Damn, damn good piece and pretty pushes for what I'd like to see in our next government, though there are a few issues that need to be resolved.

Take the french system of governance - they're mired in economic stagnation with high unemployment - this isn't the solution... we need a middle ground, though to be sure, Australia has drifted very far to the right and repositioning ourselves closer to the centre should be a priority.

economic power and political power are not the same, but if you have more of one, you will soon have more of the other. so i suggest decentralization of political power from parliament to the electorate.

this decentralization is much easier to achieve than economic equality. it just needs a democratic constitution- switzerland would provide a good model.

with the power of initiative, direct election,and public access to government activities, the electorate could impel or direct action to achieve a more equitable distribution of wealth. this is why the rich fear democracy as much as communism. but they should not. the swiss haven't legislated away wealth, and nor would ozzies.

it's easy to get to democracy from here- a (would-be) citizen movement like 'getup' can write a skeleton constitution in a wiki process, and supporters simply add their name to a list of people who agree only to vote for parties or candidates who will put put the constitution to referendum. no riots, no gunfire.

Frank,

What would you see to be a fair Gini Co-Efficient for Australia given our people and economy? Or would you see a better measure? Is wealth more than income? For instance, quality of life? Does self-centredness play its role, whether a billionaire avoiding tax or someone "playing" the social services system, which is meant to help the genuinely needy.

Based on assets over population Australia is the wealthiest country in the World (Kotler, Jatusripitak and Maesincee). Do we responsibilities to help other countries, such as, small pacific nations? Where does being a benefactor end and being colonalist start

"...economic power and political power are not the same, but if you have more of one, you will soon have more of the other" - DEMOS

Historians of civilizations (Quigley) suggest that when economic and political powers meld, there exists a motive to maintain the status quo, which can be arresting.

Civilization, country and society are different constructs. The West is a civilization. Australia a country. Singapore has three societies, Chinese [dominant], Indian and Malay].

The West, perhaps declining, exerts a global influence. Chinese societies representative of the Chinese Shang [merchant caste], have quashed other peoples in S.E.A., and, more recently the South Pacific, e.g. Tonga. The Shang are only nominally Confucian and societal outsiders, in China, historically. Economic power is being used to buy political influence Herein, the nineteenth century term, Political Economy might have relevance?

There is no perfect world or perfect form of government. Everything is a compromise. While I agree with the writer that we should have a more egelatarian society, we also live in a global village and unless we give incentive and remuneration to those that bring wealth to Australia, they will just go to the USA or whatever country offers them more. We are governed by atavistic genes that tend to make most people want to climb to the top, and "the top" in this day and age is mostly material wealth compared to others. It always amuses me to see nightly on TV the public calling on the government to provide more money for everything from education, health, defence, pensioners, roads, R & D, social security to tax reduction. You name it, everything is mentioned eventually depending on personal priority. What seems to be forgotten is the fact that all the money is "our money" and people always feel that someone else should provide more than them. The government already "gives away" billions of dollars to compensate over half the population for anything from the baby bonus to first home buyers. Obviously there is a compromise somewhere between the USSR some years ago and the United States, but I think it is significant that even in China, a professed Communist State, there are many millionaires and several billionaires who are tolerated because of the wealth they have introduced. Gradually there is a culture appearing that seems to support more philanthropy in this country and I see that as a sign of increased empathy. Unfortunately we shall never have equality for as long as we want a strong economy because everyone works for himself and what he can obtain, not for others. As I have mentioned many times in these columns, our problem comes mainly from too many people in the world and the unsustainability of land available for building to the production of food whose costs will keep rising, through to insufficient water or the exploitation of the sea.

Yes a very astute article. Social outcomes must indeed be embraced far more and the old Howard economic growth trample-at-all-costs mantra must be silenced.

The furphy that Howard has used for so long that you can't have economic growth AND top social outcomes has been frankly a short-sighted national disgrace. I feel many are now cautiously optimistic for the first time that politics may actually be about to return a social dividend with team Ruddard.

