Home > Oz Politics > How we got to Macklin

How we got to Macklin

January 3rd, 2013

Jenny Macklin is still dealing with the response to her terse answer “I could” to the question of whether she could live on unemployment benefit. But the policy shift that led her in front of the cameras is the product of a complicated history that might be worth explanation. I’m going to go from memory, and invite commenters to supply links or corrections for my recollecitons.

The story starts in the 1960s, at a time when unemployment was very low, and spells of unemployment very short. Whether in fact or reality, the archetypal single parent was a widow. The vast majority of income support took the form of age pensions, which were means-tested and set at a very low level. Around this time Ronald Henderson estimated a poverty line at 25 per cent of average weekly earnings (AWE), well above the basic pension.

Over the late 1960s and early 1970s, pensions were increased to approximately the Henderson poverty line. In combination with some additional concessions and the introduction of Medicare, these changes virtually eliminated poverty among the old.

The changes to the value of the old age pension, relative to weekly earnings have been sustained.[1] Initially, unemployment benefits and supporting parents benefits (which replaced the former widows pension, IIRC) rose in line with the old age pension. Both were indexed to the CPI, but ad hoc adjustments kept them broadly in line with AWE. But the Howard government replaced CPI adjustment with AWE adjustment for pensions, while retaining indexation to the CPI for unemployment benefits. The result has been that the value of UB (now Newstart or some similarly Orwellian name) has fallen relative to both pensions and incomes generally.

Around 2006, the Howard government turned its attention to supporting parents, introducing a rule that recipients would go on to UB when their youngest child turned 8. At the time, the measure was strongly attacked by Labor. Here’s Penny Wong. Existing recipients were exempted (the term “grandfathered” does not seem apposite here), with the implicit promise that they would remain under the old rules. In the search for a surplus, the Gillard government decided to abandon that promise and push existing recipients with children over 8 onto UB. The question that got Macklin into trouble was about that decision.

There is a defensible case for setting the old age pension higher than UB, particularly if the government pursues active labour market policies to help the long-term unemployed find jobs. The pension needs to be enough to live on for decades, over which time household goods have to be replaced, and other long-term expenses addressed. Most spells of unemployment last only a few months, so various kinds of expenditure can be deferred. But the gap that has emerged over the past 15 years is much larger than can be justified in this way, particularly in the case of supporting parents, who are more likely to spend long periods out of employment. Instead of completing the Howard agenda, the Gillard government ought to be looking at increasing the real value of benefits, allowing the unemployed to share in some of the growth in incomes for the community as a whole.

fn1. In other respect, showever, the generosity of the pension system peaked around 1980. Means tests, which were eliminated in the 1970s, were reintroduced in the 1980s, and the pension age has gradually increased.

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  1. Doug
    January 3rd, 2013 at 11:22 | #1

    Despite means testing the part pension apparently reaches a fair way into the category of those described as self funded retirees. I was astonished to learn from my financial adviser that I was going to be eligible for a part pension and all the trimmings associated with it in about three years time despite being what I would regard as quite well off.

  2. Peter Whiteford
    January 3rd, 2013 at 11:23 | #2

    John

    A couple of comments. I think that payments for the unemployed have never been formally indexed to wages. What the Howard government did in 1996 was to change the indexation of pensions (age, disability, carers and lone parents) from indexation to the CPI to indexation to AWE, but left allowances indexed to prices. So this was a positive change for pensioners rather than a negative change for the unemployed.

    The gap has widened because we have had relatively high rates of growth in real wages since 1996 (and in community incomes more broadly), so allowance recipients have fallen behind rising community incomes – for example, real median incomes have increased by around 50% or a bit more since the mid 1990s, according to ABS income surveys.

    It is also worth pointing out that the Fraser government did remove payments for the unemployed from indexation arrangements in the 1970s, so payments fell substantially in real terms, although most of this was made up by increases in the Hawke-Keating period, and Labor reintroduced formal price indexation for the unemployed.

