Monday, May 30, 2016

Reflecting on the Leader’s Debate and what it means for Australia

above: Arguably
Bill Shorten won the recent Leaders' Debate for Labor ;
But the leader needs to make clearer the connection between education and infrastructure, and a strong and fair economy.  Labor could also do with more policy ambition ; and needs to 'do the right thing' for the elderly, and other vulnerable people.

Tristan Ewins

IN the recent Leader’s Debate (29/5/16)  for the coming Australian Federal Election it could reasonably be argued that Labor leader Bill Shorten did a pretty good job.  Slogans such as ‘Budget Repair that is Fair’ are arguably cutting through ; though Labor needs to come up with more detail as the election day approaches.  

Shorten’s approach is basically to defend Australia’s minimalist welfare state and social wage – but without such significant new initiatives – say on the scale of the NDIS. (National Disability Insurance Scheme)  His strategy is ‘to hold the line’ against Turnbull’s Ideological drive for ‘smaller government’ at the expense of pensioners and other vulnerable Australians. The opposition of the Australian Medical Association to the erosion of Medicare and bulk-billing could be crucial.  Shorten is also ‘holding the line’ on Gonski and against the projected deregulation of Higher Education.

But Labor’s back-down on restoring Aged Care funding was especially disappointing: and will have bad consequences for some of our most vulnerable Australians.   Labor needs to revisit these areas if actually elected.  Labor Governments cannot take it for granted they will enjoy the protracted time in office as enjoyed during the Hawke/Keating years.  Labor has to ‘seize the day’, and entrench important reforms while it can.  Personally I have advocated for the vulnerable elderly and the mentally ill: suggesting the importance of addressing a mental-health related life expectancy crisis. (where
about 300,000 people are dying 25 years earlier that the general average)  And also I have suggested the necessity of tackling unfair user-pays in Aged Care ; as well as the crisis there with regard quality of life, and in resourcing and staffing the system.

But Shorten needed to do a better job making the connections between education, infrastructure, human capital and a strong economy. He was spot-on identifying the waste and unfairness of Turnbull's $50 billion corporate tax cut over 10 years.  (A measure which will likely result in real increased economic growth over decades of only a tiny fraction of one per cent according to Treasury.)

But cuts to public investment in education and infrastructure especially are bad for the economy, bad for growth, bad for investment. Businesses will take what they can get. But they also look for an educated workforce and top quality infrastructure.  The ‘trade off’ between reduced Company Tax, and reduced spending on infrastructure and education – will leave the Australian economy worse off. 

Amidst talk on the economy Labor’s Negative Gearing measure is perhaps its most significant new initiative: with the hope it will make housing more affordable, partly as a consequence of encouraging investment in new stock.  This would also stimulate growth.

Ultimately, there is the choice of whether we pay for infrastructure and Education fairly through progressive tax;  or unfairly through 'corporate welfare' (an unfair tax system); or whether we just cop out entirely - 'leaving it to the market' - which will mean privatisation.   Turnbull is suggesting  an arbitrary ‘locking in’ of smaller government, aiming for around 23.9% of GDP  . By locking into the 'even smaller government' option (by some tens of billions) Turnbull will have no choice except to privatise.  But privatisation comes with big inefficiencies. The higher cost of private finance ; the costs of marketing;  private dividends; corporate salaries and so on.  And there is the possibility of private monopolies or oligopolies with unacceptable market power to fleece consumers.  Not only will that create unfairness - it will also create inefficiencies that flow on to the whole economy. Shorten needs to be crystal clear that not only is Labor strongest on health and education - But that Labor's commitment to public education and infrastructure is best for the economy as well. This is a great Labor strength if only Shorten is willing to play to it!

Turnbull argues he ‘has a plan’.  But all this ‘plan’ boils down to in the end is a massive corporate tax cut: premised on discredited ‘trickle down economics’.  The expected ‘surge in new investment’ will never come.  As opposed to an economic plan, Turnbull’s approach is only to ‘talk about having a plan’.  There is no substance.  Just a mantra about ‘jobs and growth’, and references to Turnbull’s past business background.  Turnbull assumes a highly conditioned electorate will ‘trust’ the Liberals on the economy: and will trust in his business background as opposed to Shorten’s personal background representing workers.

