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Hockey’s Class Warfare

When a politician defends his/her position by drawing attention to social classes, you can be forgiven for thinking his/her original argument wasn’t that strong to begin with. Joe Hockey is on the ropes desperately trying to defend the indefensible.

Even his own side can see that. He seems to be grasping at a variety of explanations to justify placing the burden of his cuts on those who are least able to absorb them.

Hockey seems at odds to understand the extent of the backlash to his budget. At the Sydney institute, on the budget criticism he said, ”Criticism of our strategy has been political in nature and has drifted to 1970s class warfare lines, claiming the budget is ‘unfair’ or that the ‘rich don’t contribute enough’.” Is he truly that naive?

To argue at the Sydney Institute that criticisms of the budget amounted to “old style socialism” smacks of the very things that he protested about as a university student in the 1980’s. He has also referred to it as akin to “class warfare”. Well, actually it is. And it is hard to think that he doesn’t know that.

His latest tack is to talk up the idea of equality of opportunity; his way of separating the lifters from the leaners. He assumes we all start from the same base but finish in positions relative to our success. This is an utterly flawed argument. We don’t all start from the same base. Education and financial inheritance figure prominently in our starting positions.

Trying to pit the poor against the rich by suggesting each started out equal but that those who tried harder succeeded, is arrogant. By every measure the poor are disadvantaged. By every measure the rich win hands down largely because they started from a privileged base.

And by forcing up the cost of education he is widening the gap between those who started more equal than others. Hockey should know that such an argument will do him no favours. Most Australians do not consider themselves to be rich.

It seems also, that every time he opens his mouth and makes some extraordinary claim that Australians are living in a manner that is unsustainable, we find a counter claim by a reputable authority that suggests otherwise.

Hockey’s latest rant that we are a nation reliant on welfare falls far short of being accurate when compared with the latest Household, Income and Labour Dynamics in Australia (HILDA) Survey, from the Melbourne Institute of Applied Economic and Social Research. Their report has tracked more than 12,000 people since 2001.

The report demonstrates that over the decade to 2011, both working Australians and retirees are less dependent on welfare than they were in 2001. Hockey dismisses the report saying that it only applies up till 2011. Well, he would, wouldn’t he?

barristers

Photo: www.europeantruth.co.uk

One of his more ludicrous statements recently was when he said, “The average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full-time each year just to pay for the welfare of another Australian.” Has he deliberately excluded his own class from being a part of this comparison? Are not lawyers, barristers, judges, CEO’s also workers? They pay tax too, don’t they? So why did they not get a mention? Or does he not consider them average? They are, in fact, mostly privileged.

The fact is, any number of such comparisons could be taken in isolation and produce a similar result. One wonders how many days each plumber has to work to pay the salary of politicians and fund their generous superannuation entitlements. Or how many days it takes teachers to cover politicians travel entitlements.

The reality is that current government spending could be sustainable if Hockey wasn’t so protective of the rich and famous. How much more money could be raised if capital gains and superannuation were treated more equitably? How much more could be raised if negative gearing was scrapped? How much more if the private health insurance rebate was terminated, not to mention mining subsidies and the like?

None of these tax expenditures were touched in the budget and the only conclusion we can draw is that they are part of Joe Hockey’s untouchables; that they are not the realm of cleaners, plumbers and teachers. Well, actually they are but probably not to the extent that they would impact on the more equal; the privileged end of town.

More great articles by John Kelly:

Leadership Speculation: Don’t you just love it?

What a Circus!

Dealing with Drugs: a new approach.

A Failure of Moral Leadership

 

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52 comments

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  1. trevor

    Joe baloney, Mr Eleventy, Legend in his lunchtime, Economic dimwit.

    Actually Joe knows eggzaktly what he’s saying is bullshit of the highest order, monitor the torrent of sweat as he lies..

    Great pity that Mr Eleventy can’t count, can’t add it up, can’t resolve the digits as it’s as plain as the nose on his face that the stinker he is trying soo hard to sell is snake oil amd it smells to high hell.

    Mr eleventy should try another career, stick a red nose on and frighten the horses ya lying clown.

