As we go to press this month the Coalition continues to hold an election-winning lead over Labor in the polls. In the lead up to the budget in mid May, there is much talk about the state of the nation’s finances and how to plug the budget deficit.
Regardless of who wins the election in September they will inherit a budget black hole in the midst of a worsening economic situation globally. Some economists are predicting that if Australia continues on its current path it could face a decade of budget deficits – with the annual total set to pass $60 billion in 2023.
Most capitalist commentators are urging the major parties to make some ‘tough decisions’. This is code for placing the burden on the bulk of ordinary people who work for a living. Measures such as increasing the GST [Goods and Services Tax], increasing income taxes on low and middle income earners and tightening the criteria for welfare payments are among some of the ‘solutions’ put forward by the big business press.
Socialists reject these measures and argue that it is those who profit at the expense of ordinary people – big businesses – that should be forced to pay. All the relevant figures show that they can more than afford it.
For a long time now the trend in Australia, and across most of the developed world, has been that the rich are getting richer while the rest of us are struggling to make ends meet. Wages as a share of national income is currently 52.6% – it’s lowest since September 1964. Profits as a share of national income on the other hand are near record highs.
Company tax rates have consistently trended downwards since the 1980s in Australia. From 46% in 1980 to 30% now this process has led to an increasing gap between rich and poor. Income inequality in Australia is actually amongst the fastest growing in the developed world. The top 10% of income earners make nearly 10 times as much as the bottom 10%.
Mining giants like BHP Billiton booked profits in the order of $15 billion last year while the mining tax brought in a paltry $126 million in its first six months. At the same time the mining moguls share in $13.8 billion in taxpayer funded fossil fuel subsidies. The situation is a total farce.
It is estimated that if the mining tax was increased to 40% of forecast profits in excess of $100 billion could be raised over the next decade. If the big banks and the gambling industry had their super-profits similarly taxed hundreds of billions more could be raised to both plug the budget deficit but also to invest in the areas of health and education.
Far from having to undermine the wages or the purchasing power of ordinary people there are vast amounts of wealth in Australia that are currently untapped.
While socialists support increasing taxes on big business as a basic reform we would go further by calling for the major sectors of the economy to be brought into public ownership. That way the entirety of the wealth produced by these enterprises could be shared out more equally, in a democratic and planned way amongst the population.
As we approach September we shouldn’t let either of the major parties tell us that ‘tough decisions’ or ‘hard cuts’ are required. Those who created the crisis should be forced to pay. We need to defend our living standards and fight to reverse the trend towards wealth inequality.
In order to be able to do this effectively we will have to build a new political vehicle – a party that unlike the Liberals and Labor unashamedly represents the interests of the majority and is prepared to take on big business greed. That will be our task regardless of who wins the next federal election.