Parliamentary Budget Office

I spoke in parliament on Monday on the government's legislation to create a Parliamentary Budget Office.
Parliamentary Budget Office, 12 September 2011

Over 100 years ago, Alfred Deakin could have been describing the Labor vision when he said:

'We look forward to social and unemployment insurances, to improved health services, to a wise control of our economy ...'

Providing support for those in need, making sure that every Australian has access to health care and the responsible management of our economy continue to be foremost for the Gillard Labor government. It is in the words, 'wise control of the economy' that I believe Deakin would have approved of the establishment of a Parliamentary Budget Office—an independent institution will bring greater accountability and transparency to the policy costing process and strengthen Australia's fiscal and budget frameworks. It will be an institution that stops parties avoiding scrutiny of their election policy costings as the coalition did at the last election.

We are not the first nation to establish such an institution. In the United States they have the Congressional Budget Office. Operating since 1975, the Congressional Budget Office provides congress with: objective, non-partisan and economic analysis; information and estimates for the budget process; and assistance in economic and budgetary decisions. The Congressional Budget Office also advises congress in relation to: budget, microeconomic and taxation analysis; health and human services; management and business; and national security. When in opposition, the Conservative Party in the United Kingdom made plans for an office for budget responsibility. With their victory last year the Cameron government have established the Office for Budget Responsibility. Now operational, the UK office provides economic forecasting that is independent of government.

If only those opposite displayed the foresight and economic responsibility of their conservative cousins in the UK; instead what they have to offer is a $70 billion hole from a swathe of uncosted and untested policy thought bubbles and an unwillingness to support sensible revenue measures like the fuel tax reforms, first brought into parliament by Peter Costello in 2003, and the perfectly reasonable move to means test the private health insurance rebate. This is, of course, the very same coalition that tried to conceal an $11 billion policy costing shortfall at the last election. Given that the Leader of the Opposition has been trying since that last election for a rerun of that election, it is no surprise that the member for Goldstein walked into this place deciding to refight the costings debate. The member for Goldstein just told this chamber that the work Treasury did in assessing the coalition's costings and coming up with their $11 billion hole was fabricated. That is right—when they do not like Treasury boffins, they just say, 'Their work is fabricated; they are politicised.' They do not provide a sense of respect for Treasury, which traditionally has been what conservatives have done in Australia; they attack the bureaucrats and say that they are politicising everything.

The Parliamentary Budget Office will shine a spotlight into the coalition's costings which even they will not be able to hide from. It will make sure the Australian community is better informed about the budget impacts of policy proposals and impose greater budget accountability. The Parliamentary Budget Office will prepare election policy costings upon the request of authorised party representatives and the Independent members of parliament, who played a critical role in bringing the PBO into being. It will be able to prepare policy costings outside of the caretaker period. It will prepare responses to budget-related, non-policy costing requests of individual senators and members of parliament. It will initiate its own work program with regard to research and analysis of budget and fiscal policy settings. It will provide formal contributions on request to relevant parliamentary committees. It will provide non-partisan and policy neutral analysis of the budget cycle, fiscal policy and the financial implications of policy proposals. It will also help ensure the Australian public can be better informed about the budget impacts of policies proposed by members of parliament. In short, the Parliamentary Budget Office will have a busy agenda.

The Parliamentary Budget Office will promote greater understanding in the community about the budget process and fiscal policy. Accountability and transparency are at the heart of democracy and at the heart of a government's relationship with the public. This is something the United States and the United Kingdom have realised in establishing their independent budgetary offices. Accountability and transparency were the very values that the Joint Select Committee on the Parliamentary Budget Office spoke of in formulating their recommendations for a parliamentary budget office. The committee recommended that the office have mechanisms that could ensure transparency of process, equality of access to its services and maintain the separation of the parliament and the executive. Currently there is no independent body that specialises in high quality research and analysis on fiscal policy for the parliament. That is the critical role the Parliamentary Budget Office will fill.

The joint committee also found that the election costing provisions of the Charter of Budget Honesty Act had significant shortcomings. As it stands, the act does not enable the electorate to be better informed about the financial implications of election commitments. We in this place owe it to voters to provide them with independent information that gives everyone in Australia more information about policy proposals during an election campaign. That is why the joint committee unanimously recommended measures to provide incentives for parties to use a costings process—a costings process that better informs the wider public and enhances accountability and transparency. With the Parliamentary Budget Office and the independent costing of election policies we will avoid the farcical situation the coalition found themselves in at the last election.

