Editorial
Tax craven

The crux of Scott Morrison’s first major speech on economics since the election was this: the public expects too much. It was not the subject of the speech, but it was its opening and it framed Morrison’s sentiments.

“A generation has grown up in an environment where receiving payments from the government is not seen as the reserve of the disadvantaged, but a common and expected component of their income over their entire life cycle, and not inconsistent with self-reliance,” he said.

“On current settings, more Australians today are likely to go through their entire lives without ever paying tax than for generations, and more Australians are likely today to be net beneficiaries of the government than contributors – never paying more tax than they receive in government payments. There is a new divide – the taxed and the taxed-nots.”

This has been a running theme for Morrison, and was also described in the crackdown on welfare he announced in February: “Fairness is a two-way street. You’ve got to look at the fairness to those who receive the benefits, but it’s got to be fair on those who are paying for it.”

What is interesting in Morrison’s speech on Thursday is the way his language has changed. He defines economic problems now by generation and has introduced a “divide” between the rich and the poor.

There are, of course, sensible changes to be made to the payment of middle-class welfare. But Morrison did not limit his speech to this or explicitly describe these middle-class beneficiaries. 

He mentioned John Howard and Peter Costello but refused to name them as the architects of this dysfunctional system. And that is because Morrison’s speech was not about middle-class welfare; it was about cutting services.

“The bulk of our savings measures on outlays are not surprisingly weighted to the largest spending portfolios, in particular social services,” he said. “Reigning in the growth in welfare spending is one of the most difficult challenges confronting the budget.”

And again: “Customers demand better standards of services at lower costs. Citizens are no different. We have to work together to find better and more innovative ways of delivering our services, particularly in areas such as health, education and human services that delivers for citizens and is affordable and sustainable.”

There was Morrison’s big idea: cuts to health and education. He continued the Laffer Curve lie that lowering taxes for business will produce growth. He courted disquiet in an us-and-them understanding of income tax. He appealed to an unease between generations. And then, instead of talking about fairness in the system, instead of talking about means testing and repairing Howard and Costello’s largesse, he talked simply about taking away services.

Morrison is due to give two more of these headland speeches. In them he will perhaps expand on what he means by “innovative ways of delivering our services”. But on the merit of this first attempt he seems not to have thought beyond the politics of class and greed. He pretended to be ready for a serious conversation – “my greatest concern is that we end up answering these questions too late and the hard way” – but nowhere was it clear he was offering anything decent or new. Customers and citizens, as he said, are no different in his mind.

This article was first published in the print edition of The Saturday Paper on Aug 27, 2016 as "Tax craven". Subscribe here.