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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

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September 8, 2004

The media flows are full of the ALP's big agenda setting item designed to give them the economic creditibility they crave--it is the $11 billion tax and family package partly financed by increased taxes and changes to superannuation.

To all intents and purposes the "ease the squeeze" tax policy is the centrepiece of the Opposition's campaign pitch. According to the Canberra Press Gallery, the job of the tax and family package is to reignite the Labor campaign after polls showed the ALP lost the first week of the election campaign. Will it do the trick of stopping the slow drift back to the Coalition? Or will the package be gunned down?


The three strands of the ALP's complex tax and family package are:

* giving a tax cut of up to $8 a week to everyone earning less than $52,000 - thus plugging the gap the Howard Government's tax package;

*overhauling and enhancing the family benefits system into a single new payment. It does away with Family Tax Benefit Part B, combining this money with Family Tax Benefit Part A and the Coalition's $600 supplement to form a new and simpler payment;

*reducing tax-free threshold from $6000 to $8500 to ease poverty traps by allowing people to earn more money before they start losing welfare benefits.

It is both tax and welfare to work. It is a carefully targeted, modest and responsible package, which avoids the sordid bidding contest for votes that neglects the long-term problems to which the spare cash in the budget surpluses ought to be spent on. The tax side extends the Costello tax cuts to the people that Costello ignored, whilst the welfare-to-work is a reform program that provides recognition of women as workers and helps mothers wanting to return to the workforce.

Politically, it will neutralize tax as a negative issue for Labor.

The ALP package is very neo-liberal. The "ease the squeze" rhetoric is about providing incentives for people to get into the workforce, and rewarding battlers for their hard work as they climb the "ladder of opportunity". It is an appeal to the suburban moral middle class, whose core moral values are still centred around the protestant work ethic.

It's central thrust is that a life of welfare is not acceptable and that work is the best solution to poverty. Since quality and affordable child care is not easily available, nor part of Labor's package, - who then cares for the children?
Secondly, what about those families in regional Australia where opportunities to work are scarce, or the educational institutions (eg., TAFE) are badly undersourced? There are plenty of jobless families with two or more children living in that situation.

Note how the ALP's spending emphasis is on tax cuts. In contrast, very little is being spent by them on health and education, or on quality and affordable child care. It is the Coalition who is spending big on health and education. Is this not a reversal of the usual positions?

9 September
Maybe I'm misreading the ALP package. Could this be a first step in a major tax and welfare-to work reform? One that the Coalition was unable to do?

Or are we seeing what I've argued before: that this is a very rightwing ALP and, if it gains power, it will work with the Coaliton in the Senate to pass legislation. When was the last tine you heard the ALP attack ACOSS when that ngo points out that low-income families with two or more children and some private income would lose under the ALP's tax and family package?

| Posted by Gary Sauer-Thompson at 10:04 AM | | Comments (2)


I didn't realise "very little" was being spent on health and education. Indeed, Reserve Bank statistics show the reverse. "Very much" is being spent on health and education at growth rates that can be described as "very high".

Now I understand that public sector employees might be ideologically opposed to any notion that people should not be taxed like slaves. On the other hand, the big government lobby call our policy-consensus "neoliberal" when in fact it is resulting in the government taking one dollar out of every three we earn.

I was trying to say two things.
1. that the Liberal Party, historically committed to small government and user pays, has actually become a big governemnt that is spending billions on public medicine.

2. that the ALP, historically
committed to big government and public medicine, is spending billions on tax cuts and welfare-to work.

Tis a neat reversal.

The post was meant to highlight how far the ALP had gone over to the Coalition's terrain and was outdoing the Coalition on its own ground.