Last month I suggested that John Howard was a conservative social democrat, redistributing income as a conventional social democrat would, but giving it a conservative twist by targeting families.

An interesting presentation by Ann Harding of NATSEM at today’s Melbourne Institute/The Australian conference spells out the distributional consequences of all the extra spending.

For a single and childless person earning between $1,000 and $1,250 a week, changes in the tax and welfare systems since 1996-97 leave them 4% better off in real terms. But a couple with one earner and two children on the same income is 15% better off from tax and welfare changes, and a couple of two earners and two children is 19% better off.

These figures ignore changes in private income – they are the effects of changes in government policy alone. If increases in private earnings are included, a single adult is 15% better off and and a couple with children is 29% better off. This suggests that the market alone has not changed household relativities much, but government policy has had a big effect.

Harding also finds that when we look at equivalised household income (ie, allowing for the number of people in the household) over the last decade households in the top 20% of the income distribution have had % increases in their income that are slightly below the average, though still a good improvement – 24%. The biggest winners have been those in the middle two income deciles on 32% and 29%. Decile 2 did the worst, on 14%. Harding says this group contains a lot of old-age pensioners without private resources, so they have not directly benefited from the rise in market income or the added concessions for ‘self-funded’ retirees.

Overall, though, it supports my argument that while Howard only occasionally talks like a social democrat, he has consistently behaved like one.

This morning’s Australian reports on OECD figures showing that:

Over the past 10 years of John Howard’s Government, the personal income tax burden in Australia had risen from 11.7 per cent to 12.6 per cent of GDP.

It does note that these figures are for 2004, before the 2005 and 2006 tax cuts. These cuts should bring the percentage of GDP take back to around the earlier figure, though because of rising GDP spending per person will continue to grow.

Many people have criticised the Howard government’s taxing and spending record – Des Moore’s latest critique should be on the Policy website in the next few days. I’ve been writing another for the Summer issue, focusing on the expenditure side to see just what went wrong.

What’s particularly interesting is the biggest spending area, welfare payments. Though the long economic boom should, in theory, have lessened demands on the welfare system, in fact real per capita spending in the three years ending 30 June 2005 (the latest from the ABS) increased by more than in the last three years of the Keating Labor government.

Partly, this is due to the ageing of the population. We are supporting 20% more aged pension beneficiaries now than when Howard came to office. No government can do much about these trends in the short term (though there have been fiddling at the margins policies designed to encourage people to stay in work longer).

But what really struck me was that large amounts of money are being spent because the Prime Minister, despite being a hate-figure on the left, is actually something of a social democrat, albeit of a conservative kind.

Consider this statement, from a speech in 2000:

Our social cohesion, flowing directly from a quite unique form of egalitarianism, is arguably the crowning achievement of the Australian experience over the past century. Yet this cohesion will be tested if wealth and opportunity can