The Corporatist Manifesto II: the Pernicious Vice of Welfare Dependency

(You can catch up with Part I here.)

One thing that’s become obvious as I’ve read through the CIS’s corporatist manifesto is that their TARGET30 campaign is very much a moral crusade with two goals. First, to reduce the burden (of taxation) on future generations. Second, to eradicate the pernicious vice of welfare dependency which deforms the character just as surely as habitual masturbation saps your manly vigour leading to unmanly weakness, blindness and insanity:

Before the state created a right to unemployment benefits, for example, people saved or insured through friendly societies and trade unions to ensure an income if they lost their job. Nowadays, few bother. Before Medicare, families insured themselves so they could buy treatment if they fell ill, and charitable foundations raised money to build and run hospitals. But now that the state provides health care, individuals are less inclined to insure themselves. When government takes over such functions, therefore, the market shrivels, philanthropy dwindles, and self-reliance is replaced by state dependency. (TARGET30—Towards Smaller Government and Future Prosperity by Simon Cowan (with contributions from Robert Carling and Peter Saunders (and Andrew Baker, Jennifer Buckingham, Stephen Kirchner, Peter Kurti, and Jeremy Sammut)))

…Tax-welfare churn leads to economic costs—for example, administration and compliance costs, a higher tax burden, and higher effective marginal tax rates (EMTRs) and non-economic costs including increased welfare dependency, government paternalism and patronage…(TARGET30—Tax-Welfare Churn and the Australian Welfare State by Andrew Baker)

Generally, when someone makes a moral pronouncement like ‘People should be more self reliant.’ the phrase ‘like me’ is crammed in at the end between the last word of the sentence and the full stop. Rarely does such a sentence end with an implied ‘well, not me of course, I’m a special case with a special exemption’ – it’s much harder to cram into that tiny space. But that’s a subject best left for another post.

The inclusion of Peter Saunders in TARGET30’s cabal sorry cadre sorry collective sorry committee sorry group of co-authors, suggests that his ideas provide the main moral impetus of the campaign. Especially given that the CIS is spruiking a new book by Saunders Re-moralising the Welfare State. Since Saunders has frequently argued in the past that the Welfare State has no moral basis or justification – usually quite badly – I think it’s a safe bet that every ‘remoralising’ measure he proposes works towards its destruction.

Andrew Baker’s policy paper on ‘tax-welfare churn’ continues to prosecute the case for cutting back welfare spending with the twin goals of eliminating the economic efficiency that results when governments take money from individuals with the hand of the taxation system then return it with the hand of the welfare system. While it looks like old wine in a new bottle the wine has been fortified by extending the definition of welfare; government welfare now includes welfare in kind as well as money welfare. The two major forms of welfare-in-kind Baker identifies are health care – government subsidised visits to the GP or hospital treatments – and education, both secondary and tertiary:

…the median Australian household [by income] receives more in benefits each week ($103 in welfare payments and $359 in welfare-in-kind) than it pays in total taxes each week ($348). Family Tax Benefits account for more than a third of the cash transfers ($36 per week), and the Age Pension accounts for more than 20% of these receipts ($24 per week). Of the $359 of welfare-in-kind, $166 is in the form of health care benefits such as hospital stays or GP visits, and $147 is for education benefits ($107 on school education and $32 on tertiary education). The remainder comes from child care assistance and other social security and welfare supports. (Baker op cit)

Baker’s inclusion of education in Australian households’ (and by conflation Australian families‘) welfare take is interesting; it extends his attack beyond the institutions of the socialist or social democratic welfare state to the liberal democratic state from which it evolved – or devolved, if you so prefer. He brings public education, as a feature of modern Australian society into the scope of his attack without any regard for its history before the emergence of the welfare state. But that too, is a subject best left for another post.

For now, let’s just note that if the $147 Baker’s median household receives in education spending is deducted from its welfare benefits it now receives only $305 total benefit – less than it pays in tax.

