Screen Shot 2016-09-23 at 1.31.43 pm
Type
Essay
Category
Inequality
Politics

Out of touch

On 9 May 2016, the Monday after the federal budget was presented, the ABC screened a live episode of Q&A, its popular panel discussion program. Audience member Duncan Storrar had a query for the Assistant Treasurer, Melbourne Liberal Kelly O’Dwyer:

I’ve got a disability and a low education. That means I’ve spent my whole life working on minimum wage. You’re gonna lift the tax-free threshold for rich people. If you lift my tax-free threshold, that changes my life. That means I get to say to my little girls, ‘Daddy’s not broke this weekend, we can go to the pictures.’ Rich people don’t even notice their tax-free threshold lift. Why don’t I get it? Why do they get it?

O’Dwyer responded with a claim that new tax cuts for small business would help create jobs. She then made a fateful comparison to an expensive commercial toaster purchased by a local café owner: ‘[The business owner] will have access to the instant asset write-off, which means he can invest in his business,’ O’Dwyer said. ‘[He could purchase] a $6000 toaster, which means he can get more customers through his business on a Saturday.’

Future historians may look back on the moment as a significant episode in the political memory of the Abbott-Turnbull governments. The marvellous juxtaposition of a minister explaining a $6000 toaster to a man struggling to survive on minimum wage transfixed the nation. Q&A viewer Samuel Fawcett quickly set up a crowdfunding campaign that raised $60,000 in under three weeks, in the process raising some tricky moral questions about the use of crowdfunding to address systemic inequality and poverty.

Storrar’s comments sparked a feeding frenzy in the News Limited papers. Melbourne tabloid the Herald Sun reported Storrar’s criminal record, splashing his face across the front page under the headline ‘ABC Hero a Villain: Q&A Sob Story Star Exposed as a Thug as Public Donate $60,000’. The Australian dispatched big-name reporter Caroline Overington to interview Storrar’s estranged son, who accused his father of drug abuse.

Storrar’s Q&A appearance – and the savage media reaction to it – marked a fascinating inflection point in Australian political debate. The received wisdom is that we don’t have a class problem in Australia. In fact, the Coalition often counters Labor’s rhetoric about inequality by accusing it of engaging in ‘class war’. But it was impossible to deny the class markers of Storrar: he wore a white hoodie and his hair was tussled, he spoke with a recognisably broad accent and, by his own admission, he is uneducated, poor and working class.

Another reason why Storrar’s appearance was so devastating was that he framed inequality in terms of dignity: he wanted to take his daughters to the cinema, something he could not currently afford to do. It’s a seemingly quotidian cultural experience, but one that remains out of reach for many people. Seeing a film at the cinema can cost roughly $45 for a family of one adult and two children, and that is a level of disposable income that poorer Australians simply can’t muster.

Long deprecated or denied, class is now looming large in Australian politics.

 

In June 2016, an Australian on minimum wage earned $656.90 per week. That is $34,159 a year, before tax. According to the Australian Tax Office’s ‘simple tax calculator’, the tax owed would be $3030, leaving a take-home salary of $31,128. Let’s call it $600 a week.

It’s fair to say that many of us would struggle to make ends meet on that income – $600 a week does not go very far in modern Australia. The average rent for a one-bedroom flat in a far outer suburb is above $200 a week. Food, transport, clothing and utilities have to be paid for from the remainder, as do the needs of any children or dependents. Treats, such as going to the cinema, are seldom within reach.

But Storrar was earning much less than the minimum wage. His sole steady source of income was a fortnightly Austudy payment of $520, an income that was supplemented by sporadic work as a truck driver. The Melbourne Institute of Applied Economic and Social Research’s poverty line for a single person in March 2016 was a weekly income of $525. It’s doubtful Storrar makes that many weeks.

There is, in fact, a whole class of Australians living on very low incomes like this. According to the Australian Bureau of Statistics, there are four million people who earn a weekly equivalised disposable income of less than $511. There are more than 830,000 children in this group. The ABS says, in the dry language of a statistician, that ‘low-income households are at risk of experiencing financial hardship’.

