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The Income Divide in Australia: The Return of Class-Based Politics?

By Denis Bright

For the first time in generations, issues about social class are intruding into the 2016 election agenda. Barnaby Joyce made an unintended contribution to the politics of class in his assessment of Bill Shorten in a RN Breakfast interview with Fran Kelly:

People are going to have a clear choice between someone who’s actually made a quid in their life, made a success in their life, which is Malcolm Turnbull, or the nation being run by Bill Shorten (RN Breakfast 19 April 2016).

Class is a most sensitive issue on both sides of the Australian political divide. LNP insiders promote the notion that the income divide is of very little significance. Labor strategists fear that greater proactive support for lower income voters might produce a backlash from more middle income sections of the electorate.

More of the electorate still wants to incur higher private debt to sample middle income consumer and modernist values. Further up the social ladder, wealthy parents might always assist with their children’s first home according to Prime Minister Turnbull as a market solution to the old problem of housing affordability.

Dennis Shanahan of The Australian is aggrieved by the return of the class divide in political discussion.

Shorten further pursued the comments Turnbull made on the program about wealthy parents buying homes for their children by asking: “Can the Prime Minister confirm that in the past two weeks his advice to young Australians struggling to buy their first home is to have rich parents or to have parents who buy you a home when you turn one? Prime Minister, just how out of touch are you?”

Realising Labor’s basic attack would be over fairness and the lack of tax relief for those earning under $80,000 while those earning more — including MPs — would get $6 a week, Turnbull tried to deflate the ­attacks on him and the budget by declaring Labor was using the politics of envy.

“Labor is setting itself up for a war on business; they are setting themselves up for some kind of class war,” he told ABC Radio National. “They are arguing that people who earn $80,000 a year are rich. Labor doesn’t want them to benefit from a tax cut. Labor presumably would like them to go into the second-top tax bracket. Now that’s the type of war of envy, the politics of envy, which absolutely stands in the way of aspiration and enterprise and growth.”

After being asked twice in parliament about being out of touch, Turnbull picked up his earlier theme and said Labor was “sneering at aspiration” and conducting “a political war they wanted to ­foment against aspiration” (The Australian Online 5 May 2016).

Similar remarks are made by Treasurer Scott Morrison in criticism of the politics of envy.

Such protocols against discussion of the income divide within Australia are now a feature of the communication spin of conservative parties around the world. There is a universal commitment within Thatcherite ideology to the possibility that wealth generated by privileged sections of the population will trickle down in a more equitable manner to enable everyone to enjoy the political participation of quiet consumption.

Research commissioned by the ILO shows that this trickle down dream does not occur without proactive government policies and trade union campaigns for greater social justice.

In Australia’s now largely non-unionized workforce, annual wages growth of 2.1 per cent is the lowest since the ABS commenced systematically recording the trends in 1998. However, cost of living increases for big ticket items such as housing repayment costs and rents have rising exponentially.

A tamer trade union movement would of course moderate wages growth in the future and the social wage which has assisted with child-care and access to health and medical services.

SBS Online 19 May 2016 (http://www.sbs.com.au/news/article/2016/05/18/wages-growth-slowest-record-abs-data-confirm)

SBS Online 19 May 2016 (http://www.sbs.com.au/news/article/2016/05/18/wages-growth-slowest-record-abs-data-confirm)

Fears about job security force many middle income workers to extend their working days until the day’s jobs are completed. There is always the hope of future career rewards from this workplace loyalty.

Only in the unionized segments of the workforce retain genuine bargaining rights on both industrial and social issues.

With income divides on the increase, ANUpoll (2015) on social class shows that Australians are increasingly aware of the income divide in society despite social pressures to identify with mainstream values. On the Gini Coefficient of income inequality, Australia is still well short of the US income divide although the federal LNP has its sights on that social model.

The Class Divide in Contemporary Australia

The Class Divide in Contemporary Australia

Surprisingly, over 40 per cent of Australians identify as working class in the ANUpoll. Many LNP federal members represent electorates with disadvantaged postcodes. Like conservative parties worldwide, the LNP had replaced commitment to social market values with social conservatism that is linked to populist appears against welfare recipients, trade union power and border protection.

The proposed Prepare-Trial-Hire (PATH) Programme is a fundamental challenge to the remnants of Australia’s social market traditions and it offers interns wage rates of $4 per hour during their internship period.

Australian Budget 2016-17 http://budget.gov.au/2016-17/content/glossies/jobs-growth/html/jobs-growth-07.htm

Australian Budget 2016-17 http://budget.gov.au/2016-17/content/glossies/jobs-growth/html/jobs-growth-07.htm










Coyness about discussing the growing income divide in Australian society has also been lessened by blatant discrimination in the federal budget about income tax relief for lower and middle income families.

