Andrew Leigh

I spoke in parliament today about Australia's first randomised trial of an early childhood program.

Randomised Evaluation of Early Childhood Programs
15 September 2011

Improving the life chances of young Australians is a key priority for this government, and I acknowledge the important work done particularly by the Minister for Employment Participation and Childcare and the Minister for School Education, Early Childhood and Youth. Under this government, we have boosted the childcare rebate from 30 to 50 per cent. We have created the MyChild.gov.au website. We first collected information for the Australian Early Development Index in 2009, and this census of five year-old children will be run again in 2012.

I would like to acknowledge the work of experts in this area, including Frank Oberklaid, from the Centre for Community Child Health, Royal Children's Hospital, Melbourne; Matthew Gray, from the Australian Institute of Family Studies; Lance Emerson, from the Australian Research Alliance for Children and Youth (ARACY); and Pam Cahir, from Early Childhood Australia.

The Gillard government is committed to evidence based policy making. We know a lot about the importance of early years interventions but we still have much to learn. That is why I would like to pay particular tribute to the team that is running the Early Years Education Research Project: Nichola Coombs, Jeff Borland, Yi-Ping Tseng, Anne Kennedy, Janet Williams-Smith, Dave Glazebrook and Brigid Jordan.

This is Australia's first randomised trial of an early childhood program. It has received ethics approval and it is following in the footsteps of the great randomised early childhood evaluations: the Perry Preschool program, the Abecedarian Project and the Early Training Project – all begun in the 1960s in the United States. The Early Years Education Research Project will provide valuable lessons about what works in the early years. It will allow us to improve our policies and it will do it using the most rigorous evaluation methodology available. I wish the team all the best of luck.

I spoke in parliament yesterday about the tenth anniversary of the September 11 tragedy.

United States of America: Terrorist Attacks
14 September 2011

Last Sunday, Peter Negron once again stood before a crowd gathered in Lower Manhattan to remember and pay tribute to the victims of the September 11 tragedy. Two years after losing his father in the attacks, Peter, then a slight 13-year-old barely able to reach the microphone, had read the children's poem Stars, including the lines:

'I felt them watching over me, each one
'And let me cry and cry till I was done.'

The enduring acuteness of the loss and sorrow felt by the nation was captured by the boy's shaking voice.

At the time of the attacks, I was living in Boston. On the morning of 11 September 2001, standing in the atrium of the Littauer Building at the Harvard Kennedy School, I looked up at the television screen and saw smoke pouring out of the Twin Towers. Around me were students from all over the globe, including many Americans. Some had friends who had boarded flights leaving Boston at eight that morning—friends they would never see again.

That morning we were supposed to choose our classes. To help us decide, Harvard had each professor give a short overview of the course they were offering. By chance, I entered the room where Michael Ignatieff was presenting his overview. After a minute's silence to remember those who had died that morning, Ignatieff spoke eloquently about international law and the challenges of deciding when to intervene in another nation for humanitarian reasons. He balanced the head and the heart: the need to honour those we have lost while thoughtfully considering the circumstances to justify sending our military overseas. When I left his classroom, one of the Twin Towers had fallen. The second would fall minutes afterwards.

This week, Peter Negron spoke of how he has tried to be a father figure to his younger brother, and his plans for the future. Ten years have passed since Peter's father's death and, while the depth of his heartache was still visible, it was heartening to see the young man's fortitude. Nearly 3,000 families lost a son, daughter, sister, brother, father or mother on September 11.

Ten Australians are known to have died. From New South Wales, Alberto Dominguez, from Lidcombe, age 66, was a Qantas baggage handler; Yvonne Kennedy, 62, was on American Airlines flight 77, which crashed into the Pentagon; Craig Gibson, 37, from Randwick, was working in the World Trade Center's north tower, in the offices of insurers Marsh & McLennan; Steve Tompsett, 39, from Merrylands, was in the north tower; Elisa Ferraina, 27, from Sydney, who had just taken out UK citizenship, having been born in Australia, was in the north tower; and Lesley Thomas, 41, was also in the north tower. From Victoria, Leanne Whiteside, 31, a lawyer from Melbourne, was in the south tower; and Peter Gyulavary, 44, born in Geelong, was in the south tower. From South Australia, Andrew Knox, 29, from Adelaide, was in the north tower. I remember Andrew's friend Kirsten Andrews coming to stay with me in Boston shortly afterwards as she worked through the experience of losing such a close friend. From Queensland, Kevin Dennis, 43, from the Gold Coast, was a US based stockbroker with Cantor Fitzgerald, a firm which lost two-thirds of its employees on that fateful day.