Education, health, public transport, employment e.g. all need major inputs if Australia is too stay competitive - and on the rails.

the article talks a lot about perceptions of growing inequality, but not much about the data.

As I understand it, the data are quite mixed. There has been growth in asset inequality over the last decade or so, but the case of income inequality is a lot less clear, with ABS data suggesting it's fairly stable or even declining slightly:
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6523.02003-04?OpenDocument

The authors suggest that "neoliberal think tanks have relentlessly disseminated propaganda that is conducive to inequality and hostile to welfare" Maybe so, but leftist think tanks have relentlessly disseminated propaganda suggesting that income inequality has widened dramatically and rapidly thanks to neoliberal policies, whereas the truth may be more complex and nuanced.

Politics are important, but the starting point of good policy on income inequality must include looking at what the actual data say and having a firm handle on the causes of inequality. I don't see much of either in this article.

The article by Sally Babbington, Sue King and Christine Ratnasingham seems much better focussed on describing the reality of poverty then finding means to address it

Crisis, what crisis ?

Lowest unemployment rate in a generation, high and growing wages , highest percentage of University graduates ever, strong economic growth. The neoliberal tweaking of the past 20 years has been such a tragedy for all of us.

Why should we pay more taxes ? Why is a government smarter at spending money than the $14 an hour cleaner who earned it ? Why should we spend more on welfare when we could spend it on getting them off welfare ?

Old Left spend spend spend solutions belong in a world which does not exist anymore, the 1970s brand of Keynesian economics won't work in a deregulated economy with a floating currency.

I would also have to question the need ? Just because top executives are earning more does not mean everyone else is poorer.

My apologies but I am feeling very right wing after the ALP conference.

In your zeal to tax the hide off everyone making more than some hypothetical maximum amount remember that those making the very high salarys are frequently the ones bringing employment to our fair shores.

In fact an argument could be made to significantly reduce the maximum tax rates to further increase employment in Aus. As an example why do you think PBL (the Packer dynasty) was recently aggressively bidding to set up a casino in Macau. I would assume that it wasn't because he had a particular fondness for the Chinese but rather for their 15% tax levy.

How many more jobs and career advancement opportunities could we have in Aus if this casino (or any other major revenue generating enterprise) was set up within our shores.

Or have I missed the point entirely - maybe from the perspective of envy politics it is better to tax the bejesus out of our successful entrepreneurs so that we can then slow the economy back down to pre '96 levels and all major investments (and high paying jobs) can then go offshore.

Bruce, to be fair those that live below our set poverty line (I heard it suggested on the news this morning that it is the equivalent to $650/week take-home, or $42,000 gross per year per family), should not pay any tax. Particularly those in receipt of welfare - its beyond idiotic that we pay welfare, then tax it, pay administration costs, then pay it out to someone else. Dumb dumb dumb! This means of course that those on higher income have to pay a bit more tax to compensate. Yes, I get your arguments about global businesses etc (I am after all, normally right-wing), but we need to find a balance between attracting business and jobs, and building a fair society. I champion the cutting of taxes for those that earn less than say $35,000, even though it will do me out of a job myself (a tax accountant).

As to your argument about PBL's casino, might I kindly suggest that while tax rates play a role in business planning, the income-generating capacity of the project is far more important. Any accountant that advises their clients purely on the tax consequences are opening themselves to one hell of a law suit.

Country Gail,

The people who are really hit hard with taxes are the Middle Folks, $80K-$200K pa. Above those amounts, you have the ability to tax dodge and form trusts excetera. Primary producers and small businesses, receive subsidies and have disguised income. Cost of living is another factor. Someone living in Amidale does have to pay for a weekly train ticket from Glenn Brook to Town Hall, Sydney: If fair slice of a youn person's pay. Also, inheriting a $300,000 farm or a cake shop, means one can start-off, where others finish.

Bruce,

If memory services the Packers don't pay any tax, yet complain about inadequate infrastructure. Wasn't it Kerry who said words to the effect that only fools don't minimise tax. The rub is, not everyone has the capacity to so. It is caste system.

