Joe Hockey shows how “Class Warfare against the Vulnerable” is done

 

 

Joe Hockey is promoting a 'Social Civil War' - pitting even low wage workers as well as the well off and the middle class against the welfare-dependent.   In response to this regressive campaign, Labor cannot accept the Liberals' 'terms of debate' but must propose its own policy agenda for just and socially fair Australia.

nb:an Apology to 'The Australia Institute'; In a typo I accidentally referred to that left-wing think tank when I should have referred to the right-wing 'Sydney Institute'. The typo has been corrected.

Tristan Ewins

Australian Treasurer Joe Hockey has been “on the attack” recently; targeting Australians who for whatever reason have been welfare-dependent, or have benefited from welfare during their lives.  Specifically, Hockey asserted that one in ten Australians were welfare-dependent in some way, with a total welfare bill of $146 billion a year in a $1.6 Trillion economy. 

Apparently, this is meant to produce a ‘shock and horror’ effect amongst an electorate which is considered to be ‘narrowly self-interested’, without any sense of social solidarity, or of the gains to be had through such reciprocal solidarity and also the various forms of collective consumption.

Interestingly, though, Minister for Social Services, Kevin Andrews himself has observed that cash payments in Australia comprise around 7 per cent of GDP, compared with approximately 19 per cent in France; and approximately 14 per cent in Sweden!  Though in Denmark, for instance, there is a much more substantial social wage, with social expenditure at approximately 31 per cent of GDP compared with approximately 19 per cent in Australia.  (also approximately 33 per cent in France,  and approximately 29 per cent in Sweden)

More particularly Hockey has alluded to those dependent of Youth Allowance,  Newstart, the Aged or (military) Service Pension, and the Disability Support Pension.   Apparently in an attempt to stir up division and resentment, Hockey argued that “the average Australian”, whether “a cleaner, a plumber or a teacher” works over a month every year to provide for the nation’s welfare bill. (Herald-Sun, June 12^th, 2014, p3)   This ‘political play’ to narrow financial self-interest ignores the benefits of reciprocal social solidarity via welfare.

Meanwhile in a speech to the right-wing Sydney Institute Hockey launched into a tirade against those he describes as “leaners” as opposed to “lifters”.   For Hockey it is claims that the wealthy must ‘pay their fair share’ that comprise ‘class warfare’; and not the Federal Government’s attacks on welfare, as well as their assaults on Medicare and rights and conditions for labour.  Rather than ‘social solidarity’ Hockey proclaims ‘individual responsibility’. (ie:  ‘sink or swim’)   

In an infuriating furphy, Hockey promoted his personal interpretation of “equal opportunity” as opposed to the ‘straw-man’ of “equality of outcomes”.    On this basis he also attempted to defend the Federal Government’s Higher Education ‘reforms’ – which will see a fee deregulation (some of the highest fees probably reaching well over $100,000), as well as a reduction in the repayment threshold for student loans, and also an increase in the rate of interest paid on those outstanding loans.  (‘The Age’, June 13^th, 2014, p 8)  This will affect women - whose working lives are often interrupted.  

In the same vein, there will be those with significant university debts who for various reasons (eg: disability) may not be able to continue their pursuit of a career in law, medicine etc.  These peoples' university debts could easily spiral way out of control. The element of ‘risk’ here means that many young students from disadvantaged backgrounds will not dare to take on a university debt.  Those that do also may be distracted from gaining their most from study because of the necessity for part-time work.  And ‘equality of opportunity’ in this context is a lie: because those students tend to be concentrated in lower socio-economic zones, with relatively under-resourced schools.   (they may also lack the support of parents who have enjoyed a tertiary education)

In response to Hockey one of the most important of his assertions to deal with is that ‘straw-man’ argument of ‘Equality of Outcome OR Equality of Opportunity’.    Instead of this false dichotomy it is much better to frame the issue as a matter of Fairness.  Pretty much no-one – even on the far Left – want full ‘equality of outcomes’.   Rather there is support for redistribution via the social wage, welfare state, social wage, and forms of social insurance for the sake of distributive justice. (as opposed to full equality)  ‘Equality opportunity’ is part of the picture; but so too are ‘fair outcomes’.

Here, ‘distributive justice’ assumes that the outcomes gained in the labour market through ‘supply and demand’ of skills – and ‘consumers’ capacity to pay’ are not necessarily just.   For cleaners, as well as hospitality, child care, and aged care workers – people whose work deserves respect –there is an argument for intervention and redistribution as the means of achieving fairness.   (not absolute equality)   Those measures of redistribution – through the social wage, tax-transfer system,  welfare state, labour market regulation - do not have to put the remuneration of a cleaner ‘on par’ with a surgeon, for instance.  But all workers who face disadvantage and injustice in the labour market deserve fair outcomes; and those means of intervention are effective means of providing those fairer outcomes.

