Andrew Leigh: kicking goals, requires promotion

I just came across this MPI speech by Andrew Leigh. Damn fine job. Straightforward, informed, powerful. In a world in which people somehow get divided into subject wonks and sliver-tongues, it’s amazing how much actually knowing stuff and having a perspective on things gives you a platform on which to communicate.

Can we please have a promotion for this man. I can think of one or two people who might make way for him, but here at Club Pony, we don’t name names like that.

(Note Leigh’s outrage at the fact that we will go to the next election, as we did to the last, and as we did in the last NSW and Victorian elections with an opposition that gets its accountants signed off by its accounting friends, without the slightest regard for the basic laws of arithmetic. Of course the media will cover it all with ‘he said – she said’ blather and the farce will continue. )

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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36 Responses to Andrew Leigh: kicking goals, requires promotion

  1. JB Cairns says:

    He is good

  2. Paul Frijters says:

    definitely, the Labour Party should make far more use of him than they do at present.

  3. derrida derider says:

    But then Andrew is being a bit cute on the stuff about superannuation – judging from old blog discussions he has some private sympathy for what Tony Abbott said about it in 1995 (FWIW my own view is that the Mad Monk was absolutely correct then).

  4. faust says:

    He is good but has a Pyne-like high pitch voice which is unfortunate.

  5. Nicholas Gruen says:

    I sd also have added, though it can be taken as read, that it is a political speech. It is not a no-spin zone. (That’s actually something to like about it. Andrew’s now a politician, not an academic and has to act within the genre.)

    In any event, as if it weren’t obvious, no mention has been made of the GST for instance – which is the one act of altruism in the political economy of the Howard Government. Personally I agree with Paul Keating that it was a second order issue (ie not the Keating a few years earlier who told us it was central to avoiding the slide into a banana republic) but I expect Andrew wouldn’t agree with that.

    WorkChoices might also have been OK if it had been situated within a wage/tax tradeoff of some kind and hadn’t been such a dirigiste piece of class warfare and flat Orwellian lying – unchain my heart and all (and yes I know that was the ad campaign for the GST, but it could have been for pretty much anything).

  6. Pedro says:

    “In its fundamentals, the Australian economy today is the product of economic reforms that were put in place by Labor governments and opposed by those opposite.”

    So the Libs opposed all the Hawke Keating economic reforms? Okey dokey. And the super increase is a good idea. Sheesh, you’re holding that bar real low.

  7. Dan says:

    Yeah, he’s good. My mum says he’s a interpersonally a genuinely nice, decent guy too, fwiw.

  8. JB Cairns says:


    Howard voted for the reforms but campaigned against them ( as did Peacock).

    to take two at different times tariff cuts and competition policy

    Yes the Super increase is a good idea.

  9. Pedro says:

    Homer, then you should tell Ken Henry to stop being such a dill about the super increase. Take home pay reductions are simply wonderful, and the job losses while we wait for those pay reductions to kick in.

    Being slavishly devoted to the ALP sure saves having to use your noggin.

  10. JB Cairns says:

    Ken Henry wants the retirees to rely somewhat on the government in retirement as does the opposition.

    I prefer retirees live without direct government support.

  11. derrida derider says:

    Don’t want to get into an irrelevant argument, JB, but what precisely is the difference between a 12% tax to provide a government pension and a 12% compulsory levy to provide a private pension? The main similarity is that the government has forced you to take a 12% cut in your working income in both cases. The main differences are that in the second some private fund manager/adviser will have taken a cut and individuals rather than the government bear the investment risk. It’s actually another example of hiding a finance problems by an off-balance-sheet transaction – as Abbott said, a massive con job.

  12. Nicholas Gruen says:

    Yes, it’s an interesting issue DD.

    Its interesting how much support super has – and that’s because people see it as their money. The politics would be pretty different if it were all taxes and outlays I suspect.

    Also I presume in the model you’re proposing that the money would be managed – that the managers of the money would try to get decent returns and not put it all into general revenue or bonds? I’d agree that in principle that’s superior, although if you have a good enough default system you could have the state managing a very low management cost portfolio of mixed assets so that anyone who wanted the kind of outcome you’re talking about could choose to avail themselves of it.