Bill Shorten’s blunt assessment of this situation was well covered in his Address in Reply Speech on 5 May 2016:

A working Mum on $65,000 with two kids in high-school will be over $4,700 worse off, every year.

And someone on a million dollars, will be almost $17,000 better off every year.

Three quarters of Australian workers won’t receive any tax relief from this Budget but will disproportionately suffer from cuts to schools, hospitals, Medicare and family support they count on.

The most entrenched forms of discrimination against lower income families is embedded in the rise of middle and higher income welfare which became a feature of the Howard Years. Enough taxation was generated by the economic growth from the resources boom to fund these excesses.

Forecasting revenue from the mining boom would increase for decades, the Coalition Government, from the early 2000s, created this second welfare system which involves a range of transfer payments, tax concessions and subsidies which have tended to enhance artificial markets in housing, superannuation, healthcare and education.

The second welfare system now costs more than the traditional welfare system and it is growing quickly, through a double compounding process, as both the number of recipients and the cost per recipient has increased.

Following the GFC and the collapse of the mining boom, the Budget has fallen into deficit – revenue from income and company tax has continued to be constrained (as revenue from exports of unprocessed commodities have fallen short of forecasts) while the costs of the traditional and second welfare systems have risen.

ALP Candidate Sharryn Howes in Leichhardt (NQ)

ALP Candidate Sharryn Howes in Leichhardt (NQ)

The Abbott government failed to remedy the Budget deficit because its first budget, while placing a temporary levy on higher income groups, concentrated on trying to reduce expenditure on the traditional welfare system – while leaving the second welfare system untouched. There was a perception of unfairness that has been seized upon in Bill Shorten’s current election campaign strategies.

Favouritism by the LNP towards its own support base was qualified in 2016 by placing limits on transfers from taxable income to higher income superannuation. In return, there was some compensation in the 2016 budget for higher income earners.

It is reinforcement by quasi-legal income alienation mechanisms through the misuse of family trusts, formation of family companies and resort to offshore overseas management funds as identified in the Panama Papers.

In this week’s election campaign, the LNP has been desperately trying to shift its campaign agenda back to the populist issues of terrorism and asylum seekers which sustained the Howard Government in 2001 and 2004.

However, the mining boom is now over and the harsher realities of the income divide are being reflected in the polling from Research Polling over the fortnight to 17 May 2016.

Labor’s problem is still the drift of the protest vote to minor parties which still account for 20% of the intended voting preferences.

Essential Report Online 17 May 2016 http://www.essentialvision.com.au/category/essentialreport

Essential Report Online 17 May 2016 http://www.essentialvision.com.au/category/essentialreport









Political risks must be taken to open up Labor’s slender lead which is still dependent on the favourable drift of preferences from the minor parties including the Greens, the NXP Party in South Australia and Putting Tasmania First.

The most interesting feature of Essential Research is the strength of the class divide which parallels the income divide across Australian society after the resources boom.

While Malcolm Turnbull is perceived as an affable enough and thoughtful leader, his LNP Party is increasingly associated with political elitism by a vast majority of Labor, Green and Independent voters.

Essential Report Online 17 May 2016 http://www.essentialvision.com.au/category/essentialreport

Perceived representation of the LNP.












Bill Shorten’s commitment to the pragmatic renewal of the Labor Party as the consensus-builder from the progressive centre of Australian politics still needs to lift Labor’s primary vote to above 40 per cent. Having 20-25 per cent of the non-LNP vote, syphoned off to minor parties could easily produce a repeat of the 2010 result which denies the Labor Party a mandate to govern in its own right.

In the ANUpoll, the ALP still has a credibility problem in reaching out to progressive sections of the electorate although this situation has improved since April 2013.

Perceived representation of the Labor Party

Perceived representation of the Labor Party.











With the ghosts of the 2001 and 2004 elections poised to be directed by the LNP against a resurgent Labor Party, it is worthwhile to emphasise the impact of LNP policies on the future income divide in Australia. Any lingering protest vote that puts the LNP ahead of Labor threatens the formation of a stable Shorten Government with a majority in the House of Representatives of 2007 proportions.

denis-brightDenis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in developing pragmatic public policies for a social market that is quite compatible with contemporary globalization. Denis will be absent for three weeks in Southern Europe from the 19 May enjoying some of the dividends from his Q Super Fund. He will report back later in the campaign as trends become more firmly established by mid-June.



