The Chaser Report - Leading the World at Being Unfair | Richard Denniss

Episode Date: April 12, 2023

Charles speaks with the director of The Australia Institute on their latest report findings into the lucky country's glorious wealth inequality. Hosted on Acast. See acast.com/privacy for more information.

The Chaser Report is recorded on Gatigal Land. Striving for mediocrity in a world of excellence, this is the Chaser Report. Hello and welcome to the Chaser Report, and today we have a very special guest. The Executive Director of the Australia Institute, Richard Dennis. Now, you've been going all around the media landscape all day talking about your big report. What's it all about? Look, it's quite simple. We hear a lot about how if we grow the economy,

if we grow the pie, if the economy gets bigger, we'll all benefit from it. And what the report we've put out today shows is that in the 10 years to 2019, in the decade leading up to 2019, 93% of the benefits of economic growth, 93% of the increase in national income went to the top 10% of income earners, and the bottom 90% got 7% between. Right. That is, that is, and how does that compare to the rest of the world? Well, we're leading the world. It'd been unfair. Really?

Yeah, so, well, for that decade, what we did was we used a big international data set put together by a group of economists, including the famous economist Thomas Pocketti. Ah, yes, he wrote that huge book on inequality and everyone only read the first chapter. Exactly, that's the one, the thousand-page book with a question. great intro. So he's kind of pulled together a whole bunch of data, raw data, and we've analysed it, sort of broken it up in terms of income and time. And yeah, what it shows is that Australia really leads the world in being unfair in that decade where the top 10% got 93% of the, of all the increase in national income. Yeah, that's way off the charts compared to other other countries.

And so what's going on? Is it because we didn't bring in a mining text? Is that what happened? Yeah, that's a part of it. I mean, sort of go back to the things that everybody knows. We know that the minimum wage hasn't kept pace with CEO pay. We know that unemployment benefits hasn't kept pace even with average incomes. We know that during COVID, we chased people for robo debt.

and we let big business hang on to any jobkeeper that they got overpaid. We kind of know how all these individual decisions have been made. What this data does is sort of look at it top down, look at the big picture and say, all right, not what happened to a low paid worker, what happened across Australia. So that increase in inequality we see isn't some sort of random act of the markets. It's the sum of all these little decisions we made, the decision not to boost the minimum wage, the decision to not pay teachers and nurses a lot more, the decision to not have a mining tax. Because the one thing we know about that 10 years, as everyone said, oh, the mining boom's great,

the benefits will trickle down. Well, you know, if you're getting 200 grand to work in the mines or if you happen to own a mine like Gina Reinhart, sure, a mining boom is a great thing to have. But for the 99% of Australians that don't work in coal mining, that boom did kind of very little for them. So, yeah, unfortunately, how did it happen? It happened because of the choices we made. So isn't there a simple solution, though, Richard, which is, like, don't people have

themselves to blame for not owning a coal mine or an iron ore mine? or, you know, like, shouldn't they just go out and become a CEO? Like, if CEO pay is better than minimum wage pay, why don't they, shouldn't they just, why don't they just get a job as a CEO rather than the cleaner? Well, it's a good question. And, you know, of course, Joe Hockey once said that the way to make housing more affordable was to get a better job.

So, yeah, look, unfortunately, we do like to blame the victim in Australia. But individuals don't set the minimum wage. individuals didn't create the gig economy, individuals didn't deliver big tax cuts for high-income earners. So yes, of course individuals have always got a role to play in their own livelihood. Like, of course they do. But what this data shows is that in other countries, economic growth, the benefits of economic growth, have been spread a lot more fairly than Australia. So it seems like poor people in Norway, Denmark, Sweden, Finland, Germany, France, somehow they're better at getting a fair share out of GDP than low-income earners in Australia.

And I hate to say it, I think it's because our obsession in Australia with things like the mining industry, our obsession in Australia with things like tax cuts have really not just harmed low-income earners. But remember, we're saying the bottom 90%, so nearly all of us, 9 in 10 Australians, have missed out, teachers, nurses, police, ambulance drivers, they've missed out on the gains of economic growth as well because rather than have a tax on the mining industry, rather than have a carbon tax, and then spend that money on the people who deliver great public services, unfortunately, you know, even people in the middle have missed out a lot in Australia. What about the people who deliver sort of mediocre public services? Like, you know, I'm thinking like the trains in Sydney, terrible. Do you think maybe we can sort of carve out a bit of it? Like, do your solution, make it all a bit more equal, but you're like not for people who

are a bit grumpy as bus drivers? You know what I mean? Like just sort of still keep a little bit of inequality in the system? Look, I mean, the reality is there's grumpy people everywhere. There's some grumpy people drive buses. There's some grumpy waiters. And there's some grumpy bankers out there. I think what we need to do is create a society where there's enough job opportunities going around