Baker’s source for his ‘statistical analysis’*

*: those scare quotes are a sop to the sensitivities of statistically literate readers who might, by the end of this post, vehemently object to my application of the phrase ‘statistical analysis’ to whatever the hell it is that Baker has actually produced.

is the ABS publication Government Benefits, Taxes, and Household Income, Australia 2009–10 (ABS Cat. No. 6537). His description of the median household precedes this table of personal incomes and welfare received by quintiles of the population:

Equivalised private household income quintile, 2009–10, average weekly value ($)

Lowest

Second

Third

Fourth

Highest

Private income

170

810

1,447

2,090

3,650

Total social assistance benefits in cash

435

251

103

35

15

Total selected social transfers in kind

455

435

359

292

234

Total income

1,060

1,496

1,909

2,417

3,899

Income taxes

1

58

167

317

756

Production taxes

105

149

181

216

273

Total taxes

106

207

348

533

1,029

Final income

954

1,289

1,561

1,884

2,870

Total benefits allocated

890

686

462

327

249

Total taxes allocated

106

207

348

533

1,029

Net benefits allocated

784

478

114

-206

-780

The explanatory notes for ABS Cat. No. 6537 include the following explanation of ‘equivalised income’:

Equivalised income

  1. Much of the analysis in this study uses equivalised income rather than gross or disposable income since it enables comparison of the relative economic well-being of households of different size and composition. Equivalised household income is calculated by adjusting household income by the application of an equivalence scale. This adjustment reflects the requirement for a larger household to have a higher level of income to achieve the same standard of living as a smaller household. Where income is negative, it is set to zero equivalised income.

  1. When household income is adjusted according to an equivalence scale, the equivalised income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household, it is equal to income received. For a household comprising more than one person, equivalised income is an indicator of the household income that would be required by a lone person household in order to enjoy the same level of economic wellbeing as the household in question. (emphasis added)

  2. The equivalence scale has been used to adjust private, disposable and final income for differing household sizes and composition…

To base an argument on the notion of the ‘median household’ – as if it were real and not a statistical abstraction – ought to be error enough for anyone. Not Baker – he compounds that error by ignoring, in his exposition of the ‘median household’s’ finances, the extra layer of abstraction that’s imposed by ‘equivalising’ household incomes in the manner described above. Each equivalised household consists, essentially, of one person. Bearing that in mind, let’s take a look at composition of the social benefits in cash that these single person households receive:

Table 2: Social assistance benefits in cash – Average Weekly Value ($)

EQUIVALISED PRIVATE HOUSEHOLD
INCOME QUINTILE

Lowest

Second

Third

Fourth

Fifth

Age pension

158

87

24

8

4

Disability support pension

66

18

8

3

2

Veterans’ Affairs pension

34

16

6

3

2

Family tax benefit

58

68

36

9

1

Parenting payment

32

11

4

1

0

Unemployment and student allowances

38

24

11

6

3

Other government pensions and allowances

51

27

15

5

3

Total social assistance benefits in cash

435

251

103

35

15

So the single person in each of the equivalised households of the third quintile receives, in addition to his or her private income: $24 a week from the Age pension, $8 a week from the Disability support pension, $6 a week in DVA pension, $36 a week in Family tax benefit, parenting payment of $4 a week and $11 a week in either student allowances or Newstart. If such a person actually existed it might be a scandal to society – it might also be cause to wonder why anyone would go to the trouble to set up so many bogus identities for such petty returns.

There is, of course, a much more reasonable way to interpret these figures. The lowest quintile consists of households ranging from those with no personal income to the highest income for the quintile: the top income of the 20th percentile (P20). According to table 1 of the ABS Excel file, the highest personal income for P20 is $284. The average weekly values of the various forms of income support received by the lowest quintile reflect the mix of households it includes and the mix of income sources. While this point seems bleeding obvious to me it seems it wasn’t so bleeding obvious to Baker.

It’s also worth taking a closer look at the ABS listing of social transfers in kind (Baker’s ‘welfare in kind’) in more detail:

Table 3: Selected social transfers in kind – Average Weekly Value ($)

EQUIVALISED PRIVATE HOUSEHOLD
INCOME QUINTILE

Lowest

Second

Third

Fourth

Fifth

Education benefits

School education

76

114

107

75

50

Tertiary education

15

29

32

36

28

Other education benefits

6

9

8

6

4

Total education benefits

97

152

147

116

83

Health benefits

Acute care institutions

108

88

65

57

52

Community health services

60

59

51

48

43

Pharmaceuticals

42

28

15

11

9

Private Health Insurance Rebate

5

8

10

12

16

Other health benefits

18

23

24

23

20

Total Health Benefits

233

206

166

151

140

The low averages for education in the lowest quintile are consistent with the notion that this quintile contains a lot of Aged pensioners, and others, who are already at least School educated. Other than that, the figures for education suggest very little.

