Swan revs up billionaire bashing

Here’s the transcript of the Treasurer’s Press Club address this afternoon. Pretty clear now where he’s taking his assault upon the billionaires, straight to Tony Abbott’s door and, to be honest, Abbott is going to struggle against this attack. Opposing the carbon tax may be a political winner. Opposing the mining tax isn’t.  This is a nice wedge to Tony’s “high taxing Labor” rhetoric.

Thanks Laurie (Wilson) for the introduction; thanks to the Press Club for organising such a good turnout; and thanks for the warm welcome.

As most of you would appreciate the job of Treasurer is an all-consuming one, especially so when you combine it with the job of Deputy Prime Minister.  So when last Christmas rolled around I was really looking forward to the prospect of some family time, and the opportunity to tackle some of my own reading, beyond the usual offering of briefings and memos.

For reasons that are pretty well-known – from global meltdowns to tax reviews to natural disasters – there hasn’t been time in recent years to make much of a dent in my summer reading.  But this year was different.  I had a bit more time for family, for friends, and to really immerse myself in a debate that is raging around the world – one that President Obama calls the ‘defining issue of our time’.

It’s a topic that drew me to the Labor Party four decades ago; one that spurred me into the parliament 19 years ago; that inspired me to write a book seven years ago; that motivated me to publish an essay over the weekend; that got me up this morning; and that brings me here today.

In the international debate, they describe this issue as equality, or as social mobility, but here in Australia we’re used to calling it the fair go.  The idea of a fair day’s work for a fair day’s pay, opportunities for our kids irrespective of where they were born or who their parents are, and a decent safety net for the most vulnerable.  And given my lifelong passion, I was pleased to find available over the summer so much thoughtful writing and reflection on the gap between rich and poor and what it means for the economies of the world.

I was heartened to see this issue capture the attention of some of the world’s finest economists and thinkers; names like Roubini and Krugman and others – some of the absolute greats.  But the most telling indication of the urgency and intensity of the debate was the fact the Financial Times, a flag carrier for freer markets, opened its pages to the debate with its compelling Capitalism in Crisis series.  If you can only read two things on all this, read that series and read the Fukuyama contribution in Foreign Affairs, about the impact of the declining Western middle class on the very foundations of capitalism.

Surveying the wreckage of the GFC, Fukuyama argues the idea of the middle class society is under mortal threat in the West, even as a growing middle class is lifting hundreds of millions out of poverty in the East.  It was this argument that prompted me to write the Monthly essay and come here today, really to make four main points about: why this debate about inequality matters in Australia; the role of our contemporary policy mix in advancing the fair go in this country; why productivity, competitiveness and wealth creation is so crucial to providing opportunities to more people; and the risk posed by vested interests who’d rather see the benefits of the Asian Century flow disproportionately to a fortunate few.

So my first point is that the global debate about rising inequality is genuinely relevant to Australia today.  Although this issue is being hotly contested overseas in the media, in parliaments, in universities, and on campaign trails around the world, the volume of the conversation here has been a lot lower.  And although the Occupy movement that began on Wall Street also reached our shores, its local incarnations on the streets of Brisbane, Sydney, Melbourne and even Canberra were not really comparable.

You often hear commentators say our local debate is isolated or complain that we’re not talking about what’s being talked about in the great centres of the world.  In this case though, I suspect our debate is different because our reality is different.  Simply put: we actually are fairer than much of the world.

Australians have done much better matching strong growth with social equity than almost anyone over the past century, and particularly in the aftermath of the global financial crisis.  One of Australia’s great achievements in the twentieth century was the creation of a truly middle class society.  One where the overwhelming majority can get a good education, gain valuable skills, experience the dignity of employment, feel they have a stake in the character and direction of the national community, and have the resources to provide an even better life for their children.  In Government, over the past four years, we protected this achievement and we built on it.

The social upheaval and disillusionment that’s occurred in so many other parts of the world has not been the Australian experience.  So as you follow the debate overseas, you can’t help feel a sense of appreciation for what we’ve achieved in Australia. In the essay, I detail some of the indicators that show how well we stack up:  Like the fact that incomes for the poorest 10 per cent of Australians have grown at more than double the average for developed economies in recent decades.  Like the fact that shortly after the Second World War, Australia and the U.S. were roughly equal in the percentage of total income going to the top 1 per cent, while today the gap in Australia between the richest and the rest is less than half that of the U.S.  And like the fact that Australia has done a better job than most other countries at preserving economic mobility – at making sure that success can be determined by hard work and effort and not simply where you were born or who your parents are.

So across 17 OECD economies, Australians that are in the bottom 20 per cent of income earners are the equal third most likely to lift themselves out of that situation within three years.  We’re at the top of the ladder when it comes to letting people climb the ladder.  But with pride comes the sense that without constant attention these achievements and the egalitarian social contract upon which they rely is also somehow fragile, and at risk.

As the Prime Minister said last week, this didn’t happen by accident, this took leadership, not luck.  And it’ll continue to take leadership to protect the fairness we value for the future.  This brings me to my second main point: that there is nothing accidental about our record of social and economic mobility – it’s a product of our history; a reflection on our people; and a tribute to our policy successes.

You see, the fair go was never pre-ordained or guaranteed; we’ve always had to fight for it.  And I’m proud the labour movement has always been there, guarding it, advancing it, extending its reach.  I’m talking here of things like the aged pension or superannuation; or Medicare; or paid parental leave; or the defeat of WorkChoices – all proud Labor achievements underpinning the fair go.  Same goes for the Education Tax Refund we introduced; or more money for parents of teenagers, or the boost to the childcare rebate.  Or laying the foundations for a National Disability Insurance Scheme; or better schools for our kids; or tripling the tax free threshold to benefit workers.

Or the Labor values that make sure government payments are sustainable and targeted to where they are needed most, with practical steps like pausing indexation on some payments and means-testing the private health insurance rebate.  These policies are all guided by deeply held values.  They are guided by sound economic thinking as well.