Rather than follow the provisions of the Charter of Budget Honesty Act ,the political party that had been relying on leaks from Treasury decided that Treasury could not be trusted. The shadow Treasurer infamously claimed: 'The coalition's numbers are exactly right.' That was despite the $11 billion discrepancy between what was being promised and how it was going to be paid. This kind of dishonesty and disregard for proper costings processes should not continue. The Australian public deserves better than having to make a judgment on the responsible management of the country's budgetary and fiscal frameworks according to figures provided by private accounting firms. That is not good enough for the Australian people; they deserve a proper, transparent and accountable parliamentary budget office.

Under this bill the election costings function of the Parliamentary Budget Office will complement that of Treasury and the Department of Finance and Deregulation. The costings service will be fully transparent and consistent with similar processes under the Charter of Budget Honesty Act. The bill also amends the Charter of Budget Honesty Act so that parties with at least five members in the parliament will be able to request election costings from Treasury and Finance. Previously only the government and the opposition were able to access this service. ,Independent members of Parliament and political parties with less than five members in the Parliament will also be able to have their policies costed by the Parliamentary Budget Office. To ensure independence from the executive the appointment of a parliamentary budget officer will be made by the presiding officers following approval by the Joint Committee of Public Accounts and Audit. This way the Parliamentary Budget Officer will be accountable to the parliament via the presiding officers rather than to the executive.

In respect of its annual work plan, draft budget estimates and annual report, the Parliamentary Budget Office and officer will be overseen by the Joint Standing Committee on Public Accounts and Audit. This was the model for a parliamentary budget office and officer that was unanimously recommended by the Joint Select Committee on the Parliamentary Budget Office. Compare this to the kind of budget office the coalition wants. I spoke earlier today in this place about the private member's motion moved by the member for North Sydney, and I noted there that that model would undermine the office by making it accountable to ministers, not the parliament. It would reduce the level of transparency and public accountability that a parliamentary budget office brings to the election costings process. Under the proposal put forward by the member for North Sydney, election policy costings can remain confidential and hidden from the public. This is not the right thing to do.

This government is committed to increasing transparency and accountability, but the coalition cannot seem to kick the habit of poorly-thought-through policies—a habit that showed itself at the last election, with their $11 billion black hole, and a policy that shows itself at the moment with the coalition's $70 billion costings hole.

I also want to use this opportunity to note an additional issue which goes to the mechanics of the costings process—an issue which has not been raised in the debate so far. It is the issue of dynamic scoring. Dynamic scoring has been politically controversial in the United States, where the issue of how to analyse the cost of tax policy changes has arisen. Essentially what is behind dynamic scoring is predicting the impact of tax changes by looking at the effects of individuals' reactions to policy. It is an adaptation of static scoring, which is the traditional method for analysing policy changes. The problem with dynamic scoring is that there is little agreement about how to model long-run economic growth and the effect of tax cuts on the economy. We have some reasonable estimates of multipliers as a result of fiscal policy such as the fiscal stimulus put in place by the Rudd-Gillard governments in 2008-2009, but the impact of taxation changes is highly controversial.

I draw the House's attention to the 2003 report by the Congressional Budget Office commissioned under Douglas Holz-Eakin, who worked for the Bush White House and then went on to run the Congressional Budget Office. The study that the CBO did under his direction estimated the impact of a reduction in personal taxes and the claim that some in the Republican Party were making that such a tax cut would pay for itself. The CBO concluded that the free-lunch mantra—the so-called Laffer effect, which has been around for many years—is just plain wrong. The most optimistic assumptions the Congressional Budget Office could come up with were that tax cuts might stimulate enough economic growth to replace 22 per cent of lost revenue in the first five years and 32 per cent in the second five. But the CBO noted that that was the most optimistic case and, on pessimistic assumptions, the growth effects of tax cuts did nothing to offset revenue loss.

