The Poverty Of Class War Rhetoric | newmatilda.com. If there is a single phrase that reveals the poverty of our national conversation in 2013, “class war” must be it. It was once a genuinely-held view of ALP firebrands, such as the Melbourne thunderer Frank Anstey or the New South Wales populist Jack Lang – neither of whom, by the way, would have suffered the description of socialist. In the 1940s, Ben Chifley really did try to nationalise the banks, in a bitter constitutional and political battle that eventually cost his party government. But in the wake of the Whitlam government, big-L Labor has made its peace with capital. The 1980s government of Bob Hawke and Paul Keating was so neo-liberal that a new phrase, “economic rationalism”, entered the vernacular to describe its deregulatory impulses. Nor have the governments of Kevin Rudd and Julia Gillard been noticeably anti-business, except by the yardstick of business itself, which has consistently opposed key ALP policies even when they have been of benefit to the broader economy.
What is the Median Australian Income? My Drum post today, as long time readers of all good blogs would know, owes a bit of debt to Matt Cowgill’s post of a couple years back. In the time since, the ABS has brought out some new figures, so I thought it timely, in light of Joel Fitzgibbon’s remarks about people struggling on $250,000 to update the figures. One of the things about “equivalised” household income is that you can get a picture of what the disposable income needs to be for every size of household to maintain the same standard of living.
So for example the median disposable income for a single person is $37,180 and for a family with 2 adults and 2 kids it is $78,078. Here’s what the median income is for different sized households: The data also lets us have a look at how the different percentiles have grown, going back to 1994. Certainly this does suggest the bottom 10% are being left behind. A good way to look at it is compare the ratio of the 90th percentile to the median and the bottom 10: Apparently everyone lives on struggle street now - The Drum Opinion. Myths of the moocher class in Australia | We are all dead. David Uren’s piece in the Australian today has some pretty eye-catching figures: …nobody starts to pay tax until their earnings exceed $18,200, but the Australian Bureau of Statistics shows that 60 per cent of all households receive more in cash benefits than they pay in tax. A household in the middle 20 per cent of the earnings distribution pays income tax of $143 a week but gets cash social benefits totalling $164.
Subsidised health, education and childcare deliver that average household a further $346 a week. To use these figures in this way is disingenuous and potentially misleading, as they don’t include the indirect taxes that households pay, like GST and excise on fuel and alcohol. Any complete calculation of the net amount a household receives from, or pays to, government would need to take account of these four things: direct (income) taxes, cash payments, indirect taxes, and in-kind benefits.
With that in mind, let’s go through Uren’s piece line by line: False. False. Incomplete.
Wages Breakout Lets Us Down Once Again. It is really starting to get annoying. Today the ABS once again produced data that failed to show any sign of a wages breakout. How long must we go before we turf out these current union hacks and bring back some 1970s style leaders who will deliver the destruction of the economy so long promised us by conservative commentators since around mid-2007? Today the ABS revealed that the Wages Price Index rose by 0.9% in trend terms over the previous quarter, and in seasonally adjusted terms rose only 0.71%. Both the Public and Private Sector WPI rose by 0.9% in trend terms, in seasonally adjusted terms, the Private sector WPI rose 0.8% and the Public Sector by 0.7%.
It’s clearly dire times for us who are trying to find evidence of the Fair Work Act leading to wages spiralling out of control, especially in that clearly, wasteful public sector: Oh look, bugger the quarterly numbers – they clearly must be just exaggerating an anomaly. Surely the annual figures will reveal the spike in wages: Share photos and videos on Twitter. MattCowgill: Who relies on social assis... MattCowgill: And here's another way of... MattCowgill: Here are the incomes of mi... In Bed With The Basket Cases. It's the first Tuesday of the month — interest rate decision time. Many will be blissfully unaware of the fervour with which financial markets and mortgagees greet the monthly announcements from Australia's Reserve Bank.
But for those with an interest in the economy, speculation about movements in official interest rates is something of a contemporary obsession. Today will be no exception. With the stock market falling below 4000 in recent days and global financial markets in a gathering state of panic over the state of the world's economy, local financial markets appear confident of a quarter per cent interest rate cut at the very least. Europe is, of course, the source of the global economic miasma.
The European currency union was negotiated in sunnier times, when it was thought that the benefits of expanded trade and freer movement of goods and labour would more than compensate for any structural issues thrown up by the currency zone. And then there's Spain. MattCowgill: Here's how the real weekly... MattCowgill: @nephstar @bootce here's t... MattCowgill: Here's how the Australian... Swan's Careless Surplus. Has Joe Hockey promised the end of the Australian safety net?