If one wants to be productive consider the Rural sector consuming only 5% of GDP and producing of 5% of the same. We can't keep supporting the Farmers for ever. They need to be retrained not proped-up indefinitely. Luxury and death taxes above $5 million, is a consideration, only the avoiders will move their money offshore.

No more Family Trusts? The politicians have these themselves. So, these Trusts will stay.

There are too tiers to the tax system too.

Middle managers, senior technicians and researchers, produce wealth. The Packers just hire them.

Frank S.,

Please note, above request/comment on Oz Gini Co-efficient. What would you aim for?

It seems a core of all is “economic inequalities facilitate productivity and economic growth”.

Slavery is nothing new for a British-style civilization, it is not-reinvented by resent governing minders, it is just being imposted at a modernised scale.

Surely, no economic change in a steady decay of the social Dark Ages

I can see that we are going to end up going off topic here Oliver, but cant resist responding anyway.....

1. Small businesses and farmers receive subsidies. Generally, no. Farmers can access some grants in relation to landcare projects, recognising that it is in the communities interests, not just the farmers, to improve and protect land. Farmers also get a fuel rebate, which is simply a refund of the roaduse tax component of the fuel that they use off road (eg on farm). Not really fair to tax them for something that they dont use, eh. Income support to farmers is simply the Newstart Allowance (dole).

2. Only those that are above the middle class can use trusts. Not at all. Anyone can form a trust - it can be particularly useful if you have a large investment portfolio. However, a person earning a salary of $500,000 cannot run it through a trust. An employee is an employee, and the tax office looks through this structure at what is really going on and levys tax accordingly. Trusts are good and fair vehicles, and only those that dont understand them dont like them. Eg Centrelink - a lot of farmers that would otherwise have qualified for income support during the drought have been unable to receive it because farm income distributed from a trust is classed as off-farm income by Centrelink (and so those that are receiving it are classed as not being dependant on farm income).

Country Gal,

Thanks for your post...

INCOMES AND FARMERS

Regret, I misread your post to say that those on low incomes (under $42K) SHOULD BE taxed, as that level was adequate, and, herein, saw inequalities regarding rural owners and poorer PAYEs: Admit that I have have penchant for being critical of farmers complaining about social security to say single mothers, while lobbying for handouts for themselves. Many, on one hand, are far right wing, except when it comes to agrian socialism. The Japanese rice farmers and the US lamb farmers are the same. Prefer one is a socialist or a capitalist than a hypocrite farmer.

As I mentioned, by me, between us, on another thread in Scandinavia it is not uncommon to cross-train farmers in other industries, so they remain product during economic downturns.

Historically, from the Enclosure Acts through the Great Depression until today, farmers have been a provincial lot,caring little for labour [organic capital]. Similarly, I would posit coutry folk care less about the city, than the other way around.

Both sides of politics maintain farmers are "a special case", more equal than others.

TRUST ACCOUNTS AND THE RICH

The comment about Trust Accounts was borrowed in part from John Howard, who was saying basically that if we don't allow the Rich to get away with here, they will do so somewhere else. A PAYE has a lesser opportunity to minimise tax.

If are tax account, I wonder if you have clients who live "in town" and bee hive or a few head on acres to minimise tax?

OTHER

Equalities would be achieved with a simplified tax system and more tier.

[Earlier statistic should read produce 3.5% of GDP and consume 5% of GDP]

Kirrily or Frank,

What do either of you feel would be a fair Gini Co-efficient for Australia. 20?

Playing money-flow games resolves nothing but an illusion of “healthy economics” – gambling surplus is a perfect example of factually increasing the debt while none produced but REDISTRIBUTED only on a basis of foreign borrowing.

That is Australian egalitarianism - stealing money silently.

MichaelK,

Playing money-flow games resolves nothing but an illusion of “healthy economics” – gambling surplus is a perfect example of factually increasing the debt while none produced but REDISTRIBUTED only on a basis of foreign borrowing. - MK

- Please elaborate a little more.

