Stephen Cenatiempo:
Time to talk federal politics with the Assistant Minister for Productivity, Competition, Charities and Treasury and the Member for Fenner, Andrew Leigh. Andrew, you’ve got to be concerned about the impact that this roll‑out is having on regional areas very, very close to your electorate?
Andrew Leigh:
Well regional areas are of course the ones that are most affected by dangerous climate change as you know Stephen. Farmers are already feeling the brunt of more extreme weather events – droughts, Australian bushfires…
Cenatiempo:
Yeah okay, but Andrew putting wind farms in Australia is not going to change any of that. We know that based on the figures.
Leigh:
Australia makes a contribution to global emissions, and this is a bit like saying that…
Cenatiempo:
Yeah, a very tiny one. A very, very tiny one.
Leigh:
It’s a bit like saying that I can just walk around and drop all my garbage on the street, because I’m only a small emitter compared to the total amount of garbage produced in Australia. I don’t do that. I put my garbage in the bin.
Cenatiempo:
Yeah, but it’s a false equivalence because you’re suggesting that by destroying farmers’ land they’ll be okay because floods are going to stop. Well, they’re not. Floods are not going to stop, droughts are not going to stop, and at the same time it doesn’t matter because they won’t have their farming land anymore.
Leigh:
Stephen, many farmers are benefitting from having wind power on their farms. Many farmers are also committed to a renewable roll‑out. Ensuring that we have a clean energy transition is in Australia’s interests. Not only in terms of reducing emissions but also because the modelling that we have from the Climate Change Authority makes clear that that will lead to lower energy prices in the long‑term.
Cenatiempo:
Well okay. Well, it hasn’t borne out like that and there are many, many analysts that say otherwise. Now I do want to talk about some things more immediate I guess. The budget bottom line is not looking as pretty as it should. Government spending has increased under this government. Now, I mean fiscal responsibility was something that the government promised in the lead‑up to the election. It’s not been delivered.
Leigh:
Stephen, there’s been no government that has delivered a bigger budget turnaround than ours over the last term – $200 billion dollars…
Cenatiempo:
But Andrew, let’s be honest. The government hasn’t delivered that, it’s off the back of higher tax receipts and commodity prices. That’s through no fault of the government’s.
Leigh:
No, we’ve made a whole range of difficult decisions, including shutting down the range of the rorts under the Coalition – the sports rorts, the carpark rorts. You know, we made savings in those programs. But it is also true that the economy is doing well, and when the economy is stronger, the budget is stronger. So, we’ve got this low unemployment rate, we’ve managed to bring inflation down to the target band without smashing unemployment.
Cenatiempo:
Well, inflation went up again in the last set of figures?
Leigh:
Well, unemployment is still what most economists would call full employment, and the consequence of that is higher tax receipts and lower welfare payments. That’s a great thing for Australians and it turns out it’s a good thing for the budget as well.
Cenatiempo:
Sure. But our electricity prices have gone up – driving inflation, and we won’t get another interest rate cut today because of it.
Leigh:
Well if you’re interested in the budget, we’ve turned 2 big Liberal deficits into 2 Labor surpluses, and in this third year the deficit is down to about a fifth of what it was projected to be when we came to office.
Cenatiempo:
And forecasts for deficits as far as we can see.
Leigh:
The budget turnaround under Labor has been substantial. The Liberals will talk a big game about surpluses, they’ll print the Back in Black mugs, but they never managed to deliver a single surplus. We’ve delivered 2, and we’re continuing to make responsible savings and that’s allowed the Reserve Bank now to deliver 3 interest rate cuts for Australian families. That’s been good for mortgage holders. Of course, mortgage holders would like more and the Reserve Bank will make its decision independently.
Cenatiempo:
I love the way you take credit for what the Australian people have done rather than the government. But I do want to talk about a speech that you made about zero‑sum thinking and abundance. Now, I want to start with the concept of abundance. What do you mean by that?
Leigh:
Yeah, so this is a book which is written by a couple of American thinkers – Ezra Klein and Derek Thompson, which argues that it’s important for progressives like me to be committed to delivering plenty of stuff, plenty of clean energy roll‑outs, plenty of homes, ensuring that there’s plenty of research going on in our institutions. And part of delivering that is recognising the role of right‑sizing regulation. I’ve also been concerned about the way in which in contrast to a politics of abundance – the politics of more, there has been increasing amounts of so‑called zero‑sum thinking. The idea that we can’t all have more, that anything good someone gets has to come at the expense of someone else.
Cenatiempo:
Well, but in the context of government it does, doesn’t it, because there’s only finite money that can be spent?
Leigh:
So, if we provide a great education to a poor kid, then that provides an opportunity for that child to grow up and deliver more tax revenues to the rest of us and help out their workmates. When we deliver better competition reforms, then all of us are better off from a more competitive, more dynamic economy. I think there’s lots of win‑win opportunities in government, and I think it’s really dangerous to envisage that everything has to be win‑lose.
Cenatiempo:
But none of it is win‑lose, isn’t it? I mean it comes down to opportunity costs, so every dollar that is spent on one thing can’t be spent on another. That’s just basic fact?
Leigh:
You’re speaking my language as an economist. I think one of the biggest insights of economics is the notion of trade‑offs and the idea that we do need to be clear about opportunity costs, as you rightly say. But what we’ve aimed to do also is to recognise that in getting rid of nuisance tariffs in the reforms that we’ve put in place flowing out of the Economic Reform Roundtable. We’re looking for opportunities in order to grow the pie, not just worry about how we slice it up.
Cenatiempo:
But that’s something that conservative governments have been saying forever and a day that we need to grow the pie, and every time they say it progressives come out and say, ‘No, no, you’ve missed the point here’. So, are you really being progressive here?
Leigh:
There’s certainly an element of the left that is anti‑growth. I’m a proud pro‑growth progressive. I think it is terrific that we have strong economic growth, I think it’s important in order to deliver more equitable outcomes. I want to see incomes rising across the board. So, you won’t hear from me the hairshirt politics that the only way of dealing with environmental problems is by stopping growth. I think we can have growth and better environmental outcomes together.
Cenatiempo:
That’s why they kicked you out of the left‑wing faction Andrew.
Leigh:
You know, Australia is a renewable energy superpower, I think it is a really important goal and that’s something I’m passionately committed to. Getting more renewables, and getting lower prices and energy prices in the long run.
Cenatiempo:
We can agree on the second part, probably not on the first. Andrew, good to talk to you. We’ll catch up in a couple of weeks.
Leigh:
Likewise Stephen, take care.
Cenatiempo:
All of the best. Andrew Leigh, the Assistant Minister for Productivity, Competition, Charities and Treasury and the Member for Fenner.