The figures for Health Benefits tell an interesting story: households in the lowest quintile of are the biggest users of publicly provided acute care, community health services and pharmaceuticals but the lowest users of the Private Health Insurance Rebate (PHIR). Also, while usage of publicly provided health services decreases as income increases, the opposite is true for the PHIR.

Baker canvasses a number of possible reforms to reduce the problem of ‘tax-welfare churn’ including:

  • The creation of a ‘Personal Future Fund’ (PFF) for every Australian to –
    allow people to accumulate funds they could draw upon to fund their own unemployment benefits, health care, education or homeownership. The expenditure savings that PFFs create would be returned to families and individuals by increasing the tax-free threshold to the point where people are earning enough to cover their living costs. This would eliminate the need for government aid, simultaneous churn, and welfare dependency;
  • Replacing unemployment benefits with either a PFF or income contingent loans –
    As part of his PFF proposal, Saunders proposed scrapping the Newstart and Youth allowances so individuals could fund their own unemployment benefits for up to six months before moving on to Work for the Dole programs until they find employment.
    A possible alternative to using PFF-style savings accounts is to enhance existing welfare arrangements for the unemployed and students with income contingent loans. Instead of providing the unemployed with an income support payment, they could be given an income contingent loan, which they will be required to repay once they return to the workforce;
  • Superannuation reform –
    aimed at addressing lifetime churn—abolishing taxes on superannuation contributions and requiring retirees to convert some of their superannuation into an annuity when they retire. By reforming superannuation to help ensure retirees live off their own superannuation for longer, retirement savings would be increased and the government’s future pension liabilities would be reduced;
  • Refundable tax vouchers for education –
    One way to reduce taxpayer expenditure on school education is by using a refundable tax credit, ideally in the form of a voucher.56 Instead of paying taxes and receiving a publicly funded school place, parents of school-aged children could spend their own money on providing for their child’s education at the school of their choice and then receive a reduced tax bill to the same value in return;
  • Means testing government subsidies for aged care in accordance with reccommendations of the Productivity Commission and the adoption of another Productivity Commission reccommendation –
    The Productivity Commission also recommended establishing an ‘Australian Age Pensioners Savings Account’ scheme that would allow age pensioners to deposit some or all of the proceeds of the sale of their principal home into the account, while maintaining their eligibility for the pension. These funds could then be used to help cover the costs of their care;

Baker consistently justifies these measures on two grounds – they reduce ‘tax-welfare churn’ and foster self reliance. In some cases, such as the suggestion that unemployment benefits be replaced by a loans scheme, they merely replace one form of churn with another. ‘Tax-welfare churn’ merely reverses direction and becomes ‘welfare-tax churn’; I see no good reason to suppose that the latter will cost any less than the former.

Neither will these reforms make Australians more self- reliant. We can see this from the existing example of superannuation; most Australians rely, in one way or another, on financial corporations to manage their superannuation. Few have the knowledge, skills and resources to manage their own superannuation funds. The same will most likely happen with ‘PFFs’, Pensioners Savings Accounts, annuities and whatever forms of personal insurance might be advocated as replacements for government spending on education, health and welfare. Australians might end up paying the government less in tax but they’ll be paying more to private corporations for various forms of insurance and other benefits.

If the TARGET30 campaign succeeds it will merely replace state dependency and welfare dependency with another form of dependency: dependency on the corporations that will provide the management services for those Personal Future Funds, private health insurers and whoever takes control of public schools once government has been chased out of the field. This realisation of just who the ‘self-reliant’ citizens of Australia would actually be beholden to crystallised for me after I read the following letter – probably a tongue-in-cheek provocation – published in The Age on Tursday, May 2:

Being a Quadraplegic, I have some idea of the daunting costs involved in providing disabled people with a chance of life. But we should be winding the welfare state back, not cranking it up. Disability insurance is a terrific idea, but it should be run by private companies in the same way life insurance is.

When parents decide to have a child, they will insure the newcomer, in the same way they insure their new house or car. Companies will require tests and provide premium discounts for precautionary measures that will reduce tragic births, disabling diseases and accidents. A culture that encourages people to insure themselves and their children against disability will drastically reduce the numbers who have to rely on charity or welfare.

