Monday, January 31, 2011


Why are so many Australian's not prepared to contribute to the government's flood relief fund? This column attempts to examine how our trust in other people has vanished.


The pain in Gerry Harvey's words is almost palpable. "These people" he said, "whoever they might be, they go for you zealously and with hatred . . . [they call us] greedy, ugly, old c---s . . . people writing this seem to think we have been ripping them off for years". Until he'd seen the online reaction to his call to charge tax on Internet purchases, Harvey apparently believed that the people buying his products felt good about giving him their money and paying tax while they did so. He was swiftly disabused.
The sudden, vitriolic outcry of condemnation accompanying Harvey’s effort to mobilise the country against cheap goods supposedly flooding in from overseas obviously shocked the tycoon. He genuinely believed that he was the good guy in this instance and Australians would rally to his cause. They didn't. People are, increasingly, under monetary pressure. Life hasn't been easy for a long time, but right now it's getting harder. Financial concerns are eating away at the reservoir of goodwill that we normally have for other people in our community. Trust – that basic building block necessary to form a real community – is corroding away.

Harvey's not the only high-profile public casualty of this new attitude. A similar confusion could be seen in the face of Julia Gillard as she announced her flood levy (not levee) to rebuild Queensland, only to have Tony Abbott condemn the idea out of hand. The fact that he saw political advantage in this demonstrates the deep scar of mistrust that’s now stretching across the land.

It always used to be part of being Australian to help a mate, even someone you didn't know, if they'd go under without a bit of help. Today, people feel as if they are under too much pressure and the rewards are always going to someone else. The surprise is, although both Harvey and Gillard have appealed to our altruistic sense of Australia with sound ideas, people are unwilling to support such apparently good policy. Only part of the reason is because people are under financial pressure. The bedrock of opposition is lack of trust at the motivations of others. Harvey is condemned because he just wants to cut off competition; Gillard’s condemned because we don’t trust her to spend money wisely and because she quite obviously doesn’t ‘get’ what climate change is all about. This doesn't augur well for the future.

The reaction against both business and the government proposals emanate from the same deep feeling of disquiet. The wellspring of both appeals should be the concept of community; the idea that we'll pull together to "help a mate". But that basic goodwill has gone -- we no longer trust the other party, government or big business, to do the right thing.

Just a couple of years ago Harvey himself sounded as if he was singing off the same hymn book. He suggested donating to charity could be a waste of money. Giving money to people might be like "helping a whole bunch of no-hopers to survive for no good reason". He obviously believes there’s a good reason to slug a new tax on internet goods, but consumers don’t trust him. They think he just wants to prop up his profits. Some voters object to Gillard’s appeal for much the same reason. They don’t trust the government to spend the money wisely, particularly after the waste that’s accompanied other recent programs, like the BER and pink batts. And the government’s commitment to the flood victims depends on slashing other programs designed to mitigate the effects of climate change. It doesn’t make sense. People are already under pressure, which is why they’re less willing to offer their help freely. It’s easy to discern the improvisation in the government’s response to the floods. Accompanying this has been a growth in cynicism. People suspect their money will be wasted.

The response to big business is the same. It’s obvious the likes of Harvey will benefit if we buy more at their super-stores. This is not about supporting the local grocer or IGA, electronic repair-shop or neighbourhood. It’s about sandbagging the profits of the big conglomerates and that’s why people aren’t happily falling into line. Underlying this are the widening divisions within society. Everyone is out for themselves. At one time there was a reservoir of goodwill restraining entrepreneurs who've "made good". We still admire people -- Dick Smith, Gerry Harvey and the like -- who've managed to build up their own business empires. But our enthusiasm is finite.

Australia has undergone phenomenal growth over the past 30 years. This has made us all more prosperous; but some have become more wealthy than others. Firm statistics from the University of California, Berkeley, have proved that, in the United States, more than 80 percent of the total increase in income in the quarter-century to 2005 was enthusiastically sequestered by just the top one percent of the population. That was the year the fortunes of Bill Gates and Warren Buffett ($89 billion) nearly eclipsed the combined wealth of the bottom 120 million Americans ($95 billion). Facebook founder Mark Zuckerberg already has a fortune of $6.9 billion (having doubled his wealth in the past year alone), although he was only born one year before the survey commenced. As with the careers of Australian entrepreneurs, this demonstrates it is possible to move rapidly into the lists of the (very) well-heeled. But these few cases of individual financial mobility hide the concentration of wealth in the hands of a few. Stark disparities in wealth and income are behind this surge in inequality. Until these are addressed, deep fracture lines will continue to divide our society -- particularly when the country is being asked to do something in the "common good".

There is, of course, no overt agitation for any serious redistribution of wealth but this doesn't mean it's not an issue. Although we all supposedly benefit as we become more prosperous (compare the number of computers or high-definition televisions you possessed a year ago with a number you've got now), a few trinkets aren't enough to buy off people -- or more importantly, voters -- who are feeling under increasing difficulty. Reserve Bank Governor Glenn Stevens displayed (during the 2007 election campaign) that he didn't give a fig about keeping politicians happy and he’s ready to pull the trigger again. He’ll raise interest rates whenever he feels the need, as he engages in a single-minded battle against inflation. This will take steam out of the economy. It will also knock the stuffing from the poor most of all: they're the ones who will have to suffer until wealthier people get the message not to spend so much.

The economic cycle is turning. This is putting families, particularly Gillard's "working families", under pressure, and that's why they're angry. It shouldn’t be like this. People don't mind digging a little bit deeper when everyone's suffering in the same way, or when they see some others are far worse off, as after a flood. When, however, a plutocrat begins preaching the need to "buy Australian" to protect his own profits (Harvey's net worth is about $870 million), people feel differently. And they’re not happy to give government their money, either.

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