Why Won't Australia's Ruling Elite Acknowledge The Benefits Of Coal?

The hypocrisy of Australia's anti-coal contingent was exemplified this week by Richard Marles, who is the federal Labor Party's spokesman for Defence.

Mr Marles said "the global market for thermal coal has collapsed, and wonderful — that's a good thing."

This statement is, of course, untrue.

There is a desire among many in the higher echelons of Australia's political, corporate, and legal system who want to see coal finished once and for all.

There are currently 2240 coal-fired power stations in operation around the world.  Last year there was a record amount of coal-fired power generated and coal is Australia's biggest export.  The business has hardly collapsed.

But the deeper problem with Mr Marles' statement, though, is the wishful thinking it reflects.

This is demonstrated by a recent decision by Glencore, Australia's largest coal miner, to cap its global coal output at current levels apparently in response to pressure from climate activist shareholders.

It is also demonstrated by a decision handed down earlier this month by the Land and Environment Court to refuse the implementation of a new coal mine near Gloucester on the NSW mid-north coast.  The court said the mine should not proceed because it would increase greenhouse gas emissions.

Most dramatically, though, it is demonstrated by the struggles that the Adani Carmichael coal mine and infrastructure project has faced.

The project, located in the Galilee Basin in central Queensland, is exactly the kind of project this country needs.  It is set to create 1500 jobs directly and support a further 5000 jobs through flow-on effects in other industries.

But it has been held up in the regulatory approvals process for eight years, faced 10 legal challenges, and prepared a 22,000-page environmental impact statement.

Indigenous landowners that stand to be affected by the mine and associated infrastructure even recently voted 294 out 295 in favour of the project going ahead.

But this won't stop anti-coal activists who are against the development of Australia's natural resources.  Geoff Cousins, former president of the Australian Conservation Foundation, gave the game away when he said in 2015 that "we have no desire or intention to simply delay the Adani Carmichael mine.  We want to stop it in its tracks."

This is not just a concern for the Maroons up north, or even just for Australians.  The anti-coal activism could deprive the world's poorest of access to cheap and reliable electricity.

My 2015 report conservatively estimated that Australian coal could help about 82 million Indians access electricity.

Many Indians who would no longer be able to access Australian coal will not magically shift to wind and solar energy.

Instead they will burn wood, crop waste, and animal dung, sometimes in open furnaces in their homes.  Not only is this bad for their environment, it is bad for the people as four million people each year are estimated to die from illnesses such as pneumonia, stroke, and lung diseases as a result of the pollution.

Is that wonderful, Mr Marles?

It is curious that many on the left are happy to send $4.2 billion a year in foreign aid to lesser developed nations, but want to stop those same nations getting access to Australian coal.  Perhaps they don't really care about the world's poorest and are instead more interested in lining their pockets with government rebates and subsidies for wind and solar energy.

What all of this also reveals is how hypocritical and out of touch the ruling elites of Australia are.

They tell us that high electricity prices and supply disruption are the "price of progress".

Following power blackouts affecting 160,000 homes in Victoria in January this year, for example, Greens senator Richard Di Natale said Australians were being unreasonable if they complained about the inconveniences of not having power.

Tell that to the truckie who is up at 4am to drive 14 hours up the Pacific Motorway.

Tell that to millions directly or indirectly employed in energy-intensive heavy industry.

Tell that to the family-run cafe on the street corner that can't afford to pay the bills.

Australia now has the fourth highest electricity prices in the world.

Yet many in the ruling class are blissfully unaware of the pain that is being afflicted.  Or maybe they are aware of the pain.

And maybe imposing pain on the unwashed masses is precisely the punishment the elites think they deserve for "complaining" about not having power.

What would be wonderful is instead of our leaders bemoaning coal, they were instead proud of our nation, our resources sector, and for the role coal has played in making Australia a prosperous nation that has played an integral role in alleviating global poverty.

Maybe they could even put their hand on their hearts when they sing "Our land abounds in nature's gifts."

The NAB Board Will Pay A Heavy Price

The story of the resignation from NAB of its chief executive Andrew Thorburn and its chairman Ken Henry after the Hayne royal commission is instructive.