John Dawson, Chelsea

This is the future the TARGET30 campaign offers ordinary Australians – a future where a multitude of insurance premiums replaces tax collection. Where your personal well-being in times of unemployment and your access to medical treatment depends on corporations whose only responsibility is to increase their profits. Corporations whose limited obligations to you are spelt out in an incomprehensible, self-serving contract which you won’t be able to challenge through a court of law – or more likely a dispute mediation corporation – unless you can afford personal litigation insurance. Assuming of course, that your litigation insurance policy covers you for taking legal action as a plaintiff and not merely for the risk of being the defendant in a civil matter.

And there you have the reason that this series carries the overall title ‘The Corporatist Manifesto’.

  • Update (May 14, 2013): today, I received some information about ABS Cat. No . 6537 in answer to an e-mail enquiry I sent on Friday. The private income listed for each quintile in Baker’s table is the mean equivalised private income for the quintile not the median value for the quintile. The median equivalised private household income was actually $790 (top income of the 50th percentile). Score another – easily avoidable – error to Baker.

About Paul Bamford (aka Gummo T)

Gummo Trotsky is the on-line persona of Paul Bamford. Paul recently placed his intellect at risk of finally becoming productive by enrolling in a Lemonade, Lime & Bitters degree via distance education. He also plays the piano but Keith Jarrett he ain't.
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25 Responses to The Corporatist Manifesto II: the Pernicious Vice of Welfare Dependency

  1. conrad says:

    Another problem with the PFFs etc. apart from those you mention is that they won’t reduce welfare costs much anyway, because it will be just like superannuation where those that don’t earn much are not likely to contribute much anyway. Thus it may save some money in the short term (e.g., people with small amounts burning through this whilst they are unemployed), but that will simply be offset later in pensions. In the best case, you could start off poor, save a bit, burn through the bit, and then earn so much you wouldn’t need a pension later. I doubt that is going to become an especially common life pathway. This is made even worse if you presume that unlike superannuation, all of these things would be voluntary (or perhaps they believe it’s fine to enforce having a PFF), in which case those people with little money are not going to be able to afford such cover anyway, in which case either the government pays or these people get no health cover, live on the street etc. .

  2. murph the surf. says:

    “When parents decide to have a child, they will insure the newcomer, in the same way they insure their new house or car. Companies will require tests and provide premium discounts for precautionary measures that will reduce tragic births, disabling diseases and accidents.”
    This sounds sinister to me.Are these people actually promoting a sort of breed out the weak and defective program accompanied by ………….discounts!!??

  3. Gummo Trotsky says:

    Murph,

    As I said in the post, that letter to The Age was probably written tongue in cheek. It’s a worrying political climate when it’s so hard to tell the difference between the piss-takers and the piss-takees, isn’t it?

  4. nottrampis says:

    The largest contributor to the tax/churn was the imposition of the GST according to Peter Whiteford.

    Their proposal doesn’t really address this

    • Gummo Trotsky says:

      Interesting. Whiteford scores two mentions in Tax Welfare Churn and the Australian Welfare State.

      First there’s this:

      So is churn a problem in Australia? The economic costs of churn in Australia are relatively small compared to similar countries. As Professor Peter Whiteford, a vocal critic of churn, points out, because of Australia’s relatively tough means-testing requirements for income support payments, the rate of churn in Australia is the lowest in the OECD by a substantial margin. (emphasis added)

      And later this:

      Peter Whiteford criticised Saunders’ emphasis on returning the savings of reduced churn back to people in the form of income tax cuts.19 Given that many low income earners, particularly those on welfare payments, do not pay any income tax, Whiteford argues income tax cuts would do little to reduce churn. However, low income households pay relatively more in indirect taxes—for example, in GST and excises on alcohol and tobacco—than they do in income tax. If policymakers want to reduce low income earners’ tax liability (and therefore churn), indirect taxes should be reduced instead of income taxes.

      The first I’ll chalk up to a misreading of Whiteford. The second I’d say addresses the issue raised in your comment Homer.

  5. nottrampis says:

    It could be it is monday morning but my comments were critical of the CIS proposal because of Whiteford’s research which you confirm.

    If My reading is incorrect then disregrard

    • Gummo Trotsky says:

      Not your reading at fault Homer – my writing. Bit of an omission on my part perhaps. Bad case of guff-weariness.