Also importantly: Turnbull is attempting to trade on his commitment to build new subs in South Australia.  
Building the subs will cost $50 billion and create 3,000 jobs.   But by comparison the Conservative LNPs withdrawal of only modest support for the auto industry will cost 50,000 jobs.    And it was projected about half of those jobs (about 24,000 of them) are lost in South Australia alone.   Hopefully workers have long memories; and if not so then Shorten should remind them! 

This is also an area that Shorten should arguably revisit if he wins the election.  Former Prime Minister Kevin Rudd had suggested an initiative which may have saved those 50,000 jobs for only a $2 billion subsidy.  Australia could potentially develop an ongoing ship-building capacity: building vessels not only for ourselves, but for the world.  But if the auto industry could be restored, arguably there are more jobs in the balance there.  Winning back the trust of the auto-manufacturing companies would be difficult, though, after Tony Abbott effectively ‘drove them out of town’. 

Tellingly, during the debate Turnbull suffered on the theme of climate change.  The problem with high expectations is that when they fail to be realised the disappointment is all the more bitter.  There is a Centrist, politically and social liberal demographic out there which may have swung the election for Turnbull.  But Turnbull’s compromises have given the impression of ‘weak leadership’.

Finally: during the debate both leaders were asked to clarify whether or not either one of them would ‘lock in’ with no further changes to superannuation concessions.  In an act of irresponsible opportunism, Malcolm Turnbull indicated he would make just such a commitment.   But Shorten did not answer the question clearly. 

Let’s be upfront. According to many commentators superannuation concessions could soon cost close to $50 billion a year.  That is: more than the entire Aged Pension budget.  This will be partially mitigated by the modest measures taken by both the major parties: reducing concessions for the richest of the rich.  But while average income earners should not be targeted, there arguably remains a broader demographic including the indisputably well-off and the upper middle class.  Let’s say at least the top 10% income and wealth demographics.   In order to reel in this massive imposition on average tax-payers  a broader base needs to be targeted.   Broad enough to save tens of billions , but narrow enough to be fair.  Labor itself has not yet found this balance -aiming for too-narrow-a-demographic to make the difference to the Budget which is needed.

For Shorten what is also absolutely necessary is to create a ‘sense of proportion’ around claims in the Conservative tabloid media that Labor are ‘irresponsible big spenders.’ Spending has hovered around 25% of GDP across BOTH Labor and Liberal governments for many years now. In fact both Labor and Liberal have maintained a regime of ‘small government’, and any Australian government would need to double spending by approximately $400 BILLION a year to reach proportionate Swedish levels of expenditure! (ie:  at approx. 50% of GDP)   As an admirer of the Swedish welfare state, nonetheless that may not be within our grasp!   But in fact, if we want to INVEST in education, health, aged care, transport and communications infrastructure, then we do need more progressive tax and higher spending. The alternative is that our services and infrastructure will decay. People will suffer ; and so will the economy.  

To reinforce that ‘sense of proportion’: Labor’s proposed changes to Capital Gains Tax and Negative Gearing will save only $7 billion a year.  And Labor’s measures on superannuation concessions will save only $14 billion over ten years.   (which is not so much as it sounds when you consider it is staggered over a decade!) 

But Malcolm Turnbull’s approach of cutting Company Tax by $50 billion over ten years – while opposing Labor’s savings via progressive tax measures - cannot but result in a big hit to Education and Health, services and infrastructure.  At the same time it could make any return to surplus impossible.  (once the tax cut reaches its full amount it will cost the Budget even more over time)

All in all Shorten ‘won the debate’.  But this is no guarantee of winning the election.  Shorten’s defensive posture - for the most part ‘protecting what we’ve got’ – will appeal to many people.  But ultimately we need more if we are to protect the vulnerable, and promote the rights and interests of the working class, and of low to middle income earners. Here’s hoping for more ambition from Labor as the campaign continues.

