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A new normal – yeah, right

By 2353NM

I bought some milk at my local Supermarket yesterday. It cost me $3.59. The checkout operator didn’t ask me about my ability to pay for the milk in comparison to the person in front or behind me as the sale price is based on the ability of Coles to arrange for the milk to be produced and transported to my local supermarket for a specific cost – and they make some money for themselves in the process. If I’m on $577 per week (or $30,000 per annum), the milk cost me about 0.6% of my weekly income, if I’m on $3,846.00 per week (or $200,000 per annum), the milk cost me about 0.09% of my weekly income.

Unlike most retailers, the federal government doesn’t theoretically believe in ‘one size fits all’. The progressive taxation system is supposed to ensure that the rate of taxation, plus levies, rises as your income increases. And that’s a good thing as those that can afford to pay a bit more to provide services to our society are theoretically doing so. As demonstrated above, if you are on a lower income, a fixed price for a necessity is proportionally more of your income than someone who is on a larger income. So by the time someone on a low salary pays the fixed costs for the food, utilities, rent or mortgage, transport costs and all the other commitments involved in keeping body and soul together for another week, they have far less money left over to stick in the bank, go to the movies, buy the new car or afford the bigger mortgage on the larger house in what the real estate agents will tell us is in a more ‘exclusive’ area.

Taxation is the mechanism whereby the Government keeps control of monetary policy and creates demand for the Australian dollar. The taxation revenue received into the Treasury is recycled across government to enable services to be provided – be they roads, defence, childcare, health and so on. It stands to reason that what money they can’t recycle, they have to create. Recent events have destroyed forever the claim by the Abbott/Turnbull/Morrison Government that because they can’t create money, we must live within our means. History shows they were attempting to justify insufficient money in the ‘bank’ as the reason for the lack of funding for programs that create equity and equality across the country. Maybe the real reason is an ideological indifference for equity and equality.

So while Frydenberg claims that having a 30% income tax rate from around $30,000 annual income up to $200,000 is fair and reasonable, mathematics would suggest otherwise. Someone on $30,000 would be liable for $9,000 per annum in income tax, leaving $21,000 to spend each year in keeping body and soul together. Someone on $200,000 would have a liability of $60,000 and have $140,000 to spend each year in keeping body and soul together, which leaves a lot more for the new car, the expensive holiday or the bigger mortgage. Certainly those on lower incomes also are generally eligible for other government support payments but these wouldn’t go anywhere near matching the gap in after tax income or the purchasing power the extra $120,000 or so per annum gives.

The legal principle of ‘equal pay for equal work’, first established in 1912, was endorsed again in 1969. But the ‘definition’ of ‘equal pay for equal work’ isn’t explicitly what it seems,

The underlying presumption that a woman didn’t need to be paid as much as a man was confirmed by Justice Henry Bourne Higgins, the president of the Court of Conciliation and Arbitration, in the Fruit Pickers Case of 1912.

In this, the court’s first explicit ruling on women’s pay, Justice Higgins declared women should be paid the same as men – but only when they did jobs predominantly performed by men (such as blacksmiths) or were “in competition” with men (such as fruit-picking). This was out of concern that allowing a lower pay rate for women could put men out of work.

A century later, and regardless of the assumptions of equity and fairness in industrial relations legislation made over the past century, the reality in Australia today is generally ‘care’ based professions such as child or aged care are at the lower end of income expectations. These ‘trades’ are dominated by females, unlike the male dominated and higher paid ‘trades’ such as electrician and plumber.

It is the lived experience of most women in Australia who are over 50 that they (or women that they know) had to give up secure and moderately well paid work when they either married or became pregnant, limiting them to offer their services for work not traditionally done by men, such as nursing, child care, receptionists or aged care. As there was no ‘male competition’ there appears to have been no appetite for payment of wages that would enable women to support a family. The wage inequality continues to exist.

During 2020, we all discovered who the really essential workers were. The economists tell us that people (including essential workers such as aged and child care workers) on lower incomes have a propensity to spend a greater percentage of their wages because they have people to shelter, mouths to feed and bodies to clothe, regardless of the gender of the wage earner. If the tax cuts promoted by Morrison and Frydenberg have no effect on your lifestyle except bringing forward your next ski trip to Aspen, the tax cuts are really not doing what they are supposed to do – help the Australian economy recover from the ‘Rona Recession’.

If the Coalition was serious about helping those who have a go, they would be giving larger tax cuts to those who would value the extra $20 or thereabouts a week and spend it on fixing the car, paying the outstanding bills or going away for the weekend for the first time in years, rather than those who really won’t even notice the extra $20 a week in their bank accounts. Morrison and Frydenberg had the perfect opportunity to make a real change for the better. Did they take it? – nope, of course they didn’t.