Inequality isn’t just unfair – it’s inefficient.  It makes no moral sense for the battler to subsidise his boss’s private health insurance.  It makes no financial sense either.  That’s why we’ve struck a balance between strong fiscal discipline and continuing to support job creation and growth.

And these important savings which double as fairness measures show that our determination to return the budget to surplus in 2012-13 doesn’t come at the expense of our determination to keep providing a helping hand to those that need it most.  Because ensuring more Australians feel the benefits of a growing economy is core business for the Labor Party and we’ve got a very proud record of dedicating these policies to nourishing the fair go.

But we also know it’s not possible to give everyone a bigger piece of a smaller pie – they need a bigger piece of a bigger pie.  And this is what brings us to the productivity challenge, our wealth creation agenda, and my third main point today:

That even with our successes to date, the big opportunities for Australian workers and businesses in the global economy can only be maximised into the future if we find ways to boost productivity, so we can create more wealth.

As you know, our future is being shaped by the relentless shift of global economic weight towards Asia.  And as the global economy changes, this will inevitably change the structure of our own economy.  The Asian Century can be as much the Australian Century if we make the right decisions and adopt the right policies.

In the 1950s, only 15 per cent of global GDP was created within 10,000 km of Australia’s shores.  Today, that share has doubled to around 30 per cent – and it could double again to almost two-thirds by 2050.  This is already making an enormous imprint on our own economy, as Asia’s enormous appetite for our mineral commodities drives an investment pipeline in the resources sector worth $456 billion.  But the demand for resources is just the first taste of the economic transformation that’s underway in the Asian Century.

In just eight years from now, there’ll be more middle class consumers on our doorstep in Asia than in the rest of the world combined.  These new ranks of middle-class consumers will increase demand for more than just our mineral wealth. It will also benefit Australia’s tourism operators, education providers and manufacturers of high-end goods.  But while the opportunities are immense, so are the challenges.

While industries in the fast lanes compete for better infrastructure and skilled workers, manufacturers, tourist operators and other sectors are coming under immense competitive pressure from the high dollar and weaker global demand.  Many workers and businesses are understandably apprehensive about what the future has in store. This is despite our economy’s solid growth, low unemployment, contained inflation and strong public finances – a considerably more accommodating backdrop compared to past periods of structural change.

You only have to look back to the early ‘90s, where workers and businesses adjusted to the dismantling of the tariff wall at a time of recession and double-digit unemployment.  That gives us grounds for confidence – but not complacency. Because our success has never been an accident of our geography nor our geology – and it never will.

At the end of the day, the key ingredient to higher living standards of all Australians is productivity growth. Only greater productivity can help sectors of our economy make a sustainable adjustment to the pressures of a high dollar.  And only greater productivity will make us the winner in the Asian Century, only greater productivity will build the manufacturing, agricultural and service sectors of the future which can compete for the business of the rising global middle class.

It’s why we’re investing in education, skills training and apprenticeships, delivering faster and more widely available broadband, and improving the delivery of services such as health care and public administration.  It’s why we’re reforming the tax system, improving the competitiveness of businesses through cuts to the tax rate, and driving innovation in areas like clean energy technologies by pricing carbon.  All to lift productivity.  By fostering gains in broad-based productivity, we will lay the foundations for the long-term prosperity we need to spread opportunity right through our land.

Over the decades, I have come to appreciate this basic equation: productivity equals growth equals opportunity.  And I’ve come to appreciate just how much business understands this equation too.

The overwhelming majority of businesspeople in this country are a force for good in our society; I have tremendous respect for them.  I know they want to work constructively to ensure we make the most of the opportunities of the Asian Century.  And I know that 99 per cent of Aussie businesses know how critical it is that we simultaneously prepare for the challenges ahead and retain the fair go.

For every Andrew Forrest who complains about high company taxes and then admits to not paying any, there are a hundred more that go about employing Australians and creating wealth in a constructive way.  Like those who held on to their employees and worked with government to keep the doors of business open during the dark days of the GFC.

But despite the best efforts of government and the vast majority of businesspeople, I still feel that our prospects in the Asian Century and our proud egalitarian tradition are in grave danger.  This is my fourth main point for today and I want to take some time to explain it.

As I wrote in the essay, the idea that an economy exists to serve society has always been one of the legitimising pillars of capitalism.  We can all agree that rewards should be proportionate to effort and enterprise, recognising the hard work and entrepreneurship that create wealth and employment.

While pure equality is obviously not the answer, we do need to combat the types of disparities in opportunity that damage our society.  But in recent years, we’ve seen the emergence of a tiny handful of people – in fact, theMonthly calls them ‘The 0.01 Percent’ – who mobilise their considerable wealth against policies designed to benefit the majority.

The combination of deep pockets, conservative political support and the ranting of the shock jocks has more and more brazenly sought to defend and promote the interests of very narrow section of the economy.  I reckon whether or not you think that $180 000 a year is rich, we can all probably agree that $180 million a year is rich.  Even in Sydney.

Of course, the wealthy have always exercised an influence over public affairs in Australia as they have elsewhere.  And I welcome the involvement of everyone of good heart in the discussion of public policy whether I agree with them or not.  But there has been a perceptible shift in this country over the past few years towards a stronger and stronger influence, being wielded by a smaller and smaller minority, and more and more plainly expressed in their own private interests.  We see this most obviously in the ferocious attacks bankrolled by the likes of Gina Rinehart and Clive Palmer against the mining tax and a price on carbon pollution.

The billionaires’ protest against the mining tax would have been laughed out of town in the Australia I grew up in yet two years ago it got a wide and favourable reception in the media.  We’re also seeing the vested interests wielding their power in campaigns being waged against a range of other good public policies like the plan for the plain packaging of cigarettes and the means-testing of the private health insurance rebate.  Advertising, armies of lobbyists, and dodgy modelling are all being used to stymie critical reforms that benefit all Australians.

Just as worrying to us is Ms Rinehart’s foray into at least two media companies, reportedly to influence public opinion and further her commercial interests.  You would have been just as worried as I was to read John Singleton let the cat out of the bag when he admitted to employing journalists to overtly and covertly attack governments they don’t agree with.  And that’s before you even consider the havoc that these hyper-rich activists have wrought on poetry or soccer!

