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My interview Razor Sharp 18 February
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My interview Razor Sharp 11 February 2014
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Time for a House Un-Australian Activities Committee?
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Fix the budget deficit – tax the rich

So the obvious has become a reality. Australia’s predicted tax revenue is short $12 bn.

My prediction earlier in the year that the Budget deficit could be up to $20 bn looks on track. Of course now that Gillard has said nothing is ruled out, the actual budget deficit itself will be less than that as Labor makes us suffer death by a thousand cuts.

Let’s put this into perspective. A deficit of $10 or $20 billion in comparison to GDP of about $1.5 trillion is by international standards small beer.  However the bourgeoisie and their two parties have adopted the strategy of never letting a good crisis go to waste.

The Labor Party and Liberal Party will have different ways to address the deficit ‘crisis’. The Liberals for example in power after the 14 September election will launch an all out assault on public sector jobs. Their proposed 20,000 by natural attrition will turn into 30,000 or 40,000 by sacking and attrition once the ‘real’ size of the ‘black hole’ is ‘known’ after they win government.

If they can get out of it they will not proceed with current government initiatives like Gonski, the NDIS, support for child care workers, the dental health scheme etc etc. They will cut a swathe through the social wage, assuming workers and their unions let them which, given the systemic cowardice of many of the current union leaders, may happen unless rank and file members fight back.

On top of that repealing the carbon tax will cost billions and the MRRT possibly hundreds of millions (not the predicted billions).

Labor on the other hand will spread the cuts around in the current Budget on 14 May. Funding and other cuts to Universities, staff and students totaling $2.8 billion are a good example. These cuts are the biggest since Howard in 1996 and come on top of another $2 bn in cuts since 2011.  An adjustment here, a cut there approach – $900 million in efficiency dividends and $1.2 bn in turning a $1025 a semester grant for books into a HECS loan – will be replicated or at least looked at  for all funding sectors.

‘Sharing the burden evenly’ will be Labor’s mantra.

The $728 million in ‘savings’ over 4 years produced by attacking the single parent payment is another example of the type of ‘saving’ Labor could look for in the May Budget.   Presumably sending 90,000 single mums into deeper poverty is both liberating women and not cutting to the bone.

My guess is that in the Budget there will be more of these social security adjustments to make the less poverty stricken welfare recipients more poverty stricken like the rest of their colleagues.

Another guess is that Labor will cut departments across the board. Increasing the Orwellian public service ‘efficiency’ dividend again could do that and see government departments cut staff over a few years to achieve what Abbot and Hockey will do in a year.

Can the Labor government sell off more assets? Yes, but those sales (e.g. Medicare) won’t happen until during or after next financial year so it won’t give an immediate hit of money to the Budget.

As to spending cuts, I can think of 2 that would save billions and that I would support  – to defence and by abolishing the detention centre concentration camps here and offshore.

Both Gillard and Abbott are Thatcher’s political spawn. That has been neoliberalism’s crowning success – having both sides of capitalist politics embrace essentially the same vision and have them arguing over the detail and pretending there is some grand difference.

Labor will, apparently, just spread slightly less of the pain among more poor and working class people.

The more important issue for Australian capitalism is the reason for the revenue fall – the collapse in company profits. Gillard blames the high Australian dollar. A super profits tax on miners might have helped cut the Australian dollar back  bit. So blame the minerals council.

But the fact is Australian profit rates have been propped up or their generally stark reality papered over during the last decade by high profits for the mining industry and the banks.  Profit rates for example in much of manufacturing have collapsed or perhaps more accurately have remained very low.

This radical restructuring of Australian capitalism is continuing apace, with Labor seemingly powerless or unwilling to address it and manage it for the benefit of workers.

Where could the money come from?

Gillard has not ruled out tax increases either, but her talk about sharing the pain means that the burden of tax increases will be borne by you and me, not the rich. It is all about priorities.

Labor won’t tax the rich. Instead it has attacked the vulnerable, like single parents and those sectors it wants to further privatise, even if under government tutelage, like universities.