Joe Hockey has called for an “end to the age of entitlement”. He added on Lateline that “we need to compare ourselves with our Asian neighbours where the entitlements programs of the state are far less than they are in Australia”. He says that “the age of unlimited and unfunded entitlement to government services and income support is over”. He compares the 16% of GDP that Australia devotes to social spending with Korea’s figure of “around 10%,” which is actually 7.6% on the latest OECD figures. It’s important to understand exactly what we buy with that 16% of GDP.
When a politician talks vaguely about “middle class welfare” and a culture of entitlement, a lot of voters probably nod sagely and think of their least favourite porky perk for other people, like the baby bonus. Here’s where our public social spending goes: Public social spending as a proportion of GDP in Australia Source: OECD Social Expenditure Database Public social spending as a proportion of GDP in the OECD countries.
Hockeynomics Eats Our Safety Net. Good old Joe Hockey. Tony Abbott might be ruthless and disciplined on the campaign trail, but his Shadow Treasurer seems incapable of such finesse. And so we woke up this morning to newspaper splashes reporting Hockey's views about welfare entitlements, courtesy of a speech he gave to British free-market think-tank the Institute of Economic Affairs. Entitled "The End of the Age of Entitlement", Hockey's speech is a wide-ranging philosophical assault on the welfare state, brought on, he says, "as a result of the recent financial crisis". Hockey's argument is a simple — or rather, simplistic — one.
Big programs of welfare entitlements were constructed by western democracies in the years after World War II, but now we can't pay for them. Therefore they must end, because otherwise we'll all go broke. "However an inadequate level of revenue has forced nations into levels of indebtedness that, in an age of slowing growth and ageing population, are simply unsustainable. " What do we want? Is Free Trade Worth It? Last week in Melbourne saw some rather important international negotiations taking place.
They concerned the Trans-Pacific Partnership, or TPP. It's currently being negotiated between the US, Australia and a number of Asia-Pacific nations including New Zealand, Peru, Chile and Vietnam. Mexico, Canada and Japan have also expressed interest, which would increase the weight of the trade bloc significantly. The government thinks the TPP could account for annual trade totalling US$17 trillion in 2010 terms. That's a lot of money in anyone's perspective. The TPP is part of US President Barack Obama's big-picture attempt to shift American trade and foreign policy priorities toward the Pacific and Asia. As Clyde Prestowitz in The American Prospect observes, "the TPP is anchored in the same orthodox free-trade philosophy that has inspired every US trade negotiation and agreement since the end of World War II.
" And that's why it's proving controversial. Another big issue is drug prices. Size of government: big is not so bad - The Drum Opinion - You can and should take issue with some of the Government's spending, but the reality is Australia is a low-taxing, low-spending nation. Find More Stories Size of government: big is not so bad Ben Eltham In 1999 I visited the tiny island of Dominica in the Caribbean.
It was the height of the so-called "banana wars" , in which the US fought the European Union over access to European markets for cheap bananas sold from the big plantations in south and central America. In the wake of decolonisation in the 1970s, the banana trade in Dominica and the other Windward Islands had been propped up by a special trade quota, under which the EU agreed to set aside 7 per cent of its banana market for poor farmers from the Caribbean. Unable to compete, the Caribbean banana industry has since collapsed. I was reminded of the plight of Caribbean banana farmers when reading Sinclair Davidson's recent article here .
Davidson's argument was that governments are rather poor custodians of public money, and that therefore, the smaller government spending is, the better for all of us. Well, not quite all spending is bad. Email Share x del.icio.us Digg. Gillard Won But Labor Lost. The Kevin and Julia show has wound its way to the latest denouement in an increasingly messy saga. As expected, Gillard has won comfortably, even overwhelmingly.
Many will be shaking their heads and wondering how it got to this, both inside and outside the Labor Party. It's a tale that encompasses much that is wrong with our political system. Principally to blame are of course the protagonists themselves, who apparently can't distinguish personal animus from the national interest. But underlying the corner office psychodrama are some very real structural issues. Teasing them out will help us understand the broader trends of this unseemly imbroglio for our democracy. The issue of character cannot be ignored. Gillard has again shown her toughness, discipline and organisational nous. Serious consideration must be given to the role of the media in this affair.