that people don't have to do jobs they hate, that you don't have to be in the service sector. You're a communist. Well, no, I'm an economist. We reckon that high unemployment's a terrible waste of human capital. We think unemployment's terrible for the economy. economy. It's just in Australia, we've kind of been trained to believe that, you know, having half a million unemployed people is a good way to keep inflation down. So, yeah, look, there's some grumpy public servants out there. There's some grumpy private servants out

there. And I'm sure that's true in other countries as well. But maybe one of the reasons people are grumpy is Australia's become such an unequal society. Okay, so I'm going to pitch you a few solutions because, you know, I can hear, you You know, you're complaining a lot. You've got all the sort of problems, but I haven't heard any solutions yet beyond tax the rich or whatever. So I'm thinking, I'll just pitch to you a few ideas, and I don't know whether the Australia Institute can sort of run some sort of research program based on these ideas. But I'll just pitch them to you and see what you think. First one is, what if we just ate the rich?

Like, you see, there's 10%. What's there, everyone on over 120 grand, is I mean? Yeah, about 120 grand to get you into that category. So I reckon, I mean, they would be the tastiest. They're the best-looking. They always have the good maker. They're the sort of people who live in the eastern suburbs. They would present well on a dish.

You'd just eat them. Yeah, well, you know, not really accountable myself. And of course, you know, we probably should all make sure we eat a more balanced diet. It's the ultimate democracy sausage. We're doing this for democracy, Richard. It's not about cannibalism. This is about just evening things up. Yeah, the democracy sausage

and the inequality sausage all wrapped into one. Yeah, yeah. You know, in an inequality bun. Anyway, yeah, okay. Anyway, put that into the Australian industry. Maybe somebody else's... Yeah, we'll get back to you on that one. Yeah.

The other one is, and I pitched this the other day, I think, to Max Chandler Mather. Is that Greens MP? A bit of a communist. as well. And he, and we were talking about how the Labor Party, what we were specifically doing about is how everyone seems to still want to build fossil fuel mines, you know, especially in Queensland and stuff like that.

But I think it would be applicable. This idea would also work for inequality, right? Which is what we do is we give rich people VR headsets, like AR heads. You know those Apple, Apple's about to release. sort of thing where it's sort of virtual reality. But what you do is you tell them, you create this reality for the rich people that makes them feel like they're still not paying tax and they, like they're in the reality where it's all like completely unequal and everyone's grumpy because they're being underpaid and stuff like that. Whereas in reality, we then start taxing everyone

properly and fixing up all our social services, paying teachers and nurses properly and everything like that, but they don't realize because they've got these VR headsets on it. It's really realistic. I like, so it's like beer goggles for rich people. Yeah, yeah, exactly. Because the thing is, all the dystopies, if you watch Netflix, every second show is about the opposite idea that all the, you know, dregs of the population get put into, you know, Matrix-style dystopian hellscape where they're all in VR headsets, right? But I recommend we just do it on the rich, on the top end of town. Yeah. And then, of course, we can all just kind of whisper and chuckle as they walk past.

Yes, exactly. And it'll look like where they're butler or something like that. But actually, we're just laughing at them. I like it. I like it more than eating them. Okay, good. Well, then definitely put that in your model. It's on the list.

Yeah, okay, great. The Chaser Report, now with Extra Whispers. And this one's a bit weird. So this one's a bit of a curb ball. I'm not sure whether anyone will want to research this. but hear me out, what if we didn't bring in the stage three tax cuts which are due next year, which will see most of the benefits of the tax breaks going to the top 10% of income earners? Oh, that's crazy talk. That's crazy talk. I mean, imagine why, I mean, imagine if a newly elected

Labor government decided that enormous tax cuts invented by Scott Morrison five years ago were a bad idea. It would never happen. No, that's, that's, that's, that's, that's, that's, that's, that's, that's, that's, that's, that's, that's, that's just, that's just, that's, that's, that's, I thought. I thought, I thought this was a legitimate podcast, not some sort of alternate dystopian, universe fantasy show. Um, um, yeah, look, you spot on. Uh, we're about to spend a quarter of a trillion dollars, a quarter of a trillion dollars on tax cuts that will deliver nearly $10,000 a year to people earning 200 grand. So 10,000 bucks a year and literally not a cent to someone working on minimum wage at 40, 45,000 bucks, not a cent. And these tax cuts were invented by Scott Morrison. They were invented before COVID.

They were invented before inflation went through the roof and real wages fell. Like these tax cuts were a dumb idea back when Scott Morrison was treasurer, even before he was prime minister. and here we are implementing them in Australia in an environment where, you know, post-COVID, we've got falling real wages, we've got soaring cost of living pressures, and, you know, we're that committed to a Scott Morrison policy that, yeah, it's become crazy talk and heresy to just say, well, what if we ditched that? I love how you're trying to taint them with the word Scott Morrison.