    Export Abbott not Refugees.

  2. Lee

    Ah it’s so good to see Boofhead on the ropes. I’m amused at the lame attempts to discredit socialism, which is working very well in Scandinavian nations.

    What I cannot understand though, is why he has forgotten about his roots so quickly? I know some Liberal voters whose parents migrated to Australia for a better life, experienced racism in their early years here, and now the next generation, like Joe Hockey, want to demonise asylum seekers. Surely they know that life would not be so good now had the next generation been raised in the parents’ home country. Those boat people need to be kept out of Australia or they might harm their children. How short sighted that they overlook the rioting in places like the UK and Syria because people are starving and governments aren’t helping them. They are completely oblivious to the threat of violence here when people are forced to go without unemployment benefits for 6 months of the year.

    I’ve been talking with a number of conservatives in recent months and they all share the same attitude towards businesses and business owners. They are to be excused from paying their fair share of tax because they create jobs. But try explaining to them that the lower class makes up the biggest consumer group and their consumption keeps those businesses operating, and they just don’t understand it at all. What is so difficult to comprehend?

    I’m delighted to see that Abbott’s 2nd attempt to eliminate the Clean Energy Finance Corporation went pear shaped today. Too bad I’m still not seeing anything from Labor that makes me want to vote for them should we have a DD election. Sigh…

  3. DanDark

    Just thought I would share this email I sent Smokin’ Joe a few months ago after Reza was murdered
    He was proud that his doona cover it was only $20, he is a big fat brainless kid, and still lives in Barts world, and he can’t count, he is a lot like his hero Bart Simpson, similar personality an idiot
    what a joke of a bloke, eleventy is.
    Subject: (No Subject)
    Date: Thursday, 6 March 2014 8:29:57 AM
    You are a fat pig mate, immature and childish
    Watched you on Annabell’s kitchen show
    When I saw your bed linen and your excuse for having the little Bart idot on your bed
    I went god help us if this fat jerk gets into gov
    You are a fat fat liar,you have no brains
    This shows through everyday
    You are good fodder for the campaign,you are a ranting big mouth,uneducated bum,

    Go back to where you come from, I would prefer the young Iranian man killed on Manus island in Gov, than your poor inconsidered policies hahahaha,
    You and Phony Tony and the rest of the gestapo are on the way out, sooner than you and your fat guts can say, Where’s the food Gina?, race you to the fridge Gina,
    The greed you and the fat cats of this country are displaying is breathtaking ,
    Geee you would only would be able to fit you and Fatty Fatty Gina in one room,no room for skinny people,the two pigs are in the room

    You and Phony Tony are both maggots, greedy, lying maggots,and the people know you are an idiot,and there is a no confidence vote coming,
    Start packing your Doona Cover fat face, your gov is sliding into oblivion,
    Just dont kill another innocent asylum seeker in the mean time will you murderer…..
    Have a great day LIAR

  4. Stephen Tardrew

    John:

    What a clear and decisive example of factual writing. The logic is impeccable and the evidence self-explanatory. I am continually amazed that contributors on this site outperform Labor in a well reasoned critique of this government and its incompetent treasurer.
    <
    They don't seem to understand you can keep lying while the deception is working however when found out the noose will tighten around your neck until asphyxia sets in. Sort of like sweating and blustering as the ship is sinking in a cloud of verbose misspeak and bare faced lies. The clock has moved on and the rewind is past redemption. Self immolation is the only path left to these draconian, immoral, narcissistic egotists.
    <
    And yes they can certainly be designated antisocial personalities by operating on sufficiently dysfunctional axes of DSM (Diagnostic and Statistical Manual). Moral and good people do not set out to harm their fellow citizens for no other reason than greed and self-interest. They are truly disturbed and dysfunction fools.

  5. Winifred Jeavons

    Of course this bunch of wealthy politicians and their cronies are the big lifters . They plan to lift money from our pockets, the cost of health care, the cost of educating our future essential professionals (doctors, teachers, lawyers , etc,etc) , the cost we will pay for future climate disasters, the hopes of the young, when it is so obvious that there are too few jobs to go round, fewer still if you call a job one with enough hours to pay a living wage . Lifting is the new theft. leaning is the preserve of professional politicians, who lean on us to squeeze more out of the already impoverished.

