Conservative Misconceptions on Tax , The Aftermath of 'Senate Reform', and More

 

above:  Greens leader Richard Di Natale argues reforms to the Senate will make Parliamentary elections more democratic ; But is he mistaken?  Could the Liberals soon control the Senate in their own right?  

 

This week I'm publishing six more letters looking at important issues in Australian and international politics...  These were originally sent to The Age, the Herald-Sun and The Australian ; Mostly they were unpublished.

 

Also this week we 're considering:  

• 'mental health and life-expectancy',
• 'Conservative misconceptions on Tax', 
• 'Superannuation reforms 'not a new Tax''
• 'Integration and Assimilation not the same thing!' and
• 'Was Bernie Sanders wrong on Clinton?'....

Dr Tristan Ewins

A Bigger Threat to those with a Mental Illness than Suicide – Close the Gap Now…

“Neil Cole (Reducing the Suicide Rate 9/3) raises the connection between Schizophrenia and suicide ; and by inference that we should tackle this just as seriously as we do the road toll for instance.  Yet one issue that none of the major parties are dealing with is that of reduced life expectancy for people with mental illness, and especially those with schizophrenia.  Here looking at suicide is only just ‘scratching the surface’.  For those so afflicted  (approximately 300,000 Australians with schizophrenia)  there is a reduced life expectancy of 25 years.   What is required is a ‘close the gap’ program similar to that pursued for indigenous peoples.  Not only to reduce suicide rates, but to promote fitness, health, good eating and the like, and also to further ameliorate poverty, provide flexible work, reduce social isolation etc.  ‘The Age’ has briefly considered this issue last year, but what is needed is an ongoing media campaign  demanding this be put this on all the major parties’ policy radar ahead of the coming election.  Some corners of the media could also do to stop treating Disability Pensioners like criminals.”

Conservatives misguided on Tax

The Herald-Sun (9/3) alludes to the corporate sector urging Turnbull to ‘be bold on tax’ and make sweeping cuts to the Company Tax rate.  Superannuation Concessions are mentioned, and indeed according to Richard Denniss of the Australia Institute those concessions (mainly for the wealthy) will soon cost taxpayers as much as $50 billion a year!  But are Company Tax cuts better for the rest of us, and do they really improve the economy?   Company Tax cuts mean that business is increasingly excused from contributing to paying for the services and infrastructure it benefits from. (eg: education,  communications, transport)  So either those services and infrastructure are neglected (hurting the economy) or the rest of us are called upon to ‘pick up the tab’.  This is what some people are calling ‘corporate welfare’.  It amounts to a ‘race to the bottom’ and effective ‘corporate blackmail’.  But ironically an economy with low corporate tax rates may end up being a LESS attractive destination for investment exactly because of the neglect of infrastructure, services and human capital.

Reforming Superannuation Concessions is not ‘A new Tax’

Mark Kenny (14/3) argues that voters are “sticking with the Coalition’ because of “Labor’s plans to lift taxes on superannuation and investment properties.”  This statement is profoundly misleading.  Labor is not bringing in new taxes, here, or even raising any existing taxes. Instead Labor is proposing that a series of concessions and subsidies be wound back.   Subsidies and concessions overwhelmingly favouring  the well-off.   Indeed these could be credibly interpreted as areas of government expenditure.   So a simple ‘reframing’ of the question could radically alter the terms of the debate.  Superannuation Concessions and Negative Gearing provisions could be seen as rorts for the well-off which cost average and low income tax payers.  Indeed Richard Denniss of the Australia Institute has estimated that superannuation concessions alone will soon cost taxpayers over $50 billion a year.  The sheer scope of the cost to the public purse is phenomenal.  It’s enough on its own to pay for an entire National Broadband Network (NBN) every year!  Incidentally Labor’s proposed  measures on superannuation concessions are at best modest.   If anything Labor needs a stronger policy. But they will be ‘spooked’ by the way ‘The Age’ and other publications are approaching this issue.

Integration and Assimilation not the Same Thing!

Frank Basile (HS Letters, 19/3) argues that ‘integration is the only way’ and that we should adopt a policy of “assimilation”.  But Integration and Assimilation are not the same thing.   Assimilation demands that people abandon their own culture to adopt the host culture.  That is, that they give up their cultural distinctiveness.  But Integration has a different aim.  Integration aims to establish enough ‘shared ground’ to facilitate interaction, communication,  intermingling and inclusion.  That might also include a commitment to liberty, democracy and social fairness.  In this way Integration aspires to achieve social harmony.   But under Integration this ‘shared ground’ does NOT mean immigrants must abandon their cultural identity and distinctiveness.  Integration is the way of bringing distinct cultures into relation with each other on the basis of ‘common ground’. In such a way cultures overlap and interpenetrate rather than 'one cancelling the other out’.  Integration is well and fine but let’s be clear what it really means.

What Senate Reform Possibly Means

(19/3/16)  The Greens have combined with the Liberals to implement Senate Reforms  which will probably wipe out the so-called  ‘micro parties’.  Here we speak not only of the ‘Sex Party’ and so-called ‘Liberal Democrats’ but also of the Carers’ Alliance and the Women’s Electoral Lobby.    In short voters will no longer be able to vote  for a Party ticket with the preferences being distributed according to those parties’ wishes.  The Greens will argue that takes the power away from the parties, and puts that power in the hands of  voters. .On the one hand it may do away with the questionable scenario of micro-party candidates being elected on automatically distributed preferences with only a tiny primary vote of their own.   On the other hand it might do away with the prospects of micro-parties  frustrating the Coalition’s social and economic agendas.   Joe Hockey’s brutal Budget would have passed without opposition in the Senate.  Anthony Albanese has rightly asserted that a system of ‘quotas’ – ie: imposing a minimum primary vote necessary for election - could also have rectified the system without the same ramifications.  Another option would be for the preference directions of all candidates be made public ahead of any election.   We can only hope these reforms do not deliver the Coalition absolute power through control of both Houses of Parliament.