Saturday, May 21, 2016

Refuting Rita Panahi on Melbourne's Homeless ; Opposing Small Government; Rejecting the Character Assassination of Duncan Storrar

above:  An Iranian refugee, Herald-Sun columnist Rita Panahi has little tolerance for Conservative Islam when it comes to the role of women ; But since being a Labor Party activist in the 1990s Panahi has now 'swung Right' , and seems to have little patience for the liberal rights of Melbourne's Homeless.
What Follows are a number of Letters – written by Tristan Ewins to the ‘Herald-Sun’ and ‘The Age’ around May 2016 ; This time the topic matter includes ‘The Cost of Small Government’, ‘the Character Assassination of Duncan Storrar’, and ‘attacks on the liberal rights of the Homeless made in the Herald-Sun by columnist, Rita Panahi’….  At the time of my posting these none of these letters had been published.   Sometimes I succeed, though, so I am trying to persevere. :-)

The following was a response to Herald-Sun columnist, Rita Panahi – who attacks some of Melbourne’s homeless for daring to make a political protest against their plight
Rita Panahi and Intolerance for the Homeless: What of liberal rights?
Rita Panahi’s attack on the Homeless (HS 18/5) is distressing.  She argues that the protest in the City Square has become “political” because protestors are standing in solidarity with others for a more permanent solution to homelessness rather than just accepting the short-term solutions offered to them personally.  Here, Panahi’s comparison with the “Occupy” movement also displays an intolerance for political activism and protest.  Too often amongst more-conservative commentators there is an almost-systemic promotion of intolerance with regard rights of protest and civil disobedience underscoring our liberal society. Panahi admits that amongst these people there are “physical and mental health issues”, but she does not consider in depth the nature of those afflictions, and how they affect peoples’ capacity to provide for themselves long-term.. Also there is the question of housing affordability, including rental-affordability for those in poverty– the consequence of the housing bubble.  Panahi observes the social programs offered by the Salvation Army, inferring the solution is for individuals to give generously to charity. But while charities do valuable work, nonetheless homelessness and other social problems require resources that only government can bring to the table. It is entirely legitimate to demonstrate in favour of that kind of solution.

The following two letters cover very similar terrain to each other.  Their non-publication (so-far) is suggestive that the Herald-Sun may not accommodate debate on the issue of ‘small government’ – as if ‘both sides’ should take it  as a ‘given’.  The comparison with the Nordics illustrates just HOW small ‘small government’ is in this country ; and the social and economic consequences…. The example of Nordic Health Care versus US Health Care speaks volumes: Hence I tried twice to get that information published in the Herald-Sun…  'The Age' had published that information in a different context earlier in 2016.

The cost of ‘Small Government’: Letter One’

Malcolm Turnbull warns Australians to watch out for “Labor’s big spend”. Yet tax, in Australia is approximately  25% of GDP compared with approximately 50 per cent in the Nordic countries.  The Nordics understand that you must INVEST resources to reap the rewards.  Neglect of services and infrastructure saves money short term – but harm the economy long term. Transport and communications infrastructure add to productivity, and there is the prospect of new industries arising from Labor’s world-class National Broadband Network. ‘Human Capital’ means more high-wage, high-skill jobs – but requires an investment in Education. An interventionist Industry Policy can get unemployment sustainably down well below 5% boosting tax revenue and growth - but also requires resources. -(The Swedes demonstrated a sustainable rate of unemployment around as low as 2% was possible for several decades during the 20th Century)  Social consumption (via tax) can also provide better value and free-up wealth for private consumption elsewhere.  Nordic universal health care costs around 9% of their GDP, whereas the US system of (mainly-private) health insurance costs 18% of their GDP for only 40% coverage.  (from ‘Governomics’ by Lyons and McAuley) Finally we are a society, not merely an economy ‘in abstract’.  Health, Education, Aged Care, ABC and SBS, Roads, Rail, NBN – are ‘social goods’ which improve our security and quality of life.  These things are worth investing in if they make us happier and healthier.   If anything Labor’s policies are exceedingly-modest ; but still far-preferable to Conservative austerity.

The cost of ‘Small Government’: Letter Two’

The Herald-Sun (21/5/16) observes that “record high” taxation will soon be necessary without big spending cuts.  But Australian taxes are already extremely low (24.2% of GDP) compared with Denmark and Sweden. (at around 50%)  We would need to raise tax by approximately $400 billion to match!  Also, the economies of European and Nordic countries don’t seem at all worse off – despite Conservative warnings only ‘small government’ delivers prosperity. Higher taxes can mean better industry policies and better education opportunities – with the growth and prosperity which follows. Without so-called ‘bigger government’ we have regressive charges for higher education, the neglect of state schooling, and the destruction of public health (Medicare). Also, private consumption can offer bad value for money compared with ‘collective consumption’ via tax. The Nordics spend around 9% of their GDP on universal public health care, compared with the US whose private system soaks up 18% of their GDP for only 40% coverage.   So low-taxes are a ‘false economy’ leaving  Australians worse-off. And Labor’s proposed reforms (eg: $7 billion saved from Negative Gearing and Capital Gains Tax) are very modest when put in the global context.  (editor pls note: The stats on health care come from “Governomics” by Lyons and McAuley)

