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Tuesday, March 26, 2013

Responding to Andrew Bolt: Is Social Insurance ‘Class Warfare’?

above:  Julia Gillard, Wayne Swan and the Federal Cabinet have the task ahead of themselves for the May Budget - hopefully extending Social Insurance into Aged Care and Disability support and services; as well as implementing the Gonski education reforms.  But funding these signature programs must not come at the cost of austerity affecting working class families, and vulnerable Australians.
nb: Readers sympathetic to the ideas expressed in this article are welcome to join the 'ALP Socialist Left Forum' facebook group as well;  see:!/groups/102658893193637/
Tristan Ewins

In the ‘Herald-Sun’ March 25 Herald-Sun propagandist-in-chief Andrew Bolt gave us a sense of the probable Conservative strategy come September.  Bolt accused Julia Gillard of a “politics of hate”, and of a “divide and conquer” strategy.  Some on the Left are suggesting a return to some kind of Accord (as attempted by Labor in the 1980s) -  partly in order to counter this kind of rhetoric.

The principle of social unity and comprehensive social peace under the aegis of “national reconciliation” by Hawke was a powerful discourse – but was also always problematic.  It was seen as the unions’ responsibility to compromise; to consent to wage restraint and labour market deregulation for relatively little in return.  All the while the very principle of industrial militancy – whether in defence of political rights or in the form of collective bargaining – was delegitimised.  Labor governed during these years. But despite a formal partnership in the Accord process, in reality the  labour movement was on the defensive. Wage restraint was accepted to ‘buy time’ and ensure short-term organisational survival. Over the long term the movement continued to demobilise.

While it is not the inevitable consequence, there is often the danger in corporatist arrangements that those groups so co-opted – for instance unionised workers – will have their interests subordinated to those of the state, and of the more powerful partner in any agreement – the capitalist class.  Quite likely Bolt would respond to such a suggestion – that there is a capitalist class, and that it promotes its own interests ahead of the interests of workers - as ‘class war rhetoric’.   But sadly it is simply a social fact – a fact almost considered ‘unspeakable’.  That is – that classes exist, and that at certain levels they have distinct and sometimes antagonistic interests.

And so today Bolt hides behind rhetoric of social peace – all the while the Conservatives he backs play their own ‘divide and rule game’.  They pit workers against environmentalists on the basis of lies about the impact of the carbon tax on cost-of-living pressures.  They seek to divide workers against job-seekers on the basis of distortions regarding the numbers of long-term-unemployed, and the assumption that welfare must be ‘punitive’.  On such a basis – resentment against the welfare dependent - they hope even to win the support of the low-paid. Yet they do not support wage justice for those very people whose support they court.  They speak the language of ‘social peace’ while working to remove industrial rights; worsen punitive welfare or even remove welfare entirely; exacerbate user-pays mechanisms in higher education; raise effective taxes for low income Australians; and abolish the low-income superannuation contribution introduced by Labor to assist disadvantaged workers.  

Meanwhile – regardless of whether it was his intention, Martin Ferguson’s stated aversion to “class war rhetoric” was a gift to the Conservatives.  This is a statement that must be viewed in the context of a monopoly mass media campaign which portrays all distributive justice initiatives as ‘class warfare’.  Any hint of progressively structured taxation - or progressive means-testing of benefits like the Private Health Insurance Rebate - has been consistently labelled as such. As most likely would be the removal of superannuation concessions for the top 5% income demographic.  (notably not the same thing as a new tax; or indeed a tax at all!)  It is a deliberate strategy. 

By contrast, attempts to stigmatise, vilify and criminalise trade unions and trade union activity do not attract the same label of ‘class warfare’.  And neither did the mining industry’s abuse of its enormous economic clout and pool of resources to launch a relentless campaign of fear against the original Resource Super Profits Tax – in defence of its own sectoral class interests – and against the interests of the country-at-large.   

That said - ‘democratic class struggle’ – so-dubbed by Swedish sociologist Walter Korpi – involves ‘historic compromises’ depending on the balance of class forces.  The problem, though, is that for decades Swedish workers negotiated from a position of organisational and electoral strength – whereas Labor faces a weakened union movement and a united front on the part of Australia’s monopoly mass media and mining establishment.  Labor needs to construct its own ‘historic compromise’ for modern times.  But the labour movement cannot afford the kind of compromise which would see it further weakened and demobilised.