So the debate over the future of our country is at risk of being distorted and decided not by the strength of ideas, but the strength of influence.  This is a deeply disturbing development that we must understand properly so that we can resist it forcefully.  We can’t afford to let the market system or the political conversation be undermined by the greed of a wildly irresponsible few.

It is a defining issue for our economy and our community.  I believe it is also now the major dividing line in our politics. I’ve had plenty of disagreements with the conservative leaders of the past – from Menzies to Howard and everyone in between.  But what you could never contest was that ever since the creation of the Australian Labor Party – in fact, because of it – the non-Labor leaders have been in a vigorous contest with us for the middle ground of Australian politics.

Today, we are witnessing the Americanisation of the Right in this country – obsessed with defending the advantages of the most-advantaged in our society. That has become their primary cause and all else is the search for a political strategy to sell that to the public at large.

Mr Abbott’s opposition to spreading the benefits of the mining boom or preparing our economy for a clean energy future is about more than his reflex for negativity.  He is of course singing for his supper – we can see that in the donations from the likes of Clive Palmer that have flooded into the Coalition’s coffers in recent years.

In choosing to kneel down at the feet of the vested interests, rather than stand up for the interests of Australian workers, Mr Abbott has encouraged them at every turn.  That’s what explains the Coalition’s plans to give a tax cut to the immensely wealthy while opposing tax breaks for small business and more retirement savings for Australians workers.

Reading the opinion pieces in the newspapers this morning from Mr Hockey and Mr Robb, I see my essay has done the impossible – making the Liberal Party’s economic stooges finally agree on something.  I don’t remember these guys spending their weekends to rush out breathless op-eds defending more super for workers or tax breaks for small business  But there they are, rushing out to defend the vested interests – and that proves my point about who we represent and who they do.

So let me finish on this general point.  When you stand up to the vested interests, you’re invariably accused of being anti-business or engaging in the politics of envy – these are the convenient phrases used by the champions of privilege.

My essay has been wrongly described as an attack on the rich when it is an attack on an imbalance in influence and opportunity.  In a way the criticism of the essay from some quarters proves my point.

There was a time, when I was establishing myself in the office and part of a new Government, where I was probably concerned about this sort of criticism.  To be honest, now I welcome it.  Our economic credentials, and our credentials for working with serious business people in the national interests, are well established.  And if talking straight and having the argument helps shine the light on something that matters so much, it’s worth being the target of a few predictable phrases from a few predictable quarters.

With the resolution of the leadership issue on our side of the House, I for one am pleased we can turn to what really matters in federal politics.  We can return to a straight comparison between our economic record and plans versus our opponents’.

We will be asking Australians to determine whether the benefits of a strong economy in the Asian Century flow to more Australians in our community, or just to the fortunate few.  Whether we should choose shrinking inequality and growing middle class; or a shrinking middle class and growing inequality.  These are the questions I tried to answer in the essay because I think they are the crucial ones for the economy and for our political system.

A strong economy is not an end in itself.  What matters is what we do with our nation’s prosperity.   Who benefits.  It’s not just about putting dollars in people’s pockets, but about building a better society; a society that provides opportunity to more people, a society that lifts up the worst-off, and gives everyone a decent shot at a decent life.

Economic success spreading in widening ripples to the very edges of our society. Not trickling down from the well-fed at the top.  Because simply, if we don’t keep growing together economically, our community will grow apart.

What’s at stake here is the Australian egalitarian tradition and the prospects of so many Australians who we want to be the biggest winners out of the Asian Century and not just a fortunate few.

I look forward to your questions.


  1. The problem as I see it there will never be a fair distribution from any tax. Give the money to any party and they will squander it.

    What we do need is good policy for after mining. That isn’t happening for any side of politics.

    In general, it’s all about being in power, and nothing else. While in power make sure you get the right connections for after. Why don’t they vote for the same super as us, likewise restricted time before they use that power outside of politics.

    There may be some exceptions, but whatever Swan is doing is not for our good. If he had that tax we’d have our Nuke Subs IMO.

  2. If Swan’s Monthly piece was unbalanced, self-serving, hypocrisy as many here suggested last week, then I would heartily recommend a read of Clive Palmer’s Bjelke-Petersen era style remonstration of Swan in the Fairfax press today – self-serving, self-agrandising, leadenly patriotic, all laid on with a trowel around Palmer’s key objective – get rid of the Labor government and defend Australia against the evils of socialism. You don’t buy yourself a conservative political party to lose, after all. And if you don’t think Palmer has bought the LNP in Queensland, you haven’t really been paying attention.

  3. in relation to the dollars that have been swelling the various parties bank accounts, Swan says clive P has been pumping up the liberals. lets look at all parties accounts, cause I was not amused that someone took money out of mtaa super fund and gave it to the Mtaa union ($8mill), that could have been benefiting members not the unions and I’m guessing here the labour party …. I guess (speculating) thats why the current govt has changed the default super rules to only be an industry based super fund as they get a kickback ??

    while many good points are raised the increasing public sector employment seems to negate much of the good that could be done with the $’s raised

  4. It’s about damn time. I have wondered for a while now why the ALP was letting these rich ****suckers get away with their crap.

    Really they should be attacking them much much more and much harder.

    • Can’t agree SCM that a Gov’t with any wit needs to attack any one. Gov’t holds the levers.
      Get the policy frame work done eg Tax reform. and let the private sector do its work.

  5. drsmithyMEMBER

    A good start would be clamping down on political contributions. Some starting points:

    * Donations to political parties can only be made by individuals (ie: not businesses, unions, or any other sort of collective unit).
    * Donations can only be made by individuals enrolled to vote.
    * Donations capped at the equivalent of 160 hours of the minimum wage, per person, per year.

    • Agree with all of those suggestions but the ALP only wants to read favourable stuff in the press. Stopping rich people you don’t like from contributing to your opponents doesn’t stop the press from being critical of your performance.

      In other words if those things already existed — and I agree lets implement those changes — it wouldn’t change the situation the ALP finds itself in w.r.t. rich people it doesn’t like.