The proposed NDIS levy gives a good indication of what Labor really means by sharing the pain. An increase in the Medicare levy falls on salary and wage earners. Companies don’t pay it.  So sharing the cost of NDIS apparently doesn’t include business. Why not? It is business which benefits from a healthy and I would add well educated workforce.

Is there an alternative? Labor could tax the rich. It isn’t rocket science.  Here are a few examples with very rough guesses about revenue.

The top 20% own 62% of Australia’s wealth, which is in total about $6 trillion. So they own roughly $ 4 trillion. The bottom 20% own less than 1%.

So a wealth tax of 1% on the top 20% (none of whom will be workers but rather capitalists and their managerial class and upper middle class) would yield, by my calculations, $ 40 billion a year.  What better way to get those who have benefited the most from the 2 decade long boom to help all of us survive the coming recession.

According toEssential Vision 64% of Australians support increasing taxes on big business.  Labor could increase the company tax rate to 35% (from 30%). There’s $10 billion. Now, this gain would be offset by an automatic increase in tax credits for shareholders, known as dividend imputation. So halve dividend imputation. Billions.

61% of business is non-taxable. Between 2005 and 2008 40% of big business paid no income tax. A minimum company tax based on turnover would get some money out of these bludgers. Billions.

Labor could abolish tax concessions for the rich and big business. $20 billion. This includes the superannuation tax rort for the rich.

What about quarantining rental negative gearing losses to be offset only against future rental income. Billions.

Tax capital gains like all other income and abolish the 50% general concession to bring in $5 billion.

Make the income tax rate steeply progressive by increasing tax on income over $120,000 a year rapidly and impose a 100% rate on incomes greater than $250,000.

Impose not only a one percent wealth tax on the rich. Impose a wealth transfer tax on them. Tax the gains on their homes.

Impose a super profits tax on all super profits – not just coal and iron ore but all minerals and other industries like the banks. $20 billion.

This gives you enough money not only to fund socially necessary activity on public education, health and transport, and addressing climate change. It also gives you enough to abolish the regressive the GST. That would cost $45 billion.

There are many more progressive tax changes I or others could suggest.

This isn’t ‘socialism’ but it will make life better for workers and the poor. It will require a shift to combativeness by the working class to put tax the rich back on the political agenda.



Comment from That flogger, Calligula
Time April 29, 2013 at 10:02 pm

Herr Passant,
You’ve seen it with your own eyes these last many months.
It has come to a head these last days.

The Rudd regime might have had a chance but Gillard has been working in step with the other team – intentionally working in step with the alleged opposition.
Meanwhile the states have been setting up to sell off assets owned by Australians.
Whichever way it is presented this island continent is bankrupt and only fit for what the seppos call a ‘firesale’.

At breakfast this morning I had a fair old problem explaining to my son about exactly how he may need to find a place to go and live.
Certainly he’ll have a problem, given the way we’ve been treating refugees lately.
I don’t particularly want to be selfish enough to leave him in the lurch in the near future but there is SFA that I can (will be able to) do to help him when the crunch happens.
All our adult lives we, as a family, have railed against denying honest refugees their place in a wide open land.
Sorry. The buggers are ruling our streets these days and they have no manners whatsoever.

I had to contend with a similar situation in my youth.
Too many emigrants from Europe – too many far too full of piss and vinegar.
We managed with them and eventually they settled down (except for the drug trade and cut-throat behaviour in the pubs.)
And now we have to endure countless of these womanless little exploitative ‘chitterjees’ lurking around the streets seeking out their main chance.
That happens to be their public image and accepted fact.
Meanwhile that show do happen to be setting up enclaves, or ghettos, within our society.
Whether you like it or not these enclaves exist and have become no-go areas for us whiteys.
It does boil down to the fact that multi-culturalism is a complete cluster f..k.

