Ross Solly:
Well Andrew Leigh, the Member for Fenner has hung on to his portfolio of Competition, Charities and Treasury, and he’s also added productivity to his workload in this term of the parliament. Dr Andrew Leigh joins us on the Breakfast Show – Andrew Leigh, good morning to you.
Andrew Leigh:
Morning Ross, great to be with you. Those numbers you were asking about…
Solly:
Yes please!
Leigh:
We’re expecting that the House of Representatives will be 46 per cent women, and the Senate will be 60 per cent women. Obviously not every seat is nailed down, but I think they’re the figures we’ll go into.
Solly:
Okay.
Leigh:
And the Labor caucus overall will be 57 per cent women, up from 53 per cent women in the last term.
Solly:
I mentioned in the introduction that I’m pretty certain you’ve done some research in this area – on quotas. Do they work? Is it a positive thing to do it? And do you think that parties like the Liberal Party for example, should seriously consider going down this path? What’s your experience in this area?
Leigh:
I do. Labor’s story goes back a bit over 30 years to the 1994 Conference which decided that from in 2002 – which was 8 years on from that conference, that 35 per cent of candidates in winnable seats would be women. There was a lot of concern at the time with people saying ‘Well let’s just end up with Labor pre‑selecting unsuccessful candidates’. In fact, the reverse happens.
Where you look at the class of 1998, you had people like Tanya Plibersek, Nicola Roxon and Julia Gillard coming in. And so, what we saw is a whole host of talented women, and some analysis that I did with Amy King [PDF 259 KB] looking at how women performed at the ballot box for the Labor Party after that change suggested that they did just as well as beforehand. So, there is no sense in which we were getting people of any less calibre – if anything, probably the opposite.
Solly:
So, quotas can work even though it runs the risk of people maybe feeling Andrew Leigh, like they’re only pre‑selected or they’re only running because they’re ticking a box? They’re trying to meet some sort of a quota figure?
Leigh:
Look, I don’t get the sense that any of the women in the party room have that that sense now, and that’s with our quotas now being moved up to 40 per cent. It just changes the conversation in the party room.
So, when you’re having conversations around family violence, around the work we’ve done on gender pay transparency, around allowing unions to campaign on gender equity and of course, on the women’s health issues – all of those voices are represented and really it’s vital that your party room looks like the country that you serve.
Solly:
Alright, let’s talk about productivity. This is a new string to your bow. It’s been added to your portfolios, and now today I think the Productivity Commission is releasing its 5 inquiries into reinvigorating the productivity roadmap here in Australia. Fifteen priority reforms.
I notice Andrew Leigh that you’re saying Australia runs the risk of being just one generation away from a US-style inequality. Now you’ve spent some time in the States. What does that look like for those who’ve never been there, for those who don’t understand what the US-style inequality looks like. How does that present itself?
Leigh:
Well, the US is a country which has enormous gaps between rich and poor and where the earnings of those at the bottom have barely budged in a couple of generations. That gulf between the haves and the have‑nots is substantial. And if you look at one measure Ross, the top 1 per cent share of incomes – that has doubled in both Australia and the US since 1980. We have ended up where they started off. And so, if you continue that trend, then we do end up on that American trajectory.
I think part of the answer is to look for sweet spot reforms, reforms that boost productivity and which also boost equity. Getting rid of non‑compete clauses – allowing low and middle income workers to move to a better job – is one of those. Competition is another, and ensuring that people can get a good deal at work, and also that they have more choices as to where to work. Tackling monopoly power and monopsony power.
Solly:
So for you though, to be concerned enough to issue this warning Andrew Leigh, you obviously must be looking at some gaps in our systems in areas where we’re not doing enough. And if we are only one generation away from a US-style inequality, I mean, the clock is ticking here.
Leigh:
Yeah, it is. And you know, one of the warning signs on that clock, I guess Ross, is that productivity performance of the Australian economy in the decade to 2019–20 – that was our worst productivity decade in over 60 years. And that’s really sounded the alarm bells for the need to put in place productivity boosting reforms.
So, we’re really pleased the Productivity Commission is engaging so broadly with Australians on this work. They did something called a productivity pitch at the start of the year. Now they’re looking to consult on a set of 15 reforms. It’s going to take longer than 2 terms to turn around the productivity problem that’s been building in the Australian economy. But I think there’s an awful lot we can do, from occupational licensing to artificial intelligence to streamlining regulation.
Solly:
Actually, a question from a texter, ‘Ross, can you please ask Andrew Leigh ‘what is the standard measure of productivity?’ It’s a simple question, but it’s a very good question. Andrew Leigh is there a standard way that we can measure productivity?
