Patricia Karvelas:
To discuss the direction of this week’s roundtable, I want to bring in one of the figures in the government most focused on regulation, deregulation and competition – that’s the Assistant Minister for Productivity, Competition and Charities, Andrew Leigh. Andrew Leigh, welcome to the program.
Andrew Leigh:
Thanks Patricia, great to be with you.
Karvelas:
This is your Christmas week, is that right?
Leigh:
Absolutely. Christmas comes early for policy wonks. Three days in the windowless Cabinet Room talking about how to raise the speed limit of the national economy and how to deliver higher living standards for Australians.
Karvelas:
Okay. So, business groups are framing this week’s productivity roundtable as a legacy moment for Australia. Is that what it is – a legacy moment for Australia?
Leigh:
I think it’s a wonderful opportunity to bring together big thinkers to discuss big ideas around the Cabinet table. There’s the challenge of artificial intelligence, there’s the opportunity of skilling up Australians, there’s the moment where Australia can be a superpower in the renewable energies transition. All of that is going to be a discussion around the Cabinet table. Three days split into talking about resilience, talking about opportunities in productivity and talking about budget sustainability.
Karvelas:
Danielle Wood says economic growth hasn’t been a priority for years. Were you too fixated on other issues in the last term for it to be a priority when it should have been?
Leigh:
We had a big growth focus in the last term, and I enjoyed Danielle Wood’s speech at the Press Club today, where I attended. We talked about the importance of getting the National Competition Policy going again. We’ve reformed our merger laws. We’ve invested in the education system, which is a real key driver of productivity. And we’ve announced the scrapping of non‑compete clauses to make it easier for people to move to a better job.
Some of productivity is about boosting individual workers’ productivity capacity; some of it is about making it easier to move to a more productive firm; some of it is about encouraging more productive firms to grow and allow those less productive firms to exit the market. So, that reallocation process was really fundamental to how economists think about productivity, much in the same as sports people would think about how to raise the speed limit on the track or in the pool or on the sporting field.
Karvelas:
So, one of the focuses will be cutting down regulation when it comes to housing, particularly. I mean, that seems like a pretty obvious thing to do if you can do it safely. Why can’t the government just get on with it and do it immediately? Why do you need to have a talkfest to achieve something that seems so obvious?
Leigh:
Well, we are, and I pay credit to Clare O’Neil, who’s really focused like a laser beam on this in a way that none of her predecessors have had the opportunity to do so. That then means that she’s able to work with local and state governments in order to cut through that thicket of regulation and ensure that homes are built faster. We know that we need to build more homes, and this is predominantly a supply challenge. Of course, we’re funding home building like never before.
But Clare O’Neil has also engaged in questions like how we get modern methods of construction operating better. And that, according to the Productivity Commission, will deliver billions of dollars of potential benefit to the Australian economy, allowing people to afford homes more easily and also to live near where they work, as Sally McManus has pointed out.
Karvelas:
I really pushed Andrew Bragg on this idea that they had been responsible under their government for what was really inertia on productivity. That’s been the case under the Albanese government, too, for 3 and a bit years. Do you accept that you put too much regulation on the books in the last term?
Leigh:
Not in the least. Our Competition Taskforce was focused on the challenge of productivity, and competition really is fundamental to this. Again, you take the sporting analogy – if some of our sporting codes looked like some of our industries, you’d have one team, one set of fans and one very bored mascot.
Instead, we need to take a leaf out of the sporting book and see more competition flowing through the economy. That encourages people to raise their aspirations, people perform better in a competitive environment, and it gives more choices to consumers about where to shop and more choices to workers about where to work. If you look at the biggest 5 firms in the Australian stock market, 4 of them were in the top 5 back in 1985. We just haven’t had that degree of dynamism that really matters. That has been a focus for the government and for me personally throughout our time in office.
Karvelas:
But there has been a shift, hasn’t there? You’re not talking in the same way you were last term. There has been a reckoning about over‑regulation.
Leigh:
I’ve been talking about competition reform for more than 3 years, so…
Karvelas:
Not just you alone, Andrew Leigh and your own musings and writings. I mean more broadly as a government. We didn’t hear about a slashing of these kinds of regulations. There has been a shift?
Leigh:
I think there’s a recognition that regulation can get in the way of good things, and the well‑meaning regulation can sometimes deter. You look at this situation with renewable energy in Victoria, where tens of billions of dollars of renewables projects are caught up in the Victorian Civil and Administrative Tribunal. They’re looking to cut through that because we don’t get to the renewables transition if we’ve got projects taking 10 years to get built. We need to accelerate the speed at which things get built. In the university sector, we need to make sure that researchers are spending less time doing paperwork and more time doing their research.
And so a lot of these areas which have been identified by the Productivity Commission and others are about increasing the speed to approval so we can increase the productivity – productive capacity of the economy and do that in an artificial intelligence era where the Productivity Commission says the benefits for artificial intelligence over the next decade could be anywhere from half a per cent to 13 per cent on productivity.
