Excellent analysis. Thanks, Tristan.
"And yet Single Parents will be shifted on to NewStart Allowance (a $56/week reduction) when their child/children reach the age of 12 (down from 16)."
This is most disturbing. Is it definitely the case, or a misreading? If true, what is the Government's rationale?
Tristan? Anyone?

Thanks Alan; The quote is as follows:

"Those recipients will be moved on to the lower NewStart Allowance when their child turns 12, instead of 16 under the old arrangements."

from the following URL:

http://www.businessspectator.com.au/bs.nsf/Article/Groups-question-tough-love-welfare-GQGNM?opendocument&src=rss

Although I did find this:"who were granted the payment before 2006".

So maybe it will affect fewer people than I originally thought.

Nonetheless - it's unfair to put it mildy. And with all the emphasis on 'teenage single mums' Rachel Siewert points out in another article here at OLO today:

"85% of single parent pensioners are over 25yo, only 2-3% teenage mums"

Labor was desperate for savings, but perhaps thought means-testing the childcare rebate would be too controversial.

So it seems they've gone after some soft targets. I think Penny Wong would have liked better than this. In fact I think Wayne Swan would have liked better. From their perspective they were 'backed into a corner' - But doing away with the Company Tax cut would have been more than enough to cover the costs saved by these measures against single parents and young unemployed.

Labor needs a 'big ticket' 'big picture' initiative now - to 'capture people's imagination' like NBN did. All the tight budgets in the world won't save them unless they can achive that...

Tristan why is it that income seems to be the only criteria which you (amd others) take into account when it comes to determining what you consider someone else's fair share of social responsibility is?

There are a variety of factors which impact on people's income. Basic ability and opportunity are two of them but choice is another and often a big one. I know that I could earn more than I currently do by making some different life choices, I choose not to make them. I used to be in a lower paid job and chose to study part time to allow me the opportunity to increase my income.

If I chose to forgo some more of my time to increase my income further why should my responsibility to the community increase? Why is my social responsibilty greater than those who make the choices between work and other parts of life at a different point?

The concept of taxable income is fundamentally unfair because it takes no account of the effort or time an individual takes to earn that income? It takes no account of how they have treated the opportunities that life has given them or what their needs are.

Your talk of a fair share for people in certain income brackets is a flawed concept, it's not fair, at best it's expediant because trying to measure fair may be unworkable.

R0bert

Robert; Agreed the system is imperfect and not always fair - but what to replace it with? Many people are in relatively unskilled jobs - but these can be demanding physically and mentally... Should skill - translating into labour market power - be the sole determinant of income?

If we considered inherited wealth and unearned income from dividends - and restructured the tax system to suit - then everyone could get a 'fairer go' through provision of high quality essential services in health, aged care, education...

Apprently over a million workers get minimum wage $15/hour; And about 20% of Australians own about 60% of the wealth. Meanwhile the WAGE SHARE of the economy has fallen by about 20% since the 1980s. (according to ACTU research - follow the URL below to see the figures I base this estimate on) Something is wrong here also... See: http://left-flank.blogspot.com/2011/05/whats-class-got-to-do-with-it-appendix.html#more

At the very least, though, the usually most vulnernable groups - eg: single parents - deserve support rather than stigma...

And people on Newstart - facing tough active labour market policies; and even 'work for the dole' deserve a fairer go. We must remember the broader context - including a rising cost of living, including extreme housing stress for many...

As a psychiatrist working in a public hospital I'm sorry to be sectional, Tristan, but the mental health funding is not as straightforwardly good as you may think. The limitation on psychological services through Medicare may be sensible but what there is to replace it through direct publicly funded services is murky. There's also a greater shift to "partnerships" with the low-wage NGO sector to effectively subcontract what should be public provision to private operators (even if they are non-profit).

The early intervention stuff is the most worrying, IMO. It is based on very little evidence in terms of producing good results at a population level. Many of the psychiatric problems adults have come from adverse social and family circumstances in childhood, but that is not the same as saying that individually targeted MH services will ameliorate these problems disconnected from progressive social policies (which the government seems unwilling to offer in any serious way).

It's neoliberal mental health policy, with a scary aspect of individual social engineering aligned with the reactionary "social inclusion" agenda. When it is tied into the "efficient price signal" I suspect it will be much less effective for patients and much more deleterious for the conditions health workers face than it currently appears with McGorry, Hickie & GetUp! celebrating having their pet project approved.

"Agreed the system is imperfect and not always fair - but what to replace it with" - I'd suggest rarely fair which is why I object to claims that slugging people with a higher tax bill purely on the basis of income is "fair".

There are those who don't have the ability to increase their income but for most it's a matter of priorities, they may be good priorities but for most there are options.

I don't know that there are practical way's of doing a fair income tax system, I would like to see campaigners such as yourself drop the offensive pretense that what you advocate for is fair though. It's expedient but not fair.

As for directions of reform, for income derived from effort I'd like to see the tax system move more towards the view that time is something which we all get the same amount of each week. Base the tax liability around time.

