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John Passant

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June 2010



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



When Labor is a better friend to business than the Liberals

If Liberals are friends of capitalists the Labor Party is the friend of capital.

The controversy over the Resource Super Profits Tax (RSPT), announced by the Rudd government in its response to the Henry Tax Review, is the latest illustration of this longstanding relationship.

The largest chunk of the revenue from the new tax will be spent on reducing the company tax rate from 30 to 28 per cent, infrastructure projects for big business and tax concessions for mining companies. A little has been allocated to superannuation contributions for the poor. So the tax is largely a way to redistribute income from the mining industry to business in general.

The justification for the tax comes from conservative, mainstream economics and its mouthpieces in Treasury. Most of the profits of the mining industry are a result of a monopoly rent rather than any productive effort. The monopoly the mining corporations exercise, acquired for a song in the form of mining leases, is the right to dig coal, iron ore and other minerals out of the ground where the costs of production are low compared to other areas.

Treasurer Wayne Swan argues that the level of tax on the huge profits from this monopoly has fallen dramatically in recent years. Royalties paid to state governments have plunged from a third of mining profits in 2000 to a seventh today.

In populist tones, the government argues that the “Australian people” should get more back. Kevin Rudd, unusually, even marched with unionists on May Day in Brisbane to bolster this message.

Despite the rhetoric, the tax on mining corporations’ superprofits is mainly about redistribution among businesses rather than from bosses to workers.

In 1943, Lance Sharkey, a leading Australian Communist, pointed out that the Labor Party can often manage Australian capitalism and promote profits more effectively than the conservative parties. Business people are prominent as members of the Liberal Party and as contributors to its coffers. Consequently Liberals find it much harder to say no to the demands of particular sections of the capitalist class.

Tony Abbott and the Liberals have taken the field as the champions of the mining industry. They oppose the new mining superprofits tax and they oppose the cut in the company tax rate.

The pattern conflict over Australia’s tariff policies in the 1970s was similar.

From the mid 1960s, public service – especially in the Tariff Board – and academic economists had been increasingly critical of the strategy of building up local industry behind tariff walls. It was becoming more expensive and less effective. In the manufacturing sector, the friends of the Liberal Party and Country Party Minister for Trade Jack McEwan disagreed.

Menzies and his conservative successors, with their close establishment connections, were hostage to manufacturers who had grown fat from protectionism over the decades. They baulked at the changes big business needed.

It was Whitlam, untied to private school old boys’ networks, who cut tariffs by 25 per cent in 1973 and set in train two decades of economic restructuring.

No less than the Liberals, the Labor Party seeks to support Australian capital. For the foreseeable future, that depends on keeping profits up across the economy and boosting international competitiveness. The ALP was never committed to a program of radical social change in practice. Even socialist rhetoric has long since been abandoned.

In recent decades Labor has also received major contributions from corporations. But the ALP is nowhere near as reliant on business support. It has a close organisational relationship with the trade unions and its core voting base is in the working class. Consequently, Labor is still in a position to more fearlessly implement policies that hurt sectional business interests while promoting the wellbeing of the capitalist class as a whole.

The Victorian grazier Malcolm Fraser who came to office in 1975 spouted free-trade rhetoric. For fear of alienating Collins Street bankers, the Coalition did not implement the reforms of the financial system recommended in 1981 by the Campbell report it had commissioned. It was a Labor Treasurer, the boy from Bankstown Paul Keating, who in 1983 floated the dollar and allowed in foreign banks, later introducing other changes in regulations recommended by Campbell.

Fraser squibbed tariff reform too. Anticipating screams about jobs from the car makers and textile, clothing and footwear factory owners, his government increased protection for these, the most protected of Australian industries. Again, it was the Hawke government which cut tariffs and eased quotas in the automotive, TCF and other sectors, paving the way for growth based on closer integration with the world economy.

The same is true today. Tony Abbott may be keen for a fight over Labor’s “great big new tax”, but it is not at all clear that he has the business big guns, outside the mining industry, lined up behind him. Sharkey was right. At times, a capitalist workers’ party, such as the ALP, can do more for business than parties whose core supporters are employers.

This article, by Rick Kuhn and Tom Bramble,  is republished from Socialist Alternative.


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