Arguably Joe Hockey is is attempting to ‘divide and rule’ the nation.  An element of divison is inevitable – perhaps even desirable – in a democracy.  The point of democracy after all is ‘to set oppositions free’ and resolve them through democratic processes. 

But Hockey is inciting resentment against the vulnerable – no matter what he has said to the contrary.   This is qualitatively different than attempts to tax the wealthy – which Australia’s Conservatives try and dismiss with hypocritical howls of ‘class warfare’.

More specifically, Hockey’s approach comprises a ‘bold gambit’.  Low-income workers themselves are to be ‘played off against’ the welfare dependent. Rather than raising minimum wages and conditions, or improving the social wage – they are urged to express resentment against the vulnerable.  The ‘endgame’ is a US-style class system.  The very wealthy are to be ‘untouchable’ and largely untaxed lest we be bombarded with cries of ‘class warfare’.   Taxes are to be ‘simpler’ and ‘flatter’ – that is, more unfair. The middle class are to provide ‘the base of stability’ for Conservative political forces: their lifestyles supported by the exploitation of the working poor. And the working poor – indeed, the ‘underclass’ - are to be ‘disciplined’ by fear of homelessness and destitution – with the erosion of the ‘social safety net’. 

Crime will also likely escalate as a consequence of desperate inequality; but this insight is to be ignored for the sake of a warped, and ultimately immoral, notion of ‘meritocracy’.  How this ‘meritocracy’ is meant to work without real equality of opportunity (especially education); while there is ‘hyper-exploitation’ of the working poor; and amidst ‘windfall’ inheritances in the most privileged families - is not really considered by today’s Conservative Ideologues.  It is ‘an inconvenient truth’.

In Hockey’s ‘grand statement’ to the ‘Sydney Institute’ those designated as ‘leaners’ are to be reviled.  There are Aged Pensioners. (who have largely paid taxes their whole working lives)  And yet no mention of self-funded retirees – whose liquid assets alone can range well over a $1 million – but who receive enormous superannuation tax concessions.  The total bill of those concessions will soon cost the nation over  $40 billion a year. As Richard Denniss of the Australia Institute observes:   "the top 5 per cent of income earners get a third of the benefit, and the bottom 20 per cent get literally nothing."

Then there are the disabled. Underlying resentment against Disability Support Pensions is the notion, for instance, that ‘mental illness’ is not to be seen in the same way as ‘extreme physical disability’.  We’re talking about people with anxiety disorders, depression, schizophrenia, bipolar disorder...   Something Andrew Robb could probably advise the Parliamentary Liberal Party about: and yet from a cursory web-search he does not appear to have done so. 

Often the ability of these disability pensioners to work is intermittent at best.    And the underlying assumption that they are to be looked upon suspiciously – as ‘rorters’.   Hence ‘Disabilitywatch’ has noted moves by the Federal Government to ‘tighten up’ assessment for eligibility, including ‘work for the pension’ for those deemed able to work at least 8 hours a week.  (now to be reduced from 15 hours a week)   But arguably if a person is living in poverty due to disability, and may be capable (intermittently) of some work, then perhaps their payments could be complemented fairly in return for voluntary community work, without the threat of losing that pension altogether.  Instead we are getting another dose of labour conscription – this time for some of the most vulnerable of all.

In conclusion: a movement is building against Hockey’s ‘Robin Hood in Reverse’ Budget.  In Melbourne the day before this article was written the ‘Bust the Budget’ rally amassed around 20,000 attendees – perhaps more.  The ‘Your Rights at Work’ campaign against John Howard’s aggressively in egalitarian ‘Work Choices’ labour market legislation attracted the support of millions.  Today the same is possible if we stand collectively against Hockey’s cynical ploy to ‘divide and rule’ the country.

Yet Opposition Labor Party leader Bill Shorten is ‘treading lightly’ around Joe Hockey’s appeal to divide the nation – a ‘nation at war with itself’; a war of so-called ‘lifters’ against so-called ‘leaners’. So far he refuses to reject this characterisation of Australian society outright.

But Labor cannot accept a political discourse which is propagated on the Liberals’ terms.  Labor needs to respond to Hockey with its own powerful narrative:  of a society based on mutual and reciprocal social solidarity.  This means promoting social security and social justice through a range of measures including labour market regulation, welfare, a progressive tax mix, the social wage, and various forms of ‘collective consumption’.  Not a society of ‘absolute equality of outcomes’ – but a FAIR and JUST society!

In a practical sense that must mean a decisive break on the part of Labor with the mindset of ‘small government’.  Labor must ‘go on the policy offensive’: advocating both old and new policies.  That includes Gonski and the National Disability Insurance Scheme.  But it must also include National Aged Care Insurance and Comprehensive Medicare Dental, amongst range of other policies.   The way is open for a progressive counter-offensive mobilising millions.  Labor, the unions, the welfare sector, and all progressive social movements - must seize the initiative.

