ga('send', 'pageview');
John Passant

Site menu:

February 2016
M T W T F S S
« Jan   Mar »
1234567
891011121314
15161718192021
22232425262728
29  

Tags

Archives

RSS Oz House

Share

Authors

Subscribe to us

Get new blog posts delivered to your inbox.


RSS Blog RSS

Site search

Miniposts

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
(0)

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)

Advertisement

Links:

Hey unions – how about fighting for big wage increases as compensation if the GST goes up from 10% to15%?

Scott Morrison this week likened a possible GST increase to turning back the boats. Tough, but needed, and he is, he said modestly, just the man to do it. Of course an alternative view might be that the bastard who brutalised refugees is moving on to brutalising poor people and workers, made confident in this by the very support he has received in locking up asylum seekers and refugees on the Manus Island and Nauru concentration camps.

Increasing the rate of the GST from 10% to $15% will raise an extra $32.5 billion, according to New South Wales premier Mike Baird in the same article. That money will come from me and you. Ah but each and every defender of GST ‘reform’ says that we will be compensated with income tax cuts for workers and increased payments to welfare recipients.

That sits at odds with the distribution demands  of those making the case for the GST increase. Thus Mike Baird argues not just for social welfare increases and tax cuts for workers but for increased State government spending on health and education to come out of the $32.5 billion magic pudding.   On top of that business and politicians want to cut company tax rates from 30% to 25%, costing about $7 billion.

So the obvious question is – if the GST is going to raise an extra $32.5 billion, and  if some of that is diverted away from increased benefits to welfare recipients and tax cuts, to more spending on health and education and company tax cuts, doesn’t that mean that poor people and workers will not in fact be fully compensated for the 50% increase in the GST?

Not only that but bracket creep will eat up the tax cut in a few years, leaving workers in the same position as they were before the increase in the GST in terms of their effective tax rates, but with an increased GST on top. Those on welfare will have their entitlements restricted and tightened as part of a general crack down on government spending.

There are 2.5 million Australians, including 660,000 kids, living below the poverty line. Will these changes make them any better off? No.

Talk of GST compensation is a three card trick.  We should not fall for it.

Since the income tax cuts to compensate for increasing the GST will not deliver real and lasting compensation for workers, and since workers are the one group in society with the power to fix that, the task of militants in our trade unions should be to argue for and organise around winning wages increases to compensate for any increased GST. Over to you militant unions and class conscious workers. Just the threat of GST wage increase strikes might cause some ruling class members to hesitate about increasing the GST. And it might help unions win back some working class support.

Like all posts on this blog, comments close after seven days. To have your say, hit the comment link under the heading.

Advertisement

Comments

Comment from Lorikeet
Time February 3, 2016 at 5:41 pm

The government doesn’t care what unions want. Big Business demands cheap labour.

The GST should be abolished and direct taxation should be increased for high income earners. More tax rebates should be available to people with children.

Comment from Chris Warren
Time February 4, 2016 at 4:03 pm

Can you really compensate for a GST with wages increases when the GST is a percentage of wages?

Surely, it is much better to broaden the GST to tax surplus value – ie daily shares transactions. Also foreign exchange because when you purchase foreign currrency – this is a purchase of an asset.

5% tax here would earn 2-4 billion per day.

In short – tax surplus value – not wages.

5% GST on shares traded = 50 billion p.a.

Comment from John
Time February 4, 2016 at 6:59 pm

Not sure what the logic is. the GST is not a percentage of wages, well not a fixed one in any event. More is paid by poor people and lower paid workers as a percentage of their income than higher paid workers. Increase wages by a figure greater than the impact o the GST and threatening that before it is implemented is a way of slowing down the ruling class’s dash for a GST of 15%.

Comment from Chris Warren
Time February 4, 2016 at 11:57 pm

In effect, all wages are spent on consumption, so the amount of tax is 15% (except exempt items).

If you increase wages to compensate for a GST hike, the new rate of GST applies as a percentage of new wages – as they are consumed.

So if wages start at 100 and GST is $15, then consumption is $85.

So if GST is increased by extra 5%, wages must increase by 6.25%. This is the only way workers will be left with $85 ‘after tax’ purchasing power.

Now if wages are increased over 6% – capitalists will hike prices. This is a second effect.

So I do not think you can compensate for an increased GST this way.

Maybe it is possible to compensate for a GST increase through a cut in PAYE rates. But I prefer taxing surplus value.

In general, you cannot compensate wage-workers for being victims of capitalist exploitation.

You have to abolish capitalism.

Comment from John
Time February 5, 2016 at 5:09 am

Of course in the abstract you have to abolish capitalism. To get there you have to have the working class arguing and agitating and acting for that. Arguing that workers have the power to win wage increases that improve their living standards (and redress their lost purchasing power arising from the GST) is to actually point to the one power, however indirectly, that has the power to win socialism.

Comment from Chris Warren
Time February 5, 2016 at 1:20 pm

Yes, that is the case as well.