    Also as you point out the generosity of age pensions has been reduced by raising the pension age and reintroducing income and assets test (all Labor initiatives), but it is also worth noting that in terms of basic entitlements, they are now at their highest real level and relative to wages in Australian history.

    In fact, to give credit where it is due, the pension increases for single pensioners in 2009 (with Jenny Macklin as the relevant Minister) were the largest single real increase in Australian history, and equal to about all of the cumulative real increase under the Whitlam government.

    I’ve edited the post to correct the details about indexation. Thanks for this – JQ

  3. January 3rd, 2013 at 11:41 | #3

    Indexing to wages was a policy position from (I think) the Whitlam era and was achieved by ad-hoc increases to rates when required. Howard formalised the arrangement legislatively, but, as Peter Whiteford notes, only for pensions.

    Interestingly, the Newstart single rate structure still reflects decisions made in older times. Arguably, the key rate is the higher single one (often misleadingly referred to as the with child rate). It was the original rate and it and the partnered rate show you what pensions would be if only indexed to CPI – they were the same rate up until the Howard change.

    As part of a cost saving and clamp-down on those lazy surfie unemployed (to borrow the stereotyping of the day) the single rate was split into two, with the one to people without dependents or other special characteristics being allowed to fall in value. These days it’s the most common of the single rates, but it’s actually a discounted version of the original.

    To complicate things further, the Howard government introduced a third single rate which is equal to the single parenting payment rate, but it’s reserved for “special” single parents who have been exempted from activity test requirements.

  4. Jane Stephens
    January 3rd, 2013 at 12:04 | #4

    I was one of those single mothers who separated in 2007 and was therefore unceremoniously hauled onto the Newstart allowance when my youngest daughter turned 8. She is now 12 and I have been employed full time since then with no extras. My partner’s ex has been on the single parent’s payment for 10 years. She has a 16 year old and a 14 year old. Can anyone tell me why all this brouhaha for these “grandfathered” parents? I don’t get it; their kids are much older and you don’t need to work part time or be at home during the day for them if they are in their late teens! Those parents can go to work full time without problems with child care. I think that Newstart is too low for anybody, it should be raised for all unemployed people, regardless of marital or parental status. But I don’t get why one part of single parent demographics have to get more than the others, where was the fuss in the media over this in July 2006 when Howard introduced this discriminatory policy anyway?

  5. Jane Stephens
    January 3rd, 2013 at 12:06 | #5

    First Dog on the Moon at the Crikey website has a fantastic cartoon about the impossibility of living on the dole. Rather then following the furphy of the single parents who have been brought in line with the rest of them, the question about the inadequacy of the dole should be debated urgently, for all recipients.

  6. John Quiggin
    January 3rd, 2013 at 12:37 | #6

    @Peter Whiteford

    Thanks for this correction. I think that, before the shift to AWE indexation for the age pension, there were ad hoc increases in pensions and benefits in addition to CPI indexation. If that’s right, and they stopped after 1997, then the shift was good for pensioners (regular instead of ad hoc increases) but bad for UB recipients.

  7. Tom
    January 3rd, 2013 at 12:53 | #7

    Although I have not ventured much into social securities in Australia, this link might help with the topic:

    http://www.aifs.gov.au/institute/pubs/fm2008/fm80/hs.pdf

  8. Ikonoclast
    January 3rd, 2013 at 12:59 | #8

    I have lost all patience, reasonableness and goodwill towards all parliamentary members of both major parties and their corporate oligarchic puppet masters. They are heartless, mendacious and venal. How long are they going to keep up this oppression? They need to be overthrown totally, peacefully and democratically. We need a campaign to vote NO to all major parties and maybe even to vote no to any candidate in a formal party.

  9. Ray Polglaze
    January 3rd, 2013 at 13:05 | #9

    A big thing that’s missing from this discussion is the increases in private rents in the housing market. Private rents are a big proportion of people’s basic expenses so that after paying rent from Newstart there is not much left for anything else.

    This reflects the failure of Commonwealth policies over decades with reduced funding for public housing and relying on the private market to meet the needs of people on low incomes. If there had been an ongoing expansion of public housing and other policies to keep rents low then people would be more able to survive on Newstart and the aged pension.