My point is that, if this legislation is enacted and a parliamentary budget office is set up, I would strongly urge that office to steer clear of dynamic scoring, to be pessimistic in their assessments of the impact of taxation changes on economic growth and not to get into the free-lunch mantra—the idea that tax cuts can pay for themselves. We have little evidence for that, and it is particularly dangerous because it sets up the potential for a government to simply suggest we can cut taxes and get the revenue back. That is not what careful economic studies have found. We have to be vigilant to the potential politicisation of the Parliamentary Budget Office in this way and in others. Its independence and its non-partisan character is paramount. By having an independent agent providing the costing and analytical services for policy proposals, I hope we can take away some of the embarrassment that the coalition currently finds themselves in with their $70 billion black hole.

It is a lot to hope for. Only last week the shadow Treasurer was telling 2GB listeners the number was not $70 billion, but at the same time the shadow finance minister was confirming that $70 billion was not a furphy. That was the gap that the coalition had to make up. This inconsistency and uncertainty does not befit a team that would like to have themselves regarded as the alternative economic policymakers in Australia. The accountability and transparency of the Parliamentary Budget Office will bring to an end this kind of deception—these kinds of attempts to claim that parties have closed the gap when, in fact, their costings simply do not add up.

A parliamentary budget office will be an important new institution. It will bring greater accountability and greater transparency to the policy costings process during election periods. I hope it will continue to draw on the academic expertise in Australia in public finance. This is an area to which I made a small contribution when I worked at the Australian National University, but, frankly, when you look at Australian economics overall, we have traditionally been stronger in macroeconomics and labour economics than we have in public finance. And the Parliamentary Budget Office will make an important contribution there. I hope they will engage thoroughly and deeply with Australian academic economists on this, as this government is seeking to do, for example, through the tax forum that will take place in early October.

The Australian people put their trust in us. They expect us to be honest with them about the policies we intend to implement that impact on their lives. Our respect for them means they deserve nothing less than a government that is accountable and transparent in presenting what Alfred Deakin called 'its wise control of the economy'.
Add your reaction Share

Tax Forum Submission

I'm attending the government's Tax Forum in Canberra on 4-5 October. Participants have been asked to supply a Statement of Priorities. Here's mine:
Tax Forum - Statement of Priorities
Andrew Leigh MP

A wide range of participants have been invited to the Tax Forum, and we can expect that many diverse ideas will be brought to the table. This statement aims to set out some of the guiding principles that should be at the heart of tax reform in Australia.

In the last parliamentary term, the Australian Government commissioned a major review of the Australian tax system, the first in a generation. The 2009 Australia’s Future Tax System report (‘the Henry Review’) is a seminal document, which outlines the core principles that should be at the centre of tax reform.

As a nation, we need to identify the opportunities and challenges facing us and then target reforms to meet them. The Australian Government has identified the mining boom and climate change as major issues that require tax reform. We have introduced the Clean Energy Future legislation into parliament, and will soon be introducing legislation for a Minerals Resource Rent Tax.

Among the core principles for taxation reform are the following:

  1. Taxes should be shifted away from mobile tax bases to immobile tax bases.

  2. Taxation of savings should be more neutral and sustainable.

  3. Polluters should internalise the social cost of environmental damage.

  4. Disincentives to labour force participation should be reduced.

  5. The tax system should be as simple as possible.

The Australian Government is already acting on these priorities. For example:

  • we are shifting the tax burden from mobile to immobile tax bases by cutting business investment taxes and introducing a mining tax;

  • we are ensuring more neutrality and sustainability in savings decisions by increasing the compulsory superannuation contribution rate, increasing the incentive for low-income earners to contribute to superannuation, and cutting the tax rate on interest earnings;

  • we are ensuring that polluters internalise the social cost of environmental damage by implementing a carbon price, and reforming the Fringe Benefits Tax regime on cars in order to remove the incentive to drive excess kilometres;

  • we are reducing disincentives to labour force participation by phasing out the dependent spouse tax offset, making income tests more generous for single parents and introducing a pensioner work bonus; and

  • we are simplifying the tax system by tripling the tax free threshold and replacing the ineffective entrepreneurs’ tax offset with more straightforward measures such as an improved instant asset write-off.

The tax forum is a valuable chance to continue a national conversation about tax reform. That conversation takes place at a time when Australia’s economic fundamentals are among the best in the world. Our unemployment rate is around half the level of the United States and the European Union, and government debt is a small fraction of that in most developed nations. Australia’s geography has us in the fastest-growing region of the world, and demand for our exports is higher than it has been for a century. Not everyone is sharing in the benefits of the boom, but as a nation, we approach the task of reform from a position of strength.

