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Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (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. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (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
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Sick kids and paying upfront

(0)

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. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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We workers are the lifters: the capitalist class are the real leaners

This is a draft of an article I am writing for Solidarity magazine. It needs major editing to reduce its word length.

We workers are the lifters: the ruling class are the real leaners

Australian Treasurer Joe Hockey famously declared that Australia needed to be a nation of ‘lifters, not leaners’. Just who are the real leaners?

For Marxists the ruling class exploits the working class. This means it extracts surplus value (what becomes profit, interest, rent, dividends etc) from workers. That surplus value is the unpaid work workers do for the boss in the normal working day over and above what they are paid to survive, come back the next day and raise the next generation of workers, and with a little left over for socially determined results and activities (including as a result of previous class struggles) like the social wage and even after work drinks on Friday night.

This means we are the lifters. It is the bosses as a class who are the real leaners.

Now I accept for most people this exploitation is hidden, but workers feel it in their bones. That is why the vast majority of Australian workers have a social democratic vision of, among other things, well paid and plentiful jobs, and better public health, education and transport. On most issues they are far to the left of most politicians.

The rise of neoliberalism began in Chile in 1973 under the dictator Pinochet and spread to the UK in 1979 with the rise to power of Margaret Thatcher and the USA in 1980 with Reagan being elected President. It was followed in 1983 by the election in Australia of the first neoliberal government here, the Hawke Labor government, committed to containing wages and union activity, reducing government spending and privatising key government assets.

Using the state to restrain if not neuter the union movement, or at least its more active sections, is one of the main aims of neoliberalism.

The real goal, in a time of falling profit rates, is to extract more and more surplus value out of workers as a way to counterbalance that fall.  As Peter Jones showed in his magisterial article ‘Economic shock as mining boom evaporates’ in Solidarity magazine in March, the mining boom, from around 2001 till 2011, saw Australian profit rates resist the global downward trend but from 2011, with the collapse of the mining boom, they began to fall. The current stock market crisis in China, reflecting deeper problems of interconnectedness between China and Europe and North America, will exacerbate that fall.

One way to address falling profit rates is to extend the working day beyond the normal working week. Research by the Australia Institute ‘suggests a national trend of full-time workers putting in six hours unpaid overtime every week, while part-timers work an additional three.’  It describes this as a donation of $110 billion a year to employers. Tell me again who the real leaners are.

Another way is to reduce the share of the national income going to labour and increase that going to capital.

According to the Australian Bureau of Statistics the share of national factor income going to labour has fallen dramatically over time.

Compensation of Employee share of total factor income

Graph: COE share of total factor income

 

Profits share of total factor income

Graph: Profits share of total factor income

 

The share of national factor income going to capital increased markedly over the same time.Tell me again who the real leaners are.

These trends are not mainly caused by the changing nature of the workforce. They reflect the lack of combativity of the Australian working class over the last 3 decades and the role of the trade union bureaucracy in a deliberate program of trickle down class collaboration.

These trends are systemic. One result is increasing inequality in Australia.  As the Australian Council of Social Service (ACOSS) puts it in its June 2015 report Inequality in Australia: A Nation Divided:

A person in the top 20% income group receives around five times as much income as a person in the bottom 20%. A person in the top 20% wealth group has a staggering 70 times as much wealth as a person in the bottom 20%. The Report also finds that these gaps are widening. Over the last 20 years the share of income going to those at the top has risen, while the share flowing to those in the middle and at the bottom has declined. The same is true for wealth, with the bottom and middle having lost ground to those at the top. The wealth of the top 20% wealth group increased by 28% over the period from 2004 to 2012, while by comparison the wealth of the bottom increased by just 3%.

Tell me again who the real leaners are.

Poverty is increasing. In its Poverty in Australia Report 2014 ACOSS revealed ‘that poverty is growing in Australia with an estimated 2.5 million people or 13.9% of all people living below the internationally accepted poverty line.’  Two and a half million people, including almost 700,000 children, are poor so the very rich can continue to accumulate capital. Tell me again who the real leaners are.