    This is a key missing factor from the whole debate. A good long term strategy to tackle welfare costs would be to expand public housing so that people could live on lower welfare payments.

    A significant proportion of the current welfare budget is going from the government to welfare recipients, then to private landlords, then to banks as interest payments, and ultimately to bank profits. It has become a welfare system for private landlords, banks and their shareholders.

  10. Ikonoclast
    January 3rd, 2013 at 13:10 | #10

    To expand on the above, we somehow need a movement to put together a loose national coalition of independents (not a formal party) who are the intellectual and social “elders” of the nation (but not necessarily too old) and well representative of gender and social groups. Then run a campaign to refuse to vote for any member of a formal party and vote only for the independent national elders.

    One other stipulation. There must be no lawyers, not one, in the national coalition of independent elders. But there definitely must be professional academic and business economists, doctors, teachers, church and religious leaders, musicians, artists, scientists etc. and many ordinary workers from all walks of life.

    Somehow we have to cut the Gordian knot which politics and society is hopelessly tangled in at the moment. It has a lot to do, in fact everything to do, with professional politicians and oligarchs running the whole system for themselves.

  11. Tom
    January 3rd, 2013 at 13:26 | #11

    This contains the historic rate of unemployment benefit in nominal dollar value (which have to be translated to real terms in order to compare the current rate):

    http://guidesacts.fahcsia.gov.au/guides_acts/ssg/ssguide-5/ssguide-5.2/ssguide-5.2.1.html

  12. John Smith
    January 3rd, 2013 at 13:34 | #12

    In the debate on how much the dole should be, the dichotomy of interest is not so much between ‘higher’ and ‘lower’, but between (as some commenters eloquently put it in the previous thread) ‘living’ [in your community, with some human dignity] and ‘existing’ [without dignity, with the constant stress and humiliation of poverty].

    In relation to the punitive right wing types who are happy with a dole finely calibrated to avoid actual starvation, I suspect they simply don’t understand that dignity is important. It doesn’t occur to them that ‘existing’ without dignity for extended periods is probably very damaging to people’s employability.

  13. Will
    January 3rd, 2013 at 14:02 | #13

    Might I say that I find the current hard-line view towards welfare recipients to be perplexing. The marginal cost to the proverbial average taxpayer of an additional welfare recipient is…..zero. The tax burden does not rise with each additional person on the rolls. The taxation burden also does not rise as a consequence of natural economic fluctuations of the business cycle. That argument simply cannot be sustained on economic grounds.

    Of course, the predictable con rejoinder is to point out how much money would be saved by scrapping the scheme altogether; a typical dull-witted response which only considers their nominal purchasing power and totally ignores all wider micro- and macroeconomic effects.

  14. TerjeP
    January 3rd, 2013 at 14:25 | #14

    JQ – My understanding is that means testing of aged pensions is long standing. It was partially removed by Whitlam and then restored by Hawke. I recall some of the later (I was young but recall a pensioner relative tearing up his ALP membersip over the issue). I rely on google for the former. Happy to be corrected if I’ve got it wrong.

  15. January 3rd, 2013 at 14:47 | #15

    @Ikonoclast
    Brilliant and well-said! My husband (The Bard) has been saying the same for years. But why won’t the sleeping, duped masses wake up???

  16. Hermit
    January 3rd, 2013 at 14:54 | #16

    What if PIGS levels of unemployment gradually infect other Western countries? For Spain I believe youth unemployment is 50% and overall unemployment half that. In effect we may end up with disposable income rationing. If you have a decent job you pay so much in income taxes to support welfare there isn’t much incentive to work.

    For reasons I can’t quite fathom higher consumption taxes (GST) are supposed to iron this out. Perhaps if unemployment was 50% then all jobs would be precarious because if you displease the boss even slightly there’s plenty more waiting. Some might argue that casual work is already a form of income rationing. Will people have mortgages and late model cars when say 10-20 hours a week is the new normal?

