Ryk Goddard:
Right around Tasmania today, Dr Andrew Leigh MP is visiting Tasmania to deliver a lecture about economics and he’s one of those people who actually has a portfolio in an area in which he has some expertise. Andrew Leigh, good morning.
Andrew Leigh:
Good morning Ryk, great to be with you.
Goddard:
Welcome to Tassie. You’re speaking at the Giblin Lecture today at the University of Tasmania on economics and we will dive into the economics of crisis. But is the Prime Minister really taking 47 per cent of my small business?
Leigh:
No, that’s simply not right. I mean, right now there is a capital gains tax discount and in the future, there’ll be a capital gains tax discount. But it won’t be an arbitrary one, it’ll be based on inflation – going back to the system we used from 1985 to 1999. So you’ll pay capital gains on the real gain, not on the nominal gain discounted by 50 per cent. For some people, that will be more generous. For some people, it’ll be less generous. But overall, it’s going to help 75,000 people get into the housing market who can’t get in there now.
Goddard:
Have you lost control of this discussion? It’s gone bananas on social media and certainly a lot of business people I see, clearly have the belief that the hand’s in 2 pockets on this tax?
Leigh:
Ryk, I’ve knocked around politics for long enough to realise that anytime someone is doing serious reform, there’ll be a scare campaign on the horizon. That was true when capital gains taxation was first introduced in 1985. It’s true of some of those big reforms of the Hawke, Keating, Howard, Rudd and Gillard governments. Each of those reforms faces critics, but ultimately this is the right thing to do for young Australians who are being locked out of the housing market right now.
Goddard:
Dr Andrew Leigh, Assistant Minister for Productivity and Treasury. Apparently Andrew, Tasmania is the most productive state in Australia because we’ve got a 2 per cent year‑on‑year growth forecast without any immigration. Does that in your economics mind sound possible?
Leigh:
Look, it’ll be a matter for the boffins who are doing the estimations in Tassie state treasury. I wouldn’t want to opine on that without seeing their calculations, but certainly you need to get productivity growth going. That’s why I’ve got this portfolio for productivity. We’re really keen on a productivity agenda that involves investing. Investing in individuals, in institutions and in infrastructure. We’re doing that in Tasmania with serious investments out of the federal Budget, and the state Budget will be a matter for my state colleagues down there.
Goddard:
Artfully ducked. So, you’re here to talk about the economics of existential threats. Is that somewhat of a contradiction when this government’s approving so many gas projects, we can’t meet our climate targets anymore?
Leigh:
We’re the most ambitious climate government that Australia’s ever had. Under us, we’re overseeing a significant turnaround in our electricity production system, going from a third of renewables in the grid at the start of the decade to four‑fifths by the end of the decade. But actually Ryk, I’m looking in this talk at catastrophic risk – which is not simply bad outcomes such as wars or recessions, but species‑ending outcomes.
We don’t talk about it very much in politics, but I think we probably should devote a little bit more attention to the topic. One estimate puts the chance of human extinction at 1 in 6 over the coming century, with the biggest risks being superintelligence gone wrong and bioterrorism. So, I’m talking about how economists should view that through the lens of Lyndhurst Giblin, one of Tasmania’s great economists, and thinking about what that means for economic analysis and perhaps also for public policy.
Goddard:
Dr Andrew Leigh MP, here to give the Giblin Lecture. And looking at this ability to extinct ourselves really, isn’t it? And it’s interesting that AI is now top of the list above bioterrorism. And what I grew up under the mushroom cloud Andrew, for those of us who remember – that’s still there, we just stopped talking about it. Which is more likely?
Leigh:
Well, superintelligence is estimated by most people to be the single most important threat we face. And you’re right Ryk, to say that these are human‑caused risks. If you’d gone back a century, you’d be worried about natural risks such as naturally incurring pandemics or asteroids or supervolcanoes.
But if you ask a typical AI researcher what’s the chance once superintelligence is attained that it ends the world, you get a number around 5 per cent. I don’t know about you, but I wouldn’t get on a plane that had a 5 per cent chance of crashing. So we need to make sure that as we’re building these incredibly useful systems – which can be really valuable for productivity – that we’re making sure that they’re aligned with human values and constrained in their ability to go rogue.
Goddard:
I so just want to put that question to ChatGPT now and find out what AI tells us when it’s going to make us extinct. But I’m not allowed to use it here at the ABC. So we have our own internal system though. What are the economics then of species extinction? Like, is this about how we spend money to stop ourselves from killing ourselves?
Leigh:
Well part of it’s thinking about an economic framework, Ryk, that envisages the positive potential and also the danger and trying to then optimise systems. And so, we’re getting the greatest benefit to humanity from synthetic biology which is producing new drug breakthroughs and the like, while also constraining rogue actors from bringing back bad bugs of the past or creating turbocharged bugs which are both highly transmissible and highly deadly.
Pathogens tend to be one or the other. They don’t tend to kill at a high rate and be easily transmissible, but there’s a risk if DNA synthesis is unconstrained and if people have access to the wrong tools that rogue acts create problematic strains. So getting the very best out of technologies while constraining the worst means that you’ve got to think about how you build the guardrails before you build the highway.
Goddard:
6 pm tonight, 21st of May at the Stanley Burbury Lecture Theatre, the Economics of Human Extinction. You can book that and dive more deeply into these ideas with Dr Andrew Leigh, who’s here. Finally, you are Assistant Minister for Productivity. There’s been a lot of examination of the supermarket duopoly. When will we see genuine competition between those 2 big supermarkets, Andrew Leigh? What are you doing to bring that on?
Leigh:
Yeah, we’ve banned price gouging, which means that the supermarkets won’t be able to charge a price which is unreasonable relative to the cost of supply. That’s a historic measure. And we’re also helping farmers through a new supercharged Food and Grocery Code of Conduct.
For Tasmania, the best benefits would come from getting the entry of Aldi. Tasmania and Northern Territory are the 2 jurisdictions in Australia that don’t have Aldi and the competitive pressures that come from that. That’s obviously a decision for them and they’re a private company. But I think that would be a huge benefit to Tasmania. And having planning and zoning rules that make it attractive for Aldi to enter the market is something that I’m sure the state government would be keen to look at.
Goddard:
Pleasure to talk to you this morning.
Leigh:
Likewise, thank you.
Goddard:
Dr Andrew Leigh MP. ‘Big fan’, says this text. Sean from Launceston. G’day Sean. ‘Qualified, smart with a heart and writes books as well. Maybe he’s not got a bigger portfolio because he’s not in a faction, and they take all the big positions’. Interesting observation.