So if Labor is to revive the idea of an ‘Accord’ – it needs also to learn from the mistakes of the past.  The labour movement cannot afford further strategic retreats.  Though some ‘common ground’ with the liberal bourgeoisie may be possible on education and training, Newstart,, infrastructure, the price on carbon and other issues.  (for example, note the positions of former Australian Industry Group Chief Executive, Heather Ridout)

What should Labor do?   Further austerity and imposition of regressive user charges for everything from aged care to transport infrastructure are certainly not the answer. Yet somehow Labor needs to bring together diverse constituencies – white collar professionals, unionised industrial workers, students, low income workers, and ‘post-materialist’ elements concerned more with work-life balance, as well as environmental and liberal rights.

Gonski and NDIS are powerful weapons in Labor’s policy armoury; as is the frightening prospect of an Abbott government which would slash and burn welfare and services on an unprecedented scale.  Labor’s subsidisation of the wages and career paths of child care, aged care and other community sector workers – comprises a real step forward – and an advancement for women who are disproportionately represented in these fields.  More action is necessary, but hopefully Labor should be able to count on their active support, now, as the September election approaches. But Labor’s Sole Parents decision is a ‘running sore’ that must be rectified come the May Budget.  Another callous decision was  the policy of unfairly tightening disability pension eligibility, with some of our more vulnerable Australians relegated to a highly-deficient Newstart payment.

But if Labor does need to project a ‘historic compromise’ what should it look like?  I am suggesting the following positions as a basic policy framework for September, capable of mobilising broad support in the electorate without damaging industrial concessions:

Firstly: Equal opportunity in education – both in the sense of meritocracy, as well as in the sense of labour market requirements, and high quality education (including extensive liberal/civics education) as a social right.

Secondly: Social Insurance.  Progressively financed protections for all Australian suffering a disability, and for the Aged Care requirements of all elderly Australians; provided on the basis of need, and excluding regressive user pays mechanisms for low income and working class Australian families.

Thirdly: Maintained commitment to a price on carbon emissions, and to direct public investment in renewable energy; as well as subsidies for low income Australians especially to invest in renewables, and so to lessen cost-of-living pressures.

Fourthly:  Maintain the bulk of the Fair Work Commission’s industrial relations regime; except revisit the theme of modernised Awards; Intervene directly to raise minimum wages in real terms, and deliver on the previous promise that no worker be left worse off.  Defend pattern bargaining.

Fifth: Deliver a diverse Australian media, not only seeking to wind back virtual monopolism; but also encouraging new entrants into the sector for the sake of pluralism; and maintaining funding for a public ABC and SBS – with charters to deliver on diverse local content, and promoting political balance to deliver meaningfully on that policy of inclusive and authentic pluralism.

Sixth: Deliver further on effective cost of living relief for those who really need it; Achieve this through tax restructure and welfare reform (including raising Newstart) as well as increased minimum wages.  To that same end seek to contain further cost-of-living pressures by ruling out infrastructure privatisation and regressive user-pays charges for existing and future infrastructure; and by publicly funding future communications, energy and water infrastructure. (reducing borrowing costs; and including the National Broadband Network)  Commit that if user charges do apply for state-owned transport infrastructure that they will be progressively structured (excluding low income groups), spread fairly, and will not effectively discriminate against Australian families and workers – often in new, infrastructure poor suburbs -  who lack access to sufficient public transport.

Seventh and Finally:  Fund all these policies progressively. No more austerity for vulnerable groups.  An absolute Minimum policy of withdrawing superannuation concessions (not the same as a new tax!) for the top 5% income demographic, and reverting to 75% dividend imputation – drawing in $15 billion in new revenue.  Furthermore consider reform of the Minerals Resource Rent Tax, and implement a progressively scaled levy to assist in funding NDIS and Aged Care Social Insurance, cementing the principle of ‘Social Insurance’ in the public’s imagination and vocabulary.

Labor is seeking to follow in the footsteps of the Obama presidential campaign – mobilising ‘on the ground’ on an unprecedented scale.  But the social forces Labor is hoping to marshal will demand more than rhetoric; with “one step forward, two steps back”, or ‘robbing Peter to pay Paul’. Already teachers, aged care workers, child care workers and community sector workers have good reason to support Labor in 2013.  A revisitation of the MRRT, with some revenue being deployed to support industries impacted by the high Australian dollar – could also get some employers ‘in Labor’s corner’. 