It reveals just how hopeless the boards of directors are of most big businesses in Australia.  What happened at NAB demonstrates that, these days, directors are more likely to make the easy and supposedly popular decision rather than the right decision.

NAB got it the wrong way around.  Thorburn and Henry should have stayed and it should have been the board that quit.

The board of NAB caved into pressure from two sources — politicians wanting a scalp from the royal commission and the media lynch mob.

This is exactly the sort of pressure that shareholders pay company directors to resist.  In the long run, appeasement never works.  The NAB board should have refused to accept the resignations of Thorburn and Henry and given them their full and public support — any director who felt unable to do so should have stepped down.

There may be reasons for their resignations not yet publicly disclosed, but for all intents and purposes it looks like the NAB board felt it had to accept the resignations because Thorburn and Henry were singled out in a few sentences in the final report of the royal commission.

According to Commissioner Kenneth Hayne:  "Having heard from both the CEO, Mr Thorburn, and the chair, Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learnt.  More particularly, I was not persuaded that NAB is willing to accept the necessary responsibility for deciding, for itself, what is the right thing to do, and then having its staff act accordingly."

DANGEROUS PRECEDENT

The commissioner is entitled to his opinion — and Thorburn and Henry are entitled to challenge that opinion.  Whether the commissioner was going beyond his terms of reference in stating his feelings as to whether NAB executives had demonstrated sufficient guilt and remorse for their own and their predecessors' misdeeds is another question.

Thorburn and Henry did absolutely nothing wrong when they gave their evidence to the royal commission.  In this country (at least for the time being), you're allowed to defend yourself when you're in the witness box, whether at a royal commission or in a court of law.  Likewise, witnesses are under no obligation to accept the assumptions of the questions from the lawyers interrogating them.

In his evidence, Henry acknowledged his own and the bank's failings — but at the same time he made it clear he wasn't willing to endorse the imputation that the bank as an entire organisation and the bank's staff as a whole were to blame for the mistakes of a few.  He was widely criticised for the manner and tone in which he defended the bank and its staff.  While Henry's supposed "arrogance" was minutely dissected in the media, the substance of what he said, namely that the overwhelming majority of the bank's employees were good people trying to do the right thing, was almost entirely ignored.

The NAB board has set a dangerous precedent for every other bank — and indeed for every other big business in Australia.  What the NAB board has effectively said is if you're an executive and you upset the government and its regulators by having the courage to defend yourself and your staff against them, then your job is at risk.

The fight between big business and government is only just beginning.  New legislation imposes jail of up to 15 years for individuals guilty of corporate crimes, and penalties of up to $525 million for companies guilty of civil offences.

The Coalition has spent the past few years bashing big business, and if Bill Shorten wins the federal election big business will be bashed even harder.  What could happen under a Labor government will be bad for Australia, but if company boards follow the precedent set by NAB, those boards will only have themselves to blame for what happens to their businesses.

Radical Feminism Has No Place In Psychology

Australian boys and men seeking help for mental illness may soon find themselves being lectured about toxic masculinity and white privilege.

The Australian Psychological Society (APS), Australia's peak body for psychologists, has signalled that it is likely to follow the path of the of the American Psychological Association (APA), and adopt something similar to the APA's newly-released Guidelines for Psychological Practice for Boys and Men.

The APA's guidelines have been fiercely and widely critiqued.  Not only for the partisan and divisive language used, but also for their poor scientific practice.  Most worryingly the document takes aim at not just "toxic masculinity" but "traditional masculinity" which in turn is defined by the most thuggish aspects of male behaviour.  Positive attributes of masculinity such as honour, strength, sacrifice or, to use an Aussie phrase, mateship are noticeably left out.

The president of the Australian counterpart, Ros Knight, has brushed aside such concerns.  She said, "there is an opportunity for us to consider whether making specific practice guidelines for boys and men would be a sensible thing to do".  And further explained:  "I think as a result of the APA really bringing this much more to the fore, it's something that we're going to think about doing in 2019."

