Sunday, May 19, 2019

Essence of Hawke reforms lost on new Labor leaders

On the occasion of Hawke  leaving the scene

“Could Bill Shorten be the saviour of capitalism?” read an ­improbable headline in The Sydney Morning Herald. The question mark served as a trigger warning that the writer was hedging his bets. Peter Hartcher has been around long enough, after all, to be wary of a leader who frames his legacy while he’s still auditioning for the job.

Shorten told Hartcher he did not want to tear capitalism down. He merely wanted to save it from its own excesses, just like his predecessor Bob Hawke.

The coming election would be “a referendum on wages”, he ­insisted, rather than a test of ­voters’ appetites for a $387 billion increase in taxes across the next decade or a referendum on Labor’s fanciful plan to save the planet one subsidised battery at a time.

Labor’s referendum on wages has so far failed to excite the crowd. It is hardly surprising since many Labor policies seem designed to drive wages down. A 45 per cent emissions reduction target, the reinstatement of union pattern bargaining and the deliberate dampening of the property market are just some of the ways Labor seems intent on slowing the economy, putting downward pressure on wages and increasing unemployment.

Raising the superannuation guarantee will further eat into take-home pay, while Shorten’s love of big government is an ­indulgence that will be funded with our taxes or money borrowed on our behalf.

What Hawke understood, but Shorten plainly doesn’t, is that wages don’t grow in a shrinking economy, and that the way to make an economy grow is for business to work its magic.

Besides, the promise of wage rises all around, hollow as it may be, no longer has the broad ­appeal it once did. Thanks to the reforms begun by Hawke and Paul Keating, a growing number of voters relies on dividends from its accumulated wealth to make ends meet, rather than wage packets.

Shorten is relying on a false correlation between age and stupidity if he thinks he can fool them into voting Labor. Taxing the bejesus out of retirees is not the best way to turn them into friends.

When Hawke was elected in 1983 on a pro-jobs platform, a mere 14 per cent of voters were of retirement age. This time, 23 per cent of voters are over 65. Another 16 per cent are in the 55 to 64-year-old pre-retirement zone where attention turns from earnings to accumulated savings.

These are Labor’s forgotten voters, the ones Shorten has written off in his quest to calm millennial anxiety about house prices, climate change and the social justice cause de nos jours, intergenerational equality.

Shorten has given little thought as to why most Australians will retire with considerably more wealth than their parents or the role of the Hawke and Keating governments played in this.

One wonders how much attention he paid to the taxation debate between 1985 and 1987, when he was honing his factional politics skills as an arts undergraduate at Monash University.

Keating abolished negative gearing, only to reinstate it two years later when the effect on the supply of rental accommodation in Sydney and Melbourne could no longer be ignored.

Keating’s change of heart gave hundreds of thousands of middle-income baby boomers the opportunity to become landlords. Purchasing a rental property offered tax relief in their earning years and the chance to acquire an asset that could provide income in retirement or be sold to release its value, allowing them to avoid the indignity of ­relying on the state in their golden years.

Far from relieving so-called intergenerational inequality, scrapping negative gearing will dramatically increase it. Baby boomers and Gen-Xers who ­already own investment property will be quarantined from the change, while their children will be denied the opportunity to follow their example. They will ­retire less wealthy than their ­parents in relative terms and will be more likely to call on the pension.

Opposition Treasury spokesman Chris Bowen’s description of negative gearing as “welfare for the wealthy” is as insulting as it is misleading. Few of those who claim tax deductions for negatively geared property could be described as rich. Analysis soon to be published by the Menzies Research Centre shows that their median income is less than $60,000. Fewer than a 10th earn more than $120,000.

Bowen’s welfare-for-the-wealthy slur betrays a disturbing evolution in thought within Labor encouraged by the Orwellian language of Treasury, which has taken to describe a tax concession as “tax expenditure”.

The logic is that the state is ­entitled to 100 per cent of your earnings and anything it deigns to leave in your pocket is an act of supreme generosity by the government. Shorten is trapped in a topsy-turvy world in which a tax increase is described as “a ­saving” and franking credits, a ­refund to shareholders of tax ­already paid by the company issuing the dividend, is described as “free money”.

