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John Lang-like Shorten is betraying the workers

By Gary Johns - posted Thursday, 29 December 2016


Thank goodness for the food workers up before dawn to replenish the shelves for Christmas. Thank goodness for the transport workers (Brisbane train drivers excepted) who toiled late into the day and night to take people to and from their celebrations. Thank goodness for the emergency workers ready when celebrations went wrong. Thank good­ness for the IT people who kept our electronic highways ticking. And millions more.

The time has come to praise the working person, especially business owners, the self-employed, the contract workers, those whose pay is uncertain.

The distinction in Australia between those on permanent incomes and all others is a vital one. Most workers have much less certainty about their source of income, level of income, or long­evity of contract than do those in the public sector or on benefits, especially age pensions. This is not to decry those people and their benefits - far from it.

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Both sides of politics have attempted to make all incomes more certain through transfer payments, subsidies and benefits. But they have overshot the mark. Too much money has been spread around in this venture: debts are piling up.

The Howard government poured money into family benefits, the Rudd government pumped Australia's public debt to 10 per cent of gross domestic product, and the Coalition has failed to bring it under control; it now stands at 37 per cent of GDP. Australia's credit rating affects borrowing costs and government bond yields, and the private banking sector. Workers, on uncertain incomes, will pay for it.

There might be some hyperbole on the part of Treasurer Scott Morrison in claiming that failure by the Senate to pass the so-called zombie bills will cause Australia to lose its triple-A rating. But in the absence of compensating measures, it is highly likely.

Australia last lost its AAA credit rating in 1986, some months after Paul Keating reminded us we were headed for banana republic status. It was restored in 2003, following years of surplus budgets and sumptuous mining taxes.

The zombie measures - cuts in access to family tax benefits, outlawing double-dipping maternity leave schemes, freezing Medicare benefits and changing the safety net for the Pharmaceutical Benefits Scheme - are modest indeed, a mere down payment ahead of greater measures.

Down the track the big items must come into play - tougher assets tests on the age pension, and lifting the age for access to the age pension and superannuation retirement benefits. Workers will have to work on. This is why they need praise now. There is no source of wealth other than the efforts of these people.

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According to the Grattan Institute, about half of budget debt is a result of increases over the past decade in net transfers to households aged over 65.

Spending per older household on health and the age pension has grown faster than the economy, and younger households will "pay an additional $10,000 in tax over their lives to pay back the principal and interest".

This is Malcolm Turnbull's challenge. To press into the electorate's mind that workers carry the weight of those on pensions and benefits, and that Labor stands in the way of budget repair.

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This article was first published in The Australian.



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About the Author

Gary Johns is a fellow of the Australian Institute for Progress and an adjunct professor at QUT.

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