Ideas@TheCentre
Left or Right can find common ground
The Greens’ support for the government’s superannuation increase is tepid at best. They’ve agreed to pass the legislation but Leader Bob Brown this week expressed ‘misgivings ...because most of this is going to end up in the pockets of high-income earners, rather than low-income earners.’
He’s right. When another 3% of wages are taxed as superannuation contributions at 15% instead of workers’ marginal rates – which could be as high as 45% for people earning over $180,000 a year – the absolute size of the tax concession is skewed to high income earners. Eva Cox, a left-wing activist, vehemently opposes the increase in superannuation for the same reasons.
Too bad for Australia the Greens didn’t stick to their principles and block the superannuation increase. It turns out their desire to clobber small miners with a clumsy ‘rent’ tax outweighed their penchant for progressivity.
Now workers are set to endure a bigger federal impost, and have their freedom and self-respect further eroded. The superannuation industry, moreover, will profit from a bigger pot of commandeered wages compulsorily acquired and public finances impaired as tax concessions outweigh Old Age Pension reductions. For these reasons I oppose the superannuation increase.
Classical liberals support a less progressive tax system, so arguments about the ‘unfairness’ of flat superannuation taxes carry less weight, even if some might characterise them that way.
But is it not fascinating that the more reflective elements of the Left and the (properly) liberal Right agree with each other on a major public policy issue like superannuation? Indeed, not only about superannuation: in America, Tea Party and socialist activists are equally enraged about the machinations of Wall Street.
This is partly because those in think tanks or fringe political parties have less concern about opinion polls.
Surveys suggest about two thirds of Australians support the increased superannuation. That’s great for the Labor Party, which will trumpet its superannuation subterfuge as much as it can. It’s not great for the Liberals, who would have had to chip away at the (shallow?) public support for increasing superannuation with astute combinations of rhetoric and reason. At present, they have chosen not to bother; perhaps in office they will reconsider.
But it is not only their remoteness from political realpolitik and populism that can align the Left and Right. Both intellectual strands have an aversion to favours or resources gained without justification. Their criteria for the proper allocation of resources may differ markedly – the Left favours state intervention, the Right individual effort – but their mutual aversion to subversion of those criteria is equally strong.
To the extent public policies are perverted by rent-seekers, perhaps the Left and Right have greater cause to advocate for better policies together. Given a voting public bombarded with conflicting messages from potentially conflicted sources about what is right for them and the country, such a co-operation could be especially persuasive.
Adam Creighton is a Research Fellow at The Centre for Independent Studies.