“I would rather spend revenue on healthcare, on aged care, on childcare than spend it on property investors and tax subsidies,” Shorten told Hartcher. Ironically, most people invest in rental property and superannuation in the hope of never having to call on the government for health or age care. By taxing their retirement income, Labor will make that harder to do.

The audacity of Labor’s plans for the trans-generational redistribution of wealth is so astonishing that Shorten should not be surprised that he’s being asked where Labor might go next. Death duties perhaps? After all, that is the policy of the Greens, his likely ally in a hung parliament, and a surprising number of his own MPs who believe personal savings are not the reward for a lifetime of hard work, ­patience and prudence but money borrowed from the state that should be returned to their rightful owner on the issuing of a death certificate.

Shorten’s categorical statement to Hartcher that death or inherence taxes are not part of his agenda should reassure older readers on that point at least. Or then again, possibly not.


Leftist hate again

A man who allegedly assaulted a Liberal volunteer with a corkscrew at a polling station in Tony Abbott's Sydney electorate has been charged.

The 62-year-old man allegedly began yelling abuse at volunteers who were putting up campaign material outside the Balgowlah Heights Public School just after 8pm on Friday.

Police said the man allegedly threatened an 18-year-old man before thrusting a corkscrew at a 31-year-old volunteer's stomach, causing a minor injury.

He then started tearing down the banners before fleeing.

The victim was treated by paramedics and didn't need to go to hospital.

The alleged attacker was arrested at Balgowlah Heights about 10.30pm and taken to Manly Police Station, where he was charged with two counts of common assault.

The man is due to face the Manly Local Court on June 5.

The contest for Warringah has seen some of the dirtiest tricks of the campaign, including a book with faeces inside being dumped outside Mr Abbott's Manly office.

Former Olympic skier Zali Steggall is vying to wrestle the seat from Mr Abbott, who has held it for 25 years.

Mr Abbott has been the member for Warringah, the electorate that includes Manly and the affluent northern beaches suburbs of Mosman and Neutral Bay, since 1994.


Toxic bill divides to conquer us

On his Sky News show this week, Andrew Bolt summed things up perfectly. “I don’t know whether to laugh or cry,” he said, after our election campaign, already peculiar in nature, took a turn towards the totally bizarre.

In Tasmania, where large numbers of older voters are concerned about Labor’s “retiree tax”, Labor leader Bill Shorten turned to the camera and asked: “Are you worried about someone who has got their sixth investment property or complains about franking credits sitting on the back deck of their yacht?”

Clearly frustrated, and unprompted, he plucked this little gem out of thin air, declaring: “I cannot believe in this election that there is a discussion even under way that gay people will go to hell.”

One reporter had asked Scott Morrison this question on Monday, but the irrelevant question of who goes to hell after they die doesn’t feature in any political party’s policy.

Regardless, Shorten decried the fact it was an issue, demanded the Prime Minister reveal his views on the topic, then gave everyone else an exasperated blast: “The nation’s got to stop eating itself in this sort of madness of division and toxicity … This country needs to really lift itself and the political debate and coverage needs to lift itself in the next four days.”

Speaking of division and toxicity, Labor has separated the voting population into three distinct economic categories.

There are the working and middle classes, versus the “top end of town”. Labor stands for the first two and intends to make life better for them by taking from the latter.

This concept — hit the rich, help the poor — may sound very appealing. Yet Labor’s tax plans will hit almost everyone, rich or poor, and make private wealth creation, for the non-wealthy but aspirational, much more difficult.

As most people want to get ahead in life, and achieve financial security, they will cast a vote for Labor in the same way a turkey will cast a vote for Christmas.

This weekend, we find out how shrewd the electorate is. If self-interest rules, most people will hold their noses and vote to return the government. If self-interest is forgotten, they will vote Labor, and cut their noses off to spite their faces.

Perhaps you think this assessment of ALP policy too harsh. Take a look at the three examples below, calculated with Self Employed Australia’s online tool, to find out just how hard Labor is going to hit the rich to help the poor.

1. Alison earns $45k a year but, still, she is from Labor’s top end of town and really needs to start paying her way. If only Alison would pay more tax, then everyone else could have more services. Schools and hospitals need to be better funded, which is why Labor, during the next five years, will charge Alison an extra $3339 in income taxes. This is not much to ask, really, and on Alison’s income she will hardly notice it.