Karvelas:
Andrew Bragg was very critical of the under‑16s ban on YouTube, for instance. He says, you know, we’re trying to overregulate the internet at the same time as we’re trying to bring in AI. Isn’t there an intellectual incoherence in the government’s approach on these things?
Leigh:
I don’t know if Andrew Bragg’s got teenagers. But the thing that I find Patricia is that teenagers lead much less productive lives when they’re stuck inside doomscrolling rather than out with their friends, learning from doing homework and engaging with their parents. A rich childhood is one that isn’t just sitting there scrolling, scrolling, scrolling. It’s a childhood that’s spent playing sport, out with mates, engaging in learning, reading books.
All of these things become possible with the government’s social media minimum‑age laws which take effect in December, strongly supported by the Australian community, but also there’s a keen interest from overseas. So, I think Andrew Bragg really is off with the fairies on this one if he thinks that Australian children should spend more time doomscrolling and less time living life.
Karvelas:
Well, I don’t think that’s what he said. He didn’t suggest they should be doomscrolling, but YouTube doesn’t just have doomscrolling on it. I think there is a genuine conversation to be had about the level of regulation. And I think the incoherence – and that’s my language, not his – is, you know, you’re pretty open to AI not being too regulated, but there has been a real regulation push when it comes to social media. Why such a different approach?
Leigh:
YouTube Kids is allowed. The educational services and the mental health support services, they’re all allowed. But we want kids to be kids. And when we talk about a productive childhood for kids, we’re not talking about them earning more money. We’re talking about them having more fun and getting more of the pleasures of being a young person in the rich variation that childhood allows. But we see our kids disappearing down these rabbit holes, not having the opportunities that previous generations have to enjoy a free‑range childhood.
Now, I love Jonathan Haidt’s work and the work that they’ve been doing around that research group not just about how we get kids off devices but how we get them on to other activities. Such as adventure playgrounds, such as ensuring that kids have the opportunity to go out and take public transport and maybe take a few more risks within controlled environments in person. Now, I think we’ve become over‑protective of kids in the physical world and under‑protective of kids in the virtual world. And the social media minimum age is about trying to tackle that.
Karvelas:
Okay. Just on tax reform, we’ve talked a lot about what I think is quite clearly low‑hanging fruit. I hear unity from the Opposition and your government on regulation. But I don’t hear unity yet on tax reform. Is that an outcome, more work that you want to see come out of the Economic Reform Roundtable? Ideas that have been raised, for instance, in relation to the corporate tax and the ideas out of the Productivity Commission, should they be pursued?
Leigh:
We’ve had a lot of big ideas on tax over recent weeks, and I think that’s a great thing for the country. The Prime Minister and Treasurer have made absolutely clear that those decisions will be made around the Cabinet table by the Cabinet. But we welcome the conversation that will take place.
We’ll have a presentation from Bob Breunig, the head of the Tax and Transfer Policy Institute. We’ve got others who’ve pitched up ideas in the tax space, including the Productivity Commission. That’s a healthy thing for the nation. And not all of this needs to happen at a federal level Patricia. States and territories have the most economically‑efficient and the most economically‑inefficient taxes. And so, transitions which allow us to reduce the tax burdens on mobility and insurance will be a good thing for productivity as well.
Karvelas:
Just finally, the Albanese government has banned a far‑right Israeli politician who’s a member of Benjamin Netanyahu’s governing Coalition. He won’t be able to travel to Australia for 3 years. Your government says it won’t allow him to come because he spreads division. This is Israeli MP Simcha Rothman. Why shouldn’t he be allowed to come to Australia?
Leigh:
Social cohesion is really important to our government, Patricia, and the Home Affairs Minister has said he makes no apology for taking a hard line on intolerance and spreading division. What we want to do is make sure that those that are coming to Australia are doing so, contributing to the public conversation in a positive way. We don’t want to see that conversation become nastier and more divisive than it is already.
Karvelas:
And so, you think it’s appropriate not to let this person come and speak because – is there anything specific that has led to this?
Leigh:
Well, the Home Affairs Minister can go into the specifics of that decision. I’m not here to proxy for Tony Burke in that regard. But I do know that the philosophy that Tony Burke has taken, whether that’s from people on the Palestinian side or the Israeli side, has been to refuse those visas who are seeking to sow discord in Australia.
We have a wonderful multicultural democracy. We have a lot of people expressing their views on what’s going on in the Middle East right now. That is all very welcome, but when we see it spreading division, then we draw the line in terms of visa access. And you’ve seen that in other visa decisions that the Minister has made, including the one for Kanye West.
Karvelas:
Well, good luck for the next 3 days. I know it’s a very exciting time to be alive for you.
Leigh:
Can’t wait Patricia. Absolutely! Thanks again.
Karvelas:
Thanks Andrew.