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  1. CrOwS6491

    What a great & lengthy article, but so true! There is no “class war” here in Australia, just ask Malcolm Talkbull! As far as he is concerned there is none, as ALL his obscenely wealthy mates have no “knowledge” of any such thing. After all, in the circles in which this inept, lying conservative mixes, there is no “class”, just them! IF the 1% of all of Australia were to pay the taxes they should & they showed some sort of “concern” towards all the low paid workers (all of whom will have contributed to their wealth!), the Pensioners & the unemployed etc, then maybe,Australia would be less of a “class” divided society–but unfortunately–that will never happen. ALL these obscenely wealthy people could not care two hoots about anyone “below” them!

  2. Rubio@Coast

    Thanks Denis. Everyone at the Coast is really disappointed that long-term unemployed are going to be offered a $4/hour training wage under PATH.

    Hopefully Lucy Stanton in Wide Bay will take up this issue as part of Bill Shorten’s nuts and bolts defences of our living standards.

  3. silkworm

    “More of the electorate is still wants to incur higher private debt to sample middle income consumer and modernist values.”

    Can anyone make sense of this sentence?

  4. Rubio@Coast

    Of course this is an illogical action: People go into debt to impress their friends and become a part of the bourgeois commercial culture which prevails throughout global capitalism.

  5. Rubio@Coast

    Ever been to parties Silkworm where people drink and take drugs to excess regardless of the consequences.

  6. bobrafto


    Hopefully Lucy Stanton in Wide Bay will take up this issue as part of Bill Shorten’s nuts ……..

    my morning laugh

  7. townsvilleblog

    So aspiration can only be had by those making $80,000p.a. plus. I am much like Duncan Storrer in that my education was poor, I left school in Grade 9, but have a strong work ethic so have rarely been out of work in my life, except for one year spent in WA they are very parochial in the West. I have never earned brilliant money, my highest pays were at the now defunct Yabulu nickel treatment plant. I have managed my money well and live a debt free life apart from rates and electricity which is kept to a minimum with solar panels and Solahart hot water. There has always been a class war in Australia, mostly unspoken but one can see the rich, look down their spectacles at you and its obvious what they are thinking. 75% of the 8 million Australian workforce receive under $80,000 p.a. not that I’m claiming that that amount donates wealth, but certainly if a couple were both on $80,000 then yes they would be well on the way to being wealthy. My top pay was $27,000 p.a. around 20 years ago.

  8. DisablednDesperate

    I agree Denis. It is more obvious in the US but it getting the same here. Example: a guy in US on 1.7 nil a year bought the mayor of Chicago. He got him to close 50 schools citing that the State couldn’t afford them. The billionaire complained that 50 wasn’t enough. It should have been 125.

    I see the same corporatism happening here.

    The only thing I disagree on is as a currency issuer the govt doesn’t need to tax to be able to spend.

  9. Revitalizing Labor

    LNP strategists clearly underestimated Bill Shorten’s capacity to rebuild an older style of Labor Party as the income divide widened in Australia

  10. The Social Wage Returns

    Malcolm Turnbull is helping to revive Labor’s fortunes as he talks down to the electorate which is facing difficult times due to the income divide. As Mr Harbourside Mansion, he cannot government for Western Sydney as he does not understand our battles.

  11. Wide Bay Activists Unite

    So many disadvantaged people in our electorate still vote for the LNP directly or to the LNP via smaller parties.

    Lucy Stanton has made waves with her 5% swing to Labor on 2 July.

    Hopefully her support base will build up in the more Labor centres like Noosa, the Noosa Hinterland and Maryborough.

    It is important to call for a lessening of the income divide in regional electorates.

    Only Labor has the support base to do this effectively at state and federal levels of government.

  12. Freethinker

    I hope that you are right Wide Bay Activists Unite because my years in Childers and Moore Park Beach give me no hope at all for people to change their political views.
    They are very conservative or in many cases politically uneducated.

  13. Möbius Ecko

    “So many disadvantaged people in our electorate still vote for the LNP directly or to the LNP via smaller parties.”

    https://en.wikipedia.org/wiki/Joe_Bageant Just as relevant here.

    Over a long time and with the aid of the MSM, especially Murdoch and commercial TV executives, and right wing think tanks like the IPA, Menzies Institute, H.R, Nicholls etc. also run by right wing vested interests like Murdoch and co, the Liberals have convinced the Australian public and most of the commentariat that the Liberals are better security and economic managers, when on scrutiny of the empirical facts they aren’t.


    Because of the fear they have instilled in certain groups and demographics like the aged and rural, these groups steadfastly vote Liberal even though it’s not in their interest to do so. They are inevitably worse off under the L-NP than Labor.

    I don’t know how you break this hard wired belief as it’s now so ingrained in the Australian psyche, so much so that I often hear rusted on Labor and Greens supporters I know say the Liberals are better economic managers, but they vote against them for social reasons.

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