Leon Delaney:
The federal Member for Fenner and Assistant Minister for Productivity, Competition, Charities, Treasury and other things as well, Dr Andrew Leigh, good morning.
Andrew Leigh:
Morning Leon, great to be with you.
Delaney:
Thanks for joining us today. It’s a big day for you and your colleagues. It’s day one of what I have described as ‘Woodstock for policy wonks and economic nerds’ – the productivity roundtable. What are you expecting?
Leigh:
Three days in a windowless room talking policy. What can be more exciting for those of us who are excited about building stronger productivity growth, a more resilient country and dealing with some of the budget sustainability issues? This really is an exciting moment, and a great group of people have been brought together. I’m really expecting a productive conversation around issues of how we get regulation right, whether we can improve our tax settings and what we need to do to make the most of the artificial intelligence opportunities for the future. Now, the energy transformation is not just something we need to do for climate reasons, but also a great opportunity for a sun‑drenched country like ours, so there’s great upside of potential for this 3‑day conversation.
Delaney:
Okay. A lot of commentary has suggested that it will be nothing much more than just a gabfest with very little, if any concrete value to be produced. And in that context, it seems a little odd that the Prime Minister and the Treasurer have both kind of downplayed expectations in recent weeks. Why have they done that?
Leigh:
Well, they’ve been very clear that decisions are made around the Cabinet table by the Cabinet, but that this conversation in the Cabinet Room will help inform that. I think it’s a great opportunity to build stronger consensus for some of what we need to do and to think through some of the big challenges for the economy. We know for example, in the area of capital attraction we need to do more. The government’s got a significant agenda on competition, which you and I have talked about frequently Leon, and much of what we’ve done in the first term and have said we’ll do in the next term will lead to a more dynamic and competitive economy. That’s really fundamental to increasing the speed limit of the economy. Think of it like a sporting team, you’ve got to make sure that you get the athletes as fit as possible, that you get the team working together, and that the rules of the game are fair, and so you can do your best before you get on the field.
Delaney:
It has been suggested to me that standard government practice would be not to conduct any kind of inquiry or gathering without having a predetermined outcome. You know, obviously you have to set the agenda, but you know, how much have the government prepared for what they want to see out of this discussion?
Leigh:
Look, I know all the people around the table today, and I don’t think you could pre‑set what they’re going to say. They’re people with big minds, big hearts who are going to bring big ideas on to the table. Some of those, I think, will be things that they’ve talked about before in the public domain, others are going to be fresh. I’m really excited to see what, for example, Scott Farquhar brings into the room – someone who’s been a successful tech entrepreneur and is now coming in with the perspective of leading the Tech Council. I think there’s going to be points of agreement between the Business Council of Australia and the Australian Council of Trade Unions, but I’d be deeply surprised if they agree on everything. So, all of those perspectives will be in the room. That’s good for the government’s goal of raising living standards.
Delaney:
Well, they’re not going to agree on everything because the ACTU has already flagged its intention to talk about the 4‑day working week proposal, and I don’t suspect for a moment that’s actually going to get up. But I have a question. I’m curious, because the response from the business community has been predictable, ‘Oh, you couldn’t possibly do that’ it’s like, you know – but my concern is we’ve changed working week hours and days before. Most recently – well, not quite most recently, but the most significant one was 1948 when we moved from the 6‑day working week to the 5‑day working week and instituted the 8‑hour day across 5 days. People before that often worked on Saturdays, sometimes for a half day, sometimes for a whole day. When we made that change, what was the impact on productivity? Did it send the economy in a spiral, or did it actually make things better?
Leigh:
I haven’t gone back and looked at that Leon, but my guess is there will be different arrangements arrived at by different firms. Now there’s certainly been some firms that have sat down with their employees and said, ‘Look, we reckon we can get as much output out of 4 days as 5 days’, and good on them if they want to have that conversation, and the government’s not about making these sort of prescriptions right across the economy. What we want is to have the environment at which workers and businesses are able to come to agreements that bring out the very best in both sides. Again, like a sporting team you don’t get a successful sporting team if the players are miserable, you need the players to have the buy‑in in order to perform their very best when they go out on to the field.
Delaney:
Yeah.
Leigh:
I think sport has a lot to teach us about building a more productive and dynamic economy, and it starts with making sure that the players are performing at their best.
Delaney:
I thought I’d put the question to you because of your former career as a Professor of Economics, and maybe it’s worth looking into previous changes to the working week and what impact they actually had. Even going back to the beginning of the 20th Century, a 50‑hour week was not uncommon, or even longer. So, it would be something worthwhile pursuing to put that into context, but there’s a couple of other big‑ticket items that are probably going to be the focus of discussion. You mentioned artificial intelligence, and everybody seems to be convinced there are terrific opportunities there. But we’ve got Barnaby Joyce running around today saying, ‘If you work from home and you sit behind a keyboard in your bedroom, or whatever the case might be, you can easily be replaced by artificial intelligence, your job is at risk.’ Now that’s the big fear most people have, isn’t it, that they will lose jobs as a result of artificial intelligence?
Leigh:
I think many people are taking advantage of the best of artificial intelligence. My first professional job was working as a junior lawyer, and the job that junior lawyers hated the most Leon, was discovery. Paging through endless documents for upcoming court cases in a windowless room. Artificial intelligence has streamlined that and allowed the computer to find some of the key documents for the trial, and that then means that junior lawyers’ jobs are a whole lot more fulfilling than they were. I don’t know a junior lawyer that would want to bring back discovery. In other cases, there’s going to be impacts of artificial intelligence that are going to be more dramatic, not just taking away the drudge parts, but taking away some of the more inspiring parts. And I think our real challenge is to ensure that workers have the skills in order to make the very best use of artificial intelligence. On‑the‑job training, it’s not as good as it could be, and an area like AI really needs to be better.
Delaney:
Okay. And finally, the one point that most participants seem to be able to agree on, and that’s the idea that maybe we need to wind back some regulation. Cut some red tape. Now obviously some regulation is important to protect consumers from avaricious businesses that might otherwise cause them problems, but this does seem to be an opportunity to really reconsider how we regulate our activity doesn’t it?
Leigh:
Yeah, and the Finance Minister and Treasurer have written to 37 regulators across the country saying, ‘What do you think you can do through regulatory reform to boost productivity?’ In the area of housing for example, I speak to builders now who say that doing the paperwork takes more time now than it used to do just to build the entire house. So, we need to get that balance right, which obviously you need to ensure that new house are fit to standards but you also need to make sure that builders aren’t being turned into paperwork pushers and that we’re able to build the houses that we need in order to house the next generation of young Australians.
Delaney:
Indeed, and of course when we talk about housing, which we won’t do now because we don’t have time. But there’s a lot more to it than just the tangle of red tape. There’s also the increased costs over the years imposed by local government. It’s really shifted that burden quite significantly, and it’s resulted in more expensive property. Andrew, thanks very much for your time today.
Leigh:
Thanks for your time Leon, pleasure.
Delaney:
Thank you. That’s Dr Andrew Leigh, the Assistant Minister for Productivity, Competition, Charities and Treasury.