20 November 2019

Sydney University is one of our citys most historic and important institutions.

But long before the Great Hall was built, this was the land of the Eora Nation, and of course it remains so. In paying my respects to elders past, present and emerging, I like to ensure that it is not only a symbolic recognition, but that we take the opportunity to remind each other that the task of eradicating indigenous disadvantage in our country has hardly begun.

At this gathering, it seems appropriate to highlight that a young indigenous man in Australia is more likely to go to prison than university and we all have both a responsibility and an opportunity to do what we can in our respective capacities to end that disparity and all other disparities in indigenous well-being.

It is an enormous honour to have been asked to present the Warren Hogan Memorial lecture.

I was keen to accept the invitation for a number of reasons.

Firstly to pay tribute to Warren Hogan.

His long service as Professor of Economics from 1968 to 1998 should be honoured. I was a student in the economics faculty here when Warren Hogan was still a professor. I didnt get the opportunity to study directly under him (turns out my most famous lecturer, although not famous at the time was the then impressively pony-tailed Yanis Varoufakis, who of course would later go on to be the Finance Minister of Greece, to the surprise of many, including his former students).

Whilst I wasnt a student of Professor Hogan, I was certainly aware of his presence and his eminence. I would later come to know his son Warren, who shares his name and love of economics.

Warren seniors love of economics certainly had a big impact on his family with four of his five children having economics degrees. But of course, his impact went much further than his own family.

Warren Hogan was a giant of this faculty and of economics teaching.

Secondly, to honour Warren is to honour the economics faculty here more generally and all those who taught in it. Warren Hogans legacy is in keeping with the history of the faculty, from its founder Richard Irvine, who argued against the conventional orthodoxy of wages reductions and retrenchment in the Great Depression and who was an important and positive influence over then Federal Treasurer Ted Theodore who was trying to come up with innovative solutions to avoid the or lessen the impact of the Great Depression.

In that vein, Warren Hogan would, I am sure lament the relative decline of economics as a field of study for young people.

Before I came to study economics here at the University of Sydney, I like many young people of my generation studied it for the HSC. While our lecturers and professors made it very clear we had to wipe the slate clean and start again with the study of the fundamentals of economic science, there was no doubt that studying economics in the senior years of high school inculcated my thirst for further economic learning and love of the subject, turning me away from an early ambition to study law and towards a determination to study economics.

I didnt know at the time however that I was almost among the last of the big wave of economics students at high school and almost as soon as I finished my economics degree here, the numbers of students studying economics started to decline.

Around 40,000 young people studied economics in their HSC or equivalent qualification in 1993, falling to around 11,000 today.

Business studies has thrived, economics has shrunk.

Since the early 1990s, which is when the subject of business studies was added to the curriculum the study of economics in high schools has collapsed by 70 per cent across Australia, and 75 per cent here in NSW.

When I was doing economics for the HSC, it was the third most popular subject, after English and Maths. Those were the days!

Of course, this is a vicious cycle.

As fewer and fewer kids choose to study economics, schools find it difficult to offer it as a subject, meaning that students who DO want to study economics arent offered it as a subject.

Economics is now taught in just one third of government schools and half of non-government schools. There are just four public high schools offering economics in Adelaide for example.

And while the number of university undergraduates studying economics at university has remained static at around 10,000 over this time, this is of course against the background of a big increase in the numbers of university students in total, meaning economics has shrunk has a proportion of university study generally.

In fact between 2001 and 2016, the number of economics undergraduates fell slightly, while the numbers undertaking banking and finance, management and commerce and business studies degrees grew strongly.

Im concerned by the fact that the number of Australian universities offering economics degrees has fallen from 21 to 17 in the ten years to 2016.

Im also concerned that the gender gap in economics study has been increasing, not decreasing.

There has been a growing disparity in the number of men and women studying economics at university.

Im on the record as saying previously that its disappointing that Australia is one of the very few OECD countries that has not managed to have a female holding any of the equivalents of the Office of Treasurer, Secretary of the Treasury, Governor of the Reserve Bank, Chair of the ACCC, Chair of APRA and Chair of ASIC.