  6. A63 has a point, governments do tend to squander money – however, they both do that (Liberal and Labor) and at least it sometimes hits the mark.

    Have to agree that I feel they are onto a winner with this one – Clive Palmer and Gina Rinehart need to keep their collective mouths shut instead of bleating about how poor they are going to be under a rent tax… Doesn’t sit well with the majority on the eastern seaboard who are struggling because of the high dollar and loss of industry mostly due to mining. Capital cities are doing it tough with jobs – I can tell you that there’s a lot of people living off their credit cards who are terrified of what the future might hold for them should interest rates/prices keep accelerating. Telling them that we shouldn’t be taxing billionaires and their windfall profits (as Tony Abbott will probably be arguing next election) won’t go down well no matter how much poetry Gina writes!

    • SoulNigga Chips


      This is the first action by the Labor Party in about 6months that actually looks like it could win them some votes.

    • It is still not enough Sean.
      The vision and narrative is too narrow.
      To blather on about one tax measure when the entire tax system needs urgent overhaul is a waste.
      There is a real opportunity to own this debate outright if Swanny can grow some statesman like spine

    • Well said Sean.

      Two or three years ago there was a widespread belief that the mining sector “saved” Australia from the GFC. Today public opinion has flipped 180 degrees and most Australians see more downsides than upsides from the mining boom.

      I think Abbott has made a huge political error by going all-in with the miners. Most of the marginal electorates he has to win are in the outer suburbs of east-coast cities. The Coalition already holds most of WA and Qld.

      I agree that Gina, Clive and Twiggy should shut up and hope the MRRT gets through before public opinion really turns against them. We’ve seen with the coal-seam gas issue, that when the miners cross the line it can unite some odd-bedfellows (Alan Jones, Mad Bob Katter and Bob Brown) into a powerful political force.

      Over to you MineBot…

    • Sean G – ‘onto a winner with this one’. I doubt it mate, this one is a non starter. You don’t get to be in the billionaire club without some smarts or at least some smart advice. The money raised from the MRRT will not benefit us all, only vested interest – but it could send the Chinese to South America or Africa in bigger ways. It could genuinely kill the goose that has laid it’s golden egg. Pure diversion from Swanny. A no goer!

      • Africa is applying resource rent taxes quicker than we are. A lot South America already has SWFs drawn from high resource ownership. Australia much more open and stable than both. The sovereign risk angle is a crock.

        • H&H – not so sure mate; the wages of Africa & South America are much, much lower than Ozzie’s high wages – of course the Chinese will go elsewhere if the PRICE is not right. Crock smock there will be no more exporting ROCK!

          • Neil,
            China and India are already in South America in a big way…
            Using Coal as one example.
            China has been buying Coal companies in Colombia…Colombia is South Americas largest coal exporter…Shipping costs have kept the delivered cost of coal to China uncompetitive compared with Australia…Yet China is buying…What is the average daily rate to rent a ship to carry raw materials…How much closer is Australia to China and India compared with South America…

            You might be interested…Colombia is switching to minerals rights auctions in 2013

          • Jumping jack flash

            China “owns” most of South America if a documentary I recently saw about their mining/export industry is correct. Chinese steel and shipping companies directly fund and build port and rail infrastructure there.

            And the South Americans love it!

  7. Do read the Foreign Affairs Jan/Feb 2012 edition, front to back. I have recommended the Fukuyama article previously but the publication is recommended in its entirety.

    A sort of potted history of the ideas that led the modern economic evolution to social democracy and free market globalisation. Essays by influential thinkers (Berlin, Croce, Trotsky (Swan really liked that one 🙂 etc) including the Fukuyama one, focussing on (among other things) the threat to the middle class in developed economies.

    The issues are far more complex than the concerns of any one group; welfare advocates or financial oligarchs. The interweaving of the global economy has created a labrynthine tapestry that appears fraying at the edges, to repair will require far deeper thinking than a reflex resort to us versus them.


      • And MSM will be overwhelmed upon realisation that they are everywhere, both sides of the political divide!

          • They are all worth worrying about, that’s the point.”

            Julian Assange is not worth worrying about

          • “They are all worth worrying about”

            Go tell Swan.

            Banks, Unions, Property Developers, Education Complex, Manufacturing Sector, Farmers, Health Complex, Automotive Sector, Retailers, Home Builders ad infinitum.

            All wanting special treatments, concessions, allowances, funding, whatever. I am becoming so cynical I see vested interests as being The Economy. Everyone wants a piece of taxpayer pie at minimal cost. Remove vested interests and the economy would grind to a halt. A natural progression of government/business interface?

          • You know I agree that it’s a general problem but none of groups are currently aiming to buy Fairfax. You can’t surely be suggesting that any of these, mostly losers in the new economy, have anything like the power of mining?

          • I would suggest that each and every one is an active participant in the game.

            You would have to agree that banks have been particularly successful, so too largesse in various forms to the property sector (taxation treatment, FHB, etc) automotive sector would have been crippled years ago. It is how the economy now functions, vested interests everywhere, wanting and/or needing assistance of some kind.

            The media purchase is a bit of a furphy, but as I said the other day, clearly spooked Mr Swan. We obsess far too much about media ownership in this country.

            So what if Rinehart did attempt to have some of her views aired. Not any different from Swan airing his. But he doesn’t like the idea…the RSPT backlash rattled Swan to the core.

          • These things are all about balance. I do not think Gina wielding influence at Fairfax is balanced.

            And no, it’s not the primary motivation. Wining votes is. I agree with some other commenters here that it’s going to work.

          • Winning votes is the motivation!!!

            You said it. Spin spin spin. That is all it is – and you only need to look here at comments here to see how many were suckered in.

          • You don’t actually believe what you just said. Surely.

            How can it ‘be the right thing’ when the sole purpose is to win votes. To my mind that makes his recent action even more underhand and abhorrent. A circuitous plan to gratify the media and fool the voter.

            A disgrace really. And so many deceived.

          • I may not be able to see what I look like in this debate, but I can see the truth.