Was Bernie Sanders Wrong on Clinton?

 

A letter sent to ‘The Age’ a while back)    Some people are criticising Bernie Sanders for not allowing Hillary Clinton to interrupt and speak over him. Who was in the right? Is 'what's good for the goose good for the gander', or do different rules apply to women and men? Generally speaking on the broad left we should not talk over or interrupt one another. We should have enough mutual respect or consideration to let arguments take their course, and allow people to arrive at their judgements. And in the past men's voices were always dominant - and that had to be corrected. But if a woman can interrupt or speak over a man, but a man cannot interrupt or speak over a woman (or even try and reassert himself as Sanders did when he was interrupted) - is it fair? And could this incident really hurt Sanders' campaign? And would that be fair also?

Progressive Letters on the US Presidential Campaign and More

 

 

above:  Bernie Sanders, US Presidential Candidate

 

 

The following are another series of letters to The Age and to the Herald Sun ; addressing topics as diverse as the US Presidential election; to Richard Denniss on economic reform;  a response to Peter Costello on ‘small government’;  on the threat of ‘elder abuse’ by government;  and the case against austerity!  Unfortunately the clear majority were not published.

 

Dr Tristan Ewins

Richard Denniss on Economic Reform

Richard Denniss (‘The Age’, 15/2) makes a compelling argument regarding the real nature of the social choices we need to make, and the social priorities we need to set.  Are lower corporate and personal income tax rates, as well as other concessions and subsidies for the well-off really a greater priority than quality, accessible state education ; a fair welfare system which is sustainable for those depending on it; social insurance for the disabled and the aged ; and comprehensive public health which is truly responsive to human need?  Peter Martin (15/2) makes the point that the top 10% consider themselves ‘battlers’, whereas in fact they are amidst the truly wealthy and the upper middle class. We cannot afford social services, welfare, social insurance and public infrastructure without a genuinely progressive tax mix.  And we must not be scared to put the arguments for redistribution and higher social spending – without which the minimum human and social needs of a great many Australians would not be met.  This election the progressive parties should be aiming to increase social expenditure by at least 2.5% of GDP (or $40 billion in a $1.6 Trillion economy) rather than parrot conservative mantras on ‘cutting expenditure’.

Responding to Peter Costello on 'Small Government'

Peter Costello (Herald-Sun 16/2) argues  “spending, not tax, is our biggest problem”.   Yet Australia’s public spending is low by OECD comparisons. The problem is that ‘small government’ imposes a ‘false economy’.  Some social needs are non-negotiable.  Health, Education, Aged Care, pensions for the vulnerable and for those who have earned it through a lifetime of work.  Crucially: In these fields ‘collective consumption’ via tax actually gives us a better deal as taxpayers than we would receive as private consumers.  To illustrate – in their book “Governomics  - Can We Afford Small Government?’ Miriam Lyons and Ian McAuley argue that whereas ‘high taxing’ and ‘high spending’ Nordic countries “contain health costs to 9 per cent of GDP”, in the US the figure is 18% despite only 40% coverage.   Australia’s Medicare is somewhere in the middle: It is an effective universal coverage scheme – but neglect and under-funding leave us ahead of the US but behind the Nordics.  So even with progressive tax and higher social expenditure these policies can actually get costs down as a proportion of GDP, and in the process free up a greater portion of the economy for ‘negotiable’ needs (eg: entertainment, holidays) which improve our quality of life. 

Continuing the Argument against 'small government'

Conservatives are arguing Turnbull must “slash government spending”.  But where would that come from?  The unemployed live in such poverty it interferes with their ability to seek work. The Disabled already experience poverty through no fault of their own.  Student poverty forces mainly young people to seek out work that actually prevents them from getting the most out of their study.   The Aged are forced to sell their houses to access sub-standard Aged Care even when they are from a working-class background.  Waiting lists are spiralling out of control in public health ; and we have the threat of a permanently two-tiered Education system which disadvantages those unable to afford private schooling.  Mental health is neglected and many mentally-ill can expect to die 25 years younger on average.   There is insufficient public money for infrastructure and privatisation passes on added costs that hurt the broader economy.  Public housing could increase demand and make housing affordable for more families.  So in fact more public money is needed – not less.  AND the deficit must be brought under control as well.  Only PROGRESSIVE tax reform (not the GST) can tackle all these crises fairly.  Cutting savagely is not the answer.

Meanwhile on Elder Abuse by the Federal Government!:

Christine Long (‘the Age’ 24/2/16) provides an exposition on elder abuse, usually at the hands of relatives.  Yet the worst elder abuse and negligence comes as a consequence of the actions (and otherwise negligence) of the Federal Government.   Nursing homes lack staff to resident ratios, and what is more there is no provision for a registered nurse on the premises 24/7.  Indeed nursing homes are often akin to ‘warehouses for old people’. There is little or no mental stimulation or diversity in environment.  Lack of staff means residents do not always eat, and some are left in their own excrement for protracted periods for the same reason.  What is more, onerous user-pays mechanisms are forced upon working class families who may have struggled their entire lives to afford a home.  User pays aged care is akin to regressive tax – but much worse even than the GST.  For quality of life in old age other reforms are also necessary.  A significant increase in the Aged Pension.  Free public transport.  Taxi vouchers, and social gatherings to cater for all interests.  Programs to combat loneliness and the likelihood of suicide.  A National Aged Care Insurance Scheme would be a great place to start.

