In a week in which we have the joyful collision of a budget sell and an election campaign, the narrative of lifters and leaners has returned. And just as when it was spruiked by Joe Hockey, it’s once again about undermining the voice of the poorest in order to reduce welfare spending and lower taxes for the wealthy.

On Monday night Duncan Storrar appeared in the audience for ABC’s Q&A and rather perfectly cut to the quick on the issue of fairness in the tax system. As a man on the minimum wage he didn’t need graphs or tables at hand to talk about the impact of changes to the tax system.

And not surprisingly the response from the conservative media, led by the Australian, has been to paint him as an example of the horror of Australia’s tax and transfer system.

The headline in Wednesday’s Australian – “ABC’s ‘budget fairness’ victim pays no net tax” – reflects a longstanding view of the conservative side of politics and the media that we should worry about the rise of those paying no “net tax” – where you balance the amount of tax paid with benefits received.

Peter van Onselen, from Sky News and the Australian, for example, got himself quite worked up on Twitter, pondering: “How in the name of God is it sustainable that half the working population don’t pay any income tax ... I completely give up.”

Of course, it is sustainable because more than half do pay income tax.

Ben Phillips, from the ANU centre for social research and methods, replied to van Onselen that ABS records show that in 2013-14 “65% of 18-65 [year-olds] pay personal income tax”, to which van Onselen oddly replied, “exactly”.

I guess a third now equals a half.

Now it is true that around half of Australians pay less tax than they receive in government benefits – but there are a few caveats.

The most recent full breakdown of government benefits, taxes and household income by the Australian Bureau of Statistics, which includes not just income tax but other indirect taxes such as GST, shows that in 2009-10 the top 60% paid more tax than they received in government benefits. But when you include social benefits such as education and health only the top 40% were net tax payers:

 

But dividing things into lots of 20% is not very precise and hides a lot, especially the age factor.

Modelling by the National Centre for Social and Economic Modelling (and actually reported last year in the Australian) found that 67% of those under 65 in 2015 were net tax payers, but this dropped to 52% when you included those aged over 65:

 

That level was actually a fall from the 56% of net taxpayer households in 2005. But, crucially, the percentage of households aged under 65 who were net taxpayers hadn’t changed over the 10 years.

What had changed is that fewer over-65-year-old households were net tax payers, and such households also accounted for a greater proportion of the total due to our ageing population.

Our welfare system is actually very tightly means-tested.

The vast majority of cash welfare assistance goes to the poorest half. The support through services such as education and health, however, is more evenly spread:

 

I’ve argued in the past this is a good thing. When government services such as schooling and health are provided only for the poorest, they quickly become separated from the services provided to the wealthy. And because the wealthiest get no benefits, they have no care for the quality or quantity of those services and soon demand the government spends less on them – after all, the rich pay most of the tax so why should the poor benefit?

We see this in the way welfare is now treated – and by extension the talk about net tax payers.

The headline “ABC’s ‘budget fairness’ victim pays no net tax” might as well have the sub-heading, “So shut up you ungrateful whinger”.

But we should remember what we’re talking about here. When we talk about the poorest half it can be easy to lose yourself in rather meaningless waffle about income quintiles and deciles.

Last week the tax cut for those earning over $80,000 was labelled as a “middle-income tax”. And yet, as I noted last week, $80,000 puts you about $26,000 above the median income.

When earning almost 50% more than someone on median income gets you classed as “middle income” you know things have become very skewed.

Fortunately, last year the Productivity Commission looked at tax and benefits and used actual incomes. It found that around 39.5% of all families either received benefits and paid no tax, or they received more benefits than they paid in tax:

 

The largest share of those who pay no tax and only receive benefits are those earning less than $25,000. Ninety three percent of such households are in that category and they account for 88% of all households who pay no tax but receive benefits.

The commission also found that half of Australian households received no benefits at all – including two-thirds of those earning between $25,000 and $50,000.

The commission found, however, only 7.7% of all households paid tax but received more in benefits – 60% of whom earned less than $50,000. But even among those earning between $25,000 and $50,000, only 20% were such “net recipients”.

So the big problem in Australia really isn’t tax and transfer churn. Is it really unsustainable that 8% of households get more welfare than they pay in tax?

Indeed, the Productivity Commission has noted research that found “Australia had the lowest level of churn among 19 OECD countries for which data were available”.

And the problem isn’t welfare spending.

According the Bureau of Statistics, in 2000-01 28.1% of households were dependent upon welfare for a majority of their income; by 2013-14 this was down to 24.4%:

 

And while our spending on welfare is very low compared with other OECD countries, we get pretty good bang for our buck, with each percent of GDP spent on social benefits reducing our inequality by more than most OECD nations:

 

We don’t have an issue in Australia of too many working people paying no tax or no net tax.

Our tax system and welfare systems are both highly progressive and talk of churn through middle-class welfare is massively overstated.

We are an ageing population. More people are moving into retirement – and that is where the fall in “net tax payers” is coming from.

Someone who pays less tax than they receive in benefits isn’t bludging on the system. In Australia it almost certainly means they are earning less than the median wage, and they are part of one of the most efficient welfare systems in the world. And their views on what is fair in the system certainly deserve to be heard.