I look forward to engaging in this discussion, guided by the principles outlined above.

Other submissions will soon be published on the Tax Forum website.
Add your reaction Share

Sky News AM Agenda with Andrew Leigh and Mitch Fifield

Ashleigh Gillon hosted Mitch Fifield and I on the AM Agenda program on Sky News yesterday.
Add your reaction Share

In praise of public sector workers

I spoke in parliament yesterday about the important role played by public sector workers - particularly teachers and public servants.
House of Representatives, 12 September 2011

I rise to speak in praise of public sector workers in the ACT and throughout Australia. It was my pleasure recently to attend a roundtable event hosted by Slater and Gordon Canberra and the Centre for Policy Development, to discuss a new report by the CPD authored by James Whelan, and commissioned by Miriam Lyons, CPD’s executive director. The report, titled The state of the Australian Public Service: an alternative report, is an insightful analysis of the role that the Australian Public Service plays today. It notes that the Australian Public Service's employment - currently 163,778 people as at the end of 30 December 2010 - lies somewhere between the number of people employed in Coles and the number of people employed in Woolworths.

The report discusses, in a real broad sweep of history way, how the Australian Public Service has developed and some of the major challenges currently facing it. Its findings would make interesting reading, I imagine, for the member for North Sydney, who has repeatedly claimed that the increase in public servant numbers since Labor came to office has been 20,000. The member for North Sydney continues to sprout this figure despite having been repeatedly corrected by the Special Minister of State for the Public Service and Integrity. As the minister has pointed out, the change in Australian Public Service numbers since this government came to office has been 8,355, rather than 20,000. But it is not these inaccuracies that most worry my constituents; it is the repeated promise from the member for North Sydney to slash 12,000 public service jobs out of Canberra. This lies in contrast to the views of those from the Centre for Policy Development.

The Centre for Policy Development Research has delved into a range of important issues for the Public Service. For example, it tabulates the Australian Public Service retrenchments since 1995. When one looks at that graph, a clear spike stands out. That is in the years 1997, 1998 and 1999. Australian Public Service retrenchments in no other year exceed 4,000 but in those three years the annual retrenchments were 10,070, 10,238 and 9,061 respectively. It is very clear what happens to numbers in the Australian Public Service when a coalition government comes to office. They are slashed.

The report also focuses on the role that the Big Society reforms are having in the United Kingdom. The report notes:

'The Coalition's desire to reduce the size and cost of the Australian Public Service taps into 'small government' movements that have been prevalent here and in other western countries since at least the 1970s. The values, vision and policies of these movements are currently expressed by the Tea Party in the United States and 'Big Society' in the United Kingdom.'

You can see a clear contrast of values in the report. For example, the member for Fadden has told parliament:

'I want the government to be small, I want the public service reduced.'

The member for Wannon has said:

'… the government needs to put a freeze on Public Service recruitment.'

But not all of those opposite take this simplistic view to the Public Service. The member for Wentworth says:

'Squeezing public servants probably appeals to some people. I think the critical thing is to ensure that Government delivers its services efficiently at every level but you've just have to be smart about it.'

The member for Kennedy says:

'They have done a good job and their Public Service has done a good job.'

Those are words that I commend to this House.

It is important that we continue to recognise the great work occurring in the Public Service. Nicholas Gruen's Government 2.0 report suggests some ways in which innovation could be rewarded, including the novel notion of a policy idol competition. When I was in the United States I was privileged to be a judge for the ‘Innovations in American Government’ awards that are run annually to recognise innovation within local, state and federal government. There are also major challenges in this sector. One of the challenges noted by James Whelan's report is increasing the share of Indigenous workers and the share of workers with a disability in an Australian Public Service where recruitment now typically starts at the APS 3 level or above.

We need to recognise that public servants are critical to the quality of service delivery. One of the reasons that Australia avoided the global financial crisis was the rapid fiscal stimulus put in place thanks to the work of the Treasury, the Australian Taxation Office and Centrelink. On this 10th anniversary of September 11, it is worth remembering that on that fateful day it was the government workers who were running up the stairs. And when the Queensland floods hit earlier this year, the Minister for Human Services noted the tragic death of Centrelink worker Gillian Harman who spent a month volunteering in flood hit Queensland in Dalby. As the minister said, Ms Harman returned home on Sunday night. She went straight back to work in her Centrelink office in Guyra in northern New South Wales on Monday and tragically was killed on Monday going home from the office. It is this sort of dedication to work of the Public Service that we on this side of the House recognise.