            If you drop the ideological baggage you will be able to too!

          • You clearly are unable to see what you look like in this debate.

            Its a robot. It has no emotion. It has no shame, no dignity, and feels no embarrassment. It will argue a losing cause forever, never tiring, never sensing the futility of exercise.

          • Add me to that list 3d1k. Just started getting youth allowance. BOOM. Another satisfied vested interest.

        • Well, we can’t tackle all the 800 pound gorillas in the room all at once.

          One at a time will just do nicely by me. Don’t bleat because mining gorillas are the first in the queue.

          • You’ve clearly identified that people have a propensity to organise to defend their own self-interest. But the logic of your conclusion basically seems to be – the whole economy is one giant tapestry of vested interests, pull on one thread and you shred the entire structure, therefore, just leave it be. But in action that is never the case on any side of politics.

            There always is, always will be an ‘us’ and ‘them’. Such a conception is the genesis of political thinking. There is no wishing it away. It’s when the mechanisms for managing the dynamic between the two are blunted that things really start to go pear-shaped.

            Such a blunting is certainly an effect of globalisation, but very specifically what Palmer, Rinehart et al are also attempting to achieve for their own political position. They can drape themselves in the Australian flag all they like and bang on about their efforts for the cause of liberty and individualism, but they are primarily motivated by self-interest. To imply that Rinehart is just an ordinary citizen wanting to have her say is laugable.

            I would rather a perfect government that pushed back against all of the distortive excesses of the groups you have identified; failing that particular Utopia, I accept the inherent hypocrisy of our imperfect government attempting to maintain an even keel against the resource sector, because I believe the alternative is a far worse result for any government attempting to implement policy aimed at equalising social outcomes, and the Liberals are just as much in that camp as Labor, whether they admit it or not.

          • Spleenvent

            Firstly, grab a copy of Foreign Affairs, it may persuade you of the error of reduction.

            Secondly, I have no problem with media ownership, don’t care who owns what – will read what I want to read, watch what I want to watch. I have an independent mind and am not easily swayed. I’m sure there are many many more just like me.

            Thirdly, you kinda get it. Vested interests = self interests = the economy (even down to the humble voter – now don’t say they don’t have influence, because as HnH has just said, Swan has done all this for the votes).

            It is somewhat depressing that Swan claims to have read the essays but seems to have reflected on the content very little.

            Of course!! It was the speechwriter that read it…

          • As it relates to reductionism, the only error in political analysis and strategy is in ignoring it.

            I cancelled my subscription to Foreign Affairs when I realised it wasn’t in fact a German fetish magazine.

            Nice work, though, Meryl. Fighting the good fight.

  8. Alex Heyworth

    All this crapping on about social mobility and how someone can rise from the bottom to the top, but when it comes to someone like Twiggy Forrest who has actually done that, he is anathema. All because he didn’t like being left out of the cozy deal Labor made with BHP and Rio.

    What a hypocrite.

    • jesus h christ, surely you see the irony in that comment.

      The cozy back room deal done with multi nationals by labor — the same labor crying about the influence of billionaires.

      • Alex Heyworth

        PS, Krusty, I was describing Swan as a hypocrite, not Twiggy. Not sure if you realized that.

        • kinda read like forrest was the hypocrite from complaining about being left out of the special secret backroom deal — so thanks for clarifying

        • Alex Heyworth

          No worries. Swan was the hypocrite for praising our society as enabling social mobility, then getting stuck into someone who actually did rise from the bottom to be a billionaire.

          • Swan is a grubby political animal. If Forrest were to donate to the ALP he would be the next Australian of the Year (nominated by Swan)

    • Well actually, he’s not ragging on Forrest because he’s a self-made man, he’s ragging on Forrest because the guy complains about companies being taxed too much when Fortescue hasn’t actually paid any company tax yet!

      • Alex Heyworth

        I haven’t paid any company tax either, and I’m entitled to think that company tax rates are too high. Ken Henry thinks company tax rates are too high, and he doesn’t pay company tax either. There is no connection.

  9. ceteris paribus

    What a tonic. The Labor Party has found its voice, lost for so long in poll-driven fear about job tenure.
    Well done Mr Swan.

    Now that it has found its voice, there is only the small matter of implementing its re-found vision and philosophy by:
    -redressing the stark inequality of the $30 billion per year tax expenditure in super, the on-shore tax haven of the rich
    -restoring a balanced profit-share between workers and companies and stamping down on obscene executive pay
    -abolish tax trusts
    – abolish upper and middle class welfare and introduce fair means-testing.
    -make more equitable the taxtion of income versus capital
    -establish Denticare so the very poor don’t have to live with rotten teeth
    -bring unemployment benefits above the starvation level
    -differentiate tax treatment of companies with super profits and struggling small business.
    -giving the young a chance at shelter by revisiting speculation-driven negative gearing.
    If it can only match this new rhetoric with action, Labor is back from the dead.

      • Alex Heyworth

        Certainly should be looking at the rest of them seriously. The RSPT was probably the worst proposal of the lot (as originally structured) yet it was the only one that got a guernsey.