At this point the possibility of ‘Bob Katter’s Australia Party’ holding the balance of power should not be dismissed either.  Some on the Left support ‘free trade internationalism’, but if an accommodation with agrarian interests is what it takes to spare Australia an Abbott government, dealing with Katter should not be ruled out.  Indeed, it was just such a manoeuvre that preceded decades of social democratic hegemony in Sweden beginning in the 1930s.  Katter is also sympathetic when it comes to industrial rights.  Though if it comes to that Labor should bargain hard in the search for common ground, and not relent on matters of social conservatism or environmental sustainability. 

Labor has a long and difficult task ahead of itself, fostering party unity and mobilisation in the wake of recent events.  But we should not give in on the struggle before it even really begins.  The May Budget will be crucial. Labor must be in a position to fund Gonski, the NDIS and Aged Care Insurance without austerity elsewhere.  For Gonski and the NDIS alone it has to raise over $20 billion in the context of a $1.4 trillion economy. (more to include Aged Care Social Insurance) 

Australia is one of the lowest taxing nations in the OECD.  Specifically, Australia’s federal tax intake (excluding state taxation)  is about 30% of GDP compared with 48.5% in Sweden.  So there is certainly scope for tax reform to provide for disability and aged care social insurance, as well as reform of education and welfare. This is what Wayne Swan and Cabinet need to keep in mind as the May Federal Budget is developed.  It will be the best chance Labor has to turn the debate around, and win credibility on funding its crucial signature policies.

Wednesday, March 20, 2013

Responding to Simon Crean on ALP unity and Government Policy

above: Victorian Labor MP, Simon Crean

Today veteran Labor MP Simon Crean helped facilitate a spill of the Labor leadership once yet again.  Without the numbers, and with Rudd refusing to contest the spill, Gillard was re-elected unopposed.   But Crean has raised issues that are crucial for the Party as the May Budget approaches.  Unfortunately, the author, Tristan Ewins, finds he cannot agree with Crean when it comes to reform of superannuation concessions and other fiscal reforms which might well be necessary to pay for NDIS and Gonski. 
(initiatives that will ultimately cost over $20 billion a year in the context of a $1.4 Trillion economy)

(nb: Also I have corrected a rather large typo as well!!!; So apologies to anyone who may have been shocked by the apparent argument I supported infrastructure privatisation!  Rest assured that is NOT the case!  I did not catch the typo until after I rushed to publish with the events unfolding rapidly around us...)

By Tristan Ewins

Today in a media interview Simon Crean put a strong argument against the constant destabilisation process going on within the Federal Parliamentary Labor Party.  As he argued, the prospect of an Abbott government is frankly “scary”.   The tens of billions in cuts Abbott would follow through with would result in unprecedented damage to Australia’s welfare state and social wage.   The stratification of our education system would continue apace to the point where constructing a constituency for revivifying the state sector would pose a very difficult challenge.  Punitive labour conscription policies for the unemployed.  would acquire previously unthinkable dimensions.  Finally, Paid Parental Leave under Abbott would be skewed towards the truly wealthy at a time when the entitlements of poorer Australians are under attack.   One way or another the ‘leadership question’ needs to be permanently resolved ahead of the May Budget.  Labor needs a progressive Budget the whole Party can unite around in May.

A few hours, however, it seems are a long time in politics!  Just moments ago there was a spill for the Labor leadership positions. Crean had been instrumental in bringing the spill about – but without Rudd contesting it, Gillard was re-elected party leader unopposed.

From this Labor activist’s position there are two crucial issues.

One – is that the leadership speculation and destabilisation must be ended finally and categorically.

Secondly, Labor must remain on the policy front foot – and not step away from its commitments to Gonski and NDIS. 

IN that context two questions raised by Simon Crean still remain problematic for this Labor Party activist.  Those questions concern infrastructure privatisation and treatment of superannuation concessions.  I am hoping that the options of removing superannuation concessions on the one hand; and of maintaining public infrastructure on the other - have not been sacrificed.  The consequence of forsaking reform of superannuation concessions in particular could potentially mean there would be insufficient funding for NDIS and Gonski….

Infrastructure privatisation?