Public sector workers more broadly benefit from the representation of their unions. I pay tribute to the CPSU, the AEU, the ASU, the ANEF, United Voice, the UFU and the Police Federation among others for the work they do every day in representing public sector workers.

Finally, I would like to turn to another type of public sector workers and pay tribute to the many teachers in the electorate of Fraser who day in, day out do work that is enormously valuable; which inspires the next generation of Canberrans to learn and to understand the world around them.

I also want to pay tribute to the Teach for Australia program. I had the pleasure recently of having dinner in Canberra with, and speaking in Melbourne to, Teach for Australia associates, as they are known—the new teachers who teach in the classroom. I would like to thank Melodie Potts-Rosevear for giving me that opportunity. Teach for Australia is an extraordinarily selective program. In 2009, over 750 applications were received for only 50 places. Of those selected for the program, the average UAI/ENTER score was 97. This selective program means that Teach for Australia associates are placed into classrooms after an intensive pre-placement education and then teach for two years in disadvantaged schools while they continue to complete their education through a two-year postgraduate diploma of teaching at the Melbourne Graduate School of Education at the University of Melbourne. This program has built on the success of similar programs in the United States and the United Kingdom and works to get as many talented people as we can into the classroom. Not all teachers will be Teach for Australia associates, but it is another flexible pathway into teaching.

I acknowledge in particular to the Teach for Australia teachers who have been working hard in the ACT this year: Lia van den Bosch at Hawker College, Imogen Byrne at Belconnen High, Corey McCann and Igraine Ridley-Smith at Calwell High, and Felicity Oliver at Erindale College. In the ACT, we are grateful to them for joining the teaching workforce and for working alongside the many great teachers who enrich the lives of young Canberrans every day. I know that this is not always an easy job. I know that walking into the classroom when you are tired, when the kids are not always behaving at their best, can be a challenge, but it is essential work for the future of our nation and I pay tribute to the many teachers who do it every day.
Add your reaction Share

Community Organisations

I spoke in parliament today about Canberra's community organisations (with special mention of the Canberra Times fun run and Hall village).
Community Organisations
12 September 2011

There are many reasons to love this fine city of Canberra, but the No. 1 reason from my standpoint is its social connectedness. Canberra is a place to enjoy the simple pleasures of sharing time with friends and neighbours, working together in clubs, groups and associations and strengthening the social ties that bind us together. All of this, what academics have called social capital, is the idea that the ties that bind us together have an inherent value. When it was first introduced it was a bit controversial, much as the idea of human capital, that the skills that people have could have an economic value.

But, just as we have come to recognise that people's skills and education have value, like a bridge or a road does, increasingly we are recognising that social capital, the ties that bind us together, are economically important. They are important not only because they are fun but because they make businesses work better. The more you trust the person who is supplying the goods to your business, the less you have to have a contract that writes everything down in case something goes wrong. The bonds of social capital, the networks of trust and reciprocity, exist between two friends who meet for a beer on Friday night. They link together the members of a local cricket team, who know that the more they trust one another the more games they are going to win. And they link together, co-workers who find that working together gets the job done faster. From the year 2000, when I first came across Robert Putnam, the author in the US of Bowling Alone, until last year I was working on a project looking at social capital in Australia, the strength of community ties. The material was eventually published in a book by UNSW Press called Disconnected. The more data I collected the clearer it was to me that we knew what was going on.

In terms of organisational membership, surveys of Australians show we are less likely to be active members of an organisation than our counterparts were in the 1960s. Organisations themselves have gone out of business. There are fewer associations today in Australia than there were in the late 1970s despite a big increase in the number of people in the country. The average age of members of organisations has also risen. This is also because existing organisations have shed members. When I pulled together as much membership data as I could from bodies like Scouts, Guides, Rotary and Lions, I saw that the mass membership of organisations peaked as a share of the population in the late 1960s and has declined markedly since then.

As to people giving their time, Australia saw a rise in the share of people volunteering in the late 1990s—maybe an Olympic effect—but volunteering rates are probably still below their post-war peak. And the proportion of us who give any money to charity has stayed pretty stable over recent decades despite a substantial increase in average income.