It happens that our society is on a road to nowhere.
They keep blethering about the global village.
As a caretaker rapidly losing all influence in his queensland village – I had believed I would have been able to say – these are our rules for our village – abide by them and you are welcome to live here..
But how in Christ’s name are people who have been subject to years of conflict and miserable exploitation expected to come settle here when our own bogans behave like utter filth?

That is what we are facing in my part of the world in upper south east queensland.
The rule of law tremblingly maintained by Bligh’s regime has collapsed like a pack of cards since newman assumed his mantle.
I am tired of hearing about the oppressed overseas.
About time we helped our own!
It is time the Bleeding hearts in Australia directed their attention toward what is happening here, on their own sorry patch.

Comment from crumpet- Calligula
Time April 30, 2013 at 12:30 am

How may times have you been here John?
Tax the rich?
Why would anyone want to tax the rich?
Where is your head at?
How could you arrange it?
Tax the Rich – the bludgers and sociopaths?
How might that be managed?

The other day I had a brainwave.
I have zoomed off and patented it all comprehensively.
All we do is abolish the houses of representatives and the senate.
We replace them with the ‘Gents’ and the ‘Ladies’.
Bingo –
All that argument ceases about gender representation.
Two houses of parliament – Gents and Ladies – as equals.
Next we have to work out which will be the ‘upper’ house.

Which will be, as we might see the situation, ‘on top’.
A bit of a problem that. – but might we look at the way the Irish do it.
One year at a time – and a turnover at the appropriate time.
Some pals of mine visited Sunday afternoon and suggested some turnout.
But you wouldn’t want to hear about their suggestions.

Nonetheless it is of merit.
Put those women into a house of parliament where the screeching bitches would, for once, be held accountable.
And the same for the bloody corrupt jocks.
Corral the useless bludgers and force them to perform.
Put them in a situation under the microscope when if they failed, they would be taken apart by that other house of parliament.

Perhaps that time has come.

Comment from crumpet- Calligula
Time April 30, 2013 at 12:58 am

This thing about taxing the wealthy.
In ancient societies it was something of a moral pressure for those more fortunate in society to support their people.
It was never a question about who was starving or down on their luck – or circumstance.
It was a fact that they were there and canny enough to know who was hitting it hard in the community.
Those more fortunate would just help those less fortunate without any question.
It was entirely within their interest to do that –

I’ll stop there to give the reader time to think about that.
Why would it be in the interest of the fortunate to support the less fortunate?

Wouldn’t that be a no-brainer?

Think about it.
I’m talking about Greece and Rome.
Why would those guys construct a life principle amounting to something close to a modern welfare state created and supported by the wealthy?’Cos in their hearts they were decent people.
Something we are close to losing these days.
They were essentially decent people.
Decent people.
We seem to go close to losing that concept – about decent people.
What happens when the wingnut wins the next election and you lose your job?
There will be no ‘decent people’ that you will be able to call upon to help you resolve your mortgage arrears.
So work it out now well before you vote.
Work it out now before you lose your public-service job.
Work it out now before your wife loses her job in personne management.
Work it out now before the mines thing drops through the floor.
Work it out now while you have a chance that no-one gives a stuff about you.
Work it out now since you are nothing more than an expendable digit.
Most importantly – just work it through in your tiny mind now before they send you to perdition.
But what is the use arguing the toss with dolts in a queensland overpopulated with ill mannered, ignorant, bogans from the south.

Comment from Kay
Time April 30, 2013 at 7:20 am

It’s a pity the Labor government made such a hash of our economy to start with! They at least did inherit a reasonable situation.

But many of your suggestions seem reasonable. Regardless of who rules after September 14 (and unless Abbott really stuffs up big time – always a possibility with him – it will be Abbott) tough times are ahead for us all. It would be good if the burden fell disproportionally on the obscenely rich – but they are the ones with the clever accountants and lawyers to configure their finances in such a way that they are almost impossible to tax.

Comment from Ross
Time April 30, 2013 at 5:03 pm

They are not listening John.Cyprus here we come.