Over half of these people hold less than $1000 in liquid assets; they have, essentially, nothing to fall back on. For emergencies, they must choose between the usury of credit cards or the misery of payday lending. The ABS’ measures of ‘financial stress’ make for grim reading in and of themselves: ‘unable to raise $2000 in a week for something important’, ‘could not pay gas, electricity or telephone bill on time’, ‘pawned or sold something’, ‘went without meals’. The ABS says about 70 per cent of younger low-income households experience this sort of financial stress.

You can see why Duncan Storrar questioned tax relief for the upper classes: ‘People who make $80,000 a year – I don’t even know who they are – they don’t even notice it. We notice that.’

‘We actually need to grow the pie,’ Kelly O’Dwyer replied, in an answer of breathtaking vacuity.

And yet, in the substance of his statements on Q&A, Storrar was right: low-income earners didn’t receive an income tax cut in Scott Morrison’s 2016 budget. High-income earners did.

 

Why is it that our politicians seem disconnected from the Australian voters they supposedly represent?  In the wake of Joe Hockey’s disastrous 2014 budget, which sowed the seeds of Tony Abbott’s destruction, the Monthly published Richard Cooke’s ‘The People versus the Political Class’, a blistering essay in which Cooke warns that ‘the distance between us and our rulers is getting bigger’. The fact that the Abbott government could willingly deliver such an unpopular budget, Cooke argues, was a sign that it truly didn’t care about popular opinion. He cites the work of Martin Gilens and Benjamin Page, political scientists from, respectively, Princeton and Northwestern universities. Gilens and Page argue that America’s democracy is a sham; in practice, they argue, it’s a corporate oligarchy in disguise.

Cooke’s essay quotes a focus group of disaffected Australian voters, taken from a study by Brisbane-based political analyst Scott Steel:

‘Let’s talk about politicians.’

[Groans, chuckles and guffaws are the response every single time, regardless of age, gender or more complicated demography.]

[More laughter.]

‘Give me a few words that you reckon most accurately describes politicians today.’

‘Just in it for themselves.’

‘Lying [expletives].’

‘The two most popular expletives,’ says Steel, ‘are “bastards” and “dickheads”. Except for old ladies over seventy – they particularly like the word “mongrels”.’

The prevailing attitudes of Australia’s ruling elite, Cooke concludes, are out of touch with the great bulk of the electorate.

Cooke’s view, shared by many, is that the majority of Australians have never really liked laissez-faire or neoliberal economic policies, and they like them a lot less now that the mining boom has tailed off. Moreover, on a range of social and environmental issues, such as marriage equality and climate change, the electorate has left the political class behind. ‘The views of the political class are diverging from those of mainstream Australia,’ Cooke writes. ‘People are retracting from politics – but it’s also retracting from them.’

This diagnosis appears prescient in light of subsequent events. 2016 has seen the twin earthquakes of Brexit and Trump shake the foundations of the British and American political systems.

It’s notable that Cooke describes the elite as a ‘political class’. The outlines of such a class have been taking shape for some time now. The economic resources afforded to them mean that their lives are utterly different to that of low-income Australians. They also inhabit a social milieu separated from poor and working-class citizens.

The 43rd Parliament: Traits and Trends, Martin Lumb’s remarkable report on the biographical details of senators and members, includes a section on previous occupations. Of the 226 people elected in 2013, 25 per cent were from a business background (executives, managers, self-employed businesspeople and company directors) and 14 per cent from politics (consultants, advisers and lobbyists). Lawyers, party operatives and trade union officials round out the top five professional backgrounds. There were a number of what you might call run-of-the-mill, white-collar office workers (public service/policy administrators and local government officials), as well as eight farmers, eight researchers, five teachers, four health workers and one sawmiller, Ricky Muir. But there were no cleaners, truck drivers, hairdressers or retail workers, no plumbers or tilers or baristas or chefs, no 7-Eleven counter servers or fitness instructors or aged carers.

 

So what is the difference between you, me and our elected representatives? One difference, as Hemmingway apocryphally joked to Fitzgerald, is that they have more money.

Compared with Duncan Storrar, anyone in federal parliament is rich. Perhaps they are not Malcolm Turnbull rich – the Prime Minister’s net worth is thought to be in the vicinity of $200 million – but they are wealthy just the same. A backbencher enjoys a base salary of $195,130: that puts the lowest-earning backbencher in the top 2 per cent of Australian income earners. Cabinet ministers like Kelly O’Dwyer are the 1 per cent.

