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Issue #1643      June 18, 2014


Raw, ruling-class rhetoric

The protests and opinion polls may have shaken Abbott government members of parliament but their dream of an end to the public sector is alive and kicking. Speeches to select audiences continue to provide jaw-dropping quotes about their driest of economically dry intentions. Treasurer Joe Hockey kicked off the series with his address to the Institute of Economic Affairs in London in April – the now-infamous “End of the Age of Entitlement” speech. It might have been written off as an overly enthusiastic offering to a gathering of Thatcherite free-marketeers but the raw, ruling-class rhetoric just keeps coming.

The “End of the Age of Entitlement” speech laid out the goal, the path to which is provided by the example of the Asian “miracle”.

“The sense of government entitlement in these countries is low,” the Treasurer said. “You get what you work for … By western standards this highly constrained public safety net may, at times, seem brutal. But it works and it is financially sustainable.”

Brutal but “fair” and, unlike all other models cited, “sustainable”! That’s Hockey’s assessment. Of course, the plan needs a bit of selling for Australians to sign up for the wholesale slashing of their living standards. Myths, distortions and “statistics” are needed to show that Australia’s current welfare arrangements are “overly generous” and even “unfair”!

Hockey returned to these themes with a speech to the right-wing Sydney Institute last week. Space doesn’t permit review of all of Hockey’s fancy footwork but one of the more widely quoted examples serves to give the flavour:

“Given that only around 45 percent of the population pays income tax, the average taxpayer must pay more than twice this amount in tax to fund welfare expenditure. In other words the average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian.”

Regardless of whether this statistic is accurate when all babies, children, students, unemployed, pensioners, part-time workers, etc, are considered, it is the thinking behind the assertion that one person is carrying another person as though they are bludgers that is dangerous. It runs contrary to the claimed concept of the state taking responsibility for the welfare of society and its services and welfare measures being funded by central revenue raised through a progressive taxation system based on ability to pay. Companies and individuals pay taxation to fund health, education, unemployment benefits, age pensions, etc. People receive these services and benefits at various times during their life according to need.

The fact is that many families receive as much back in benefits like the Family Tax Benefit and tax returns as they paid out in income tax. This relief dries up as the children grow older. The temporary boost to families’ disposable income and the economy (praised elsewhere for its resilience and high standards of living) is now clearly seen as indulgent.

Those wealthier Australians not completely protected by deft accounting are still paying slightly higher marginal rates of income tax. This also used to be seen as reasonable by governments because these high income earners were more able to contribute. Now, the wealthy are said to be growing impatient with the poor. The rich are sick of propping up the system and Hockey is going in to struggle for their “rights”.

Similarly, he insists the current rate of 30 percent will have to limbo down further to compete with the 17 percent company tax levied in Singapore or the 16.5 percent in Hong Kong. This is the real agenda. To abandon the government’s social responsibilities to the people so that it can slash and eventually abolish company and personal income tax and rely on the regressive GST to fund the military, justice system, intelligence agencies and whatever else remains of the state apparatus.

The contradictions in Hockey’s tirade are obvious. The fact that one in ten Australian households rely entirely on government benefits (way below the poverty line) is not a failing of the capitalist job markets, it’s due to those people’s own behaviour. And reports that Australia’s nine wealthiest individuals own more than the bottom 60 percent of the population are not worthy of comment at all.

Next article – Cuban 5 event great success

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