In the 10 years after the September 11 attacks there has been something of a trend among academics and commentators to focus on where to place blame—blame for the initial attacks, blame for the subsequent fighting. Christopher Hitchens, while describing Osama bin Laden as 'the proud of beneficiary of the export of violence', highlights the indecency of trying to act as a mouthpiece of terrorists and engaging in apologist rhetoric. As Hitchens notes, there are legitimate grievances held by the Palestinian people. United States foreign policy is sometimes imperfect. But to link these with al-Qaeda's primeval, totalitarianism, misogynist, anti-modern ideology is deeply wrong. Hitchens points out that after Salvador Allende was murdered on 11 September 1973, the Chilean opposition had legitimate grievances against the United States. But the Chilean opposition never dreamed of pursuing their goals by committing atrocities against civilians on United States soil. Nothing justifies the mass murder of civilians.

Hitchens emphasises the duty we owe to others who continue to suffer, such as 'Afghanistan's people, whose lives were rendered impossible by the Taliban long before we felt any pain'. Australia has a proud history of upholding this responsibility by serving around the world as peacekeepers. Since 1947, more than 30,000 Australians have worked for the cause of international peace and security. Today marks the 64th anniversary of our involvement in international peacekeeping. I pay tribute to one of my predecessors as the member for Fraser, John Langmore, who has been a strong advocate for the global role played by Australian peacekeepers.

Our peacekeeping efforts were recently recognised by United Nations Secretary-General Ban Ki-moon, who acknowledged the work of Australians in Africa, Europe, Central America, the Middle East and the Asia Pacific region. Australian peacekeepers saved lives, helped communities and worked to rebuild nations. Those efforts are continuing today in Afghanistan—about which I spoke in much more detail in parliament last October.

To say that September 11 changed the world is no exaggeration, but it also reinforced some absolutes. Australia continues to share the United States' vehement opposition to terrorism. Together we remember the lives that have been lost and together we will work to ensure that such a tragedy does not occur again, be it in our own country or elsewhere. It is our responsibility to ourselves and to the world to work towards a peaceful future.

http://www.youtube.com/embed/CkDRfJssXjk?hl=en&fs=1

I was pleased to speak today on the government's climate change bills (aka the Clean Energy Future plan package):

Clean Energy Bill 2011 and related bills
14 September 2011

Over the past few decades, as we in this place have debated solutions to climate change, climate science has become increasingly unequivocal: the world is warming and human beings are causing that warming. This parliament sits in a city that shares a close connection to the natural environment. The bush capital is particularly vulnerable to climate change. Unchecked climate change over the next five decades could subject Canberra to more high and extreme fire danger days, more frequent droughts, more scorching hot days when elderly people and young kids cannot go outside, and less water in our dams. We cannot blame climate change for any single extreme event but we know that more of them will impose a greater cost to households. Canberra's devastating bushfires in 2003 delivered a damage bill of a third of a billion dollars to what was then just a $16 billion economy. If you increase the probability of extreme fire danger days then you increase the expected cost of bushfires.

One way of regarding climate change mitigation is as a form of insurance. I am not in the habit of regularly quoting Rupert Murdoch, but he says:

'Climate change poses clear, catastrophic threats. We may not agree on the extent, but we certainly can't afford the risk of inaction.'

If you accept that asbestos is very likely to cause malignant mesothelioma and that bad cholesterol is very likely to increase the risk of a heart attack then you should accept that our greenhouse gas emissions are very likely causing global warming.

The coalition likes to flirt with climate change deniers. Their Western Australian branch recently called for a royal commission into climate change science. But in their official policy the coalition have recently accepted the science and agreed to an emissions reduction of five per cent on 2000 levels by 2020, so the question we in this chamber have to think about is: what is the best way of getting to that bipartisan target? The choice is clear: ‘Direct Action’ or a market based approach.

The problem is that the coalition's policy is indirect and it will not take action in the most effective way. When you reject a market based mechanism and place your faith in command-and-control you lose a lot of flexibility. You can see this if you look, for example, at Australia's projections of renewable energy growth in the decade from 2000 till 2010. At the start of the decade experts projected that two-thirds of the renewables growth would come from bagasse and none from wind. By the end of the decade bagasse had contributed less than one-tenth of the renewables increase while wind had contributed nearly half.

