Europe's shifting status quo

Something's happening in Europe.

Sure, there's been discontent bubbling for years. There always seemed to be some group, somewhere, unhappy about something, but it has always appeared to be a minority concerned about a minor issue, and they have disappeared in time. Over the past year, though, it's become clear that the collective grievances of the European nations' inhabitants are reaching boiling point.

The first obvious sign was the European Parliament elections. Traditionally these have been a way for people to register their unhappiness with major parties at a level where the voters know it doesn't truly matter too much. But when Eurosceptic parties come first in these elections, as they did in a number of countries in 2014 (most notably in the United Kingdom), something is clearly different.

Now, the lid is off. The refugee crisis, the mixed messages from governments, the inability to absorb the latest waves of migrants and, above all, the all too real threat of terrorism have combined to create a Eurosceptic surge like never before. It isn't particularly focussed, and the beneficiaries greatly vary in ideology from country to country, but all of them have a significant bone to pick with the European Union and its associated people and policies.

Eurosceptics are rapidly rising up the polls. You can see for yourself at the excellent European polling aggregator Electograph. The most significant move in the opposite direction from this new norm is Finland, where the Eurosceptic Finns Party have dropped 6% since the most recent election. The most likely reason for this is their involvement in the governing coalition. Elsewhere, this has not been the case. Netherlands? Eurosceptic Party for Freedom is topping the polls. Sweden? Eurosceptic Swedish Democrats topping the polls. Germany? Eurosceptic Alternative for Deutschland is eating into the CDU/CSU numbers. France? Eurosceptic Front National pulling ahead. Italy? Direct democracy Eurosceptic 5-Star Movement are still as popular as ever, while Lega Nord has succesfully moved into the national sphere with its southern sister party. Poland? Eurosceptics won a general election two weeks ago. Portugal? Eurosceptics are part of a coalition government. These are not coincidental.

The shifting status quo is not that European leaders will continue to pursue the policies that they have been for the past two decades. The emerging status quo is that this will be done in direct opposition to an expanding number of people. As the borders shut one by one across Europe, it does not appear that this unhappiness will go away.

Joe Hockey's week of distractions

Peter FitzSimons, rugby union international, author and bandana wearer, spoke at the National Press Club this week. The topic? The rebirth of Australian republicanism. Now, this may not have been a particularly notable speech - a lot of people go through the NPC, and there are quite a number of disgruntled republicans around FitzSimons' age - were it not for FitzSimons' announcement that the Treasurer, Joe Hockey, was leading a Parliamentary Friendship Group on the issue.

I suspect most of the community was not even aware of the existence of such groups. We are told that the groups exist so that members of both major parties can discuss issues that they share positions on. Apart from the question of why MPs need such groups to discuss issues with members of other parties (surely a sign of our Parliament having descended into petty sport, if further proof was needed), the elephant-in-the-room question is why now?

For starters, the republican movement is not doing particularly well at the moment. The most recent poll done on the issue, from Newspoll last year, shows that republicanism has been trending downwards since the 1999 referendum, and is now neck and neck with monarchism. Most worryingly for the movement, the level of strong support has significantly ebbed, especially amongst the young. The largest amount of strong support comes from middle-aged men (like FitzSimons and Hockey).

I suspect there are two reasons for the lack of strong support among the young. Firstly, they do not remember the bad old days for the monarchy during the 90s, particularly between the annus horribilus and the death of Princess Diana. Secondly, they're quite taken with the Duke and Duchess of Cambridge, to say nothing of Prince Harry, quite possibly the only royal today who could become Governor-General of this country without too much fuss being made (not that he will). The young royals also make their older relatives look better. I suspect even Charles is more popular today than he was a decade ago. (Note: these are not the only reasons for young people (or older people) to support a monarchy, but they do help explain the changing levels of support.)

Maybe it's this waning republican fervour that has avowed republicans determined to make it an issue again, presumably thinking that as long as young Australians are made to think about the issue, that the 'incontrovertible logic' of an Australian republic will easily turn them to the cause. Given that young Australians also care less for democracy than any other age group, I'm not so sure this is the case. 

If it is this desire to get republicanism waxing again before its too late, then there is still the question of why, specifically, right now? This was the week which the Treasurer began by announcing that he would be focusing on cutting income tax, and began setting out the case for such a move, explaining why it was that this must be done and why it must happen now. What logic is there in announcing this policy, proclaiming that it is important, and then two days later allowing another topic - one which has neither widespread support nor a pressing need to happen right now - to distract from this supposedly important issue?

The thing is, even the issue of income tax cuts appears to be a distraction. The case for it is not strong. Yes, bracket creep is an issue - a given when tax brackets do not keep pace with inflation - but it isn't one that is going to change the fundamentals of the economy (which are in desperate need of attention). Nor, in the short term, does it do anything for the deficit, which the government promised to deal with, or assist public services, which every federal government continues to expand, therefore requiring a larger tax base. If the money isn't coming from a healthy economy or income tax, where will it come from? 

Furthermore, who benefits the most from cutting the income tax? At face value, this depends on how it is delivered. If it is simply from increasing the tax-free threshold, then anyone on the edge of a tax bracket benefits, from the poorest to the richest. If it is actually about cutting rates, then the government is presumably most interested in using it to gain votes from middle-income earners - but there's also no way they wouldn't then also cut the taxes of high earners, as that would just give the latter more incentive to take their earnings offshore (and also stop donating to their traditional party of choice). Given high earners are, by design, the largest individual contributors to the government collections of tax, this would create a shortfall that needs to be made up somewhere.

At another level, though, any income tax cut is likely to hit the affect the poor the most, not directly, but through indirect results. The shortfall can be made up in two ways: increasing income and reducing spending. Increasing income can only come from some other form of taxation which, given this government's record, is unlikely to be a form of company tax. Instead, it will likely be some other form of individual taxation, which isn't reliant on income. The thing is, flat taxation naturally affects the poorest more than it affects the richest, as it takes away a higher proportion of their wealth. This will essentially mean that cutting income tax will be a redistribution of taxation away from the rich towards the poor. Reducing spending can only come through cutting the amount of things the government does - that is, government services - which, proportionally, are also most used by the poorer. So, this important policy is simply a way of changing the degree to which wealth is redistributed amongst the population. It does nothing to change the structure of the economy. Or, to put it another way, it's a distraction.

The republican issue served to distract from the distraction of income tax cuts. Is it any wonder so many seem disenchanted with the government?