What do you think?

This article was originally published on The Political Sword

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  1. Keitha Granville

    Make it fair, raise the tax free threshold to $30,000.
    All the people who would pay no tax will spend in the economy, and nobody further up can complain about paying too much.

  2. DrakeN

    Tax cuts are of no value to the 100s of thousands of people who, effectively, have no income and of no value to those who rely on government ‘largesse’ to survive.

  3. Geoff Andrews

    2020 is making Modern Monetary Theory look good.

  4. pierre wilkinson

    expecting equity and equality from this mob is like believing that they are an honest and transparent government
    btw I like Keitha’s suggestion
    and thanks for your articles

  5. RomeoCharlie29

    We have had a long but chequered history of progressive taxation which formerly included a top marginal rate of 60 cents. Conservative governments, but including Keating, reduced top rates and changed the income levels, watering down the progressive nature of taxation. This latest proposal though, as pointed out in the article, takes tax unfairness to a new low. Of course that is totally consistent with this government’s propensity for helping their mates and donors while reviling and denigrating the neediest and most deserving in our community. We must get rid of Morrison and his crony government

  6. wam

    I think you have done a great job in assessing the greed of this mob of elitists.
    When the government gave relief to those on $90k to $300K(the base pollie salary) the media income was just over $53k, it was obvious a big majority of australians were getting nothing.
    There were two areas of equality in my mind one increase the tax free thresh hold put money in every workers paypacket more for pollies and FIFOs. The other was to reduce the medicare levy and put it on gross income.
    Currently the pollies give themselves and howard’s battlers thousands whilst deductions and superannuation trade ofs let the packers, twiggies and little irishmen pay little or no tax and little or no levy.
    Put it on gross and everyone pays from the paperboy, the unemployed through scummo to minjilee and twiggy
    up to the hail mary beads on the election

  7. New England Cocky

    When since 1949 has the Liarbral Nazional$ COALition ever done anything to benefit the so called working class, aged or infirm? They would rather benefit the corporate mates to qualify for a cushy corporate sinecure after they leave politics.

  8. DrakeN

    N E C – it’s another example of “Mind over Matter” 😉

    (They don’t mind that you don’t matter.)

  9. wam

    you are too bitter NEC they have done plenty menzies carried on labor’s work saved us from the commos and went to war
    billy mcmahon’s wife had a split in her skirt. pant-less farmer fraser did something?? he passed gough’s land rights and was into the environment and an ombudsmen and would be unrecognisable in today’s liberals the lying rodent sold airports, sold gold and went to war the rabbott hahahaha

  10. 2353NM

    @pierre wilkinson, Thanks for the compliment

    @Wam, Didn’t Fraser resign from the Liberal Party some time prior to his death?

  11. wam

    yes, in 2010 when the rabbott hit the scene as opposition leader
    laura tingle
    “Malcolm Fraser, the former Liberal prime minister, has resigned from the party he once led, saying it is no longer a liberal party and he cannot stomach the way it operates”

  12. meself

    Ha so it is the great (grate) neo-Liebral piddle down LIE. Yes, LIE: the piddling poor serfs don’t pay any taxes. HA!!!

    Then there is the Johnny ‘Deputy Sheriff’ Howard TEN PERCENT 10% GST.

    ” Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.”

    Pray tell how do the hoi polloi escape that??

  13. Mark Shields

    Oh for the days of a single household breadwinner! Remember imagining what the whole family could do, if both partners split the working hours? Somewhere, in the midst of EEO, OHS, Union membership compromisation, Workplace contracts, basic wage stagnation and reduced funding for education and healthcare; we all lost that benefit and are now working twice as long for less, whilst family work hours are now multiplied by two for both parents.

    We must not forget that over the last thirty years, the so-called limited employment market has been halved, with the addition of stay at home mums wanting to work, which is all good. Therefore by simple mathematics, unemployment has doubled.

    If industry and corporate administration insists on cutting back workers annually at a secret rate; then it is not hard to see unemployment now quadrupled.

    And on top of this when our elected government has no qualms about allowing corporations and wealthy individuals to sack, dismiss, downplay, de-seat, remove, re-arrange, employees at will; it is no wonder that no one wants to undertake unskilled work in this country – it’s probably easier selling drugs or your body, than trying to fill the demands of Centrelink.

    And for those artistic/cultured qualifications, which individuals spend years of hardship trying to re-join their communities with some creative expression, but end up being constantly ignored and derided: Yet again, we can thank the evangelic-loaded government and it’s religious, myopic view of anti-science, anti-culture and anti-art as the real destroyer of our civilisation!

    Our comfortable lives of privilege over the last twenty years have been utterly destroyed by the recent corruption of corporate/governmental influence!

    Be aware: CORRUPTION will happen wherever you fail to look!

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