The following was in response to attempts to demonise Duncan Storrar in the Murdoch Press:  A low income worker with a family – Storrar pointed out on QandA how Scott Morrison’s election Budget provided very little for those on low incomes: 

Character Assassination to Stigmatise the Working Poor

Much of the mass media sees fit to dig up the past of Duncan Storrar apparently with the aim of discrediting arguments that have arisen around him about distributive justice in this country. But Duncan’s history in no way detracts from the needs of his family, or the needs of others on low incomes.  That includes millions of working people: in aged care, child care, hospitality, cleaning, retail, cab driving and more.  Some on around $40,000/year ; some on much less.  These are the people who suffer most from the GST – which is a flat (regressive) tax on consumption. They are the people who have suffered most from the user pays which followed privatizations.  They are the people who would suffer most from cuts in penalty rates. Indeed: in some ways the exploitation of the working poor props up the material living standards of others: and that is not fair.  Fairness demands a restructuring of the tax mix.. It requires a stronger welfare state,  social wage, and stronger labour market regulation.  The average wage in Australia is around $60,000/year: and even that is distorted by the weight of those on very high incomes.  Why is it that calls for fairness for workers and pensioners are branded ‘class warfare’ but measures which hurt the poor and vulnerable do not attract the same label?

The following was written in response to an ideological attack on the Left  published in the Letters section of the Herald-Sun around April-May

Response on ‘The Left’ re: Herald Sun

Anthony Gilchrist attacks ‘The Left’ on a number of fronts, and in a way which warrants a response.  Firstly, it is true that there is a double standard from many when it comes to the treatment of Christianity and Islam. As a Left-Wing Christian this disturbs me greatly. On the other hand our accepting and pluralistic culture has if anything provided a shield against Terrorism - ameliorating the alienation that can lead to Terrorist acts. Meanwhile with regard Indigenous Australia, closing the gap on Education and Life Expectancy remain legitimate objectives ; and a Treaty might provide the kind of reconciliation that enables us to ‘move forward together’ as a nation.  Gilchrist condemns multiculturalism ; but while there are crime problems in some migrant communities is it the ‘Christian’ thing to do to turn refugees away?  (Many of whom are Christians themselves, fleeing war and persecution)  Meanwhile, of course we should never forget or disrespect the sacrifice of the ANZACs.  But neither should we be uncritical with regard this nation’s participation in wars.  60,000 Australians died in World War One – many others horribly maimed and mentally scarred.  Only resistance from within the labour movement prevented the death of many thousands more.  That war was an Imperialist bloodbath more so than ‘a fight for freedom and democracy’.  Some people on the Left have drifted away from engagement, preferring to silence their ideological enemies. But calling the Left ‘un-Australian’ is just a way in itself of silencing critical opinions.

Tuesday, May 10, 2016

Analysing the Morrison Federal Election Budget, and Considering the Shorten Labor response

above:  Treasurer, Scott Morrison's pitch on 'Jobs and Growth' is more of a Slogan than a 'Plan' or a reality
Some are interpreting the Morrison Federal Budget as 'modest' and 'non-controversial' ; A closer look reveals that much of the Hockey austerity agenda remains

Tristan Ewins

The first (and possibly last) Scott Morrison Federal Budget is being widely misinterpreted as modest and non-controversial – playing to the theme of ‘living within our means’.  Effectively token personal income tax cuts for those on high incomes are suggestive of Liberal Party priorities in the context where other income tax-payers experience no relief. 
Further; increases in tax on tobacco may seem like a ‘safe bet’; but neither side of politics appears concerned at the distributive ramifications. 

In the ‘big picture’, though, there are still big cutbacks implicit in this Budget that may escape voters’ eyes at a casual glance.  Cuts in Medicare and Higher Education will undeniably lead to an intensification of user pays and privatisation over the course of a re-elected Turnbull LNP Government.   The LNP is hoping to evade scrutiny by adopting some distributively-fair policies.  But a thorough analysis reveals a Budget which retains too-much from the disastrous 2015-16 Hockey austerity Budget.