On the matter of informal socialising, Randall Pearce of Ipsos Mackay was kind enough to field the same question to a group of Australians in the 2000s that had been put in 1984 when people were asked about the number of close friends they had and the number of neighbours they could rely on. Even on that measure too social capital had declined. The respondents in the 2000s had shed two friends who would keep a confidence, and half a friend who would help them through a difficult patch. Compared to respondents two decades earlier, the typical Australian in the 2000s has one and a half fewer neighbours of whom they can ask a small favour and three fewer neighbours they could drop in on uninvited. We are also more likely to live alone.

I am pleased to inform the House that in Canberra, although our community strength is probably below what it was, we are the most active in a civic sense in Australia. A cornerstone of social connectedness in Canberra is the community of Hall, and there the Hall Progress Association is a critical organisation. When the original boundary was drawn for the then Federal Capital Territory, the direct line from Mount Coree to One Tree Hill took in the village of Hall. Since its official proclamation in 1882, the village of Hall has had a long and rich history of community engagement and civic spirit. The Hall Progress Association, formed in 190, has been meeting and working for the development of Hall and its residents for 110 years.

I recently had the privilege of meeting current members of the association to learn about local matters of interest. Over coffee at the general store, first opened in 1889 and still a hub in the community, I was told of the vision the association has for preserving the historic value of Hall, making it a great place for families and having an eye always firmly to the future.

One idea that we talked about over a terrific coffee, was the establishment of Hall as a 'green village', where solar power generation can meet the energy needs of Hall's 350 residents and, through the retrofitting of sustainable systems for energy, water, waste and landscape management, provide a demonstration case for other communities.

In the face of declining social capital, Canberra and the community of Hall are working strongly to maintain and build social networks. I would like to commend the Hall Progress Association for the role it plays in the process, particularly Bob Richardson, Helen White, Alastair Crombie, John Starr, Phil Robson, Paul Porteous and Trudy Mansfield for their hospitality, enthusiasm, energy and dedication to the Hall community.

I am proud to say that you see a lot of community spirit in the rest of Canberra. On virtually every social capital measure, Canberra is at or near the top. Compared to other states and territories we have got the highest share of charitable donors and the highest volunteering rate. If any Canberran listening to or reading this would like to be recognised for their volunteering we have even got volunteering awards on at the moment. Eighty-five per cent of Canberrans give money to causes in a given year, compared to 73 per cent in New South Wales, the next closest jurisdiction. In terms of giving time, 38 per cent of Canberrans volunteer in a given year compared with 33 per cent of Victorians, the next closest. In terms of sporting events, 47 per cent of Canberrans attended a sporting event in the previous year, compared to 44 per cent nationally, and 41 per cent of Canberrans actually take the field, by playing organised sport, compared to only 30 per cent in the rest of Australia. On the cultural front, Canberrans are twice as likely to attend an art gallery or a museum than other Australians. They are more likely to go to the movies and more likely to go for a stroll around the National Botanic Gardens. They can cheer for the Raiders, the Brumbies, the Capitals and the Prime Minister's XI. They can see Alfred Deakin's portrait in the Museum of Australian Democracy and Ned Kelly's death mask at the National Portrait Gallery. They can enjoy a cool stroll through the Botanic Gardens.

Canberra's community organisations may not have the same level of exposure as its well-known national institutions, but the role they play in building social capital is just as valuable. Community organisations are an integral part of the fabric that forms social capital. They bring together a wide cross-section of members of the community. They build networks of trust and reciprocity, and they link together individuals from diverse backgrounds. It is one of the reasons that living in Canberra is such an enjoyable experience and why so many people from throughout Australia choose to come to our city for work or to study. Community organisations lend a helping hand to help people newly arrived in Canberra. They help new residents connect to established members of the community.

In closing, I would like to acknowledge Jessica Woodall, an intern in my office who is working with me for the week. I pay tribute to her favourite community group, the Peregian Beach community school. I would like to acknowledge Alisha White, an Indigenous intern from Airds High School, whose favourite community group is the Iragmga Dance Group, and Damien Hickman, an adviser in my office. His favourite community group is ACT Veterans Rugby, which works to raise money for Clare Holland House, an activity that I am sure makes his wife, Kate, and his daughter Liesel greatly proud. I would also like to pay tribute to ACT volunteers: those who care for people with a disability; who help out at the school tuckshop; who assist refugees, such as the organisation Companion House does; or who campaign on issues that matter to them, like the Australian Youth Climate Coalition does.

