Shorten Labor’s false road to fairness

Shorten Labor’s false road to fairness, by Paul Kelly.

Attempting to hold together the centre of politics, Treasurer Scott Morrison has launched his initial foray against Bill Shorten’s inequality crusade, warning that the politics of envy — “that someone has to do worse for you to do better” — is the road to ruin. …

The question is whether the Opposition Leader can control the tidal wave of ideological sentiment he has authorised as the Labor right — having moved to the left — now faces a Corbynite eruption from the left and from trade unions convinced that a pre-Thatcherite policy is an idea whose time has come.

“The Labor Party is taking us back to a pre-Whitlam time,” Morrison tells Inquirer. “This is not the Hawke-Keating approach — they knew equality was best achieved by creating jobs — but this is now retro Labor going back to the 1960s. …

Morrison is right to be alarmed: last year Shorten stole a long march on the Turnbull government by building his campaign on the misleading claim that Medicare was going to be privatised, and now he taps into a deep public sentiment to build the next campaign on the premise that Australia has failed the equity test. …

There are many elements folding into Shorten’s momentum. The single biggest element is generational hostility from the under-30s at exclusion from the Sydney/Melbourne housing market. The British experience was stunning — the key to Labour Party leader Jeremy Corbyn’s surge was command of the youth vote and his fantastic pledge to abolish university tuition fees (at a cost of £9.5 billion, financed by taxing the better off). The ALP is already using every tool in the education debate to seize control of the youth vote from the Coalition and the Greens. What else might it pledge before the next election?

The current redistribution of income by government in Australia:

Asking what constitutes a fair society, Morrison said this week:

  • the poorest 20 per cent of householders, on average, get cash transfers and benefits worth eight times more than they pay in tax;
  • more than 40 per cent of families pay no net tax according to the Productivity Commission (other studies put this figure far higher);
  • the top 10 per cent of income taxpayers pay almost 50 per cent of total income tax; and
  • the top 1 per cent pay “a staggering 17 per cent of all tax received”.

Morrison calls this system “pretty fair” and says Labor’s plans for a further decisive change and even higher taxes are “ideology masquerading as fairness”. Given Shorten wants to shift the system towards greater redistribution as a priority, the issue becomes: what sort of society does this mean? …

How does Australia rate in global measures of inequality? Wilkins warns these measures are highly unreliable. But a recent OECD analysis shows Australia rates above the midpoint in terms of inequality, with 13 nations rated worse — including New Zealand, Britain and the US — and 21 nations rated better. …

Labor’s direction:

Shorten wants to eliminate tax breaks that favour the better-off — a justified move in terms of both tax equity and efficiency. Beyond that, Labor is fixated by the idea of zero-sum politics redistribution.

Are many Americans poor because Bill Gates is worth about US$90 billion? If Gates had never succeeded, would poorer Americans be better off? Is one person’s poverty because of another person’s success?

The logical answer is to repudiate such cause-effect propositions. But Labor jumps this hurdle with its political coupling of the process, witness Anthony Albanese on the ABC saying: “The wealthiest two Australians own as much as the bottom 20 per cent.” Game, set and match — there must be a link.

hat-tip Stephen Neil