Responding on the US Presidential Campaign: Bernie Sanders' Prospects

 

Rita Panahi  (Herald-Sun, 15/2) decries US Presidential Candidate Bernie Sanders as “An ageing socialist who wants to raise existing taxes and introduce a bunch of new ones.”   The unspoken assumptions, here, are that small government is un-contestable, and redistribution unthinkable.  The Herald-Sun (15/2) was also concerned that what are probably the top 10 per cent of families live ‘pay-check to pay-check’ on $200,000 a year and more to maintain their lifestyles.  But according to the ABS  the average pre-tax individual wage in November 2013 was $57,980. And many truly battled on close-to-minimum wage: cleaners, skilled child-care workers, aged care workers, retail, hospitality and tourism workers.  In 2015 the minimum full-time wage was barely $650/week.  So redistribution is fair for many reasons.   Arguably everyone should have minimum rights to social inclusion, shelter, nutrition, education, and health care.  Best provided through the social wage, social insurance and various social services which demand progressive tax as ‘the price we pay for civilization’.  But pay is also based on ‘demand and supply’ in the labour market, and some workers’ industrial strength. Those mechanisms do not guarantee fairness.  You don’t get fairness and human decency without redistribution including services, welfare, public infrastructure and progressive tax.

Meanwhile:

Julie Szego (‘The Age’ 25/2) infers that women supporting Bernie Sanders in the US Presidential Election is not the ‘feminist choice’.  Underlying this is the assumption that identity is privileged over broader outcomes and over ideology . But if Sanders succeeded in winning free universal health care women would stand to gain as women – exactly because women are otherwise disadvantaged financially due to the exploitation of feminised professions, and due to women’s interrupted working lives.  Secondly, if Sanders raised the minimum wage this also would help the most exploited women in those same feminised professions.  Whereas Hilary Clinton can be seen as supporting a ‘liberal feminist agenda’ Sanders agenda ought appeal to ‘socialist feminists’  concerned also with class, and with the inequalities even between women themselves.   In this context it would not be ‘a betrayal of feminism’ to support Sanders.  Modern progressive politics needs to be based on reciprocal solidarity between human beings against oppression, exploitation, subordination and domination.  Here gender does not ‘trump’ other issues any more than those issues (eg: class) ‘trump’ gender. The agenda is for us all ‘to see the struggle through to the end’ with nothing less than ‘full human liberation’ as the aim.

 

From Privatisation to the GST - Letters of Relevance to Labor

Above:  South Australian Labor Premier Jay Weatherill has Upset and Awful Lot of People in the ALP with his Position on the GST!

Dr Tristan Ewins


Comrades and others; The following are a series of letters I've written over the past couple of weeks - in the hope of being published in The Age, The Herald-Sun, The Saturday Paper...  I'm hoping by republishing them here I can spur further debate.  Topics covered include 'How Federal Labor Must Respond to Jay Weatherrill on the GST', 'Privatisation Now and Then', 'the Holocaust and Cold War Atrocities - Never Forget',  'Why Isn't Shorten Cutting Through?', 'Infrastructure and Population'.  Most of the letters were never published debate here could help make up for that I think! :-)

Privatisation Doesn't Make Sense - Never did make Sense!

The Herald-Sun (27/1) makes a point of the fact the Liberal NSW Liberal Government will have $20 billion to spend following privatisation of electricity.  But it ignores the associated cost of this privatisation.  To pay for private dividends and corporate salaries increased structural costs will be passed on to consumers in full.  Energy will be more expensive – and that includes businesses as well as voters.  Dividends from the energy sector will also be lost to NSW voters – probably forever.  To get a picture of this: The Commonwealth Bank privatisation brought in about $7.8 billion (the total for the sale of the entire business!!!   )after being privatised by the Keating Labor Government.  But in 2015 the Commonwealth Bank registered a PROFIT (for only one year) of over $9 billion!  Meanwhile the Federal Government is having to pay Telstra several billions to access the very pits and wires that were privatised under John Howard.  How has any of this ever been in the public interest?

Remember the Holocaust - and ALL other Atrocities - So they are never repeated

Dvir Abramovich (Herald-Sun 27/1)  makes some crucial points about teaching young people of the dangers of hatred and prejudice, as epitomised most horrifically by the Holocaust, and the associated industrial scale murder and persecution of Jews, Poles, Russians, Roma, the disabled, and political dissidents. (mainly Leftists)  Such a public education program could be incorporated into a broader critical/active civics and citizenship curriculum reform agenda.  That is: reform the curriculum to empower all students to understand their rights and interests; to commit politically on the basis of their interests and acquired values; and to participate deeply in a truly and meaningfully pluralist democracy.  He also mentions Cambodia, Bosnia, Rwanda and others.  But one aspect that he neglected (unintentionally I believe) was the record of atrocities on the ‘anti-Communist’ side during the Cold War.  Over half a million leftists and trade unionists were murdered in Indonesia in 1965-66. And genocidal attacks during Guatemala’s civil war claimed between 200,000 and 300,000. As well as political mass murders in El Salvador, Nicaragua and elsewhere. Truly we must remember ALL of history’s shameful passages that we do not repeat them.  And that includes those committed ostensibly by ‘our side’. 

Why Isn't Shorten 'Cutting Through'?  And how can he change this?

Mark Kenny (28/1) argues Bill Shorten has failed to cut through since the elevation of Malcolm Turnbull as PM.  Yet the Liberal Party stands on the verge of another bout of bitter austerity: of the proportions which brought former Treasurer, Joe Hockey , undone.  For too long Labor has pinned its fortunes mainly to ‘socially liberal’ issues like Equal Marriage: neglecting robust social and distributive justice policies.  Hence the ‘socially liberal’ but ‘economically neo-liberal’ Turnbull has capitalised on the prevalent discourse.  Labor needs to change the prevalent discourse – and quick.  Labor’s strong endorsement of Gonski –  $3 billion on average a year - may show that Labor strategists are starting to learn their lesson. Other options could include more robust reform of superannuation concessions for the well off.  Superannuation concessions may cost taxpayers $50 billion/year by 2019, and Labor should be able to shave $20 billion of that from the well-off. Other areas of tax reform could include no further Company Tax cuts; gradually rescind Dividend Imputation; index the bottom two income tax brackets for fairness.  That could pay for a National Aged Care Social Insurance Scheme, reform of pensions and more, while improving Labor’s economic credentials, reining in the deficit.