The politicised nature of the guidelines is visible even in the introduction.  Which begins sentences with caveats that seem to accuse the very people they are claiming to help.  One begins "although boys and men, as a group, tend to hold privilege and power based on gender ..."  The document then moves onto a glossary of terms, most of which are borrowed from the jargon of identity-politics:  Oppression, Privilege, Cisgender, Gender Bias, Gender Role Strain and Gender Sensitive.  Their definitions are not backed by the citing of evidence and credible academic papers, but instead by quoting the words of controversial activists such as American feminist Dr Peggy McIntosh.

In doing so, the guidelines notably fall into the postmodernist trap of prioritising group identity above that of the individual.  As noted by Sally Satel, a practising psychiatrist and lecturer at the Yale University, "... it is questionable because it encourages clinicians to assume, before a patient even walks in the door, that gender is a cause or a major determinant of the patient's troubles."

In other words, the guidelines take the data-driven area of psychology and shape it into an activism driven practice.

One of the psychologists responsible for the guidelines, Ryan McDermott, was unabashedly forward in the activist roots of the document saying in relation to the guidelines:  "If we can change men ... we can change the world."  This statement rests on the presumption that there is something inherently wrong with men in the first place.  Unlike women, who as we all know, are all beautiful beings of goodness being held back by the patriarchy.

Professor of Psychology, Jordan Peterson, has publicly critiqued the guidelines.  In response to a segment on the early socialisation of boys, which claims that men who socialise their boys in a traditional manner will damage the mental health of their offspring, he cited statistics showing that it is fatherless boys who are over-represented in crime, addiction and other anti-social behaviours.

He then posed the question;  "If it is fatherless boys who are violent, how can it be that masculine socialisation produces harm both to mental health and society?"

The guidelines do have some very small moments of sanity hidden among the activist agenda.  As feminist academic Christina Hoff Summers noted, there is a segment recommending that "for boys and adolescents, shorter sessions, informal settings outside the office (e.g., playground), instrumental activities, using humour and self-disclosure ... may provide more congruent environments than traditional psychotherapy."  Unfortunately, these rare moments of wisdom are buried under partisan and divisive jargon about "Eurocentric masculine ideals of restrictive emotionality".

The APA guidelines stated purpose is to address the mental health crisis that has been facing men for the past few decades.  Six men will take their lives in Australia today, a statistic that demands a response from the psychological community.  But the APS would be misguided if it follows the American approach to this issue, in which the stated purpose appears to have overwhelmed by radical feminist slant.  It would be a self-defeating move because the politically charged, bias and overtly partisan language used is more likely to drive men away from seeking psychological help.

We must not let activism and political interest take over the human sciences in Australia — particularly in such a vital field as mental health — but this is what will happen if activists are allowed to set the agenda in professional associations and associations of scholars.

Queensland's Rising Incarceration Rate Calls For Criminal Justice Overhaul

Queenslanders are facing a massive increase in criminal justice costs but without any promise the spending will lead to safer communities.

This is the key finding of a new Queensland Productivity Commission report on incarceration and reoffending.

The report shows a radical rise in the number of Queenslanders going to prison.  The incarceration rate, meaning the proportion of adults who are in prison, has risen 44 per cent since 2012.

There are more than 9000 offenders in Queensland prisons, which are at 130 per cent capacity.

On average, each prisoner costs state taxpayers $107,000 per year.  This works out to about $900 million each year for incarceration.  What's more, the report estimates that taxpayers are on the hook for up to $6.5 billion in new prison construction.  That sort of money can buy a lot of schools and roads.  Or hire more police.

Of course, by themselves these numbers do not tell the whole story.  If every extra dollar makes us safer, then these are dollars well-spent.

But there is growing evidence that prison does not always increase community safety.

While crime has fallen overall in recent decades, prisons have grown less effective in correcting offenders' behaviour.  The number of prisoners who return to prison within two years of release has risen from 29 per cent to 40 per cent in the past decade.

The report suggests one of the reasons for this trend is more offenders serving short sentences.  The median sentence is 3.9 months.

Short sentences are often used for non-violent crimes, like drug and property offences.  Prison is a costly and often disproportionate punishment for these offences.

Sentences this short do not allow for rehabilitation programs but do expose offenders to the negative effects of prison, like being with other offenders and being separated from positive influences like family and work.  The result is frequently an escalation of criminal behaviour — the opposite of what we hope our tax dollars are buying.

