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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This entry was posted in Economics on the left, Politics of the Left, Socialism and tagged , , , . Bookmark the permalink.

36 Responses to Advance Australia Fair

  1. Nerblnob

    Inequality is what you complain about when you don’t have actual poverty.

  2. WolfmanOz

    Depressing but marvellous article.

  3. .

    Inequality is what you complain about when you don’t have actual poverty.

    Gold!

  4. Leo G

    Why would the 10th man willingly pay £59 or even £49 for £10 worth of Welfare brand beer? It tastes likes its been passed by a tax collector.

  5. Rabz

    Two rich white middle aged males were spotted in the Palace Hotel Sydney last evening hoovering many $5 beers.

    It happens.

  6. @SeditionaryI

    The fact that the supposedly well educated political class thinks variance of outcome through personal choices is inequality that needs to be fixed, because they don’t agree with the outcomes is positively terrifying.

  7. Mark

    Yes, but the question of inequality is but a red herring. The objection is merely that inequality is a perceived function of capitalism, therefore bad. At the moment the whipping boy is supposed ‘inequality’, but it could be anything, who cares? It requires no analysis or logic. I doubt that the counter argument really needs to be especially logical either.

    Those who are uncomfortable with socialism are often not that good at promulgating sentimental reasons for the way the world works or ought to work. It is comforting to know there is sound logic behind one’s point of view, but I wonder how much power logic really has.

    Traditionally there have been two movements in politics – those indebted to reason, and those indebted to sentiment. The 19C makes a good case study of this. A particular instance is in the state of emergency case Phillips v Eyre (1870) LR 6 QB 1. (Yes, that is our very own Eyre, the explorer.) John Stuart Mill organised a pressure group to have Eyre tried. Ruskin, for example, opposed it. The case was very divisive. I’ll leave you to guess who was on the side of reason.

  8. Mark

    Hint:
    John Stuart Mill, On Liberty.
    John Ruskin, Sesame and Lilies.

  9. Habib

    Emigration is an increasingly attractive option. Let this shithole collapse, and it’s parasites stew in their own oleganeous juice.

  10. alexnoaholdmate

    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”.

    I agree with Triggsy, actually.

    Under the current government – Abbott and Turnbull – the human right to free speech has seen an incredible setback.

    If only we had some sort of vast government-funded bureaucracy that was devoted to defending human rights, perhaps we wouldn’t be in this position.

    Hey, wait a second…

  11. Peter

    I LOVE it. I have been struggling for a way to explain this phenomenon for ages – But being only a simple minded economist I only had recourse to facts and statistics and I found that quoting statistics and facts to the Left just does not work. (They don’t count such things as meaningful, I presume as these things don’t arouse feelings). So as a result they are absolutely impermeable to facts and reason.
    But by explaining this as a parable in much the way the Bible does (for all those kiddies who remember Sunday school back in the days when attending a Christian church did not automatically make you a fascist or even worse, a privileged white male) even the worst kind of idiot (that is a socialist) should be able to comprehend why, as Maggie Thatcher once put it, “Other people’s money eventually runs out”. Or as in this case the other person eventually runs out – presumably to drink in another pub. Or create jobs and wealth in another country.

  12. Shy Ted

    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…
    C’mon, thi is modern Australia we’re talking about and nothing happens outside of the inner city. Let me rewrite it.
    Suppose that once a week, ten people identifying as men go out for chardonnay and zinfandel and the bill for all ten plus a bath house and a wax comes to $1000. It’s late night shopping so they each buy a new dress. And so on.

  13. Robber Baron

    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.

  14. alexnoaholdmate

    Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100…

    … and after two weeks of this, they called it quits. With the incredible taxes the Government had placed on beer, they simply couldn’t afford to continue.

    The publican, too, went broke, as the Government had driven all his customers away. Seven staff members found themselves unemployed.

    The same happened to two-out-of-three pubs in the city, after new lockout laws and closing times – again, imposed by the Government – made the cost of running a pub just not worth the effort.

    Three thousand people now found themselves added to the unemployment rolls in a single town alone.

    Meanwhile, in Canberra, politicians mused about how why the economy was foundering and why the unemployment rate had risen. “It’s because greedy tycoons aren’t paying their fair share of tax!” they all agreed, nodding to each other sagely.

  15. Jannie

    But the know deep down that if they take all the money away from one rich guy the pub will go offshore, so they continue drinking on borrowed money and let unborn drinkers pay for it.

