Governments should only help citizens to life’s “starting line” and could never promise “equality in outcomes”, treasurer Joe Hockey has said, dismissing claims the federal budget is “unfair” as misguided “old-style socialism”.



In a speech to the Sydney Institute on Wednesday, Hockey directly addressed the central attack against his budget by opposition parties, welfare groups, students, pensioners, doctors and even former Liberal leader John Hewson – that it was inequitable.

He said high income earners or companies could just as easily argue the current situation in which their taxes fund an “unsustainable” welfare system was “unfair”.

“Criticism of our strategy has been political in nature and has drifted to 1970s class warfare lines, claiming the budget is 'unfair’ or that the 'rich don’t contribute enough'," he said.

“Tonight I want to address the claim that the budget is unfair and exacerbates inequality. This misguided cry is made on the claim that not everyone is asked to contribute equally and that in the future some people will pay more for government services or receive less in payments.

“The truth is governments have never been able to achieve equality of outcomes. Some governments try but they always fail. Only in a closed economy, based on old style socialism, can a government hope to deliver uniform equality of outcomes.

“We have moved on...In our view it is the responsibility of government to provide equality of opportunity with a fair and comprehensive support system for those who are most vulnerable. After that it is up to individuals in the community to accept personal responsibility for their lives and their destiny.

“Our first budget is based on the premise that it is fair to expect those who have the capacity to pay, should accept more personal responsibility for their cost of living, the cost of raising their children, their health services and their education,” he argued.

And he said the current “unsustainable” welfare system saw the Australian government spend on average over $6,000 on welfare for every man, woman and child and meant that “the average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian” and that 10% of the population paid two thirds of all income tax and 2% of the population paid more than a quarter.

“Maybe these taxpayers would argue that the tax system is already unfair,” Hockey said, adding a similar charge could be paid by companies paying higher rates of company tax than other jurisdictions.

“Our duty is to help Australians to get to the starting line, while accepting that some will run faster than others….it is not the role of government to use the taxation and welfare system as a tool to “level the playing field”.

“We must use the levers of government to help those who are vulnerable and frail. A just and fair society never leaves anyone behind. But a just and fair society must not seek to penalise those who aspire to be better,” he said.

The charge that the budget is unfair has come from many quarters, including Hewson, who argued on Wednesday that it was characterised by “obvious inequity”. The Australian Council of Social Security found that more than $19bn of the $37bn in budget savings came from reductions in spending on programs theat mainly assist low and middle income earners and only $5.7 billion came from tax increases or savings in programs mainly benefiting people on high incomes.

An analysis by the Crawford school at the Australian National University also found that lowest income workers would suffer the most pain from the budget.

State premiers, doctors, community and welfare groups, most vice-chancellors, students, pensioners, scientists, researchers, Indigenous groups, some government backbenchers and businessman David Gonski have also said some parts of the budget are ill-thought through or unfair.

Long serving Nationals Senator Ron Boswell told News Corp many people thought it had “an equity problem...That’s falling on the lower-income earners, more so than the high-income earners or middle-income earners.”