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Issue #1554      4 July 2012


Taxes, symbolism and the need for change

According to the major players in Australia’s parliamentary arena, radical changes to the country’s tax system were ushered in at the weekend. The Gillard government and the Greens insist that the Carbon Tax and the Minerals Resource Rent Tax (what is left of Rudd’s own very gentle mining “super profits tax”) are great steps forward for the people of Australia. Hype is building that this is true, reforming Labor back doing what it used to do best – nation building and looking after the battler.

Abbott and Co are banging away tirelessly that both taxes will be insurmountable imposts on Australian business and will hit ordinary income earners and their families hard in cost of living terms. The debate is a farce. Neither side believes big business will be disrupted by the latest Labor “reforms”. In this neo-liberal age, if the monopolies don’t like an idea it simply doesn’t happen in Australia.

Take the carbon tax. The “worst polluters” are mostly “trade exposed” companies that need protection from foreign competition: steelmaking, aluminium smelting and the like. They will get generous servings of taxpayer assistance to carry on with business as usual. Most households will get a series of opportunistically timed bonuses and tax cuts so that they can keep consuming the way they did in pre-carbon tax times while the monopolies simply pass on the cost.

As a consequence, nobody is expecting miracles of green innovation to flow from the measure and nobody is talking about significant reductions to Australia’s contribution to worldwide CO2 emissions or global warming. Australia has simply joined the club of developed countries pretending to be doing something about climate change.

Most commentators expect price gouging with the carbon tax given as an excuse. Tough talk from the government about this eventuality is unconvincing. If anybody is going to pay for this elaborate smoke and mirrors tax it will be low-income households.

Then there is the Minerals Resource Rent Tax. Mining corporations will be compensated for royalties levied on minerals extraction by state governments. The munificence of the taxpayer in providing infrastructure for these projects will continue uninterrupted. Industrial relations policy will continue to be bent to the transnationals’ needs.

The MRRT is not even a minor bump in the road for this super profitable sector of the economy. It takes place in an overall environment of reduced corporate taxation. Labor boasts that only Coalition negativity keeps the federal government from reducing corporate taxes further. Both Labor and the Coalition are committed to the Friedmanite goal of low corporate and individual taxation. Both are coy about their support for the alternative of privatisation, “user pays” and regressive indirect taxation like the GST. Prime Minister Gillard’s discomfiture in connection with questions about the GST, a genuinely epoch-making tax, should be noted.

The major parties are big on symbolism and small on pro-people policy. Examples abound. Former PM Kevin Rudd got in early during his term in office to offer an apology to the stolen generations of Aboriginal Australians. Meanwhile, the Northern Territory Intervention continued unaltered. The measures were extended to others in the community relying on inadequate social security payments. Legislation replacing the Intervention has just passed the Senate so we can expect further dispossession of Aboriginal people living in remote communities. The pro-corporate essence remains but some symbolic “progress” is offered up for celebration.

This type of politics breeds cynicism and apathy. At present there isn’t a real alternative on offer but we must continue to put truly appropriate demands – proper regulation of industry and public ownership to bring the climate emergency under control, significant tax imposts on the obscenely rich mining magnates in a genuine effort to share the benefits of the current mining boom.

The achievement of these demands requires the building of a mighty new force in Australian politics. That shouldn’t daunt us. To borrow a phrase from Margaret Thatcher who used it perversely, “there is no alternative”.

Next article – Will Tony Abbott bring UK-style “Big Society” cutbacks to Australia?

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