    • This is a late post but I cannot let the above comments go by with out some comment:-
      So the $30b in super is all for rich people? Where do the Industry Funds get their drip feed from? Does the struggling small business pay 9% (soon to rise with no productivity trade off)of wages for only their rich employees?
      Obscene executive pays? Do the Industry Super Funds ever invest? Don’t they have a say on executive pays? Never hear much do we?
      Abolish Tax Trusts? Do you have any idea about how a trust is taxed or not taxed? Don’t regurgitate a myth about tax & trusts if you don’t know what you are talking about. The irony is that 50% of your “struggling small businesses” are operated via a “tax trust”. The taxation treatment for trusts & small business is extremely complex & you really should get over the idea that it is a rort. The other irony is that Small Business uses a trust & are subject to extremely complex tax trips & traps. All put in place by brown cardiganed Canberra public servants who have never had any of their own capital on the line. As an aside most expert left wing commentators who have never run a business & have never actually had to pay employees wages from their own money are saying that small business will benefit from the reduction in company tax rate to 29% with the introduction of the Carbon Tax, what a load of tosh. With the complex small business rules & Div7A it will make no difference, & also most small businesses are not even run through a company.
      What is a super profit? If a company’s taxable profit is $100 the tax is $30, if the company’s tax profit is $10billion the tax is $3billion. All Australian taxpayers are required to lodge a Full & True Tax Return & pay the tax as assessed. If they don’t then the law is supposed to come down on them. So all taxpayers should be paying the tax that is deemed by the Tax Act, including all those “Welfare Recipients & home builders & struggling hairdressers in the cash economy!”
      When the taxed company profit is distributed to Australian shareholders it is taxed at their marginal tax rate, which could be 46.5% with a credit for tax paid by the company.
      Make more equitable the tax on capital & income? An expansion of this comment would be appreciated? There are some Capital Gains Tax (“CGT”)concessions for small business & certainly some strange CGT concessions for Rental Property Owners (sorry this is a generalistion – applies to other asset classes, but don’t get me started on this – I would certainly agree more tax is required here, but in next few years it will be losses!). But in the main Capital Gains incurred in Australia by Australian residents are taxed & if in a company it is 30% & when distributed to shareholders it is at marginal rates, pretty much like income.
      Can’t disagree with getting rid of Middle Class Welfare as a general statement, but what actually do people mean by this? Do they mean lets have welfare for genuinely disadvantaged people or is it really the Welfare of Envy we are talking about? What is actually meant by “fairer means testing”? Is this a reference to the level of income – i.e. is Kevin Rudd’s $250K fair? Or is Swan’s $150K fair? Does this income seem fair in western Sydney as compared to Adelaide? What does fair means test actually mean?
      Can’t comment on rotten teath & poor people other than Dental Hospitals are available, but perhaps people also don’t allocate their own funds to Dental. Is the plasma a better return on investment?
      Its quite easy to make throw away statements but are the statements & reality quite correct? The myth in Australia about tax & structures such as a trust is too hard to break down. The reality is that assessable income & allowable deductions are the same for any resident taxpayer in Australia, it actually does not matter what the structure is, the section of the Act is the same. The tax rate does differ as between individuals & companies, but when the cash comes out of a company it is taxed in the shareholders hands as an individual. If tax is avoided in Australia it is mostly because the taxpayer is not declaring their income, whether its as a large or small taxpayer, basically they are all cheats if they lie, billionaire or cafe owner. The law actually applies to all taxpayers equally. Therefore if the billionaires’ have not paid their tax in full the authorities should investigate. Likewise the builder, plumber, cafe, hairdresser, etc. I am sure that if Andrew Forrest or Fortescue has not declared all the net taxable income that they should have then they will or have been investigated. If Wayne Swan has said they have not paid their correct tax he should explain exactly how & why he would know this, if it turns out that the billionaires have paid their correct tax he should now have to say in public that they have complied fully with Australia’s Tax Act. Otherwise Mr Swan should shut his trap & only speak about what he knows about. No-one can go around saying people do not pay their tax if they actually have no idea about what they are talking about. Tax fraud committed against the Commonwealth is not something that is exclusively the domain of “rich” people. Tax fraud is committed by a broad cross section of our community. So lets be careful how we label people & lets be sure of the facts about what we are talking about. The politics of envy is a very bad place to be. Society is never improved or enhanced by our leaders grasping at a nettle to make some noise.

      • drsmithyMEMBER

        Can’t comment on rotten teath & poor people other than Dental Hospitals are available, but perhaps people also don’t allocate their own funds to Dental. Is the plasma a better return on investment?

        I can always tell when someone is just rambling incoherently when they start talking about “plasma” TVs as if they’re some frivolous luxury item only the well-off and profligate could possibly own.

        • I see & hear of plenty of other things that people are willing to spend their money on before dental care. $300 on a girls hair? Sure! Try getting the same girl to come to dental appointments.

  10. There will always be billionaires.

    If i have to choose, I would prefer an australian billionaire having our mines, etc, than a foreign billionaire having them…

    We in Oz seem to thumb our noses at the australian ones and seem to welcome foregin money with open arms.

    Funny, aren’t we?

    • Jumping jack flash

      Yes, the self-loathing Australian. We are a strange bunch.

      Not to open the proverbial, but possibly one of the reasons we magnify our impact on climate change and accept high carbon taxes so easily.

      “we evil Australians, ruining the planet with all of our nasty pollution! Bad, bad, bad. Punish us, please.”

      Also goes to explain our “culture” of tall-poppy syndrome. (And perhaps our relatively high suicide rate)

      “I’m a failure, my life is of no consequence, so why shouldn’t everyone else’s be the same?”


      “What, you want to make me look bad by actually succeeding, you try-hard?”

      • drsmithyMEMBER

        Not to open the proverbial, but possibly one of the reasons we magnify our impact on climate change and accept high carbon taxes so easily.

        What strange world are you living in where the carbon tax is being accepted “easily” ?

  11. While I agree with the thrust of Swannys speech, you could argue that Labour and the Liberals caved into banks demands during the GFC and beyond was nothing more than support to a yet another vested interest group. Maybe the whining miners should take a lesson from the banks low profile approach.

    Anyway, I reckon Swanny needs to tell the miners that if they want the RSPT scrapped, then the Government will begin to claw back some of the $10 billion in subsidies provided to the mining industry. Simple really.

    • The subsidies to mining are predominantly in the form of fuel subsidies. A lot of other ‘vested interests’ would be really upset to see this subsidy go.

      It was a little unfortunate that the big Australian miners were not invited by Gillard and Swan to the negotiating table – they have some views that differ from the major multinationals and no doubt would have appreciated being consulted.

      They were not on Gillard and Swan’s agenda. Curious.

      • If we think back a few weeks Swan was dishing the bankers, before that media owners, and now the big bad miners. Who with lots of money will be next?

        I don’t have faith in any political party, but the theme of the debate is getting scary IMO.

