Podcast transcript

On economics and politics

 Andrew Leigh MP

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Transcript

Matt Smith

Hello there. This is me, Matt Smith, welcoming you, the listener, to a La Trobe University podcast. My guest today is Andrew Leigh. He’s the Federal Member for Fraser and former Professor of Economics at the Australian National University. Now, I don’t usually do this, but let’s just for a moment listen to what Andrew says during the mike sound check.

Andrew Leigh

As virtuous men pass mildly away, And whisper to their souls to go, While some of their sad friends do say, “the breath goes now” and some say, “no”. So let us melt, and make no noise, No tear-floods, nor sigh-tempests move …”

Matt Smith

There we go. I’m sure he won’t mind that. That was Andrew reciting A Validiction Forbidding Mourning by John Donne. And now I bring you the interview.

In 2002, you co-edited a book called The Prince’s New Clothes: Why Do Australians Dislike Their Politicians? Can you see where this question is going?

Andrew Leigh

I can indeed Matt. Go on. Go on.

Matt Smith

What has made you so eager to join their ranks? Especially from a profession as respected as university academic?

Andrew Leigh

You’re certainly right about the shift in public standing there, Matt. So, if you look at Roy Morgan surveys of university lecturers, about four in five Australians say university lecturers are ethical and honest, about one in five say the same about federal politicians and it’s a figure that’s been going down over recent years. But it’s a chance to make a difference, and it’s a chance to have a positive impact on your community, having done academic research with a public policy focus, I guess I’m passionate about seeing how we can make a difference, particularly around some of those issues on disadvantage, and inequality.

Matt Smith

Did that book kind of give you a few pointers of things to avoid, or maybe do differently?

Andrew Leigh

It did a little, yes. Certainly the public standing of politicians is not high, and I think part of that is the way in which people see politics. Question Time is an hour that most people don’t watch parliament, but snippets of Question Time make their way onto the evening news, and it’s those shouted exchanges that for many people characterise what politicians do when they’re in Canberra. I think that’s a pity and I would like to see ways of changing that dynamic. I also think the kind of sportsplay journalism, which frankly has gotten worse over the last decade, has contributed to the negative standing of politicians – much more commentary, more nastiness, and I think shallower reporting of politics, as a result of the big technological changes that have gone on. But for all that, it’s an extraordinary job to have. I’ve loved the last two years and have never done anything this rewarding before in my life.

Matt Smith

From your perspective then, what’s the key to getting a politician’s true message out, if the media can’t be as trusted as you’d like it to be.

Andrew Leigh

I think the challenge for an individual politician at the backbencher level is to make sure that you’re engaging with issues, and that you’re not getting into the sort of political mudslinging. Now that’s kind of easy to say in the abstract, but in the heat of battle, you do have to remember when you’re in a one-on-one interview with someone on the other side and they’re saying nasty things, or untruths about your leader, that it doesn’t help to respond in kind. You have to remember that even though people on your own side may enjoy it, when you dump buckets of mud over the other side, that that’s not necessarily a good strategy because, as the old line goes, from all the king’s men, mud’s a funny thing. Some of it ends up on everyone.

Matt Smith

Now you’ve dabbled a bit with journalism yourself in the past. I believe your first article that was published in the Sydney Morning Herald was on hooning, is that right?

Andrew Leigh

That’s right. Illegal street drag races.

Matt Smith

Is that a good way for a politician to engage directly with the media – by taking out the middle man and writing their own content? Are you still engaged in writing opinion pieces sometimes?

Andrew Leigh

Yes I do sometimes. I had a fortnightly column with the Financial Review for a few years which I enjoyed greatly. I’ve probably written a couple of hundred opinion pieces over the last decade, and I find for me it’s a useful way of getting a message out that’s undistilled, but also on a personal level, writing, for me, is the core of the thinking process. I don’t really feel I’ve understood an issue until I’ve actually written about it, so there’s a sort of clarifying process that goes on when I write. Working on longer pieces is even more challenging too, because you not only have to think about what you believe on particular issues, but how those issues fit together with one another. It’s exhausting. I feel utterly drained after a good day of writing, but I think it probably makes me a better politician for that.