2. Sanjeev is one of Labor’s retired fat cats. His annual income is $40k a year, which includes $5k in fully franked dividends, and he spends $2k a year on his accountant. Should Sanjeev be sitting on the back deck of his yacht worrying about his franking credits, which have been described as a gift by senior ALP types? Across the next five years, Sanjeev will pay $15,960 in additional tax under Labor.

3. Rowan is one of those greedy, selfish people trying to get ahead in life, with the eventual goal of a self-funded retirement. By ruthlessly manipulating current tax loopholes, he has two investment properties, which he negatively gears. His salary is a whopping $83k a year, which is about the current average wage for full-time earnings in Australia. Rowan intends to continue building his property portfolio, and after January 1 next year he intends to buy an older unit for $600k in the inner city, where he will eventually live in his old age. In the meantime, he will rent it out. During the next five years, Rowan will pay $30,145 in additional tax under Labor.

Putting the known financial impact of Labor’s plans to one side, let’s look at the unknown costs of its climate change policy.

Earlier this month Shorten, when asked for the costs, replied to the interviewer: “You know what, mate, you are a great athlete, but if you had a friend who was perhaps on the large side, the chubby side, and they had 10 Big Macs a day … there’s a cost to not eating the Big Macs. But in the long term it’s an investment, isn’t it? The idea that you can get positive change from putting nil effort in. I’m going to use this example of the exercise. Sure, there’s a cost to exercising, but there’s a benefit. Now which do you measure? The cost or the benefit, or do you accept that it’s all part of a total package?”

Following this incoherent nonsense, in subsequent appearances Shorten labelled further questions over costs as “dumb” and “dishonest”.

In this campaign, it is not the questions that are dumb and dishonest. Labor’s policies are dumb and they are being sold dishonestly. What remains to be seen is whether the voters are dumb enough to vote them into power.


Busybodies ensure gender bias has now gone full circle

It is now men who are heavily discriminated against but sexist policies continue to rule

Reworking a suggestion by US Chief Justice John Roberts, the way to stop gender discrimination is to stop discriminating on the basis of gender. The judge was dealing with race discrimination in a case before the US Supreme Court just over a decade ago. But it is high time we draw some honest conclusions about gender discrimination. Have we turned the tables of injustice so that we now punish men? Are we OK with that?

Parents with sons and daughters about to enter the workforce ought to be particularly concerned. Those with young sons should be especially troubled if the search for fairness for one sex causes unfairness towards the other sex.

For years, gender warriors, corporate social engineers and motley bands of busybodies have been preoccupied with dismantling unconscious bias against women in the workplace. Unconscious bias is said to take place when recruiters prefer candidates who are similar to them, or when there is group pressure to conform with the decisions of others. A wider culture of appeasement by people who don’t want to make waves has sustained this agenda, regardless of whether unconscious bias is real.

In fact, the idea that many employers fall back on a deep-seated bias that discriminates against women has become so ensconced that gendered recruitment has sped in reverse. Corporate fashion now favours conscious bias, system-wide positive discrimination that gives young women a terrific boost into jobs. The flip side is that the job prospects of young men, and their careers, are being damaged. Unconscious bias is bad enough, if it exists. But is cementing real conscious bias the answer?

Feminist warriors talk about corrective justice that addresses historical wrongs. The weak-willed go along with this social justice narrative and virtue-signalling men, including those Male Champions of Change who advocate for positive discrimination in favour of women, relish the halo effect of sounding so damn good.

But are any of these people doing good? Recruiters will tell you, sotto voce, that women continue to make very different career choices at key points in their ­careers, and without a hint of ­coercion. Recruiters won’t say this publicly because dissenting from social justice orthodoxy is certain social death, and a likely career-killer too.

But anecdotally, they explain cases where the numbers of young women applying for certain graduate jobs are dramatically lower than for young men. Take XYZ Investment Bank with an annual program to recruit 100 new graduates, split 50-50 for gender equality. The bank will often receive applications from 300 men and 100 applications from women (a not unrealistic difference in some professions).

This means that the 300 men will have a one in six chance of ­securing a job and the 100 women will have a one in two chance.

Are we OK with that gender inequity?

