This is a C&P. Work beckons
Abbott, not Gillard, is the true 'class warrior'
http://www.canberratimes.com.au/opinion/politics/abbott-not-gillard-is-the-true-class-warrior-201304...
Is Prime Minister Julia Gillard engaging in ''class warfare'' in a desperate bid to save her political skin? A recent Galaxy poll found most middle-income earners think she is. So, that settles it, right? Well, not really.
As with most things in politics, the reality is more complicated.
''Class warfare'' used to refer to the conflict in society between the competing interests and desires of people of different socio-economic class. In recent times, however, it has become a knee-jerk response to any Gillard government policy that affects one group in society differently to another.
Tighten superannuation tax breaks to make the system more sustainable - class warfare. Fix Australia's broken and unfair model of school funding - class warfare. Move the mining taxation system from royalties to profits - class warfare. Tighten enforcement of 457 visa requirements so the scheme works as intended - class warfare
As Age columnist Tim Soutphommasane presciently observed in these pages, ''class warfare'' has become the catchcry of a new conservative political correctness.
The truth of this assessment is made clear by an analysis of the competing policy platforms of Labor and Tony Abbott's Coalition. What it shows is that both parties have policies that result in a redistribution of resources from one group in society to another.
This is not surprising. With only finite revenue, a decision to give to one individual or group means, by definition, that another will miss out.
What is surprising is the extent to which Coalition policies will result in a significant redistribution of wealth upwards rather than downwards. Consider the following Coalition policies:
■ Lower the tax-free threshold from $18,200 to $6000. This will drag more than one million low-income earners back into the tax system. It will also increase the taxes for 6 million Australians earning less than $80,000.
■ Abolish the low-income superannuation contribution. This will reimpose a 15 per cent tax on superannuation contributions for people earning less than $37,000.
■ Abolish the proposed 15 per cent tax on income from superannuation above $100,000 a year. The combined effect of these two superannuation changes is that 16,000 high-income earners with superannuation savings in excess of $2 million will get a tax cut while 3.6 million workers earning less than $37,000 will pay more than $4 billion extra in tax on their super over the next four years.
■ Abolish the means test on the private health insurance rebate. This will deliver a $2.4 billion tax cut over three years for individuals earning more than $84,001 a year, or couples earning more than $168,001. People on lower incomes will receive no benefit.
■ Introduce a paid parental leave scheme that replaces a mother's salary up to $150,000. To put it crudely, this means a low-income mum gets about $600 per week while a high-income mum gets close to $3000.
■ Abolish the means-tested Schoolkids Bonus that benefits 1.3 million families by providing up to $410 for each primary school child and up to $820 for each high school child.
These policies will result in low- and middle-income earners paying billions of dollars more in tax while those on higher incomes receive billions in tax cuts and new benefits. Rather than take from the rich and give to the poor, the Coalition policies are a case of take from the poor and give to the rich. And this remains the case even taking into account the flow-on effects of the abolition of the carbon price and the funding of the Coalition's paid maternity leave through a tax on big companies.
So who is waging the real class war? And why is it that Coalition MPs are the ones who most frequently level the accusation of ''class warfare''?
One answer lies in Australia's tendency to mimic political debates in the United States and Britain.
In the US, Republicans rallied against Democrat Barack Obama in the 2012 presidential race with the claim he was waging ''class warfare'' with his deficit-reduction plan. The plan included tax increases for high-income earners and the introduction of the Buffett Rule - named for billionaire investor Warren Buffett - to compel those making $1 million or more a year to pay the same overall rate as other taxpayers.
The President defended the plan by arguing: ''This is not class warfare - it's math … The money has to come from some place. If we're not willing to ask those who've done extraordinarily well to help … the math says everybody else has to do a whole lot more.''
That is the rub in Australia as well. With the government facing a very tough budget environment it is perfectly entitled to give consideration to things such as ''fairness'' or ''capacity to pay'' in making difficult decisions. It is because of these considerations we have a progressive income tax scale and a welfare system based on need not entitlement.
If the values behind these policies meet the modern definition of ''class warfare'' then it seems the voters are all for it. The Galaxy poll also revealed that voters supported cutting back on middle-class welfare if it was to pay for school funding reform or the national disability insurance scheme.
It is also the case that Obama's so-called ''class war'' worked. He won the election and it is looking more likely that he will get a deal on the US budget. Did the President have an eye on the politics in framing his budget plan? Of course. Do Australian politicians do the same thing? Absolutely.
All parties consider the impact of their policies on different groups in the community. Their objective is to stay true to their values while building a coalition of voters across society that will win them the next election.
It is simply wrong to claim only one side in Australian politics is engaging in ''class warfare'' when both major parties have policies that will shift resources between different income groups.
What we desperately need before the September 14 federal election is a debate that moves beyond the rhetoric and examines the real impact on people's lives of the parties' competing policy agendas.
Nicholas Reece is a public policy fellow at Melbourne University and a former senior adviser to Prime Minister Julia Gillard and premiers Steve Bracks and John Brumby.
