Treasurer Scott Morrison continues to play into Labor’s inequality trap, tying himself in knots trying to explain why inequality has not worsened recently in Australia. From The AFR:
Scott Morrison has rejected claims he has been contradicted by Reserve Bank of Australia governor Philip Lowe who stated on Wednesday that inequality “grew quite a lot in the 1980s and the 1990s, and it has risen a little bit just recently”.
Fighting a Labor campaign claiming inequality was on the rise in Australia, Mr Morrison said he agreed with Dr Lowe that income inequality over 20-to-30 years has gotten worse.
“I haven’t disputed that, the OECD actually found that in their report in 2015,” he said.
“Now, what the Reserve Bank governor was referring to was more recent movements in asset prices, particularly house prices, on what’s impacted on the wealth equality measure.
“What I’ve been referring to is the money that’s actually in people’s pockets that pays for the grocery bill and on that score. Whether it’s disposable income, household income or gross household income, the Gini coefficient, which is the universal measure for these things, it has actually improved over the last five years”…
Mr Morrison said Mr Shorten was measuring fairness “through the narrow lens of envy”.
“We must not buy the flat earth argument that you’re doing worse because someone else is doing better,” he said.
So wealth inequality doesn’t matter, Scott?
Anyway, Labor’s left faction will reportedly use its New South Wales state conference to ramp up its push to make inequality a key policy agenda. The left faction intends to formally repudiate the neoliberalism policies of the Bob Hawke and Paul Keating-led Labor governments in favour of the socialist agenda of the UK Labour Party’s leader, Jeremy Corbyn. From The Australian:
In the left publication Challenge, the party’s national assistant secretary, Paul Erickson, describes Mr Corbyn as “within the mainstream of post-war social democracy” and backs greater government intervention in the economy and higher taxes on the wealthy to fund public services.
“The growing sense of anxiety and frustration in the electorate about a deck that is stacked against working people is as real in Australia as it is in the United Kingdom,” Mr Erickson writes.
“A bold, progressive platform that promises dignity and equality to working people can be just as effective here”…
As reported by The Australian last week, the minority left faction wants alleviating inequality to be the party’s central economic creed. It supports a full employment goal, proposes increasing taxes on high-income earners and businesses, and backs the adoption of an inheritance tax.
As I argued yesterday, Labor is on a winner with its inequality agenda.
With workers experiencing no increase in per capita wages & salaries in a decade:
Worker’s share of national income falling to half-century lows:
Home ownership collapsing among younger cohorts, while remaining steady (or increasing) for older cohorts:
And the wealth of older generations soaring, due primarily to the surge of house values, whereas the wealth of younger generations has stagnated:
Many households will feel like their standards of living are sliding and they will believe that inequality is worsening, even if some figures dispute this.
That said, Labor needs to tread a fine line and cannot lurch too far to the left.
This debate is getting more interesting by the day.