These findings reveal a starting point for criminal justice reform:  strengthening alternative punishments for non-violent offending.  As the commission notes, 70 per cent of offenders are already in some form of community corrections, but these punishments receive just 10 per cent of the corrections budget.

The main alternative to incarceration is community service, where offenders are put to work to repay some of their debt to society.  Unfortunately, in Queensland, offenders serve on average just 30 hours of community service, even though they are ordered to serve 64 hours on average.

If community service is to be part of the solution, it needs to be a lot better, and a lot tougher, than it is right now.  My research shows that allowing for-profit businesses to participate in community service would increase the quality and quantity of the work offenders must perform.

Community service should be imposed together with electronic monitoring and restitution orders that require offenders to directly compensate their victims.

The Commission has also broken new ground by making Queensland the first state to consider whether criminal justice reform also means rethinking the scope of the criminal law.  For example, many economic regulations carry criminal penalties when civil penalties would adequately capture their seriousness.

Expanding the criminal law can be wasteful both because of enforcement costs and in terms of reduced economic productivity.  In that sense, it is akin to red tape.

In this way, the report reiterates its main point:  everyone benefits from an efficient criminal justice system that focuses on preventing and prosecuting the most serious offences, and taking the most dangerous criminals off the streets.

Three Years In An Aussie Re-Education Camp

The next cohort of prospective undergraduates who plan on studying Australia's history at university in 2019 should scrutinise the subject descriptions on offer with considerable care.  If they are hoping that three years of a university education might provide an understanding of modern Australia in terms of our debt to Western civilisation, they should steer well clear.

If, however, they would like to know more about becoming a political activist, race relations or LGTBQ rights, they should ideally do a BA in Australian History.  This is because Australia's history has been re-packaged and re-labelled by ideologically-driven academics and presented to undergraduates as a social and political commentary on contemporary issues rather than as a study of actual history.  Students are, in short, being swindled.

My report, Australian History's Last Stand:  An Audit of Australian History Teaching at Universities, reveals that Australian history as a discipline is suffering from the same existential crisis which is currently crippling the humanities in universities across the West.  Rather than being provided with a solid grounding in the key social, political and economic events which formed our nation, students are being served up a flavourless, colourless and depressingly bland dish of identity politics.

Of the 147 subjects which were taught across 35 universities in 2018, a total of 102 treated to greater or lesser degrees, the left's favourite themes of class, race and gender.  This means that three quarters of all subjects which purportedly focus on Australia's past do so through the modern fixation with identity politics.  The examples are as ludicrous as they are numerous.  In "Race and Place" at the University of Wollongong, students were asked to consider the following:  "Why does race matter now?  In a progressive, multicultural country such as Australia we highly value equality and therefore believe that racial heritage should not influence people's opportunities."

At Monash University, those who enrolled in "Australian Stories:  People, Place, History" explored "crime and punishment, gender and sexuality, the environment, family [and] race relations", while students at the University of New South Wales taking "Inequality in Australia" were asked to consider "How was inequality influenced by race, gender, sexuality, age and disability?" and "When and why did it become a political issue?"  Why indeed.

Students who took "Migration Nation:  History Culture Identity" at Melbourne University drew upon the work of "historians, social and cultural theorists, policy makers, activists, writers and artists" to understand "how history continues to shape contemporary society".  Meanwhile, over at Federation University, students who opted for "From the Coast to the Outback" were promised a "thorough overview of the major issues confronting Australians in the present".  By no stretch of the imagination could this be deemed as history.  Those academics who are clearly more interested in writing the past as a way of empowering minorities and the oppressed than they are with constructing a narrative motivated by professional rather than present-day political concerns, should consider transferring to more suitable departments, such as sociology or political science.

This monomania and apparent addiction to applying identity politics to the past is disastrous on many counts.  It does nothing to explain the origins of this free nation which has been built over the last 230 years.  It fails abysmally to expose students to the ideas, values and institutions of Western civilisation which were brought to these shores by the British in 1788, and which, like it or not, we continue to benefit from.  Unsurprisingly, research undertaken for Australian History's Last Stand found that in the 147 subject descriptions, no single subject mentioned either "liberalism/liberal", "agriculture" or "free trade", while "democracy" and "capitalism" featured just once each.

