Since the election, there have been a lot of newspaper articles analyzing what happened. As the ABC pointed out today, those who wanted Labor to win were lifted by the polls and therefore doubly dashed by the result. But actually, the “swing” was not dramatic. It was only hope that lead to huge disappointment and an increase in the number in inquiries about moving to New Zealand.
Bill Shorten has been criticized for a few of the moves in his playbook. Among them were his personality (which is a somewhat unfair criticism and should perhaps rather be blamed on the party for choosing him), his detailed plan which left him open to attack, and his open references to “the top end of town”.
This “top end of town” are a mysterious mob from where I sit. I cannot imagine their lives or their priorities. But recently I listened to a Ted Talk by Nick Hanauer. He is an American “top end”er. He starts off by saying “You probably don’t know me but I’m one of those top 0.5 percenters” and from there he goes on to say that he is really addressing his talk directly to other Plutocrats. The talk is called “Beware, fellow plutocrats, the pitch forks are coming” and basically points out that historically, when the gap between the very rich and the rest of the population gets too large, the rest of the population takes violent action. Mr Hanauer has reason to be concerned that this is what will happen in the USA in the near future.
He goes on to explain very clearly and succinctly why it is a problem for the economy when the very rich are hoarding large proportions of the total wealth. To put this in perspective, according to Wikipedia in 2011 the top 20% of Americans owned 86% of the nation’s wealth, leaving only 14% for the other 80% of people. Mr Hanauer says that if he had born in a poor African nation he would probably be barefoot on the side of some dusty road selling fruit. Why? Not because of lack of talent or brains. But because that is all his customers could afford. You can’t run an economy on capitalist and consumerist philosophies if you have a poor and suffering middle class. That’s his point. If you want business to flourish, you need customers. If you want consumer spending to look impressive on your GDP you need people with disposable income. If only 20% of your population have that kind of income, how are they meant to support every restaurant, shop and business that needs customers? As he says, one man can only go out for dinner so many nights a week.
So while I understand that the top end of town may not have appreciated being victimized by Mr Shorten, perhaps economically speaking, Labor weren’t as far wrong as the LNP would like to pretend. And if you say “Oh, but that’s in the USA!”… here’s a quote from the Roy Morgan website from September 2018:
“The wealthiest 10% of Australians with an average per capita wealth of over $2 million, hold 48.3% of net wealth compared to 46.8% in 2007, while the poorest 50% of Australians have seen their total share of net wealth fall from 3.9% to 3.7%.”
Recently a friend of mine was lucky enough to win just over $10,000 in Tatts Lotto. What do you think he did with it? He spent it immediately. He had been saving up to do some work on his house and when he came into this cash, he spent it immediately on paint and curtains and flooring. In other words, he sent that money straight back into the economy. That’s what the middle class is for . . . if you believe in consumerism. They keep the money moving around.
I think the Murray Darling Basin is an apt environmental analogy for this problem. You have a river system which is supposedly feeding a huge area of farms. If a bunch of the biggest, wealthiest farmers build huge ponds and siphon off massive amounts of water to protect their own interests, then the river system is no longer viable for the number of jobs it is intended to do. It can’t house an ecosystem, feed all those farms (which feed us) and supply massive ponds as well. There has to be enough water shared around that the whole system doesn’t die. It’s just the same with money.
Right now there are economists in Australia forecasting doom and gloom. The housing bubble is being fed by Morrison’s agreement with the RBA to increase lending, the financial institutions only need to have 6% of the capital they are lending out, the middle class are crushed between rising living costs and static wage growth, the new government is threatening to cut jobs in the Public Service, the world is reducing its demand for coal (our biggest export) and there has been a lot of bad press about the treatment international students by Australian Universities (our second biggest export).
What’s worse, one wonders? The top end paying a bit more tax… or the national economic equivalent of those awful photos of dead fish?