        • It’s scary!!!! Even scarier is the fact that people like HnH et al are barracking for it who we would normally rely on for being sentinels on such stuff are actually in favour
          …re the bankers…he didn’t vilify individual bankers personally!!! That’s a special aimed at the few who got off their a..e and went and did something of worth.

          Sorry I can’t hang around….keep up the fight for free thinking!

      • Great! If it means reducing tax churn then all the better. If Swanny wants to upset ‘vested interests’ then shake this tree out.

  12. Alex Heyworth

    On the subject of media ownership, it seems to me that Swan and the left generally are barking up the wrong tree. If there is one thing that is clear about changes in the media in recent times, it is that the “old media” have been and continue to decline in both influence and profitability. Fragmentation of opinion writing via blogs, Twitter and Facebook is a fact of life. Newspapers and free to air TV are no longer the influential players they once were. So Gina Rinehart buying stakes in Ten and Fairfax is not that big a deal. She has probably just thrown money away.

    In the case of Fairfax, their declining newspaper circulation figures suggest that the public isn’t interested in what they are offering, so if their content changes it might at least offer a chance to stem the rot. Personally, I doubt if that will work. Gen Y’s just don’t read newspapers. I doubt if very many of them bother with newspaper websites either.

    • drsmithyMEMBER

      On the subject of media ownership, it seems to me that Swan and the left generally are barking up the wrong tree. If there is one thing that is clear about changes in the media in recent times, it is that the “old media” have been and continue to decline in both influence and profitability. Fragmentation of opinion writing via blogs, Twitter and Facebook is a fact of life. Newspapers and free to air TV are no longer the influential players they once were.

      Maybe for people under 40, but I can assure you the vast majority of people in the 40+ age group scoff (if not outright scorn) “new media”.

      Which, given the _average_ quality level, is hardly surprising. You need to wade through a lot of mindless crap to find the odd Macrobusiness.

      • Old media is full of mindless crap. I would also say that old media fails to produce anything half as worthy as Macrobusiness.com. And I’m 40+!

        I agree with you that most over 40s pour scorn on new media. That just makes them wrong. IMO.

  13. If Swannie & all you billionaire haters don’t like what they do why doesn’t Swan/Labor-Green Party just Nationalise their assets, take their money, put them out of business, deny them the right to vote & then maybe do a Putin/Chavez & put them in jail? Simple really, problem dealt with. Swan is at his vitriolic best. He’s vented his spleen on Rudd & now he has to do it to someone else. It covers for his lack of ability to articulate any other thought. Swan is no different from a radio shock jock.

  14. The issue is basically all these pr teams have this ability to make out special interest groups, have more voting power than they actually do and somehow suck governments into thinking such?
    Reflects poorly on government but I think swanny, like a lot of us, are over it.

  15. Alex Heyworth

    On Swan’s main point of rising inequality in developed nations, Henry Ergas makes some good points in today’s Oz, noting that both rich and poor have had significant increases in real income in recent decades and that developed nations commonly thought of as social democratic strongholds have had similar growth in income in both rich and poor sectors.

    Neither Swan nor Ergas, however, have come to grips with the real issue, which is the hollowing out of the middle class in developed nations. We are in danger of becoming countries with small numbers of rich, large numbers of (relatively) poor and not much in between. The reason seems to be that much of the employment traditionally taken by the middle class has either been taken over by computers or outsourced to Asia or Africa. Even highly skilled work such as actuarial analysis can now be outsourced via the internet. I read recently of a company that was getting actuarial work done by a UK trained actuary in Africa for $9 an hour.

    We can hope, I suppose, that in time wages in developing countries will rise so that outsourcing is no longer an obvious way to save money. But in the meantime, it is putting enormous pressure on the capacity of developed nations to maintain the real wages of the middle class and still maintain employment levels.

    This has nothing to do with rich billionaires or their influence in the media. Taxing billionaires more, or restricting their media ownership, or controlling the media via a government appointed body, will do nothing to address these global changes. Swan is setting up a straw man which is completely irrelevant to the real issues. Until these are identified, a sensible national discussion on how to deal with them cannot commence.

    • Alex, you are absolutely right. Swan claims to have read Fukuyama (and I assume the rest of the essays) yet fails to reflect on what is being discussed; fails to recognise that the malaise is far more complex than simplistic reduction to us and them (which is purely political opportunism).

      One would hope that a leading government figure could discuss the issues more deeply than the broad-brush way Swan has, omit the petty references to individuals and invite the nation as a whole to come to an understanding that very real challenges that lay ahead.

      Not a visionary at all.

      As you say, the hollowing out of the middle class will continue, globalisation is here to stay – developed economies are now facing up to the enormity of the economic change that has taken place – change which until recently we all enjoyed – but as I have always maintained, globalisation has been a driven by one of the largest credit bubbles in history. That is unlikely to be repeated (at least not in the household sector) any time soon. We live in interesting times, if only they were a little more ‘thoughtful’.

      • Fukuyama is half right. Within an Australian context though, his analysis fails to recognise that the ‘Right’ that have held the high ground on economic issues, as he describes it, in this country anyway have resided in the Labor Party for the last generation. Contrary to Fukuyama’s assertions about the ‘left’, the Labor Party in Australia has actually done very well to recognise the need for economic liberalism, and has for the most part balanced that pretty well against its traditional objective of pursuing policies of social equity. I feel that Fukuyama himself is setting up a false dichotomy between economic liberalism and ‘old-fashioned social democracy’ in his framing of the problem.

        I actually think Swan has taken Fukuyama’s advice to heart vis espousing a new conception of old political ideas. Swan’s cri de couer of recent weeks is uncannily similar to Fukuyama’s proposed recipe for an ideology of the future. As Fukuyama says himself – ‘The ideology would be populist; the message would begin with a critique of the elites…It would have to argue forthrightly for more redistribution and present a realistic route to ending interest groups’ domination of politics’.

        Fukuyama himself admonishes the middle class for their own self-interest as an impediment to a new paradigm. Swan is cognisant of this, and that political reality well explains why any political figure will struggle to cut through in the first efforts to enunciate a new political vision. Hence, the crude populism of the message.

        • Alex Heyworth

          “It would have to argue forthrightly for more redistribution and present a realistic route to ending interest groups’ domination of politics”.