The obsession with identity politics also means that students will never discover the rich tapestry of characters who have made incalculable contributions to the development and success of this nation, and who have been cast aside in favour of the collectivist narrative struggles between different groups.  It is simply astounding that not one single prime minister, either Labor or Liberal, is mentioned in any of the 147 subjects.  Tellingly however, Pauline Hanson, who is alive and kicking, features rather a lot.

A degree in Australian history looks like three years in a re-education camp, where any natural interest which might have existed at the beginning will be well and truly extinguished by the end.  Identity politics renders Australia's history uninspiringly, mind-numbingly dull.  What student really wants to sit through class after class, semester after semester, being indoctrinated by political activists masquerading as historians?  Where is the inspiration if every subject you choose is taught using the same tedious predictable template?  And the university administrators wonder why students are leaving the humanities in droves.

What a degree in Australian history does not look like is a comprehensive, instructive exploration of all facets of Australia's history which will produce highly knowledgeable, well-rounded graduates.  As Cicero remarked, "To know nothing of what happened before you were born is to remain forever a child".  It is not only failing to elevate the students, but it is ultimately infantilising them by stunting their intellectual growth.

In his monograph Why Western Civilisation is Our Future, Cambridge historian Professor Robert Tombs muses with characteristic perspicacity that "ignorance of history makes democratic national conversation at best impoverished, at worst impossible".  There is little doubt that our history departments are in the business of churning out graduates who, having majored in identity politics, sorry, Australian history, land jobs in the civil service, the government, in journalism and in politics.  And every year when Australia Day comes around, it is these individuals, full of moral righteousness, who are imposing their skewed version of Australia's past on the rest of the population, whether the population wants it or not.  It is this vocal, virtue-signalling minority which makes proper, intelligent national conversations nigh impossible.

Banking Royal Commission: Duplicitous Banks, Foolish Borrowers

The funniest thing to come out of the Hayne royal commission is a story that appeared in The Sydney Morning Herald on Monday.

Titled "I'm amazed they approved me:  CBA lashed for lending to the naive", the article began as follows.

"One victim of irresponsible lending, 24-year-old Georgia Clark, believes the banking royal commission's recommendations are a missed opportunity to protect the vulnerable from systems designed to reward bankers' greed.  The Sydney journalist walked into a Commonwealth Bank branch when she was 19 to ask for a loan to pay for a holiday to Europe and pay some other expenses.  Though she was a full-time student who was working casually in hospitality, she was given an unsecured personal loan of $18,500 with an interest rate of 16.9 per cent.  She fell behind on the repayments and talked to the bank about getting back on track, but at "no stage would they lower the rate, even despite my financial troubles".

Georgia went to on say that she felt "the bank took advantage of her naivety and she was the victim of irresponsible lending".  She said she finished up paying almost $9000 in interest on her original $18,500 loan, with her "ordeal" ending a year ago when her parents paid off the loan, and she is now paying them back.

The article concluded with Georgia claiming "I am amazed that they approved me for the loan and my parents felt the same.  I was fortunate to have my stepdad and mother back the loan, but a lot of other young people would not be as fortunate."

There's so much wrong about a 20-something complaining a bank gave them money to go on a holiday it's difficult to know where to begin.

As far as we can tell no one forced Georgia to go on a holiday to Europe.  She chose to borrow the money and she knew what the interest rate was.

The royal commission uncovered plenty of instances of bad behaviour by the banks, but from what we know, what happened to Georgia doesn't have much to do with "bankers' greed".

Certainly a bank loan loan for $18,500 is a not insignificant obligation on a 19-year-old, and maybe the CBA could have asked Georgia whether she'd thought of going on a cheaper holiday to Byron Bay instead of Europe.  But that's also a question Georgia could have asked of herself.

TWO-WAY STREET

What's been lost in much of the discussion about the banks is that lending money is a two-way street.  Banks choose to lend money and borrowers choose to borrow that money.  Just as lenders sometimes make bad decisions, so too do borrowers — that's a consequence of a free-enterprise economy — and it is a point that perhaps the royal commission could have done more to acknowledge.  Not every bad loan is the bank's fault.

