The Australian political system and the scourge of Neoliberalism

There are many myths on which the current Neoliberal system of analysis relies. One such is that our system of government is merit driven. One only has to look at Abbott and Hockey to see that such a proposition is ridiculous. Conniving, two-timing, ruthless, duplicity, lying, cheating, crawling, denying and stubborn pig-headedness are better predictors of how far a politician will get on the greasy pole. Different but equally depressing characteristics determine how far public servants will go and it never hurts to have the capacity to turn a blind eye to their superior's corruption or maleficence. In the commercial world much the same applies.

A very important Neoliberal myth is the suggestion that rich people earned their wealth or in the case of those who patiently had not earned their wealth that they deserved it for other reasons such as inheritance, genius or whatever. Associated with this myth there are a number of automatic corollaries, which we are expected to recognise. The first is that rich people are smart; second without any training in the area, they know how to run the welfare state; and third, they are fully cognisant of what it is that the poor need. How else would Twiggy Forrest have landed the job of designing the perfect system for dispensing demeaning welfare?

Neoliberals mouth off about level playing fields, stopping subsidies to malingerers, ending single mothers being encouraged to have more children and forcing unemployed shirkers back to work. Subsidies for industries somehow escape attention as do tax loopholes, tax havens, and other tax breaks.

We have witnessed what Scott Morrison did to asylum seeker attempting to seek refuge in Australia and now, that he has metamorphosed into the treasurer, we are about to see what he is prepared to do to the citizenry, particularly those who are not rich. He is already claiming that we don't have a revenue problem and that our Budget difficulties are due to excessive spending. He and Turnbull have set the hares running on increasing the rate and the scope of the GST. They, like Howard before them, are promising to compensate low-income earners for the losses they'll experience with increases in the GST.

The problem is that Australian governments, using existing income support mechanisms, cannot compensate everyone at a rate commensurate with their potential losses because many poor people are refused income support on one pretext or another. Many are refused social services because the people with whom they reside are considered to be able to adequately support their partners –they may or may not provide such support.

John Howard promised compensation for low-income earners and initially provided it to people on social security benefits. But within a few years the value of the compensation was significantly eroded and Howard also set out to drastically reduce the number of people who were beneficiaries of unemployment benefits, lone parent income support and disability support pensions.

The only way that we could get close to providing appropriate compensation would be if the government were to introduce a universal Basic Income paid at a level above the Henderson Poverty Line. This Basic Income could be raised in line with the cost of the extra GST. Even then, if the GST was extended to medical expenses, there would need to safeguards in place to ensure the chronically ill weren't grossly disadvantaged.

1947 and now

Neither Hayek nor Friedman were opposed to providing all in necessitous circumstances with a form of guaranteed minimum income. Today's crop of Neoliberals have lost sight of this humanitarian base – they just want to cut the cost to the State of income support, health, housing and educational expenditures.

Even those Neoliberals who are not driven by a hatred of low-income earners and social security recipients are committed welfare state cost cutters. There is a reason for their enthusiasm for slashing programs designed to assist poor people. They have an overwhelming desire to protect the perquisites to the well off. They happily tolerate family trust concessional tax arrangements, the preferential treatment of rich people's superannuation contributions compared with less-affluent workers, negative gearing, business subsidies, tax minimisation and avoidance schemes because they either are or might subsequently engage in some or all these connivances.

Expanding the base to include health, fresh food and education and / or increasing the rate of a GST to 15% won't be the end of civilisation as we know it. Nor will placing increased impositions on the union movement. Certainly such changes will leave low-income earners and social security recipients more vulnerable. It will make this society less equal, it will drive some to suicide, lead to increased depression, drug taking and crime but Neoliberals would consider such externalities small beer so long as the perquisites of the rich and particularly the top 1% are safeguarded.