  6. Terry Goulden

    Winfred, lifting is not the ” new theft”. To lift is an old slang term for stealing/ pick pocketing therefore when they classify themselves as lifters they could actually be classifying themselves honestly for the first time ever.

    And Trevor I prefer the quote that they are all Legends in their own Minds

  7. Maveleanor

    Who can forget Kerry Packer when he fronted the Senate Committee in 1998 and with a smirk on his over fed face smugly announced that in the previous financial year he had paid………$41 in tax. And the outrageous git was proud of of it. Wouldn’t mind seeing Gina’s last tax bill.

  8. Kaye Lee

    The richest 1% of Australians now own the same wealth as the bottom 60%.

    The nation’s nine richest individuals had a net worth of US$54.8bn, which was more than the combined bottom 20% of the population, or 4.54m people.

    But let’s cut company tax and the dole. That will even things out….?

  9. June M Bullivant Oam

    Me thinks he protests too much, only someone who is so completely out of touch and saying so much about the ordinary Australians is beyond belief, Mr Hockey, come down from your ivory tower and live in the real world, where people are losing their jobs, where small business is having a really tough time, and don’t forget Mr Hockey we have the most important tool to in our armoury, and that is our vote, your counterparts in NSW is the first on the line, so watch this space.

  10. corvus boreus

    June, why would he climb down,
    Celebrate your ascendance.
    with taxpayer sponsored booze,
    a quick fling round the public office with the missus,
    smoke kickback cigars,
    then toddle off to legislate some cutbacks for the masses.
    Must be nice to make the laws.

  11. Kaye Lee

    Just to put things in perspective here…..9 people have, between them, more money than the country’s deficit

  12. DanDark

    As you can see, I was a tad upset when I wrote the above email to Eleventy
    And things have not improved, he is playing a fools game, and he will lose as.

  13. Stephen Tardrew

    Kaye:

    Is it just me or has this all gotten completely out of hand. I am dumbstruck at the lying stupidity and duplicity that would drown the marginalized in an ocean of distress, hardship, poverty, inequality and suffering. There seems to me a tipping point has been reached and we must somehow struggle to return to sanity, justice, equity and reasonable utility. These people are truly dysfunctional, morally compromised, humanely inept and incredibly cruel. We are going in the wrong direction and by heavens we need to apply the brakes and avoid this unnecessary suffering. Sometimes humor is not enough.

  14. Carol Taylor

    It was interesting to note Hockey’s plea on Q&A when confronted with a question which suggested that he of privileged background did not understand the real world. Not so said Joe, his parents were migrants who owned a delicatessen.

    However on perusal of Joe’s background he in fact was not peeling salami and pickling onions to help out the struggling old folks as they toiled long hours in the deli. Joe attended a private north shore school (St. Aloysius) whose fees currently range around $15,000pa. Full marks indeed to Joe’s parents for having the resources to send their brood off for exclusive, private education, however for Joe to plea ‘look at me, I’m working class too’, is stretching it a long, long way.

  15. DanDark

    If you go back a little further, I think it will be found that his eleventys mother was a illegal backyard bookie literally 😉
    She would take wheat off a chicken that one, and she took a lot of wheat off the hungry chickens for a long time. To keep the Hockys life style, his wife’s a gambler(a banker) took the world finances down
    because of dodgy dealings, he is a gambling man, that cannot count as we all know.
    And dosnt lie well either, corrupt is his second name, he has been taught well.

  16. Carol Taylor

    DanDark, there were more groans and 🙄 than sighs of admiration from the audience. However, irrespective of background and irrespective of how well one is now doing, it’s the generousity of spirit, the care about others which is important. Old Joe *tries* to reek of sincerity but really he does not give a rat’s which is why the pic of him smoking a cigar resonated so strongly. It wasn’t that we begrudge a person having a drink and a cigar, but it was Hockey’s blatant hypocrisy in telling pensioners that he intended to hit them and hard, even grubbing a lousy 70 cents extra from them for their prescriptions…little things mean a lot.

