Cuts in an era of rising inequality

My op-ed in today's Telegraph looks at what Charlie Sheen and Joe Hockey have in common.
Committed to dividing society by eroding basic principles, Daily Telegraph, 6 May 2014

A few years ago, after trashing yet another hotel room so badly that he was barred from the hotel, actor Charlie Sheen simply got his publicist to do the talking. There’s nothing to see here – he told the newspapers – just a quiet night out with some friends.

Perhaps Joe Hockey has been watching too many re-runs of Two and a Half Men, because his fiscal strategy since the election has a touch of Sheen about it. After winning office, the Coalition manufactured a budget crisis, doubling the budget deficit by rejecting 55 Labor tax measures. Going soft on multinationals. Scrapping the mining tax. Ending the carbon price. A billion here, a billion there – and soon you’re talking real money.

In the election campaign, Mr Abbott promised that he would not raise taxes, and that his government would keep its word.  ‘There should’, he said, ‘be no new tax collection without an election.’

At election time, a report from the public servants who head the departments of Treasury and Finance made clear that Labor would have had the budget back in surplus in 2016. After Joe Hockey’s first budget update, we had red ink as far as the eye could see.

The Commission of Audit recommendations are what you might expect from a report that asks big business to write our social policies. Higher fees to see a doctor will – as the Australian Medical Association and the Doctors’ Reform Society have said – make us a sicker society. The Commission wants bricklayers and nurses to wait until 70 to get the basic pension.

If the government must break a promise, it could start with its unfair parental leave scheme, which gives the most to those who have the most. Australia currently has a scheme, which recognises that a baby born into a poor family is worth as much as a baby born into a rich family.

Since the early-1990s, CEO pay has risen three times as fast as the minimum wage, but the Commission of Audit thinks the ‘wage problem’ is at the bottom. It’s hard to see the fair go from the fairway.

The question for Australia is whether we let this continue. With a government as committed to cuts at the bottom as it is to giveaways at the top, Australian egalitarianism is under threat like never before.

Andrew Leigh is the Shadow Assistant Treasurer.

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