Swan’s thesis (if that is what one would call it) is that rich miners have been successful at rent seeking and should be silenced. As noted by Henry Ergas, it seems that Swan considers some wealth is worthy (such as that by property developed Schwartz and Cate Blanchett) but other wealth is unworthy (such as by miners including Palmer, Forrest and Rinehart).
What Swan neglects to mention, however, is that rent seeking and crony capitalism are a feature of government. And the Rudd / Gillard governments have done more to encourage rent seeking than most others in our history.
Rent seeking can only occur when a government allows it to flourish. Without the active support of government, no person – no matter how rich – can legally seize the resources of others.
Look at some of these policies which entrench rent seeking:
- the Australian Business Investment Partnership (aka Ruddbank) which fortunately was blocked in the Senate
- handing $250 million to broadcasters
- the national broadband network
- climate change policies, including the carbon tax
- increasing the power of unions
- increasing the superannuation surcharge to 12 per cent
- making the default superannuation fund be industry funds run by union mates
- throwing massive amounts of taxpayers’ money at a stimulus program
- ignoring (or not conducting) cost-benefit analyses
- promoting the private interest over the public interest
- throwing money at assorted manufacturing businesses, in particular in the automotive industry.
If Swan really wants to go back to
Australia’s egalitarian tradition
he should reduce the size of government substantially, and stop crowding out charitable organisations. Charities, too, should stand on their own feet supported by philanthropy rather than acting as agents of government.