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John Passant

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End business entitlements instead, Hockey

In London on a taxpayer funded trip, economic ignoramus Joe Hockey and likely Treasurer in the Abbott disaster, called for an end to the age of entitlement in Australia.

Was he talking about the rich and powerful mining magnates who are entitled to rip profits out of the ground without paying any tax? Evidently not.

Was he talking about the almost $2 billion in fuel subsidies to big business? Evidently not.

He certainly wasn’t talking about the private health rebate going to millionaires. No, that evidently is not on his cutting agenda.

And he wasn’t talking about the CGT concessions to small and big business along with other tax concessions totalling tens of billions in disguised handouts to business every year.

The Treasury Tax Expenditures Statement estimates that last year business received over $9 billion in disguised grants through tax concessions.

The capital gains tax concessions are estimated to cost the revenue almost $41 billion a year.  

Taking out the family home for workers would cut that to around $31 billion.

So a few tax changes to get rid of exemptions and concessions for the rich and business and there’s $40 billion in ‘welfare’ savings straight away Joe. Or do you only attack welfare for poor and working class people people Mr Hockey, not that given to your rich mates? Why is that?

Perhaps Joe was talking about the $10 billion in disguised handouts that go to the top 20% of income earners in superannuation tax concessions. No?

Perhaps the billions in handouts to rich private schools. No?

He must have been talking about pensioners.

Clearly these ‘bludgers’ are causing Australia’s ‘horrific’ economic problems. Just think about it.

These people don’t work. They just put their hand out every fortnight for the outrageous sum of $347.65 a week if they are single, or $262.05 a week each if they are a couple.

Outrageous. What have they ever done to deserve this?

I dunno, maybe 40 years in the workforce, paying taxes and raising kids might have something to do with it. And the dignity of human worth and paying people enough to live decent lives as they age?

In fact the pension is  a pittance, even after a $30 a week one off increase from the Gillard government last year.

What other entitlements could Joe Blow be on about?

Newstart perhaps? Should we expect the Opposition to be spewing forth the bile of dole bludger rhetoric soon?

Newstart is even lower than the pension. It is $244.85 a week for a single person with no kids. Try living on that Hockey.

You know what else? We spend even more on health than we do on the pension. So maybe Hockey is going to attack Medicare? Cut spending on health, is that it Joe?  

According to the OECD as a percentage of GDP Australia spends less on social welfare than the US.

Partly this is because the US as a society spends a lot more on its health system. Despite all the neoliberal rhetoric, nationalised health schemes are cheaper than private ones and produce better results – a healthier working class from which the bosses can extract profits.

However capitalism is not a logical system. So the ideology of neoliberalism – the market is the best way to determine how to provide goods and services and everything, including health and education, is a commodity – infects so many (including neanderthals like Hockey) that in the name of the market they will introduce policies that are actually more costly for capital.

Taking his cue from the Asian century rhetoric, Hockey said our current social welfare spending needed to be bought into line with our Asian competitors.

He singled out South Korea where social welfare runs at about ten percent of GDP according to the great Hock. In Australia, Hockey says, it is 16 percent.

Let’s play with these figures. Let’s assume Hockey’s goal is to have Australian social welfare spending down to ten percent of GDP. That would be a cut of around 6 percent of GDP. Our current GDP is over $1 trillion a year.

So Hockey wants to cut $60 billion from welfare spending.

Abolishing Medicare and the pension would do it. There’d also be an uprising.

How about abolishing defence spending? That would get you halfway their and clearly these payments are made to people who don’t do anything useful. 

Of course this is fantasy stuff on my part, and Hockey’s. But it shows you the vicious direction and intent of the soon to be the Tony Tory Government.

They’ll target the poor and working class and ignore their rich mates and their real gravy train entitlements.

Let’s go a step further. Wages in Australia are much higher than our Asian competitors. Using Hockey’s logic, to stay competitive, should we cut wages too to Asian country levels? I wonder how much a senior Chinese or Indian politician earns?

Cutting welfare entitlements in the long run is counter productive.  A healthy, fit and relaxed workforce, one feeling secure about its old age, is a profitable workforce for capital.

But the short sighted nature of the drive for profit means that capitalists themselves,  and now most of their politicians, cannot see that.