Beginning with the matter of infrastructure privatisation: Simon Crean raised the issue of employing Superannuation funds to pay for basic infrastructure.  While this is far preferable to the kind of privatisation preferred by the Conservatives, superannuation funds would also seek maximum return for their investors.   Certain union-dominated superannuation funds might benefit, it is true: but potentially at the expense of the public more broadly in their capacity as consumers.

Also even the most robust superannuation funds will not achieve the credit rating of the Federal Government. 

In short, superannuation investment in infrastructure would be great for the superannuation funds, but an inferior deal for consumers and taxpayers. When it comes to infrastructure: roads, public transport, water and energy infrastructure etc – public sector investment still delivers a ‘better deal’.   It can raise funds more efficiently, and it can run on a ‘not for profit’ footing. 

Preferably infrastructure user tolls of any kind should be avoided – as usually tolls take a form approximating regressive flat taxation.   Servicing public debt sustainably over the long term would deliver the fairest outcomes;  but progressively-structured  taxes may have to rise as consequence.

Reforming the tax mix is a better option – and as we will soon argue there are a number of progressive options available.   But if tolls are introduced in any way, they should take the form of tolls on public owned infrastructure – as occurred for a period with the Westgate Bridge in Melbourne and the Sydney Harbour Bridge.   That is: they should comprise temporary measures, without the drawbacks of privatisation.   And if they are applied at all, they can potentially resemble progressive taxation with a ‘tiered system’ for public and commercial use, and for individuals and families in particular income brackets. Indeed, such a system could form part of a ‘quid pro quo’ between the Federal Government and the States. It would assist the Federal Government in freeing funds for Gonski and NDIS while at the same time maintaining a progressively structured model of infrastructure finance.

Superannuation Taxation?

The other potential ‘bogey’ Simon Crean raised was that of "taxes" on superannuation.  (a misnomer because the concessions comprise tax relief rather than taxes in of themselves) 

Admittedly it is true that a fear campaign has already begun on the theme of superannuation concessions.  The upper middle class is concerned their retirement lifestyle may be threatened; and while many struggle to make do on the Aged Pension alone, the upper middle class see an annual retirement income of over $50,000/year as a ‘right.’   A
recent segment in the 7:30 Report presented the matter in a most unbalanced fashion. 

But is the theme of social class helpful for Labor?  Or is it a source of division, and hence electoral marginalisation?  And what does class conciliation really mean in a context where employers are opposing minimum wage increases, attempting to wind back penalty rates, and trying to prevent labour organisation?  Does it mean anything in the real world, or is it just an Ideology behind which social democracy has self-liquidated?

Already in another recent article we have noted that superannuation concessions have risen to prominence as a massive instrument for tax avoidance by the very wealthy – at the same time as user-pays mechanisms for the most basic infrastructure are being considered.  Specifically, superannuation concessions are currently around $30 billion, and will cost $45 billion perhaps as early as 2015.  And the top 5% income demographic alone is already receiving over $10 billion of those existing concessions. 

In that same article we also observed that – by comparison – then entire Aged Pension Budget was only $25 billion in 2012. 

This is more than ‘middle class welfare’. It is ‘upper middle class welfare’, and a subsidy for the wealthiest of all – the top 5 per cent – effectively paid for by everyone else. Despite Ideologies of class conciliation, distributive injustice is a glaring reality – which we must choose whether or not to facilitate and excuse – or whether to work for a more socially just alternative.  Tax avoidance and tax minimisation from the wealthy impacts upon the welfare and social services we all depend upon in Health, Aged Care, Transport, Welfare and so on.

In that same article this author demonstrated that by halving Dividend Imputation the government could bring in over $10 billion, and by removing superannuation concessions for the top 10 per cent income demographic Labor might recoup as much as $25 billion altogether. 

And elsewhere the Greens had argued that raising the Minerals Resource Rent Tax (MRRT) rate to 40 per cent, eliminating loopholes and removing “generous accelerate depreciation provisions” could raise $26 billion our four years. 

Finally,  based on statistics used by “Crikey’ last year, increasing Company Tax by one per cent could potentially bring in an additional $1.5 billion a year.  That kind of money could prove very useful come September if ploughed into Aged Care or mental health, for instance. It is about time to draw a line under decades of corporate tax cuts.  For decades now a regime of ‘corporate welfare’ has taken root, with lower taxation for Companies and wealthy private investors – at the same time as government struggles to pay for basic infrastructure and education expenses – which the corporate sector shares the benefits of.

