All poor people have low taxable incomes, but many people with low taxable incomes are a long way from being poor.
[First published in the Australian Financial Review – here]
And while the debate about the fairness of abolishing cash refunds for “spare” tax credits has conflated poor people and those with good accountants, the two groups are quite easy to distinguish.
Poor people don’t have $50,000 worth of shares because, if they ever owned any shares, they sold them long ago to pay the rent, see the dentist or register their car.
While poverty exists in Australia, those who own their own home, top up their age pension with super and have a parcel of shares are simply not among them.
We know for a fact that the Turnbull government doesn’t think that even those relying solely on the age pension are poor.
From the moment the Coalition won office they have been determined to cut the incomes of pensioners and Australians who live on far less.
The Turnbull government is trying to abolish the energy supplement for new recipients of the age pension.
If the Senate agrees, a pensioner couple would be $21.20 a week, or $550 per year, worse off. Needless to say such cuts have been justified on the need to help repair the budget.
What about the pensioners?
The same was true back in 2014 when the Coalition proposed lowering the rate at which the age pension was indexed.
If Joe Hockey had his way then every age pensioner living today in a rented house with no super and no shares would have less money to spend.
And then there’s the unemployed.
If the Turnbull government is worried about how someone who owns their own home and lives on a tax-free income of $50,000 per year makes do, then they must be apoplectic about the difficulties faced by someone who, having lost their job in the car industry, must now live on $269.40 a week.
And then there’s the minimum wage.
While Turnbull wants us to reflect on the difficulties experienced by retirees lucky enough to live in their own home, have a bundle of shares and an age pension topped up by super, the minimum wage in Australia, for those lucky enough to find a full-time job, is just $695 per week.
And just last week, in the middle of a national debate about how much money retirees need to live with dignity, the National Retail Association argued against any increase to the retail award wage. Not even to keep up with inflation – zero. The silence from Turnbull was deafening.
Millionaires aren’t poor
And finally there are the cuts to hospitality and related penalty rates.
While it has become a truism in Australian politics that you can give to retirees but never take, the same ratchet clearly does not apply to those still working to pay off their house.
While it would apparently be “retrospective” and “unfair” to change government policy in any way that reduces the incomes of those over 65, apparently no such concerns exist when it comes to working Australians who relied on the penalty rates that the government cut last July.
Despite the fact that Australia is one of the richest countries in the world, real poverty and disadvantage exists in our country.
There are people with rotting teeth who can’t afford to see a dentist in a hurry.
There are women fleeing domestic violence who cannot find adequate shelter for themselves or their children. And there are old people living in aged care facilities suffering from bed sores and malnutrition.
But despite the fact that none of these problems are a secret, for the past week we have had a national debate about whether millionaires whose disposable income eclipses their taxable income are poor. It is obscene.
Since the last election Bill Shorten has been accused by the Coalition and the business community of waging a class war.
And after proposing to shut down a lucrative tax loophole enjoyed primarily by the rich, he is being accused of waging a war on the poor.
In a democracy waging a war against everybody is generally considered to be a poor strategy, yet, somehow, Labor is well ahead in the polls and just won the Batman byelection comfortably.
Most Australians pay tax, and most Australians think it’s ridiculous to pay people tax. Maybe that’s why Bill Shorten is way in front.
Richard Denniss is chief economist at The Australia Institute.
Tanya Martin Office Manager
Jake Wishart Senior Media Adviser