When you reject the market based mechanism you do not tap the ingenuity of the market. You lock yourself into an inflexible system. We should never forget that a price on carbon pollution is not just a disincentive to polluters but also an incentive to investors and entrepreneurs looking to invest in renewables. Joshua Gans, one of Australia's brightest economists, said about the two contrasting policies:

'The point is that this game could go on and on with very little impact and possibly negative impact on total emissions. And there is example after example of this. Think of the taxes required to employ all the inspectors and personnel to ensure that regulations are doing what you wanted without unintended consequences. Sure, it can be done but you will need a government that would make Lenin blush to make it happen.

'Contrast that with a carbon price—by tax or trade. That requires none of this because it hits directly on the problem: emissions create external costs so we need everyone to build that cost into their decision-making. The problem is, as right-wing economist Frederick Hayek pointed out, that no-one has the information required to plan out what individuals might do themselves. By placing the decisions of environmental management in the hands of the people, you can let things work themselves out in a way the heavy-handed Government involvement cannot.'

He went on to say:

'I can’t parse the dual hypotheses that either the Coalition just deny economic evidence or that they actually want more emissions and handouts to business. Perhaps one of their number can enlighten us.'

Professor Gans is not alone in favour of an approach which prices carbon and allows business to innovate in their solution. A poll of members of the Economics Society of Australia, released at the July Australian Conference of Economists, found that 79 per cent agreed with carbon pricing and only 12 per cent supported direct regulation.

This is not some complicated economic theory. It is based on lessons from first-year economics. The best way of addressing a negative externality is to put a price on it. And it is not unproven theory either. In 1989 when US President George HW Bush proposed the use of a market based mechanism to deal with acid rain, the electricity generators warned that costs would skyrocket. Today, that market based emissions trading program is universally regarded as a success. It achieved its emissions targets at around one-third of the projected costs.

Why was it so successful? Researchers found that firms used a variety of approaches to reduce emissions. Some of them retrofitted emissions control equipment. A number switched to cleaner fuels. Others retired their dirtiest generators. Because each firm took the lowest cost approach to abatement, the social cost was minimised. Those opposite used to subscribe to such an approach. In 2007, their election manifesto said, 'A re-elected coalition government will establish the world's most comprehensive emissions trading scheme.'

Whenever I speak at schools and universities, I meet young Australians who are optimistic about a clean energy future and want us to get on with pricing carbon. They get the science and they want us to act. Young people can and do make a positive contribution on environmental debates.

Indeed, in 1990, one young person argued that a 'pollution tax is both desirable, and, in some form, is inevitable'. That young person pointed out that the national interest must be favoured over sectional interests, saying 'even if some of the Liberals' constituents do respond negatively, a pollution tax does need to be introduced to properly serve the public interest'. Who was this young person? It was the member for Flinders [Greg Hunt], and his remarks were from his law honours thesis.

I cite his work not as some cheap political trick in this place but rather as demonstration that there are still some opposite who deep down know that the advice of experts and economists is right, that acting on climate change using the most efficient means possible is the right thing to do. As recently as 28 April 2008, the member for Flinders told a Sydney audience:

Perhaps the most important domestic policy was the decision of the Howard Government that Australia will implement a national carbon trading system.

But the reluctance of conservatives to listen to the best advice is not new. We know that former Senator Minchin, political godfather for many of those opposite, did not accept the scientific evidence on the need to act on smoking or on climate change, which he believes to be some 'vast left-wing conspiracy to de-industrialise the world'.

Former Liberal Premier of New South Wales Nick Greiner lamented this approach, saying in 1990:

'Regrettably, too many people on the conservative side of politics still view environmental consciousness as some sort of left-wing conspiracy Amongst both the Liberal and National Parties there is still a cringe when the environment is mentioned, a subconscious aversion that arises, I believe, from a misconception that there is some fundamental philosophical inconsistency between environmental consciousness and democratic capitalism.'

More than 20 years on, those remarks have never been more relevant.

Recent history, including the Liberal Party's leadership change in December 2009 by one vote—which is a great example of the fact that tipping points really do matter in climate change—lays bare this reality. Pricing carbon is in the traditions of capitalism. Business recognises this and has been calling for certainty in this policy area. For example, the Energy Supply Association of Australia called for a well-designed emissions trading scheme back in February 2007. Nathan Fabian of the Investor Group on Climate Change has said:

'Delaying the introduction of a carbon price is a false economy. We know we must achieve lower domestic emissions, send clear investment signals and support a stronger international agreement. It's time to get on with the job.'