The Infrastructure Crisis and Population: A Response to a Herald-Sun Reader

 

Nola Martin (Herald-Sun, 1/2) blames the transport infrastructure crisis – crowded trains – on overpopulation. Increased population has good and bad consequences.  On one side we will run into difficulty if schools, hospitals, roads, public transport – fail to keep up with population.  On the other hand higher population creates ‘economies of scale’ in the public service, defence and other areas. (ie: we can get away with paying proportionately less there)  But the real problem is that public investment in infrastructure and services – like roads – is not ‘keeping up’ on account of ‘corporate welfare’ and subsidies for the well-off.  Company Tax cuts mean corporations aren’t paying for the infrastructure they benefit from.  And superannuation concessions for the well-off might cost taxpayers $50 billion by 2019 according to Richard Denniss of the Australia Institute.  When there’s not enough public money for infrastructure like roads this also leads to privatisation.  The problem here is since the private sector cannot borrow as cheaply as the public sector, and must pay dividends to shareholders,  the increased ‘cost structures’ are passed on – hurting the entire economy.  But as the Federal Election approaches Malcolm Turnbull is considering more tax cuts. (eg: Company Tax)  When will we learn our lesson?

SA Premier Jay Weatherill and the Debate on the GST; And the 'Revenue Problem' for Health and Education

Regarding his discussion of raising the GST; On the positive side at least South Australian Labor Premier Jay Weatherill IS saying there’s a revenue problem we have and not a spending problem. It’s good to actually confront that issue - and to prioritise health and education. The problem is that he's undermining Shorten on the GST – which could be crucial in the coming election. The best reply Shorten can come up with is promising to address BOTH the revenue problem and the Health crisis - including Aged Care. There are a host of possible measures. Hit superannuation concessions. Gradually rescind dividend imputation. Reform capital gains tax concessions. Rescind negative gearing. Restructure and increase the Medicare Levy. DON'T cut Company Tax.  Shorten has options! Outlining those options NOW - AS OPPOSED TO THE GST can answer Jay Weatherill's concerns re: 'the revenue problem'.   And we can then enjoy serious reform of Education and Health including Aged Care - where tens of billions new funding combined are necessary to make a serious difference. In response to the answering of those concerns Weatherill will probably then 'fall into line' on opposing the GST.

Recent Observations from the Media ; And observations on the ALP’s Policy Trajectory

above: Bill Shorten needs to focus more on Policy Substance and Depth; 
Very Little is possible without a serious commitment of resources

What follows is some commentary on recent material in ‘The Age’, ‘The Herald-Sun’ and the “Border Mail’, as well as a critique of Labor’s current lack of policy on strong tax and superannuation concessions reform….

Dr Tristan Ewins

Cash Splash?  How a ‘throwaway line’ offends both our values and our intelligence

 

i)                    ‘The Age’ should have been more careful with its rhetoric in relation to  the Gonski education reforms. (‘The Age’, 29/12/15)  In particular the term ‘cash splash’ is highly questionable.  Of recent years the term has been deployed heavily, with the obvious inference that the public spending associated is ‘frivolous’ or ‘wasteful’.  Indeed the term has consolidated the neo-liberal Ideological assumption that public spending generally tends to be wasteful.  But Gonski is anything but wasteful. The Gonski initiative and its associated funding are crucial in stopping the drift to a highly stratified education system; where the state sector becomes ‘residual’ and ‘second class’.  That is: only for those who cannot afford better.  By contrast Gonski has as its assumption that this drift must be halted, and that all students should have the opportunity to realise their full potential. There are economic reasons for this (training tomorrow’s workforce) – but the social and cultural ramifications are just as important.  Journalists for ‘The Age’ should be more careful in the future.  Gonski is anything but a ‘cash splash’, and ‘The Age’ should from now on be more careful in realising the ramifications of this kind of rhetoric.   (letter to ‘The Age’; edited version published)

 

A Surprising Position on Tax Reform in the Herald-Sun of all Places!

 

ii)                  It is good to see the Herald-Sun considering options for fair tax reform as opposed to austerity.  Capital Gains Tax discounts and Negative Gearing provisions are already set to cost around $20 billion year as Kara Vickery’s article (14/1/16, p 15) indicates.  But there are other options for government in containing the $40 billion/year deficit.  Dividend Imputation (rarely applied outside of Australia) could also be wound back for another $20 billion a year.  And a more rigorous winding back of unfair Superannuation Concessions for the wealthy and upper middle class could bring in well over $20 billion a year. Finally there are other options to actually expand investment in infrastructure, education  and health, fair welfare, and more.  Company Tax could be held steady. (already at 30% is lower than the Amercian rate) The Medicare Levy could also be increased and restructured – and channelled into Aged Care and Mental Health. And for the sake of fairness bracket creep for low and average income Australians could be contained by indexing the bottom thresholds.  Austerity is not the answer to the deficit – and would only hurt the economy , and at the same time some of our most vulnerable Australians.  (letter to ‘The Herald-Sun’ ; not published)

 

 

iii)                Interesting Position from NSW Labor Leader Luke Foley on the GST

The ‘Border Mail’ recently observed that:  “Opposition Leader Luke Foley [said] he would consider supporting an increase in the GST from 10 to 15 per cent as long as the funds were used solely for health and education and to compensate low-income earners.  NSW Conservative Premier Mike Baird seems to agree.  But the ‘Border-Mail’ also observed that:

“federal treasurer Scott Morrison insists any potential GST increase must also be used to fund income and company tax cuts”

In response I would argue the following:

A package including but not limited to the GST and other measures can be made 'progressive' depending on the compensation. If the compensation is strong enough the poor could even end up better off. (ie: if an increase in the GST pays for big improvements in welfare, targeted tax concessions etc) The problem, though, is that taxpayers tend to focus on INCOME TAX.   And if we cut the income tax of people on low incomes, for instance (in order to compensate), later down the track that will come under pressure as a consequence of high income (and potentially even some middle income) resentment.  Any increase to welfare could also come under pressure in such a way.  The focus will be on the simple rates of welfare (without considering the place of compensation in the total package), as well as the cost to the Budget and so on.  AND before you know it that compensation is whittled away! That is: both tax credits, income tax restructure, increases in welfare.... So in the end – over many years - we have a reversion to the full impact of the increased GST re: its distributive effects. Those on low incomes especially will be hit hard. Which is why we need to communicate this fact to Foley and others who think raising the GST could be a good idea.

This is not to suggest, however, that we should not try and raise welfare and lift people out of poverty.  But a big restructure of income tax as compensation for an increased GST would definitely face a significant threat of being wound back over time.  Possibly through another restructure later down the track.  And possibly because of bracket creep. (if there is not indexation of the lower thresholds)

There are alternatives, however: Tackle negative gearing; reduce dividend imputation, wind back capital gains tax concessions; maintain company tax; raise and restructure the Medicare Levy; introduce a financial transactions tax; withdraw superannuation concessions for the wealthy and the upper middle class; impose a super profits tax on the banks; introduce new progressive property taxes, modest inheritance taxes for large inheritances...

Indeed the measures listed above could potentially bring in $60 billion or more.

I can see how if the specific model of change pondered by Foley was implemented it could have good outcomes short term. But I'm just saying the progressive distributive changes would be whittled away over time. And eventually the effect would be regressive.

 

iv)                But isn’t Bill Shorten promoting strong reform on superannuation concessions?

 

Well, No.  The superannuation concessions reforms currently proposed by Bill Shorten currently are VERY modest.  The suggested reforms could even be dismissed as being ‘cosmetic’ in ‘the big picture’.  Shorten proposes cutbacks in concessions only for the wealthiest of all: "$14 billion OVER TEN YEARS" (that is: $1.4 billion a year by today's reckoning)  By contrast Richard Denniss of the Australia Institute believes the cost of Superannuation Concessions will soon balloon to OVER $50 BILLION EVERY YEAR.  (ie: by 2019)   And the deficit is currently in the vicinity of $40 billion a year.  To get a sense of proportion the economy is valued at approximately $1.6 Trillion.  So Bill Shorten's proposed superannuation concessions reform amounts to about 0.01% of GDP – and probably proportionately less when you factor in economic growth.  That is: it is so modest as to be considered trivial.

All this means that a Labor government will be under enormous pressure to introduce austerity. At this rate there could be cuts in pensions, an increase the retirement age, and so on.  Or they will ‘sit on the deficit’ and attract massive flak from the Conservatives.

At the ALP Socialist Left Forum Facebook Group one contributor inferred I should just get behind Labor’s costed policies, and that criticism was simply succor to the Liberals.

But the ALP Left is more than a 'cheer squad' for opportunistic policies that are about appearance and not substance.  I am saying that once we step back from the heat of the rhetorical policy battle - there is not enough SUBSTANTIAL difference between us and the Libs on policy yet. (though there are notable differences on Penalty Rates for example)

NOW if you want to talk about ALP Policy - I understand the PLATFORM does NOT lock us in to 'small government'. But understand that as things stand - without a change of direction - we won't have the fiscal ‘room to move’ to fully introduce Gonski and NDIS - let alone other absolutely critical reforms like:

·         National Aged Care Social Insurance on a similar scale to NDIS

·         reform of welfare to lift the most vulnerable out of poverty

·         full integration of dental, optical, physio, psychology, hearing aids, speech therapy, urgent cosmetic surgery -  into Medicare

·         increase proportionate and absolute funding for mental health

·         Begin a fully-funded program to ‘close the gap’ on mental health related  life expectancy - just as critical a priority as ‘closing the gap’ re: indigenous lifespan

·         A big investment in public and social housing

·         Maintain a retirement age of 65

·         Restructure HECS to approximate something like a genuinely progressive tax

·         Big public investments into infrastructure: transport, energy, water, communications, hospitals, schools, ports and more

·         Bolster Legal Aid

·         Kickstart a process leading to a negotiated Treaty with indigenous Australia

·         Big public investment into renewable energy research and infrastructure

Without root and branch reform of tax and superannuation concessions pursuing even a modest selection of said policies (above) would mean either extensive austerity elsewhere, or a ‘sit on our hands’ attitude to government. (neither of which are acceptable)  ‘One step forward, two steps back’ is not enough , and the prize of government is not sufficient if there is so little progress on the policy front.

I want a REFORMING LABOR GOVERNMENT. I want 'the forward march of labour' to get moving again.  A trajectory of progress.  Is that too much to ask?

Critique of Labor and The Greens on ‘Policy Compromise’

 above: Labor and the Greens can work together; But need to be conscious of each others' electoral imperatives ; Carbon Tax was good policy ; but a 'political death warrant' for Labor

 

 

Dr Tristan Ewins


Recently the Australian Greens negotiated a compromise with the Liberal Federal Government in Australia on the question of pursuing tax evasion by “Australia’s wealthiest private companies”. ‘The Age’ reported that as part of the compromise “Up to 300 of Australia's wealthiest private companies will be forced to disclose their annual tax bill for the first time.” But that the legislation also will “shield up to 600 more companies that would have been brought under new transparency requirements.”

Labor has branded the deal “a sellout”. They had pressed for all companies with revenues of over $100 million to be affected by the reform – whereas the Greens negotiated a compromise with a threshold of of $200 million. Labor argued a compromise was not necessary – on the assumption the Government itself would have been forced to compromise before the end of the sitting of Parliament.

