During Scott Morrison’s budget presentation last night my mind drifted, bizarrely, to Kath and Kim, although I suppose it’s understandable that, in the face of ScoMo’s unrelenting drone attack, the mind seeks any respite it can get.
If I remember correctly, Kim is shopping for a dining suite and mentions to Kath she is looking for “pure monogamy.”
“Oh no, Kim,” Kath responds. “Monogamy’s very old fashioned. You just want a veneer of monogamy, that’s all anyone cares about these days.”
Fairness. It’s a word we hear a lot from all sides of politics at the moment. When Hockey presented his second and last budget in 2015 he used the word fair 15 times and published a taxpayer-funded Fairness Booklet to explain why reducing welfare access and increasing upfront healthcare costs was, in fact, fair.
ScoMo’s first budget speech featured the f-word only once. It is a much fairer budget than either of Hockey’s efforts and it makes minor tweaks to some of the more egregious drivers of inequality in our economy. But as I’ve written previously, the drivers of inequality are often the devils in the detail, and in detail the budget is severely lacking.
Superannuation was the centerpiece of this budget and it took two reasonable steps towards making the system more fair: people on incomes of $250,000 plus must pay an additional 15% tax to put money into super (the previous threshold was $300,000). And, more significantly, the amount of after-tax money individuals can put in to super has been restricted to $500,000 over a lifetime (the previous limit was $180,000 per year).
As I said, this is a step in the right direction. Super tax concessions available to the wealthy had become so unfair that the government had no choice but to act. Last year an ACOSS report singled out superannuation tax settings as a key driver of wealth inequality in Australia. And while Australia is still far more equal in terms of wealth than both the US and the UK (Australia ranks 10th lowest in wealth inequality – the US is fifth worst), an estimated 2.5 million Australians live below the poverty level, which is unacceptable in a country as rich as ours.
Limiting tax concessions at the top end is an important part of tackling inequality in our retirement income system, but it does nothing to help alleviate poverty unless the tax gains are equitably distributed.
Under the Rudd/Gillard Labor government, employers’ minimum mandatory superannuation contributions were planned to increase from 9.5% to 12%. Under Abbott/Turnbull this has been delayed to 2025, which in political terms is never.
So apart from retaining the Gillard government’s Low Income Superannuation Contribution in slightly modified form, this budget has done nothing to alleviate poverty in retirement, which is not only a very real problem, but a very gendered problem. On average, women retire with $90,000 less than men and almost a third of women are retiring into poverty. (Sorry Kath, sorry Kim…ScoMo doesn’t care.)
So after spending months fretting over (and leaking) varying thought bubbles on the generosity of benefits accruing to those on very high incomes, the concerns of those on very low incomes, particularly women, have been comprehensively ignored.
Fairness. Is it old fashioned? Do we want real fairness, or is a veneer of fairness all anyone cares about these days? I guess we’ll find out come July.
(Note: these views are my own and do not represent the views of my employer.)