The Bottom Line

The bottom line is as follows. 

Federal and State Governments are facing a ‘legitimation crisis’ stemming from their inability to pay for basic infrastructure, and their plans to revert to user-pays mechanisms on the understanding that real progressive tax reform is ‘unspeakable’.

And Labor is in a bind in so far as it is not yet proposing a concrete, fair and sustainable way of financing Gonski and NDIS -  policies which it is committed to and on which Labor’s credibility rests.

But if Labor implements reforms rapidly following the May Budget; and can establish that tax measures are aimed squarely at the upper middle class and the wealthiest of all – It can demonstrate that state-financed infrastructure, as well as Gonski, NDIS and Aged Care insurance are in the interests of the vast majority.  (Though arguably NDIS should involve a more broadly-based levy in addition – to establish the principle of ‘social insurance’.  A ‘mixed’ funding mechanism could also bring in additional revenue for Aged  Care – where user pays mechanisms and the often poor quality of care are a national disgrace.)

On the other hand, if the media is still speculating on the form of tax reform and superannuation reform by September, the uncertainty and fear mongering could be damaging. It was protracted speculation which left a lasting negative impression with regards the Carbon Tax even after implementation should have put paid to the fear campaign.

But even if superannuation concessions were revoked and that revocation locked in’ for only the top 5% income demographic – It would still yield a pool of over $10 billion.  And the modest measure of implementing 75% dividend imputation would yield over $5 billion.  Taken together, those measures would comprise a very good starting-point from which to fund NDIS and Gonski, even though further initiatives are also desperately necessary to fund far-reaching reform of Aged Care. 

The Greens’ proposals for reform of the Minerals Resource Rent Tax (MRRT) – bringing in about $6.5 billion a year - could be enough to provide for a strong suite of policies for Aged Care reform – including  removal of user-pays mechanisms for poor and working class families, and improvement in areas such as staffing, diversity and quality of environment, privacy, facilitated social interaction and so on.  Another option would be to establish National Aged Care Insurance with a Medicare-style levy – but with progressive tiers.

‘Middle Class welfare’?

Finally, there is the prospect of freeing funds through the further curtailment of ‘middle class welfare’.   Adam Creighton over at ‘The Punch’   has argued that “More than 11 per cent of households in the top 20 per cent of the income distribution – with incomes above $115,000 – receive some form of welfare payment from Canberra…”   He argues further that: “Family Tax Benefit B, which is paid to households with incomes up to around $175,000 a year, is the main culprit.” 

To elaborate: According to “The Australian’NATSEM's* modeling shows that removing [Family Tax Benefit B] from families with combined taxable incomes of $100,000 onwards would save about $500 million a year. That money could be employed to reverse the callous government policies for Sole Parents, with hundreds of millions to spare.

Further means testing could also apply to the Private Health Insurance Rebate, removing it entirely from singles in the $97,001-$130,000/year bracket and for families in the $194,001$-260,000/year bracket.  At an estimate, this could bring in additional hundreds of millions every year.

But it is VERY notable that these measures pale in comparison with what could be saved from more ambitious reforms of superannuation concessions for the wealthy,  and a partial curtailment of Dividend Imputation.” 

And over-targeting of welfare has the potential to narrow the demographic support base of the welfare state over time.  More broadly, there needs to be a balance between means testing of welfare, and the principle of universalism - for instance as embodied in Medicare.

When Labor’s credibility depends on the sustainable funding of Gonski and NDIS it simply doesn’t make sense to rule out two of the most effective and progressive means of paying for those programs. And Labor cannot afford more of the callous austerity that cost the government deeply in terms of a popular backlash against cuts to Sole Parents. Reform of superannuation concessions MUST stand; and reform of Dividend Imputation must also remain an option in providing the necessary funds for those programs. 

·         NATSEM = “the National Centre for Social and Economic Modelling

Saturday, March 2, 2013

Superannuation and Dividend Imputation the Key for Delivering in the May Budget

Above:  Gonski is crucial in moving closer towards educational equal opportunity
If Labor wants to win in September it needs bold new initiatives – without ‘robbing Peter to Pay Paul’.  Reforming superannuation concessions and dividend imputation may provide Labor with the ‘warchest’ it needs to ‘break through;’ to disengaged voters.   Labor also needs to deliver in the immediate term as well – as voters may be sceptical of commitments only for the ‘distant future’.