(Read more: http://www.smh.com.au/federal-politics/political-news/greens-deal-with-scott-morrison-on-tax-shield-sparks-labor-fury-20151203-gle9ft.html#ixzz3taKrNOA9
Follow us: @smh on Twitter | sydneymorningherald on Facebook )



Also considered recently in discussion has been the decision by the Greens several months ago to agree to another compromise - tightening means tests on Aged Pensions in order to save $2.4 billion over four years.

By contrast Labor was arguing for reform of Superannuation Concessions delivering windfall gains to some of the very most wealthy: though arguably Labor wasn’t considering a broad enough base (including the upper middle class) in order to bring in serious revenue without need for unfair austerity elsewhere.

To summarise: Shorten’s plan foreshadowed savings of $14 billion OVER TEN YEARS. But the Government is facing a deficit ballooning to over $40 billion a year ; and root and branch reform of tax is what is necessary – not only to get the deficit under control, but to pave the way for a reforming Federal Labor Government which actually improves the social wage, social insurance and social welfare by tens of billions in the context of a $1.6 trillion economy.

Again by contrast: The deal agreed to by the Greens with the Liberals had 170,000 of the most financially disadvantaged Pensioners standing to gain $30/week as of 2017; But approximately 330,000 (relatively better-off) Pensioners would see cuts through tougher means tests ; and more than double that into the future.

(See: http://www.smh.com.au/federal-politics/political-news/pension-assets-test-deal-with-greens-secures-coalitions-changes-20150616-ghplxg.html )  

The following are some excerpts regarding my thoughts: not only on this specific compromise, but on the ALP working with the Greens generally.


SL in relation to the Greens ; Is it right for the SL to Criticise ALP Policy?


At the ‘ALP Socialist Left Forum’ Group we’ve had plenty of debate on the place for criticisms of the ALP. Should criticism be considered ‘treason’ of some kind? Should we work for co-operation with the Greens – or should we fight them tooth and nail on account of the threat to several of our most talented Left MPs ; and the likelihood of declining Socialist Left influence in Caucus and Cabinet?


Nonetheless: Labor often gets it wrong on policy. For instance, we often pursue symbolic policies for appearances sake which are far from the ‘root and branch’ reform needed to serve the interests of our constituents. Shorten’s Superannuation Concession reforms are very modest , and at this rate Labor will be pressed to pursue extensive austerity if we regain government. Perhaps regressive policies such as more attacks on vulnerable groups such as Sole Parents. Or an increase in the Age of Retirement. And yet Labor’s Platform leaves the way open potentially for an expansion of progressive tax and social expenditure. Labor still has options for a genuinely progressive mandate.

If as the most significant Left formation in the country (The broad ALP Socialist Left) we do not criticise our own party's policies when our leaders get it badly wrong - then who will step into that space? There are a number of possibilities. Either groups like the Greens will step into that space ; or because of our silence the Left more broadly will be demobilised. This would especially be a threat if the Greens’ tending towards compromise marked ‘a move to the Centre’ which again would leave a space in the Left of the Australian political milieu. A new challenger on the Left of Australian politics could take a long time to re-emerge therefore ; just as it has taken decades for the Greens to establish themselves properly. This would simply assist the broad Australian Right in consolidating their hegemony.


 Don't get me wrong:... I'm all for staying and fighting within the Party. But when the Party leadership gets it badly wrong its up to us whether we vacate that (public) Left space and/or demobilise the Left - or whether we choose our battles - and publicly dissent at times – in the context of important debates – such as a much more robust winding back of superannuation concessions for the wealthy and the upper middle class. We must do this because there is the alternative of Left demobilisation. And before we know it even our own people don't know what we're supposed to be fighting for anymore... (take privatisation, tax reform, social wage and welfare expansion and reform, industrial rights and liberties etc)


Insofar as criticism is constructive we shouldn’t just tolerate criticism of Labor policy - indeed it must be encouraged.

Nonetheless, the trend towards Labor and Greens just trashing each other always seems to involve a degree of 'spin' and is not necessarily 100% honest. What we need is honest, reciprocal criticism.


 There's also the urgent question: What will WE (ie: Labor) do on Company Tax? Here we really need ALP and Greens to team up and vote down Company Tax cuts - because that is Corporate Welfare. That is business avoiding paying their share for the services and infrastructure they benefit from! So instead ordinary citizens, workers, taxpayers - are left to pick up the tab – directly or indirectly. (whether with an increased GST, or austerity elsewhere) Where does Shorten line up on this? (seriously) There are many billions at stake.


More on Greens Compromises


Regarding Greens’ compromises it must be observed: It’s the old dilemma over whether to compromise and get something 'right here right now' - or whether to hold back - in the hope of discrediting the Conservatives - and getting something much better with the next change of government. Labor has faced these dilemmas itself at times.


 For instance, the Carbon Tax was the best policy - but was politically impossible after Gillard’s commitment "There will be no Carbon Tax in a Government I lead". The Greens should have recognised this. There were other options. Like billions in annual direct public investment in renewables research and infrastructure. In a convoluted kind of way the Greens’ insistence on the Carbon Tax could even have been considered an instance of opportunism in its own right. The Greens got their policy – and it granted them prestige with their constituencies. But arguably it sealed the fate of the Labor Government. This is not to say the Greens shouldn’t press their leverage to get robust policy compromises from Labor. And arguably Julia Gillard should never have backed Labor into that corner in the first place. But direct investment in renewables research and public infrastructure would not have involved a blatant, high-profile broken promise. Of note: Labor must not back itself into a corner on ‘small government’ now either!



What Reforms must Labor and the Greens pursue now as the 2016 Federal Election approaches?