Weve managed to have a female Governor-General, a female prime minister, a female Chief Justice, seven of the eight states and territories have had a female premier, weve had two female foreign ministers and a female attorney-general.

Im pleased weve had two female finance ministers, in Penny Wong and Margaret Guilfoyle, but the fact remains in key economic positions, women are dramatically under-represented.

I am hopeful that this sad record will be broken soon. Had I been serving as Federal Treasurer after May it was my intention to make each of those appointments on merit. But it was my view that, on merit, more than one of them would be filled by a female candidate within our first term.

But into the future, I hope we can agree that we need more women studying economics, not fewer.

We have a long way to go if we are to turn this around. Again, in the early 1990s when I was a young economics student at school, the breakdown of males and females in the economics classrooms of Australia was 50/50. Thats how I remember and thats what the stats tell us. But as Jacqui Dwyer at the Reserve Bank has shown, the ratio of boy to girls is now two to one. Thats worse than we do in the STEM subjects.

Why do we care? Or why should we care? What would it matter if economics remained a male dominated subject and profession?

Well, it matters because if the profession is narrow, the perspective of the profession will be narrow.

Do we think the economics profession will be devoting itself to the task of proposing ideas to eliminate the gender pay gap and improve gender equity for example, if the vast majority of economists in the country happen to be blokes?

Now I am sure all male economists would agree that eliminating the gap is a good idea, dont get me wrong. But they might not be as inclined to prioritise it as an interest and field of study as a profession which was more gender balanced.

In this regard, I want to pay tribute to the work of the Women in Economics Network, which is under the auspices of the Economics Society of Australia. The Network is doing excellent working promoting the study of economics to young women and also supporting the women working in economics. I also want to record, happily, that the founder of the Network, Danielle Wood is now the President of the Economics Society, and doing a great job.

Now, dont get me wrong.

I have nothing against business studies as a subject. And clearly, students are making a rational decision in their own best interests about how to maximise their career prospects.

But I am concerned that the nation will lose out, our society will lose out, if fewer young people are trained in the fundamentals of good economic decision making and more and more are trained in the more commercial skills sets of banking and business studies.

Far from blaming young people for not choosing economics as the degree of choice, rather I want to argue this evening that there is an obligation on us, those of us with a love of economics and who want more young people to share that love to make the studies of economics more interesting, more relevant. Dare I say it, more sexy.

Also, to celebrate economics, as we are doing tonight, and to promote to young people the interesting and rewarding career paths available to economists.

Of course, I am not the only one who thinks this. Luci Ellis and Jacqui Dwyer of the Reserve Bank have highlighted their concerns about the state of economics education.

Internationally, a body of concerned academics have developed the CORE first year economics text book to modernise economics and make learning economics more exciting. I know the CORE text is used here at Sydney University, which is encouraging.

If we get this right, I am an optimist about encouraging more young people to study economics.

Young people are more and more passionate about the big issues facing our society.

I dont think you need to tell me how passionate young people are about climate change. The climate strikes and extinction rebellion tell the story.

They are also passionate about inequality.

They want solutions. And if we want solutions that are effective, enduring and efficient, only economics can supply them.

A rigorous economic training can equip young people to challenge the issues of their age.

And explaining the value of economic training to young people in dealing with things like climate change and inequality might just make it a more attractive option for study.

As Samuel Bowles and Wendy Carlin found in the survey which informed their article What students learn in economics 101: time for a change in the Journal of Economic Literature, people who are starting an economics degree around the world, when asked to nominate the most pressing problem that economics should be tackling, mainly nominated inequality.

Im talking here about both school and university study, making both as interesting and enticing as possible.

The fundamentals of good economics teaching havent changed since I was a student. In fact it hasnt really changed since Alfred Marshall. But the context has changed dramatically.

I had a look at the Year 11 and 12 economics syllabus recently. It looked very familiar to me as pretty similar to what I studied in 1989.

But havent a few things come up in the last thirty years which potential students might find enticing?

Like how the world was shaken by the global financial crisis and what lessons needed to be learnt to avoid it happening again?