Yesterday I enjoyed competing in the Canberra Times Fun Run to raise money for the Heart Foundation. My staffers Gus Little, Louise Crossman, Damien Hickman, Lyndell Tutty, Ruth Stanfield and Claire Daly all joined me, and they were willing to put their pride aside and all wear an 'Andrew Leigh—Supporting Our Community' t-shirt for the run. I thank them for being part of a terrific community event and for their role in raising money for the Heart Foundation. On a gorgeous Canberra spring day we ran down Adelaide Avenue, looking up at Parliament House and recognising what a wonderful city this is, how lucky we are to live in it and how terrific our community organisations are in building the social fabric of Canberra.
Add your reaction Share

Find your lost superannuation

Member for Ginninderra, Dr Chris Bourke MLA, and I yesterday launched a local campaign to help our constituents find their lost super.

According to a national survey, people living in the Belconnen suburbs covered by the 2615 postcode such as Charnwood, Holt and Spence are owed more than $45 million so the campaign will concentrate on those areas.

Dr Bourke and I will hold a series of mobile offices in local shopping centres to show constituents just how easy it is to find their lost superannuation accounts and combine them into one.

If you need help finding your lost superannuation, please contact my office on 6247 4396 or come and speak to us at a mobile office.
Add your reaction Share

Talking International Economics on ABC24

Add your reaction Share

National Volunteer Awards

There are some parts of being a Federal MP that are incredibly rewarding. One of those is the ability to recognise local volunteers for their hard work out in the community. Today, Kate Lundy, Gai Brodtmann and I announced with Volunteering ACT the opening of nominations for the ACT's National Volunteer Awards. The National Volunteer Awards are a part of the 10th anniversary of the International Year of Volunteers activities. If you're familiar with my work before entering the Australian Parliament, you'll know that volunteering is something that I'm very passionate about.

If you know a local volunteer individual or group I encourage you to go to the Volunteering ACT website from tomorrow to put in a nomination. Details on award categories and how to nominate are in the media release below.

Member for Fraser Andrew Leigh, Member for Canberra Gai Brodtmann and Senator for the ACT Senator Kate Lundy today announced the launch of the National Volunteer Awards in conjunction with Volunteering ACT.

Volunteers will be able to nominate, or be nominated for, awards in the following categories:

1. Individual Volunteer Award
2. Team Volunteer Award
3. Young Volunteer Award (under 25)
4. Corporate Volunteer Award
5. Long – Term Volunteer Commitment Award
6. Innovation in Volunteering Award
7. New Organisation or Volunteer Program Award
8. Emergency Management Volunteer Award
9. Education Volunteer Award
10. Environment Volunteer Award

“Volunteering is an important part of the social fabric of Australia,” said Andrew Leigh.

“Most volunteers participate to give back to their community and we thought it was time we publicly recognised the contribution made by volunteers.”

The National Volunteer Awards are an initiative of the Gillard Government to recognise individuals who contribute to their local communities.

“2011 is the tenth anniversary of the International Year of Volunteers,” said Senator Lundy.

“The theme for the world- wide celebrations is ‘Inspire the Volunteer in You’ – recognising that everyone can be a volunteer and make a valuable contribution to their community.”

Nominations open tomorrow and will close on 21 October 2011. Nomination forms are available from the Volunteering ACT website:

“I encourage all Canberrans to nominate the hard-working volunteers that they know for an award,” said Gai Brodtmann.

“We look forward to seeing all of the different types of contributions that people are making to the Canberra community”.

The awards will be handed out at a ceremony on International Day of the Volunteer, 5 December 2011.

“Volunteering ACT is pleased to host the event for these awards on the International Day of Volunteers” said Maureen Cane, Chief Executive Officer of Volunteering ACT.
Add your reaction Share

A Mess, But No Messiah

My AFR column today is on the myth that WorkChoices was good for productivity. I conclude with a few ideas about what we might do to raise productivity.
End Work Choices Myth, Australian Financial Review, 6 September 2011

In Monty Python’s The Life of Brian, a man is accidentally mistaken for the messiah. Despite all facts to the contrary, he is unable to persuade his devoted followers that he is not divine.

