When you’re in a hole, the old saying goes, stop digging.
It’s a hoary cliché that Joe Hockey, for one, appears not to care for. Faced with an overwhelmingly hostile public reaction to his first budget, the Treasurer has doubled down on his anti-welfare rhetoric. Rather than stop digging, Hockey has called in the earth moving contractors.
That’s the skinny from Hockey’s speech on Wednesday night to conservative think-tank, the Sydney Institute, in which he accused those calling his budget unfair of waging “class war”.
“Criticism of our strategy has been political in nature and has drifted to 1970s class warfare lines, claiming the Budget is ‘unfair’ or that the ‘rich don’t contribute enough,’” Hockey told the assembled notables.
“The criticisms alleging ‘budget inequality’ are not new,” Hockey continued. “The gap between rich and poor has often been used to attack governments when all other avenues have been exhausted.”
Later in his speech, Hockey stated bluntly that “we have moved on.”
You can see what Hockey’s trying to do here. Framing criticism of the budget as tired, old “socialism”, the Treasurer wants to claim the high moral ground of economic reform.
Indeed, Hockey even tried to flip the inequality arguments around, arguing that it is the rich who pay too much tax.
“Just 10 per cent of the population pays nearly two thirds of all income tax,” he said. “In fact, just two per cent of taxpayers pay more than a quarter of all income tax.”
Not surprisingly, the cartoonists had a field day. Cathy Wilcox depicted Hockey atop a castle, sprinkling cigar ash on protestors below. “Whingeing peasants” is the caption.
John Shakespeare is just as blunt. He’s drawn Hockey in blue braces and bow-tie, with a glass of “True Blue” shiraz.
The letters flooded into the Fairfax newspapers, too. Greg Loder of Springwood wrote that “if Joe Hockey thinks critics of his first budget are engaging in class warfare, he should sit down, have a cigar and a long think. The Abbott government's first budget was itself an exercise in class warfare.”
Opposition leader Bill Shorten calls it Hockey’s “Romney moment.” It’s a pretty fair comparison. There’s more than a passing resemblance between the sentiments uttered by 2012 US Presidential candidate Mitt Romney to a group of wealthy donors, and those of the Treasurer in this week’s speech.
“At the moment over half of Australian households receive a taxpayer-funded payment from the government,” Mr Hockey said. Australia must now “discourage the leaners”.
And what discouragement the budget provides! Just this week, we learned that those claiming unemployment benefits under the age of 30 will have to look for 40 jobs a month, for six months, before they receive a cent of Newstart. How they will be expected to travel to job interviews, buy a pair of shoes, or even pay for a working phone or internet connection is yet to be spelt out. Mutual obligation? Just plain old obligation, it seems.
In Senate Estimates testimony last week, we learned that the Department of Social Security is budgeting $230 million over the next four years for emergency relief, because of the hardship that the new budget measures will cause.
“The purpose of that funding is to provide assistance to people who need assistance with food, utility bills, those sorts of things,” the Department’s Deputy Secretary, Serena Wilson, told the Senate. “So it's about essential, essential needs.”
All up, the Department estimates that more than 550,000 job seekers will seek the emergency assistance.
The fact that the government’s budget will force half a million Australians to seek emergency help with food and utility bills does rather put Joe Hockey’s rhetoric about class war in perspective.
“I think it shows that they know that these measures will force people into crisis situations, it will cause significant financial hardship, it will put people into poverty,” Greens’ Senator Rachel Siewert told the ABC in response.
As Warren Buffett famously remarked, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
None of Hockey’s claims about inequality stack up. Far from a rising tide lifting all boats, inequality has substantially worsened in Australia in recent decades.
Labor’s Andrew Leigh had a career as an economist before getting elected to Parliament. His expertise was inequality.
“Since the 1970s, earnings have grown three times as fast at the top than at the bottom,” he writes today. “Over the same period, the income share of the top 1 per cent has doubled, and the income share of the top 0.1 per cent has tripled. The richest three Australians now control more wealth than the poorest 1 million Australians.”
Perhaps the meanest insult of all was Hockey’s tendentious claim that governments should only work to ensure “equality of opportunity”.
There is plenty of opportunity in Australia – if you’re wealthy, healthy, well-educated, able-bodied and already have a roof over your head. Being a man is quite a handy advantage too.
For those of not quite as fortunate as Hockey, whose income as Treasurer places him comfortably in the top 1 per cent, the playing field of opportunity looks rather different.
It doesn’t matter whether you believe in the concept of equality of opportunity or not. The only thing you need to know about this government’s view about equality of opportunity is this: it wants less of it.
As the budget papers make plain, the Abbott government is quite openly planning to reduce equality of opportunity. That is the very plain substance of its policies.
Ripping government benefits off jobseekers under 30 reduces equality of opportunity. How will people with no money be able to look effectively for work?
Making sick people pay a $7 co-payment to see the doctor or get a blood test reduces equality of opportunity.
So does cutting funding to public hospitals and preventative health.
Making it more expensive to go to university reduces equality of opportunity.
Ending the Gonski schools funding reforms in 2018 reduces equality of opportunity.
Delaying the National Disability Insurance Scheme reduces equality of opportunity.
Cutting funding to legal aid reduces equality of opportunity.
Abandoning federal funding for homelessness next year reduces equality of opportunity.
Hockey’s speech allows us to put one media cliché to rest: that the government’s problems are due to dodgy communication.
The unpopularity of the budget, and of the government, is not about the government’s poor job of “selling” its measures. It’s about the product the government is selling. It’s about the government’s policies themselves.
Joe Hockey might think that ordinary Australians care little for values like fairness; that they resent paying taxes so others may be helped. The savage reaction to his punitive budget suggests otherwise.
The Coalition may not realise it, but Australians quite like our welfare state. It may be that fighting a class war against the bottom half of the population is not quite as effective as the government first believed.
CORRECTION: This article original attributed a Cathy Wilcox cartoon to Judy Horacek. The copy has been corrected. Apologies to both outstanding cartoonists.
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