Hard choices for Labor - social justice and inflation

Additional savings might imaginably be achieved in the Defence budget - especially in the wake of withdrawal from Iraq. Importantly, only cuts in personnel could reasonably be deflationary. Cuts in the acquisition of military hardware would not.

Abolishing negative gearing and halving dividend imputation, meanwhile, could free funds necessary for progressive restructuring of the broader tax system, radical expansion of public housing, and of social services.

Surely this is better than demanding austerity for the vulnerable and average income-earners, and sending desperate home buyers to the wall.

There is a good and valid argument, here, that Labor is bound by its pre-election promises, and thus feels compelled to abide by its mandate. And indeed, Labor’s platform is seriously constrictive: promising not to increase taxation overall as a proportion of Gross Domestic Product (GDP). But if the minerals boom comes to an end, though, along with its corresponding explosion in Company Tax revenue, the consequences of such a policy could be disastrous. In the face of such contingencies there must be “room to move”: exactly what Labor has denied itself.

This argument (that Labor’s platform must be strictly upheld) would resonate more strongly if Labor had not already so flagrantly violated its own platform: such as with the privatisation of the Commonwealth Bank in the 1990s.

The need to rein in inflation, however, without impacting negatively upon social justice, or giving rise to the spectre of unemployment, demands bi-partisan attention. As a matter of “national emergency”, it is an urgent and valid position that tax cuts be put on hold.

Surely - as already noted - such money could instead be redirected into infrastructure and education, thus responding to the skills shortages and “infrastructure bottlenecks” that are feeding into inflation. And surely with steep increases in the cost of living, it is time to be more generous and just with the provision of welfare for the vulnerable and the needy.

It should not be these people, or ordinary working-class families struggling with exorbitant mortgages, who pay the price of the fight against inflation through wage restraint, spiraling interest rates, and austerity.

Furthermore, in regard to urges for “wage restraint” it must be noted that workers’ share of the “economic pie” has already fallen to a 35-year low.

Australian workers need to organise: to strive for wage justice, and compensation for prior wage restraint in the form of collective co-ownership and economic democracy. Poorly organised, unskilled and semi-skilled workers also need stronger protection than what is currently envisaged in Labor’s proposed “safety net”.

Beyond this, Labor needs also to develop a plan to restructure the tax system progressively: addressing inflation through taxes that seek to dampen “conspicuous consumption” among the wealthy.

Labor should not shift a greater proportion of the tax burden upon the poor, the vulnerable, and average workers. Instead of reducing the number of PAYG income tax brackets, the system would do better to encompass a greater number of thresholds.