Taxes or Wages: What’s the best way to address inequality?

Richard Denniss, Waleed Aly and Scott Stephens ask the question: is taxation overvalued as a way of addressing inequality? Full interview on The Minefield.

“Wage growth doesn’t fall like an apple from a tree. There is not some force of gravity pulling wage growth down — wage growth has fallen in Australia after 20 years of policies designed to lower wage growth,” says Richard Denniss, chief economist at The Australia Institute.

“It’s no accident that public sentiment changed. I’d say Margaret Thatcher, Ronald Reagan and and indeed John Howard here in Australia, were highly successful in having a moral debate about tax and having a moral debate about the public sector — and they won.

“I’m very happy with competition and market forces in the cafe industry, but I’m not so interested in competition and market forces when it comes to emergency wards, rape crisis centres or aged care.

“They have high wages and high taxes, and high levels of economic growth, and low levels of unemployment. In Australia we talk as if this is a fantasy land when it’s actually called Scandinavia.”

an independent think-tank based in Canberra >

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