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Help for voters by a Christian economist

Putting your money where your faith is

Last night’s televised Leadership Debate – the first of this federal election campaign – predictably saw both Prime Minister Scott Morrison and Opposition Leader Bill Shorten articulate competing philosophies about the best way to steward the Australia’s economy.

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Morrison took the offensive, asserting that the Labor Party hadn’t disclosed the costs incurred by its platform.

“Today is the day we should know what is the total tax bill that Bill is going to put on people? … What is the cost of his emissions reductions policies?” asked Morrison.

Shorten pointed to the long-term economic gain of short-term investment.

“I can categorically say that if we don’t take real action on climate change, it’ll be a disaster for our economy. I can categorically guarantee that if we invest in climate change policies and we’re fair dinkum, in the future we’ll have more jobs, in the future we’ll have lower energy prices and we won’t be known as the generation who handed on a worse deal to our kids.

“What will you do to lift wages?” Seven News’ Political Editor, Mark Riley, asked Morrison.

“Mr Shorten is saying that everything is going up except your wages – I think a lot Australians probably believe that to be true. Do high-income earners really deserve about $140 billion worth of tax cuts at this time? What will you do to increase wages?”

“It doesn’t much matter politically which party it is, provided the parties are committed to that broad vision of making the economy work.” – Ian Harper

Morrison responded: “Well, wages are growing at 2.3 per cent and that’s up from 1.9 per cent when I was Treasurer … But the way you drive wages forward is not by taxing people more. You don’t do it by taxing the economy more, because that slows businesses down. You don’t put taxes on business which mean they can’t employ and they can’t pay their workers more. You don’t do it by putting in reckless emissions reduction targets…”

Shorten retorted: “Don’t people in Australia not just deserve an improvement in their tax position but actually a wage rise? Mr Morrison said; ‘It’s 2.3 per cent, no problem there’. Don’t people in Australia deserve better than just being told they don’t have a problem? Wages growth in this country under this government is at record lows and everything is going up. Childcare is up 28 per cent. Out-of-pockets to see the doctor up 20 per cent. Specialists 20, nearly 40 per cent. Private health insurance up and up. You name it, everything is going up except your wages.”

All of this was, of course, the predictable clash of economic philosophies that undergird each party’s policies.

“I think your money is better off in your hands than it is in the government’s hands. Bill thinks it’s better off in his,” said Morrison.

“What is key is the relationship that we have with one another as we seek to meet our mutual material needs.” – Ian Harper

Despite the polemical framing, Morrison was simply articulating the Liberal Party’s belief that Australia will become wealthier if the wealthy hold on to their money, while the Labor Party believes the government should spend tax money on improving the living standards of Australians who are doing it tough.

Unsurprisingly, Christians are divided over which of these philosophies is more biblical – an issue taken head on by The Good Vote podcast host Mel Wade, when she spoke to the Dean of Melbourne Business School’s and Reserve Bank board member Ian Harper.

MEL WADE: Does it even matter which party we vote?

It feels like when we talk about the economy we often talk about it like it’s a super-human who we can’t control. You know, words like ‘healthy’ or ‘unhealthy’ or ‘strong’ or ‘weak’. Are these analogies helpful?

IAN HARPER: When we talk about the economy, we’re talking about the sum total of people’s commercial interactions – buying and selling, trading, working, being paid for work, buying and selling shares, owning companies.

It’s a sum total of the arrangements that we come to, to meet our material needs. And depending on our circumstances, we do that by: going to work each day and then being paid for what we what we produce – our contribution; for putting an investment in a business and having the business serve its customers and being paid, [and] in turn taking income from that.

So, what is key is the relationship that we have with one another as we seek to meet our mutual material needs. So, again, the emphasis is on materiality – clearly the Scriptures talk about relationships on a much higher plane, but they don’t actually say, as we were indicating before, it doesn’t matter how you interact with one another for things like ordinary material goods now. That does matter. It’s a sort of subset of a bigger set of relationships.

So to say we talk about the economy, we’re talking about how we relate to one another in fulfilling our material needs.

Now in that context then, Mel, to your question, it matters what the rules of the game are.

How we relate to one another in all sorts of contexts – personal relationships, [or] in this context commercial material relationships, that matters for whether these relationships are mutually beneficial, or one side gets exploited and the other side takes advantage, whether when we’re collectively engaged in this, there’s some bigger issue that gets set aside or ignored.

So policy is about setting those rules of the game. So we all enjoy a game of football and we know that, yep, injuries come and there’s a sort of pretty fierce spirit [that] goes on in a game of football, [but] we also recognise that it’s very important that this game take place within well-policed and understood rules, so that we can enjoy this as a contest and it’s not just, you know, frankly, a melee or free-for-all. And the same thing applies to the economy.

So it doesn’t much matter politically which party it is, provided the parties are committed to that broad vision of making the economy work. I mean, that doesn’t matter. But what does matter is that the economic policies are appropriately structured and then enforced.

Hear more of the conversation between Professor Ian Harper, Mel Wade and Tim Costello on Episode 1 of The Good Vote. Other topics covered include: commerce and trade; taxes; Adam Smith; capitalism; morality; national debt; foreign aid; and a biblical vision for the economy.

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