I don't know what the actual figure should be but as an estimate say 6 hours per week per person. For those working full time their tax liability is 6 hours of income, for those earning a lot less over shorter hours then 6 hours to community projects (or maybe training for a better job). Eg there should be a safety net which gives people options without excusing the capable from responsibility whilst overly loading others with the burden.

The idea needs a lot of fleshing out but as an approach it's a lot fairer than slugging someone working extra hours with an extra tax bill. Different rules would need to be determined for income which can't be tied back to an hourly rate. Perhaps an assumed working week.

It's a starting point for a different way of thinking about social responsibility.

R0bert

Robert; I do try to do what I think is right - though I don't claim my judgement is perfect. What you argue about the tax system being partly dependent upon hours worked (not just income) sounds fair in principle - But you'd have to worry about such a system being rorted... And such a system might not consider other personal circumstances. (eg: illness, family, carer status etc)

Also as a minimum I think all people deserve shelter, nutrition, social inclusion, quality education and health care, quality health care. I think this is the 'base' upon which we should 'build upwards' for everyone....

Tad; I understand many people are first stricken my mental illness in their 20s; Isn't it best to get to people quickly before some kind of major trauma which could have effects the remainder of their life? (hence the emphasis of 'Headspace' centres) But it does bother me that this has to come from savings elsewhere from other meritable programs... I've never understood 'social inclusion' as reactionary - though maybe I'm just not well enough read there. Could you elaborate? At worst I think there's a problem in so far as it's taken as a *replacement* for equality...

All welfare, inevitably, leads to high effective marginal tax rates.

Even for those on $150000 a year it seems.

I WANT MY FTB!

Sounds like a Dire Straits song...

Scrap the lot, and just tax us less in the first place. Sure heaps of Lawyers, tax accountants and public servants will become redundant but they could be better employed doing something useful anyway. Election bribes will become harder to target too!

I DONT NEED MY FTB! What WE need is a tax reform. In so many areas.

I'm with r0bert. I could, at a blink, earn $20k-30k more, but I do not wish to wear a suit in order to do so, or even commit $5000 (Tax deductable I'm sure!) and a few hours a week for 6 months to do a course.

Maybe Tristan, I can claim some sort of benefit for psychological problems due to my crippling aversion to suits and responsibility?

I hate suits because they are uncomfortable, I have Daddy Issues, an Anti-authoratarian complex, and philosophical objections (But maybe they're just justifications for the other issues); There's enough material there for an entire conference of psychiatrists. Then there's that quote I love about when you wear a suit, you're publically declaring whose side you're on!

Am I being socially excluded? I think I am! I'm sure some suit wearing 'aspirational' will pick up the bill for me? Where is the empathy and altruism!

Though I do believe there are no people on $150k who would let a bit of tax or loss of benefits come between them and that $160k salary and a stepping stone to their $175k salary. No risk there. The risk is more for people on $25k or who know if they have another baby they wont have to turn up to Centrelink to justify why they shouldn't have to put their 1 yr old in child care.

It's all about perceptions and expectations. The Rodent created the expectations, the perceptions is all that's left to work with.

Just hide it in bracket creep like they've been doing for the last 30 years.

Tristan
"Agreed the system is imperfect and not always fair - but what to replace it with?"

To the extent it is not fair, it should be abolished and replaced with nothing.

"Many people are in relatively unskilled jobs - but these can be demanding physically and mentally... Should skill - translating into labour market power - be the sole determinant of income?"

At least that way it is decided by society on the basis of how those people's work satisfies society's wants, as decided by society, and on the basis of *peaceful* relations. But you haven't given any reason why it should be decided by you, on the basis of *violent* relations.

"If we considered inherited wealth and unearned income from dividends..."

People who invest capital don't have to. They can just consume it all. If they do so, they will be in the same position as workers who don't invest but consume all their income. By investing, they accumulate capital goods which increases the total amount produced for all to share in. The profits of such investment disappear, but the benefits to workers and society in removing the maladjustment of the factors of production is permanent.

So you haven't given any reason for regarding income from dividends and unearned.

Peter; For your average worker with money in superannuation - yes there is a sense in which returns in that context are earned. But for large investors who have inherited their tens of millions or even billions can the same be said? In all cases there is expropriation of surplus value; But at the same time someone who works hard and invests deserves a fair return on that investment...

Regarding the "violence" you mention (I'm assuming you mean taxation enforced by the state); There is the opposed scenario of workers forced to sell their labour and have surplus extracted; and in the case of unskilled workers to do so at poverty wages on pain of destitution. (especially if there is a 'reserve army of labour' impacting on that person's bargaining power; or anti-union legislation limiting collective bargaining and the right to withdraw labour...)

So there are many forms of "violence"; The state power is based upon violence of a form whether it pursues liberal, conservative, fascist or socialist interests and ideology... But the state is something we cannot do without... Some forms of "violence" are not as bad as others...

You’re trying to have a bet each way. If a worker has superannuation then he is a capitalist and his “expropriations of surplus value” are unjustly taken from someone else, according to your logic.

Your appeal to a mythical class of obscenely rich plutocrats who are to be bled to pay for your handouts is false, since the tax you advocate is not confined to such, is it? The money comes from ordinary Australians who have decided to put in the extra work or take on extra risk to earn more, and who have no significantly different living standard from the people you want to give away their property to.