The way to stop Hockey swinging an axe through social welfare is to fight Gillard in her Budget attack son the poor and working class, her ongoing assault on our living standards and her policies which shift wealth to capital from labour. If we let her get away with a mini or major Hockey then she’ll be emboldened to attack more and Hockey will be confident he can cut even harder.

To stop the Liberal barbarians in the distance we have to stop the Labor barbarians at the gate.



Comment from Shane H
Time April 19, 2012 at 11:05 pm

Nice one.

I love the recent views of economists and BCA. Having campaigned relentlessly for a budget surplus all of a sudden they are talking about how non-essential it is (just a political decision by govt etc)

Presumably they realise that it may tank the economy to withdraw $20 billion and thats money that won’t be spent on them (sorry needed infrastructure) – which Howard didn’t spend either to get the surplus.

Be good to get more details of the business subsidies if you have them.



Comment from John
Time April 19, 2012 at 11:17 pm

I do have the tax ones somewhere in one of my earlier articles.

Comment from John
Time April 20, 2012 at 7:03 am

I’ve just added some tax expenditure detail. These are disguised grants through the tax system. And I’ve just heard a news rumour that some of the super concessions (which I mention) might be under attack. It is an outrage that the cost of these concessions (80% of which go to the top 20% of income earners) will soon pass the amount we spend on pensions.

Comment from Bazz
Time April 20, 2012 at 10:56 am

What almost all commentators (left & right), are missing is signalled in Hockey’s comment that all countries are out of money.
Rising energy prices, oil in particular, are the cause of a new regime of Zero Growth.
Note how all commentators talk about getting more growth, well here is the news for you;
Since crude oil production hit its maximium in 2006 (IEA) the price of oil is eating any GDP and while GDP decreases with rising energy prices growth will be impossible.
All expenditure will have to comply with whatever is left over after energy costs are met.
Whatever Wayne Swan cuts back on this budget will be nothing compared with what we will be forced into in the near future.

Comment from Gavin R. Putland
Time April 20, 2012 at 11:30 am

In summary, dumping tax concessions for “capital gains” and high-income super would raise enough revenue to get rid of Howard’s Great Big Tax on Everything, a.k.a. the GST.

Pingback from En Passant » End business entitlements instead, Hockey | #Auspol @johnpassant | The Left Hack
Time April 20, 2012 at 2:55 pm

[…] En Passant » End business entitlements instead, Hockey | #Auspol @johnpassant Posted on April 20, 2012 by Darin Sullivan via […]

Comment from Denis L White
Time April 20, 2012 at 9:44 pm

John youv’e nailed it again but how on earth can the ignorance and apathy of Australians be overcome. There is ample and substantial evidence on the public record which indicates that since the destruction of the Whitlam Government that the regimes which followed were dominated by American imperial and corparate interests. Traitors to their own people in both countries. Successive administrations in the USA have built a military network, in excess of 900 bases spread around the world, from which they could obliterate any city in the world within 30 minutes. They are estimated to posses some 25000 nuclear warheads and have already used weapons “enriched” with depleted uranium in Iraq.Their second most powerful surveillance facility is at Pine Gap in Australia.Which incidentally Whitlam threatened during His brief tenure. Read Helen Caldicotts book “The New Nuclear Threat”. The world must confront the evidence both historical and current and wake up to the reality that America is in fact the ROGUE STATE which underpins the instability. destruction and genocide which has bedevilled the planet for the last 30 years or so. If anyone wishes to contest this perspective, I suggest they first go to their local libraries and read 20 or so books on the subject as I have done. As far as Australia is concerned to get our house in order the first thing to do is to rewrite the constitution to include a comprehensive bill of rights and eliminate the powers of the Governor General. The Swiss constitution is probably the most democratic model available. It would be the classic voice in the wilderness trying to convince the people about such a basically essential change.

Comment from John W
Time April 23, 2012 at 9:08 am

Thanks John Passant for a great article. All I would add is the 4 major banks (CBA & ANZ & NAB & Wetpac) were given the opportunity (by Rudd, Gillard & Swan when they gave them a tax-payer funded guarantee) to increase their market share from 60% to 90%. Now of course they raise interests regardless of what the RBA does & they fire Australians & send workers overseas & Gillard & Swan do nothing. The 4 monopoly banks have destroyed many small business & cost the jobs of thousands. It is the cancer eating away at the heart of the Australian economy & society. I could also mention the Wealth Destruction (aka Management) Industry that charges exorbitant fees for destroying Australian’s Super & life savings.