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There are better options than tax cuts

By 2353NM

Prime Minister Scott Morrison spent the Christmas break this year promoting Australia opening up to the world regardless of the increasing threat of yet another form of the COVID-19 virus. Morrison claimed that while there will be people in hospital and that others will die, the economic cost of retaining infection prevention measures was too great. New South Wales Premier Dominic Perrottet was just as gung-ho, removing almost all pandemic management restrictions in NSW just as the Omicron variant of COVID-19 was starting to appear.

While it is true that we can’t stay isolated forever, the reality of the past month or so is that as a country we have suffered through the highest death and serious illness tolls of a pandemic that has been affecting us for two years. Just think about that – more deaths and serious illness now, when the health experts have a pretty good idea how to minimise illness and death than at the beginning – when everyone was scrambling for understanding.

Agreed, the rest of Australia (except for Western Australia) followed Perrottet’s lead in partially reducing restrictions and ‘opening up’ their states. In reality, they didn’t have a choice. However none of them removed restrictions such as mask wearing and were then forced to reintroduce them, as was the case in NSW.

And while Morrison and Perrottet can carry on about economic recovery and ‘pushing through’ the discomfort, every person who has died or has been in hospital Australia wide as a result of COVID-19 complications since the beginning of December 2021 is a direct demonstration of Morrison and Perrottet’s absolute lack of understanding. There is a person behind every statistic and that person, their family and friends are all adversely affected by Morrison and Perrottet’s fixation on ‘economic good times’.

Again, we have seen ‘panic buying’ in the supermarkets (what is it about toilet paper by the way?) and disruptions to various commonly available services. This time around, the root cause appears to be the number of people that are either forced or choose to isolate because they or someone close to them is infected by COVID. Not only are there a large number of health workers isolating because they or those close to them caught COVID, there are shortages of people to produce the food, transport the food and stock the shelves. On top of that there are shortages of people well enough to provide childcare for those that have to go to work, drive the public transport for those that rely on it to go to work and so on.

The past couple of years has proven to us the real essential workers in Australia are not the politicians, the marketing executives, the share brokers or the management consultants, all of whom probably contribute to the economy. They certainly don’t deliver the food to the shops, stack the shelves, look after the sick, the elderly or our children on a full-time basis. It is therefore easy to argue that the transport drivers, shop workers, nurses, aged or childcare workers are far more important in keeping our society functioning.

It’s also easy to argue that the transport drivers, shop workers, nurses, aged or childcare workers are some of the most poorly paid members of the community. That is probably because traditionally these roles are performed by those who are believed to be unskilled or female – often both.

There is nothing unskilled about driving a semi-trailer into a suburban shopping centre and backing it into the loading dock or piloting it along the highway for 8 to 10 hours between larger cities while remaining on a timetable that is calculated to reduce fuel costs and distribute merchandise as quickly as possible, rather than help the driver perform their role easily. Neither is it unskilled to be standing there and fielding questions without notice about a range of products that is available for sale in the retailer you are working for. Nurses, aged and child care workers require specific qualifications in 2022, however their hourly rates do not reflect the skill and experience they bring to their roles.

For example, at the time of preparation the minimum pay rate for a full time Enrolled Nursing Assistant is $22.19 per hour according to the Fair Work Commission’s website. Aged and childcare workers are similar. Yet those who choose to follow these professions turn up at work every day, COVID notwithstanding because it’s really hard to provide ‘hands on’ individualised care and attention to others using Zoom or email. The share brokers, politicians and management consultants have the option to work from home with the inherent comparative safety that allows.

Alan Kohler, writing for The New Daily suggests that

Too many jobs are chronically underpaid, and they are mainly the ones done by women: aged care, child care, nursing, waiting, interior design, book editing – in fact virtually any job done mainly by women is both undervalued and underpaid.

And that’s apart from the 12.5 billion hours of totally unpaid work that is estimated that women do worldwide, worth about 12 per cent of the global economy.

Kohler argues

Government subsidies for aged care, child care and health care could be increased sufficiently to lift wages, thereby socialising the solution rather than putting the burden entirely on those using the services.

But with taxes being cut (ridiculously), government debt heading for a trillion dollars and the necessarily government-funded NDIS and defence taking a growing share of the budget, that seems unlikely, even under a Labor government.

