Irony of ironies. In a time of unprecedented communications control where political statements are workshopped to death, both sides of politics are struggling for clarity.
What for weeks had been slated as a tough Budget softened greatly as the day approached and eventually emerged as a “Labor Budget”. In name anyway.
Indeed, Wayne Swan, Julia Gillard, and Penny Wong said so often as they ‘executed’ their media plan - a dizzying blitz of interviews across the land. Yet in reality, it was perhaps more of an old-style Liberal budget, winding in spending, lowering welfare payments and attaching tough new strings to disability support payments, the dole, and other supports.
But then, we’re all liberals now aren’t we? We all believe in markets and lower taxes, and small government, and getting the taxman’s hand out of your pocket and removing the dead weight of government from business. And none of us any more defends the comprehensive welfare state or allowing social security payments to become a way of life.
A hand up, not a hand out, right? Well, sort of.
The response to the 2011 Budget suggests some muddying.
The heat since delivery of the very “Labor” Budget has been around the decision to “pause” for a further two years the upper income limit for eligibility for family tax benefits and the FTB supplement as well as the Baby Bonus and Paid Parental Leave scheme.
It is actually a fairly modest measure saving the Commonwealth just $2 billion or so over four years. And its aim is entirely consistent with the longstanding small ‘L’ liberal principle of providing transfers only to the needy and preferably on a temporary basis thus minimising the tax take, and any sense of a permanent culture of entitlement.
Yet the move sparked a furious debate about what constituted rich. At its core was an assertion that the Government had embarked on a class war stripping you of this vital support because it thinks you are rich if your income exceeds $150k a year.
Construed in those terms of course, it seemed maximally offensive - especially given that the flip-side of the entitlement coin is a flourishing culture of complaint in which the cost-of-living squeeze gets ever tighter and we are all inevitably going backwards.
Here you are just trying to get ahead and these heartless bastards in Canberra think you’re sitting pretty just because you are, well, getting ahead.
It’s a classic straw man argument anyway because there was never any claim by the Government at least that families with such incomes were “rich” per se.
Rather, the logic was presumably that you are not so poor as to require permanent assistance once your income exceeds $150k - assistance which by the way, comes in large measure from the pockets of the bulk of taxpayers below you on the ladder.
Indeed, if you do earn $150k a year or more, you are in the top 3 or 4 per cent of incomes. Clearly if you have five kids, that’s a lot of mouths to feed, but penury, it probably ain’t.
Full -time employees in Australia earn on average less than half of that at just under $65k per year. And this figure is inflated by a few very high-income earners at the top end and by the exclusion of part-timers at the bottom. What the majority of people get is around $10k lower. And you can wipe another $10k a year off that if you include part-timers in the calculation of the median wage. In other words, half of Australian employees get about a third or less of the new income cut-off for FTBs and supplements.
This should be a slam-dunk for the Government to defend but don’t hold your breath.
Just like the recent NATSEM modelling which showed comprehensively that households are actually better off over the last five years from increased transfers, and tax cuts and lower interest rates and pay rises, despite most costs going up (including necessities), the facts about earnings are a truth that dare not speak its name.
Working families, as both a moral idyll and an economic construct, are the agreed political battleground in Australian politics and the narrative exchange by necessity is all about their universal hardships - both real and imaginary.
Given this, Tony Abbott was hardly about to let the opportunity to stoke further resentment go by.
His Budget reply was a pitch-perfect message to the “forgotten families”.
“I do not think you are rich,” he said, capitalising on the annual chance to beam directly into the nation’s prime-time living rooms. “I know you are struggling under a rising cost of living.”
The upshot from a week of big set-piece plays is that the guardian of small government is now an advocate of expensive permanent, structural redistribution to boost incomes of upper middle-income earning families.
And that the Government is fighting its case with one hand tied behind its back for fear of admitting - as John Howard once did - that “working families have never been better off”.
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