The Comments section from SMH readers under the original article provides an interesting perspective from mainstream Australians about what occurred to Georgia.

One reader asked:  "So you got a loan you asked for?"

Another remarked:  "Do people ever take responsibility for their own actions?  She was 19.  An adult by law.  Can drive, get a loan, get married, go to an adult prison, yet they feign stupidity when they get themselves into this."

A number of readers recounted their own personal experiences about borrowing to go on a holiday or to buy a car.  "When I was in my early 20s I decided to go on a 6-week trip to Europe.  I saved for months so I could afford it.  I would never have dreamed of borrowing the money."

One reader, Jo, used Georgia's case study to venture into a broader social commentary:  "Talking on a mobile phone whilst driving is someone else's fault because they didn't stop me.  Taking illegal drugs is someone else's fault because they didn't stop me.  Speeding is someone else's fault because speed cameras only raise revenue."

Perhaps the final word on this should go to a reader rejoicing in the pseudonym of "Sir T":  "Genuinely encouraged by the common sense responses here ... Taking responsibility for one's actions may become a new trend."

Children Lose Out If Academics Shade Literature With Gender Politics

The news that academics from Queensland University of Technology are demanding that the selection of texts recommended by the national curriculum should "better reflect the sexual diversity of the classroom" provides us with more evidence that academics are more interested in engaging in political activism than they are in imparting the knowledge and wisdom of great literature.

To put books into pigeonholes based on the class, race or gender of the author, the subject matter of the book, or the identity of the student, is disastrous.  All school students should be exposed to great literature, because the great books speak to each and every one of us about our human condition.  They speak to us about being rich, being poor, being happy and being sad.

The ideas and themes treated in great literature are universal, not particular, and they have endured and will continue to endure for generations because of their universal appeal.  There is a reason why the Globe Theatre in London was able to put on Shakespeare's plays to a full house in 37 languages, including Maori, Urdu and Swahili.

The idea that books should be chosen according to the students' background or sexuality is patronising.  It is essentially telling them that they don't possess sufficient imagination to read books that do not in some way reflect their own lives and environment.  It is like saying that because the experience of a 15-year-old Australian today is different to that of a Scottish king in the 12th century, they should not read Macbeth.

The books that we devour as children and in our teens form us.  They shape our world, they give us insight, and they teach us to use our imaginations.  The total dependence on a thoroughly modern invention, identity politics, to analyse texts means that all this precious insight and experience is lost.  It is an enormous loss that results in serious problems and raises serious questions.  The greatness of these books will remain undiscovered and unexplored if they are only read using one viewpoint.

We cannot weed out bad ideas and develop the good if we insist on restricting our thinking to the unsophisticated classifications of race, gender and class.  Society cannot continue to progress if we choose to observe the world through such narrow and limited prisms.  This monomania and obsession with identity politics is impoverishing rather than enriching the students, who will hardly be motivated to read any of these books, if all they are going to hear in the classroom is the same old tropes of class, gender and race.

This is a problem with which Mark Bauerlein, English professor at Atlanta's Emory University, has long been preoccupied.  Author of the bestseller The Dumbest Generation:  How the Digital Age Stupefies Young Americans and Jeopardizes Our Future (Or, Don't Trust Anyone Under 30), Bauerlein has seen student numbers falling rapidly in the humanities.  The reason, he says, is because of the predominance of identity politics in all disciplines related to the humanities.

He believes that it is because identity politics is a downer.  Students will say, "You're going to sit and talk about (Ralph Waldo) Emerson and how racist he is?  I don't want to take this class!  I don't want to hear so much negativity."

Identity politics is a negative.  It is not a positive idea.  In the words of Somerset Maugham:  "To acquire the habit of reading is to construct for yourself a refuge from almost all the miseries of life."

Both QUT researchers behind the paper Queering Senior English are employed in the faculty of education, where everything is examined through the lens of class, race and gender.  It's hardly a secret that humanities are hotbeds of identity politics or what is sometimes referred to as "the identitarian Left", which now defines itself, and engages with others, through the prism of identity rather than on the basis of ideas.