  17. DanDark

    He has always had the yellow streak down it’s back, and just cannot hide it how much he tries, and he is trying,that’s for sure, always been a nasty piece of works, that didn’t potty train well either, he would be classed as ” slow progress” in that area, not much has changed, can’t keep his crap to himself still 🙂
    I might send a pkt of Huggies to him and suggest he wear them 🙂

  18. DanDark

    The best got ya moment was when he turned on photographer at acoss meeting that aired on TV
    He was sweating, squirming, and had to lash out the nasty coming out under pressure at photographer bloke, cos he couldn’t attack the questioners and MS Goldie, was a treat to watch it lose control, people need to see the real him and gov for who they are and not what they are, there is a difference.

  19. Lee

    @Maveleanor

    In 2011-12 the 75 wealthiest people in the country paid no tax at all. I expect nothing has changed for Gina.

  20. Lee

    Income tax that is.

  21. leighton8

    Spot on … in so many regards ….

  22. Diannaart

    …claiming the budget is ‘unfair’ or that the ‘rich don’t contribute enough’.” Is he truly that naive?

    Apparently Hockey believes that the above is a valid argument. I’m sure it is – – – among his peers. Clearly out of touch with the reality of the 99% of this country, when he thinks dismissing the concerns of everyone of us is some kind of judgement or deliberate war.

    The budget IS unfair to the majority of Australians.

    The rich DO NOT contribute enough.

  23. Matters Not

    Dan as you would know, this has implications far beyond religious folk in schools. Section 51, after being virtually ignored all these years, allowing the Feds to do as they please, has been given new life. But for how long? Because so much of the Fed’s activity will be affected, it will have to be appealed again and again.

    Interesting times. And it was unanimous. Dear oh dear.

  24. John Armour

    The reality is that current government spending could be sustainable if Hockey wasn’t so protective of the rich and famous. How much more money could be raised if capital gains and superannuation were treated more equitably? How much more could be raised if negative gearing was scrapped? How much more if the private health insurance rebate was terminated, not to mention mining subsidies and the like?

    Whilst these seem to be totally reasonable propositions John, they perpetuate a fallacy, that taxes “fund” government expenditures. In fact taxes fund nothing.

    This is not just some wonkish economic esoterica, but if more widely understood, would pull the rug from under Hockey and deny him the grounds for his argument, as flimsy as it is.

    Whilst ever people believe that taxes fund stuff, the wealthy can claim with some narrowly defined legitimacy that they do the heavy lifting.

    The reality is that in a fiat currency regime like Australia has, the purpose of taxation is, after stripping away all the layers of bullshit and hoopla, the management of aggregate demand. Inflation. This is not just an opinion. It is the inescapable reality. Once again the question arises, why does a government that creates its own currency, ex nihilo, need to gather up taxes to fund its spending ?

    We tax the rich because if we let them keep it all and spend it, it would create inflation. It’s got nothing whatsoever to do with financing government spending, and the sooner the Left understands this, the more effectively we can argue our case.

    Perpetuating the myth just postpones the day of reckoning.

  25. Totaram

    John Amour: I am not qualified to dispute what you say. However, how does this square with Lee’s comment that:

    “In 2011-12 the 75 wealthiest people in the country paid no (income) tax at all. I expect nothing has changed for Gina.”

    Surely, these two “facts” cannot both be entirely correct. Something appears to be missing.

  26. John Kelly

    John Armour, if taken to one of its logical conclusions, were a government not to tax it’s citizens and corporations and simply print money ex nihilo to fund expenditure, our currency would be worthless on world markets, e.g. Argentina, Zimbabwe etc. There would be no imports because there would be nothing anyone would be able to afford. Our exports would never get to ports without infrastructure that required something manufactured in another country. Who would bankroll imports? Or have I missed something?

  27. Lee

    @ Totaram

    Wealthy people are required to pay income tax if they earn enough, just like everybody else. But with creative accounting they reduce their taxable income to well below the threshold so they don’t have to pay any. Gina moved to Singapore as a tax dodge.

