August 02, 2012
Illustration: Simon Letch
IN HIS lecture last night commemorating the late John Button, Wayne Swan took a beguiling approach to a potentially eye-glazing subject Labor politicians are prone to bang on about - disparities of wealth and opportunity. He channelled Bruce Springsteen, the rock singer and songwriter who found a nobility in the daily life of America's blue-collar workers and sang about how they were shafted by economic change and by conscription for the Vietnam War.
Swan's point was that from a bit before Springsteen released his epic Born in the USA album in 1984, America's great run of equalising prosperity after World War II had come to an end, and wealth was polarising at the top end of the scale again. Certainly, to look at political debate in the United States right now, it seems like a fight by the beneficiaries of that wealth aggregation - the very rich, the medical industry and others - to stop efforts at redressing the long-term rise in inequality, by bamboozling the have-nots with appeals to patriotism, religion and fiscal rectitude. Don't let it start here, was Swan's appeal.
But has it? And if not, is it a serious risk? Swan spent a lot of his speech attacking three mining billionaires who, in different ways, have jumped into public debate to contest government policies - taxation in particular. He finds it outrageous that Clive Palmer wants to run for parliament, that Gina Rinehart wants to buy into Fairfax Media, and that Andrew Forrest is mounting a High Court challenge to the mineral resource rent tax. They're using parliament, the constitution, the independent media as ''playthings'', Swan says. But as Australians they're entitled to try all of these things. It takes a dim view of voters, newspaper readers and judges to think that sheer weight of money and advertising will prevail if sound arguments are not there.
Nor is the alternative government rushing to embrace the thoughts of these would-be plutocrats or their leadership. Tony Abbott is doing his best to fend off Palmer, for one thing. For all the rhetoric in opposition, it's a reasonable bet the Coalition will shift unapologetically from attacking Labor over debt and deficits to the same cultivation of middle Australia that John Howard and Robert Menzies before him raised to an art form - giveaways to the rich like Peter Costello's superannuation concessions being an aberration. It might well find convenient difficulties in repealing the resource and carbon taxes.
As we pointed out at the time, Swan and his government colleagues squibbed the major chance to rebalance the tax system's incentives that currently encourage inequalities, when they decided to adopt only four of the 138 recommendations of the Henry report on taxation that they themselves had commissioned. When the mining giants mounted a lobbying campaign against the most important of the new policies, the mining super profit tax, the government wilted, retreating to the more limited resource rental tax that started last month.
In baulking at the broad sweep of reform, Swan pushed aside the opportunity to apply the deep tax-free threshold, the simpler income tax rates, the lower company tax, and the removal of incentives for landlordism suggested by Henry. These offered more employment prospects and net earnings for the middle and lower income Australians struggling with structural change, and a better chance for the young to get a foot on the ladder of career and a home.
In terms of reform, the current Labor government has still to sheet home the reforms that would put it on a level with the Hawke-Keating team in which, at the time of Springsteen's best-seller, John Button was the industry minister carefully unwinding the protection around Australian manufacturing and its blue-collar workforce. Five years younger than ''The Boss'', Swan can be forgiven for indulging in nostalgia about his youthful milieu. But if he thought this exercise would help rejuvenate Labor, and appeal to young voters, he needs to update his music collection.