Oliver,I dont have any clients that live in town and run a few head of stock to get tax breaks,although I know it does happen. The worst offenders are city-dwellers,who think they are farmers with 5 sheep and an alpaca. A colleague of mine recently moved to Sydney and couldnt believe that none of her new firms "farming" clients had more than the stated 5 sheep. It does happen,and I think it is wrong. Most tax breaks given to farmers are in the form of income averaging,which recognises that they might make $1mill one year and nothing the next 4 years. Professional entertainers and artists get the same averaging for the same reason - recognition that there is little consistency of earning generation from year to year.

I do get your point about right-wing farmers not liking others getting social security. Single mothers in particular. I think the problem is worse in other countries more so than Australia,but there is definitely an element here. I think it stems from very conservative family values more than anything - which is why single mothers get singled out.

With regards to your point about Scanindavian countries retraining their farmers,I dont think that this would solve our problems. Firstly, there tend to be not many jobs in close proximity to farming regions in Australia (if farmers arent spending in town, then the other businesses are struggling too). Secondly,in times of drought farmers tend to be busy with their farm anyway. They need to cart water and feed stock,and they still plant the crop if there is rain at sowing time (the problem has been the last several years that there has been no followup rain so crops have subsequently dried). They still have machinery to service,dams can be desilted when dry,fencing can be caught up on (often falls behind when times are good as busy elsewhere). Shearing still happens for what stock are left etc etc. Very few farms actually shut down. But if you can come up with specific ideas,then I am sure that the farming community would be prepared to listen.

Country Gal,

Good, interesting posts. I had forgotten about the Pitt Street Farmers. My comment about Scandinavian countries was not from an academic source, but a tour guide. I think farmers in downtimes helped out the mobile phone industry. Given the distances in Oz, I guess something virtual. I am aware of a Shire President who aimed to set some local non-farm industry, but the farmers remained focosed on the Land. Maybe, some form of wealth management, which allows preferential treatment of non-farm investment by resident farmers, in the same way companies are encouraged to invest in R&D? Migrational shift and diversification?

Both my parents, wife and in-laws are from the country. It was visiting my in-laws, where I saw the mental disconnect in attitudes towards wider community welfare and farm welfare.

Do you feel some communities have already reached there Nauru Moment? That is, no longer sustainable.

Oliver I see your point about the Nauru moment. I think there are many communities that are marginally viable, if at all. The question could be put that propping these communities up may help to alleviate some of the crowding problems that either are or will be faced by our large cities and coastal communities. Its governments responsibility to think decades ahead of our current situation to promote investment in infrastructure in areas that might not currently be profitable, but would be for the greater good of the country eventually. Not sure that any government (or potential govt) that we have at the moment is anywhere near far thinking enough, partiularly in this regard. Its all the more important if we are targeting population growth. Immigration can even be used as a tool in this respect - yes you can move to Australia, but you cant live in the city for X number of years.

Most farmers (and those living in the country) would happily pay more tax if they thought it would come back to them in the form of various services. Instead they see hospitals closed, rail lines closed, roads disintegrating, school struggling to keep teachers.... most feel that there is a leakage from regional areas to the cities, and I've seen a number of other posts on this forum and various statistics that suggest similar (I'll have to go and try to find some now!).

I agree with you in regards to preferential treatment of off-farm investments. Problem is that current support policies discourage this by putting caps on levels of off-farm assets that can be owned if assistance is to be sought. Whilst I understand why this is the case, it is definately a disincentive.

Oliver,

Straight to the point. Money itself is a paper and money represents amounts of energy initiating the projects vital for society. If tax increases from money-turnover -round the gambling machines and GST,- it represents potentially increasing inflation only, because volumes of funds are not sustained with factual volumes of goods being produced and available for further potential consumption.

Country Gal and Michael K.,

Thanks. Busy. Will come back. In the interim:

CG: There is a link between shutting down train lines and disintergrating road. I forget the exact numbers but about 10-15 years ago in the Open Road there was article which said that a truck weighing say five times as much as a car 10,000 times the damage. As I say, I don't recall the exact numbers but this was the ordor of magnitude.

