families, friends and the community.

Drug Action Week 2011 will see about 700 events taking place in the coming days.

These will include conferences, theatre events, youth group activities, remote Indigenous community concerts, outdoor movies, sporting events and other festival events.

This year’s theme is Looking After Your Mind. The aim is to draw attention to the links between drug and alcohol abuse and mental illness.

The risks to young Australians and to vulnerable communities of a binge drinking culture also feature in Drug Action Week 2011.

All of us – health workers, NGOs, governments, and the general public – must recognise the needs of people whose health is affected by both drugs and mental illness.

The facts speak for themselves: 35 per cent of people who use drugs also suffer from mental illness.

This Government has delivered on mental health, with a record $2.2 billion five-year reform package to drive fundamental reform in our system so that more lives are not needlessly lost.

A highlight of Drug Action Week 2011 will be the National Drug and Alcohol Awards in Sydney on Friday 24 June.

The awards will recognise and promote the achievements of those who work to reduce drug-related harm.

These awards, which this year are being coordinated by the Australian National Council on Drugs, are supported with funding from the Australian Government.

National Drug Strategy and related initiatives

Awareness activities like Drug Action Week support Australia’s National Drug Strategy.

The aim of the strategy is to build safe and healthy communities by minimising the health, social and economic harm related to alcohol, tobacco and other drugs.

It lays the foundation for a broad range of Government initiatives to reduce the demand for alcohol and other drugs, to reduce their supply, and to minimise their harm.

This is the year of action on mental health – and it will be a major factor in the Government’s second-term health agenda.

Investments in mental health in this year’s Budget build on existing arrangements by the Council of Australian Governments to improve services for people with drug and alcohol problems and mental illness.

In the sphere of drug and alcohol treatment services, the Australian Government is working towards the development of a new quality framework and funding model for services, including in the area of comorbidity where mental illness and substance use issues coincide.

In addition, the Government is investing in improved infrastructure and service delivery so that Aboriginal and Torres Strait Islander people living in regional and remote areas will have better access to drug and alcohol treatment services.  The plan is to both expand existing services and establish new ones.


Ladies and gentlemen, drugs and alcohol affect all parts of Australian society, and it takes a collective effort to reduce their harmful effects on our family, friends and community.

Those Rum Corps roots that I spoke about will always be part of Australia’s history.

But so is that spirit of restless innovation – that finds problems, talks about them openly, and looks for practical solutions. We see that spirit in Australia’s traditional owners, and in those migrants that have come to this land since. That same can-do attitude underpins my belief that we can do more to reduce the harm done by drugs and alcohol – and that we will do so guided by good sense. Facts and evidence – not ideology and dogma – are the Australian way.

I commend the work of ADCA and its partners in bringing together  organisations and individuals across Australia to collaborate in this effort, and have great pleasure in officially launching Drug Action Week 2011.
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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.