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Issue #1672      February 11, 2015

Editorial

Tax – a one-sided “conversation”

Federal government and big business figures are telling the Australian public that it must be ready for a “mature, national conversation” about taxation. “Reform” is the word being bandied around again to describe a very reactionary agenda. Reviews, inquiries and columns in the corporate media are full of the tax issue and they hold to the monopoly line – expand the GST (or lift its rate) and reduce company tax. This Robin Hood in reverse approach is going to take some selling. Embattled PM Tony Abbott says it won’t happen before the next election but that’s less than 18 months away and the softening up has started.

Some, like the Australia Institute, see potential for good in the “debate”. It suggests putting the GST on private education fees and private health insurance. Federal Trade Minister Andrew Robb says it could be whacked on banking fees and financial commissions. Backbench Liberal MP Dean Tehan and Liberal National Senator Ian Macdonald want all the exemptions lifted, including the one for fresh food. After all, the Howard government went to the polls in 1998 with a “tax-it-all” GST policy and won. And who would notice the small increase in food and other prices? That is how the argument goes.

Tehan, Macdonald and other GST maximalists pretend Australian workers and other less privileged sections of the community have embraced the tax. They haven’t. Howard was returned in 1998 despite the policy; memories of Labor’s own privatising, deregulating onslaught were too fresh with voters at the time. The policy was introduced in 2000 after the Democrats agreed to pass it in the Senate. The condition was that fresh food would be exempt. The sell-out was the beginning of the end for the Democrats and, even today, the question of altering the GST is raised with extreme caution by more senior supporters of indirect taxation.

Taxes like the GST used to be unthinkable. The suggestion that the extremely wealthy and the poor should pay the same rate of tax would have been scoffed at in the early stages of the establishment of the “welfare state”. Of course the wealthy should contribute more to maintain the government’s commitments! Of course the higher a person’s income, the higher the marginal rates of tax should go. And of course big business should pay higher rates of tax than the workers they employ! Workers were never persuaded to ditch those commonly expressed ideas but they were effectively silenced in subsequent “conversations” leading up to the current campaign.

The assumptions for the “debate” are being set by big business leaders and the likes of Joe Hockey. Some of the Treasurer’s contributions have backfired. Suggestions that middle income Australians currently work six months of the year to pay their taxes and that, in the relatively near future, the elderly will have to be supported until they are 150 years old got the reception they deserved. But the consensus being cooked is that too much money is being spent by governments and too little is coming in and that it is the workers who need to get ready for a “hair cut”.

The idea that big business should pay more tax is intolerable to those pushing the agenda. The carbon and mining taxes – token levies by design – have gone after long, dishonest and hysterical campaigns. The Tax Justice Network has been attacked for mentioning that, of Australia’s largest 200 publicly-listed companies, 29 percent had an effective tax rate of 10 percent or less and 14 percent had an effective tax rate of 0 percent. At the same time, the Australian Taxation Office is trialling a scheme whereby Australia’s largest companies will hire their own auditors to oversee tax compliance. The “Big Four” firms – PwC, Deloitte, Ernst & Young and KPMG – who advise on how to avoid tax, will be charged with keeping other big companies honest.

Workers and other exploited Australians are being taken for idiots in the current “debate”. They know the score but they will have to press home their point of view or suffer another blow to their living standards.

Next article – IOM prey on Manus asylum seekers

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