We can see more specific examples of who the leaners are coming out of a discussion of tax avoidance.

The Australian Financial Review has exposed the tax arrangements of Apple. Neil Chenoweth in the AFR tells us that Apple ‘has shifted an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade.’

It is not just one bad Apple. As The Tax Justice Network and United Voice report, ‘Who pays for our common wealth?’ says:

Overall, the effective tax rate of ASX 200 companies over the last decade is only 23%. If the largest Australian listed companies paid taxes at the statutory corporate tax rate of 30%, it would produce an additional $8.4 billion in annual revenues. Within the ASX 200 companies nearly one-third have an average effective tax rate (ETR) of 10% or less and 57% disclose subsidiaries in secrecy jurisdictions (tax havens).

The Senate Inquiry into Big Business Tax Avoidance also reveals the tax leaners many big businesses are.

Multinational pharmaceutical companies extracted $8 billion in revenue from Australia. That includes $3.5 billion from the Pharmaceutical Benefits Scheme. They paid just $80 million in Australian tax, or one percent of revenue.  Are they leaners or lifters?

Mining companies in Australia shift billions in profits to Singapore through marketing hubs. Evidently they can’t market their minerals from Australia. The fact that Singapore is a low tax country and does side deals to lower tax even more has absolutely nothing to do with these arrangements. Absolutely nothing. Real lifters eh?

Speaking of mining companies, Laura Tingle said in 2011 in the Australian Financial Review that Twiggy Forrest ‘has never signed a corporate income tax cheque for any of the listed companies he has run in the past 16 years. And FMG has another $700 million in tax losses still to bring to account before he will have to do so.’  But not to worry. He is [sarcasm alert] a philanthropist and great friend of Aboriginal people. A real lifter no doubt.

Just like Clive Palmer. According to Sarah Kimmorley in Business Insider his companies, Mineralogy Group, QNI Resources and QNI Metals, have not paid income tax for the last 6 years.  What a combination – a lifter and a parliamentarian.

According to the Australia Institute mining companies also receive $4.5 billion in taxpayer funded subsidies.

Google has arranged its affairs so that in 2013 it paid just $470,000 tax in Australia on revenues from here of more than $2 billion. One estimate is that, but for the Singapore arrangements, it should be paying around $136 million in tax in Australia. Real lifters.

In 2013 Rupert Murdoch’s News Corp group got back $882 million in tax, a refund which was the big contributor to the increase in the Budget deficit Hockey announced in December 2013 which Hockey  then used to justify the brutal 2014 Budget attacks on the poor and working class.

Nothing highlights the absurdity of neoliberal politics in Australia for me more than the recent ‘debate’ on pension ‘reform’, aka pension cuts.  The Greens agreed with the Abbott government to cut off or reduce the pension of over 300,000 people.  At the same time former National Bank of Australia CEO and Chairman of BHP Don Argus and his wife receive $1.2 million a year in superannuation pension payments which in normal circumstances would be tax -free.  The Abbott government won’t change this and Labor has proposed some minor changes.

The superannuation tax concessions forgo over $30 billion in tax a year. Estimates are that in a few years the revenue forgone will be greater than the $45 billion spent on the age pension.  The Australia Institute has argued that abolishing the superannuation concessions would allow the government to make the pension universal for everyone over 65 (i.e. remove the asset and income tests) and increase it by 25%.

The superannuation tax concessions overwhelmingly favour the very rich. This graph from the Murray Financial System Inquiry (hardly a hotbed of radicalism) exposes the reality.

Chart 6: Share of total superannuation tax concessions by income decile

Taxation of superannuation | Financial System Inquiry

This chart shows the proportion of superannuation tax concessions accrued to different deciles of income earners, based on 2011-12 ATO data. Higher income earners receive greater tax concessions, with more than half tax concessions accruing to the top 20 per cent of income earners.

The top twenty percent of income earners get 57% of the tax concessions, or more than $17 billion. The bottom ten percent of income earners are actually worse off. Tell me again who the real leaners are.

This snapshot I hope shows one thing. We workers are the lifters and capitalists are the leaners.

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