Of course, to a lowly backbencher, it can sometimes seem like $195,000 is not that much money. The average parliamentarian’s day is filled with meetings with people who earn more than they do: high-level bureaucrats, departmental secretaries, vice-chancellors, federal court judges, top brass in the defence force, ASIC commissioners and the like. Even the Director of Old Parliament House earns more than a backbencher.

It’s hardly surprising that politicians, when moving in this social milieu, lose touch with the economic reality of ordinary citizens. Indeed, the wonder is that more of them don’t lose their heads completely. It could even be argued that the average backbencher is more in touch with ordinary life than the average top public servant or business executive. After all, an MP at least has to meet with and talk to her constituents. The top mandarin or CEO, in contrast, moves smoothly between their corner office, hired car and expansive suburban mansion. The only middle- to low-income people they are likely to meet are their servants in the gig economy precariat: the Uber driver, hotel porter, barista, cleaner.

The politics of the political class is interesting in and of itself. Political parties remain dominated by the ideological warriors and factional warlords staking out their turf. We should expect little but commitment to the movement from George Brandis or Eric Abetz or Doug Cameron or Kim Carr.

But the politics of the broader class of policy professionals is just as enlightening. For the most part, it’s a mix of economic neoliberalism and soft-identitarian liberalism. As Cooke points out, precepts of free trade and corporate special interests are rarely questioned, as is the US alliance, the need for strong borders, or the embrace of an open, largely deregulated market economy. To the political class, with its immeasurable privilege and vast human capital (in the form of personal networks and university degrees), Turnbull’s bromides about ‘innovation’ and ‘agility’ can seem perfectly natural.

The way the political class speaks, smells and dresses is another way to judge its separation from the broader mass of Australian life. Not to put too fine a point on it, politicians dress corporate. So do their minions. Nothing shows this more clearly than when politicians and their entourages stride into a public event. Typically, every single one of them will be wearing corporate attire: the men wear two-piece, off-the-rack suits, while the women wear smart skirts, crisp shirts and jackets, generally with heels. They carry clipboards or folios. They smell great.

In a committee room or a television studio, such attire doesn’t seem out of place. Everyone is wearing more or less the same thing, though the journalists are distinctly shabbier and the lowlier staffers often discard their coats. But when politicians and their Praetorian Guards move into a space like a school, a café or even a regular street, their dress and mannerisms look weird. This is one reason why made-for-television ‘pic facs’ look so manufactured: the politicians in their nice suits and black shoes are absurdly discordant with the blokes in hi-vis or the tuckshop parents in cheap t-shirts and pants. They are overdressed, and as the office schmucks shuffle by in cheap trousers and $30 shoes, even the casual observer can see what modern sumptuary amounts to.

But the best place to see Australia’s political class is not in parliament, or out on the hustings on election day, or in a Qantas lounge, but in a bar. Every year, after the budget is delivered and the facts and figures digested, a fair swathe of the nation’s political class adjourns to the Public Bar in Manuka. There, late on budget night, you can see politicians and their staffers mingle with editors and journalists, think-tankers and lobbyists, unionists and environmentalists … even the odd academic (generally an economist).

It’s as concentrated a gathering of political operators you will find, outside of the political parties themselves. But the real advantage of the Public Bar is what it tells you about the porous boundaries between the political parties, the political media and the political hangers-on. In previous years, I’ve watched Liberal parliamentarians fete Fairfax journalist Latika Bourke, and Scott Ludlam drink whiskies with the Guardian’s Katharine Viner. This year the most notable characters were Sam Dastyari and James Patterson, both of whom were surrounded by entourages of friends and supporters. Dastyari and Patterson are genuinely popular within their own parties, and both have moved seamlessly from positions in the party machine to elected senators.

When you survey our rulers across the crowded bar on budget night, it’s not hard to see them as a coherent and identifiable class. After all, when it comes to markers of class distinction, such as income and education, our  rulers are remarkably homogenous. The political class is really just a handful of occupations, all of them concerned with the manipulation and coordination of power. Politicians, self-evidently, wield political power. News editors wield symbolic and informational power. Lobbyists and think-tankers move fungibly between both, taking money from business groups and interest lobbies and then translating it into the political influence, the coin of Canberra’s realm. All the while, business funds the exercise; donations remain the fuel of the political machine.