  6. derrida derider says:

    Before the state created a right to unemployment benefits, for example, people saved or insured through friendly societies and trade unions ….

    Geez I hate it when people lie about history to support their prejudices. The whole reason unemployment benefits had to be introduced was because most people dild not and could not self-insure. The reason for that in turn is well-known to any insurance company actuary – mass voluntary insurance against unemployment is commercially unviable (google “adverse selection” to understand why).

    One thing to note about such welfare state features as unemployment payments is that they were all introduced not long after universal suffrage was attained, when ordinary people were finally able to vote to choose between them and the sort of alternatives that their betters had previously chosen for them. The majority of people understood – and still understand – that over a lifetime the majority of people win by the welfare state. Its the insurance function rather than the redistribution one that makes for this.

    People who want to get rid of the welfare state should be rudely asked why they wish to privilege property rights of the affluent over the welfare of the majority.

  7. Pedro says:

    “The figures for Health Benefits tell an interesting story: households in the lowest quintile of are the biggest users of publicly provided acute care, community health services and pharmaceuticals but the lowest users of the Private Health Insurance Rebate (PHIR). Also, while usage of publicly provided health services decreases as income increases, the opposite is true for the PHIR.”

    I’m not sure why you’d describe as interesting a fact that would be predicted with a moment’s thought. Snark aside, I won’t argue against a well-targetted and limited welfare net. I will argue that forcing people to hand over money for the poor is not a moral act, but it is a pragmatic necessity.

    As for personal super not increasing self-reliance, if you think that the super system should be changed to limit the influence of pirates and parasites then fine; but if you are saying that saving is bunk and we should have higher taxes and more pensions then I think that is crap. Whatever you think of financial corporations, at least you have some choices and so some self-reliance. If most people only have the govt to rely on then they are fully reliant.

    DD, what a shock that giving the vote to the poor led to increases in tax and transfer! Gosh, who’d a thunk it! The reason it is soon popular is not the insurance element, it’s the redistribution mainly from the few to the many.

    As for your closing point, the recognition of property rights involves the prevention of taking. The enforcement of the welfare state requires the imposition of taking. The practical effects and the arguments for and against property rights are obviously affected by the changing nature of wealth over time. When property was stone tools and sharp sticks the arguments against property rights are pretty meaningless. When property was land acquired by the sword then the arguments for property rights look different, though I suppose that has to be balanced against the different concept of those rights at the time. To my mind the valuable property rights of today look a lot more like sharp stones and sticks than feudal estates and so I think the idea that there is any inherent injustice in property rights is hard to make.

    I won’t argy

    • desipis says:

      the recognition of property rights involves the prevention of taking. The enforcement of the welfare state requires the imposition of taking.

      It’s a good thing “taking” is not a definitive moral determinant. One really has to look at outcomes and context to assess whether an act of taking is a good or a bad thing.

      • Pedro says:

        Perhaps not, but I think it a reasonable starting point that not taking is quite a bit less likely to be objectionable than taking. So when DD suggests that property rights for the wealthy are the immoral equivalent of abandoning the welfare state I think that requires a bit more than an angry “just because”.

        • desipis says:

          …not taking is quite a bit less likely to be objectionable than taking.

          It depends on whose point of view you take. Obviously, the person from whom something is taken is likely to object, but they’re not the only party of concern. Equally as obvious is that the person taking is unlikely to find it objectionable. What’s not obvious is how independent third parties would see the issue. There would be a whole range of factors that someone might consider relevant covering what was taken, why it was important to either party, how needy each party was, how deserving each party was, etc. The notion that something abstract like “taking” should inherently take priority over issues such as human suffering, economic instability or social injustice as starting point for determining what is objectionable is quite bizarre.

    • derrida derider says:

      No, Pedro – I suggest you do some research. The insurance motif was foremost in Otto von Bismark’s mind when he created the first contributory social insurance scheme (BTW as a deliberate strategy to avert revolution by wedging the working class between skilled workers and the lumpenproletariat). It was also the rhetoric of Lloyd George’s People’s Budget of 1909 – he went to some lengths to hide the interpersonal redistribution aspects (inevitable in any effective insurance, social or otherwise) of the his new scheme. And finally the Beveridge Report of 1942 opted for the “contributory principle” on social insurance grounds.

