SUSAN RYAN. Class warfare or fighting for fairness

Jun 29, 2018

Every time Labor in Opposition proposes to remove or reduce a publicly funded benefit from a high earning individual, or a medium to large company, anguished cries of “class war” ring out

Is it class warfare to reduce investor tax concessions at a time when in NSW alone over five years homelessness has increased by 48%?

Every time Labor in Opposition proposes to remove or reduce a publicly funded benefit from a high earning individual, or a medium to large company, anguished cries of “class war” ring out.

Those who believe they have something to lose, or who  “aspire” that one day they maybe wealthy enough to be affected by higher taxes or lower concessions, raise their voices and thrust fingers on keyboard to tweet in rabid support  of their ever reliable mouthpiece journalists and Coalition  members of parliament .Opinion writers notably in the Australian  cut and paste everything they or  likeminded robot writers have ever written about class war, and pin it again on their favourite piñata Bill Shorten.

What do they mean?  If by the label “class warfare”, they refer to the big divide in Australia between readily identifiable groups of citizens, the well off and the poor, to the large gulf between those who can exercise economic power and choice and those who lack choices and can barely survive, then perhaps the label has some basis in fact. The interests of these two groups can be in conflict, but the resolution need not involve war. Rather the right public policies can resolve the class divide.

We don’t need to tie ourselves up in arguments about where the income level for “well off’ should lie precisely, we just need to look at the realities.

“Well off “in Australia means observable objective circumstances: secure home ownership, timely access to health and medical services through subsidised private health insurance, substantial private assets, usually through the accumulation of large tax favoured superannuation balances acquired from years of well-paid employment. It means owning dividend producing share portfolios, some of which even yield cash payments for a zero-tax debt, and owning investment properties, in multiple, also tax favoured.

The way current policy works in favour of the well-off is straightforward. If you earn a lot you get a lot of superannuation and thus reap large super tax concessions. If you can afford investment properties, you get generous capital gains and negative gearing tax concessions, enabling you to grow your investment portfolio further regardless of massive inflation of property prices. When you get old enough to need aged care assistance you live in an area where you have a choice of competent providers of such services. If you are among the100 000 older people assessed eligible for aged care but still waiting for a package, you can afford to hire care privately while you wait.

If you care to indulge in a little philanthropy, you can choose to give donations that produce healthy tax deductions. If you need to travel around our cities and suburbs you will probably have the flexibility to travel off peak, avoid massive traffic jams, and of course avoid inconvenient overcrowded unreliable public transport. You live longer than average and enjoy better health. These factors broadly describe the “well off”.

Federal Labor has announced policies that would upset these arrangements. Their policies consider first those on the other side of the divide. They are not well off, they are poor, have no secure housing, cannot get a job, cannot get affordable reliable vocational training or retraining. They are more likely   to suffer a range of diseases from cancer to diabetes. Chronic unemployment, unaffordable and unstable housing, poverty- creating weekly income such as Newstart lead to family breakdown, further poverty, and worse health problems. Older Australians who have worked hard all their lives for low wages finish a working life without assets and without super and must rely on charities to survive. If they need the government provide aged care services they may have to wait more than a year, and those without a home can’t get home based aged care at all. Poorer people who need hip surgery can rely on the public system but may wait years in extreme discomfort and reduced mobility. Dental care is often out of the reach of poorer people, young and old.

While all citizens can benefit from large public expenditure on schools, universities, health, the national disability scheme, and better transport, on the poorer side of the divide, such public expenditure is essential. It is funded from tax revenue. Unnecessary tax concessions to well off people and companies drain revenue from what most agree are essential programs.

It is when Labor announces intentions to reduce tax benefits to well off individuals and businesses to improve the lives of everyone else, they are accused of class warfare. The accusations come mainly from those who wish to retain all their publicly funded benefits, sustainable or not.

What is proposed? Giving priority to improving the circumstances of poorer people, Labor has set policies for increased tax on middle and large businesses, for higher rates of tax on high earners, for resetting some balance in the housing market by reducing concessions for well off property investors. This last measure is for some a particularly vicious weapon in the class war.

Labor’s intention to reduce tax concessions to property investors comes at a time when homelessness is bigger than ever and rapidly growing. This could seem to the objective observer not so much a declaration of war but an intention to make access to housing fairer, so that individuals seeking a roof over their heads are supported ahead of investors lining up for their sixth or seventh tax favoured investment property. Is it class warfare to reduce investor tax concessions at a time when in NSW alone over the last five years homelessness has increased by 48%?

Compare the two groups of Australians who experience the wildly different circumstances outlined above. If this gulf in circumstances is to be reduced, tax and other policies are needed to create more fairness, more equity between how Australians of differing circumstances can all experience the basics of secure, dignified living, and can exercise their basic human rights.

Proposals from Labor to reduce the gulf continue to attract vociferous hostile opposition from those who are determined to retain their privilege regardless of the nation’s capacity to sustain it and regardless of the massive needs of those living in poverty and insecurity. Are these policy intentions of Labor properly labelled class warfare? Or are they better described as fighting for fairness?

Susan Ryan was Australia’s first Age Discrimination Commissioner, and a Minister in the Hawke cabinet. She has headed various superannuation bodies. She is an advocate for affordable housing particularly for older women.


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