JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Treasurer Joe Hockey and the 47 per cent

Date

Andrew Leigh

You know Joe Hockey is in trouble when he starts sounding like Mitt Romney. As the multimillionaire Republican US presidential candidate hit the skids in 2012, he gave a speech to a $50,000-a-head fundraiser in which he claimed that 47 per cent of Americans "are dependent upon government" and "believe they are victims".

This week, Mr Hockey stepped into the same desperate territory, bemoaning that "over half of Australian households receive a taxpayer-funded payment from the government". We must, he said, "discourage the leaners". In effect, Mr Hockey is arguing that half the Australian population are leaners, not lifters.

Let's put aside for a moment the fact that Mr Hockey's signature social policy is a new taxpayer-funded parental leave payment, and think about who Mr Hockey's "leaners" are. Some are retirees, like my grandfather, a boilermaker who left school at age 14. Others are people who lost their jobs when the local car plant shut down. There's the woman I met recently who walked out on her abusive husband, and relies on government assistance to feed and house her children. Or the woman in a wheelchair who worries that without public housing, she would be homeless.

For a group of "leaners", these people have done a surprising amount of heavy lifting. And yet, what Mr Hockey's unfair budget will do is shift resources from their wallets into the bank accounts of multinational corporations. At the same time as he will take one dollar in 10 from the poorest single mothers, Mr Hockey will give $1.1 billion back to multinationals by failing to pursue reasonable Labor measures to prevent profit-shifting. For all his big talk on fair company taxation, the only thing the government has done since coming to office is backslide on multinational profit-shifting.

At the heart of Mr Hockey's speech to the Sydney Institute is the belief that success is due to hard work, and failure to a lack of effort. This Ayn Rand philosophy misses the role that luck – good and bad – plays in all our lives.

My income places me – like Mr Hockey – in the top 1 per cent of individual income earners (the cut-off is about $230,000). But it would be ludicrous to suggest that this is due to effort alone. I'm fortunate to have been born into a family that valued education, in a relatively affluent nation, and at a time in history when the ability to string a sentence together matters more than your ability to outrun a lion.

The moral obligation on those of us who have been lucky in life's lottery is to help those less fortunate – not to make it harder to see a doctor, tougher to attend university and impossible to get unemployment benefits for half a year.

This would be true at any moment in history, but it particularly matters today. Since the 1970s, earnings have grown three times as fast at the top than at the bottom. If cleaners and checkout workers had enjoyed the same wage growth as financial dealers and anaesthetists, they would now be $14,000 a year better off. Over the same period, the income share of the top 1 per cent has doubled, and the income share of the top 0.1 per cent has tripled. The richest three Australians now control more wealth than the poorest 1 million Australians. Inequality has stayed pretty flat over the past few years, but nonetheless remains at a 75-year high.

It is in that environment that Mr Hockey has brought down a budget that will break promises, which will leave the budget deficit larger than it was in the Pre-Election Economic and Fiscal Outlook, and will fail the fair-go test.

As independent NATSEM modelling has shown, the burden of the budget will fall disproportionately on the poorest families. Even the income tax increase on high-income earners will have little impact, with a senior Treasury official recently admitting that about half the revenue in the first year would be lost as high-income taxpayers shifted income into fringe benefits. The poor, alas, cannot go to their tax accountant to get back the Schoolkids bonus.

In his speech, Mr Hockey described critics of the budget as being engaged in "class warfare". But if he wants to see class war in action, he might look at the family impact statement that he sneakily cut out of the budget papers. That table would clearly show that this is a budget that will move resources from the most vulnerable to the most affluent.

They are not leaners, Mr Hockey. They are battlers. And don't be surprised if they are angry when you take money away from them to give it to billionaires.

Andrew Leigh is the shadow assistant treasurer and author of Battlers and Billionaires: The Story of Inequality in Australia.

28 comments so far

  • Joe Hockey says that "claims his policies are ''unfair'' are reminiscent of ''class warfare'' from the 1970s". No Joe, class warfare is making lower and middle income people pay a $7 co-payment to visit the doctor. Class warfare is a gold plated parental leave scheme that benefits the well off. Class warfare is cutting off the dole for the children of the less well off unless they are successful in competing for the ever decreasing number of entry level jobs. Class warfare is doing all of this and yet not reining in all of the perks and loopholes that allow the very well off to pay as little as $8 tax per year.

