Why it matters that the Greens dumped an estate tax

The Greens special policy Conference, held on the weekend in Adelaide, made a couple of striking decisions. Judging by those who got in touch  yesterday, this may be only the first policy reversal from the Greens – pushing the party further away from its progressive origins.

Beyond just the complete change in rhetoric from Dr Brown, several sources, who attended the Conference, relayed that Dr Brown had cited that redoubtable bastion of news, Andrew Landeryou, as a reason to move away from the policy on inheritance tax.

Some Federal MPs and State delegates described the need to change the policy in terms of minimising future attacks on the Greens economic policies, well before the next election. However, there are few public attacks on this part of the Greens policy platform from 2010.

So why does this matter? A well-structured inheritance tax appears in the Henry Tax Review as something that should be discussed.

“Given the very uneven distribution of wealth among Australian households, a tax that fell only on large estates would raise much of the revenue available. It would, therefore, be appropriate to set a substantial tax-free threshold, so that the large majority of estates would not be affected. The threshold should be indexed to wages to preserve its value in terms of community standards.”

Taxing unearned wealth occurs in other areas, such as land tax, but after the abolition of inheritance taxes in the 1970s, Australia became one of the very few OECD countries that does not have one.

The Greens’ policy settings are intended to sit within their philosophical framework that includes social justice. How then is dumping a policy on an inheritance tax consistent with social justice issues? Short answer – it’s not.

In a 2006 paper for the Centre for Policy Development, now ALP MP Andrew Leigh explained why an inheritance tax was good progressive policy.

“We believe that reinstating an inheritance tax on the super-rich would be consistent with the Australian values of egalitarianism and the fair go. An inheritance tax would be an efficient way of raising revenues — causing fewer distortions than income and sales taxes. An inheritance tax would also help address Australia’s low levels of philanthropy, and give social entrepreneurship a much-needed shot in the arm. “

The economist Frank Stillwell makes an even stronger argument:

“The social equity argument for taxation on inherited wealth is particularly strong. Inheritance perpetuates economic inequalities intergenerationally and therefore obstructs egalitarian ambitions for a fair society.”

There are plans for further policy reviews, particularly looking at education and drugs, coming up to the Greens National Conference, in Sydney, in November.

So why does this matter? For all the current, silly bleating by the ALP about the extremist nature of the Greens, the reality is that there has been a push on within the Greens to water down a great deal of policy; removing specific measures and replacing strong progressive ideas with meaningless, fluffy wording.

Specific measures in the Greens policies were put there by member engagement over a considerable period of time. Policy development within the Greens can be a fraught process, but in the past, it has been a genuinely member-driven process. These policy measures were hammered out in a time before the Greens got anywhere near the levers of power and were meant to safe-guard the values of Greens members against any future threat. They are also the platform that Greens MPs, elected through the hard work of Greens members, are expected to deliver upon.

It is a measure of how difficult the debate was in Adelaide on the weekend, that the decision came down to a vote. Unlike other parties, the Greens’ commitment to consensus decision-making means votes are meant to be rare and lamented. Despite over two days of debate and discussion between delegates; a variety of alternative proposals put on the table, and earnest speeches from all sides, the vote was taken and the policy ditched.

The Greens have walked away from a progressive social and economic policy because they might get attacked on it by media outlets that will never do anything other than attack the Greens. Watering down policy is never going to get News Limited media to be nice to the Greens.

Greens members, who value social justice principles, should know this is going on and be ready by the November Conference to fight a whole lot harder. If the Greens walk away from policies like this, who’s left?

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About bluntshovels

Freelance writer, with an unhealthy interest in Senate committees.
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9 Responses to Why it matters that the Greens dumped an estate tax

  1. How can you promise a larger public sector without a clear strategy on how to pay for it? In long-run this approach undercuts Green economic credibility, party will end up like 1990s state ALP promising much more on schools & health to be magically paid for by gimmicks such as cutting down the senior public service. Voters eventually saw through this.

  2. .. and it was so easy to get the Greens to capitulate on this !

  3. Desmond Murphy (Lower North Shore Greens, NSW) says:

    Not far to seek why the Greens dumped the estate tax, The Greens are a timid, muddle-headed bourgeois party,

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  5. Andrew B says:

    An inheritance is not ‘unearned wealth’. I earned it. It’s my money. I’m going to give it to my daughters – that’s why I wanted to earn it in the first place.
    Get your naughty Green hands off my family’s money and go and earn your own.

    Thank you for your attention. That is all.

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  8. SCUM says:

    I agree this is a sad development! Especially as it relates to the upcoming election.

    I talk about it here: http://scumpolitics.wordpress.com/2013/02/27/presidents-and-assholes/ (shameless)

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