Like behavioural economics, or as its been popularised, Freakonomics, and the expansion of economics into fields like crime, health and education. Or the ever expanding application of game theory, and recently, the use of Big Data to study economic issues. And you only have to look at this years Nobel Prize winners Ester Duflo, Abhijit Banerjee and Michael Kremer to recognise the power of innovative economic thinking in a field as important as poverty alleviation and development.

While I am on this point, let me take a moment to pause and say surely the award of the Nobel in Economics to its youngest ever recipient, who happens to be a female, Ester Duflo, is a chance to celebrate women in economics. Perhaps we could invite her to Australia to help promote the study of economics to young women in particular (as well as to talk about her new book, Good Economics for Hard Times).

The other thing that has emerged since I sat for the HSC economics exam in 1990 is the economic rise of Asia.

This is another area I have pointed elsewhere that we are lagging behind in.

There are two examples I use that I think starkly underscore the size of the challenge before us: more Australian school students learnt Bahasa Indonesia in 1972 than do today and the number of non-background speakers of Mandarin at a business level of competence in Australia is estimated to be a paltry 130.

We pay the Asian century lip service.

But my point here in this context is: this is an opportunity as well as a challenge.

Young people know that we are living on the edge of the fastest growing region in the world and know that they have to arm themselves with good qualifications to compete in that world.

But many are deciding a degree in banking or business studies is the way to do that.

A good quality economics degree, perhaps as a double degree in Asian Studies or with an Asian language and Asian economies major as part of the degree is something not as widely taken up and not really widely enough offered.

I dont profess tonight to tell the economics teaching profession how to do its job. Far from it.

Rather, to lend parliamentary support to the economics community and say your work is valued, I would like to see bigger and more popular economics faculties in Australian universities and I think the subject of economics could do with more champions. Im happy to be one.

I mentioned before that passion to tackle climate change might be one selling point for young people and the study of economics.

That brings me to the second substantive issue that I want address in my time with you this evening.

I like many of you, for several years now, have read with anticipation the Economist magazines annual global warming edition.

It was in the Economist several years ago that I first read the argument that while the science of global warming is compelling and overwhelming, even if it wasnt it would be prudent and careful good management to give the planet the benefit of the doubt because the implications of getting it wrong are so severe.

Economists believe in evidence and the evidence of the link between human activity and climate change is as conclusive as the evidence of the link between tobacco and cancer.

And last week, as Australia suffered devastating bushfires, the country also had to indulge a silly and pretty unedifying debate about the links between climate change, drought and bushfires.

Again, lets just state it soberly: climate change makes drought worse. It makes the bushfire season longer and more intense.

I thought Australian Financial Review journalist Phil Coorey put it well when he pointed to the vindication of the key predictions from Australias climate scientists over a decade ago.

This group of scientists pointed out that there would be an increase in the frequency and severity of both droughts and bushfires in Australia.

Coorey asks:
So why today, when bushfires have become so commonplace that, unless affected, we are almost inured towards them, is it outrageous to talk about climate change?

And the report of the Governments own Co-ordinator-General for the Drought, Major-General Day, which wasnt released for seven months, was also very clear.

Its worth quoting it, because it actually hasnt received much attention: As a consequence of climate change, drought is likely to be more regular and longer in duration and broader in area. It means that farmers and communities who rarely see drought are likely to see it more often. And those that have been managing drought for many years may now see it intensify beyond their lived experience.

The retired Australian Fire Chiefs who issued their plea for climate change action last April also knew how compelling the need for action was.

Whether it is bushfires in Australia or floods in Venice, climate change makes natural disasters more likely and more likely to be more intense. And people suffer as a result.

Climate change effects population health, and not just through drought and natural disasters.

The World Health Organisation four years ago declared climate change to be the greatest threat to global health in the twenty first century.

Why do they say this?

Because it is estimated that by 2030, 250,000 people a year will die globally as a direct result of a warming planet.

Natural disasters are already occurring more regularly. Vector borne diseases will become more prevalent and widespread. Heat waves, which already claim many lives in Australia will be more common and more severe.

But what is often missing from the public debate in Australia is an understanding that severe climate change, of the type the globe is currently on track to experience, isnt just about the frequency and severity of weather events, it is about changing climate zones, desertification, ocean acidification, ecosystem collapse; these impacts threaten our food supply, our economy, our security and of course our health.