 Tristan Ewins,  March 2013

As the May Federal Budget approaches and Liberal state governments increasingly move to sabotage the Federal Government’s Gonski proposals purely for political purposes – it seems increasingly likely that if Gonski is to succeed the Federal Government must ‘pick up the entire tab’.  The National Disability Insurance Scheme (NDIS) will also involve a heavy cost, and Labor simply cannot deliver without progressive reform on the revenue side.   More unpopular austerity – as in the case of Sole Parents – which saw disgust and cynicism amongst parts of the electorate – is not a viable option. And in any case it simply should not be part of the Labor ethos –‘to take from Peter to pay Paul’ – seeking to spin these matters to create only an illusion of overall progress.

Mark Kenny, writing for the Sydney Morning Herald explains how resort to superannuation investment has become a prime means of tax avoidance for high income groups.. Hence:

“High-income earners simply have greater scope to save and thus evade the 46.5 per cent marginal tax rate on income by sending it into super. The result is that what is saved on the aged pension budget through self-funded retirement winds up being less than what the superannuation policy costs in tax revenue foregone.”

Richard Denniss of the Australia Institute has been one of the most determined critics of the existing system of superannuation concessions. In August last year he put the argument that while those concessions cost the public $30 billion in late 2012, they will cost $45 billion as early as 2015.  This is well in excess of the entire Aged Pension budget – which was only $25 billion in 2012.  And in 2012 $10 billion of these superannuation concessions were going only to the top 5 per cent income demographic.    Denniss has argued:  “We estimate, for high income earners, up to 60 per cent of their lump sum is actually the contribution of the taxpayer.”

The ACTU, meanwhile, has urged the Government to target the top 10 per cent income demographic.  And were superannuation concessions revoked for that top 10 per cent group, at an estimate it could bring in over $15 billion -  enough for the government to fund Gonski and the NDIS without having to depend upon the Conservative states.  (nb: though NDIS will cost more over the years as the full program is phased in)

Yet even as Tony Abbott and the Liberal Party condemn Labor for considering revoking concessions for some of the most privileged, they are committed to withdrawing superannuation tax breaks for low paid workers. Bill Shorten has pointed out that the restoration of a 15 per cent tax rate on these Australian workers will affect 3.7 million people, including 2.1 million women.  It could cost these workers $500 a year: which is not inconsiderable for those on low incomes.  This is blatant hypocrisy from Abbott.

So what should Labor do?  Gonski and NDIS are potentially landmark reforms which appeal strongly to Labor’s base. Withdrawing superannuation concessions from the top 10% income demographic would make these policies affordable regardless of the Liberal states’ spoiler tactics.  And withdrawing Labor’s unjust policies on Sole Parent payments could moderate the backlash from this callous and self-destructive decision.

But arguably Labor needs a more robust electoral war chest in order to ‘break through’ to a cynical electorate which has already ‘turned off’ in parts of the country. 

Another area of potential reform is Dividend Imputation  - which the Henry Tax Review considered axing a few years ago.  Dividend Imputation seeks to eliminate so-called “double taxation” of investments by providing credits on dividends.  This is fine for small investors – but should the wealthy be receiving a massive tax break as a consequence?   Especially when the Company Tax rate has been cut again and again for decades. 

Writing for ‘The Age’ Nicholas Gruen pointed out late in 2012 that the Dividend Imputation system costs the government in excess of $20 billion a year!  That being the case he went so far as to suggest getting rid of the entire system; demonstrating that the benefits of the system in spurring additional investment are minimal anyway. A spare $20 billion annually – on top of rescission of superannuation concessions for the wealthy – invested in health, education, aged care, welfare, infrastructure, and foreign aid – could work wonders!  It could also help Labor balance the budget over the course of the economic cycle without further callous austerity.  (indeed, quite the opposite!)

Even were the dividend imputation rate only incrementally reduced, an initial reversion to a 75 per cent imputation credit could bring in over another $5 billion; and a 50 per cent rate – argued for in the early 1990s by economist, John Quiggin, could bring in over an additional $10 billion.  