Instead of just positioning against each other with the hope of gaining an electoral advantage over largely ‘cosmetic’ policies, again Labor and the Greens should be projecting root and branch reform in any Labor Government where the Greens hold decisive sway over the cross-benches


 More specifically: Labor and the Greens need to move together to secure a minimum $35/week increase in all full pensions INDEXED upon Labor taking government.
This must include Newstart and Student Allowance. Although I've been arguing for this for years already and $35/week isn't as much as it used to be. Full indexation is crucial, and perhaps now the figure should be somewhat higher. (eg: $40/week


Also in an exchange at the ALP Socialist Left Forum Facebook Group I accepted the need for subsidies to help the elderly invest in air conditioning and heating. Increasing the Aged Pension should be part of that. Existing pensions and payments make insufficient consideration of contingencies which vulnerable Australians may be faced with. From a visit to the dentist to having to replace a washing machine – such everyday challenges can leave our most vulnerable destitute.

Some would call the Greens' compromises through 2015 opportunism. Labor would attract that claim from the Greens themselves if it was Labor who had made the compromises. The Greens are trying to shake off their reputation as a ‘protest party’ – which never has to compromise. Labor argues the Greens are about appearances re: policy protest – but are not about outcomes.



But there is the argument that some of the compromi...ses the Greens have pursued have helped the most vulnerable. Though in a way which has hardly been fair to some people who would not fairly qualify as 'rich'.

There are two sides to this. What matters is that if we get a Labor Government - and if the Greens hold the cross-benches - there will be no more need for 'compromise with the Liberals'. And in that case we should see the whole policy schema recalibrated in a way which is truly fair - and doesn't involve 'compromises' whereby one constituency (not really 'privileged' by any reasonable measure) is played off against another (truly, genuinely disadvantaged). Better to target the top 15 per cent income and wealth demographics for redistributive measures aimed at improving the lot of those on low and middle incomes ; workers and vulnerable welfare recipients.


Target 'the top 15 per cent' as it is a narrow enough constituency for redistribution to be fair ; narrow enough to be electorally viable ; and broad enough to bring in serious revenue for serious reforms...
 

The problem right now is that most in the Parliamentary Labor Party will oppose taxing the sole residence of the elderly - fair enough - but they may not support other progressive measures (as listed) necessary to repairing the welfare state, social insurance and social wage.

Ideally we should pursue a more progressive tax mix which does not necessitate the elderly being forced to sell their home towards the end of their lives when familiarity can be so important. We should hit superannuation concessions for the wealthy and the upper middle class. We should restructure the income tax mix radically. We should consolidate Company Tax and begin to gradually wind back D...ividend Imputation - which most advanced economies manage to do without. (worth over $20 billion now) Perhaps we should tax the banks. And perhaps we should tax the largest inheritances ; and introduce a Tobin Tax on financial transactions. Finally we should definitely raise the Medicare Levy - and progressively restructure it into more progressive tiers.

With this we can bring in tens of billions. We can introduce National Aged Care Social Insurance ; we can implement Medicare Dental, Physio and Optical and cut waiting lists. We can fully implement NDIS. We can implement Gonski and transform HECS into a genuinely progressive tax. We can invest billions into social and public housing, as well as infrastructure of all kinds – increasing housing supply , making housing affordable , providing transport and services to new suburbs. We can revivify Legal Aid, and we can provide Federal Funding for Local Government - to make Local Government less dependent on relatively regressive levies/council rates. And we can reform welfare, support payments and pensions and lift the most vulnerable out of poverty. Finally, we can invest in the ABC and SBS. That's what we should do ; and it doesn't necessitate driving the elderly from their homes - even if their homes are valuable. And especially if their residence is their major asset - and they are not wealthy aside from this by any reasonable measure.


In conclusion – Labor needs to settle on policies of depth and substance. Because while ‘cosmetic’ policies may win over some voters – that is not our ‘reason for being’. Labor should not be driven by the quest for government purely for its own sake: outside the context of winning deep, meaningful reforms. Before Thatcherism and the decades-long retreat of the Left there was reference to the notion of “The Forward March of Labour’. We need to reconceive of our reform trajectory. Of what comprises our ‘forward march’ on policies which reform social wage, social insurance, welfare, personal and collective liberties, the extension of democracy – and more.

And we need to establish our reform trajectory quickly and soon if we are to have the time and the opportunity to sell such a package to voters ahead of the Federal Election in 2016.

Mental Health, Poverty and Life Expectancy – A decades-long Crisis which finally Demands our Attention

 

above: Stigma is a major problem with mental illness ; But arguably there is another neglected crisis - mental health related life expectancy - which results in hundreds of thousands dying decades before their time...

Tristan Ewins

 

Last week was ‘Mental Health Week’ in Australia. Importantly this has drawn attention to related issues such as poverty, stigma and a decades-long crisis in mental-health-related life expectancy.

 

 

 According to a study from The University of Queensland and The University of Western Australia mentally ill Australians are on average dying 16 years earlier than the general population. This would include sufferers of Depression, Bipolar, and Anxiety. The study noted that the vast majority of cases of early death actually related to “physical causes such as cardiovascular disease and cancer, rather than from suicide or accidents.” Medication can certainly play a role in promoting obesity – which as noted can lead to heart disease, but also diabetes.

 

Also despite this, recent research has established that suicide claims approximately 2,500 lives a year. Proportionately the most likely to commit suicide were elderly men.

 

What is more, regarding mental health related life expectancy, “the gap is growing”. And the figure for sufferers of Schizophrenia – which is estimated to be a minimum of 200,000 Australians (some say closer to 300,000) – is 25 years. That is, those with Schizophrenia in Australia die on average 25 years earlier than the general population.