Leigh:
Typically we look at labour productivity Ross – how much somebody produces in an hour. And on that measure for example, a typical Australian now produces more in an hour than those at the time of Federation would produce in 7 hours. We’re 4 times as productive as Australians in the 1960s. Part of that is that we have access to better technology. Part of it too is we have access to better skills. So, they’re 2 things that are at the heart of what government and of course, business as well can do.
Productivity is not just a cake that government cuts up and hands out to everyone. It’s ground out through efficiencies with firms and workers we’re engaging together. So, government has a role in providing the opportunities to firms to become more productive.
Solly:
Another listener wants to know ‘Are we Australians simply living above our means and living on the grandkid’s credit cards. When did we get a working poor and food insecurity?’
Leigh:
Yeah, I mean certainly that issue of inequality has been a big concern to me as of course to the government. That was one of the reasons for significant increases in income support payments and the substantial increase to Commonwealth Rent Assistance which is now up 40 per cent. That’s one of the reasons we argued for this minimum wage increase last week, because we do realise that those on the minimum wage – currently $24 an hour, are often struggling to make ends meet.
But productivity is fundamental to growing living standards. It’s hard to identify a country around the world that is able to be generous to those at home and abroad, that’s able to tackle environmental challenges that isn’t experiencing a strong, growing economy. I’m very critical of a sort of degrowth philosophy, that the best way of tackling environmental challenges is to stop economic growth. If anything, I think that would make many environmental problems worse.
Solly:
Someone else on the text list says, ‘Increased productivity is no guarantee that households income can recover if big business are able to continue with price gouging’, and I know that’s an area which you have some pretty strong feelings about as well Andrew Leigh.
Just one of the recommendations that have come up in this Productivity Commission report saying that we should speed up clean energy infrastructure approvals. Andrew Leigh, I spoke to you a couple of times leading up to the election about the nuclear debate. Do you think that discussion is dead and buried now given the result of the election? Do you think that is completely off the table now that Australia will never revisit nuclear power again as an option?
Leigh:
Look I certainly hope we’re committed to renewables Ross, because that’s really critical for getting the investment that we need. A huge amount of the renewables investment has been coming from overseas, and if you’re asking an overseas investor to plonk down significant amounts of money for a multi‑decade investment, they need to be sure that the climate wars are over.
I really hope that Sussan Ley and her colleagues will make clear that there is bipartisan support for renewables, as you see in New Zealand, as you see in the United Kingdom, as you see in much of Europe, because that allows us really to confidently attract that investment. That allows us to get cheaper and cleaner energy.
Solly:
But there are many experts out there, Andrew Leigh who are saying you can’t reach net zero without nuclear. Do you agree? I mean, is that true, or are we going to try and buck the trend here in Australia?
Leigh:
No, that’s not my assessment Ross, and it’s not the assessment of organisations that report to government like the CSIRO and the Climate Council.
Solly:
So do you think we can get to net zero without examining nuclear, and there’s no need for us to put that discussion on the table again?
Leigh:
Absolutely. I think Australia can be a renewable energy superpower. I think we’ve got huge resources in terms of the amount of wind and solar that hits the country, and it’s a matter of using gas to firm that up. About having the national electricity grid to join it up, and about having the batteries to link it up as well. All of that is about creating greater prosperity for Australians and creating the opportunity for us to become a clean energy exporter to other countries in our region.
Solly:
So other countries around the world, and there are a growing number who have gone down the clear path – have they got it wrong? Including last week, I think it was Denmark from off the top of my head, who already have a lot of energy which comes from renewable resources, they’re now turning their back on 20 years or so of policy and now saying we need to look at potentially using nuclear power as well to get to maintain that net zero. There’s a lot of countries Andrew Leigh, who have embraced it. Why would we not even have that discussion?
Leigh:
There’s also a range of countries Ross that are moving away from nuclear, and I think part of that is the huge blowout in costs for projects. So, take Hinkley Point C – the new nuclear power plant in the United Kingdom. Originally, that was estimated at £16 billion, now it’s projected at £35 billion. It’s possible it’ll go up as high as £46 billion. So that’s potentially a tripling in the cost of their new nuclear reactor.
This is a technology which is extraordinarily expensive. CSIRO says it’s the most expensive form of energy on a levelised cost basis. So, it really doesn’t make sense for us to go about abandoning the cheapest form of energy and going for the most expensive form.
Solly:
Andrew Leigh, I appreciate your time this morning, thank you.
Leigh:
Real pleasure Ross, thank you.
Solly:
That’s Dr Andrew Leigh, the Member for Fenner, also Assistant Minister for Competition, Charities and Treasury, and also Productivity – he’s had that added to his bucket list.