          More redistribution = more churning, more government bureaucracy. It does not mean latter day Robin Hood. The incomes of all Australia’s billionaires put together would hardly make a dent in the Federal Budget.

          As for getting rid of special interest groups’ domination of politics, while it is clear that interest groups have strong influence on politics (particularly as regards union influence on the ALP) 🙂 they do not have dominance. Politicians here are much more answerable to the electorate than in many places. There is more scope here than in most of the world for minor parties to exercise influence (special interest groups of another kind?). Governments that don’t deliver for ordinary people do get the boot.

    • You might have in fact encountered my own comment on this site about hiring an actuary at $9 an hour, which was purely an act of curiosity on my part to gauge the quality of actuarial work done at that kind of pay – not great, as it turns out. The end result was the hiring an Australian trained actuary at Australian levels of pay, so at least some of our middle class are safe a little longer from being hollowed out.

      I am bemused that so many are quick to perceive what is a pretty mild political tactic on Swan’s part, as some callow, indignant assault on the virtues of individualism, hard work, aspiration and wealth. I appreciate the political necessity of some to glean such an interpretation, but to read carefully what Swan has written within the context of Labor’s broader agenda, such an interpretation doesn’t hold.

      Swan is not setting up these miners as straw men – they are engaged in a very real political fight against the Labor Party on the issue of taxation. The issues you identify are not being addressed by any political movement globally, because there is no politically palatable answer. The confected outrage at government which is providing so much momentum to such ‘grassroots’ movements such as the Tea Party in the US, is ironically railing against the best means of tempering the impacts of globalisation.

      It is a big leap of faith to believe that controlling a significant media organisation in any country, even in the age of blogs, is not going to reap a substantial dividend of influence. If that were the case, then John Singleton and his talkback charges would abandon their mainstream media interests and pursue the much cheaper and scalable avenues of blogging. Why doesn’t Murdoch just exit News International and rely on the power of blogging to wield political influence ?

      I would love to know when this country had its last sensible national discussion. If it were ever possible, you only need to revisit the Keating/Hewson debates of ’93 to realise why ‘sensible’ discussion is unlikely to ever see the light of day again.



      • Agree with the unlikelihood of “sensible” discussion seeing light of day any time soon. Again I bring it back to Swan’s reference to The Clash of Ideas Foreign Affairs publication. I am not saying that this series of essays was the be all and end all, but it was an attempt at serious discussion with an historical perspective. It has been polluted by Swan’s intrusion.

      • Perhaps there is some validity to Swan’s criticism of the manner in which wealthy mining magnates wield political influence at present. But having read Fukuyama’s essay, Swan is largely misappropriating his argument here. What the mining industry is doing at present bares little resemblance to the economic adjustments outlined by Fukuyama. These are savvy, tenacious individuals who took a large gamble on rocks in the grounds. Their wealth isn’t built upon the hollowing out of the middle class. It is true that a necessary structural shift arising from unseen levels of investment in the resources sector has caused pain in the manufacturing sector in this country, but unlike declines in middle class employment and wages elsewhere due to technological advancements, miners’ wealth is not dependent on job losses in other sectors. Rather, it is dependent on high international commodities prices, which has fed a rising exchange rate and exacerbated a long-term decline in manufacturing competitiveness in Australia. Being so reliant on volatile commodities markets, as quick as their paper wealth was amassed, it can disappear. This is far removed from the rising and seemingly entrenched concentration of wealth caused by technological changes and the internationalization of the global labour market, which is the main concern in Fukuyama’s essay.

        I must concur with 3d1k, Swan’s obliviousness to these nuances has indeed polluted the discussion.

        I suspect Swan was somewhat seduced

        • I was going to bother myself with a spot of amateur psychoanalysis with regards to Swan’s motivations, but decided it wasn’t of consequence. Hence that that last part ought to have been deleted.

        • I think Swan is aware of the nuance, but the reality is that there is no undoing the changes already wrought by globalisation that have helped bring us to our current dilemma. There remains, however, the need for Labor (and Liberal) to balance the benefits of globalisation against objectives of social equity, which will increasingly take the form of re-distributive policies as other sectors adjust. There may not be the sweeping vision of a new economic paradigm in Swan’s message, but I think Fukuyama himself has an unrealistic expectation for such a vision appearing from either side of politics.

          • I agree that sweeping vision might be too much to expect at this point. Acknowledgement of the real problems would be a start. Even avoiding the divisive politics of envy would be a start.

      • “I would love to know when this country had its last sensible national discussion.”

        On economic issues, probably the early Hawke era.

  16. Where did this ‘Asian Century’ crap come from? Nothing lasts 100 years (except for religious disagreement)…

  17. The biggest problem that we are facing not only with this government, but governments globally, is that policy is short sighted and focused on ideology. The only thing this Labor government will do with taxes from Carbon and Mining will be to balance budgets so that they can be seen as good economic managers so they can be re-elected. What we need is less government and more free market. For those that feel that equality is needed, just wait for your next stimulus cheque in the mail.

  18. Oh please, if Swan really can’t handle someone owning a bit of some media empire he could test his ideas & change the law. Why does’t he just quickly come out & say “no person with more than $500K of net assets is allowed to have a share in a media company, because they might be too wealthy & exert influence that I don’t like”. This is getting ridiculous, who is actually going to want to invest if one has to answer to Swannie & pass a “Swan/Police check” every time they did something in this country? As I have tried to say before Mr Swan has tasted blood by venting his spleen at Rudd & like any rabid dog he has to keep going. Once he’s done with mining billionaires who will he attack next? Maybe he will vent his spleen at those other wealthy entities of influence, known as Unions? Swan is a political attack dog not a policy maker or progressive thinker. Just rewind to the last few weeks & watch the vitriol against K Rudd. Thats the real Wayne Swan. Not the Treasurer we need.

    • Alex Heyworth


      Swan won’t need to stop wealthy people buying shares in media companies. The newly formed Ministry of Truth will force media outlets to toe the government line.
      Thanks, Finkelstein.