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Carbon Tax package finally unveiled

By Tristan Ewins - posted Thursday, 14 July 2011


Finally there are the truly vulnerable, those who are unable to work as a consequence of illness or disability, or those who have worked all their lives, and deserve a peaceful and fulfilling retirement. And to this we could add the unemployed, those who overwhelmingly are searching for work and are subject to harsh active labour market provisions. They need our assistance to 'keep their heads above water' and avoid social disengagement and isolation during the interim.

A progressive taxation system is therefore well justified in moderating discrepancies of income, which are unjust and ensuring universal access to social necessities.

The tax system more broadly is justified in providing best-value 'collective consumption' of essential social services from which most Australians benefit. Whether we speak of health, education, aged care, social security, social housing or other infrastructure, often these are provided more fairly and more efficiently via the 'social wage' than would be the case if 'left to the market.'

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Such principles have historically been acceptable to a variety of ideological perspectives – whether we speak of liberalism, or of social democracy, or indeed of socialism. It is only at the extremes, propagated by the likes of Hayek and Rand, that the principles of progressive taxation, the welfare state and the social wage have been rejected sweepingly.

But such is the ideology which 'has a grip' on some parts of the Liberal Party of Australia today. It is an ideology that threatens the 'Americanisation' of Australian society, with greater extremes of poverty and a lack of basic social solidarity. And it is an ideology that needs to be criticised explicitly by Labor.

All this said, there are dangers for Labor. In regions such as the LaTrobe Valley in Victoria, there are well-grounded fears that the shift to renewable energy will ultimately cost jobs in coal-fired energy, and as a consequence will destroy many 'flow on' jobs that use that industry as their economic base. For example, Hazelwood power station is very likely to find its operations scaled back.

Greg Combet has announced that the LaTrobe Valley alone will receive"a $200 million package over seven years for ''strongly affected regions, with help in training and diversifying." But in the same article Electrical Trades Union state secretary Dean Mighell is quoted as arguing more needs to be done to create local jobs.

This begs the question of whether government ought 'get its hands dirty' with more direct industry policies – reforging the economic base in the LaTrobe valley and other affected regions – which would flow on in maintaining thousands of other peripheral jobs.

And in another concern, the Financial Review has reported an impending $4 billion 'budget toll' over the next four years in order to pay for industry and household compensation. Labor is flagging its intent to make 'savings' in order to reach its projected surplus for 2013, but had already been struggling to find savings for 2011-12 without impacting on crucial programs and initiatives.

Therefore, between now and the next Federal Budget, progressive forces across the factional divide in Labor, need to build momentum behind an alternative response for the government to this shortfall. Importantly, Labor has the choice of revising its party platform in December to open the way for a moderately increased tax as a proportion of GDP.

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Such a decision could be followed with modest tax reform to the extent necessary to avoid austerity, or to the extent necessary to fund a bold package of initiatives addressing what is seen in this country as a cost of living crisis.

This would also attract the charge of 'redistribution.' Labor could well win this debate by improving the circumstances of average Australian families.

A 'National Disability Insurance Scheme' is another potential choice for Labor in seizing the initiative and delivering on a reform agenda. However, this would also need to be backed by tax reform and increased revenue, another reform Abbott would find very difficult to undo.

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About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.
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