Clumsy quotas ignore the real­ity of women’s choices. From sociologist Catherine Hakim’s extensive research, we know that for every woman who regards work as the centrepiece of their lives, there are three men. In other words, men and women are not competing in equal numbers. Rather than some misogynistic conspiracy to clip the careers of women, women are deciding to work differently from men.

Social engineers don’t like facts that expose the new injustice against men in the workplace. Rather than a nuanced debate, the activists and their appeasers continue to artificially engineer a 50-50 gender representation in the workplace despite drawing from a pool that is not made up of equal numbers of men and women.

Corrective justice for past injustices is not a sound reason to discriminate against young men today. If XYZ Investment Bank has a pool of 300 male applicants, compared with 100 young women, the pool of 300 young men will necessarily reflect a wider slice of Australia, from exclusive inner-city private schools to public schools in the country. Are we OK with preferring private school girls from Abbotsleigh over working-class boys from Newcastle High?

Many are so wedded to conscious bias in favour of women that they reject moves that might dismantle it. This week, The Australian reported on a study that found removing names from public service job applications to confront unconscious gender bias has backfired. The trial was conducted by a behavioural economic unit established when Malcolm Turnbull was prime minister. The study of more than 2100 public servants from 14 agencies found that when recruiters reviewed gender-neutral applications, meaning names were removed, men fared better than they did under recruitment processes that included names of applicants.

In other words, gender-neutral applications expose the ­entrenched gender bias in favour of women that exists when gender is included on job applications. ­Instead of calling out conscious bias in existing recruitment processes, the study urges “caution” as de-identification of gender may “frustrate efforts aimed at promoting diversity”.

In a cute twist, last week, after being mobbed by school girls at St Joseph’s Catholic School on the NSW central coast, Bill Shorten committed a Labor government to gender-neutral resumes in the public service. The man should be mobbed by schoolboys who will benefit from an end to conscious bias that favours women. That’s not what Shorten had in mind, of course, as he committed his Labor caucus to 49 per cent women. But it points to the determined ignorance of facts over gender agendas. The indifference to facts gets worse the higher up you go in corporate Australia. The reality of women’s preferences is reflected in higher attrition rates among women who have different work-family preferences as they enter their late 20s and 30s. More women than men choose to leave jobs to raise children or to simply work less for other reasons, or to work differently. Sometimes that is not voluntary, but often it is.

The knock-on effect of this higher attrition rate is that an even smaller pool of privileged women reap even larger rewards at the expense of a bigger pool of men. Yet quota-seekers never address how quotas, drawing from different sized pools of men and women, inevitably deliver unjust outcomes.

By the time you get to the level of corporate boards, women become the Golden Skirts of corporate Australia. Good on them. But let’s not pretend it is fair or just.

The Golden Skirts phenomenon originated in Norway following laws that mandated 40 per cent of women on boards. The shallow pool of talented women means a few privileged women sit on ­multiple boards. In Australia, as of last year, 38 female directors from a smaller pool of female talent sat on three or more ASX 200 boards while only 25 men from a larger pool held the same number of board seats.

Conscious bias, at the graduate level or at higher levels, is not the high road to equity. It is a racket for a few lucky women at the expense of a large number of men. And Labor’s Andrew Leigh says a Shorten government will legislate that low road by mandating quotas for women on ASX-listed companies, cementing injustice into corporate Australia.

It is profoundly demeaning for women to be given a job because they are female rather than because they are the best person for the job. Sadly, ideas like this will remain unfashionable until more of us agree that the best way to stop gender discrimination is to stop discriminating on the basis of ­gender.

Which reminds me. At a small lunch in a salubrious Melbourne club last week, Institute of Public Affairs chairman Rod Kemp told us that he had an announcement.

He prefaced his news, that I will take over as IPA chairman come July 1, by saying he must surely have joined the saintly crowd of Male Champions of Change.

Then Rod burst out laughing, as did others, at the utter nonsense of those virtue-signalling men. Just as well. If Rod were serious about this appointment depending on my gender, I might have decked him.


 Posted by John J. Ray (M.A.; Ph.D.).    For a daily critique of Leftist activities,  see DISSECTING LEFTISM.  To keep up with attacks on free speech see Tongue Tied. Also, don't forget your daily roundup  of pro-environment but anti-Greenie  news and commentary at GREENIE WATCH .  Email me  here

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