Comment from John
Time April 30, 2013 at 8:10 pm

Ah Kay, you mean low unemployment, weathering the GFC, high living standards etc. Workers voting for austerity makes little sense to me.

Comment from Kay
Time May 1, 2013 at 5:32 am

Regardless of the outcome, austerity is on its way. You can’t live in a fool’s paradise forever – as Europe has discovered. Somehow, and eventually, you have to balance the books!

Comment from John
Time May 1, 2013 at 9:20 am

Why? The level of government debt in Australia is incredibly low. There is no comparison that can be made with Europe. What balance the books means is continue to give big tax concessions to the rich and capital and let them pay little tax. At the expense of socially useful spending. And why does the system go into periodic breakdown? It has a lot to do with the real problem – the tendency of the rate of profit to fall which arise as a consequence of the way capitalism is organised.

Comment from Chris Warren
Time May 1, 2013 at 9:39 am


Capitalism is fool’s paradise.

“Austerity” only means cuts to public services, jobs, wages and pensions. As Nobel prize winning capitalist Krugman notes – this will only make things worse.

The only solution is for society to launch a wide program of job creation based on non-profit principles.

A society of non-profit enterprises always balances their books.

Comment from Kay
Time May 1, 2013 at 9:44 am

Well, I was agreeing with your “tax the rich” proposals! I do agree that the widening gap between the very rich and the very poor needs to be addressed – now.

I for one feel much more comfortable with a lower level of debt – both personally and as a nation. A high level of debt means that a great deal of your income goes to paying interest on your borrowings. I think that is just wasting money that could better be spent on services. And why allow our debt to drift as low as the European problem countries? Better to step in now and tax the richer companies/people a bit more, so as to to stop the type of severe austerity measures in place in such countries as Greece.

I like to operate as much as possible with balanced books – that way we can cope with emergencies that come your way – like our previous surplus allowed us to easily weather the GFC storm. But then again, I believe that a more moderate and regulated form of capitalism is the way to go – a la Keynes, I guess.

Comment from Robert LePage
Time May 1, 2013 at 10:31 am

Remember what Malcolm said a long time ago; You will have to keep it under your mattress?????

Comment from Karalta
Time May 1, 2013 at 11:44 am

Thanks John, I’d be happy with your alternative!

Comment from Hasbeen
Time May 1, 2013 at 1:20 pm

Just how many times do you lot have to learn the same lesson. You don’t hit the goose too hard, or pretty soon, no goose. You even have to leave the goose some golden eggs, or no goslings, & no more layers.

Surely Julia’s recent mining tax should have taught you this simple fact. How many projects are now cancelled?

It was only after China let people earn some wealth for THEMSELVES, that they started to prosper. Now even Russia is doing OK, on the same basis.

I’m just an old pensioner, so taxing anyone won’t effect me, but it will destroy the economy if you take too much from the rich, & hand it out to the layabouts.

Now here’s a deal.

Get rid of 50% of bureaucrats, every second one just gets in the way of getting anything done.

Close 50% of university departments. Put nurse training back in the ward where it should be, & cancel all advanced macramé courses for the duration. Teach only useful subjects, & limit all academics to 5 year contracts, with a 5 year hiatus between contracts. Oh & require 20 hours productive teaching duties each week.

Then perhaps you could grow up, & start earning your own way in the world.

Comment from Dan Lawton
Time May 1, 2013 at 5:32 pm

The best thing you can do for the pooer is not to become one of them.

Comment from Chris Warren
Time May 1, 2013 at 6:24 pm


Didn’t anyone explain to you that the Golden Goose was a fairy tale?

Wealth comes from work. If you create unemployment and poverty, less wealth is produced.

Get rid of capitalists, they all get in the way of sustainable growth and equity for all.

