Advance Australia Fair

Who is the one creating more wealth for toil:

  • the person pouring the beer; or
  • the person who took out a business loan to buy the pub; who paid for the pub’s fitout and facilites; who takes on the unending administrative and operational burdens imposed on the pub; the risk of the pub failing – and, who guarantees to the beer pourer (and all their fellow beer pourers) that they will enjoy the certainty of having an agreed amount of money deposited into their bank account at the same interval of time?

Or how about:

  • the person digging the coal out of the ground; and
  • the person who risked hundreds of millions of dollars to set the coal mine up in the first place; who patiently waits years for a single dollar of return – and who also guarantees to the coal digger and all their fellow coal diggers that they will enjoy the certainty of a regular payment for their toil?

Or:

  • a North Korean coal miner; and
  • a member of the Workers’ Party of Korea?

Ok, so maybe that last one is a bit tricky. But the fact remains that you can’t pour beer for money without a pub and you can’t dig for coal without a profitable mine.

In re-agitating this particular aspect of the great equality debate, the left has slyly ignored the fact that workers already collectively get plenty more than proprietors. Go and have a look at the books of just about any business and see what the top item of spending is. I can assure you it ain’t the owner’s drawings or shareholders’ dividends.

Which brings us to the main point when it comes to the confected and deliberately divisive equality debate – a point which Sinclair Davidson makes very clear in his great article over at IPA, in which he states what should be obvious to those with any brains: Australia is not an unequal society, particularly when it:

  • devotes around 35.3% of its federal budget to welfare – which will amount to $164 billion out of $464 billion in 2017-18; and

UN

Of course, just try telling any of that to outgoing Human Rights Commissioner, Gillian Triggs:

Gillian Triggs has accused the Australian government of being “ideologically opposed to human rights”, saying Australia’s human rights are “regressing on almost every front”.

Triggs has used the last week of her tenure as human rights commissioner to say human rights in Australia were going backwards for almost all relevant groups. “Whether it’s women, Indigenous, homeless and most of course asylum seekers and refugees,” she told ABC Radio National on Wednesday morning.

Triggs said the Coalition government held some responsibility for the regression. “I think it’s partly because we have a government that is ideologically opposed to human rights,” she said.

Or to Bill Shorten:

Rising inequality is the single biggest threat to Australia’s social cohesion and the economy, Bill Shorten says, and tackling it head on will be the “defining mission” of a future Labor government.

In a speech to be delivered Friday that will help define the political battlelines ahead of the next federal election – and which borrows from the populist message of progressive political leaders including Bernie Sanders in the US and Jeremy Corbyn in Britain – Mr Shorten will suggest greater intervention by government may be needed to fix inequality.

It all brings to mind the following parable which you may have already come across:

Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59. 
So, that’s what they decided to do.
 
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your weekly beer by £20.” Drinks for the ten men would now cost just £80.
 
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody’s share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer. 

So, the bar owner suggested that it would be fairer to reduce each man’s bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving). 

Each of the last six was better off than before with the first four continuing to drink for free. 

But, once outside the bar, the men began to compare their savings. “I only got £1 out of the £20 saving,” declared the sixth man. He pointed to the tenth man, “but he got £10!” 

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a £1 too. It’s unfair that he got ten times more benefit than me!” 

“That’s true!” shouted the seventh man. “Why should he get £10 back, when I only got £2? The wealthy get all the breaks!” 

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!” The nine men surrounded the tenth and beat him up. 

The next week the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important – they didn’t have enough money between all of them to pay for even half of the bill! 

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. 
 
For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

On the point of those who do not understand, this committee meeting of the left’s brains trust did its very best to counter the above parable. Indeed, the original poster was begging for help in coming up with a ‘rebuttal’ to what they described as a ‘right wing tax metaphor’. The responses are illustrative to say the least.

Suffice to say, those who can, do. Those that can’t should keep quiet… and shouldn’t look a gift beer in the mouth.

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11 thoughts on “Advance Australia Fair”

  1. Australia Bankruptcies Notes

    In Australia, bankruptcies account for insolvent corporations who cannot repay their debts to creditors and carry on with their business.. This page provides – Australia Bankruptcies – actual values, historical data, forecast, chart, statistics, economic calendar and news. Australia Bankruptcies – actual data, historical chart and calendar of releases – was last updated on July of 2017.

    Actual Previous Highest Lowest Dates Unit Frequency
    792.00 590.00 1123.00 217.00 1999 – 2017 Companies Monthly
    Volume, NSA
    Using other peoples money of course. No loss to the company directors I suppose.

    Do you people live in the real world or are you public servants and employees who keep demanding more than what you are worth?

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  2. The global financial crisis badly bled Australian investors in some big-name but overstretched companies. Then-ASIC chairman Tony D’Aloisio told a joint Parliamentary Committee in 2009 that major corporate insolvencies then – including ABC, finance outfit Allco, investment bank Babcock and Brown, agriculture investment operations Great Southern and Timbercorp, and Gold Coast funds manager MFS – had caused losses of about $23 billion. “A further 11 entities have lost more than 90 per cent of their market capitalisation; the aggregate loss there is another $39 billion,” he said.

    Is this inequality enough?

    By the way I vote conservative and I have lost many dollars over dealings with the likes of these.

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    1. Thanks for commenting both here and on the Cat Philby. I challenge anyone to come up with societies that are significantly and demonstrably ‘more equal’ (whatever that is really supposed to mean) than Australia. The world is never going to be perfect and Australia is among the very best at giving the most of its people a fair chance to make something of themselves – albeit less so these days in my view. Isolated hard luck stories and some examples of crooks who got away with it doesn’t change this. You simply cannot solve every injustice on this planet.

      That said, even on the Cat, I get inane comments like these:

      “Marcus, let me understand your point. You are suggesting that beer prices are too high for the working man even after the rich capitalist exploiter publican has given the working men a discount”.

      and

      “Yes Marcus whilst I find most of your pieces informative I believe that in this instance you have failed to tell the whole story and your story is just that. Like global warming models that fail to work due to gaps in information and understanding of a very complex system your narrative fails to tell the whole story . Climate scientists use the same tricks to support their theories also”.

      What is anyone supposed to make of these thoughts?

      Just like the parable says:

      “For those who do not understand, no explanation is possible”.

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  3. I am reminded of that guy who was on Q&A (where else?) last year (I can’t remember his name), who was bitterly whinging about the very idea of those in the highest tax bracket getting ANY tax breaks.
    Needless to say, he was on welfare himself, and not paying any taxes!
    He was true to form for many socialists who are net beneficiaries of the taxpayer, and not only have a massive sense of entitlement, but believe that those better off should be slugged even more.

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    1. These kinds of people have precious little idea of how things work and where things come from. They look as basic things such as this in reverse and wonder why they’re always the ones asking others for money.

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  4. You couldn’t explain it better than that,although I’m sure staunch leftists could tear it to shreds somehow.

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      1. Leftists could spin it however they like it, but as the parable points out, without the contributions of the very well-off those at the bottom will be even worse off.
        The middle-class would be worse off too, because they would be expected to take up the slack.
        But I think many socialists would rather everyone was equally poor.

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