I was Trumped on national television last week. It was puzzling at the time, embarrassing afterwards when called out on Twitter, and subsequently annoying as L’esprit de l’escalier set in – the delightful French term that translates as “the spirit of the stairs”, meaning staircase wit, thinking of exactly the right thing to say when it’s too late.
Being “Trumped” in this instance doesn’t mean having the US President sool a mob of halfwits onto you or having a wall built around you bigly. It’s being hit with an “alternative fact” that confuses and distracts before quickly moving on to another issue without correcting the “fact”. It’s an ancient third-rate debating trick that’s been taken mainstream by the Trump political machine and ratbag commentators – increasingly one-and-the-same thing.
Did Scott Morrison announce a revolution?
It wouldn’t matter much except for the serious consequences of muddying public opinion and beliefs, resulting in President Donald Trump. In my very minor case, it’s an example of what makes it hard to develop a rational attitude about government revenue, expenditure and the future of Australia.
Of course it wasn’t The Donald himself who Trumped me – I wasn’t in Sweden, Atlanta or Bowling Green. Instead, it was retired Major-General Jim Molan on an episode of the ABC’s The Drum.
In the context of discussing the government’s omnibus bill, I thought it was a big deal that Treasurer Scott Morrison had finally admitted the possibility that we had a revenue as well as an expenditure problem, that the government might have to increase taxes.
Molan weighed in with: “This country, Michael might be able to tell us, I heard something yesterday which says that 90 per cent of our tax revenue is consumed by $160 billion worth of social services, figures along that line. We have gone past the stage where we can go back and have another discussion about it. This is the discussion and either we get this stuff through, we’ve got to lower our, our personal standard of living, particularly middle-class welfare and we’ve got to make the country pay its way.”
So you’re a member of a panel on live television and you’re told $160 billion is spent on social welfare, eating up 90 per cent of tax revenue, and you think, “Hang on, that doesn’t sound right”, but as you start mentally working backwards from a federal government budget of about $450 billion, you’re also told we’ll have to lower our standard of living if we don’t cut welfare spending.
Bang – you try to explain that the government raising more revenue doesn’t necessarily mean lowering our standard of living, that it’s a lot more complicated than that, that intelligently levied taxation used for sensible investment in people can increase our standard of living. And you’ve let the numbers go through to the keeper.
If it had been Fox News and Trump was watching, it could have morphed into a presidential tweet that 90 per cent of taxes go on dole-bludgers. It’s a huge problem. Huge. Very bad. Must cut taxes!!! Cut dole!!!
Retailing half-heard, unchecked figures is dangerous. The Australian fiscal reality is not what the Major-General heard yesterday, figures along that line. If you want to know, there’s a fine set of interactive ABC graphics that show what’s what with this year’s budget.
The government expected to raise $411 billion, of which $279 billion was from income tax. On the spending side, $159 billion was classed as social security and welfare. There’s nothing like a 90 per cent figure there.
If you want to scratch around to manufacture a headline figure – as certain tabloids regularly do – the closest you could get is by ignoring all other taxation and revenue and specifying just individuals’ income tax of $197 billion. The social welfare figure is 81 per cent of that. It’s a somewhat meaningless figure – as Fairfax’s Peter Martin has explained, there ain’t no Treasury jam jars for revenue – but that doesn’t stop people.
It’s like observing that budgeted company tax of $69 billion almost pays the federal government’s $71 billion health bill. You could imply that reducing company tax by, say, $50 billion, would cause a health crisis – but that would be a silly and dishonest thing to do.
So, back on the stairs, or rather in the lift from the ABC studio, what I meant to say was: “Hang on, Jim, that’s not right. Social security welfare spending of $159 billion this year is 57 per cent of budgeted taxation revenue, 38.7 per cent of total revenue, 35 per cent of government spending – so about a third, you could say. It’s what we pay to try to minimise poverty, to have a reasonably cohesive society, to take care of each other so the nation doesn’t go to shit.
“If I could just call up a graphic of expenditure, thank you, you can see where the social security money goes. The biggest item there is assistance for the aged – $63.3 billion for pensioners. People with disabilities get $33.4 billion. As for the favourite whipping boys of the Murdoch media, assistance for the unemployed and the sick is $10.5 billion – 2.3 per cent of the budget. That’s one of the areas Scott Morrison wants to squeeze even when everyone from the Business Council to the pet shop galahs say the dole is actually too low.
“Unfortunately these numbers don’t include something called ‘tax expenditures’ – that’s the cost of tax deductions, lurks and loopholes. A little favourite of mine is the novated lease rort. It’s costing close to $1 billion a year now. You could say that’s about three times what the federal government spends on sport and recreation ($341 million) – you might have thought a beneficial thing for an increasingly obese nation – but that would be fiddling unfairly with the numbers.
“Now, as for the idea of having to reduce our standard of living …”
But I didn’t say that. I’d been Trumped.
First published SMH Feb 21, 2017