  13. Tel says:

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

    If the U.S. government tried to go to a balanced budget now, our standard of living would crash and there would be riots in the streets. The American people have been enjoying false prosperity for so long that they have lost any notion of what “normal” actually is.

    Think of it this way. If your family makes $40,000 this year and you spend an extra $20,000 on your credit cards, your family would be enjoying a false sense of prosperity.

    You could do that year after year as long as the credit card companies keep loaning you more money.

    But debt always catches up with you in the end.

    Don’t laugh too hard… it could happen here. There’s been bigger and faster borrowing by the Aus government in the past few years than any other time in our history. Of course, bumping up the tax would help them cover the debt, but only if they can get spending under control.

  14. conrad says:

    “Its interesting how much support super has – and that’s because people see it as their money.”

    That’s because it is to a far greater extent than would otherwise be the case — if it was a compulsary government tax, it could used for any number of things, distributed to people who hadn’t paid much in, distributed to other people/things for political purposes (e.g., the grey vote, “infrastructure building”) etc. . Now, what you put in is basically yours to get back, and you can put more in also without having to worry about some getting taken for other purposes (excluding tax).

  15. emess says:

    @6 Pedro.

    The coalition also had eight years before Hawke and Keating to introduce those reforms…and didn’t.

    @12 Nicholas.

    I guess the government could offer a voluntary immediate annuity to those wishing to seek a government guaranteed income in retirement. Private sector immediate annuities have an effective negative interest rate and consequently don’t have much uptake. You don’t have to delve too far into the commissions and fees to work out why that is.

    The government on the other hand has the potential to be able to be more efficient than the private sector, because it already has the centrelink pension apparatus to make payments etc. In fact, it could even become more efficient because it could pay people who also qualify for a pension at the same time both the immediate annuity and the appropriate pension payment. Presumably if the liabilities and amounts received were correctly assessed, this would have no negative net debt implications either.

  16. Nicholas Gruen says:


    There are two issues there – risk sharing – and you’re presuming that super sd be defined benefit and so be at the risk of the funder. I expect we’ve gone way too far towards loading risk onto the superanuant, but not sure we should go all the way back to defined benefit.

    But the government ought to be able to offer financial products to super funds that would be better for superannuants than they do.

    The other thing is how contributions are invested. It’s important that they be invested in higher yield assets than govt bonds (though they’re presumably part of a good portfolio.

  17. perplexed says:

    I assiduously read Andrew’s blog from the days prior to him going to the big house. And always thought it a shame that the site ceased from that day on. The same goes for Bob Carr’s Thoughtlines blog the last time I looked. What is it about the ALP, if responsible, that they can’t allow these threads to continue. Too contentious? Possibility of going ‘off message?’ Surely like keeping a share portfolio these thinkers couldn’t simply outsource the blog while hopefully maintain a ‘presence’.

  18. Nicholas Gruen says:

    perplexed, I agree with you. While doing the job they now do imposes heavy constraints – on time and on what can be said – I think it’s quite important that they retain some capacity to speak independently. It would have to be constrained, but it is important that it exist. It doesn’t seem to at present. Solidarity is obviously important in politics. But so too is dissent and independent thought and discussion.

  19. emess says:

    The point of having a defined benefit scheme for superannuants is that there are many who neither have the skill or the inclination to manage their affairs. People on this site are generally financially very literate. However, many people now on retirement have absolutely no talent for dealing with the amounts of money involved. Imagine if you were told at age 60 to go out and do something both completely alien or beyond your ability – or end up on the pension. This problem of competence should not be overlooked by policy makers merely because those policy makers have no such difficulty.

    I am suggesting that there should be a defined benefit scheme available so that those who cannot understand money, for whatever reason, can have an income in retirement. It should be voluntary, simple, and possibly limited in scope (say a maximum investment of only a specific multiple of average annual earnings).

  20. Nicholas Gruen says:

    Yes, I’d agree with that, though I think it’s good policy to ensure that the expected return from such a policy was less than the expected return from taking more risk, because otherwise it would be rorted by the rich. And as I’ve said, this could be done within the current arrangements by governments providing instruments designed to augment standard portfolios. One would also want to provide such instruments in a way that permitted superannuants to avoid their fund managers charging a margin on top of the government product.