  17. Peter Whiteford
    January 3rd, 2013 at 15:02 | #17

    @John Quiggin
    John, yes, there was a policy of ad hoc increases in benefits in the Hawke and Keating years, but I think that the last real increase in payments for the unemployed was in 1994.

  18. J-D
    January 3rd, 2013 at 15:21 | #18

    @Ikonoclast
    If you’re going to construct an implausible fantasy, why such a modest one?

  19. Fran Barlow
    January 3rd, 2013 at 15:45 | #19

    @J-D

    And let me tell you, my governance structure fantasy is a lot more ambitious than Ikonoclast’s. ;-)

  20. Tim Macknay
    January 3rd, 2013 at 15:52 | #20

    One other stipulation. There must be no lawyers, not one, in the national coalition of independent elders. But there definitely must be professional academic and business economists, doctors, teachers, church and religious leaders, musicians, artists, scientists etc. and many ordinary workers from all walks of life.

    Why the bigotry against lawyers? I’ve never met an economist, teacher, religious leader or scientist with any more sense or decency than a good lawyer. And I’ve seldom met an artist with any sense at all (but then that’s not what artists are for). It seems to me you’re letting your prejudices run away with you.

  21. January 3rd, 2013 at 16:36 | #21

    I remember reading a science fiction story a long time ago about a society where the citizens were able to borrow the money they needed to live the life they wanted to up to a limited total. The only people who worked were those who wanted to become adults and those who were forced to because they had reached the borrow limit. I often think that elements of this approach may be appropriate for a society like ours where there is a chronic shortage of work.
    A lot of people might be a lot better off if unemployment benefits came in the form of HECS style loans rather than a free gift.
    The system could afford to be more generous in terms of the amount loaned because some of the loan money would be recovered from those that simply needed help between well paying jobs.
    In addition, many of the administrative pressures placed on benefit recipients could be ratcheted up as the total loan increases.
    It might also allow us to get rid of the crazy idea that it is OK to pay people to do essentially meaningless tasks but not OK if someone is doing the serious study to become more employable.

  22. Fran Barlow
    January 3rd, 2013 at 16:49 | #22

    @Tim Macknay

    Why the bigotry against lawyers?

    Several theories:

    1. Populism Ikono’s arguments often retrace the predispositions of populists. Populists are generally hostile to anyone that doesn’t work with their hands. Left-of-centre populists are generally more open to artists and scientists but lawyers press most populists’ buttons as paid liars and shills. cf: The Simpsons — a show aimed at a slightly liberal US audience rarely if ever presents lawyers in a positive light. Almost invariably they are presented as at best amoral if not downright grasping and dishonest.

    AND/Or

    2. It’s said that a very high proportion of state and federal politicians are lawyers by training. I’m not sure what the current number is but I suspect that they are over-represented in our parliaments compared not only with the population at large but even with the elite sections of the population at large. It would be interesting to ccompare their numbers with the occupations of all people on incomes of $100,000+ and see how skewed the sample is.

    Given that Ikono is aiming to correct an imbalance, he may simply be proposing a coaltion that would over time reduce the number of trained lawyers in parliament to something like their concentration within the population, or less ambitiously, within the elite.

    NB: I’m not either

    a) endorsing stereotypic populist views of lawyers or legal practice. I’ve had some legal training (though I never completed a law degree) and see no reason to assume in the absence of evidence anything worse of lawyers than any other comparable professional person.

    b) saying that there is an intrinsic value in reducing the proportion of lawyers in parliaments in Australia. There is an argument for having a substantial number of legally trained people in the place if only to apply scrutiny to the drafts of bills.

    I don’t share your suggestion that artists may on the whole be senseless. I’ve met quite a few, and though they are more likely to be more eccentric than the population as a whole, most of them have been at least as rational as the population segments from which they are drawn, IMO. Some of them have been gifted with kinds of sense that are unusual and admirable. I was listening to “Will.I.Am” on the radio this afternoon and he seemed at worst a reasonable and well motivated fellow, who, despite being an artist of a kind, favoured encouraging interest in science and technology amongst low SES children in the US, especially girls and likewise favoured a “big picture” view of politics.

