Fred Argy said:

I accept that the government may have tilted the field too much in favour of families with kids, but my support for the family benefit reforms of Howard rests on a simple proposition: without them, inequality would have increased substantially in Australia over the last decade.

I accept that that is a defensible position, Fred, if one assumes that there was no alternative and feasible means of addressing vertical inequity. Of course, simply taking from the rich (whether parents or childfree people) and giving to the poor (whether parents or childfree) is an alternative that in my view could have improved vertical equity without the major adverse effects on horizontal equity (ie between parents and childfree people) that have resulted from the Liberal’s policies.

PS: Contrary to your post, I did not concede two advantages to domestic reproduction. One of the matters I mentioned - cultural preference - was an advantage; the other (the ability to screen people for quality) is an advantage of the immigration route.

But the Oz is quite clearly campaigning for Howard, yep.

Patrick said:

Since I don’t think anyone thinks that organic growth is lower cost than immigration-based growth, I think this is a policy that anyone who cares about real-world facts can be boxed into supporting.

Sorry Patrick, but your box is made of wet cardboard. Consider the costs of subsidising domestic reproduction today versus importing already-raised and educated 22 year olds in 22 years time. Both options provide you with a worker-cum-taxpayer, but the latter saves 22 years of public subsidies and induced private expenditures in the process. Of course, there are more issues - cultural preferences (which may favour domestic reproduction), and the benefits of pre-screening (which favours sourcing via immigration), to name just two. However, the point remains that the case for domestic reproduction subsidies on topping-up-the-population grounds is not nearly as strong as you seem to think.

Backgroomgirl said:

I would have thought it indisputable that a family with children … needs a higher income than a family without children to attain the same standard of living.

This misses the point that, in choosing to spend their time and money on having children, parents are valuing the net pleasures of parenthood at more than the other things they could spend their time and money on. Of course, once you spend your income on something, whether it be a BMW, a world trip or on having and raising a child, you have less money left - and thus need more money to get back to the financial position of someone on the same income who hasn’t spend their money on such things. But so what? We wouldn’t say that the person who purchases a BMW needs a higher income than someone who buys a Skoda, or who simply doesn’t purchase a a car, to attain the same standard of living; nor should we when talking about people who choose to spend their income on having kids.

Since I don’t think anyone thinks that organic growth is lower cost than immigration-based growth, I think this is a policy that anyone who cares about real-world facts can be boxed into supporting.

Comparing the average family with kids to the average single person household is a bit meaningless, since as you note people without private income are a much larger subset of the latter group than of the former (ie all other things are definitely not equal).

This is mainly because their private income is much higher to begin with, but nevertheless it calls into question the nature of ‘need’ here.

This is a bit off topic, but I’ve never quite understood at what point the child as parental consumption choice becomes a citizen in its own right and therefore entitled to some share of what society has to offer, including financially.

I’d be one of the first to agree that the current government has probably gone a lot further than it needed to increase the disposable income of people with children relative to those without. However, I would have thought it indisputable that a family with children (who will, after all, be the working tax-paying citizens of tomorrow) needs a higher income than a family without children to attain the same standard of living. Whether you do this through various tax mechanisms (tax rebates or deductions, higher tax thresholds) or through income transfers is largely a matter of choice, but conceptually that is all that the ‘government largesse’ you refer to is attempting to do.

“This is not to deny in any way that Howard has been very generous with his family benefits for low-income families (and more recently with tax offsets) and deserves credit or it.”

Why, Fred? You often assert that government largesse for families is a good thing, but to my knowledge you have never explained why people who choose to spend their time and money on the pleasures of parenthood warrant even more welfare (errr, sorry, family assistance), at the expense of childless people, who have simply chosen (if they had a choice) to spend their time and money on other things.

Over that period there have been both social and policy changes that are likely to have had an impact on where people with particular characteristics are likely to appear in the final income distribution. On the social (more strictly speaking, labour market) side, there have been very substantial increases in labour force participation among women aged 45 and over and among men aged 55 and over. So households with ‘mature-aged’ workers are likely to be higher in the income distribution than they were in 1998-99.

On the policy side, all that extra money that this government has thrown at families with children (especially single parents) must also have had an effect on where families with children stand relative to families without children.

So, in the end, it may be that the effect you note where people in the second quintile received less benefits and paid more taxes may be largely (or even entirely) explained by changes in the demographic characteristics of households that fall into that quintile.

I’m sure if you asked most people, not just left-wingers, if the gap between rich and poor was widening most would say ‘yes’. Though the handful of people who study the evidence don’t think this is right, most newspaper readers would not have registered the occasional article pointing out the correct information.

Is there any evidence to substantiate either of these claims? Especially the one purporting to know how ‘a hell of a lot of people think’. I don’t recall reading about any research conducted into people’s views on the matter.

And there is no doubt that income distribution has NOT become more unequal under Howard - a fact I have tried in recent years to explain to left-wing writers who persist in saying that income inequality has been increasing. It has not, although the trend may change. The real worry is about increasing inequality of opportunity but you know my views on this and it is not the issue we are currently debating.

But returning to my original post, my main grouch against the Australian article was that it made a big drama out of the fact that “low income earners receive the lion’s share of government assistance”. As I acknowledged in my post, this was not incorrect. But it was hardly worthy of front page treatment per se (everyone should know by now that Australia has a well targeted tax/transfer system). Had the Australian examined trends, it might have had a more valid story to tell.

Another reason evident in cat 6537.0 that the top quintile’s tax contribution has dropped is that their private income share has declined - it is down 2 percentage points while their tax share is down 1.8 percentage points. I haven’t checked other income data sources, but the intitial drop is counter-intuitive.

Equivalised final income does show the ‘progressive’ feature lauded in The Australian, with the bottom 3 quintiles gaining and the top 2 losing. The apparent losses you note above are presumably due to household composition factors. While I too dislike The Australian (and any paper) in campaign mode the gist of their story was correct on these figures.

I’m assuming whyisitso you find Gerard Henderson, Janet Albrechtsen, Miranda Devine and Greg Sheridan paragons of common sense and reason. As opposed to people like Ross Gittins and Mike Carlton. One can only assume your brain stop developing some time ago.

Compared to The Age writers? An Age staff writer said she would prefer to live in a socialist dictatorship.

Take a look,
“Personally, I’d be happy with a benevolent socialist dictatorship…….”

http://www.theage.com.au/articles/2007/06/12/1181414295905.html