'Class war': Joe Hockey's insult to voters

Federal Treasurer Joe Hockey. Picture: ANDREW MEARES

Federal Treasurer Joe Hockey. Picture: ANDREW MEARES

COMMENT

Politicians really shouldn’t be left unsupervised with the English language – they are notorious for committing crimes against it and for torturing it into strange positions to suit their own interests.

Treasurer Joe Hockey is by no means one of the worst offenders – he speaks in plain language and is straighter in his responses to questions than most.

But when he invoked the words ''class warfare'' during a Wednesday night speech defending his budget, Hockey was being a little bit tricky with his language.

He used this term – heavily freighted with associations from the last, disastrous Labor government – to equate all complaints about the budget with the unthinking ideology of the extreme left, which is anti-aspirational and which hates the rich on principle.

''Criticism of our strategy has been political in nature and has drifted to 1970s class warfare lines, claiming the budget is 'unfair' or that the 'rich don't contribute enough','' Hockey told the Sydney Institute.

''The gap between rich and poor has often been used to attack governments when all other avenues have been exhausted.''

You can't blame Hockey for trying manfully to defend his budget, but this is him essentially telling Australians they are wrong – after all, the Nielsen-Fairfax Media poll taken immediately after the budget showed 63 per cent of voters considered the budget unfair.

An Ipsos I-view Omnibus survey taken a fortnight later showed time had only hardened voters' views. It found 70 per cent of voters did not believe the budget shared the burden of spending cuts, benefit changes and tax increases equally. Only 19 per cent said the load was shared.

Hockey then set up a few straw-man arguments to counter perceptions that the budget is inequitable. He said, for example, that healthcare and university education had not been universally free for a long time.

He pointed out that a co-payment for the Pharmaceutical Benefits Scheme was introduced in 1960. But this dodges the fact it is the GP co-payment that worries most people, and that, if introduced, that co-payment spells the end of bulk-billing.

Poor people are more likely to rely on bulk-billing and they are more likely to need the doctor as they have far worse health outcomes than the middle classes.

Hockey also said that university hadn't been free since 1987 – when, as a Sydney Uni student, he famously campaigned against the imposition of higher education fees.

But no one is arguing university should be free – just like Joe's own stance, the community's views have evolved on this point. It is generally agreed that prime minister Gough Whitlam's free university experiment was unsuccessful.

Australians have accepted that those lucky enough to attend uni should pay for it, but they consider it fair that government subsidise them, and that fees be regulated.

This is not middle class molly-coddling, it is good public policy – Australian society needs the skills and economic clout that come with having a highly educated population. If you effectively restrict education to the richer folk, you fail to exploit the brain power of a substantial portion of the population.

Hockey argued that the government's responsibility is to create equality of opportunity, not equality of outcomes. Of course it is. And equality of opportunity is precisely what people feel they will lose if university fees are deregulated.

He also said there has been an over-emphasis on the ''rich getting richer'' narrative, when the real story was that ''everyone is getting richer as a result of economic development''.

But a report launched this week tells a different story. Titled Advance Australia Fair? What to do about growing inequality in Australia, it argues that since the mid-1970s, wages growth has been concentrated at the top end of income bands.

''Over the last decade, the richest ten per cent have enjoyed almost 50 per cent of the growth in incomes, and the richest one per cent have received 22 per cent of the gains,'' the report states.

''This increasing concentration of Australian incomes is not only unfair; the evidence is growing that it is counter-productive to long-term growth and prosperity.''

The report is a joint project between the Australia Institute, the Australian National University and the not-for-profit company Australia 21. It comes up with suggestions for reducing inequality, including tax reform – particularly, the reassessment of tax breaks for superannuation and negative gearing.

The report's contributor panel includes many lefties – from Labor MP Andrew Leigh (shadow assistant treasurer) to Greens senator Lee Rhiannon. But it also includes respected experts like economist Ross Garnaut and physician and addiction expert Alex Wodak, and it was launched by former Liberal leader John Hewson.

“When you cut spending, you have to cut welfare, so obviously you are going to hit lower income earners. But this is too skewed,” Hewson says of the budget.

Hewson also notes that there is no comprehensive list of tax expenditures (or tax breaks, as we know them more commonly) included in the budget, which keeps Australians in the dark about how much we are losing in forgone revenue.

According to one of the report's authors, Richard Denniss (the executive director of the Australia Institute and a former adviser to former Greens leader Bob Brown), if we abolished all super tax concessions, we could give the aged pension to everyone, and increase it by about 25 per cent.

This is rather a radical idea but it gives some sense of how much superannuation tax breaks are worth, which is precisely why governments tend not to include them in budgets. And if you don't include something in the budget, it won't be part of the budget debate.

''They are too embarrassed about it. It’s like the paid parental leave being logged in the budget contingency reserve,'' Hewson says.

Hockey used his Sydney Institute speech to highlight how widespread welfarism is in Australia. Public social expenditure amounts to about 20 per cent of gross domestic product, and more than 70 per cent of people over 65 receive the aged or the service pension. One in 20 working age Australians is on the disability support pension.

''It should not be taboo to question whether everyone is entitled to these payments,'' he told his audience.

He's right. But Hockey can't claim to be the brave soldier leading the national conversation no one wants to have unless he tells us the whole story.

We should discuss welfare spending, but we should discuss tax reform at the same time, be it the rolling back of superannuation and property tax concessions, or the broadening of the GST.

And Hockey should be careful about labelling critics of his budget as class warriors. It only makes him look defensive, and it insults the intelligence of the majority of voters who think the budget is unfair. 

smh.com.au

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