      This is precisely why so-called “middle class welfare” is so prevalent in real life systems – because that’s how the middle class gain from welfare.

      • Pedro says:

        DD, I wasn’t discussing the history of welfare, but this statement of yours, which speaks of present attitudes:

        “The majority of people understood – and still understand – that over a lifetime the majority of people win by the welfare state. Its the insurance function rather than the redistribution one that makes for this.”

  8. Gummo Trotsky says:

    “The figures for Health Benefits tell an interesting story: households in the lowest quintile of are the biggest users of publicly provided acute care, community health services and pharmaceuticals but the lowest users of the Private Health Insurance Rebate (PHIR). Also, while usage of publicly provided health services decreases as income increases, the opposite is true for the PHIR.”

    I’m not sure why you’d describe as interesting a fact that would be predicted with a moment’s thought…

    It’s interesting Pedro, because the PHIR figures represent an income transfer from people on lower incomes to people on higher incomes. A transfer that doesn’t get included in total government spending because it’s achieved through a tax concession – similar to the tax concession that the CIS paper argues should be applied to education funding. It’s called tax expenditure (Google it) – a very effective way to gratify the entitlement mentality of high income earners without anyone raising a stink about excessive government spending.

    Snark aside

    Noted, but not put aside.

    I won’t argue against a well-targetted and limited welfare net.

    Thanks…

    I will argue that forcing people to hand over money for the poor is not a moral act, but it is a pragmatic necessity.

    …but no thanks. What is your issue with the poor?

    As for personal super not increasing self-reliance, if you think that the super system should be changed to limit the influence of pirates and parasites then fine; but if you are saying that saving is bunk and we should have higher taxes and more pensions then I think that is crap. Whatever you think of financial corporations, at least you have some choices and so some self-reliance.

    Instead of speculating on what I might mean, why don’t you just read what I’ve written and work from that?

    If most people only have the govt to rely on then they are fully reliant.

    Replacing the government – which in a democracy they can vote out if they don’t like its policies – with private corporations doesn’t, I re-iterate, make people more self reliant – it shifts the reliance to the corporations. The only ‘choice’ they have is between different standard offerings from different suppliers. Usually, in my experience, a choice between a variety of offers of service that look attractive right up to the point where you get to the lock-in contract, the coverage exclusions and all the rest of the fine print.

    DD, what a shock that giving the vote to the poor led to increases in tax and transfer! Gosh, who’d a thunk it! The reason it is soon popular is not the insurance element, it’s the redistribution mainly from the few to the many.

    That’s for DD to answer

    As for your closing point, the recognition of property rights involves the prevention of taking. The enforcement of the welfare state requires the imposition of taking.

    You’re starting to sound like that Argentinian playboy pirate character in Atlas Shrugged whose mission in life was to take money from the undeserving poor and return it to the deserving rich.

    I defy you to provide a historical or real world example of any process of wealth accumulation that didn’t or doesn’t involve the imposition of taking.

    The practical effects and the arguments for and against property rights are obviously affected by the changing nature of wealth over time. When property was stone tools and sharp sticks the arguments against property rights are pretty meaningless. When property was land acquired by the sword then the arguments for property rights look different, though I suppose that has to be balanced against the different concept of those rights at the time. To my mind the valuable property rights of today look a lot more like sharp stones and sticks than feudal estates and so I think the idea that there is any inherent injustice in property rights is hard to make.

    This is just Nozickian fantasy. For crying out loud, go learn some bloody history. And learn something about the real world you live in while you’re at it. Do Gina Rinehart’s rights to royalties of 2.5% on ore mined from all the mining claims her dad pegged out amount to ‘sharp stones and sticks’? And News Limited – just Rupert Murdoch’s presonal collection of geological and botanical specimens?

    And learn to bloody read – where in the post did I ever raise the issue of property rights?

    I won’t argy

    Oh good – does that mean you’re all finished?

    Look, do us both a favour – next time you feel moved to comment on one of my posts, do it somewhere else, where I won’t have to read it and you’ll find a sympathetic audience prepared to agree with you.

    • Pedro says:

      Sorry to disappoint, but I’ll comment anyway. I didn’t think this place was supposed to be an echo chamber. And of course you need not read my comments.