    Your qualification “good lawyer” makes it hard to assess the generality of your claims about their merits relative to economists, scientists, teachers or religious leaders. Perhaps at a certain level of sense or “decency” it’s all a wash any way.

    I can well imagine that you may be personally affronted by Ikono’s proposed ban, much as I would be if someone declared that teachers ought to be excluded or someone said that public servants (“shiny bums” in the old Clyde Cameron parlance) should be barred. That’s regrettable because although you and I frequently differ, you’ve given every impression of being an honest and ethically worthy person — just the sort of advocate that any worthy organisation would welcome.

  23. TerjeP
    January 3rd, 2013 at 17:46 | #23

    A lot of people might be a lot better off if unemployment benefits came in the form of HECS style loans rather than a free gift.

    I say do the same with Medicare.

  24. Tim Macknay
    January 3rd, 2013 at 18:27 | #24

    @Fran Barlow
    Fran, I admit I was mean to artists, but it was meant in jest. Several friends and relatives of mine are professional artists, so my dig was affectionate. All that’s completely lost on blog readers who don’t know me from a bar of soap, of course. :)

  25. Lyn Gain
    January 3rd, 2013 at 19:12 | #25

    Good article John. The whole thing stinks, but what really got me the other day was the Herald reporting that Macklin said “the parenting payment changes were about ensuring all parenting payment recipients were treated the same.” So Howard gives some of them the chop, then Macklin chops the rest to be equitable! But what can you expect from the woman who maintained the most pernicious aspects of the Northern Territory intervention. There are no votes in sole parents or blackfellers.

  26. January 3rd, 2013 at 19:20 | #26

    @John Quiggin

    My recollection matches Peter Whiteford’s – a proactive change was made to improve the indexation mechinism for Pensions (Sole Parent, Carers & Disability, as well as Aged) while leaving the indexation mechanism for Benefits (Unemployment, Sickness) the same. The gap between the two has been gradually growing even since, and now has reached a large chasm. I thnk this is something we can tie to the deal agreed to by Meg Lees and some other Democrat Senators in return for supporting the introduction of a GST.

    The other aspect which I think needs just as much attention is the differing treatment given to any income earned by the Unemployment/Newstart recipient compared to that for Pensioners. Unemployed people who get some some casual or part-time work have a much greater/quicker amount of their payment reduced compared to Pensioners, creating another massive disincentive/impediment to people to reentering the workforce.

  27. Hal9000
    January 3rd, 2013 at 21:14 | #27

    ‘Whether in fact or reality, the archetypal single parent was a widow.’

    My mother tells the story of how she started as a graduate clerk fresh out of uni in the then Department of Social Services in 1951 and was on her first day put onto the front counter. Her first client, on the other side of the counter and with a queue of others behind her, was a woman with three toddlers at heel and a baby in her arms. She had no teeth, because as she explained her husband had knocked them out. She had fled the marital home on account of the abuse and was desperate for any kind of assistance. She was, as of that morning, homeless, as were the children. She did not want to go to the NSW department, as that would certainly have meant her children being removed. There was no program administered by the Commonwealth that could provide her with anything, as it turned out when my mother sought advice from colleagues. Nonetheless, my mother, trying to be helpful, took down the client’s details. It turned out this woman was born on the same day in the same year as my mother, a fresh uni graduate in employment who had yet to meet my father. The woman was eventually referred to an NGO that could provide food at least. It was a traumatic experience for my mother and set her on a different path in life.

    I offer this story as a comment on the stereotype as correctly reported by Prof Q. Stereotypes reinforce the social status quo, and most definitely inform the public debate about welfare polices. The unemployment benefit is kept low primarily to pander to the consumers/retailers of stereotypes of the unemployed. That they also benefit the budget bottom line is an added bonus. I’m glad I have the mother I do, and not Ms Macklin.

  28. Hal9000
    January 3rd, 2013 at 21:36 | #28

    @TerjeP

    I realise this post was a thread derail, but I cannot allow it to pass.