One might ask: isn’t this the job of journalists – to report on the political class? Before I respond, let me disclose a little fact: I am a journalist too, one who regularly reports on politicians in Canberra. This experience exposes me to a truth that makes journalists uncomfortable: for all its persistence, craft and energy, the media is a part of the political class. Even though we don’t get paid as well, or dress as nicely, journalists are associate members of the exclusive club. This makes it hard for us to see our own biases.

Those blind spots are worth keeping in mind as we confront the next term of the Turnbull government. Re-elected by the slenderest of margins, Turnbull has immediately tacked rightwards, his fortune now hostage to the whims of the Liberal Party’s petulant ultraconservatives. In the first few weeks of the second Turnbull government, the talking points were terrorism and welfare reform, and the marriage plebiscite was as divisive as ever.

 

In 1937, a group of Cambridge researchers established what is generally considered to be the world’s first market research organisation: Mass-Observation.

Founded by anthropologist Tom Harrisson, poet Charles Madge and filmmaker Humphrey Jennings, Mass-Observation was a kind of avant-garde research outfit. Its approach was neatly announced in a letter to New Statesman entitled ‘Anthropology at Home’. The organisation’s influences were equal parts surrealism, psychoanalysis and participant observation, and its founders treated their study of the British population as an exercise in tribal ethnography. Harrisson, for instance, had built his reputation as a swashbuckling anthropologist in the style of Malinowski. But Mass-Observation was also the first to hit upon the idea of a national ‘panel’ of ordinary citizens who would contribute their observations to the research program.

Madge and Jennings’ first book was an ambitious study of Britain’s social situation on a single day, 12 May 1937, based on input from 200 observers (it just happened to be the day of George VI’s coronation). The book was an arty experiment in verbatim reportage and early photojournalism. Mass-Observation would become fascinated with researching such seemingly quotidian topics as ‘behaviour at war memorials’ and the widespread enthusiasm for football betting pools. They also happened to be present at the birth of the ‘Lambeth walk’, a London dance sensation, which they celebrated as the emergence of working-class popular culture.

By the beginning of the Second World War, Mass-Observation had become part of the British establishment. The Ministry of Information hired it to research home-front morale, and M-O’s work proved crucial in helping John Maynard Keynes establish his plans for a fully-fledged income tax that would help pay for the welfare state envisaged by social democats. Harrisson ended the war behind enemy lines in Borneo, where he was tasked by the Z Special Unit, an elite special-forces unit specialising in reconnaissance and sabotage, with fomenting an anti-Japanese insurgency among the Kelabit people.

The story of Mass-Observation is instructive, because it represents the earliest use of the research instrument that now dominates politics: the focus group. Along with the opinion polls pioneered in America by George Gallup, Mass-Observation’s creation of national panels of observers, and its commitment to qualitative descriptions of social trends, created the underpinnings of the post-war science of public attitudes research – and of public manipulation and control.

Those political tools are still with us today. Indeed, they are more powerful than ever. It’s his supposedly uncanny skill at analysing data from focus groups and opinion polls that has given professional researcher Mark Textor his outsized reputation as a political svengali. Textor, as one half of the firm Crosby Textor, is in many ways a direct descendant of Harrisson, Madge and Jennings. But while Mass-Observation was a creature of the Left, Crosby Textor is an utterly characteristic actor of the Right. The firm has weaponised the tools of social science research for the culture wars of its political masters.

The example of Crosby Textor shows how class-based ideas of social research continue to influence the political program of democratic actors. But while there is an ever-growing body of research into popular behaviours, tastes and attitudes – funded, of course, by big companies and implemented by the associated industry of market research firms – there is little comparable information available about the political class. We lack in Australia a decent class-based investigation of the ruling elite itself. It’s not that easy to survey the tastes and attitudes of the 0.1 per cent. The focus groups are of voters, for the parties. What we need are more focus groups of politicians, by voters.

