Richard Denniss on Economic Reform
Richard Denniss (‘The Age’, 15/2) makes a compelling argument regarding the real nature of the social choices we need to make, and the social priorities we need to set. Are lower corporate and personal income tax rates, as well as other concessions and subsidies for the well-off really a greater priority than quality, accessible state education ; a fair welfare system which is sustainable for those depending on it; social insurance for the disabled and the aged ; and comprehensive public health which is truly responsive to human need? Peter Martin (15/2) makes the point that the top 10% consider themselves ‘battlers’, whereas in fact they are amidst the truly wealthy and the upper middle class. We cannot afford social services, welfare, social insurance and public infrastructure without a genuinely progressive tax mix. And we must not be scared to put the arguments for redistribution and higher social spending – without which the minimum human and social needs of a great many Australians would not be met. This election the progressive parties should be aiming to increase social expenditure by at least 2.5% of GDP (or $40 billion in a $1.6 Trillion economy) rather than parrot conservative mantras on ‘cutting expenditure’.
Responding to Peter Costello on 'Small Government'
Peter Costello (Herald-Sun 16/2) argues “spending, not tax, is our biggest problem”. Yet Australia’s public spending is low by OECD comparisons. The problem is that ‘small government’ imposes a ‘false economy’. Some social needs are non-negotiable. Health, Education, Aged Care, pensions for the vulnerable and for those who have earned it through a lifetime of work. Crucially: In these fields ‘collective consumption’ via tax actually gives us a better deal as taxpayers than we would receive as private consumers. To illustrate – in their book “Governomics - Can We Afford Small Government?’ Miriam Lyons and Ian McAuley argue that whereas ‘high taxing’ and ‘high spending’ Nordic countries “contain health costs to 9 per cent of GDP”, in the US the figure is 18% despite only 40% coverage. Australia’s Medicare is somewhere in the middle: It is an effective universal coverage scheme – but neglect and under-funding leave us ahead of the US but behind the Nordics. So even with progressive tax and higher social expenditure these policies can actually get costs down as a proportion of GDP, and in the process free up a greater portion of the economy for ‘negotiable’ needs (eg: entertainment, holidays) which improve our quality of life.
Conservatives are arguing Turnbull must “slash government spending”. But where would that come from? The unemployed live in such poverty it interferes with their ability to seek work. The Disabled already experience poverty through no fault of their own. Student poverty forces mainly young people to seek out work that actually prevents them from getting the most out of their study. The Aged are forced to sell their houses to access sub-standard Aged Care even when they are from a working-class background. Waiting lists are spiralling out of control in public health ; and we have the threat of a permanently two-tiered Education system which disadvantages those unable to afford private schooling. Mental health is neglected and many mentally-ill can expect to die 25 years younger on average. There is insufficient public money for infrastructure and privatisation passes on added costs that hurt the broader economy. Public housing could increase demand and make housing affordable for more families. So in fact more public money is needed – not less. AND the deficit must be brought under control as well. Only PROGRESSIVE tax reform (not the GST) can tackle all these crises fairly. Cutting savagely is not the answer.
Meanwhile on Elder Abuse by the Federal Government!:
Christine Long (‘the Age’ 24/2/16) provides an exposition on elder abuse, usually at the hands of relatives. Yet the worst elder abuse and negligence comes as a consequence of the actions (and otherwise negligence) of the Federal Government. Nursing homes lack staff to resident ratios, and what is more there is no provision for a registered nurse on the premises 24/7. Indeed nursing homes are often akin to ‘warehouses for old people’. There is little or no mental stimulation or diversity in environment. Lack of staff means residents do not always eat, and some are left in their own excrement for protracted periods for the same reason. What is more, onerous user-pays mechanisms are forced upon working class families who may have struggled their entire lives to afford a home. User pays aged care is akin to regressive tax – but much worse even than the GST. For quality of life in old age other reforms are also necessary. A significant increase in the Aged Pension. Free public transport. Taxi vouchers, and social gatherings to cater for all interests. Programs to combat loneliness and the likelihood of suicide. A National Aged Care Insurance Scheme would be a great place to start.
Responding on the US Presidential Campaign: Bernie Sanders' Prospects