  28. Lee

    Well done to Ronald Williams! 🙂

  29. John Armour

    John Armour, if taken to one of its logical conclusions, were a government not to tax it’s citizens and corporations and simply print money ex nihilo to fund expenditure, our currency would be worthless on world markets, e.g. Argentina, Zimbabwe etc.

    That’s exactly right John, although I’d say it was an illogical conclusion, or reductio absurdum.

    I can’t imagine the circumstances under which any government would ever consider doing that.

    What other logical conclusions did you have in mind ?

    The Zimbabwe hyperinflation by the way began first with the destruction of the productive sectors of the economy, the same as in the Weimar Republic. Everyone can recite “too much money chasing too few goods” but few realise the causality usually runs the other way.

    Argentina’s more recent problems were due to running a currency peg with the US dollar.

    “As an online economic discussion grows longer, the probability of a comparison involving Zimbabwe or the Weimar Republic approaches one”.

  30. John Kelly

    John Armour, so, having acknowledged the reductio absurdum, I’m wondering what your initial point was. By any measure, the management of inflation notwithstanding, taxes still do fund ‘stuff’.

  31. John Armour

    John Armour, so, having acknowledged the reductio absurdum, I’m wondering what your initial point was. By any measure, the management of inflation notwithstanding, taxes still do fund ‘stuff’.

    I thought my initial point was obvious. I was addressing the fallacy that you were promoting, that sustainable government spending depended on raising revenue.

    This is somewhat counter-intuitive and some never get it.

    In heterodox economics it is not even controversial.

    It is actually impossible for taxes to fund government spending.

    Professor Stephanie Kelton: Can Taxes and Bonds Fund Government Spending?

  32. Bacchus

    John & John,

    That paper from Prof. Stephanie Kelton is quite heavy going. Perhaps Prof. Bill Mitchell can cut through more easily?

    Taxpayers do not fund anything

  33. Lee

    Thank you Bacchus. I could not access the Kelton paper for some reason.

  34. Bacchus

    No worries Lee. I’ve uploaded the Kelton paper to my “play” blog. You should be able to access the paper
    here.

  35. Jason

    @John Armour

    Interesting stuff.

    In following up your lead on Professor Stephanie Kelton, I stumbled across the website for New Economic Perspectives that also has some neat stuff on it.

    This article http://neweconomicperspectives.org/2014/06/worst-get-top-economics-ceos.html#more-8330 may help some to place Hockey’s class warfare into context.

    What should be remembered is what Abbott & Co are undoubtedly pursuing is an agenda that is ultimately anti-democratic.

  36. Usually quiet

    Seriously taxes don’t fund anything? We are talking about money right ? which is essentially just numbers? Now I am not a mathematician / economist / accountant but doesn’t this all boil down to money coming in and going out albeit over projected periods of time ? I think to say that government revenue ( taxes and the like) vs govt spending are not related is just bs. Printing money ad in finitem just leads to a loaf of bread costing $ 200.00 aud. we have a aaa credit rating for a reason. I think some of the point of this article is the creation of Abbott / hockey of an underclass of Australians who won’t have access to equal education and healthcare or even a living wage. All people have the right to access these things on fair terms! Those terms should not be dictated by big business who slipped through the heavy lifting net like they were covered in Vaseline .

  37. Bacchus

    Seriously taxes don’t fund anything?

    Yes Uq – seriously 😉 Read the links and attempt to get your mind around these concepts. Just because those who benefit most from leading us astray have been misleading us for decades, doesn’t make it true…

  38. Totaram

    Lee: I don’t doubt that what you say is correct. I am merely confused. If all the “rich” people pay no tax, then how can the “powers that be” control inflation by taxing them, as postulated by John Armour. Or is he suggesting that inflation is controlled by taxing any other bunch of people the government can target? That would explain the need to cancel tax breaks given to the lowest income groups by the previous government.

