Treating Australians as parasitic 'leaners' is a grave mistake
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Version 0 of 1. A month after its delivery, the first Abbott-Hockey budget is still on the front pages, and in the worst possible way. Having failed to convince the public of a budget emergency, Hockey appears to think he can do better by treating the majority of the Australian public as parasitic "leaners". Unsurprisingly, the polls do not support this view. As a recent Essential poll has confirmed, the great majority of Australians think equality and fairness are important, and the plurality view (48% vs 23%) is that the country is becoming less fair and equal. As Bill Shorten has noted, Hockey’s recent statements about the relative proportions of "lifters" and "leaners" in the Australian population are reminiscent of US presidential hopeful Mitt Romney’s remarks about the 47% of the US population who are dependent on benefits – and would therefore vote for Obama. Both are factoids of the kind that circulate through the right wing parallel universe of blogs, talk radio and spurious thinktanks, and both seem to provide an explanation for resistance to policies their proponents regard as self-evidently right. There are, however, a couple of crucial differences. First, Romney was never silly enough to knowingly say such things in public. His remarks only became known after he was caught on video speaking to supporters at a private fundraiser. Second, Hockey has, or ought to have, the benefit of hindsight. Romney’s claim was a disaster in every sense. As a factual claim, it was easily shown to be misleading at best. As a piece of political positioning, it played into the worst stereotypes of Romney as a heartless millionaire. Romney, at least, did his best to dodge the tag, turning up at stage-managed photo ops with representatives of the working class like coal miners (ordered by their bosses to attend, without pay, or be sacked). By contrast, Hockey seems determined to flaunt his status as the representative of the big end of town. Like Romney, Hockey denounces any criticism of the wealthy as "class warfare", while practising his own version, aimed at mobilising resentment against the undeserving poor. Hockey suggests that it is unfair that the average Australian should work a month a year to support people on pensions and benefits – the "leaners". The apparent basis for this is that government welfare expenditure amounts to around 8.5% of national income. In the treasurer's estimation, pension and benefit recipients represent a distinct class of "entitled" rent-seekers who are a burden on Australian workers. But around half of the total welfare bill goes to old age pensioners, the vast majority of whom have paid taxes to support the pension system on which they now rely. It is hard to summon up much outrage at the thought that we are working around two weeks a year to protect ourselves against poverty in old age. Moreover, as my colleague Flavio Menezes has pointed out, expenditure on the old age pension is matched (or outweighed, depending on the measure) by tax concessions on the savings devices preferred by the rich: superannuation, and capital gains on negatively geared investment properties. If the question were put to them, lots of Australians might be upset by the prospect of working two weeks a year to boost the retirement incomes of the wealthy. Much the same point may be made about other expenditures such as unemployment benefits. At least 5% of the workforce is unemployed at any given time, and a very large proportion will experience unemployment in any given year. Moreover, the time we work to support the unemployed has been falling steadily since the mid-1990s. Not only has the unemployment rate fallen, but the benefit has been frozen in real terms, while average earnings have risen by more than 40%. A more direct adaptation of the Romney 47% are claims of the form that "only 20% of Australians pay any net tax" made, for example, by Adam Creighton in The Australian. The key point to understand here is that, since government expenditure is equal to revenue (actually slightly higher, but this doesn’t matter), we collectively get back from government what we pay in, whether this takes the form of cash payments or public services. The same thing would be true for an arithmetical average household, if such a thing existed, although because income is distributed unequally, many more households are below the arithmetic average income than are above. So, this seemingly startling factoid is, in fact, a restatement of obvious facts. The hostile reception given to these Romneyesque arguments is unsurprising. The fact that Hockey is relying on talking points that failed even in the US is indicative of the level of delusion under which the government is operating. Having run a disciplined and entirely negative campaign, Abbott and Hockey ought to understand that they were elected by default. They owe their jobs to the fact that voters were sick of Labor’s leadership shenanigans. The fiasco of the Senate election is a pretty clear indication of a "plague on both your houses" view. Instead, they appear to be under the impression that they were granted a mandate for radical change – and long after the budget is off the front page, the electorate will punish them for it. |