Hey and welcome to Democratise Australia.
It’s been a pretty interesting last week or so, which made it tough to choose whether to focus this podcast on the attacks on our media by law enforcement or to focus on everybody’s favourite dead horse to flog: Pauline Hanson.
And purely for clickbait reasons I’m going to talk about Pauline!
It’s not frequent that I find myself agreeing with Pauline hanson. But today is an exception. Today I woke up to the news that Pauline Hanson is not on board with the Coalition’s income tax changes. The reasoning doesn’t exactly make sense, but it’s still welcome news.
She claims that the Coalition has not been able to sell the tax plan to the Australian people, despite their winning an election on the issue of tax less than a month ago. And that she’s not sold on the economic value of handing more money to top earning people who are less likely to spend that extra money than lower income earners.
She’s also said that the focus right now shouldn’t be on tax cuts but on what she says are the issues that matter to Australians: a new coal fired power plant to drive down electricity prices and, if anybody needed more proof that Pauline is living in the past, pushing a 1930’s water redirection plan called the Bradfield Scheme which is both extremely costly and environmentally dangerous. Pauline also mentioned backing a Royal Commission into Family Law and Child Support.
Now , obviously her reasons for withdrawing support for the plan based on popular support makes very little sense.
And her plans to effectively worsen the climate crisis and environmental catastrophe using the money saved are downright insane.
But the fact is that these tax cuts actually wouldn’t do very much to help out every day Australians. The first two stages of the plan are aimed at lower and middle income earners and would see people about a thousand dollars better off, and enjoy bipartisan support, but the last and biggest stage hands most of the benefits to the people at the top of the earning pyramid.
Only 12% of the benefit from these cuts flows to the bottom 50% of the population, and the bottom 20% only get 0.2%
The top 10% of earners are to receive 31% of the benefit of the cuts. And $33 billion dollars will be flowing to those earning over $180,000 a year.
This is an attack on our progressive tax system and is essentially the opposite of what we as a developed nation should be doing.
Usually, as a nation develops and wealth inequality grows, the taxation system should be adjusted to ensure that those earning at the top are helping to pay for the essential services of those at the bottom like education, health, roads, whatever.
When a nation refuses to or finds itself incapable of properly taxing the people at the top of the earnings pyramid, they can find themselves in a situation like the Greek economic collapse, which was partially brought on by wealthy people not paying their taxes. Of course in Greece to respond to this, they implemented harsh austerity measures and cut essential public services instead of reforming the tax system.
The final tax cuts in Australia are due to be implemented in 2024-25 and would likely be going in alongside an Australian economy that is showing signs of slowing, possibly even going into recession and a world trade scene that is increasingly volatile.
Under a slowing economy or even perhaps a recession, a Coalition government would likely pay for these future tax cuts by making cuts to public services, welfare, health and education.
As our economy is slowing, the best way to stimulate growth is to put more money into the hands of the average Australian, which is going to need some stimulus spending from the federal government.
It sounds like blasphemy in the Australian politick, but we should be inviting more government debt in order to avoid an economic downturn. Government investment into green energy infrastructure to push down electricity prices and expansive rail networks to ease congestion are two areas that would stimulate job growth and drive down energy prices, putting more money in regular people’s hands.
Some of the money saved from these cuts would be able to be directed to saving our many thousands of endangered species and ecosystems, a problem that is not nearly being adequately addressed.
These tax cuts aren’t just going to hand more money to people that don’t need it. They will probably result in more cuts to services, further drops in education standards and a poorer welfare system, and will compromise our ability to deal with the ongoing environmental degradation
So for that, I thank you Pauline, not for your nonsensical reasons or criminally insane plans for more coal power, but for potentially killing a destructive tax change.