      You claimed it to be interesting that poor people are more likely to use govt provided healthcare and less likely to have health insurance and that people with more money are less likely to use govt healthcare and more likely to have health insurance. To which I said, well durr! Your clever retort is that I some how missed the your important point about the transfer of income from low income to higher income people. How does a tax deduction for people with health insurance and a taxable income amount to an income transfer from the people on lower incomes to those on higher incomes? People on low incomes don’t pay enough tax to transfer money to people on higher incomes and those people on higher incomes are paying way more tax.

      I have no issue with the poor, I simply believe that forcing people to give money fairly earned is not a moral act. Giving your own money is a moral act. Having a system of tax and transfer is a necessity that I favour, but I don’t think we should have a national warm inner glow because wealthy people are forced to share their income with others. People who earn more aren’t, by and large, taking more out or getting any sort of unfair benefit from the commonwealth. It’s a simple fact that the vast majority of the people with higher incomes just have more talent, conscientiousness and thrift.

      The idea that your 1 in 12,000,000 (or whatever) voting power gives you equivalent or more control than being able to pick and choose between competitive providers of financial services is just silly. And the fact that someone might prefer a system in which people make private arrangements for pensions and savings services does not mean they are promoting the corporatist state whatever the merits or failings of that as social policy.

      I suspect there is no version of wealth that you would accept as legitimate, so I don’t see much point in arguing the merits of property rights or concepts of fairly acquired wealth. I will simply say that the capitalist market economy, with all its imperfections and imbalances, is still by far the closest thing there is to providing an objective measure of the fair earnings of its participants.

      “Do Gina Rinehart’s rights to royalties of 2.5% on ore mined from all the mining claims her dad pegged out amount to ‘sharp stones and sticks’? And News Limited – just Rupert Murdoch’s presonal collection of geological and botanical specimens?”

      I see you were having some trouble with the analogy. The vast majority of the wealth and income in modern countries is in services, manufactures and intellectual property, the modern equivalent of the tools of our hunter-gatherer origins. But even then, what is immoral about Gina Rinehart inheriting a huge mining fortune from her dad or Murdoch taking his inheritance and building a massive multinational company? In both cases large financial risks were taken and succeeded. Each employs thousands of people on varying incomes, none of whom are forced to work for them. Apart from sneering through the venetian blinds, what exactly have you contributed?

      • Gummo Trotsky says:

        And apart from piss and vinegar comments on blogs and no more tax than you could reasonably either avoid or evade, what exactly have you contributed?

  9. Senexx says:

    If the TARGET30 campaign succeeds it will merely replace state dependency and welfare dependency with another form of dependency: dependency on the corporations that will provide the management services for those Personal Future Funds, private health insurers and whoever takes control of public schools once government has been chased out of the field.

    There’s your conclusion right there or perhaps summary. Think there’s a sci-fi tv show all about it – Continuum.

    • Gummo Trotsky says:

      Senexx,

      If your suggestion is that maybe I should take a break from this topic, I’m inclined to agree. Them later posts hinted about above can go on the back-burner for a little while, I reckon.

      • Senexx says:

        Not at all. I was going to call it an Abstract but I thought that may be technically incorrect and could not be bothered thinking it through as the definition of Abstract for a paper, article wasn’t a high priority.

        I was just being agreeable or at least that was my intent.

        Put another way I also laugh at the internal contradictions of the fusionists.

  10. Sancho says:

    Tangential, but here’s an examination of how opponents of the welfare state view their own obligations.

    It’s American, but since the IPA and co are Tea Partiers by any other name, it’s perfectly predictive.

    • Gummo Trotsky says:

      I think Gene Schwimmer might be Pedro’s logic tutor.

      • Sancho says:

        Well that’s a bit petty.

        Pedro’s comments in this thread suggest that he believes the poor are well-informed rational actors who vote strategically in order to maximise their payments, and not a low-skilled, low-information group mostly likely to vote for the candidates who don’t openly hate them.

        That’s a sort of passive-aggressive respect.

        • Gummo Trotsky says:

          Now I understand his moral objection to taking money from the rich to give to the poor – it’s stealing the beluga caviar out of the mouths of all those starving rich kids.

  11. Geoff Robinson says:

    Pre-Medibank/Medicare heath insurance although clothed in anti-socialist rhetoric was lightyears from a purely private system, the standard history has chapter ‘Private practice, publicly funded’ http://www.librarything.com/work/275967/book/1054560

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