Matt Smith

I’d say the first part of when you’re approaching an issue like that, is to maybe look at numbers and trends. Is that what comes naturally to you? How do you separate being an economist from a politician?

Andrew Leigh

I’ve always approached issues through the lens of an economist, principally using cost-benefit analysis, thinking about effects on the margin, trying to avoid committing the fallacy of the sunk cost, recognising that much of decision-making is trade-offs rather than additionality. But it’s also important to recognise that statistics and economic theory don’t take you very far in the typical public debate and what you need is to couple powerful stories, which are representative of the true statistics, alongside powerful statistics and good theoretical arguments.

Matt Smith

So you’re making the research a bit accessible that way, do you believe?

Andrew Leigh

Yes, well certainly when I’m trying to write about my own research, I’m typically looking for stories that characterise that research, but also if you’re talking about, for example, inequality, it can sound a bit abstract to talk about how the share of the richest 1% has doubled over the last thirty years. But if you talk about the fact that, say, if we had a ladder, every rung was worth a million dollars, most Australians would be less than halfway to the first rung, Gina Rinehart would be eight kilometres up in the air. When you have an analogy like that, I think it can help to clarify the issue of inequality better than any hard statistics about shares and gini coefficients and so on.

Matt Smith

When you’re approaching your work then, how much of economic principle do you put it into it. I found the word randomising come up quite a lot on your website, and I’m assuming that that’s you, not wanting to shake the economist from the work that you do.

Andrew Leigh

Yes, absolutely. I mean, my value added in politics is what I bring as an economist, having done some research and thought about a range of different issues, and if I were to enter politics and say, well, I’m now going to shed that former personality, and I’m not going to bring any of those ideas and ways of thinking into politics, then you may as well get rid of me and replace me with somebody that can bring in something fresh and new to the parliament. So in the area of randomised trials, I’m really interested in how we can better evaluate government policies. I think we do too few randomised trials at the moment. Not every policy is amenable to a randomised evaluation, but it does strike me as odd that you can’t get a drug listed on the pharmaceutical benefits scheme without a randomised trial and yet almost none of our social policies have been subjected to a randomised trial. So there’s two very different standards for pharmaceuticals and social policies, and it’s not clear to me why that ought to be the case.

Matt Smith

Is it a challenge getting that sort of thinking heard from the backbench?

Andrew Leigh

It’s always a challenge getting ideas into an information-rich environment. There are powerful groups which have been working on issues over a long period, whether they’re community sector, business, employee groups, and you also have a lot of collective experience in the public service. So I’m not sure you’d want a world in which a backbencher can walk in and upset the apple cart entirely. But I do find a ready ear among ministers and their advisers to interesting ideas.

Matt Smith

By the time this podcast comes out, you will be a father again, so congratulations. For your third child. You previously spoke about the baby bonus as a bad policy, and should be scrapped, as your time as an academic, that is. Have you changed your thinking, and doesn’t a baby bonus go towards in some way addressing the inequality?

Andrew Leigh

Well, one way you can think about the baby bonus is that it’s a policy that addresses credit constraints, so if people haven’t saved enough in anticipation of having a baby, then the baby bonus acts as a top-up to the family benefits scheme that we have in place. What our government did in coming to office was to means-test the baby bonus. Previously a millionaire could claim the baby bonus, not incomes over $75,000 for the half year before the baby, disqualify you from receiving the baby bonus. I think that’s a sensible step. It’s in the tradition of targeted welfare, which has been something that my party has pursued over many decades, and I think that narrowing down of the baby bonus to people who are really cash-strapped at the time of the birth is an important step.

Matt Smith

You also looked at a number of the trends that the baby bonus caused, in particular, people trying to time their births. Has that sort of thing flowed on into how your thinking is now?