  21. Mack says:

    Good post Nick, I enjoyed the read

    Of course, you are giving a mate and one of your tribe a good plug, but as per comment #5 its a politics thing isn’t it? I am probably one of many who still enjoy Andrew’s stuff, but less so, now that he compromises his past standards on his blog for the party line as per this piece.

    Although this piece is more coherent than many of his Labor peers, I would suggest many of his points are contestable (although not so much on this site of course ;).

    A few choice things contestable in my opinion
    – Keating as the bastion of economic success
    – Positioning Fraser and McMahon Vs other worthier alternatives (did someone say Jim Cairns?)
    – The stimulus was timely and targeted
    – The stimulus was the main contributor to Australia getting through the GFC relatively unscathed
    – Someone of Andrew’s reputation may want to be a bit more quiet RE the mining tax as its design and models are proving to be quite shaky in terms of being the cash cow Labor need (although I admit he just talked about the vibe and the nobleness of it all in the speech..)
    – The concept that Ken Henry was a bipartisan public servant in his last couple of years in his position

    That’s only the first few para’s but enough Fisking for one night, you get the drift..

    Bottom line – I have no problems with the concept of him being elevated ASAP, he is much more worthy than career unionists and ex student politicians IMHO.

  22. Nicholas Gruen says:


    It’s when you get to the stimulus that I start to get the picture. We’re not really trying to assess things on their merits. I mean we all know that the stimulus produced the Pink Batts right? So it can’t have been well targeted.

    And we all know that the Australian ran a campaign against the schools expenditure – so it can’t have been well targeted.

    And we all know that Australia was nearly alone in avoiding a recession – but the talking points say that China and mining are what saved us. (Except that some routine checking of dates and numbers shows you that they don’t actually coincide with the story that needs to be told to make those talking points true.)

    As Moynahan said, you’re entitled to your own opinion, but not your own facts.

  23. emess says:

    Nicholas, in defence (I think, sort of) of Mack. He has actually pointed out a great deficiency in the ALP. The point that Andrew is getting and addressing.

    If we look at the list of subjects Mack and Andrew have pointed out, it is universally pretty much the case that the points are contestable (that’s the nature of politics surely), but the ALP have not even tried to contest those points.

    For example. Gough Whitlam vs McMahon. How often do we see the ALP defend GW when snide comments are made about his prime ministership? Mack says the question about Whitlam vs Fraser and/or McMahon is contestable. I say, yes, and ffs ‘bring it on’. (Abject apology for cliche, but it is frustrating when Gough is used as an example of incompetence and ALP figures who should know better fail to point out the bleeding obvious in McMahon and Fraser).

    The question of pink batts was contestable – yet in that 7.30 Repot interview with Kerry O’brien, Kevin Rudd failed to contest it. At the end of that interview I was gobsmacked that even though Kerry O’brien was pretty ill prepared, Rudd failed to smack him about the chops and give him a lecture about how well it was undertaken. I mean, that industry was so bad and shonky before the program, Rudd could easily have asked Kerry why the 7.30 Report or 4 Corners had never done any report on an industry with such a shocking safety record. Plus all of Possum’s stuff – Kerry could have been rolled.

  24. Mack says:

    Nick, you are verballing me a little mate, your references to Pink batts and School halls are yours, not mine – I like your Gov 2.0 work and enjoy your posts but you get far too tribal in these debates and it does not become someone of your intelligence..

    My thoughts are more along the lines of our underlying economic state pre GFC, our Reserve bank fiscal policy and the financial position of our banking system combined with the better financial regulations we had in Oz Vs USA/parts of Eurpoe were much more significant contributors than stimulus. Stimulus spending still pumping out in late 2009 and beyond is something I am sure you wouldn’t defend too hard and I think you wish away China and mining a little too glibly (but I don’t argue as them being a 100% panacea as you sort of suggest in a concedending way..) Bottom line is I expect better of you than trotting out a few “Fairfax” lines to combat a few “Australian” lines you put in my mouth

    Emess, I think the point isn’t Gough Vs McMahon but to cast both their governments off as poor performers rather than tribally ignore the failings on your own “side”, and to give credit where it is due, for example I don’t think the successes of the Hawke/Keating financial reforms are denied by any sensible person on the righter side of politics, nor are some (only some) of the recent Henry tax reforms. On the flipside, I would not expect too many proponents of the GST in this forum either and there seems to be a collective appetite for free trade (and will read up on the reference Andrew made above RE NZ)

    Also saying “that industry was so bad and shonky before the program” is surely something that should have been considered before such a program was executed, not a retrospective excuse for its failings?