MK: Understand.

Economic's is the point most governments miss because;

"Extreme inequalities in income and wealth may actually undermine economic efficiency because they create more conflict and require more resources to be allocated to controlling its effects."

The wolf crying 'Poor Bugger' me on these issues do not work. Problems need to be faced if they are to be solved.

Look at the Health and Water crisis.

Look at the skills shortage... and the A Moral ways the fast guns are suggesting we fix this?

Where is the 'TAFE Strategic Planning Services' for the people in Cooktown and Cape York, where is the infrastructure required to plant innovation or equitable change? A case for the future in (wait for it) a persons work choices?

Where is there local advocacy for these things?

Do we all just leave our homes - crowd-out our cities, as they do in the third world?.

Is this the new Australian fabric we all worked so hard to avoid.

Where's the egalitarian ideal or policy practice possible for rural isolated areas which are indeed crucial for cohesiveness, especially when we don't even have a mediation or legal aid office - officer or service except if we ring Cairns.... STD, or go the 380 or so road kms to get there... cricky eh?

The problem is that governments implicitly formulate policy priorities on assumptions that economic inequalities facilitate productivity and economic growth, because they do not understand economic's as a science - and that it is different to ordinary equations of finance .

Things that happen in small towns are far more personal than cities and for this reason the problems we find in small towns are exactly about what has to happen, if we mean to have these so called "Egalitarian policies" taken seriously.

This is a real reason why Aboriginal people in Australia and nations oversea's make small progress on issues of 'self-determination'.

We need to see economic's itself as something that delivers a egalitarian framework.

This is at the heart of why we must REFORM or face the consequences.

Really Good Essay TA!

http://www.miacat.com/
.

Mia, mia, MIACAT: water crisis, skills shoratage etc etc etc -all this is a traditional English way of keeping colonies under London crown's rule.

Debility, lack of elementary modern education and playing computers rather than creative thinking that is what only imposed wherever round a globe a royal profile minted on even the smallest coin.

Oh, mere discrimination on biological basis where particular English accent is the most, subtle racism and modern apartheid are being omitted above.

Oh MichealK, to quote something else that you have once said, and something just as deserving for it's innovative courage and might;

"The Commonwealth of Australia and majority of citizens will benefit from a republic that will open opportunities for those who can do jobs creatively rather than those who are privileged to be paid for an inherited sinecures as it occurs recently."

In reference to your post above; I say that "subtle racism" is not only about ethnic character, background, or affiliation but "creative ideas and ways of thinking".

For this reason I say "subtle racism" is a cultural discrimination moblised. Subtle, because it appears to lack colour, forms broadly as a structural violence - from top to bottom. Often invisible and the most distructive of all.

.

Oliver, " Cost of living is another factor. Someone living in Amidale does have to pay for a weekly train ticket from Glenn Brook to Town Hall, Sydney" - good point.

A couple of things that might help make the tax/income thing a bit fairer
- Make the costs of earning you living tax deductable. Public transport tickets for travel to and from work are a legitimate expense. Likewise child care for time spent at work and commuting for sole parents and couples where both parents work. The combo for me of train fair and out of hours care is around $150pw (about $200pw during school holidays if I don't take leave).
- Tie tax back to hourly income rates rather than gross income. Make the tax burdon relate to a certain number of hours of income. For those with plenty of time on their hands but not much cash let them do their share through approved community service work rather than cash.

Both ideas have some issues but I think those could be worked through and make the system fairer.

R0bert

MIACAT, at start, such a thoroughbred fighter for "clean English" had supposed taking a stance at your broken grammar skills as “Micheal” was to testify.

However, I am really surprised that at least one of participants of this forum neither ostracizes me but even pays attention to my modest posts on these pages. I regret to inform, that you had surely my thoughts SCREENED while concluding real applications from modern national-liberal racism of “on-the-middle-of the-road fascists” ruling.

Thank you for you expressing a concern vital for this country and all her residents in plain straight English.