How Joe Hockey is dividing Australia
Joe Hockey is constructing a new Australia, one in which taxpayers are being encouraged to resent those receiving public money.
It is more than two decades since Kerry Packer famously told a parliamentary inquiry that anyone who doesn’t minimise their tax “wants their head read”, establishing himself as the Patron Saint for the Bolshie Taxpayer.
He cut a defiant figure, the larrikin businessman telling all those namby pamby politicians that they weren’t spending his money wisely and he was damned if he would give them a cent more than was legally required.
So he continued to manipulate his business affairs to ensure he contributed as little as possible to the public purse. The Bolshie Taxpayers cheered him on and, when he died, they chipped in $73,000 in public money to send him off with a state funeral. The man was a national hero.
It would be fair to say that Packer and his disciples well and truly won that argument. Taxes, it is broadly acknowledged, are a Bad Thing.
The “I’m proud to pay my taxes” movement has never really taken off in Australia. It’s a sentiment you rarely hear even from progressive politicians, and admitting to it in public is the social equivalent of passing wind in a lift.
Now, Joe Hockey has taken the anti-tax sentiment to a whole new level.
His speech to the Sydney Institute last week recalibrated the debate. Not only is tax a bad thing, something to grumble about, but it is an unfair thing.
This is what 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.
“Is this fair? Whilst income tax is by far our largest form of revenue, just ten per cent of the population pays nearly two thirds of all income tax.
“In fact, just two per cent of taxpayers pay more than a quarter of all income tax. Maybe these taxpayers would argue that the tax system is already unfair.”
These must be among the most divisive words uttered by a senior Australian politician in a generation.
Hockey has managed to radically redefine the nation’s notion of unfair. Unfair is no longer the person with a disability, the chronically unemployed or the single mother who struggles to pay the gas bill.
Unfair is the person on an average wage doing the heavy lifting and paying his or her taxes. Really unfair is the person on an extremely high wage – the top two per cent – who is doing the really heavy lifting.
Hockey has gone beyond expressing the principle that the government should do everything it can to keep taxes as low as possible, ensure taxpayers’ money is spent wisely and police welfare fraud. All non-controversial stuff.
He is inviting average Australians to take the mental leap into his newly constructed Australia, one made up of, to use his words, Lifters and Leaners. He is encouraging Australians to resent those who, for whatever reason, are recipients of public money.
Hockey’s formula – in effect telling average taxpayers that they are wasting a month of every year working for the benefit of slackers – is a powerful one: “Crikey, I could spend a month in Bali every year if it wasn’t for the bloody Leaners.”
But is it also highly flawed.
We could all nominate areas where we believe our tax money should not be spent. Alternatively, many of us could nominate areas where we believe more tax could be collected.
Scratch the surface and it is pretty clear that, while the age of entitlement might be over for some, it is not for others. But that is another story.
Interestingly, the Gillard government took the dramatic step to increase the Medicare levy from 1.5 per cent to two per cent (that’s happening from July 1) to help pay for the National Disability Insurance Scheme only because it was in a fiscal pickle and could find no other way.
This was one of the most significant reforms of that turbulent administration. Yet the silence was deafening. Australians obviously felt it was a project worth paying more tax for.
The fact is that, contrary to what the Iron Lady said, there is such a thing as “society”.
In short, that means that we are all in it together and, like it or not, that means paying taxes.