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John Passant

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December 2011



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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)



Pacing towards austerity

I wrote this article for Socialist Alternative. It is a combination of two recent articles on this site about well paid politicians and the Labor Government’s attacks on its workforce and the disadvantaged to produce a meaningless Budget surplus.

The Labor government has launched a significant attack on its own employees by increasing the Orwellian “efficiency” dividend to 4 percent. This will throw up to 3000 out of work, according to the Community and Public Sector Union (CPSU). It will cut services to the public and unemployment will go up from the current 5.2 percent to 5.5 percent.

All of this so the government can worship before the false god of Budget surplus.

At the same time the Labor government is attacking its own workforce, and the less powerful in society, the parliamentarians are to be rewarded for their services to capitalism.

According to News Ltd sites Julia Gillard is to get a pay increase of $90,000, taking her salary to $470,000. That’s an increase of 24 percent. Backbenchers are going to get an increase of at least $40,000 on their base salary of $140,000. That is a pay rise of 28 percent.

It is no surprise the pollies have received this sort of increase. First, the Remuneration Tribunal is an institution of the one percent. Just as the rich have been stuffing themselves with bonuses, and being rewarded with the biggest shift in wealth from us to them in perhaps a century, their politicians are being rewarded with a massive pay increase for engineering that wealth shift; for doing the bidding more or less of the mining companies, the Business Council, the Australian Industry Group…

If pay rises of 20 per cent are good enough for politicians then they are good enough for ordinary workers – nurses, QANTAS workers, public servants.

The more pay politicians get, the more divorced they are from the rest of us. The average wage in Australia is about $70,000. Two thirds of workers earn less than that. The median wage for full time workers is about $56,000. The median wage for all workers is about $46,000.

Put our politicians on the average wage of $70,000 or, even better, the median wage of $56,000, so they can feel what we workers have to put up with day in and day out.

The OECD forecast that Australia’s growth next year will be the best in the developed world. Even the government’s revised figures show growth will be 3.25 percent next year.

In an economy with a GDP of around $1.3 trillion annually and spending and revenue of around $400 billion, a surplus or deficit of a few billion makes no difference. Even the current deficit of $37 billion is small beer.

That matters little; the ALP’s attacks on spending are a political manoeuvre to placate “markets”, i.e. the one percent for whom Labor rule and the Liberals want to rule.

But the attacks may not go far enough for the rich bankers and others for whom the two parties of neoliberalism govern. Macquarie Bank for example has already been complaining that the cuts are a magic pudding. They say the “spending cuts won’t hurt anyone” and are not “a substantial structural tightening of fiscal policy”. In other words for the rich the cuts don’t go far enough and aren’t deep enough.

However, the cuts will hurt. They will hurt workers – for example those unemployed public servants and the public they would have served.

Defence spending will continue to increase at 3 percent in real terms. Good to see Labor has its priorities for the one percent right. Withdrawing from Afghanistan would save $2 billion.

There is also a fair amount of fudge in the figures. Labor is bringing forward $6.3 billion worth of spending from next financial year into this financial year to make next year’s figures that much better. And it is postponing some spending for next year and tax changes into later years, again to make 2012/13 the show pony of surplus.

The Gillard government spouted its commitment to battlers’ superannuation by saying it would use a little of the money from the Minerals Resource Rent Tax to cover the revenue foregone from an increase in the Superannuation Guarantee from 9 percent to 12 percent. Yet the government has announced it will make changes to the co-contribution scheme (in which the government matches superannuation contributions of low to middle income earners by up to $1000.) The government will cut the level at which the co-contribution can be claimed from a maximum salary of $61,920 p.a. to $46,920 and effectively cut the co-contribution amount from $1000 to $250.

The changes will save $1 billion over the forward estimates. So much for caring about battlers and their superannuation.

It is true that the government’s previously announced low income superannuation contribution means workers on up to $37,000 will get a rebate to compensate them for the 15 percent contributions tax. But the announced co-contribution changes mean it is low and middle income workers on salaries between $37,000 and $61,920 who will in large part pay for this.

What else is this government doing? Well, it is also cutting the capital budgets of some government agencies by 20 percent. This will save the Budget over $700 million, the government says. This will have a major adverse impact on service delivery.