 

Also according to the UQ/UWA study this result was worse than that experienced by smokers, and comparable to that suffered by indigenous Australians. Indeed, research on Indigenous Australian life expectancy revealed a gap of around 10.6 years. The figure for indigenous Australia is of the highest concern and demands a significant commitment of resources. But the comparison begs the question why mental health related life expectancy does not attract the same relative amount of attention given the numbers, and given the dire plight of those involved. Indeed, both indigenous and mental health related life-expectancy warrant a very significantly increased amount of resources.

 

Furthermore the statistics on mental health related life expectancy have not improved in 30 years revealing gross negligence by governments of all stripes.

 

In early 2014 Ryan Bachelor of the Chifley Research Centre condemned apparent moves by the Abbott Government to vilify and scapegoat disability pensioners. This approach was reinforced by a disgraceful campaign by Australia’s Murdoch tabloid press. Bachelor also emphasized that while the figures for the Disability Support Pension (DSP) were high (approximately 800,000 people), more recently these figures were slowly declining. The cost to the Budget was approximately $15 billion in a $1.6 Trillion economy. And the proportion of Disability Pensioners with a psychosocial disorder was 31 per cent.

 

Considering life expectancy statistics, no – sufferers of mental illness are not ‘having us on’ when it comes to the Disability Support Pension. As Frank Quinlan of the Mental Health Council of Australia argued in 2014, many amongst the mentally ill want to work – but cannot do so on account of discrimination. And they are also deterred because of severe means testing of their pensions. As Quinlan explained elsewhere:

 

 

 

“The reality of the experience of severe and persistent mental illness is that it can have a profoundly disabling impact on day-to-day living and social functioning, leaving some Australians requiring ongoing financial assistance despite their eagerness to work independently."

 

 

 

It may not be so popular to draw on Karl Marx in this day and age. ‘Marxism’ as such has been so distorted by those who claimed to act in his name that many would not give his ideas a second thought. But Marx’s maxim: “From each according to ability, to each according to need” should seem an eminently reasonable basis on which to fairly organize an economy and a society. And it is a perfectly reasonable basis on which to organize pensions, and the social wage and welfare system more broadly. This should mean an end to severe means testing, more positive incentives to find flexible work (rather than ‘punitive welfare’), emphasis on fighting mental health related discrimination, and positive incentives for employers to provide suitable flexible employment.

 

Specifically, Disability Pensioners have trouble maintaining any kind of social existence; not only because of illness, but also due to poverty. Poverty means it is often difficult or even impossible to run a car, for instance. This impacts on ability to even search for suitable work. There’s the option of public transport ; but that is not always available. This can also make it difficult to keep friends, or to find friends in the first place. Poverty also makes fitness a more difficult prospect. Again, ill health, obesity etc can contribute significantly to early death, while the mentally Ill need to work so much harder to maintain health and fitness due to the side-effects of medication. Due to poverty Gym memberships are generally out of the question. And health costs can also be prohibitive. Consider Dental and Optical just to start. This affects all pensioners, but the disabled are likely to be dependent long term with no way out.

 

 

 

Also many experiencing mental illness are stuck in substandard and insecure accommodation. Further, not all the mentally ill have support from Carers, and many ‘fall through the cracks’ into homelessness. A 2002 report had also noted:

 

 

“many people with mental illness are unable to afford stable housing or make their own housing choices, and frequently have problems accessing appropriate housing and difficulty maintaining tenancies because of disruptions caused by their illness.”

 

 

 

  New Turnbull Government Health Minister Susan Ley says there are “no easy fixes” and that the system must “[catch] people before they fall.” (“The Age”, 5/10/15) This implies some insight as to what people actually go through. Though while early intervention is crucial in preventing such suffering few can really conceive of, healing for the afflicted is just as necessary. Expecting people to just “pull themselves together” demonstrates an appalling lack of empathy, understanding and humanity. So if Minister Ley is serious she must decisively reject the disgraceful stigmatization and vilification of Disability Pensioners conducted by the Murdoch Press, and by some elements in her own party. 

 

 

 

We are yet to see whether or not there will be a decisive change of direction under the new Turnbull leadership. Resolve to achieve the following will comprise the degree to which we can judge the extent to which the Turnbull Government is meaningfully addressing the crisis:

 

 

•  Increase the Disability Support Pension by at least $35/week indexed. To begin, this might make it possible to run a vehicle and to eat better quality food ; Improve support for Carers as well

• Implement anti-discrimination legislation and provide positive incentives for employers to offer flexible work

• Provide much more generous means-testing of Disability Pensioners – especially the mentally ill, slowing the rate at which the Pension is withdrawn ; and make it easy for those affected to immediately re-access the pension even if they had found full-time work – but relapsed into illness       

• Provide comprehensive Medicare Dental and Optical – ideally on a universal basis – but if this is not possible under the current government, then at least offer it to those in poverty, including those on welfare

       

• Provide access to ‘physical health case managers’ – who assist in improving the physical health of the mentally ill – a dimension which is commonly neglected by mental health professionals

• Provide funding so the mentally ill can actually act on such advice: subsidised access to health and fitness facilities, gear and services.

• Condemn any stigmatisation or vilification of the mentally ill in the media, including the Murdoch tabloids       

• Subsidise internet access to help maintain social-connectedness       

• Promote social-connectedness for inpatients as well by enabling access to internet and social media where viable

• Increase social expenditure on mental health to make it reflect its proportion of “the country’s health burden”; ie: raise it from 7 per cent to 14 per cent of the Health Budget ; but achieve this by increasing the investment; and not through cuts elsewhere

• Finally follow through on the demand by ‘Australians for Mental Health’: for “improved access to mental health services, clear pathways for treatment and support, more early intervention and prevention services, and service integration”

 

Again the mentally ill are not ‘having us on’ when some of them can expect to die on average 25 years earlier than the general population. We have to hope that the new Turnbull Government will mark a shift in attitude. But what is actually necessary is an increase in funding for programs assisting the mentally ill. (as considered in the dot points above) We must judge all the political parties and independents on the basis of action and not just words.