  16. Zatara

    I was born a middle class bubba. I went to school with bubbas of all classes. After school I went to work to pay for university. Then I busted my arse sacrificing, saving, and investing to achieve a good life for my family.

    Some of my classmates decided to surf and sail because that was more fun. They were very good surfers and sailors and laughed when my tan faded.

    20 years later-
    I own the yacht they are sanding the bottom of
    I own the lawn they are mowing
    I own the pool they are cleaning
    I am their landlord.

    They give me nasty looks and just know that I somehow cheated them.

  17. jupes

    The solution for inequality is communism.

  18. Rob MW

    The solution for inequality is communism.

    Only half true but tracking in the right direction…….The solution for true and absolute inequality is being buried in a cemetery where there is more than one permanent resident 🙂 where as communism can, and usually does, only leads to a slow trip, yet early, departure to the ultimate equality solution.

    I’ve yet to come across an unequal dead person, or at least, one that bitches and complains about inequality.

  19. Deplorable

    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.

    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.

  20. Philby

    How many Australian businesses and registered companies each week just close their doors and go into bankruptcy leaving others to pick up the tab whilst diverting cash from the company into other assets and bank accounts in someone else’s name therefore never losing their own cash and assets. The banks lose their loans the government( people) lose gst and other taxes. Unincorporated suppliers lose their houses their family and in some cases their lives. The crooked company director moves on buying a new harbour side home and larger yacht and a new Bentley. After a short amount of time the director with the help of some dodgey lawyers and perhaps a corrupt public official establish the scam all over again and the director complains that tax rates are too high but more than likely has never been a net taxpayer ever. Greed is so good hey.

  21. Nerblnob

    How many?

    Unlikely to be as many as close their doors or never open them because of the OTT , and increasing , multiple tax and compliance burdens on businesses in Australia.

  22. jonesy

    The tax department has been after a way of getting into discretionary trusts for decades…and now they have Bill Shorten. FBT was sold as getting into the fat cats rorting their entertainment bills…what the tax department wanted was every benefit provided by any employer to their employee to be taxable…from mining camps to the parking spot at the factory or suburban office. It isn’t just the Packer family that use trusts.

  23. Rossini

    Philby
    #2454498, posted on July 30, 2017 at 9:59 am

    Why not name and shame the “directors with the help of some dodgey lawyers and perhaps a corrupt public official”s
    Rather than just moaning and quoting unnamed sources

  24. Philby

    Why not name and shame the “directors with the help of some dodgey lawyers and perhaps a corrupt public official”s
    Rather than just moaning and quoting unnamed sources

    Pretty stupid comment they are in the papers daily even Howards brother folded a company but lost nothing. How did name and shame work there it was all over the media for weeks.

  25. Rossini

    Philby
    #2454657, posted on July 30, 2017 at 1:45 pm

    You quote 1 example of several years ago without giving any details.
    From your initial posting I would have assumed that it was a regular occurance.
    As an aside who reads the daily papers …perhaps you should become a reporter for a “current affair”

  26. LGS

    I have been pointing out for some time that many of the biggest moaners and whingers about “inequality” and tax breaks for the rich (and even middle-class!) pay extremely little to no taxes themselves, and are in fact on welfare themselves.
    If not for the “doers” and earners, these complaining spongers would be forced to look for jobs, or reduced to living under bridges and begging.

  27. Harlequin Decline

    Good article and great beer buying analogy.

  28. Rob MW

    From your initial posting I would have assumed that it was a regular occurance.

    I particularly liked the extra yacht, Bentley and harbor side mansion. I thought they were in short supply, obviously not, they make more of them every day just to cater for the dodgy director, lawyer or other assorted unionists/politicians and grubby NGOs with pay to play schemes.

  29. Philby

    From your initial posting I would have assumed that it was a regular occurance.
    As an aside who reads the daily papers …perhaps you should become a reporter for a “current affair”

    How about you stop writing smart arse comments and do some investigation yourself. You might learn something.

  30. Rossini

    Philby
    #2454981, posted on July 30, 2017 at 8:13 pm

    What ever. I’m off

  31. Slim Cognito

    The mental struggles of those trying to come up with a good rebuttal at the link are hilarious and worth reading to understand that facts don’t matter to the lefty mindset.

  32. Lutz

    Isn’t the parable what Atlas Shrugged was all about?

  33. Philby

    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?

  34. Philby

    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
    How many of these kept their homes and cash ,car,yachts and how many tradesmen and suppliers lost their houses their family and lives. Of course the bastards should pay. It is really easy when you play with someone else’s money where is the risk.

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