    Your throwaway policy would mean that residents of remote indigenous communities will carry debts to their statistically early graves, while the residents of Neutral Bay will be debt-free. What a brilliant policy that is, Terje.

  29. Fran Barlow
    January 3rd, 2013 at 21:45 | #29

    @Hal9000

    At the risk of defending Terje’s position (which FTR I reject on equity grounds) dying in debt to the state makes you a winner in income transfer terms if you have no assets that can be seized ahead of your beneficiaries or other creditors.

  30. Hal9000
    January 3rd, 2013 at 22:05 | #30

    @Fran Barlow

    But surely debt should, like assets, be intergenerationally transferrable. Or maybe I’ve misunderstood Terje’s position. But this is a thread derail. I’ll take no further part in it.

  31. Fran Barlow
    January 3rd, 2013 at 22:27 | #31

    @Hal9000

    Debt ends with probate normally. Once the estate is siezed, remaining unpaid creditors forfeit.

  32. January 4th, 2013 at 00:02 | #32

    @Andrew Bartlett
    The legislative arrangements that gave rise to differential rates of increase were in 1998. Are you suggesting that this was part of GST negotiations, 2 years early?

  33. Andrew Bartlett
    January 4th, 2013 at 00:19 | #33

    I must have that wrong then. The GST agreement occurred in mid-1999. There certainly weren’t any earlier agreements or even any discussion or communication about it at. All the negotiations that happened occurred over the space of 3 weeks (i.e. only after Harradine said he wouldn’t support any form of GST).

    There was some agreement for an extra boost in Pensions as part of obtaining extra compensation for the impact of the GST, but perhaps it was just an extra boost rather than the change I suggested.

  34. John Brookes
    January 4th, 2013 at 00:53 | #34

    WRT pensions being means tested, I recall that some time in the 70′s the age pension was not means tested if you were over 75. Billy McMahon was asked on his 75th birthday whether he would be getting it. I think he said yes.

  35. TerjeP
    January 4th, 2013 at 01:35 | #35

    Hal9000 :
    @Fran Barlow
    But surely debt should, like assets, be intergenerationally transferrable. Or maybe I’ve misunderstood Terje’s position. But this is a thread derail. I’ll take no further part in it.

    HECS debts terminate on death. I’ve never proposed otherwise. Although I have no strong view either way. If people accrued debts when receiving medical benefits or unemployment benefits from the state then many will end up repaying or the debt (or in some instances avoiding it to start with). There is an opportunity to significantly reduce the general rate of tax.

  36. January 4th, 2013 at 07:40 | #36

    TerjEP: I suggested unemployment benefits as a loan as a way of providing more suoport for the unemployed, not a reduction in tax for the rich.
    The real scandal in Aus at the moment is the reluctance of governments to do things that should done on the grounds of upsetting people who could pay more tax without any loss to quality of life.

  37. Bruce Bradbury
    January 4th, 2013 at 09:08 | #37

    I agree with Jane S about it being odd that this fuss is occurring now rather than back when the Howard govt made the original changes. I guess it is an example of the ‘boiling frog’ theory (not many people were initially affected).

    John Q says that there is a case for higher rates for age pensions (longer duration on payment). However, there are also counter arguments. Unemployment requires more insurance because people are less able to plan for it, and younger people tend to have higher housing costs. (Australia has the lowest short-term unemployment benefit replacement rates in the OECD).

    Starting from where we are now, and bearing in mind the political resistence to increasing base rates of payment, I suggest the priorities should be:
    - increasing rent assistance and
    - making it easier for lone parents to combine part-time work with benefit reciept (eg returning to the pension income test and availability for work criteria).

  38. January 4th, 2013 at 11:26 | #38

    @Bruce Bradbury
    On your last suggestion it’s worth noting that the activity test requirements for NSA single parents are the same as on PPS. PPS gets them applied when the youngest child is age 6; the transition to NSA at age 8 affects payment rates, but not work related activity requirements.

