There has been much reference to the promised tax cuts in this year’s Federal Budget, with the Labor opposition damning its “unfairness” while supporters have emailed around the famous restaurant analogy we published on this page last year.
There has been much reference to the promised tax cuts in this year’s Federal Budget, with the Labor opposition damning its “unfairness” while supporters have emailed around the famous restaurant analogy we published on this page last year.
All this controversy surrounds the size of the tax cuts, which increase the so-called gap between the rich and the poor.
It is, of course, the old politics of them and us, but it does deserve some commentary.
Let’s forget about how much each level of society stands to gain from these changes; my views in that respect are long held that Australia overtaxes its top-earning citizens to its own detriment – encouraging people who can generate big incomes to flee to the US, UK or Hong Kong.
Whether or not you stand to be $300 a year better off or $4,000 (using Kim Beazley’s numbers) is irrelevant, there is no question that there is a big gap between rich and poor.
There always was and there always will be.
Even in communist countries this gap exists. The ‘rich’ are in control and have access to things that the ‘poor’ do not.
That ‘wealth’ includes, in many instances, the power over life and death – something Australia’s rich don’t legally hold.
Perhaps more relevantly, that gap has always existed in Australia – a yawning chasm that has never been bridged, even in our heyday when wool made the nation rich and Australia’s workers briefly enjoyed a standard of living unrivalled in the world.
Even then, though, the poor existed, be they Indigenous Australians or slum dwelling factory workers who failed to reap dividends gained by shearers or waterside workers.
In other times, hundreds of thousands of Australians were out of work while their peers held on to government jobs; then the difference between the bread lines and a steady income was more significant and socially divisive than any amount of comparative difference these days.
I am not a qualified student of history but our concentration on the ‘gap’ is missing the point, constantly and consistently.
Firstly, the poor – for want of a better word – are, in relative terms, much better off than they ever were.
In terms of health care, education, transport and, most importantly, opportunity, they have standards that even the rich could not enjoy 100 years ago.
Even the ‘gap’ between the rich and poor in these basic items is not so great.
Today, if a poor person is rushed to emergency in Perth, it is quite likely they will have the same doctor as the very rich. For our children, state and private education is not as markedly different as some would like to claim.
Of course, there are some who remain in the poverty trap and these trappings of a wealthy society elude them.
That has nothing to do with the gap between rich and poor or the amount the top earners are taxed.
In real terms, more people are better off than ever before.
Of course they don’t have Lear jets or own their own island, but few people have such luxuries and they certainly are not Mr Beazley’s so-called “rich” who will be $4,000 a year better off.
Perhaps the real test of the ‘gap’ is to look at the incomes of tradespeople and professionals.
A century ago a doctor or lawyer was among the elite while a plumber or carpenter had to come and go by the back door.
These days, even before the current skills shortage, the gap had narrowed considerably.
Yes there are millionaire accountants, but there are also mansion-dwelling electricians.
More importantly, the opportunity to cross these boundaries increases every day.
These days a tradesperson does not start as some indentured labourer who may never rise above their station.
Anyone with the right motivation and intellectual capacity can make it. Universities accept anyone with the grades and tradespeople can easily start their own businesses.
I know electricians who have run their own public companies and who have the earnings to employ the best of professional assistance.
In fact, the real opportunities come from our stable society where people are encouraged to have a go.
Politicians who exaggerate the gap between rich and poor make mileage by creating classes of haves and have nots. But they are doing our society a disservice.
By emphasising that somehow wealth is unattainable or out of reach, they demotivate people from less privileged backgrounds who might otherwise grasp the opportunity to use their intellect to the best of their ability.
The politics of jealousy are risky. Egalitarian Australia is not necessarily served by having a small number of rich flouting their wealth in Hiltonesque flamboyance and waste.
But it is equally divisive to pretend that anyone beyond a small percentage that truly live in poverty is somehow stopped from getting ahead by social barriers reinforced by lower taxes.
Let’s encourage those who make money to earn it, keep it, and ultimately spend it here, not persist with a system that will ultimately force our cabinet makers and welders offshore in search of tax breaks.
