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Tackling inequality: good for the economy, good for the party

Tim Colebatch writes in Inside Story (25.7.17) about Opposition Leader Bill Shorten’s recent speech on inequality and the Australian economy, suggesting that the topic is now the one ‘on everyone’s lips’.

‘At the opening session of the annual Economic and Social Outlook Conference, hosted last week by the Australian and the Melbourne Institute, Productivity Commission chairman Peter Harris expressed surprise that no one issue seemed to have sufficiently dominated public debate in recent months to become the focus of the conference.

‘Really? I wonder if he still thought that at the end of the conference – by which time opposition leader Bill Shorten had flagged further policy shifts by Labor to tackle tax avoidance by those at the top, and the Australian had quoted the Melbourne Institute itself to declare Labor’s narrative about inequality “patently false”.

‘With Shorten tipped to announce a Labor commitment to crack down on tax avoidance through trusts when he addresses the NSW Labor conference this weekend, treasurer Scott Morrison has clicked into gear, wheeling out the usual “the politics of envy” line that you hear whenever anyone suggests making the tax system fairer. Morrison would have had the phrase ready to hand because it’s been thrown at him when he’s tried to do the same.

‘This issue has the potential to be a key battleground between the parties all the way to the next election. Shorten looked comfortable and relaxed as he staked out his ground. Fairness is not an issue uppermost in the minds of the conference’s hosts, but it certainly is one that concerns the electorate, and there is no shortage of statistics to suggest that voters’ worries are well-founded.’

There’s far more to the fair go than just economics

Eva Cox writes in The Conversation (27.7.17) about recent debates which paint varying pictures of the levels of social and economic inequality in Australia. The author wonders, when it comes to inequality, whose account can be trusted?

‘Opposition Leader Bill Shorten has often argued that inequality in Australia is the worst it has been in 75 years. Leaving aside whether that is or isn’t correct, there is a bigger, more pertinent political question: is it inequality itself, or the perception of inequality, that fuels so much of the contemporary mistrust of politicians and political systems?

‘The growing legitimacy of inequality is a serious problem, even among market advocates like the IMF and World Bank, which seek to confine the fix to more equitable distributions of wealth. They fail to recognise the strong possibility that the push on inequality comes from wider perceptions that the system is so unfair it creates distrust of those in power and their main alternatives, so the damage is social rather than material.

‘Commentator Ross Gittins has argued that the collapse of the “neoliberal consensus” is as apparent in Australia as it is in Donald Trump’s America and Brexit-ing Britain. Yet the data here do not reveal the serious poverty it brings with it.

‘The local focus on inequality has very much been more on tax rorts and the presumed sins of the rich than on the poor, either on or off welfare. This looks to be the basis of Shorten’s next policy bid for power, which he promises to release via inequality policies at the New South Wales ALP conference this weekend.

‘… His emphasis on the wider effects of inequality suggests he recognises it as a symptom of wider issues, rather than a single economic cause of problems. However, if his proposals are primarily focused on increasing tax takes, he is not tackling the wider damage, such as system distrust, that is widely evident.’

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