    Also, the NSA income test for so-called principal carer single parents has been changed from 1 January to a 40% taper instead of the 50/60% taper still applying to the rest of the NSA population. This is the same taper rate as PPS and more generous than that applying to pensioners generally (50%). The income test free area is still $62 though, and there are also tax differences.

    I’ve done a post outlining the effects of these differences if you want more info. See: http://ravebydave.blogspot.com.au/2012/11/january-changes-for-single-parents.html

    Rent assistance certainly needs attention!

  39. John Quiggin
    January 4th, 2013 at 19:48 | #39

    @Bruce Bradbury

    My recollection is that, at the time the two decisions were announced, there was about as much fuss in 2006 as this time around. If it weren’t for Macklin, the implementation on Jan 1 would barely have scored a mention.

    Here’s Margo Kingston quoting Penny Wong’s attack on the measures Labor has now extended

    http://webdiary.com.au/cms/?q=node/1042

  40. Bruce Bradbury
    January 4th, 2013 at 20:39 | #40

    David, I had missed the income test changes – that at least is a little good news (and your other blog post is a useful presentation). Nonetheless, a serious attempt at a policy where part-time work was the accepted norm for lone parents would reduce the taper rate even further.

    John, there were certainly forceful criticisms at the time. However, my memory is they didn’t get much traction in the media – particulary after the changes were introduced. But maybe you are right; the only reason for media attention this time was the entertaining sight of a minister’s office trying to hide the answer to an awkward question.

  41. TerjeP
    January 5th, 2013 at 08:35 | #41

    John D – Perhaps you first need to ban taxpayers from voting. Then governments would stop being concerned about “upsetting” them. Although personally I kind of like the fact that taxpayers get to be upset at governments occasionally.

  42. J-D
    January 5th, 2013 at 08:47 | #42

    @TerjeP
    John D did not refer to upsetting ‘taxpayers’ but to upsetting ‘people who could pay more tax without any loss to quality of life’, the scope of the intended meaning of that phrase (I am presuming) being a much smaller subgroup than taxpayers as a whole.

  43. TerjeP
    January 5th, 2013 at 10:30 | #43

    Well he should define the subgroup so we can be more specific about who he thinks shouldn’t get to upset governments.

  44. Fran Barlow
    January 5th, 2013 at 16:04 | #44

    @TerjeP

    I get upset at governments all the time, including, here and there, on their expenditure choices, but I can’t recall getting upset at the extent of my taxpaying. People in my bracket probably should be levied more tax than we are.

  45. Fran Barlow
    January 5th, 2013 at 22:40 | #45

    @Fran Barlow

    Reflecting further upon “tax rage” I can honestly say that I have never spoken in real life with someone who claims their tax rates are unfair or too high or preventing them from getting ahead. Not once. One reads about this on the internet, and of course the MBCM is full of claims about the “hip-pocket nerve” but I fear I will never meet such a person. People complain (sometimes unreasonably) all the time about the inadequacy of state-provided services but never about taxes.

  46. TerjeP
    January 5th, 2013 at 23:57 | #46

    Then what is John D talking about Fran? Who are these folk who will be upset if the government increases taxes? Could it be that the government knows of some people that you haven’t met in your survey of the Australian population? Personally speaking I don’t recall any real world encounter in which somebody said to me that they personally should be required to pay more taxes. Although I do encounter exotic creatures on websites like this who say such things. eg You.

  47. Ootz
    January 6th, 2013 at 01:01 | #47

    Talking about exotic creatures …
    http://au.news.yahoo.com/thewest/galleries/photo/-/7371734/axe-the-tax/7371743/
    Could he live on the dole?

  48. Fran Barlow
    January 6th, 2013 at 07:29 | #48

    @TerjeP

    Then what is John D talking about Fran? Who are these folk who will be upset if the government increases taxes?

    A meme, I suspect. If one hears something said often enough, one will be inclined to give it at least enough credence to think it worth weighing in one’s commentary. John D, from my recollections at LP, seems to be a somewhat conservative fellow and so be a bit more credulous of popular journalism than I am.

    Personally speaking I don’t recall any real world encounter in which somebody said to me that they personally should be required to pay more taxes.