And yet there are some aspects which are mildly encouraging.

Under the reforms foreshadowed by Treasurer, Scott Morrison, Wealthy superannuants would no longer be able to “draw tax-free earnings from balances over $1.6 million.” The Government is also "planning to introduce a $500,000 lifetime cap on the amount of after-tax contributions a person can make, backdated to 2007."  Labor has criticised the “retrospective” nature of the policy, but the measure will still only bring in $2.9 billion over four years.   Meanwhile high income workers will also be hit with a lowering of the threshold at which the concessional rate of 30 per cent applies for payments into superannuation accounts.  That is: lowered from a $300,000/year  threshold currently to a threshold of $250,000.    Other superannuation measures will subsidise low-income workers, and support the ‘topping up’ of low-income spouse’s accounts by a partner.  Those measures are a move  in the right direction. 

But Sally Rose of ‘The Age’ also observes that without a crack-down on negative gearing these policies could simply drive more investors into property – contributing to an intensification of a housing bubble which already locks so many young families out of the market.

‘The Age’ also proclaims that Scott Morrison is ‘taking aim at the multinationals’, hiring 700 tax professionals to lead a crack-down on corporate tax-avoidance.   Tax avoiders will face significant penalties.  But the projected savings of $3.9 billion are highly optimistic at best, despite the projection that corporate tax evasion is costing over $30 billion a year.   

What is more, while the Coalition’s ‘Youth Jobs’ initiative is a significant improvement on existing Work for the Dole programs, nonetheless it amounts to another form of labour conscription and exploitation.  The good news is that the program links into the skills which may actually lead to work later down the track.  The unacceptable side of the equation is that young workers will be paid a pitiful $100/week extra for working a 25 hour week.  ‘The Age’ fears the policy may create “a conveniently revolving door for cheap labour.”   The question is whether or not the opportunity for skills development will ‘break the cycle of unemployment’, or whether competition will simply increase for a limited pool of jobs.  (where there is
only one job for every five job-seekers) This raises the question of whether government needs to intervene more directly with an industry policy that links skills with additional new jobs over the long-term.

There will be some additional money for schools and hospitals – but significant pain as well.

Medicare rebates will be frozen at $37 for six years, driving  the erosion of the public health system, and heralding the introduction of steadily increasing co-payments. Prescription medicines will also increase in cost by $5 , and a user-charge will be added to Pathology services (eg: blood tests) adding up very substantially for those with chronic conditions for which medication and blood tests are non-negotiable.  

The ‘Herald-Sun’ projects “$1.2 billon” in aged care cuts.  ‘Pain management’ for residents in Aged Care will be cut-back on account of what is described as an “unsustainable” growth in expenses.  A crack-down on ‘false claims’ by Aged Care facilities is anticipated to bring in almost $500 million ; but there is no recognition of the fact little can be done about quality of life and oppressively unfair user-pays without a very significant injection of new funds.   By ‘quality of life’ I refer to a host of problems – from underpayment and under-staffing which impact on basic questions such as when residents are turned in their beds to avoid bedsores, or whether aged care workers can be certain residents are actually eating, or whether or not there is poor morale and a revolving door for skilled staff..  It also refers to the lack of things for residents to do ; of the terrible boredom, the lack of meaning, the lack of pleasant surrounds, and the lack of privacy.  Finally it includes the need for a registered nurse on the premises 24/7 in the case of an emergency.

University fee-deregulation has been dumped for the time being ; but big cuts remain in place – still begging the question of how the sector will cope.  Likely options include further reductions in HECS (Higher Education Contribution Scheme) repayment thresholds to well below Average Weekly Earnings. (AWE)  Liberal arguments, here, that government and students need to spread the cost of degrees ’50/50’ deserve to be treated with healthy scepticism. Not only does business benefit from the skills acquired by students ; but also the most equitable way of spreading the burden is through a progressively structured tax system.  If repayments are to be geared to the actual financial benefit gained, then there is no better way to go. On the other hand, higher repayment rates for those on over $100,000/year could have a ‘progressive aspect’, and should not be considered in the same light as reductions in repayment thresholds and increases in repayment rates elsewhere.

