Envy: the deadly sin of the left

Vilfredo Pareto (born in 1848) was an Italian economist and sociologist, who has been widely acclaimed. While his theories are still taught in universities, they are widely ignored by the current day Left. Pareto's most profound observation was that an economic change is an improvement and desirable, if it makes at least one person better off without making anyone worse off.

Contrast this gracious and logical attitude to individual economic success to the begrudgery and envy directed today at economically successful individuals. Such hostility is common amongst our leftist politicians. Instead of being applauded for their success, anyone with money should watch out because the Left will want to hit them with more and still more taxes.

You won't find a clearer example of envy that that professed by the Australian Greens.

"In a wealthy country like ours, everyone should be able to afford the basics: a home, food, and world-class health and education. Yet billionaires are making out like bandits – while everyone else is being squeezed. They're making on average $67,000 per hour (over 1,300 times the average hourly wage in Australia). It shouldn't be controversial: Gina Rinehart should not have $40.6 billion in her pocket while millions in this country are resorting to sleeping in tents and cars…..The Greens have a plan to make Australia's 150 billionaires pay an annual 10% tax on their net wealth".

Apart from fact that Australia does not have enough billionaires to fund the grand spending plans advocated by the Greens, and that appropriating the assets of (smart) high wealth individuals is easier said than done, such a move would be enormously destructive economically. Despite this, the Left rarely misses an opportunity to tax those seen as rich, though they tend to look after themselves and favoured groups (politicians, public servants, asylum seekers, Indigenous, and those on welfare).

The reality is that the Hancock dynasty (Lang and Gina) have contributed immensely to Australia and its economy, as did Lang's business partner, Peter Wright. What would be the tax revenue of the Commonwealth be without the contribution of the company taxes of our iron ore industry? Think of the number of high paying jobs in the industry, and the importance of iron ore royalties ($9.9 billion in 2024) to state revenue in WA.

The company Roy Hill Holdings alone paid $839 million in corporate tax, $551 million in state royalties and native title payments, $48 million in payroll and land tax, $1.8 billion to West Australian suppliers, $1 billion to other Australian suppliers, and $886 million in staff payments in 2024-25.

While these billionaire families have had their internal hiccups, they have overwhelmingly reinvested their profits back into their businesses, and Gina (in particular) must be credited with placing her companies in a far sounder financial position than she found them. Had her companies been in public ownership, there is no way that they would be in the strong position they are in today.

As far as I am concerned, Gina Reinhardt is entitled to live well. Australians have greatly benefitted from the spillover benefits of her success. As long as her companies prosper and she keeps reinvesting and supporting good causes, we are all better off.

The alternative, public ownership and management of businesses, has never worked because politicians and bureaucrats never manage other peoples' money well. Communist Eastern Europe was never able to come close to the living standards of capitalist Western Europe and suffered significant corruption. China was poor and backward under Mao.

In more recent years laisse faire America has experienced much faster economic growth than the more socialist EU. At present, due to rising public expenditures (much being squandered) and growing debt and taxes, Australia is firmly set on a socialist low per capita income growth path.

Lower incomes, higher taxes, rising debts, waste, and moral hazard are natural outcomes of leftist policies. High taxes are partly driven by envy, though more so by an uncontrolled urge to spend.

Moral hazard describes a situation where individuals lack the incentive to guard against a financial risk because they will not bear the full financial consequences.

The problem is rife in respect of "free" publicly provided services. National health services almost always suffer cost blowouts because users don't bear the costs (but taxpayers do) and suppliers of medical services take advantage and over-service or over-charge. Another result is long queues for some services (e.g. surgery) in most nationalised health systems, including Australia's. Privately funded health care is largely unaffected by this problem, but individuals obviously need to be able to pay the cost.

Measured autism rates in Australia have significantly increased over time, with a 41.8 per cent rise in diagnosed individuals between 2018 and 2022. The introduction of the National Disability Insurance Scheme (NDIS) undoubtedly has been a big influence. Australia's NDIS is now totally out of control and poor value for money, but politicians lack the will to take decisive action.

Similarly, (though we definitely need a safety net) welfare can be a big disincentive to workforce participation, and countries with generous welfare can attract unwanted illegal immigration. Voters get addicted to their "free stuff" so that once a benefit is provided by the state, it is politically very difficult to take away. In this manner public expenditures get ratcheted up in Australia almost every time a federal Labor government gets into power. Hard left administrations (Whitlam and Albanese) have been the worst offenders.

High income taxes (favoured by the Left) create disincentives to work effort, but spendthrift governments need the revenue.

The default policy in Australia has been to increase taxation through the non-indexation of tax thresholds. In this manner personal income and stamp duty revenue automatically rises because of inflation. The top marginal tax rate now cuts in at a mere two times average male full time earnings, and high stamp duty rates, originally set for lavish mansions, now apply to modest dwellings. At the bottom end, increasing income tax thresholds didn't just help low- income families. Generous thresholds also mean that students from well-off families generally pay little or no tax, and they incentivise income splitting by high income couples.