Let’s just unpack these attacks on the staff and capital budgets of the public service. There will be fewer public servants, using less efficient and older technology, providing more services and whatever new ones (like administering the carbon tax and the minerals resource rent tax) the government demands. This is a recipe for disaster.

But that’s not all the government is doing. It is cutting the baby bonus, and freezing its indexation. Women without jobs will be penalised. An alternative approach would be to fully fund a government-owned child care system with free access for all by taxing the rich.

The government has changed the rules about dependent spouse tax rebates so that a taxpayer is now only eligible if their spouse is 60 years or more old. Previously the cut-in age was 40. This will impact on 700,000 taxpayers with dependent spouses – often low income earners. It will save $1 billion.

There is a pattern emerging here. Labor is attacking the vulnerable and less well off.

The government is also slashing education and attacking some university students. It will cut $1 billion over the forward estimates from the education sector.

Next year the government was going to introduce a standard work expenses tax deduction for most workers. It would mean if your expenses weren’t above $500 in 2013, rising to $1000 the year after, you would get an automatic deduction. It would save a lot of time and money having to stuff around with receipts and the like. The government will save $1.2 billion by deferring the start-up date of this standard deduction scheme.

So the targets for Labor have been public servants, other ordinary workers, students, middle aged dependent spouses and some new mums – all part of the 99 percent. Are there any attacks on the one percent from Labor? Of course not.

The GFC Mark II is cutting billions in revenue. For example, capital gains tax receipts have dropped, and will drop, by about $7 billion over the forward estimates.

Most capital gains go to the richest 20 percent in society. But they are taxed very concessionally. Non-residents don’t pay Australian capital gains tax (unless it is land). And residents only include half the gain in their income if they hold the asset for longer than a year.

These capital gains tax concessions to the rich exist because Howard and Costello thought they were the wealth creators and should be rewarded and encouraged. Abolishing this largess would reintroduce some equity into the tax system, raise billions and solve the budget deficit “problem”.

The back down on the Resource Super Profits Tax and its replacement with the mini-me Minerals Resource Rent Tax has cost perhaps $10 billion a year. There’s your budget “problems” wiped out too.

Taxing the rich however is not on Labor’s agenda. Pandering to them is.

Remember how executives from Twiggy Forrest’s mining enterprise, Fortescue Metals, admitted that the company had not paid one cent in tax? They are not alone. According to the ATO between 2005 and 2008 40 percent of big businesses didn’t pay any income tax. The latest ATO Tax statistics show that almost 60 percent of all companies are non-taxable.

Maybe making companies pay tax might be a better approach than screwing over the poor and vulnerable? Not if you are Labor in power.

All Labor cares about is a Budget surplus and keeping the bosses happy. But the bosses aren’t happy. They know this is a pea and thimble trick by Labor. They think these cuts are minor and some of them want a horror May 2012 Budget.

The figures released on Tuesday are based on the assumption that Europe will be able to potter along. This is looking less and less likely.

If these attacks on public servants and public services, low and middle income superannuants, students, middle aged dependent spouses and mums are what Labor is prepared to do to the Australian working class when we have the best performing economy in the world, imagine what it will do if the situation in Europe worsens and drags down the global economy and Australia with it.

The Australian ruling class and their well paid politicians are sharpening the axe. We need to organise, organise, organise and fight, fight, fight to stop their attacks.



Comment from dl
Time December 3, 2011 at 8:02 am

This story should be reserved for the inevitable Saturday Socialist speak out post, but it turns out that Anders Behring Breivik is actually Insane.The presss release stated that it was paranoid schizophrenia, which is what the other recent politically motivated shooter Jared Lee Loughner was also afflicted with. With this new piece of insight, in retrospect it perhaps wasn’t very judicious to have judged these shooters as have being motivated by Right wing pundits and populist politicians, as was done prolifically in the aftermath of the shooting, and even on this blog, if I can recall correctly.I have no doubt that these ideas helped form their thought processes, but they should be seen in the context of them being mentally deranged.

That aside, I liked this article alot, and it comported well with my own thoughts on this topic. There is nothing much really to add to it.

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