Arguably students will be hit hard with debt in order to pay for big Corporate Tax Cuts. True to its mantra of ‘small government’, essentially the government is arguing it will ‘do more with less’.  In reality, though, this adds up to ‘no new programs without cuts elsewhere’. Linking the National Disability Insurance Scheme to welfare-cuts, there will be cutbacks in pensions for new recipients amounting to $15/fortnight, and a push to reassess the pension eligibility of some 90,000 Disability Pensioners. For those already living in poverty this can impact with malnutrition, or exposure to the elements as the costs of heating and cooling become unsustainable.

The Government anticipates an economic transformation ‘beyond the mining boom’, yet while it is subsidising Defence jobs in the construction of subs and other hardware (inefficiently creating 3,600 jobs at a cost of about $50 billion), the death of Australia’s auto industry undeniably occurred under the Liberal Party’s watch, with perhaps 50,000 jobs lost directly and indirectly.  

The goal of raising Defence expenditure to 2 per cent of GDP  by 2020-21 remains : but if the Liberals want bipartisanship with Labor, here, they must ensure this is not at the expense of other important programs.  If bi-partisanship is ‘in the nation’s interest’ the Liberals must disregard Ideological qualms and accept a small increase in ‘the size of government’ to lock in Defence commitments.  And Australia’s military assets should always be reserved for the actual defence of Australia and its allies, and not in adventures and wars of aggression overseas.  (as with the Gulf War of Bush, Blair and Howard)

More generally the Budget is light on infrastructure construction.  Hence the need to make tough decisions to ‘increase the size of government’ or make further painful and damaging cuts is ‘postponed’.  Given infrastructure demands in transport, communications, energy and so on, it is a situation which cannot be sustained over the longer term.  

‘The Age’ reports that Shorten Labor has responded with “$71 billion Budget Savings” of its own. This includes opposition to Turnbull’s tax cuts for corporations which will see the Company Tax rate reduced from 30% to 25% over ten years.   Some analysts are anticipating an utterly unsustainable cost to the Budget of over $50 billion over ten years should this Turnbull policy be adopted.  This should not be surprising given the Liberals’ track record of tax cuts for the wealthy and upper middle class  (unsustainable because in the context of the mining boom) –  and ultimately funded by austerity elsewhere, impacting upon those on middle and lower incomes, as well as those mired in poverty.

Here,. The Turnbull mantra of ‘Jobs and Growth’ has no substance.  While low Company Tax rates may attract some investors, the other side of this decision could be neglect of services and infrastructure necessary to sustain economic activity.That might mean less ‘jobs and growth’ and not more.  And while a small proportion of the cuts will flow through to workers, most of the tax cuts will simply be pocketed by business.  Under this scenario, If essential infrastructure and services are not to be neglected the only alternatives include privatisation and user pays, or for taxpayers to ‘pick up the tab’ elsewhere. 

None of those options are desirable or fair.  But this scenario also raises other problems such as reduced workers’ consumption power, and the inferior cost structures involved in the private finance and operation of profit-geared services and infrastructure. The Liberal obsession with ‘small- government’ with ‘no exceptions’ betrays an impractical posture where good sense is sacrificed for Ideology.

 In light of what it once called a ‘debt and deficit disaster’ the Liberals’ projected Company Tax cuts are being dismissed as fiscally irresponsible by Shadow Treasurer Chris Bowen. 

Somewhat disappointingly, though, Shorten has argued Labor will oppose the Liberals’ $1.6 million cap’ on superannuation savings which attract the concessionary tax rate.  Again: The argument is that the policy would have ‘retrospective’ elements, and hence is opposed ‘on principle’.  Some corners of the media are speculating that the idea may be to ‘wedge’ the Liberals on their own core constituencies.  (ie: the wealthy and upper middle class)    Nonetheless Labor’s own policy seeks to remove superannuation concessions from retirees already living on superannuation-streamed incomes of $75,000/year and over.   Labor expects this will impact upon 60,000 superannuation account holders with accounts valued at over $1.5 million.   But Labor is also reducing the threshold for the ‘high income super charge’ (HISC) from $300,000 to $250,000, affecting  110,000 people, and diluting their concessional tax rate on their contributions by a flat 15%. (ie: a 15% concession down from 30 per cent)