  25. Mack says:

    ^ Apologies for some dodgy spelling and grammar… Europe, Opponents

  26. FDB says:

    “Also saying “that industry was so bad and shonky before the program” is surely something that should have been considered before such a program was executed, not a retrospective excuse for its failings?”

    It was considered, safety standards were tightened accordingly with the rollout of the govt program, and the result was a massively improved industry in terms both of quality and safety.

    So what are these “failings”?

  27. Nicholas Gruen says:

    Hi Mack,

    Apologies if you feel misrepresented. I react against the charge that I’m tribal. I’m not, but of course I would say that wouldn’t I?

    I suspect we agree on more than either might have imagined at the outset.

  28. Mack says:

    No probs Nick, if you can hire an exorcist to remove Krugman from your system, we can move even closer to a common ground ;)

    FDB, sorry but I have maybe not read as widely and as detailed as you – do you have a reference or link to the current healthy state of the industry and how its process was improved, I would be happy to revise my position if the evidence is compelling?

  29. Patrick says:

    I like Andrew, or certainly used to like his blog, but I do find his twitter boringly partisan – Malcolm Turnbull, albeit perhaps more twee to Andrew’s faintly cloying, does the ‘thinking insider’ thing much better.

  30. FDB says:

    Mack, I confess that I was only assuming that systematic change of some kind was responsible for it, but the statistics show that insulation-related fires, (and concomitant injuries, deaths, property damage etc) were dramatically lower under the federal program than before.

    Perhaps it was mere coincidence.

  31. Nicholas Gruen says:


    Krugman is a bit of a touchstone of the ‘tribalism’ issue for me. Kruguman used to be a kind of formal centrist – suggesting that the foibles of Lester Thorough and Robert Reich were on a par with the Arthur Laffers of the world. He’s since come to the view that the Republicans are crazy and focuses on that in his columns and blog.

    Where do you think he goes wrong on this – chapter and verse please.

  32. Nicholas Gruen says:


    I completely agree with you on the value of politicians not just pumping out crap (to quote our PM). And pure party propaganda is (usually) crap. And yes, Malcolm Turnbull stands head and shoulders in that department and good on him.

    I recall going to some functions in Victoria where ALP Ministers spoke, and they were billed as an intimate talk amongst friends. But they were just on message all the time – the usual lies and bullshit. Terrible.

    But please remember to assess this in context. Malcolm’s current schtick is uniquely well suited to what we all presume are his ambitions – to keep himself in contention without saying anything too combative. He wasn’t so openly reflective and candid as Opposition Leader, nor as I recall when Howard was leader and candour wasn’t in his interests.

    I’m not accusing Malcolm of hypocrisy here. Just suggesting that politics has its own laws, and if we’re to admire someone for stretching them (and admire I’m happy to do) we have to ensure that he really is – rather than just exhibiting the symptoms at a time when they don’t actually signify what it looks like they do about his character.

  33. conrad says:

    “But they were just on message all the time – the usual lies and bullshit.”

    It would be interesting to know what percentage actually have no great understanding of the things they are supposed to be talking about or any particularly great vision, and hence their identity is simply constructed on the usual lies and BS (Julie Bishop comes to mind here from the Libs, although there are sure to be far worse cases in both parties).

    On this note, it was good to see Bob Carr already stirring people up on a contentious issue.

  34. Dan says:

    Krugman is a centralist who would not have been out of place advising Eisenhower.

    The Republicans have gone batshit crazy.

    Labor is terrible at selling their policies, and they need more Andrew Leighs. And also to stop tripping themselves up by enacting conservative/neoliberal policy prescriptions such as privatising natural monopolies.

    The interview with Malcolm Turnbull in the latest issue of The Monthly is inspiring and I’ve said it before but I’d vote for the guy in a flash, if he were leading a <liberal party. Unfortunately, rather, he’s on the outer in a particularly ugly and brainless stage in the history of Australian conservatism.

  35. Dan says:

    * liberal

  36. Dan says:

    * centrist

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