Whatever the solution, politicians in general need to remember that behind every set of statistics are people who are physically experiencing the ‘unfortunate’ outcome portrayed in the commentary. And in a lot of cases, they have no option but to turn up again tomorrow and do it all again for around $20 an hour while hoping they don’t get sick or injured.

Morrison and Perrottet could help immediately. Two $400 ‘special payments’ to aged care workers who are currently arguing in front of the Fair Work Commission for a 25% wage increase (which is $5 an hour) just doesn’t cut it. Morrison could repudiate the ‘trickle-down’ faux ideology, abolish the future tax cuts and and actually support those on lower incomes. His political mate Perrottet could show him how it’s done using the NSW health and education systems as examples.

As proven in the small period of time when JobKeeper was introduced and JobSeeker was increased for the lower paid and welfare recipients, those on lower incomes didn’t squirrel away the money to spend on the next $80k plus 4WD ute, SUV or future overseas trips. Generally they used it to improve their standard of living by getting their bills up to date, fixing the car they already had so it was actually roadworthy or replacing appliances around the house with ones that worked efficiently.

Who knows, engineering pay increases towards the lower paid by increasing subsidies to various industries that provide real essential services to our society might actually go a long way towards growing the economy beyond what is possible now. It will certainly reduce the current gender pay gap.

What do you think?

 

This article was originally published on The Political Sword

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7 comments

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  1. GL

    But, but, if you go with better options the 10% and big business won’t make extra piles of (no doubt mostly offshored) money from tax cuts and that could be bad for the LNP donation coffers…I mean economy. You will never get anything resembling a fair deal from the LNP (and to a lesser extent Labor as well) for the little people except when there is a looming election and the fantasy window dressing promises of good things show up like a locust plague.

  2. Andrew J. Smith

    The trap, how can they cut taxes, already low by global standards, when the working age population dominate PAYE system, but are in decline with the baby boomer bubble exiting into retirement (expecting low/no taxes?) i.e. passed the demographic sweet spot yet we have increasing numbers of oldies dependent upon public service, health care and pensions, who is going to pay taxes?

    The choice is increase taxes moderately and ensure fair share, or cut public services delivery and tighten up on pension means and assets?

    The OECD data tells a story and gives a picture of what is happening in the working age, which is avoided in Australia https://data.oecd.org/pop/working-age-population.htm

  3. GL

    Andrew,

    Under the LNP it’s fairly easy: cut public services. Increasing taxes is anathema and to be shunned.

  4. wam

    I think you are spot on again, 2353, especially with your ” lower incomes didn’t squirrel away the money to spend on the next $80k plus 4WD ute, SUV or future overseas trips” and “…government debt heading for a trillion dollars”. It was this spend that kept the economy moving and it is the spending of payrises that get the economy growing, if the government was not so afraid of workers. The rabbott’s daily rant, on the debt that saved us from the ravages of the GFC, was the end of juliar but little biily and albo have neglected the last 9 years of burgeoning debt. Why?

  5. Phil Pryor

    People must be made aware of taxes as money NOT lost, but gathered for socially useful, necessary and essential purposes, IF we have a decent and responsible and intelligent government of the people. The debt includes huge amounts of bonds, much being held by conservative and “prudent” government supporters in institutions as well as by individuals. Holding assets in bonds is “prudent” and many who hate debt must realise they have equity in bonds, property, paper, to offset worries over personal or national debt. Let us tax sensibly, getting essential receipts to balance debt. Let us plan to restore and improve the nation’s infrastructure and strengthen finance for health, education, social welfare. It pays…

  6. wam

    yes, phil, when considering the people who pay no taxes and include those who get franking credit cash, we must include the fact that these people do not pay the medicare levy either.
    Perhaps the levy should be on gross earnings?? Everyone will pay and the % will be lower???

  7. Phil Pryor

    Wam, income taxes are relatively “modern” and were promoted to fight and win wars. They are highly corruptible and I know of some rich gazillionaires who effectively pay no tax. We must tax money flows at a point of agreed fairness, so companies, consumers, excise victims need to shell out as well as wage and salary earners. I recall paying c. 8,000 tax, before deductions, on a salary of c. $29,000, while at the time, the P M, a Mr. Fraser, paid less than $1,900 (info through a friend of a colleague in the treasury and tax area). Fraser also often spoke out against that awful “Red China”, while bales of his wool were clearly stamped with a customs sticker, bound for China. Cane toads, maggots, conservatives…

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