When I read Gina Rinehart’s words early last Friday morning I wanted to react, but that would have been charged with emotion and quite unproductive.
Instead, I have slept on those words and thought that in the light of day that I might add another perspective in response to her commentary.
Here I offer my considered thoughts and back it up with some facts and feelings of a different kind.
‘‘We are living beyond our means,’’ reportedly said Ms Rinehart, worth an estimated $19,890,000,000.00. I am sure she has worked very hard for her impressive wealth but she is not alone in terms of working hard.
I am equally sure that some Australians are living beyond their means but recent economic figures show that our personal debt per capita is steadily reducing. Earlier this month, ComSec reported that while consumer spending picked up late in 2013, especially after the Federal election, over the year as a whole, growth in spending was slow; and personal debt reduced.
Does this indicate that less Australians are living beyond their means? I am by no means an economist, but from my lay perspective these figures suggest they probably are.
Many Australians work many hours every week to earn an average wage of around $70,000 (based on ABS 2012 figures) Note: The average full-time female salary in Australia (excluding overtime) is $61,760 per annum.
I should also point out that in SA that average wage is $63471.
Many earn a lot less and are required to seek income support. Others earn nothing because they either can’t find work or have a disability which precludes them from work. As a result these Australians are either partially or totally dependent on welfare. And then there is our aging population.
There is no doubting that our welfare budget is considerable.
Australia’s total 2013 budget was about $400billiion dollars with approximately 35% or $138billion being spent on welfare.
Allow me to paint a picture.
If we use an annual average income of $70,000 your annual taxation contribution is around $14000. So where does that go?
(Note: From my research the average wage of a manager in retail is more like $45K; including penalty rates.)
Put simply; (rounded figures based on 2012 data) about $5000 will go to welfare, $2300 to health $1000 to education and $800 to defence. The remainder is spread across a range of areas including the public service, transport and housing.
Want to know what tax you pay goes where? Follow this link http://www.wheredomytaxesgo.com.au/
For me, I strongly believe that the portion of my taxation contribution of around $4500 per annum, which goes towards social security and income support, is money well spent.
Let me tell you why.
For starters, my mother is in care, a nursing home. She receives an age pension of which about 85% is paid to the institution which provides her care. Her pension is about $750 per fortnight.
Because she owned her home she was required sell her home to pay an accommodation bond, in other words she paid her own way to obtain a bed.
Any income earned from the bond is used by the aged care home to improve accommodation and services. That’s fair! All ‘homes’ need maintenance.
Putting it bluntly, if my mother was not in care she would most likely not have survived living independently in her own home.
If I were to be her carer I would have had to stop working. Our family would have to make considerable sacrifices in terms accommodating her in our home and from my family’s wellbeing point of view, and my mother’s, the stress would have been challenging.
If I were to stop working to care for her I would not be eligible for a carer’s payment because my partner works. While that is also fair it would also mean one less person in our workforce paying taxes to contribute to running our country.
In her latest column for Australian Resources and Investment magazine, Ms Rinehart called for an end to the age of entitlement.
I am curious as to where she develops these thoughts? If they are based on the series of Intergenerational Reports that shows how our taxes are rapidly heading towards not being able to cover the cost of caring for those needing support, then, yes I agree. We do need some astute thinking to help our nation deal with the financial burden we must and will manage.
On the other hand if she is basing her views on the regular screenings on television about “dole bludgers” and “welfare cheats” then maybe she and others who scream the same message need to realise that these people, who do exist, are a minority and that prosecution action is taken where evidence supports a case.
She said “Australians have to work hard or actually harder and smarter to create the revenue to be able to pay that bill … something has to give, we can’t do it all.”
Did Ms Rinehart for one moment consider those who are full time carers and work 24 hours a day, 7 days a week caring for the young, the aged and the partially or profoundly disabled?
These carers are largely driven by an overwhelming sense of responsibility to their loved one and rely on welfare to put food on the table and pay the utilities bill.
I might add that the income support really only covers the bare necessities. No holidays, no respite; no fine dining or long walks in the park. Hard, demanding (physically and emotionally) mostly thankless work. Do they not deserve some relief? Some respite?
Did Ms Rinehart consider our youth? Many young Australians belong to struggling families who, through no fault of their own, have to access Austudy or Abstudy to assist them with their secondary and tertiary years in education. Many go on to lead productive lives, working for a living in our communities and contributing their fair share of tax to run our country.
Then there is our aging population. They are now required to working longer before, if eligible, they can claim an age pension.
For many their health is generally satisfactory and most have the capacity to work beyond pension age. There are also incentives such as the pension bonus scheme to do so.
Read more here: http://www.humanservices.gov.au/customer/services/centrelink/pension-bonus-scheme
Then there are those who do retire to make way for others to enter the workforce. Many retire because, prior to modern workplace safety standards, they have paid for their service to the community with their health. These people are incapable of working any longer or, for that matter, enjoying a real quality of life in retirement.
Also, stepping back and looking at the bigger community picture, do those who do ‘retire’ stop being productive? The answer is a resounding no!
Many are the carers for their grand-children and/or the principal volunteers for clubs, organisations and not for profits in our communities. These organisations rely on them because the younger generation are working their guts out for a living and just don’t have the time to ‘volunteer’.
There are many more examples of how welfare works.
My thoughts on the “the age of entitlement.”
Entitlement by its very nature can be defined as a right to benefits specified especially by law or contract or it could mean a government program providing benefits to members of a specified group.
From an income support point of view there are very rigorous eligibility criteria set out which determines if an individual does actually have an ‘entitlement’ to a particular payment under Social Security law.
Once eligible, there are many processes of review to determine continued eligibility and compliance. There are sophisticated measures to ensure that the very few that are non-compliant are supported and in extreme cases appropriately sanctioned.
One could argue that the resources used to monitor compliance in the welfare sector may well be better spent monitoring corporate compliance in the realm of taxation rather than targeting those who are already struggling.
According to an analysis of data conducted by the ACTU for a 2011 tax forum; tax evasion, avoidance, use of tax breaks and tax minimisation is costing Government revenue at least $50 billion a year.
In the same year with thousands of families struggling to make ends meet, the cost of welfare fraud rose by 10 per cent to $489 million. I would ask why the increase?
Many different approaches to eradicating poverty have been attempted in our country; however approaches which focus only on economic growth have proved to be unsustainable.
A discussion on other options and strategies based on more than economic growth will be the basis for future blogs.
I have said before and I re-state: Our Government must create an environment whereby unemployed Australians and those living below the poverty line are able to re-claim their dignity and their basic human rights. In some cases find dignity and a sense of worth for the first time.
Human rights in Australia have largely been developed under Australian Parliamentary democracy but it would seem that our Parliament doesn’t really understand what it is like to be unemployed or in a cycle of poverty. There is increasing international evidence that when governments adopt anti-poverty plans, they can make meaningful steps to reduce overall levels of poverty.
We, as a society have a moral responsibility to support the disadvantaged and impoverished and lift them out of poverty and welfare dependency.
Gina and Pauline, you can’t achieve that on around $32 per day. It is hardly living beyond your means on this mediocre entitlement.