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Do mention ze war - just don't talk about equality

by Chris Rau
20 August 2013
On a muggy, 41 degree, summer’s day in early 2004, I bundled the youngest off in his pram to watch his siblings in a primary school gala event in Sydney’s west. Their school had no hall or auditorium, so families, teachers and giggling groups of nervous performers squeezed in a u-shape around parallel groups of buildings, vying for shade among the few trees valiantly standing amidst the concrete.

The diminutive brass band members tooted in sincere, if discordant cacophony and the sequined dancers sashayed to a tape recorder, but as the speeches started, the audience bolted. A sudden heavy downpour had left the organisers to herd their disappointed troupes back to their flimsy demountable classrooms as families escaped the rain across the muddy back oval. Not much later, then Opposition leader Mark Latham announced a plan to increase funding for disadvantaged public schools by reducing federal funding to wealthier private schools.

Even though opinion polls like AC Neilsen showed a 66% approval rate for the scheme, with a 47% support rate among Coalition voters, talkback went ballistic, foreshadowing dire consequences from Labor’s ‘hit-list’. Prime Minister, John Howard, called it ‘old-fashioned class warfare’. The Australian reported churches as ‘savaging’ Latham. Private schools warned of fee hikes and an exodus back to government schools.

The term ‘politics of class envy’ got quite some mileage during that year, as did Latham’s bid for ‘voters on the ladder of aspiration’. It was all academic, given that in October 2004, the Coalition comfortably increased its majority in the Lower House and also gained a Senate majority.

A few months later, I watched quite a different kind of performance as my eldest son did an end of summer school camp gig for the Classical Guitar Society at the private girls’ school, Ascham, in Sydney’s eastern suburbs. Our family wandered in sheer awe through the 4.4 hectare, immaculately-landscaped heritage site on our way to the shiny auditorium with foyer. We passed the tennis courts and elegant sandstone buildings. Somewhere out of sight were the gymnasium and the Packer swimming pool.

Envy didn’t spring to mind, as we were more than happy with the calibre of education at our children’s school. But it was puzzling to think that a similar federal funding slice was being allocated to students at two schools with such vastly disparate facilities. Was it ‘class warfare’ to wonder where the ‘equality’ sign was in this equation?
Fast forward nearly a decade, with another election looming, and the phrase ‘class warfare’ is again booming from high-ceilinged rooftops.

Fast forward nearly a decade, with another election looming, and the phrase ‘class warfare’ is again booming from high-ceilinged rooftops. This time, over the incumbent Labor Government’s proposal to increase taxes on the earnings (not the capital) of the wealthiest superannuation account holders—those earning more than $100,000 a year in interest on their super—from 15% to 30%.

"If people make their money out of working harder, taking risks and being smarter we should celebrate their achievement," wrote former Immigration Minister, Amanda Vanstone in an April 2013 Sydney Morning Herald column: "Attacking them as the hated ‘rich’ is nothing more than the politics of envy. It creates distrust and division and that weakens our society."

Really? Whose distrust and whose division? Kevin Donnelly, director of the Education Standards Institute, wrote in The Australian, also in April 2013:

"So desperate is the ALP government to cling to power that it hopes to re-energise its traditional working-class base by appealing to the sentiments of class envy and dislike for those more privileged."

Of the Gonski education reforms, a milder, meeker version of Latham’s idea, he added that the requirement to contribute the school resource standard of 10%

"... displays a willingness to unfairly penalise those stereotyped as privileged."

What particularly stood out was his view that the ‘ALP-inspired’ history curriculum:

"... also reinforces a left-wing ideological perspective that undermines a commitment to Western civilisation and Australia’s Judeo-Christian values and heritage. ... with students ‘made’ to celebrate Sorry Day and Harmony Day."

For years now, as study after study shows the gap between rich and poor is increasing in Australia, all the highly paid spin doctors seem capable of is trotting out the tired old mantra of ‘class warfare’ every time there’s a whiff of a more equitable distribution of income. It should be amusing; a bit like John Cleese’s ‘Don’t mention ze war’, but the level of debate is so bereft it’s merely bemusing.

It’s with weariness that the electorate has lived through the kerfuffle over the original Rudd plan for a tax on miners’ super-profits; Abbott’s ‘great big new tax’ slogan about carbon which has gone quietly into Chicken Little land; the angst over a dent in the private school trough; the fear that the national disability scheme might affect retail profits; and now a tentative possibility that some highly wealthy individuals who’ve shifted funds to low-taxing super havens might see a slight increase in that tax. A reasonable person might ask if Australia were two planets?

