Ideas@TheCentre – The Centre for Independent Studies

Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Don’t let antisemitism spread here

Peter Kurti

15 November 2019 | Ideas@TheCentre

We are facing a growing threat of left-wing antisemitism that we must not allow to fester and infect Australia.

Antisemitism — long a part of human history dating back to before Christianity — has appeared in different forms and with varying intensity.

The new toxic mutation has emerged among the postmodern left.

The Executive Council of Australian Jewry (EJAC) 2018 antisemitism report noted the growing incidence of antisemitism masking itself as anti-racism.

ECAJ’s report catalogued numerous antisemitic remarks made by those on the Australian political including the ALP and the Australian Greens.As outlined in Toxic Mutation of an Ancient Hatred: Left-Wing Antisemitism, the latest paper from the CIS Culture, Prosperity and Civil Society program, the left’s obsession is with anti-Zionism, which can be a mask for antisemitism.

The real concern is that the antisemitism we see occurring in the UK and USA will become commonplace here.

Already, left-wing critics of Israel who are suspicious of supposed Jewish influence in finance, politics, and the media, are becoming increasingly vocal in Australia.

Left-wing antisemitism focuses on opposing the alleged supremacist claims of Zionism and the questionable legitimacy of Jewish national consciousness.

It adopts the language of international human rights groups and NGOs, in criticising Israel’s ‘neo-colonial ambitions’ and campaigning for the ‘long-oppressed’ Palestinian people.

In other words, this new left-wing antisemitism casts itself in moral terms as being in opposition to alleged colonialism, imperialism, and capitalism.

Criticism of Israeli government policy is legitimate. But criticism that denies the legitimacy of Israel itself, or questions the motives of Jewish communities and people is antisemitism.

Those on the Australian left must distinguish between criticism of the government of the state of Israel and attacks on the legitimacy of the Jewish state, or on Jews in general.

A vital opportunity now presents itself to the Australian left to ensure that its commitment to the pursuit of justice and human decency is freed from the ugly taint of antisemitism.

Chile a case study in anti-capitalism

Robert Carling

15 November 2019 | Ideas@TheCentre

As 2019 draws to a close, it seems destined to rival 1968 as the year of street protest. France, Spain, Lebanon, Iraq, Hong Kong, Ecuador, Chile and Bolivia stand out. The exact circumstances vary and it is difficult to generalise, but one common theme running through several of these uprisings is that a small spark has been sufficient to ignite massive and violent protests based on economic grievance.

It should be said at the outset that peaceful protest is one thing, but nothing justifies violence and wanton destruction such as we have seen on the streets of Paris, Santiago and other cities.

Subject to that important qualification, it would be pleasing to think what is happening is a revolt against inefficient and corrupt government. There are elements of that; but more often it appears that what the protestors want is not just better government but bigger government.

They want more social benefits at the expense of someone else, and they have taken their demands from the ballot box to the street.

Chile is one of the most interesting cases. Several decades of rapid economic growth and development have lifted Chile to the top of the ladder in Latin America, greatly increased living standards, reduced inequality and slashed the incidence of poverty.

This wasn’t an accident or luck. It happened because of good economic policies. Chile’s progress has been nothing short of spectacular. You would not know that from the street protests.

Certainly some have not benefited as much as others from this progress, and a degree of inequality remains as is inevitable in a successful market economy, but the free market system with relatively low taxes — the system that some now want to overturn — has in fact delivered more prosperity, more broadly, than any alternative would have delivered.

The centre-right president of Chile, having initially taken a hard line against the protestors, has comprehensively caved in to their demands.

Some of the policy changes may be warranted, but the real tragedy will come if the changes are taken so far that economic development is stunted, Chile stagnates as a middle income country and its population loses the opportunity to climb the economic ladder further and enjoy the living standards of the most advanced countries.

Chile, in a microcosm, illustrates what is wrong with the anti-capitalist movement and what is at stake if it develops into a major influence on economic policy.

Fix the flawed pension system

Simon Cowan

15 November 2019 | Ideas@TheCentre

ANU last week estimated that more than $6 billion a year is paid out to pensioners in homes worth a million dollars or more. This follows work from the Actuaries Institute suggesting some or all of the value of the home should be included in the pension assets test.

These are not new findings. The Henry Tax Review and the Grattan Institute have previously made similar recommendations.

In 2015, Matt Taylor and I published  The Age Old Problem of Old Age: Fixing the Pension,  showing that approximately a quarter of age pensioners had a net worth (including home equity) approaching or exceeding $1 million.

It is important to understand what problem (or problems) actually need solving; because a proper understanding of the issues will suggest that some reform may actually be beneficial to retirees.

The most obvious problem is the cost of the pension. Social Security payments are by far the largest item in the federal budget, representing nearly 36% of federal government expenditure. And at nearly $50 billion a year, Income Support for Seniors is the largest single government program.

Nor is it clear that the current allocation of the pension is fair to those who don’t own their home. Homeowners typically have around 9 times the net worth of non-homeowners, despite receiving the same level of pension.

Non-homeowners can receive additional support — for example rent assistance — however, non-homeowners make up most of those pensioners who are really struggling to make ends meet.

The issue that needs to be resolved is that retirees have most of their savings locked up in illiquid assets (especially houses), and tend to have low incomes. This has become even more acute a problem in an environment where interest rates — and consequently returns on safe assets — are at record lows.

This is why our 2015 research recommended three interlocking reforms be undertaken.

First, we recommended the family home should be included in the pension assets means test and the homeowner/non-homeowner distinction in that means test should be abolished.

Second, the government should support pensioners’ accessing reverse mortgage products by legislating for a default reverse mortgage product. This product, provided by banks and superannuation funds but guaranteed or insured by government, would provide a regular annuity payment at a low interest rate up to a set equity limit.

It would also ensure pensioners would never be forced to sell their home.

Third, the government should deem income from the default reverse mortgage for the purposes of the pension income test in the same way income from financial assets are treated. This would remove the distorting treatment of housing assets, provide a safeguard for pensioners and ensure the focus of the pension remained on raising living standards.

These reforms would not only deliver $14.5 billion a year in pension savings but also deliver $14 billion a year in additional income for pensioners.

There is no question this still remains a controversial reform.

However, in the longer term, getting the policy settings right will boost living standards for retirees and reduce cost to taxpayers.

This is an edited extract from an opinion piece published in the Canberra Times as It’s time to storm the gates on age pension reform