As some have put it, climate change is so dangerous to health that it threatens to unwind 50 years of progress in improving public health outcomes, as well as adaptation to already unavoidable impacts from climate change.

Of course, the ultimate best practice answer to this challenge is a robust international policy response to emissions.

But the world, and Australia, has failed to act with appropriate seriousness and haste, and so we will need specific policies to deal with the health impacts of climate change.

Other countries are acting.

The United States is not a leader in climate change policy more broadly.

However the Centers for Disease Control and Prevention actively promote climate change and health research. Back in 2015 the CDC published the Building Resilience Against Climate Effects (BRACE) framework to assist health officials develop strategies to help communities prepare for the health impacts of climate change.

The UKs National Health Service has a Sustainable Development Strategy and several European countries have identified health as a priority area in their climate change adaption strategies.

But in Australia, we have no such equivalent.

This is despite the fact we are more exposed than most, and our medical community is increasingly vocal on the issue, from Doctors for the Environment, to the Australian Medical Association, which recently declared climate change to be a health emergency.

We are already prone to natural disasters. As they become more prevalent due to climate change, we are exposed.

We are already prone to heat waves. Likewise, our exposure to their increased prevalence is pretty self- evident.

Countries not so far to our North are prone to vector borne diseases. It would not take too much more of an increase in temperature for us to be prone to those diseases.

While we need to have a comprehensive policy response to climate change, we also need a health element to our climate change adaption plan.

There is no lack of expertise or passion in Australia to tackle the issue.

In my six months so far as Shadow Minister for Health Ive been struck by the number of clinicians and medicos whove wanted to talk to me about the health impacts of climate change what can be done about it.

As one senior doctor put it to me powerfully recently Doctors listen to the science of the climate change and its health impacts like we listen to the science of vaccination and the impacts of not vaccinating. They are as clear as each other, and ignoring the science of climate change would be akin to supporting anti-vaxxers.

The problem is that this sense of urgency amongst our clinicians is not reflected in Government policy.

The word climate is not mentioned in our Department of Healths Budget papers.

A good guide to the health policy priorities of the nation is found in the National Health Priority Areas, which are agreed between the Commonwealth and the states and territories and reflect agreed priorities and action plans. The NHPA initiative recognises that to reduce the burden of disease, strategies need to be holistic and encompass the continuum of care from prevention to treatment and management.
There are nine current priority areas: cancer control, cardiovascular health, injury prevention, mental health, diabetes mellitus, arthritis and musculoskeletal conditions, obesity and dementia. Minister Hunt recently proposed the addition of medicines safety as the tenth priority area, which I support.

But I also propose that climate change impacts be added as a National Health Priority Area.

This would raise awareness of the importance of the challenge climate change health and set out a road map for dealing with it.

The addition of climate and health as a Priority Area would build on, and draw from, the Framework that has already been developed by the Climate and Health Alliance - a coalition of dozens of concerned health groups.

I would welcome the Minister proposing climate change as a National Health Priority Area. I would do so as Minister, but would prefer not to have to wait.

To conclude.

As I said at the outset, I am very honoured to be delivering the Warren Hogan Memorial lecture.

When I tentatively did the first walk from Redfern Station to the Merewether Building as the first in my family to attend university, I would scarcely have imagined that such a thing would be possible.

I was just happy to be here.

My education at the hands of economics faculty at Sydney University has helped me serve in Parliament for these last fifteen years, serve in the Cabinet for six years and be Federal Treasurer.

I cherish my time here as a student.

Id like to see more and more people have the benefit of the economics education I had.

Its incumbent on those of who want that, to make sure the study of economics is as appealing, as engaging and relevant as possible.

Having a cadre of welltrained economists can only be good for our country.

Helping us to tackle the challenges and opportunities of good policy for Australia: engendering economic growth, inclusively and sustainably.

Improving, celebrating and encouraging the teaching of economics is perhaps the ultimate tribute to the life of Warren Hogan.

Improving public policy is something he was passionate about, indeed devoted his professional life to.

We all pay tribute to that life this evening. A life well lived. A life in service of his community. A life in service of economics. A life that should be honoured.

As we do so tonight.