Andrew Leigh

Yes, absolutely. So what Joshua Gans and I did, we looked at the introduction effect to the baby bonus. The baby bonus was introduced on the 1st of July and the then Howard government was very clear that a baby born on the 30th of June would not qualify for the $3,000, one born on the 1st of July would qualify. So Joshua Gans, who’s now Professor at the University of Toronto, co-authored a paper with me where we looked at the effect of this on birth timing, and found that around a thousand births were moved from June into July, to qualify for the baby bonus. And we raised an eyebrow over the potential health impacts of that, given that babies were potentially being born much later than might have otherwise been advisable under good obstetric practice. One of the things that then happened was that when this government was increasing the baby bonus, we took the opportunity to write to all of the hospitals, beforehand, to let them know that the increase was coming and to emphasise that birth timing should always be done with the health of the mother and baby first and foremost in people’s minds. And my hope is that if someone looks at those birth data, they won’t see the same sort of blip that we saw when the policy was introduced.

Matt Smith

Now you’re here today to discuss the Labor-Green alliance at a public lecture, with Adam Bandt and Robert Manne. It’s been pointed out that a minority government with a Green alliance has pushed the left agenda further than it would have been otherwise. Has this been a beneficial outcome for the inequality?

Andrew Leigh

I don’t see many policies going into legislation that weren’t in the Labor platform and haven’t been in the Labor platform for some time. For example, if you take a price on carbon pollution, which I think has been a good success of this term of government, that’s something that is in the Labor heritage, going back to 1990, when Graham Richardson, as Environment Minister, takes a proposal to tackle climate change to Bob Hawke’s Cabinet. So I think there’s a fairly strong Labor lineage behind that policy and I also think that there’s other issues on which we’ve parted company with the Greens – asylum seeker processing being I guess, the clearest recent example. So, you know, we’ll form arrangements with other parties to get our legislation through just as John Howard did, in order to get legislation through – the GST went through with the support of the Democrats for example. But I don’t see it as being any particular alliance in the way that, for example, the Coalition between the Liberal Party and the National Party is much more a kind of intellectual sharing of ideas.

Matt Smith

I think a question that’s interesting to pose to somebody with your background is, if you were given a billion dollars to spend as a politician, what would you use it on?

Andrew Leigh

I would put in place a series of randomised evaluations, looking at policies to close the indigenous gaps in Australia. The one that’s worrying me most at the moment is the incarceration gap, but there’s life expectancy gaps, there are health gaps, there are gaps in terms of housing, overcrowding, there’s even gaps in terms of political participation. I’m not sure we know as much as we ought to, about policies to narrow that gap, and so I think my investment would be very much devoted towards improving the evidence base on what works, and most importantly, what doesn’t work. We sometimes forget that learning that a policy is unsuccessful is a good outcome. It means we can redirect funds towards other policies, and I think that we need to do a little bit more of that in the indigenous policy space.

Matt Smith

See, I would have thought that an answer from a politician in that kind of area, would be, we’re going to invest in indigenous health, in indigenous education, whereas you’re going, no, we’re going to look at the policy and examine the workings of that. Is that right?

Andrew Leigh

Well, each of those would be an investment. So, for example, you might look at innovative programs to quit smoking. So one of the substantial contributors to the indigenous life expectancy gap seems to be due to smoking rates being much higher among indigenous Australians. How do you reduce that? Well, one argument could say that the best way to do it is education, another might say that the best way to do it is through controls on underage smokers getting access to cigarettes, another might say that you might want to, for example, pay people to quit smoking. So, there’s a range of innovative behavioural economic strategies, so each of those policies I think would be worth a rigorous trialling to try and work out the best strategy for cutting indigenous smoking. I’m optimistic that those rates will come down but I’d like to see the evidence bar raised a little in terms of what works and what doesn’t.

Matt Smith

In the case of indigenous smoking though, the plain packaging laws will also have a big impact on something like that. Wouldn’t it be better to focus on something that’s going to benefit everyone, as well as the indigenous community?

Andrew Leigh

I think all of us do benefit when indigenous living standards improve, and let’s face it, all Australians are paying health bills, so all Australians benefit when we manage to improve public health for one portion of the community, but I think results can flow on as well into other areas and we ought to not, on every issue, regard indigenous Australians as being so different from non-indigenous Australians. Potentially if we can work out what works in a really at-risk community, then those findings can be used elsewhere too.

Matt Smith

That was Andrew Leigh, the Federal Member for Fraser, getting a light grilling. That’s all the time we have today for the La Trobe University podcast. If you’d like to ask any questions, comments or feedback about this podcast, or any other, then send us an email at podcast@latrobe.edu.au.

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