    I’ve met a few — perhaps a dozen over the time I’ve paid attention since 1977 — so it’s not really statistically significant. Those I’ve met have tended not to volunteer this stuff in directly personal terms. Rather, it tends to be more generic — the wealthy aren’t paying their fair share — and when you ask if they consider themselves ‘wealthy’ — as the principal of my school — who is on about $175k is — they say yes. His words were — nobody wants to pay more tax, but those who can, should be required to do so. Poverty shames us all. That, or variations on those ideas including better services in health and education has tended to be how most have spoken to me about it. On the whole though, people don’t talk much about tax or even government budget deficits, in my experience. I would note the spectacular example of Warren Buffett of Berkshire Hathaway — amongst the world’s wealthiest people — who has declared his determination to give away most of his wealth before he dies and who avows that taxes on people in his category should rise.

  49. Fran Barlow
    January 6th, 2013 at 09:11 | #49

    Only because there is no Monday Message Board:

    Electric Slef-balancing Motor Cycle

    John Davidson, who has been pushing narrow vehicles to expand effective road space for as long as I have known of him, should love this!

  50. Fran Barlow
    January 6th, 2013 at 10:38 | #50

    And here is, ironically, someone who could have advised Macklin on what to say when challenged if she could live on $35 per day:

    Uruguay’s ex-rebel President Mujica walks the talk

    Gosh — I never recognise people as heroes, but this fellow gets close to making me wonder if an exception isn’t called for.

    Some world leaders live in palaces. Some enjoy perks like having a discreet butler, a fleet of yachts or a wine cellar with vintage Champagnes. Then there is José Mujica, the former guerrilla who is Uruguay’s president. He lives in a run-down house on Montevideo’s outskirts with no servants at all. His security detail: two plainclothes officers parked on a dirt road. {…}

    Visitors reach Mr. Mujica’s austere dwelling after driving down O’Higgins Road, past groves of lemon trees. His net worth upon taking office in 2010 amounted to about $1,800 — the value of the 1987 Volkswagen Beetle parked in his garage. He never wears a tie and donates about 90 percent of his salary, largely to a program for expanding housing for the poor.

    {…}

    Under Mr. Mujica, who took office in 2010, Uruguay has drawn attention for seeking to legalize marijuana and same-sex marriage, while also enacting one of the region’s most sweeping abortion rights laws and sharply boosting the use of renewable energy sources like wind and biomass.

    {…}

    “We have done everything possible to make the presidency less venerated,” Mr. Mujica said in an interview one recent morning, after preparing a serving in his kitchen of mate, the herbal drink offered in a hollowed calabash gourd and commonly shared in dozens of sips through the same metal straw.

    Passing around the gourd, he acknowledged that his laid-back presidential lifestyle might seem unusual. Still, he said it amounted to a conscious choice to forgo the trappings of power and wealth. Quoting the Roman court-philosopher Seneca, Mr. Mujica said, “It is not the man who has too little, but the man who craves more, who is poor.” {..}

    A brutal counterinsurgency subdued the Tupamaros, and the police captured Mr. Mujica in 1972. He spent 14 years in prison, including more than a decade in solitary confinement, often in a hole in the ground. During that time, he would go more than a year without bathing, and his companions, he said, were a tiny frog and rats with whom he shared crumbs of bread.

    {…}

    Before Mr. Mujica won the 2009 election by a wide margin, his opponent, Luis Alberto Lacalle, disparaged his small house here as a “cave.” After that, Mr. Mujica also upset some in Uruguay’s political establishment by selling off a presidential residence in a seaside resort city, calling the property “useless.”

    {…}

    His donations leave him with roughly $800 a month of his salary. He said he and his wife, Lucía Topolansky, a former guerrilla who was also imprisoned and is now a senator, do not need much to live on. In a new declaration in 2012, Mr. Mujica said he was sharing ownership of assets previously in his wife’s name, including their home and farm equipment, which lifted his net worth.

    What can one say? I’m reminded, again, why the struggle to empower working humanity is fundamental.

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