Your idea that the actually physical violence you advocate is somehow justified by some notional violence elsewhere is complete nonsense. If Houllebecq decides to earn more, he’s not being “violent” to anyone, and neither are his employer or client or consumers in paying for his services. It’s a complete furphy.

Similarly your appeal to a class of desperate poor at the brink of starvation is nonsense. Even if it existed, which it doesn’t, your argument would not apply to anyone not in that class, which just happens to describe everyone you want to favour with your forced redistributions. Workers are not “forced” to sell their labour, and their employers receive no more benefit of their services above the market rate than you do. Their employers, more than anyone else in the world, relieve their unemployment, and if anyone is to be forced to pay for topping up workers’ income it should be you and everyone who agrees with you.

By your Marxist logic, the CEOs of major banks are being “exploited” because, being employees, they are workers forced by the prospect of unemployment and poverty into employment in which their surplus value is unjustly expropriated.

You also have not taken any account of the extent to which government is actively causing the problems of poverty and disadvantage that you are trying to solve by more government.

Why shouldn’t everyone “deserve” free food, clothing, shelter, transport, communication and entertainment?

Peter; My point is that there should be a baseline of material living standards and social connectedness as a human right. This is partly determined by contextual expectations and needs.

re: Wealth distribution - apparently 20% of Australians own 60% of the wealth, and the bottom 20% own 1% of the country's wealth - according to recent ACTU research. And I think if you took that further ( as I think NATSEM has in the past) to the top 10% you'd see even greater concentration. I don't think wealth concentration (and the associated power) is a "myth".

I think ordinary people investing earned income deserve a return on that investment. But for the wealthy, I don't think they should be able to live on those profits forever. I believe there is a certain injustice in expropriation of surplus value. But there is a conflict between the reasons for ending exploitation, and the right of ordinary people to a return on investment. There is no perfect answer.

But there are alternatives - such as mutualism and co-operativist enterprise - which should be encouraged.

And clearly a wage labourer who has surplus value extracted from the proceeds of the products of his/her labour is not in the same posititon as a salaried corporate executive on a $10 million salary. By comparison with the exploitation of a wage labourer, I think the returns for corporate executives are out of proportion with their actual contribution...

Tristan
I find what you say to be so confused and illogical.

You haven’t established that
• employment is exploitative in the first place, except by reference to cartoonish Marxist caricatures
• there is any “violence” in Houllebecq’s, or anyone’s, working to earn some extra income
• there is any “violence” in the consumers buying things they want
(that disposes of your Marxist premises)
• there is anything but arbitrary prejudice in your distinction that dividends earned by lower-paid employee capitalists are “earned” while divided earned by higher-paid employee capitalists are “unearned”
• foregoing instant grat now to undertake the risk of higher production later is undeserving of the income accruing to it from people’s voluntary payments
• there is any justice in your idea that people have a right to force others to work for them
• there is any reason why human society could or should be based on material equality
• there is any reason why people should not pay for the goods and services they want
• and if they can’t, why provision for the less fortunate should not be by voluntary means.

The only thing consistent about your arguments is your consistent recourse to garbled Marxist fallacies that were refuted over a century ago. Not even you will defend the logical consequence of your view that private production is evil, and state confiscations are morally virtuous and economically superior – that the state should take over all production. But when your fallacies are pointed out, you just respond with another welter of Marxist fallacies.

You don’t represent “social connectedness” - you stand for physically attacking people who won’t submit to having their freedom and property violated, based on your garbled illogical belief that to do so makes society better.

Honestly, it’s like shooting fish in a barrel.

Rather than trot out these articles which assume the labour theory of value, I would rather you do an article proving and defending it against its critics, because I don’t think you can, and everything you say depends on it.

Peter;

Firstly - arguing about the labour theory of value can be complex; There are people who argue that entrepreneurs contribute significantly to value with their initiative, vision, expertise. This is more likely the case with small business; but can be the case with large corporations as well. (eg: Bill Gates)

But the question then becomes one of whether the return on their initiative etc can be out of proportion. And even if investors deserve a fair return, should such investments involve *infinite* returns? That's where I depart from the conventional view; And I also think there is an issue with the *labour share* of the economy contracting further and further. I think the answer is to *compensaate* workers with collective capital share...

It's also relevant here that often investors are not leading with vision, management, innovation. Often the very rich depend on intermediatories to do all the work for them...

Finally I believe in a democratic mixed economy. I think Feher and Heller had a good point when they argued about 'dictatorship over needs'. Planning and centralisation can defininitely go too far, and there is a significant and enduring role for markets. To paraphrase - markets give consumers to opportunity to determine their own needs structures with relative flexibility.

But sometimes the costs of purely private competition/markets etc are too great. (eg: duplication of cost structures with essential infrastructure like in communications - hence NBN should be a natural public monopoly...) And failure to provide for minority interests is a form of 'market failure'. Public enterprise can also spur competition where there would otherwise be collusion. And the public sector can provide progressive cross-subsidy and a return on investment than can be diverted into social programs.