In April 2016 Shorten and Chris Bowen had argued that this, and measures on corporate tax evasion would save $20 billion over a decade.    Again: that is in the context of superannuation tax concessions soon costing as much as $50 billion EVERY YEAR, and Corporate Tax evasion costing over $30 billion EVERY YEAR . (according to Labor Senator,, Sam Dastyari)

It is clear now that no-one is willing to truly ‘get serious’ on the reform of superannuation concessions and tax.  On Superannuation Concessions alone Labor needs to target a ‘broader base’ ; hitting the upper middle class as well.  While the upper middle class may not be as privileged as the ‘top 1 per cent’, nonetheless it is not fair for the remainder of society, including low and middle income workers, to subsidise their lifestyles.  A better policy here could free tens of billions for investment elsewhere in services, infrastructure, and welfare.

But despite this there remain very-encouraging Labor policies as well ; which will still see Labor outstripping the Liberals on distributive justice and the public interest. 

The Gonski education reforms will be implemented, as will the National Disability Insurance Scheme (NDIS), and the construction of the National Broadband Network with superior Fibre-to-the-Home technology.

Exploitation of students (and taxpayers) by dodgy private vocational education outfits will be cracked-down upon with an $8000/cap per student, and a re-emphasis on TAFE.   This is estimated as saving $6 billion over a decade. 

Shorten Labor’s reforms limiting access to Negative Gearing to new investments, as well as restricting Capital Gains Tax concessions could save over $7 billion a year.  And a Deficit Levy on high income earners will be made permanent, saving $16 billion over a decade.   The Negative Gearing policy especially should lead to more-affordable housing and more new housing.  So while there is ‘room to improve’, this is a step in the right direction. 

BY leading the debate Shorten has forced Turnbull and Morrison to adopt some ‘Labor-esque’ Budgetary policies.  To the extent to which Labor is setting the tone for the election this has to be welcomed.  

On the other hand while Labor is condemning the far-from equitable cuts that Morrison has projected elsewhere in the Budget, Shadow Treasurer Chris Bowen also points to the maintenance of “higher taxes” under the LNP than any time during which Labor was in Government. 

This can partly be traced to priorities.  For example the $50 billion Defence contract to build 12 new subs ; and the decision to raise overall Defence expenditure to 2% of GDP.   But at the same time: eventually Labor needs to confront the fact that it cannot afford its social agenda without raising tax significantly on those who can really afford it. 

As considered earlier, Aged Care requires many billions new expenditure annually to wind back regressive user pays structures, and improve the quality of care and infrastructure. 

And Mental Health spending needs to rise absolutely and proportionately with billions new funding as well.  There is
a truly shameful National Emergency whereby the mentally ill are on average dying 16 years earlier than the general population, and those with Schizophrenia (maybe 300,000  Australians) are dying 25 years earlier than the general population average.   Catherine Armitage of ‘The Age’(‘A kind of creeping euthanasia’, 11/4/16)  has pointed out  that 9000 Australians with a serious mental illness are dying prematurely as a consequence of this situation every year. This far outstrips the road toll and suicide rate combined several times over.  Both Labor and the  Liberals need to support fully-funded government programs to ‘Close the Gap’ on life expectancy for the mentally ill, much as there are programs to ‘Close the Gap’ for Indigenous Australia. 

Again: The Liberal obsession with ‘small- government’ with ‘no exceptions’ betrays an impractical posture where good sense is sacrificed for Ideology.  Labor needs to decisively reject this Ideology and embrace reforms which reject ‘small government’, and instead promote social solidarity, collective consumption, social insurance, truly progressive taxation and so on.  The Nordics already demonstrate what is possible. But to be serious even a ‘gradualist’ posture by Labor – aiming to emulate the Nordics over the course of two or three decades -  should see social expenditure and investment rise by tens of billions under Shorten Labor. 

Labor is providing a clear choice in this election: on Gonski, tax reform, NBN and NDIS.  But we need to do better.   In Australia we should no longer ‘take small government for granted’.  With the end of the mining boom, we need to reform tax just to ‘stand still’ on social services, infrastructure and welfare.   Tax reform is ‘the price we pay for civilisation’.  And a progressive policy trajectory necessarily entails ongoing, serious and cumulative  reforms on this front.

Other sources:  
Herald-Sun:  4/5/16,  6/5/16,  7/5/16 , 9/5/16

The Age:  4/5/15 ;  6/5/16

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