• Kristin Perissinotto

High earning doesn't mean hard working

Updated: Jun 14, 2021

The Liberal Government is most positively known for its tax breaks. Many people who vote Liberal or for the Liberal National Coalition will be doing so to see more cash at the end of the financial year. The Libs will give out and promise legitimate tax breaks to Aussies, meaning if we vote Liberal, we will pay less tax, and of course, see more of the money we earn in our bank accounts. Conservative political parties most often offer the best tax breaks to high income earners and big businesses, but occasionally medium and low income earners will see a lower tax bill as well. For example, in this year's federal budget, those earning up to $37 000 will see a tax cut of up to $510. But this year was a bit of a COVID outlier, and most often, the Liberals will offer the largest, or sometimes only, breaks to high income earners pulling in upwards of $180 000.

Those earning between $180 000 and $200 000 will be the biggest beneficiaries of a tax break in Scott Morrison's big tax plan leading up to 2024. This is because, ScoMo says, they are hard workers. "They're hardworking people working out on mines and difficult parts of the country," he says. "They deserve a tax cut." Only 3% of Aussies earn over $188 667, but the PM seems to be set on rolling out a special plan just for them because they work hard, he says.

The idea that high earners are the hardest workers is deeply rooted in society. It's based on the presumption that people are fairly rewarded for their work, and earn every job, promotion, and pay rise they're given. This idea itself ignores the proven fact that our society is not equitable.

ScoMo is right that many mine workers situated in rural and remote areas are probably within that pay bracket. And many of them will be completing physical and hard work. But oftentimes, the pay packet reflects the danger in the work, particularly for those going underground, and the location of rural and remote mines that are a hassle to get to, require workers to stay on site for multiple days or weeks, and quite frankly, are in places most of us don't want to go.

We all know that, particularly for corporate workers, pay goes up when you gain more responsibilities or start managing teams. But does that mean you work harder? It means more responsibility, and people management on top of your other practical tasks, but not necessarily harder work. How many people do you know who leave work after their boss, or do all the grunt work only for their manager to get the praise?

Most business owners will earn more than their staff. Some of those owners will have built a business effective and successful enough to take a step back. But even then, they're still getting paid more than their staff. Are they doing harder work? Maybe they worked 16 hour days for years to get to this point, and the hard work is behind them. They probably carry a lot more stress and responsibility than their staff. But are they completing harder work?

I won't for a moment say that every worker earning over $180 000 is skating by with a cushy pay cheque. I'm sure some of them are. The corporate world is clouded with mystery for a reason, and I'd be willing to bet my entire yearly salary that there are plenty of top-level execs that are doing shit all in their high rise CBD offices. Likewise, there are probably workers taking home $200 000 who work extremely hard. But the idea that increased 'hardness' of work equals increased salary is simply untrue.

An article published on The Conversation and shared on the ABC unpacked the stats reported by the Australian Taxation Office, and shone a much needed light on average vs. high Aussie earners. A particularly shocking statistic showed that 45 individuals earning over $1 million a year were able to wrangle their taxable income to below $18 200 and pay no tax at all. They paid literally $0 in tax, and didn't even have to splash out for the Medicare levy.

A total of 15,358 Australians reported total incomes of more than $1 million. By the time they had applied legitimate tax deductions, the number had shrunk to 14,467. Some of these million-dollar earners were able to shrink their taxable incomes very low indeed — 45 cut their taxable incomes to less than the tax-free threshold of $18,200, meaning they didn't have to pay anything, not even the Medicare levy.

Peter Martin for the Conversation

The same article found that only 9,144 of the 14,467 Australians on taxable incomes of more than $1 million actually worked. We can presume this means their income is from businesses, investments, and the like. That's some pretty convincing stuff. If we have multi-millionaires in Australia taking home over a mil in a year who don't work at all, how can we possibly say that higher incomes equal harder work?