If anything, the debate shows how timid Australia’s political class has become in even owning up to entrenched inequality. With the few actual reforms cloaked in such impenetr- able financial gobbledegook, I’d challenge even the most sophisticated of forensic accountants to cut through the Gordian knots to find the occasional kernel of social benefit.

In Australia today, old ideological categories of left and right, ‘aspirational’ and ‘envious’, have become meaningless background chatter, twisted to suit whichever interpretation might suit that day’s spin. It’s time for any clear eyed politician to resist the phony tag ‘class warfare’ and to address the real issues.

Why, for example, do governments put the pursuit of tax avoidance—a revenue raiser rather than a spending cut—into the too-hard basket? Just as in the field of crime, corporate fraudsters are punished more leniently than those who steal a hundredth of the sum through a robbery? Class warfare or double standard? Are complex shelf company arrangements too tedious to wade through? As recently as May 2013, Tax Office figures showed 70 Australians with incomes of more than $1 million paid no income tax in 2010–11.

Australians do like to call a spade a shovel, and here are a couple of shovels:

• In 2010–11, the top 1% of earners (individuals on more than $210,000 a year) took home 9.2% of Australian income, up from 8.6% of total income two years before.
• Australia ranks in the bottom third of unequal nations. The US has the dubious honour of top billing among the prosperous nations with the hugest gap between rich and poor.
• Former ANU professor of economics Andrew Leigh argues in his forthcoming book Battlers and Billionaires that Australia was at its most equal under the Coalition- led government of Malcolm Fraser in 1981. Then, the top 1% of earners took home 5% of the nation’s income.
• According to Australian Council of Social Services Chief Executive Cassandra Goldie, child poverty is growing despite two decades of unprecedented growth. "We know 2.2 million people are living in poverty, including some 575,000 children," she told The Australian newspaper earlier this year.
• Charitable giving has slowed from a growth of 8.3% in 2011/12 to 2.6% in 2012/13. The average taxable income among the postcodes that donated the biggest share of their pay was $67,009. In the US, recent research showed the richest fifth of the country donated 1.3% of their income while the poorest donated 3.2%.
• About 80,000 single parents—mostly women—are living on $38 a day on Newstart allowance, receiving between $60–100 a week less than on the sole parents’ benefit. National Welfare Rights Network President, Maree O’Halloran, said tens of thousands of families were being pushed "deeper and deeper into poverty ... significant numbers of single parents move in and out of temporary, insecure casual employment, which are often the jobs available to single parents."1
• The ALP’s priority is ‘getting people into work,’ Employment Minister Bill Shorten told The Australian, saying he was ‘pleased’ that about 4,000 single parents had found work after the January cuts.

The ALP’s work ‘carrot’ is the Coalition’s ‘culture of self-reliance’. Opposition treasury spokesman Joe Hockey envisages a stricter approach to welfare payments, telling The Institute of Public Affairs in Melbourne in early May 2013:

"Addressing the ongoing fiscal crises will involve the winding back of universal access to payments and entitlements from the state. The Coalition would implement . . . genuine welfare reform to lift participation in work."

Under their plan, a corporate mum on $150,000 a year who has a baby will be paid $75,000 over six months’ maternity leave, whereas a teacher on $60,000 will get $30,000 for the same period and the stay-at-home mum on Newstart will be paid, well, not much.

After perusing far too many economic and political analyses in researching this article, one thing seems transparent: ‘class warfare’ isn’t about ‘the politics of envy’—it’s a hard-wired resistance to genuine equality.
The term is a thinly disguised linguistic construct which basically says: ‘Get your hands off my loot’. Whether it’s Gina Rinehart on her billions resisting the mining tax or a CEO on his millions cosy with his trust fund accountants on the hunt for another tax- minimisation loophole, the message seems still to be mired in medieval times—a bit like the limbic system in the brain.

It’s an age old conflict between recognising the need for the greater good but instinctively wanting to maximise one’s own individual share, without too much sharing!

As a letter to The Sydney Morning Herald from Keith Russell put it on 8 May, 2013:

"In days gone by, kings and princes and other such people of power paid no tax. Indeed, they were the people who raised taxes. Now we have many rich people who presume they are at least minor royalty and they should pay no taxes. Time to set them straight about whose world they live in."

1. The Australian, 10 April 2013, and The Sydney Morning Herald, 8 May 2013.
Chris Rau is a Sydney journalist and author of Dealing With the Media, UNSW Press, 2010.