What’s a Headline Worth? Oh, about $34 Billion
Posted by Possum Comitatus on October 16, 2007
Continuing on from yesterday, we can all see the target voter demographic (apart from the media) this exercise is squarely aimed at – low and middle income households with 1.5 jobs and dependent kids.
But the problem the government faces with the policy response in the electorate is the Damoclean Sword of Workchoices that is hanging over the experience and perceptions of those the policy is aimed at.
Remembering back a little while ago, where we talked about the real problem of the increasing ratio of interest payments to disposable income, what is important to households in terms of the way they perceive their standards of living is their discretionary spending budget; that part of the family budget that is left over after housing costs, general living expenses and utilities. This is the part of the family budget which is used to buy the little luxuries of life. Things like holidays, take away food, going to the pictures, the types of presents the kids get at Christmas and flashy shiny things for the kitchen, the lounge room and the back yard.
As housing costs rise, the money in the discretionary budget reduces as it gets shifted across to spend on housing. Similarly, Workchoices, particularly for the second income earner in many of these households, has seemed to either reduce household income directly via cutting wages and conditions for part time workers, or there is a perception that this could be the case at any time.
So these families see the quality of their lifestyle, which they equate as being a large part of their standard of living, getting reduced as a consequence of the reduction in their discretionary spending budget.
Assaulting someone’s perceived standards of living doesn’t make you friends in the electorate.
So when the government comes along every year and offers tax cuts, tax cuts that are, to these households, a smaller value than the reduction they’ve recently made in their discretionary spending budgets – it’s a one step forward and two steps back syndrome.
It’s why tax cuts don’t bounce the polls for this group and haven’t for years.
If you are the 0.5 job holder in a 1.5 job household and you’ve recently had your pay effectively cut with an AWA via the reduction in terms and conditions related to overtime and penalty payments, and if this reduction in income has been greater than about $30 a week (a couple of hours of penalty rates) – the $34 billion dollar tax cuts don’t make you better off than you were before Workchoices, they just reduce the amount by which you are worse off. And when you take into consideration the fact that the 0.5 job holder through penalty rates and overtime was often an easy vehicle for households to build up their discretionary spending budget for things like Christmas or going on family holidays – the negative power of Workchoices swamps any beneficial voter reaction from the target demographic of the tax cuts.
When you combine Workchoices with increased housing costs, the effects on discretionary spending budgets for this target demographic is poison.
And even if Workchoices hasn’t affected these households, it’s the threat…. the perception that it could which gives Workchoices its power in the wider electorate as a force that discounts the value of Howards economic management and tax cuts spiel.
Elections aren’t about what is true in all cases; they’re about what is self-perceived as true in most cases.
And that’s why $34 billion is just an expensive headline for too much of the electorate that matters on the 24th November.
Diana in comments pointed out an interesting George Meganomics interview on Life Matters that’s well worth listening to on the electoral demographic front.
Song of the day is nostalgia time – Courtney Love and Hole at their best (or worse) .. Celebrity Skin.