  39. Lee

    @Totaram

    All the rich people are not dodging income tax altogether, only the 75 wealthiest. Some suckers still get the privilege of paying it. Businesses owned by these people still have to pay tax.

  40. mars08

    If they can keep the lower 90% distracted, disengaged and fighting among themselves… they’ve won.

    Divide and conquer. That’s their biggest weapon….

  41. John Kelly

    So bear with me, I too am trying to get my head around this. If taxes don’t fund anything, what happens to all that money governments collect?

  42. DanDark

    Smokin joe has been rolling his cigars with it, it’s going up in smoke literally….

  43. John Armour

    So bear with me, I too am trying to get my head around this. If taxes don’t fund anything, what happens to all that money governments collect?

    It’s destroyed, with a keystroke on the ATO’s computer. All tax payments these days are ‘electronic’.

    When you understand that you also understand that “saving up surpluses for the bad times” is also nonsense.

    The Howard surpluses made no difference to whether Rudd could deficit spend to defend employment in the GFC. And the Rudd deficits should be irrelevant in Hockey’s thinking about spending now.

    Political opportunism coupled with our ignorance however over-rides public purpose.

    The mainstream agenda relies on our falsely conflating our own (household) experiences of debt with that of the government’s.

    Hang in there John !

  44. John Armour

    I don’t doubt that what you say is correct. I am merely confused. If all the “rich” people pay no tax, then how can the “powers that be” control inflation by taxing them…

    Was that Lee or Totarum ?

    This is what “broadening the tax base ” is all about: an innocent sounding euphemism for screwing the less well-off. The wealthy smile every time they hear it.

    It really doesn’t matter if the top 10% spend like drunken sailors if taxing bottom 90% is enough to manage aggregate demand in the economy and keep prices stable.

  45. John Armour

    Usually Quiet,

    You mentioned our AAA rating. Have a look at the antecedents of the rating agencies that hand these awards out. They should all be in gaol. They had a pivotal role in creating the GFC.

    These ratings are only of use to chloroform the masses, they have no effect whatsoever on the interest rates the government has to pay on bonds because the government makes that decision for itself.

    They are awarded to governments who toe the neo-liberal line (like austerity), and we all clap and cheer.

  46. John Armour

    That paper from Prof. Stephanie Kelton is quite heavy going. Perhaps Prof. Bill Mitchell can cut through more easily?

    Thanks Bacchus for posting that link to Bill Mitchell’s “Taxes Don’t Fund Anything”

    As you say, it’s a much easier read than Professor Kelton’s, which was more for the academic audience.

    For those curious about the actual accounting nuts and bolts about how the government funds its spending it could be of interest however.

    Here’s another Bill Mitchell article on a related subject that readers here might find interesting:

    If you think you know what debt is, read on

    And there’s plenty more from where that came from:Site Map

    Bill Mitchell’s archives is a fabulous educational resource. The “problem” is there are now literally thousands of articles in it but if you’re good at using the search box you can usually find what you’re looking for.

  47. John Armour

    From your link Bacchus…

    Taxes are at the bottom of the exogenous vertical chain and go to rubbish, which emphasises that they do not finance anything. While taxes reduce balances in private sector bank accounts, the government doesn’t actually get anything – the reductions are accounted for but go nowhere.

    It can be hard to grasp at first, but in the end, it makes perfect sense.

    It’s also how things actually work.

    So long as the wealthy believe (and are told by Hockey) that they’re carrying the rest of us with their taxes it’s going to be a hard to myth to dislodge. That’s an important task for the Left.

  48. petermartin2001

    @John Kelly,

    The way I see it is that taxes don’t fund anything for sovereign governments. Like the USA and Australia at Federal Level. That argument wouldn’t apply at State level and it wouldn’t apply for countries in the EZ who use the Euro.

    It all stem from the argument that currency is an IOU. As admitted by the BoE. So when I get back my own IOU I just tear it up. All IOUs are worth something to everyone else other than the issuer. They are just about worth the paper they are written for the issuer no matter what the face value may be.

    Taxes are necessary for two main reasons. Firstly to give value to that currency. Secondly to stop that tax money being spent so that the government can spend it instead.

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