Like the former Carbon Pollution Reduction Scheme, the Clean Energy Future Plan that we are debating today has a fixed-price period which, yes, operates like a tax, followed by a floating-price emissions trading scheme. For those who dislike fixed prices, also known as carbon taxes, I have good news for you. After 2015 there will be no carbon tax.

Under a carbon price, our economy will continue to grow. More than 1.6 million jobs will be created, jobs in clean and renewable industries, jobs in industries that are yet to develop.The revolution is already taking place. In my own electorate we have students in industries taking advantage of this. Earlier this year I was with the Minister for Resources and Energy—who I am pleased to see in the chamber today—at the Australian National University for a launch of a major project to increase the efficiency of photovoltaic solar cells. The project secured investment from Trina, a Chinese company that is a world leader in global energy.

Late last year - with my friend Andrew Barr, a member of the ACT Legislative Assembly - I opened the Sustainability Hub at the Canberra Institute of Technology. That facility allows Canberrans to get practical experience in the latest green building applications, materials and new products for residential and commercial sectors as well as in renewable technologies, like wind and solar. Canberra is already pioneering an electric car grid, with battery charge stations provided by Better Place—and I acknowledge the work my friends Evan Thornley and Macgregor Duncan do at that company.

The world is also harnessing these advantages and we cannot afford to be left behind. Reviews have been conducted for governments of both persuasions and they have been crystal clear on this fact. China's wind energy industry is projected to top 150 gigawatts by 2020, up from earlier projections of 30 gigawatts. China is introducing emissions trading schemes in some of its largest cities—including Beijing and Shanghai—and is reported to be planning a nationwide trading scheme to commence in 2015. That is right: a nominally communist economy is more committed to the market than the Liberal Party of Australia.

In Canada, four provinces—British Columbia, Manitoba, Ontario, and Quebec—are partners in the Western Climate initiative which aims to introduce emissions trading in phases. British Columbia's carbon price is already at $25. In the United States, a coalition of eastern states—with a combined population twice that of Australia's—participate in an emissions trading scheme covering the power sector. California will start a carbon trading scheme in 2012 and is working with the four Canadian provinces to progressively establish a regional trading market from 2012 onward. International linkage makes economic sense. Climate change is a global problem and we want to get the lowest cost abatement.

Japan and South Korea are piloting voluntary emissions trading schemes. South Korea introduced economy wide mandatory emissions trading legislation into its parliament in April 2011 to commence in 2015 and it is seeking to pass the legislation this year. All European countries and Australia's top six trading partners—China, Japan, the United States, Republic of Korea, the United Kingdom, and India—have implemented or are piloting emissions trading schemes, carbon taxes or coal taxes at the national, state or city level. The fact is the world is acting and Australia has a role to play in that action.

In December 2009, Christina Ora, a young person from the Solomon Islands stood up in front of the world at the United Nations Climate Change Conference in Copenhagen and said:

'I am 17 years old. For my entire life, countries have been negotiating a climate agreement. My future is in front of me. In the year that I was born, amid an atmosphere of hope, the world formed the United Nations Framework Convention on Climate Change to solve the climate crisis.'

I am confident we can answer Ms Ora’s challenge, that a global solution can be found, that collectively we can stabilise our emissions while allowing economies to grow and, importantly, allowing development that will see millions of people brought out of poverty.

The Australian government has been debating acting on carbon pollution since Graham Richardson brought a submission to Bob Hawke's cabinet in 1989 to reduce Australia's greenhouse gas emissions. We have had 35 parliamentary reviews into climate change.

I am a proud supporter of this economic reform. This is economic reform that sets our nation up for the challenges of the future. It is the stuff of which Labor governments are made. Labor governments brought down the tariff walls in Australia, Labor governments floated the dollar, Labor governments put in place Medicare and Labor governments implemented universal superannuation. For each of these reforms it has taken a Labor government to harness the prosperity of the future. None of these reforms were uncontroversial at the time of their enactment but all of them have increased our nation's prosperity. I am confident this reform will stand the test of time and secure our clean energy future in the low-pollution world of tomorrow.

http://www.youtube.com/embed/BZ_KQ1rLNuk?hl=en&fs=1

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'.

http://www.youtube.com/embed/ZkddN0qitC0?hl=en&fs=1

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.

Ashleigh Gillon hosted Mitch Fifield and I on the AM Agenda program on Sky News yesterday.http://www.youtube.com/embed/eHPSnDuJHYE?hl=en&fs=1

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.

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.

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.http://www.youtube.com/embed/OUEVK0MdlFg?hl=en&fs=1