Australian Treasurer: New divide ­between “the taxed and the taxed-nots”

Australian Treasurer: New divide ­between “the taxed and the taxed-nots”, by David Crowe.

Australians face a new divide ­between “the taxed and the taxed-nots” as a generation grows up on welfare without paying tax, Scott Morrison will declare today in a dire warning about the action needed to prevent deeper deficits and an economic crisis. …

“Deficits are dismissed as ­temporary, cyclic and self-correcting. If it means services are maintained, then deficits are OK — just increase the taxes or ­increase the debt.”

The speech cites Paul Keating’s 1986 warning of a “banana republic” to hammer the message that more must be done to generate growth in order to avoid an economic shock for younger Australians who have never experienced a recession.

The call to action on spending restraint echoes Mr Morrison’s predecessor, Joe Hockey, who ­infuriated Labor and the Greens by contrasting the “lifters and leaners” in society and calling for an end to the “age of entitlement” in the welfare system. …

Half of Australians receive more from the public purse than they contribute, and that fraction is growing fast.

The share of households considered net taxpayers — those whose income tax payments outweigh what they receive in social security — is tipped to fall below 50 per cent in the near future.

According to the National Centre for Social and Economic Modelling, this share has already fallen from 56 per cent to 51 per cent over the past decade, which means almost half of all households receive more from the government in welfare payments than they give up in income tax. …

There have been changes in circumstance and attitudes:

“A generation has grown up not ever having known a ­recession, of seeing unemployment rates at more than 10 per cent, with one million Australians out of work or mortgage rates at 18 per cent or where inflation is ­actually a problem, rather than an aspiration,” Mr Morrison will say, ­according to a draft of his remarks.

“In addition, a generation has grown up in an environment where receiving payments from the government is not seen as the reserve of the disadvantaged, but a common and expected component of their income over their entire life cycle, and not inconsistent with self-reliance.