Don’t let the scarcity myth take hold in Australia

By Fatima Measham | 13 Feb 17
Ben Hosking/flickr

Controversy over travel expense claims made by members of Parliament have become cyclic in Australia. Revelation, followed by outrage, met initially with mute embarrassment or flustered justification, then repayments, demotion or resignation.

The default response is often partisan. But the anti-establishment sentiment that has swept through parts of the west has been indiscriminate, buckling the left and compromising the right. If we aren’t mindful, we may find Australia caught in its own conflagration.

The UK had its own parliamentary expenses scandal in 2009, which included abuses around “second homes”. MPs were nominating whichever house let them claim more expenses, switching between them for the same reason when furnishing, renovating or renting, as well as over-claiming on council tax. Despite legal proceedings against some MPs, with a few ending in jail, annual expense claims under former Prime Minister David Cameron grew by 43 per cent. In the same period, social housing tenants who had spare bedrooms lost part of their benefit.

The resentments carried by those living under post-GFC austerity policies or regions of decline make fertile ground for toxic populism. People like the feeling of being understood. But the final analysis offered by populists is not really one of inequity, but scarcity. No one wants to share when they’re already pinched: Britain/ America/ Australia first.

Keith Ellison identified such framing as critical to the contest. He is a lead candidate for chair of the Democratic National Committee and a Minnesota representative. In a conversation with Vox founder Ezra Klein, Ellison points out: “If (Republicans) framed resource allocation as a basic issue of scarcity, we’re going to lose that one. ‘There’s not enough.’ Obviously, you’re going to pick you and your family over somebody you don’t know and have heard a lot of bad things about.”

Australia is in a tenuous situation in this regard. Lower revenue continues to be a significant, legitimate concern. Factors such as weakened global commodity prices, slower wage growth and less than expected tax receipts have had an impact on government spending, including on welfare. Treasury secretary John Fraser underlined this revenue problem last year, saying that successive falls in tax receipts have driven recent budget downgrades.

Such conditions lend themselves to nationalist, white supremacist rhetoric. As Ellison notes, once resource allocation is framed as an issue of scarcity, it becomes easy to provoke divisions over race, gender and age. It converges with rightwing preference for smaller government.

But the scandal of parliamentary entitlements exposes the fallacy that there is not enough to go around. Politicians, who are apparently able to purchase apartments on a whim, have still not curbed tax breaks that drag down revenue, such as negative gearing. They claim expenses for trips of dubious merit, even as they advise people to move outside cities if they cannot find affordable housing.

The scandal of parliamentary entitlements exposes the fallacy that there is not enough to go around.

Meanwhile, the top quintile of Australia households earns $260,000 – double the average household income – and owns 62 per cent of private wealth. The bottom household quintile earns $22,000. This is not just a matter of wealth concentration and disparity but economic mobility. Home ownership and permanent employment are already falling out of reach for a generation of Australians. The contraction of the middle class and the dissipation of “the American dream” that was a preamble to the Trump era may yet be replicated here.

But the thing with trajectories is that they may be met either fatalistically or resisted. Our robust welfare architecture has so far insulated us from the incendiary resentments that have been used as fuel elsewhere. It needs to be bolstered by close attention to wealth distribution and social inclusion.

Could our fiscal policies be more equitable? Are government agencies as rigorous in pursuing tax evaders and parliamentary entitlement abusers as mis-paid Centrelink beneficiaries? Are we making it easier for individuals to overcome poverty or harder? How do we fill the gap of opportunity between urban and regional areas?

These and other questions are more useful – and honest – than whether there is enough.