In closing one of the more egregious tax breaks for the mega-rich, the Albanese government is staring down the aspiration paradox: the proclivity of people to vote for the sort of life they wish they lived rather than the one they materially do.
Already the opposition is damning Labor’s decision to end subsidies for people with more than $3m accumulated in their super as “class warfare” and “the politics of envy”, proof positive that Labor will always stand in the way of success.
But in a time of increased financial insecurity that is disproportionally felt by those without accumulated capital, are Australians now ready to support their self-interest over their self-image?
According to the numbers in this week’s Guardian Essential Report, more Australians see their future getting harder rather than easier. For the first time since the federal election more people see the nation going down the wrong track, rather than the right track.
Digging deeper, the level of future optimism is sharply split between those who identify themselves as one day likely to have a super balance of $3 million and those who see that as a pipe dream.
(As an aside, 23% of people who have yet to retire reckon their super will max out in the government’s new hitting zone; significantly more than the less than one per cent that are in this situation today. Even allowing for bracket creep, this represents a large cohort of Australians who can only be described as “blindly optimistic” about their future.)
Which brings me back to the aspiration paradox: a phenomenon that lies at the heart of the neoliberal project alongside trickle-down economics, disdain for big government and downward envy at support for those less well-off.
The paradox has been a mainstay of the Australian political landscape for the best part of four decades, since John Howard invoked the virtues of the “battler” tradie who didn’t need anything to succeed apart from his ute, his ABN and rugged individualism.
Howard showered his battlers with direct government payments, targeted “tax relief” and, as the economy benefited from the fruits of the Hawke-Keating economic reforms, constructed a new system of private capital underwritten by tax concessions for property, share and super accumulation.
It was a brazen politics: destroy the safety net, support the destruction of workplace rights in the name of productivity, but be there for the battler by raising the bounty for those who can find a way to the top of the mountain. It worked so well that it underwrote four terms of conservative government.
Labor under Rudd-Gillard-Rudd tried but failed to confront some of these inequities, but its Henry review was hijacked at the first hurdle by mining moguls in Howard battler high-vis dishonestly claiming that if they were forced to share their windfall they would stop digging things up.
In opposition, Bill Shorten saw the more brazen upward wealth transfers via negative gearing and franking credits as obvious sources to fund ambitious social reforms but learned the hard way that the aspiration paradox can be weaponised to devastating effect.
Scott Morrison then deployed those unfair taxes against a demoralised Labor, forcing it to “rule out” any meaningful rebalancing and luring it into voting in support of even more regressive measures.
Implicit to this surrender was the proposition that 2019 “proved” removing tax concessions for the wealthy was itself an impossible political aspiration.
But is this a misread? Was it, in fact, the sequencing, the scope and the selling of the packages rather than the substance that failed to secure a mandate? More pointedly, from the seat of power, can Labor secure a more redistributive mandate?
The findings below suggest it might be possible.
Lining three of the key tax policies and cutting it along our aspiration axis, we see majority support for reining in the excesses, whether or not you think you will end up with the golden ticket.
These findings are significant. Super might be the first toe in the water, but it is an instructive test case of the sort of political battles Labor is going to have to win if it is to be a government worthy of its nomenclature.
Central to this are the stage-three tax cuts, the radical rewriting of Australia’s progressive tax system that will not only destroy the sliding scale of income tax rates to disproportionately benefit the well-off, but deliver a windfall of $9,000 for people earning over $200,000 per year.
The cuts are already legislated by the former Morrison government and due to come into effect in 2024, but if a class consensus can be reached, these could also be delayed and taken to the people at the next election.
On these numbers, an election where the LNP’s pitch for office would be to protect the super of millionaires and deliver $9,000 tax cuts to 3% of the population might not be the political slam dunk Peter Dutton and his freedom bros appear to think it is.
A final table suggests that if it ever existed, the aspiration paradox might be past its use-by date.
This slightly confusing table cross-references people’s current self-identified financial state of mind with their future expectations on retirement. (Tip: read down the column to gauge each category’s future expectations.)
In a world of aspiration, one would expect many of the people who describe themselves as struggling or in difficulty to imagine a future where they are more secure and comfortable.
But the findings suggest most see their futures as economically static, with very few people describing themselves in difficulty ever imagining themselves as secure, let alone comfortable. The most that the majority can hope for is a life of struggle.
Conversely, very few people in the comfort zone see a world where they fall back to anything less than secure. Far from a nation of dynamic and socially mobile strivers, these figures suggest Australia has retained a pretty rigid class system.
Marx would call this class consciousness. But while revolution may be a bridge too far, maybe it’s enough to simply encourage people to vote in their own self-interest as opposed to the interests of the person they wish they were.
Maybe aspiration has always been a flawed construct, and the “striving” at the heart of the Australian capitalist system has been tempered by more social democratic tendencies expressed through collective bargaining, Medicare and more recently the NDIS.
The aspiration paradox appropriated and distorted this. If it can be reclaimed and invoked to close these loopholes to fund the social infrastructure that give more people a chance to succeed, it will open the way for a truly transformative long-term Labor government.
Peter Lewis is an executive director of Essential, a progressive strategic communications and research company