And so it is with WorkChoices. Over recent months, a steady drumbeat has been sounding through the Coalition and more extreme elements of the business community, claiming that a return to the industrial relations system that existed from 2006 to 2009 would boost productivity in Australia.

Alas, there’s precious little evidence to back this up. Productivity growth in Australia peaked in the early-2000s, and has been significantly lower in the naughties than it was in the nineties. If WorkChoices boosted productivity, you might have expected that Australia’s productivity would have soared in the period 2006-2009. But the opposite is true. In the WorkChoices era, labour productivity growth rates were lower than any 3-year period in recent times.

In a pair of papers presented to the Reserve Bank’s annual policy conference in August, these results were confirmed. In a splendid analysis of productivity, the Grattan Institute’s Saul Eslake concludes: ‘In particular, the workplace relations reforms introduced by the Howard Government under the title ‘WorkChoices’ in its last term in office were not, primarily, ‘productivity-enhancing’.’

The same holds true of unemployment. Looking at the jobless rate that prevails at a given level of inflation (the so-called ‘Phillips Curve’), Melbourne University’s Jeff Borland finds no evidence that WorkChoices reduced the unemployment rate.

None of this should have come as a surprise. Most of the WorkChoices package was not about labour market deregulation, but increasing the industrial relations power of the federal government and shifting the power balance from workers to employers (eg. by abolishing the no-disadvantage test and restricting union rights). Removing dismissals protection from small businesses greatly raised the chance of employees being treated unfairly, since small firms are least likely to have proper human resources processes.

Even when the Howard Government introduced the WorkChoices package, it struggled to provide evidence for its productivity-enhancing effects. In the Explanatory Memorandum, then-minister Kevin Andrews included a graph showing a negative relationship between an industry’s productivity growth from 1990-2004 and its award coverage rate in 2004. As Griffith University’s David Peetz pointed out, such an analysis only makes sense if time runs backwards. When Peetz used a measure of award coverage from an earlier year, the relationship falls apart.

But just because WorkChoices isn’t the answer, it doesn’t mean that the question isn’t important. In his study of productivity, Eslake notes that Australia’s productivity slowdown has been broadly-based, affecting most industries. He points out that Australian firms are less likely to introduce product innovations than companies in Japan, the US and the EU, and that many large Australian firms do not even bother to measure their productivity.

Among his favoured solutions, Eslake includes regulatory reform (eg. more competition in the pharmacy, newsagency and taxi markets) and tax reform (eg. removing tax loopholes and reforming inefficient state taxes such as stamp duty). He might also have mentioned policies to reduce congestion, which operates like a tax whose revenues are dumped into the ocean.

In my view, the most promising productivity-boosting reforms are in the area of education. With test scores having flatlined since the 1960s, it is vital to find ways of making our schools work better. Publishing test scores on the MySchool website, funding reforms in low-SES schools, and creating a system of teacher performance pay are among the promising policies that the Gillard Government is putting in place to raise school quality.

Alongside this, we need to increase the quantity of education that young Australians receive: through a higher school leaving age, more in-school trades training, and a demand-driven university system. Education reforms will take some years to affect productivity, but in the long-run, their value is likely to be higher than other productivity reforms.

Lastly, it’s important that more Australians have the chance to participate in the labour market. For example, we’re updating the disability impairment tables, and requiring that people try finding work before they sign up for the Disability Support Pension. Policies like this won’t raise average productivity (in fact, they’ll probably lower it a smidgin), but they’re unambiguously the right thing to do.

So by all means, let’s continue the national debate about productivity, but let’s drop the myth that WorkChoices will be the salvation all our productivity problems. As Brian’s mother finally tells the crowd: ‘e’s not the Messiah – e’s a very naughty boy’.

Andrew Leigh is the federal member for Fraser.

Thanks to the parliamentary library for research assistance on this issue. They also have useful chronologies of Fair Work and Work Choices.
Add your reaction Share

Capital Hill 30 August 2011 with Stuart Robert

Lyndal Curtis hosted Stuart Robert and me on the Capital Hill program yesterday evening, discussing a range of political issues. Topics included support for the manufacturing industry and the plan to put a price on pollution.
Add your reaction Share

Stay in touch

Subscribe to our monthly newsletter


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.