Comment from Denis L White
Time May 1, 2013 at 9:32 pm

Perhaps the bottom line in such discussions is that we no longer live in an economic and social democracy. Whitlam’s government was the last attempt to maintain this ideal. The sell-out to neo-liberalism by subsequent governments in Australia was, in my opinion the height of hypocrisy and bordered on traitorous in terms of the interests of the Australian public. The only vestige of democracy which remains, constitutionally enshrined, is that we can vote for a change of government periodically. Beyond this we are governed by “conventions” which are subject to challenge by the political mores of the day. Effectively we may as well be subjects of an authoritarian regime. Here I raise the question as to how much would get past government were it put to public referendum. And yes I know there are problems of scale with this mechanism.

Queen Victoria might find it mildly amusing to find that the Australian people still cling to our archaic and unbalanced constitution.

Clearly our political representatives toe the party line so our vote counts for nothing in terms of representation, more fool us for voting them in.
De-regulation, privatization, the undermining of union power, outsourcing government responsibilities, floating the dollar, open door to investment and importation of consumer goods have all served to weaken the control of this country’s affairs in terms of people power and perhaps more importantly the power of government to respond to the wishes of those people.
I’m with John, if Social Alternative can gain wings I’d like to help it Fly.
Den 71

Comment from Kay
Time May 2, 2013 at 6:39 am


I rather like Kafka’s statement: “Every revolution evaporates and leaves behind only the slime of a new bureaucracy.”

In the past, socialist revolutions have just resulted in totalitarian regimes (Russia, China). Be careful what you wish for!

Comment from Denis L White
Time May 2, 2013 at 9:09 pm

Kay. Thankyou for your response. The only reason I contribute to this forum is because I do take care. Perhaps I should apologise for where I lack Knowledge but I am willing to take that risk in the hope of adding to the general thrust of attaining a meaningful democracy. The more we test or expand each others knowledge the better. I am confident the You, John and many other contributors are seeking the same fundamental goals. The challenge is to get the majority of the Australian and indeed the global population to recognise that unfettered capitalism is reaching its end-game. It is one thing that the big corporate players succeed in taxing profit from reasonable human activity, now on a global scale, but absolutely diabolical that our elected representatives use their positions of power to control and divert our taxation system to help these same big players.
I am perhaps fortunate to have had enough native cunning to recognise early on in my life that if you don’t swim you sink but I loathe those who can knowingly destroy the lives of others in the process, something which I can honestly claim never to have done.
Those who declaim socialism fail to recognise an absolutely intrinsic and essential part of their own humanity just as surely as if they denied their own individuality. True democracy must lie in the realm of “what is good for one is good for all and reversely what is good for all is good for one”. “Tell that one to the troops”
Den 71

Comment from Kay
Time May 3, 2013 at 6:09 am


I am quite sure you do care about the future of our society and of all the human beings on this poor, abused planet. I have no problem with accepting your sincerity and beliefs. I envy your belief that a future free of exploitation and unfairness is possible.

I guess I am a lot more pessimistic. And based on what I have seen of human nature and the history of the world to date, I doubt that any ‘revolution’ would result in anything very different from what we see today – exploitation by some human beings of other human beings. That’s the human condition IMO.

For that reason, I would prefer to stick with western-style liberal democracy as it has, IMO, delivered the best outcome to date for the population as a whole – after all, despite all the railing over the ‘filthy rich capitalists’, in this society we are, for the most part, quite comfortably off. So the real trick is to spread the wealth wider to reduce the poverty still remaining. And even there, in this country no one is actually starving – it is just that their living conditions and life opportunities are very limited. So, to me, that boils down to good legislation and more equitable tax regimes – and wiser spending by government of the money collected. Not by throwing the baby out with the bathwater (a revolution). But I do not support people not making any effort themselves to improve their lives – I just don’t believe in the ‘let’s just do nothing and expect handouts’ attitude that does exist in some people.

I think we both picture a better outcome for the society as a whole, we just envision different ways of achieving it. I don’t think capitalism is nearing its end – I do think it is out of control but can be reined back if enough people want it that way. Probably just as ‘pie in the sky’ as your dreams of a ‘revolution’. I think religious fundamentalism is also a threat to the welfare of people worldwide – but tackling that – wow, that’s a biggie! I’d rather start little first – concentrate on this country.