Finally,  the Greens have argued for lifting the Minerals Resource Rent Tax (MRRT) rate to 40 per cent, eliminating loopholes and removing “generous accelerate depreciation provisions.”   This, they argued, could raise $26 billion our four years.

‘Doing the math’ this would translate into an additional $6.5 billion a year on average.  

Nonetheless it is quite possible that Labor has ‘done a deal’ with the miners. If so it is a fundamental matter of democracy that this ought be made known to the public. The alternative is the kind of ‘Iron Law of Oligarchy’ referred to by political scientist, Robert Michels – whereby political and economic elites determine agreements ‘behind the scenes’ – cutting ordinary citizens out of the equation.  (the anathema of democracy) Yet at the same time trust is an extremely valuable thing in politics – and even if Labor has made the wrong call on any deal, it would be understandable were they to remain true to that commitment. 

The Greens are thinking of ‘holding Labor over a barrel’ over the MRRT. And ideally the tax does need to revert to its original form as intended by the Henry Tax Review.  But if this is politically impossible the Greens must co-operate with a Labor Government that makes big progressive social initiatives possible through thorough-going reform of superannuation concessions and dividend imputation.

To put all this in perspective the Australian economy today is valued at approximately $1.4 Trillion. The Gonski package – crucial for the very viability of our state school system into the future – and to the opportunities of hundreds of thousands of students - will cost about $6.5 billion a year to implement.  And the NDIS – crucial to some of our most vulnerable Australians and their families - is assumed to being going to cost at least $15 billion a year when ‘fully operational’ in 2018.  (but only phased in gradually)

But what else can Labor do to ‘break through’ ahead of September; with the May Budget perhaps being its last opportunity to bed down such major initiatives?

For a long time this author has argued for reform of Aged Care.  It is an issue that effects many of us. Even the younger among us will have family who may need care in the future.

The unnecessary acuteness of suffering experienced by many aged Australians is a matter of national shame.

For those needing low-intensity care there must be high quality, affordable options available.  The  2012-13 Aged Care Reforms proclaimed the end of  'Living Longer. Living Better.'  This must include those with low care needs as well as those needing high level care.

Residents in high intensity care need privacy – they need their own rooms if they so desire.  They need heating and air-conditioning, dental care, facilitated interaction, quality food, and ‘changes of scenery’ - perhaps including access to gardens.  In the future some of those who remain alert and in need of mental stimulation could do with access to information technology.   There are also problems with staff to patient ratios, including a need for more registered nurses.

More generally there is a need for more robust career paths for aged care workers; with better training being complemented with better wages and conditions.  This will also improve the quality of care experienced by aged residents.

For those older Australians wanting to stay at home – and well enough to do so –  there is a also need for regular interaction to ward away the loneliness from which so many suffer. And Families and Carers also need additional support in order to make home care viable.  Staying at home is only an option for many with significant support, and the Combined Pensioners and Superannuants Association has long argued support services here are under-funded.

A minimum additional annual $5 billion devoted to Aged Care would be a start (though certainly not the ‘final word’) in working towards these ends; while also beginning a phase-out of user pays mechanisms that hit average and working class families. Working class and middle income Australians should not be forced to sell their family homes (using the equity in the home - even incrementally,) with an effective regressive ‘flat tax’ in order to secure care for their loved ones.  All the more so while there are massive tax breaks for quite wealthy Australians that go into the tens of billions

The NDIS will care for some of our most vulnerable – but not all of them.  Care for the Aged is just as crucial.

In order to ‘break through’ to cynical Australians who have ‘switched off’ from Labor, the government needs big initiatives that capture the public’s imagination. The government needs to mobilise the welfare sector, labour movement and other social movements behind it with a raft of measures unprecedented in our time.  Yet another dilemma is how to find ways of actually delivering to the public between now and September in such a way as to avoid cynicism about ‘distant’ promises. 

By withdrawing superannuation concessions for the wealthy and reducing dividend imputation Federal Labor can amass a very substantial war chest.

One thing is clear.  Without substantial reforms bringing in the revenue for the coming May Federal Budget Labor will be left with very limited options.  ‘Business as usual’ will not win Labor the election.

The Policy of the Combined Pensioners and Superannuants Association can be found via the URL below;  They generally lead the way in campaigning for the rights of aged Australians, including those in need of care: