Health economist Professor Gavin Mooney writes:

There have been many comments on Crikey, Croakey and elsewhere on the budget. Here I want to endorse Martin Laverty’s call on Croakey for a Senate inquiry into an action plan for a fairer distribution of health.

In doing so, I want to echo his concerns about the need for more structured political consideration of the social determinants of health, especially income inequality which can be so damaging for health, but to go further and write more fundamentally about the nature of Australian society.

The budget did all too little to redistribute income.

Yes, the Government is acting on services for the mentally ill but it is, as described by Patrick McGorry, only a first step. It has been done in such a way however that the mentally ill – and also those on disability pension – must feel quite threatened and uncared for by government.

It is the issue of uncaring on which I want to focus.

Let me start globally. Australia and other OECD nations have signed up to a UN agreement to spend 0.7% of their national incomes on overseas aid. Only the Scandinavian nations are honouring that promise and Australia, in the budget, is raising its puny contribution from 0.33 to 0.35%.

Much of the aid that we are not giving is not going to people living on less than $1 a day.

Cut to the post budget debate as to whether Australians on 400 times that $1 a day, i.e. $150,000 a year, and who might suffer a slight reduction as a result of the budget, are rich. I suppose ‘being rich’ is relative.

Tony Abbott stated: “It’s a class war budget … and these are class war cuts that the government is inflicting on people.”

Now let’s put this in another context. We are a low taxed nation. As a proportion of national income, our total tax revenue is 27.1% compared to Denmark with 48.2% and an OECD average of 34.8%.

What was done on redistribution in the budget was a very minor move to help some disadvantaged in Australian society. It asked the rich – who have been doing very well, thank you, from recent budgets – to do a very little to pitch in to help those who are struggling. This is not class warfare.

No, according to Joe Hockey, it is “the politics of envy”!

And what about the top end of town? Are they willing to do their bit to help those who are struggling? No.

For example, the mining industry in the shape of Andrew Forrest and colleagues – crying unfair and exploited – last year ran a massive campaign to stop the tax on mining super profits. They succeeded. And now industry in general gets rewarded in this budget – company taxes are to fall in 2013/14 from 30% to 28%.

And note that this fall in company taxes is just a continuation of a downward spiral. Thus our own Treasury tells us:

A striking feature of recent decades is the marked decline in countries’ statutory company tax rates. The OECD average top (federal) statutory company tax rate fell from 44 per cent in 1985 to 31 per cent in 2004 … Australia’s statutory company tax rate fell even more, from 46 per cent to 30 per cent over the same period.

And the real killer for using taxation to redistribute incomes: “competition between countries to attract investment will limit countries’ capacity to tax capital income. Then, total tax revenue would decline or additional reliance would be placed on less mobile tax bases such as labour, consumption or land.”

So, with the freeing up of markets and the easy movement of money across borders in the last 30 years of neo liberalism, this global competition for profits for the rentier class (and that is a correct use of the term class!), makes them richer and shifts taxes to ‘labour, consumption or land’, thereby furthering the income divide and creating more problems for population health.

Have we really sunk so low as a nation as Abbott and Hockey would have us believe that we would not (those of us who are stinking rich anyway!) be willing to suffer a flea-bite in our take home pays to allow that little bit more to be done for those struggling in our society and indeed globally?

As reported on Croakey, John Menadue at the National Rural Health Alliance Conference in March stated:

My experience is that when the community is informed and engaged in structured discussions it comes to good decisions about the choices that need to be made and the priorities set.

And what I have found in citizens’ juries is that these “good decisions” so often are based on a genuine, compassionate desire to help fellow disadvantaged citizens, expressed as support for greater equity.

The people are not declaring class war. The people are not envious. The people represent a caring compassionate community. Why won’t governments recognise that and draw on it?

Martin Laverty’s call for a Senate inquiry into the social determinants of health looks a good place to start.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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