    Yes Joe there is class warfare and your people, the top end of town, are winning.

    Commenter
    Uncle Quentin
    Date and time
    June 13, 2014, 5:21AM
    • Andrew, the 47% of leaners are relying on you and your party to fight this mean and terribly unfair budget. This is a heartless government who panders to the rich and the large corporations. I would say that even the 47% of :"leaners" would have no problem with the government fixing the budget. Unfortunately the heaviest lifting is not from the wealthy or the big corporations but the most dis-advantaged and most vulnerable in our community, those without the means to fight back. I think the liberal party has badly mis-judged the average Joe's (not the cigar smoking pompous Joe) sense of fairness.

      This government does not have the will or the guts to really fix the budget in a fair way as it would offend those who contribute to the liberal party coffers. I recall Abbott saying he will govern for all Australians during election time. Mr Hockey seems to have you forgotten that the 47% of your so called "leaners" are also Australians.

      Mr Hockey is in cuckoo land if he thinks that $7 for a doctor's visit for a single mum on government allowance or low income is just a glass of beer or a pack of cigarettes, that a young unemployed can survive for 6 months on grass and thin air whilst he attends 40 interviews trying to find a job, that universities will not raise their fees due to competition.

      If this government is genuine about fixing the budget in a fair way, forget about the PPL, the strike force fighter, the tax cuts to companies, the subsidies to polluters, remove negative gearing, fix trusts and profit shifting loop holes. Look in his own backyard where this department paid a consultant "$200,000 for two days work".

      Commenter
      Michael
      Date and time
      June 13, 2014, 7:02AM
      • Hear hear!
        BTW - He said over half the Australian households, not 47% (that's Romney's gaffe). Is it worth noting that, by living in Singapore, Gina is not one of these 'Australian households'?

        Commenter
        SWGreg
        Location
        Not far from here
        Date and time
        June 13, 2014, 6:22PM
    • Well said and lets not forget that it's the talents we happen to be borne with have a strong effect on how much we can earn

      Commenter
      Camannie
      Date and time
      June 13, 2014, 7:55AM
      • Yes, talent to some extent. Largely though, it's your postcode and your parent's friends.

        Commenter
        Fairly wealthy, very lucky
        Date and time
        June 13, 2014, 2:40PM
    • To think that this is the same guy that kept harping on how "families are doing it tough" while in opposition defies belief...................

      Commenter
      watermelon
      Date and time
      June 13, 2014, 8:12AM
      • How many on high incomes (say more than $100k) are getting government support? That's a number I would like to know Joe. Given government support includes support of 'tax writeoffs' your numbers suggest it is only those on $80k to $120k that are not supported by government largesse.

        Commenter
        SWGreg
        Date and time
        June 13, 2014, 8:46AM
        • It stuns me just how low this government is aiming.

          Commenter
          Ruth
          Date and time
          June 13, 2014, 9:13AM
          • I note that in another article coalition members are getting very nervous about the reception of Joe and Tony's budget. Even Cormann 'he who would be king' is keeping a low profile, he probably doesn't want his future ambitions to be tainted. Joe can pontificate all over the place that his budget is fair and voters are dumb not to understand this, but Joe it isn't working and bullying won't make it so.

            Commenter
            comment
            Date and time
            June 13, 2014, 9:21AM
            • Fifty percent of the population are on welfare. Take out the age pensioners, the physically disabled and the bludgers and rorters. The many millions you have left are genuine job-seekers who can't find work and the mentally ill, most of whom have acquired their illness from the environment in which they live. What sort of country is this? What the hell are we doing to our people?
              That's what the government should be focusing on, not the tiny percentage of bludgers.

              Commenter
              jessie
              Date and time
              June 13, 2014, 9:23AM

              More comments

              Make a comment

              You are logged in as [Logout]

              All information entered below may be published.

              Error: Please enter your screen name.

              Error: Your Screen Name must be less than 255 characters.

              Error: Your Location must be less than 255 characters.

              Error: Please enter your comment.

              Error: Your Message must be less than 300 words.

              Post to

              You need to have read and accepted the Conditions of Use.

              Thank you

              Your comment has been submitted for approval.

              Comments are moderated and are generally published if they are on-topic and not abusive.

              Featured advertisers