It’s unlikely that too many politicians will consent to having voters peer over their shoulders as renegade anthropologists, particularly when they are busy negotiating policy compromises. But if Mass-Observation has taught us anything, it is that observation requires neither in-depth training nor sophisticated mathematical technique. All that is really necessary is commitment and a keen eye.

You don’t need to be a trained social scientist to compare incomes. If you wanted a demonstration of the pendulum of inequality in Australia, the contrast between Storrar and O’Dwyer could not be starker. O’Dwyer is a political insider: a former banker and a protégé of Liberal icon Peter Costello. Her journey to the upper crust of Australian political life seems almost preordained: Presbyterian Ladies’ College, the University of Melbourne, a solicitor at right-wing law firm Freehills, a stint at too-big-to-fail bank NAB. O’Dwyer’s net wealth is unknown, but her parliamentary asset registry shows that she owns a house in South Yarra and an interest in a suburban shopping centre development in Cranbourne. She is also the beneficiary of multiple investment trusts.

The granularity of income inequality is driven home by the Storrar-O’Dwyer comparison. As a cabinet minister, O’Dwyer earns $336,599 – about thirteen times what a low-income Australian makes in a year. For a poor Australian, $336,599 might as well be a billion, or the moon. Owning a house at all – let alone in a fashionable inner-city suburb – is increasingly fantastical. And the inequalities keep growing. While politicians’ pay packets ratchet up automatically with inflation, the government has announced it wants to make $5 billion in savings by targeting welfare payments.

Australia is scarcely the only country where a tiny elite dominates politics while an underclass falls ever further behind. The long half-century since the economic crises of the 1970s has seen the rise of inequality across the developed world. For high net-worth individuals, tax is now an optional extra, to be paid by those too lazy to hide their fortune away in Panama or the British Virgin Islands. The returns on those trust funds and capital investments are high, easily outstripping broader growth rates in rich-world economies. Meanwhile, average wage growth in Australia is at its lowest level in two decades.

What can be done to restore some semblance of connection between rulers and the ruled? The laundry list of possible solutions is long, but not particularly promising. Some have suggested mandatory median wages for politicians, which in Australia would cap parliamentarians’ salaries at something like $55,000 annually. While this would certainly get the attention of backbenchers, it’s difficult to see how it would address the underlying causes of income inequality, or the yawning gap between the upper crust of the business class and nearly everyone else.

Nor would it alter the hard facts of political patronage: factional backing and long years of party networking would still be required to gain preselection for winnable seats. Indeed, forcing politicians onto the median wage could carve a landscape where only the already wealthy run for office.

A better strategy might be much tougher regulation. Australia’s political donations laws, which have almost zero transparency and no pressure on donors to declare contributions, are an ongoing charade. Australia does not have a standing anti-corruption commission, either; while such a body wouldn’t solve the problems of inequality, it would hack into the thicket of dubious entitlements and preferments.

In the longer term, two directions, above all, seem hopeful: strengthening the welfare state and restoring the power of unions. It was the welfare state that tamed global capitalism in the post-war period and paved the way for a generation of growth. These welfare states were largely built by left-of-centre political parties, supported by strong labour unions, and motivated by social-democratic concerns.

Researchers Colin Gordon and Ross Eisenbrey have shown that countries with stronger labour unions have lower inequality. Another study, by sociologists Björn Gustafsson and Mats Johansson, indicates that there’s a convincing correlation between periods of stronger unionisation and lower incomes for elites.

It’s more complex than this, of course. Political trends tend to drive policy across decades. As social democracy waned in the 1980s, even left-leaning parties took fright. In Australia, it was Labor that deregulated the economy in the 1980s and introduced ‘flexibility’ into industrial relations laws. In the US, it was Bill Clinton that enacted welfare reform. In Britain, it was New Labour that embraced the footloose global capital of the City of London.

‘Substantial reductions in inequality in the future,’ often-cited sociologists Richard Wilkinson and Kate Pickett have theorised, ‘will require the recreation of a sustained political movement.’ In the long run, then, the only chance to beat the political class may be for many more of us to join it.

 

Artwork by Brent Stegeman.
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Ben Eltham is National Affairs Correspondent for New Matilda, a lecturer at Deakin University and an arts journalist. His most recent book, When the Goal Posts Move, is about the arts funding crisis.

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