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Rudd's war on the middle class

By Mirko Bagaric - posted Tuesday, 27 January 2009

The biggest enemy of “working families” is not the financial crisis. It is Prime Minister Kevin Rudd and his offensive and simplistic suggestion that middle Australia should show restraint in wage negotiations, in order to not compromise their jobs.

People are not morally obliged to remedy problems not of their doing. Families who are struggling to afford the necessities of modern life have made a zero per cent contribution to the current financial problems and it’s for that reason that they owe nothing to the rest of community when it comes to wage negotiations.

Rudd’s suggestion that more money for bosses equals more jobs for workers breaks the laws of economics and human nature. Trickle down economics has long being discredited because there are simply too many greedy sponges at the top. Rudd’s call for wage restraint is nothing other than a misguided justification to exploit the vulnerable by undervaluing the toils of their labour.


Moreover, imposing the same wage disciplines on rich and poor alike is a contemptible case of economic discrimination. Rich and poor come from vastly different starting points regarding their capacity to attain any degree of human flourishing. Even slight reductions in purchasing power are felt far more heavily by those that are already wanting. Being forced to sell the family home tends to ache a lot more than having to think twice before choosing to fly first or business class on the next family vacation.

Kevin Rudd’s recent decision to not legislate a wage rise for federal politicians is a meaningless gesture when it comes to setting the tone for how other Australians should behave. The financial pressures experienced by politicians with their $100,000 plus annual incomes and brimming superannuation entitlements - most of which, unlike the rest of Australians, are guaranteed - are negligible compared to those faced by the many Australians now battling to save the roof over their head, as a result of higher energy, school, food and medical costs.

But won’t pay raises for the middle class encourage high income earners to also go hard when it comes to wage negotiations? Not at all. High income earners already do that - always have and always will.

Even if there was evidence to suggest that pay rises for the middle class would damage the economy, workers should still bargain for all they are worth. Admittedly, the reaches of our moral and civic duties are not confined to redressing problems of our doing. In some cases individuals are required to step-up to assist another person or to make sacrifices for the good of the entire community even in relation to matters not of their doing.

However, the circumstances in which they are required to act with such benevolence are rare. The situations in which we have a responsibility to redress problems caused by others is defined by the maxim of positive duty, which prescribes that we must assist others in serious trouble, when assistance would immensely help them at no or little inconvenience to ourselves.

The principle explains why it is repugnant to refuse to throw a rope to a person drowning near a peer, but we are entitled to resist calls to allow a homeless person to move into our spare bedroom.


It is also explains why developing countries are entitled to refuse to adopt greenhouse targets. Global warning has been caused solely by western nations, which on the back of cheap energy massively increased the prosperity of their people, while at the same time refusing to share the largesse with the largely hungry third world. People in developing nations are no less entitled to improve their lot.

Why should hungry people in the third world care that their use of fossil fuel risks making future people less prosperous? Current destitution bites more harshly than potential future discomfort. If western nations are genuinely concerned by global warning they need to compensate the developing world for fossil fuel restraint. Absent this, their hypocritical environmental concerns will rightly continue to fall on deaf third world ears.

In relation to matters of flourishing on the home front, middle Australia is in fact the very constituency that is feeling the economic pinch and is already immensely inconvenienced by rising costs. That’s why it is impertinent for the PM to urge middle Australians to show wage restraint. Middle Australians need and are entitled to every last cent that they can secure in the form of wage increases.

Moreover, they should not only be leaning on their employers to improve their lot. The government also needs to step in here. Most Australians will welcome the recently mooted tax cuts later this year. But their problem - as always - is that they will most benefit the rich.

It is mindless that any Australia living below the poverty line should be required to pay any tax, especially given that they are then subsidised by the welfare system. This is bureaucratic nonsense and socially and economically unjustified. Approximately 10 per cent of Australians are now living below the poverty line (currently at around $700 a week for a family of four). Here’s a question for the PM: what is one good reason for not increasing the tax free threshold to the poverty line?

Perhaps he could contemplate this, instead of finding new ways to continue to betray the very constituency that gave him the reigns of power.

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A version of this was in the Sydney Morning Herald on January 21 2009.

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About the Author

Mirko Bagaric, BA LLB(Hons) LLM PhD (Monash), is a Croatian born Australian based author and lawyer who writes on law and moral and political philosophy. He is dean of law at Swinburne University and author of Australian Human Rights Law.

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