Budget Cuts spell Disaster for the Vulnerable

above:   Expect this to become more common on Australia's streets with the implementation of the 2014-15 Abbott/Hockey/Cormann Austerity Budget.

 

Tristan Ewins

The Government of Tony Abbott has proposed a Budget that makes a mockery of his claim to ‘spread the burden’ of ‘reform’ fairly.   The Budget has also made a mockery of the government’s claim to ‘credibility’ regarding its mandate – and the extreme violation of that which is now going on before our eyes.   Massive cuts to health, education and welfare fly in the face of the Government’s pre-election commitments.

We will now go through some of the most alarming aspects of that Budget drawing on the observations from ‘The Age’ and the “Herald-Sun” .

Health:  The Abbott Government is imposing an additional $7 charge for each GP visit, and an extra $5 for those needing pathology services. (eg: blood tests)   For those with no option but to regularly visit the doctor, and have blood tests taken, this could add up to $120 extra a year.  An awful lot if you’ve just been forced onto Newstart, or had all support payments withdrawn!  

Indeed, in  ‘The Age’ Ross Gittins argues health austerity may lead the ‘poor sick’ to delay seeking help until their conditions become acute.  And for those who do not care about anything without a dollar sign attached to it – this could cost the Budget and the economy over the longer run.

The rationale of providing a disincentive for ‘spurious’ visits to the GP is also very doubtful given the already-widespread application of co-payments;  and it is open to question whether pathology services are used ‘spuriously’ in any case.   If the government had balanced these changes with increases to pensions and progressive reform of the tax mix the policy may have sidestepped its otherwise regressive and counter-productive consequences.  But the opposite is now the case.

Education:  In higher education university fees will be deregulated leading to a ‘two tiered’ system at best. ‘Elite’ universities will be free to charge whatever they like – with the very real possibility of $100,000 or even $200,000 degrees. This ‘user pays’ aspect will also be applied to make up for an average 20% cut in Federal Higher Education funding supporting the cost of degrees. 

Abbott and Pyne argue there will be scholarships; but the reality will be a quality of education  generally dependent on the depth of a students’ pockets – rather than merit.  (as a consequence of the prohibitive cost)   Arguably ‘equal opportunity’ should involve extra and widespread subsidies and quotas for students with disadvantaged backgrounds.  And an understanding of education as ‘a social good’ beyond labour market requirements.

Student Loan repayment thresholds will fall regressively and interest rates on loans will sit around about 6 per cent.   For someone whose life is disrupted by disability, for instance, (or perhaps parenthood) university debts could easily spiral out of control.  The Conservatives claim students must ‘contribute’ towards the cost of degrees.  But surely this occurs already through the tax system; and progressive tax is the best way to ensure students (and business) contribute proportionately to the financial benefit gained.

The ‘united ticket’ on Gonski is also to be dropped assuming the Coalition wins the next election and has the opportunity to do so.  (though to be honest even Labor was not fully implementing the Gonski recommendations)

Finally on Education the School Chaplains program will receive a boost of approximately $250 million over five years.  But the contempt for which this government holds the poor and vulnerable exposes the lie of their upholding ‘Christian values’.

Local Government: $1 billion over four years withdrawn – probably leading to an increase in Rates or user pays – or otherwise a degradation of services

Aged Pension and Retirement:   The age of retirement will rise gradually to 70 by 2035; and Pension means tests will be frozen for three years – making it difficult even for part-self-funded retirees with limited means.   Arguably we are now living in conditions of great  ‘material abundance’ compared with many decades ago.  Aside from the systemic imperative of endlessly expanding markets under capitalism, abundance means arguments to ‘work us into the ground’ are not practically or morally defendable.

Other Welfare:   This is where the Abbott/Hockey/Cormann austerity really begins to bite against some of the most vulnerable of all.   Despite offensively deceitful  rhetoric of ‘spreading the burden’ the vulnerable will be driven into the most spiritually crushing poverty; and ACOSS has argued this will lead to a possible sharp rise in homelessness given the withdrawal of ‘the social safety net’.

The measures include:  

·         A six month waiting period for under 30s applying for Newstart; and then ‘Work for the Dole’ 

·         Very tough eligibility criteria for the Disability Support Pension;  particularly for those under 35

·         Unemployed under 26 forced on to the abysmally inadequate ‘Youth Allowance’

Sole Parents will also be affected by the withdrawal of Family Tax Benefit B, and deserve more robust compensatory support than Hockey’s offer of $750 per child  between the age of 6 and 12.  (see: http://www.abc.net.au/news/2014-05-13/budget-2014-ftb-cuts-worth-billions-to-hit-families/5446896 )

Furthermore: the *formula* for determining pensions will be altered by the Coalition Government.  Pensions will be indexed to inflation rather than Average Male Weekly Earnings – with a gradual fall in payments ‘by attrition’.    John Collett at ‘The Age’ believes this could cost pensioners $100 a fortnight “in several years’ time”.