Overall, it has been estimated that half the Australian population pays no net tax (after benefits are taken into account), and that the top 5 per cent of Australian income earners contribute approximately one-third of all individual income tax revenue. Based on data from around 2021-2023 the top 1 per cent of taxpayers paid more than 18 per cent of all income tax revenue.

Universal free child-care is often considered regressive because it is a big subsidy to dual-income middle-class families, and wasteful where it applies to non-working parents. While child-care is not yet totally free in Australia, this is the outcome sought by many on the Left. The Education Portfolio Budget Statement indicated that the estimated cost of the Commonwealth Child Care Subsidy for 2024–25 had reached a massive $15.429 billion. This cost is indicated to rise by 4 to 5 per cent per annum in the forward estimates.

The big problem with free or heavily subsidised universal child-care is that the concept of personal responsibility goes out the window, along with any consumer incentive to restrain usage. Childcare is also commonly not available in non-urban areas so many in rural and remote areas (especially farmers – never liked by the Left) can't easily access this $15 billion programme but are required to share the tax burden.

Government schemes designed to help first-time buyers have backfired. Such programmes always inflate prices in the market segment they aim to assist. Similarly, regulations and controls, supposed to be tenant friendly, drive landlords (another pet hate of the Left) out of the market and lead to increased rents. The Left generally either fails to understand how markets work or ignores the market consequences of its actions.

The Left's most obvious policy disaster has been the Albanese Government's raising of tobacco taxes.

Labor imposed big increases in tobacco taxes several years ago aiming to deter smoking and increase revenue. The move also reflected the Left's historic dislike of big cigarette companies. Instead of deterring smoking, however, the government fuelled a massive illicit market, leading to increased crime (including shootings and arson). The illicit tobacco market is now estimated to account for 64 per cent of all tobacco consumed in Australia and 82 per cent of total nicotine consumed.

Gangsters now control an illicit market estimated to be worth almost $10 billion. The federal government's tobacco excise revenue fell dramatically since 2020, from more than $16 billion to $7.4 billion in 2025, with further falls forecast. Due to cheaper cigarettes, smoking rates may have actually increased.

Another industry disliked greatly by the Left is coal. In 2022, the (then Labor) Queensland Government introduced three new progressive royalty tiers in addition to the existing regime: 20 per cent for coal prices above $175 per tonne, 30 per cent above $225 per tonne, and 40 per cent above $300 per tonne. According to the Minerals Council of Australia, the 2022 royalty changes almost doubled state royalty revenue from $7.7 billion in 2021–22 to $14.8 billion in 2022–23, despite production volumes remaining steady. Queensland's share of national royalty payments jumped from 32.5 per cent to 47.2 per cent in the same period.

BMA, which is Australia's largest producer of seaborne metallurgical coal and is owned 50:50 by BHP and Mitsubishi Development, has cut jobs and mothballed some mines. The company is said to now have an effective tax and royalty rate of 67 per cent, and to now return just 1 per cent on capital employed. It thus paid around eight times more in royalties than it made in profit. Taxes of this magnitude are a major impediment to further investment and are analogous to lowering the odds after a horse has won a race.

Despite the Left's envy of those with high income and wealth, Ministers of the Albanese Government have recently demonstrated a taste for lavish spending on themselves using taxpayers' money. Federal politicians spent $1.1 million flying and driving their families to Canberra and around Australia in a single year, using reunion travel entitlements. Rules are now being questioned after revelations that Communication and Sport Minister Anika Wells used the scheme for her husband to attend several high-profile sporting events, including allegedly paying a chauffeur to wait 7 hours while they were at the cricket

Analysis of parliamentarians' family travel expenses for 2024-25 shows taxpayers were billed more than $700,000 for travel to and from Canberra, while almost $400,000 was spent on flights between other destinations in Australia, and $60,000 on chauffeured Comcar and other car expenses. Trade Minister Don Farrell was the largest user of family travel over the 12 months, spending a total of $48,178. West Australian Senator Fatima Payman was the second highest spender on family travel, with a bill of $41,438. Former opposition leader Peter Dutton was third with $36,542.

Then there is the loophole with travel allowances for stays in Canberra. Canberra is the only capital city where federal MPs can choose to pocket their travel allowance (TA), even if they are staying at a house they own outright or at an apartment owned by a spouse. The current daily rate for Canberra TA for Australian Parliamentarians and their staff is $322. Albanese has refused to ban MPs from claiming the allowance to stay in their own Canberra accommodation. Some even rent out their Canberra homes on Air B&B during non-sitting weeks.

Overall, to return to the main theme, many leftists resent other people being better off to the point that (while they won't admit it) they will even accept lower national living standards, if this reduces the degree to which "tall poppies" outperform them economically. Lefties also fail to admit the obvious, which is that incentives matter, if an economy is to prosper.