You know that it's political death to call anything Scott Morrison, so you're trying to link them. No, now I'm going to use reverse psychology on you and say that even though they're Scott Morrison's idea, we're apparently wedded to them. So what is this? So we've got this theory going on, which actually Max talked about last week as well,

which is the idea is that the Labor Party, because I don't know, like I, last time Labor was elected, except for that Rud Gillard sort of lot. Like I grew up a starry, eyeed Hawk and Keatingite type thing where you sort of had this idea that Labor would be a government of reform. But it seems like the Labor Party have just turned into a government where their job, they feel like their job is to lower expectations and say, no, we can't do that, we can't do this, we can't do that. Oh, we can approve 116 gas mines. But that's basically

the only thing that we can deliver during this first term of government. Yeah. Look, I think that, I mean, the most optimistic gloss to put on it is that Labor took a pretty reformist agenda to the 2019 election and they lost. They only just lost. They only just lost, but they lost. And just as generals are often accused of kind of always fighting the last war, I think that politicians often end up fighting the last election. And whereas in 2019, Labor took an ambitious tax and spending agenda to the electorate after they lost that election for a whole bunch of reasons, I think they lost it, but they went to the 22 election kind of promising not to do any of the good ideas they'd previously had, not because they'd lost faith in them as ideas, but because

they were kind of scared of losing another unloosable election. So we're kind of now in this sort of dead space where Labor was elected, the liberals were decimated, there's this huge community expectation saying, okay, after 10 years of a coalition government pushing as hard in the wrong direction, let's really get cracking in the right direction. Unfortunately, Labor are kind of welded to this idea of, no, we promised we wouldn't do anything, we won the election, so here we are, not doing much. Now, of course they've done some things, but boy, the world has changed since the last election, the economy's changed radically.

The stage three tax cuts were a dumb idea at the time, but they are a complete, bat-hit, crazy idea in this environment. Well, with that inspiring thought, so what should we do, just to the barricades? Is that the idea? Look, I think that as citizens, we have to make it clear to our elected members of parliament that while we appreciate them keeping their promises, that we're okay with them changing their mind when the circumstances change. I mean, if I promised that I'd take you to, I promise to take you out for dinner.

We'd been looking forward to it. Richard, that's nice. Well, you never invite me out. So I thought I'd do it, you know, live on the podcast. So if I promised to take you out for a nice dinner and then, I don't know, I get COVID, it's okay for me to ring you and say, I meant it. I meant it when I said it. I was sincere.

I really wanted to do it. But the circumstances have changed. So let's adjust. adults know that even when a promise is important, it can still be broken when the times require it to be broken. So I respect the fact that the Prime Minister is saying, look, I don't want to be like that last mob. I don't want to promise one thing and do another all the time. That's how people lose faith in democracy. That's right.

But I can't see a problem with the government saying to the public, look, it's you we promise these tax cuts to. But what do you reckon? since we've had all these other things, since we've had inflation, since we had the stupid orchestra decision, you know, now we're in this pickle, do you want us to stick to this tax cut which would give high-income earners 10 grand, or do you want us to invest in health and education in protecting the environment and boosting the incomes of the low paid amongst us? I think it's okay to ask for permission to change your plans. But, you know, there's some risky politics there.

And at the moment, there's not a lot of suggestion they want to take that risk. Okay. So let's hope that they change their mind on the stage three tax cards. But if they don't, Albo would probably be a great beneficiary of that. Because he's on over 200 grand. Oh, absolutely. He'd be on like 300, 350, right? Yeah.

He probably gets like 15, 20 grand out of these stage three tax cards. So what I'm thinking is, if they still keep them going, we just borrow them. money off elbow. We just go up to him and say, well, hey, you've got a few extra bucks. Can I borrow the money? Yeah. Look, every member of parliament will get about 10,000 bucks. It kind of caps out at 10 grand, whether you're Gina Reinhart or a backbencher. Yeah. Oh, well, you want things to be equal amongst the incredibly rich. Yeah. Well, we've been very fair to the rich. We've treated all the rich fairly. But... So wait a minute. Does Jerry Harvey, does Jerry Harvey get 10 grand? Yep. Gina Reinhardt gets 10 grand.

And someone working literally on 40 grand a year won't get a cent. Well, but he was a bit grumpy. He's a bit grumpy. He doesn't deserve it. You're talking about the bus driver again. Yes, far too grumpy. Well, I reckon there's some grumpy billionaires out there too. They can live without the 10 grand.

Richard Dennis, thank you so much for your time. I really do hope that you do the modelling on that idea. On the democracy and the wealthy sausage. The wealthy sausage coming up. Yeah, on the wealthy. So eating the rich. But also, no, I think the idea of the VR heads here, I think that's got legs. I think, you know.

Yeah, it's got legs. It's got arms. Richard Dennis, thank you very much. Our gear is from Road. We're part of the Iconiclass Network. Catch you tomorrow.