The consequence will be utterly desperate circumstances for the jobless; especially the young jobless.  And those without family to fall back upon will probably end up homeless.  (those forced to move away from the support of family to find work will be hit doubly hard) This is the ‘American model’ that the Conservatives seem to be aspiring to.   The creation of a desperate class of working poor – motivated by the very real fear of falling even further down the social ladder – into homelessness; and the destruction of all hope.  But for neo-liberals this desperate ‘reserve army of labour’ is ‘functional’ in weakening the bargaining power of workers.

 It is also becoming apparent that the Federal Coalition’s $300 million cut to pensioners’ concessions will apply to everything from water to energy. (so much for fighting ‘cost of living’ pressures) Some ofthe Victorian Conservatives are outwardly angry with Abbott, as $73-$75 million in cutbacks to pensioner concessions will flow on to Victorians specifically. This could be the beginning of an internal rift within the Conservative parties: whose ‘endgame’ could include driving (or for some others providing a pretext) for desperate state governments to lobby for an increase in the GST rate, or a broadening of the GST base.



Theoretically the GST can increase in the context of a more progressive tax and welfare mix to compensate the poor and vulnerable, and average workers. But the odds are more in favour of a regressive mix – with GST ‘reforms’ hurting low income earners and pensioners again who had already been hit hard. Arguably a more regressive mix for Hockey involves a swipe at ‘the undeserving poor’ – in favour of those ‘millionaire wealth creators’, and some ‘self-funded retirees’ whose very comfortable conditions of retirement are effectively subsidised by taxpayers to the tune of tens of billions in tax concessions every year.



Also importantly: with cuts in the Carbon Tax, Mining Tax and Company Tax overall revenue is still likely to fall. The question that follows is thus: Will the GST be promoted to overcome ‘the infrastructure deficit’ – or will infrastructure privatisation reach previously unheard of extremes; with the public being fleeced in the context of ‘user pays’, and the relatively unfavourable cost structures of private enterprise? Few in the Liberal Party (or even Labor) look set to accept the proposition that a mixed economy is better for capitalism, and better for workers and the disadvantaged at the same time. So this Budget is likely only ‘round one’ of a protracted assault upon Australia’s social wage and social insurance.

Conclusions

Those enjoying incomes of around half a million a year will have to pay $6400 extra in tax. But again in a morally abhorrent fashion the government is contending that this has seen a ‘spreading of the burden’.   While millionaires will barely notice the ‘mosquito bite’ that is the temporary, so –called ‘budget repair levy’ – the effect on the poor and vulnerable will be utterly crushing and permanent.

‘The Age’ argues that the Coalition is now set to withdraw $80 billion “from schools and hospitals over the next decade.

Hockey argues Australia is “a nation of lifters, not leaners”.  He has little appreciation of the fact some of us have no choice to lean lest we fall down.  He is willing to judge the vulnerable; but he is unwilling (and probably unable) ‘to walk in their shoes’.    Under such circumstances the civilised and compassionate thing to do is to provide support for those who have the need.   Altering the formula for calculating pensions as they are, the Conservatives instead exhibit contempt for these people.

The Liberal Government would likely want to play down the legitimacy of claims to disability pensions on the basis of mental illness, for instance – playing upon popular misperceptions in order to legitimise a callous agenda.  Liberal MP Andrew Robb could possibly set them straight on that were they willing to listen…  If he has it in his heart perhaps he should make some kind of statement against these attacks against disability pensioners.  (many of whom do not have relative material wealth to fall back on)

Finally ‘labour conscription’ applied to disability pensioners able to work 8 hours or more a week  comprises further cruel exploitation of the most vulnerable.   Better to provide positive incentives for flexible community work – with untaxed payments on top of the pension -  rather than ‘the big stick’.  Flexible opportunities are crucial as disability can inhibit a person’s ability for regular work.

Abbott’s radical abandonment of the welfare state comprises both a rejection of ‘Catholic social welfare Centrism’, and also of the very-conservative but welfare-minded tradition of the Democratic Labour Party from which Abbott originally emerged.  It flies in the face of Pope Francis’s warnings about the dangers of unbridled capitalism lacking of social conscience.

What remains to be seen now is how Labor will respond over the coming years. Will Shorten ultimately capitulate on welfare, social wage and social insurance in order to maintain ‘small government’; or will he follow the principled path instead of ‘short term opportunism’?

In the meantime progressive social movements need to coalesce and prepare for the fight of their lives.

 

Hard Copy Sources:  ‘The Age’ and the “Herald-Sun'; May 14th and 15th