Don’t say the S-word out loud, but Australia secretly loves socialism

When my mother suffered a stroke a few months ago, my heart filled with dread at the thought of her lying at the mercy of our oft-maligned public health system. I needn’t have worried – the treatment she received was first class, and she’s on the way to a full recovery.

We’ve rightly come to expect top-shelf healthcare, and politicians meddle with it at their peril. But here’s the rub: universal health coverage is a socialist principle. And Australia despises socialism … doesn’t it?

Australia has long been a world leader in equality, but has recently lost its way.Credit: Getty

Australia spent much of the 20th century striving to be a fairer society. When the new millennium dawned, we arrived with work still to do, but were in better shape than almost every other country on the planet.

Medicare provided the best public health coverage in the world, according to the World Health Organisation. We ranked second in the United Nations Human Development Index, a combined measure of life expectancy, education and standard living. In Melbourne you could pick up the average house for $191,000. In Sydney it was $287,000. We didn’t realise how good we had it.

Despite setting a record for going the longest period in the world without a recession, we’ve since gone backwards on many measures. Economic equality has been in long-term decline and we’ve drifted further from being the land of the fair go.

Our housing prices are among the most expensive in the world, which explains why we have the second-highest level of household debt proportionate to GDP. Real wage growth has been lacklustre for more than a decade. Our Medicare still performs well but is no longer the world leader, having fallen to eighth on the World Health Organisation rankings behind places such as Canada, Iceland, Portugal and South Korea.

Australia is a “mixed economy”, combining aspects of both capitalism and socialism. We believe in private enterprise but expect governments to look after us by regulating commerce and industry, redistributing wealth, maintaining good public education and health systems, and providing a welfare safety net.

Our nation’s ability to strike a decent balance is a key reason we emerged from the 20th century on top of the heap. Now the data confirms what many of us have felt for some time: we’re getting the balance wrong.

Across the OECD real wages grew by an average of 1.5 per cent since the start of the pandemic. Despite recent gains, ours have fallen by 4.8 per cent, putting us ahead of only Estonia, Lithuania and Hungary. This fall in real wages disproportionately affects low-paid workers. Meanwhile, support for the unemployed remains brutally inadequate.

ACOSS and UNSW recently published research showing that the highest 10 per cent of Australian households possess 44 per cent of all household wealth at an average of $5.2 million. That’s 126 times the average wealth of the lowest 20 per cent ($41,000). The top 10 per cent also reaped 45 per cent of the wealth increase from 2003 to 2023, while the share held by the lowest 60 per cent of households declined over the same period.

Those who own housing stock have reaped windfall gains as the median Melbourne house price rose from $191,000 in 2000 to $922,050 in 2022. In Sydney, they leapt from $287,000 to $1,291,150. And local property investors in most cases enjoy a 50 per cent tax discount on their capital gain, thanks to Howard-era changes introduced in 2000. You could be forgiven for thinking the primary purpose of the housing market is to make money, rather than put roofs over people’s heads.

Housing accounts for a whopping 54 per cent of total household wealth, which will eventually be transferred to those lucky enough to be born into the right family. This is how inequality becomes entrenched across generations, but what’s to be done?

The majority of leading economists surveyed in 2023 favoured an inheritance tax, and we had one of those until it was abolished in the late 1970s. Now any political party seeking to reintroduce one would no doubt be sledged for introducing a death tax, embarking on “class warfare” or, God forbid, engaging in socialism.

The Cold War ended 35 years ago, yet the term “socialism” is still routinely weaponised to attack sensible policies that align with Australian values. When the Albanese government announced reduced tax concessions on superannuation balances exceeding $3 million, Peter Dutton accused Labor of experimenting “with the same system of socialism which has devastated nations”. But the reality is that we love socialism, as long as you don’t call it socialism.

“Equality of opportunity” is one of a handful of Australian values listed on the Department of Home Affairs website. But guess what? That’s a socialist principle, although we prefer to call it “the fair go”.

Remember the stage 3 tax cuts? Albanese and Chalmers went to the last election promising they would leave them untouched, yet they rejigged them anyway and got away with it. Why? Because almost 70 per cent of us thought it was a sensible idea to give lower- and middle-income earners a leg up in a cost-of-living crisis. Just don’t mention the fact that redistribution of wealth equals socialism.

Even the AFL is a socialist enterprise. Teams finishing the season down the bottom of the ladder get priority access to the nation’s pool of footballing talent. And central revenues are disproportionately allocated to poorer clubs while football department spending is capped in an effort to ensure teams compete on a level playing field. What a pack of pinkos.

There are compelling arguments for reforms designed to level the playing field by distributing this country’s considerable wealth in a fairer way. The ethics are obvious, but it’s also in the interests of social cohesion and political stability. Rising inequality breeds disaffection, which creates fertile ground for populist politicians to till.

There’s some way to go before those of us in the land of the fair go experience the yawning inequality endured in the land of the free, where Donald Trump has farmed the deep resentment among working-class Americans as their standard of living has evaporated. But we’d be foolish not to heed the warning. We could do with a bit more socialism around here. After all, it’s the Australian way.

Gary Newman is the director and producer of How to Capture a Prime Minister. He was previously a policy adviser and journalist.

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