Something that is not up to the government is to dissipate the toxic “us vs them”, zero sum mentality that is the legacy of Marxism and militant trade unionism.

Right on comrade!
Way to go!
Peace and Love
Rafe

On the deregulation front — how about professional licences?

I think the poverty trap is the biggest political issue for today. But the area in most need of economic debate is education/health reform. Price signals in the PBS, fewer restrictions on supply in the education sector, greater diversity of schools, abolish university quotas.

The alternative economic reform agenda to be resisted is the idea for more R&D subsidies (the new corporate welfare) based on new growth theory.

The experience of economic reform is that there will always be some losers, and often amongst people who in no wise deserve to lose. Real life Pareto improvements are very rare.

On the poverty traps, it’s actually a lot harder to fix than a naive inspection would seem (which is exactly why they haven’t been fixed). There is an ironcast tradeoff between generosity, incentives and affordability for any payment scheme - you can’t improve one without compromising at least one of the others. Affordability, of course, is necessary to maintain incentives for the taxpayers funding the scheme (as no doubt rafe would be quick to point out). No-one could credibly describe the base rates of payment for our working age payments as generous (lets see you try and live the high life on $200 a week). So it’s incentives that have been compromised.

People who speak, as The Autralian editorial page did some time ago, of increasing targeting while improving incentives are contradicting themselves.

The fact is that the Government have had buckets of revenue which they’ve chosen to spray around pretty recklessly - and also on moving thresholds up but mainly at the top of the scale.

Surely the higher priority is to reduce effective that are much higher further down the income scale.

We should use some of Mike Keating’s ideas to impose some maximum level of effective tax rates across the board - or something resembling it.

Still, I take your basic point, there are no easy answers on this stuff, and targetting and high(er) effective marginal tax rates are the two sides of the one coin. But we’ve had so much money flowing into the coffers and then back out again as giveaways we could really have done something to address this. And we have done so little. And though Howard is regarded as a master politician, I think had he done what I’m suggesting he’d get more not less electoral support.