TV INTERVIEW - SKY  - PETER VAN ONSELEN - THURSDAY 16 JUNE 2017

PETER VAN ONSELEN: Welcome to the Deputy Opposition Whip in the Senate, Senator McAllister. It doesn’t have to be as binary as how I’m about the describe it but nonetheless I’m keen to know your thoughts on what you think is the lesser of evils in this binary choice: wealth going up for everyone, but a widening gap nonetheless, which creates more inequality, or wealth not rising as fast overall, however with a reduced gap between the haves and the have-nots. Would you go for the latter?

JENNY MCALLLISTER: Peter you’d be correct in assessing that I actually wouldn’t choose either, because all the advice that we’re getting, is that more equal societies are likely to grow more quickly. That’s not just coming from ratbag lefties, that’s coming from bodies like the IMF. Their calculation is that, across the globe, what we’re seeing is that the countries that are more equal actually have had more success in sustaining growth over the last decade.

VAN ONSELEN: Can we get into that, because I knew that’s where you were going to go and in a sense that’s the whole premise of the reason that we’re having this discussion. Because the way I put it, the binary way I put it, is the way it’s often been traditionally described. If you want to have that reduced gap between haves and have-nots, you have to settle for lower growth, because that economic liberalism drives everybody north but not necessarily without inequality ensuing. Take us through some of the societies that you’re talking about, that the IMF have identified that do it differently, and then perhaps we can talk about some of the ways they do it differently.

MCALLISTER: Interestingly, Australia is actually a real success story in this regard. We, like most of the developed economies, have seen a widening gap between rich and poor, but the gap for us has not widened nearly as fast as it has in other countries. We are still a significantly more equal society than places like the United States or the United Kingdom.  The consequence of that -

VAN ONSELEN: So we’re not as bad. At the moment, the way that the political class, writ large across different tiers of government, are operating, we’re on the good side of the ledger as far as this debate goes, obviously we can always do more would be your point, but we’re on the good side of the ledger.

MCALLISTER: If you want to look at the stats, we’re actually in about the middle. Australia sits in about the middle in terms of the OECD in terms of inequality. But in terms of our historic performance, we’re at a 75 year high. And interestingly, it’s starting to translate, I believe, into some of the concerns we’re seeing in the economy. We’ve had the Reserve Bank for example, warning of concerns they have about slowing economic growth being linked to slowing household propensity to consume. And concerns about the fact that that in turn is driven by this very low wages growth. We’ve even got a Liberal government talking from time to time about their concerns about slow wages growth, although I’d observe that, to date, they have taken absolutely no steps to do anything about that problem. But they are now at least willing to acknowledge, along with the Reserve Bank, and other senior economic bodies in Australia, that this is a problem for the Australian economy. 

VAN ONSELEN: On this issue, quite often commentators, I’ve done this myself, talk about the major parties as having become Tweedledee and Tweedledum,  there’s a clamber for the centre ground if you like. What do both parties, or if you want to be partisan about it, target the Government, what do major parties need to do, to try to do more, to drive down inequality and take on what the IMF and others are saying, therefore drive up overall wealth.

MCALLISTER: On that Tweedledee and Tweedledum question, I actually really reject that, and particularly on this issue of inequality. I think it is one of the defining differences between the Labor Party and the Coalition parties at this point in time. We see the Coalition parties consistently putting forward policies that advantage only the wealthy, or punish only working and middle class Australians. By contrast I think we see Labor acting very actively to pull in the other direction. For example in the last Budget, we saw a removal of the Temporary Deficit Levy, a levy that applied to the top 2% of Australian income earners, but at the same time a tax increase, an increase to the Medicare levy, that would apply to all Australians earning over $21,000 a year. So you see a tax change to that rewards the wealthiest Australians but increases tax on really quite poor Australians. For me that’s an example of the Coalition being reasonably indifferent to the impacts of their tax policy on inequality. (inaudible) And it is one of the reasons that, when the Government put forward its change to the Medicare levy, to increase it by half a percent, for all Australians, we’ve said no. We think it should be for the Australians in the higher tax brackets only. That lower, middle earning and working class people really need to be given a bit of break. If it’s good enough for high income earners to have their tax taken off them, then we don’t really think that should be paid for by increased taxes on ordinary Australians.

VAN ONSELEN: We’re going to have to leave it there.