History as a discipline in Australia, as taught at university, has already been destroyed:  it has been turned into a vehicle for political activism.  As revealed in my audit Australian History's Last Stand:  An Audit of Australian History Teaching at Universities, the fact that Australians laid the foundations of one of the world's most successful liberal democracies, which has achieved unprecedented levels of personal freedom and social equality, is simply not being taught to students.

Of the 147 history topics taught across 35 universities, a total of 102 deal with the themes of class, race and gender.

This effectively means that three quarters of all topics that purportedly focus on Australia's past do so through the modern lens of identity politics.  Sadly, it seems that English is going the same way, which is a tragedy for every Australian child, regardless of class, race or gender.

Labor Is Coming After Apple Pie-Baking Nanas

On Thursday, Labor's Shadow Treasurer Chris Bowen said something that a politician is never supposed to utter.  At least not in public.

In response to those who will face higher taxes under Labor's proposed changes to Australia's dividend imputation system, Bowen said they were "entitled to vote against us".

On one level this is unobjectionable as it describes the democratic process — don't like one mob, just vote for the other.

But the reason that comment has rubbed so many people up the wrong way is it shows that one side of politics just doesn't care about those who would be hurt by their policies.

It sends a message that if you are not going to vote for Labor then Labor will not govern for you.

So much for the idea of the national interest.  But Bowen and Labor should care more.  Under their latest proposal to hike up taxes, cash refunds for retirees for so-called excess franking credits from shares they hold would be abolished.

This would result in some $55 billion in extra taxes being levied on Australian retirees.

It would also partially undo an important feature of Australia's tax system.  Without franking credits corporate income would effectively be taxed twice.

First corporate profits are taxed at the company tax rate, which is 30 per cent for large businesses.  This is close to the highest corporate tax rate in the world.

Second, businesses pay dividends out of income which has already been taxed.

This means when shareholders pay tax on those dividends, they are paying tax on income which has already been taxed.  The franking credit system gets around this by allowing the corporate tax rate to be deducted from the shareholder's individual tax rate.

This means the extra tax paid above the corporate rate is the difference between the corporate rate and the shareholder's marginal tax rate.

The rub is that many retirees do not work, or work very little, so they have a low or zero marginal income tax rate.  This means that the difference between the company rate and their marginal rate can be negative.  In this case the shareholder receives a rebate.  And it is this rebate that Labor wants to eliminate.

Labor likes to conjure up images that only old rich men chomping on cigars have the know-how to exploit this feature of Australia's tax system.

But recent analysis by Professor Sinclair Davidson revealed some interesting facts.

Davidson, who is a professor of economics at RMIT University, found that 56 per cent of those who receive the cash rebate are women, 68 per cent of whom are over the age of 60, and 47 per cent of whom are either single or widowed.

Labor is coming after apple pie-baking nanas, not monocle-wearing monopoly men.

What is worse, though, is that the changes would be retrospective meaning they would apply to decisions already made.

This is a particular problem for retirees given that plans for retirement are made over a period of years and decades.  Not that the Coalition government can complain.

It did, after all, propose its own retrospective tax hikes on self-funded retirees through the superannuation system in 2016.

If the Coalition was committed to lower taxes it would have more credibility in opposing Labor's tax hikes.

Perhaps one positive to come out of Labor's proposed tax hike, though, is it has brought up concerns about inter-generation political warfare.

Opponents of Labor's proposed tax hike claim Labor is setting up a battle between older self-funded retirees and younger working families.

This criticism has some merit but it misses the broader and intense inter-generations battle that has been raging for some time.

For years it has been the Baby Boomers who have dominated politics.  There are a lot of them and they are for the most part wealthy.

They have benefited greatly from the differential tax treatment of superannuation, rising asset prices from low interest rates, and rising property values.

At the same time as the boomers have amassed great wealth, their younger cohorts in Generation Y (or Millennials born between 1977-1995) and Generation Z (born from 1996 onwards) have been left with some $500 billion in gross government debt at the Commonwealth level alone.

And every last cent of this debt will need to be paid back by today's younger Australians through higher future taxes.

Inter-generation inequity is a legitimate concern but the best way to resolve it is to reduce government spending and pay down the debt, not hit nanna with another tax.