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.

Joe Hockey's numbers racket

<i>Source: The Australia Institute</i>

Source: The Australia Institute

I admit it. Between 1979 and 1981, I was a welfare recipient. 

It was the equivalent of youth allowance, money paid by the government to university students studying full-time. That money allowed me to complete a degree in the minimum amount of time, which was good for two reasons. I was the first in my family to gain a university degree. And I don’t know if I would have stuck it out part-time.

From the moment I completed my last subject, I have been in full-time employment or on (all-too-brief) maternity leave. And from that time, I have paid tax (and also provided three little taxpayers). 

That’s a little bit over 30 years and I’ve never once complained. Mind you, if other bills arrived like my tax bill, I’d be shitty.

Turns out to be a trust thing. The Tax Office, as a tool of the government, asks me to cough up in advance yet doesn’t tell me where my money is going. It’s a bill that comes fortnightly and, unlike other bills, it isn’t itemised.

Well, it wasn’t. Until last week. The Treasurer Joe Hockey thought it would be useful for me to know where my tax dollars were going. Goodie, I thought, as this government prepares to slash funding to areas I consider important. At least I’ll know where the money’s going.

Unfortunately, I was somewhat disappointed. Mr Hockey only had one figure, and it was this. He said average Australians were working more than one month a year to provide welfare. He wanted to crystallise it for everybody because he thought people were being mean to his budget. Mean, misguided and part of an attempt to start a class war.

He said the very idea of the a gap between rich and poor is just a decoy to attack governments “when all other avenues have been exhausted”. Adorable, don’t you think? The Treasurer thinks we’ve run out of ways to criticise the government. Oh my. I have a list and I’m not afraid to use it.

But before I do, let’s look at Mr Hockey’s calculation. He claims ordinary Australians work for a month to pay for welfare. What he did was divide the welfare bill by the value of the economy as a whole. So if we call GDP a year, then welfare would be a 12th or a month. So the economy works for a month to pay welfare.

So that’s 8 per cent of the GDP. Yes, a small percentage of what the Australian economy makes in order to look after the following people: the old, the sick, the disabled, veterans, families with children. It’s our contribution to the indigenous community. In fact, it’s just 8 per cent to look after our whole family, all of us. I only wish it could be more. For a social contract, 8 per cent seems a tiny amount to keep our society fair.

And if it’s 8 per cent (or thereabouts), where else does the money go? It turns out I have to work for eight seconds to pay Joe Hockey’s package. And cabinet uses up more than two minutes of my pay packet. Sad face. 

In figures calculated by David Richardson, senior research fellow at The Australian Institute, it’s 5½ days for defence, which is only a little bit less than what we spend on education. It's a pathetic 1.6 days for transport and communication. 

And, shockingly, it turns out I have to fork out more than half a working day to support mining, manufacturing and construction. I thought those sectors are supposed to be funding our economy, not the other way around.

Mr Hockey’s argument is that payments are available to too many people. It’s a shame the experts don’t agree with him. Roger Wilkins, the lead author of a new report from the Melbourne Institute, says he is somewhat surprised by the Treasurer’s focus on welfare.

He said: “Anyone advancing a particular argument is going to try to represent their argument in a particular way ... but does it communicate meaningful information? I don’t think so.”

It’s also wrong. Professor Wilkins says Australians are far less dependent on welfare now than they were 20 years ago.

And Oxfam Australia chief executive Helen Szoke is also utterly perplexed by the arguments. She says, instead of demonising welfare recipients, the Treasurer should ensure Australia shows real leadership of the G20 and put inequality as the number one concern on the agenda. She says Australians are with her.

Oxfam released two sets of research on Monday in the lead-up to Friday’s Civil 20 Summit in Melbourne, the first of the G20 satellite conferences before the Leader’s Summit in November. 

What does the research say? The wealthiest 1 per cent of Australians have more money than 60 per cent of the nation’s population. That’s a trend that continues. But Ms Szoke also says nearly 80 per cent of Australians surveyed think the gap between the richest and poorest Australians has widened over the past decade.

Mr Hockey, most Australians have a social conscience. The research shows 70 per cent of Australians surveyed think it is unfair that the richest 1 per cent of Australians owns more than 60 per cent of the poorest Australians. We also think the very wealthy don't pay enough tax. 

In fact, Mr Hockey, want to know what we really think? Australians want you and your government to take action to close the gap, not to make it worse.

Follow me on Twitter @jennaprice or email jenna_p@bigpond.net.au

Featured advertisers

Special offers

Credit card, savings and loan rates by Mozo