Parliament is sitting at present, but it's a pleasure to be joining you virtually for the launch of the Canberra Behavioural Lab. And joining you by video is proof that the framing effect works even when the frame is a TV screen.
First, let me congratulate Uwe Dulleck, Ryan Payne, and Rebekah Russell‑Bennett on making 'CanBE' a reality. It's a terrific achievement, and I'm delighted to help mark the occasion.
I also want to note my delight that Vice‑Chancellor Bill Shorten unveiling the plaque today. Back in 2013, I urged then Minister Shorten to give a speech on behavioural economics and public policy. He didn't take up the idea then, so I'm delighted that 12 years later, Bill has the chance to express his love for behavioural economics in this new capacity.
Behavioural economics matters because it gives us a richer picture of human decision‑making - one that recognises our biases, habits and heuristics. It blends the insights of psychology and economics, and in doing so, it helps policymakers design choices that work better in the real world.
One well‑known example is setting the default option. In retirement savings, for instance, we know that people are more likely to contribute if enrolment is automatic, with the option to opt out. Another is simplifying the way we present information - making forms shorter, letters clearer, and choices easier to compare.
Here in Australia, behavioural economics has been applied to everything from tax compliance to energy efficiency. One of my favourite examples is the 'nudge versus superbugs' trial run by the Behavioural Economics Team of the Australian Government. High‑prescribing GPs were sent letters from the Chief Medical Officer comparing their antibiotic prescribing rates to their peers in the same region. The result? Prescribing rates fell by 9-12 per cent in 6 months - and the effect persisted a year later. It's a great demonstration of how small, well‑designed interventions can change behaviour and tackle big challenges, such as antimicrobial resistance.
For me, that's the essence of behavioural economics. We now know that humans don't always make decisions the way the old economics textbooks predicted. We're swayed by how choices are framed. We give too much weight to the present and too little to the future. If you've ever eaten dessert while promising yourself you'll 'start the diet tomorrow', you've done a field trial in present bias.
The Canberra Behavioural Lab is poised to make its own mark. With tools such as robots, eye‑trackers, stress sensors and respiration monitors, it will give researchers, businesses and government agencies new ways to understand behaviour and test interventions. Importantly, the lab will also be a hub for collaboration - bringing together economists, psychologists, marketers, technologists and policymakers to co‑design solutions.
From my perspective in government, behavioural economics is a powerful complement to our broader push for evidence‑based policy. Via the Australian Centre for Evaluation, we want to see more randomised trials, more data sharing, and more rigorous evaluation. When we change a policy or program, we should be able to measure whether it actually makes life better for the people it's designed to help.
Of course, behavioural economics isn't a cure‑all. Sometimes, the best answer will still be a direct regulation, a tax change, or an investment in public goods. But behavioural insights can help us make those policies more effective - by understanding how people will respond, and designing them accordingly.
So, I want to congratulate everyone involved in establishing the Canberra Behavioural Lab. I'm looking forward to seeing how your work improves programs, products and policies in the years ahead.
Thank you - and may all your nudges be gentle, but impossible to ignore.
