Are half of Australians ‘leaners’?

This morning I spoke to NewsRadio about Treasurer Joe Hockey's speech last night in which he rejected criticism his budget is unfair, saying the government must "reward the lifters and discourage the leaners". Here's the transcript:




SUBJECT / S: Joe Hockey’s Sydney Institute speech; Federal Budget and Inequality


PRESENTER: The Treasurer has launched a new defence of the Budget, rejecting claims that it is unfair and hits the needy hardest. Mr Hockey says that the Budget aims to cut the overall cost of welfare so those most in need can be protected, but he says that it is not the Government’s role to achieve equality through the tax and welfare system. For a Labor response to the Treasurer, Marius Benson is speaking to Andrew Leigh, the Shadow Assistant Treasurer.

MARIUS BENSON: Andrew Leigh the Treasurer says that the welfare situation, the cost of welfare at the moment is unsustainable. As things stand, the average Australian tax payer is working for a month just to pay the welfare for other Australians. 

SHADOW ASSISTANT TREASURER, ANDREW LEIGH: Mr Hockey seems to have missed the fact that Australia is much closer down the US and Mexican end of the spectrum than the Swedish or Scandinavian end of the spectrum. Australian tax as a share of national income is relatively low. We have a lean and efficient welfare state and he has just delivered a budget which is massively redistributive from the worst off to the best off in the community.




BENSON: But do you accept the Treasurer’s calculation that Australia tax payer, on average, is working a month just for welfare, because the cost of welfare is six thousand dollar per capita, and only 45 per cent of people pay income tax?

LEIGH: That is certainly the case that we have a social safety net that looks after people in their old age, people who lose a job, people that have a disability. That is the mark of a civilised society. It is not something to set about trying to demolish. Mr Hockey is essentially describing half of all Australia as being leaners rather than lifters. 

I have got to say, that it is really reminiscent of Mitt Romney's ‘47 per cent’ comment during the last US election campaign, when he told a meeting of campaign donors that 47 per cent of Americans didn't pay income tax. What Mr Hockey has to recognise is that he is the Treasurer in a time when Australia's inequality is higher than it has been in three-quarters of a century. To then criticise his critics of ‘class welfare’ on the basis that they have rightly pointed out that his Budget redistributes from the worst off to the best off, just shows a real lack of understanding of what is going on in Australia and indeed in the world.

BENSON: Joe Hockey summed up the role of government in the speech last night. By saying that "our duty is to help Australians to get the starting line while accepting that some will run faster than others". Is that a reasonable assessment of what the government can provide to Australians?

LEIGH: It is a perfectly reasonable homily in itself. But what it really misses though is that this is a Budget that taking away one dollar in ten from the poorest single parents. If you are looking at which Australians are going to be doing it hardest to get to the starting line, well then it is probably is going to be a child from a single parent background and in the bottom fifth of the income distribution. Taking one dollar in ten out of their wallets so that you can raise the non-concessional superannuation threshold from $150,000 to $180,000 is utterly unfair. It is the kind of thing that you might think about doing if inequality had been falling for a generation, but if fact inequality has been rising for a generation. Mr Hockey has brought down a knights and dames budget and now they are accusing their critics of class welfare. This is rich stuff indeed. 

BENSON: In fact Joe Hockey sets out the role of government in this context, saying striving to achieve equality is not the role of government, to use taxation and the welfare system as a tool to level the playing field. There seem to be two quite different views on the role of government available from each side of politics at the moment.

LEIGH: Government has always played a role in helping the worst off in the community and if Mr Hockey thinks that the worst off in the community are now simply ‘leaners’ then that is going to come as tough news to the pensioners who are having their pensions cut, to Australians who are at their most vulnerable, such as twenty some-things who lose a job in north-west Tasmania where the unemployment rate is nearly twice the national average and have to wait six months before getting unemployment benefits. 

This dystopian vision that Mr Hockey paints is utterly at odds with Australian tradition of egalitarianism. That love of the fair go, the belief that we don't call people 'sir' we call them 'mate' instead. That we don't like tipping, and that we sit in the front seat of taxis. All of that Mr Hockey seems to be happy to throw out the window for a budget which is one for the knights and dames, for the cigar-chomping plutocrats, and not one for the battlers.

BENSON:  Andrew Leigh, thank you very much.

LEIGH: Thank you Marius.

PRESENTER: The Shadow Assistant Treasurer, Andrew Leigh, with Marius Benson. 

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