The ethical constraints of journalists prepared to protect the identity of anonymous sources aids and abets this manipulation. Uncertain times for the economy and your super - The Drum Opinion - After two decades of profoundly positive economic conditions, the tides of global macro-economics may finally be aligning against Australia. Find More Stories Uncertain times for the economy and your super Ben Eltham Lost money on your super last year? If you did, you're not alone. Most Australians did. The median Australian super fund lost 2.6 per cent in 2011, according to research by Chant West. It's a long way from the heady days of mid-2007, when 7,000 seemed well within reach. Superannuation wasn't meant to be like this. It hasn't quite worked out that way. There are plenty of reasons for this, but the simple answer is fear.
That has translated into historically cheap price-earnings ratios for much of the Australian stock exchange. And indeed, there is plenty of substance to current fears. Here in Australia, the domestic economy is patchy, at best. Manufacturing, tourism and education are being hammered by the high Australian dollar, while retailers are suffering from a newfound prudence amongst Australian consumers. Property, the one true love of the Australian investor, also looks to have topped out. Email Share x Digg. Is Bank Bashing Justified? Of Course It Is! Are there any institutions more hated than banks?
Right now, the answer is "no". Financial institutions, and banks in particular, have probably never enjoyed broad popular support. But at the moment they're more on the nose than ever. Not only have the big four raised their variable mortgage rates, despite the Reserve Bank holding the national reference rate steady, but ANZ has also announced it will retrench 1000 workers as part of a cost-cutting drive. Predictably, the response by politicians and many in the community has been furious. Some financial commentators continue to maintain that the rate hikes and job cuts are driven by pressures on bank margins, owing to rising costs of funding but most in the general community see only huge institutions making massive profits.
So are banks merely responding to rising funding costs? It's a little of column A, a little column B. Let's start with the public's grievances. So you can see why ordinary citizens are hostile to bankers. It's Not Class War, It's Good Economics. Remember the controversy over the mining tax — the so-called "resource super-profits tax"? Labor does.
The vicious campaign mounted against the government on the issue caused huge damage to Labor's hitherto healthy standing in the polls, and was the final nail in the coffin of Kevin Rudd's prime ministership. Yesterday, Wayne Swan was reminding us of that brutal battle. "The combination of deep pockets, conservative political support and of course the ranting of the shock jocks more and more brazenly has sought to defend and promote the interests of a very narrow section of the economy," he told the National Press Club. "The way in which I've watched some of these vested interests deploy their political power is in my view profoundly anti-democratic," Swan told a reporter in questions. "And what I don't want to see is a change in influence lead to a change in income distribution and a lessening of mobility. " Swan has been sharpening his rhetoric recently. The cost of living – if the facts aren’t sensational enough, just add a twist. Imagine if Australian prices and wages both went up by five per cent in a year.
The cost of living for Australians would be unchanged. Now imagine that the Australian dollar appreciated by 10 per cent in the same year. Although Australian goods and services would be no more expensive for Australians, they would suddenly cost more for Americans and Brits who earned US dollars and pounds. Australia would have become a more expensive place for Americans to live, if they’re being paid in US dollars, but the cost of living for Australians would have stayed the same (setting aside the fact that imports actually would’ve become cheaper for Australians). That seems to me like a fairly easy concept to understand. Apparently it’s not. The EIU report is intended to help “calculate cost-of-living allowances and build compensation packages for expatriates and business travellers”. For example, The Australian reported: Why We Love The Car Industry.
We Australians love our cars. Australians also celebrate the culture of cars. We hold national festivals of automotive culture at events like Bathurst's Mount Panorama and Canberra's Summernats. The pivotal cultural importance of cars, particularly to Australian baby boomers, was recently documented in the ABC's fine social history, Wide Open Road. For many older Australians, cars really were the freedom machines of suburban lore: the vehicles that enabled their escape from parental supervision, and the scene of their early sex lives. The suburban aspect of the car's significance shouldn't be glossed over either. All of this helps to explain why car making is such a politically loaded issue in Australia.
But dying it is. The hyper-competitive global auto industry is ever the graveyard for governments and investors. Australia is no different: the auto industry here has long been the recipient of considerable sums of taxpayers' cash. That government largesse shows no signs of abating. What is the typical Australian’s income?
Tax paper! The Myth Of The Wage Breakout. Inequality and the top 1% in Australia. The Fair Work Act and productivity. Long-term unemployment. Labor lost the war, but won the peace - The Drum Opinion. The Carbon Tax We Had To Have. The Black Hole In Labor's Carbon Tax. A close look at Abbott's Direct Action plan - The Drum Opinion.