Tuesday, 26 May 2015


Labor is losing the debate about fairness, writes MRC Executive Director Nick Cater in The Australian today.


There was more disappointing news for the hand-wringing industry last week when an OECD report found Australia to be a remarkably fair place.

The poor are getting richer and the rich are getting poorer while those in the middle are doing very nicely, thank you.

"Between 2007 and 2011, the income of the bottom 10 per cent increased by 2 per cent while incomes at the top declined by 1 per cent," the OECD found.

"This pattern is very different from most OECD countries, where the bottom 10 per cent fared worst during the same period."

Median net wealth in Australia has increased at a faster rate than wealth in the upper percentiles, leading the OECD to conclude "inequality at the top of the wealth distribution has receded".

What will become of the unsold copies of Labor's assistant Treasury spokesman Andrew Leigh's book Battlers and Billionaires now its thesis has been knocked firmly on the head?

Leigh makes it plain on the back cover: rising inequality "risks cleaving us into two Australias, occupying fundamentally different worlds".

Oh dear. Will Leigh's publishers be forced to pulp the remaining stock? Or will Battlers and Billionaires, like Wayne Swan's Postcode, gain cult status as an item of class-war kitsch to be put on ironic display alongside 1950s pulp science fiction? Yes children, they really did believe that one day cars would fly.

Leigh made a spirited attempt to tap the global market for have-and-have-not literature that the global financial crisis spawned: Kate Pickett and Richard Wilkinson's The Spirit Level , Joseph Stig­litz's The Price of Inequality and Thomas Piketty's gloomy tome Capital in the Twenty-First Century, to name but three.

Translating this North Atlantic-centric thesis into Australian proved to be a difficult task, however. As DH Lawrence noted in his novel Kangaroo, Australians are allowed to be better off than their neighbours; they're just not allowed to be better. "And there is all the difference in the world between feeling better than your fellow man and merely feeling better-off," Lawrence wrote.

Leigh did his best, but by page 99 he was flagging. "The more I looked at the data, the less certain I became that inequality was an unmitigated evil ... inequality appears to be good for growth and to have no substantial effects on crime." Presumably it was too late to turn back. Leigh had signed Morry Schwartz's contract, the vol-au-vent and chardonnay had been ordered for the launch and Leigh had no choice but to limp on for another 50 pages. And there it should have rested, but by that stage the Labor Party was running low on ideas, so Bill Shorten picked up the fairness theme and ran with it.

Labor is "the party of prosperity — and the party of fairness", Shorten told the National Policy Forum in March last year. The party's mission is "to help those struck down by the shafts of fate ... to lift people up, and gather them in".

Call it, if you will, the Hanna-Barbera cartoons approach to character development: Tom v Jerry, Yogi Bear v Ranger Smith and Shorten v Tony Abbott, the cackling villain with his dastardly plan to turn Australia into "a colder, meaner, narrower place".

For a while it seemed to work, helped along by Joe Hockey's ambitious first budget, which despite — or perhaps because of — its ser­ious intent was too easily portrayed as unfair.

It was clear long before the Treasurer's second budget, however, that the Opposition Leader needed another tune. When he was invited to discuss his reply to the budget with the ABC's Leigh Sales, it was surprising he was not better prepared. Hadn't he seen Hockey's hammering earlier in the week that left the studio looking like a Vietnamese abattoir?

Sales: "Less than two years ago, Australians voted to get rid of the Labor government that they didn't like. Leaving aside leadership instability, what will be your point of difference to the Rudd-Gillard government?"

Shorten: "Well, first of all, what I'm interested in is my point of difference to Tony Abbott.''

Sales: "But Australians need to know that when they vote for you they're not voting for a return to the Rudd-Gillard era that they didn't like."

Shorten: "Well, we're a far more united team."

To which Sales could have replied by repeating her first question, but mindful perhaps that the kiddies might not yet be in bed, she decided to move on.

Nick Dyrenfurth, one of the more astute Labor thinkers, went to the heart of Shorten's problem last week in an article in The Monthly.

"A motto of 'Australia will be fairer' cannot suffice," Dyrenfurth writes. "Fairness cannot of itself fix the structural budget deficit, develop a consensual pro-worker, pro-business economy where people actually make things and hold down stable, well-paid jobs, or address issues as diverse as an ageing population, terrorism and climate change.

"It is not alarmist to think that Labor is sleepwalking to electoral disaster ... Labor's avoidance of debt-and-deficit politics is the highest of high-risk strategies."

Many who believe ideas still matter in politics, such as The Australian's Paul Kelly, were encouraged by Labor's Treasury spokesman Chris Bowen's National Press Club speech last week. Bowen's own book, Hearts & Minds, grapples with the issues a progress-driven party — as opposed to a progressively driven party — must confront.

Unfortunately, as Henry Ergas pointed out on these pages yesterday, Bowen's plan to turn the next election into a referendum on superannuation concessions is based on flawed economic assumptions, albeit assumptions made by Treasury. It is also flawed politics, relying on false arguments about fairness to conduct a covert expedition in class war.

Nevertheless Bowen, like Dyren­furth, must be having kittens about the agenda for the party's national conference in July: gay marriage, asylum-seekers, Pales­tine and party reform. "This is scarcely the message it should send swinging voters," Dyrenfurth writes.

Fortunately some in the party are still prepared to argue the politics of common sense. It is not entirely clear, however, who — if anyone — is listening.

Nick Cater is executive director of Menzies Research Centre.






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