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Friday, February 5, 2016

From Privatisation to the GST - Letters of Relevance to Labor

Above:  South Australian Labor Premier Jay Weatherill has Upset an Awful Lot of People in the ALP with his Position on the GST!

Dr Tristan Ewins

Comrades and others; The following are a series of letters I've written over the past couple of weeks - in the hope of being published in The Age, The Herald-Sun, The Saturday Paper...  I'm hoping by republishing them here I can spur further debate.  Topics covered include 'How Federal Labor Must Respond to Jay Weatherrill on the GST', 'Privatisation Now and Then', 'the Holocaust and Cold War Atrocities - Never Forget',  'Why Isn't Shorten Cutting Through?', 'Infrastructure and Population'.  Most of the letters were never published debate here could help make up for that I think! :-)

Privatisation Doesn't Make Sense - Never did make Sense!
The Herald-Sun (27/1) makes a point of the fact the Liberal NSW Liberal Government will have $20 billion to spend following privatisation of electricity.  But it ignores the associated cost of this privatisation.  To pay for private dividends and corporate salaries increased structural costs will be passed on to consumers in full.  Energy will be more expensive – and that includes businesses as well as voters.  Dividends from the energy sector will also be lost to NSW voters – probably forever.  To get a picture of this: The Commonwealth Bank privatisation brought in about $7.8 billion (the total for the sale of the entire business!!!   )after being privatised by the Keating Labor Government.  But in 2015 the Commonwealth Bank registered a PROFIT (for only one year) of over $9 billion!  Meanwhile the Federal Government is having to pay Telstra several billions to access the very pits and wires that were privatised under John Howard.  How has any of this ever been in the public interest?

Remember the Holocaust - and ALL other Atrocities - So they are never repeated

Dvir Abramovich (Herald-Sun 27/1)  makes some crucial points about teaching young people of the dangers of hatred and prejudice, as epitomised most horrifically by the Holocaust, and the associated industrial scale murder and persecution of Jews, Poles, Russians, Roma, the disabled, and political dissidents. (mainly Leftists)  Such a public education program could be incorporated into a broader critical/active civics and citizenship curriculum reform agenda.  That is: reform the curriculum to empower all students to understand their rights and interests; to commit politically on the basis of their interests and acquired values; and to participate deeply in a truly and meaningfully pluralist democracy.  He also mentions Cambodia, Bosnia, Rwanda and others.  But one aspect that he neglected (unintentionally I believe) was the record of atrocities on the ‘anti-Communist’ side during the Cold War.  Over half a million leftists and trade unionists were murdered in Indonesia in 1965-66. And genocidal attacks during Guatemala’s civil war claimed between 200,000 and 300,000. As well as political mass murders in El Salvador, Nicaragua and elsewhere. Truly we must remember ALL of history’s shameful passages that we do not repeat them.  And that includes those committed ostensibly by ‘our side’. 

Why Isn't Shorten 'Cutting Through'?  And how can he change this?

Mark Kenny (28/1) argues Bill Shorten has failed to cut through since the elevation of Malcolm Turnbull as PM.  Yet the Liberal Party stands on the verge of another bout of bitter austerity: of the proportions which brought former Treasurer, Joe Hockey , undone.  For too long Labor has pinned its fortunes mainly to ‘socially liberal’ issues like Equal Marriage: neglecting robust social and distributive justice policies.  Hence the ‘socially liberal’ but ‘economically neo-liberal’ Turnbull has capitalised on the prevalent discourse.  Labor needs to change the prevalent discourse – and quick.  Labor’s strong endorsement of Gonski –  $3 billion on average a year - may show that Labor strategists are starting to learn their lesson. Other options could include more robust reform of superannuation concessions for the well off.  Superannuation concessions may cost taxpayers $50 billion/year by 2019, and Labor should be able to shave $20 billion of that from the well-off. Other areas of tax reform could include no further Company Tax cuts; gradually rescind Dividend Imputation; index the bottom two income tax brackets for fairness.  That could pay for a National Aged Care Social Insurance Scheme, reform of pensions and more, while improving Labor’s economic credentials, reining in the deficit.

The Infrastructure Crisis and Population: A Response to a Herald-Sun Reader
Nola Martin (Herald-Sun, 1/2) blames the transport infrastructure crisis – crowded trains – on overpopulation. Increased population has good and bad consequences.  On one side we will run into difficulty if schools, hospitals, roads, public transport – fail to keep up with population.  On the other hand higher population creates ‘economies of scale’ in the public service, defence and other areas. (ie: we can get away with paying proportionately less there)  But the real problem is that public investment in infrastructure and services – like roads – is not ‘keeping up’ on account of ‘corporate welfare’ and subsidies for the well-off.  Company Tax cuts mean corporations aren’t paying for the infrastructure they benefit from.  And superannuation concessions for the well-off might cost taxpayers $50 billion by 2019 according to Richard Denniss of the Australia Institute.  When there’s not enough public money for infrastructure like roads this also leads to privatisation.  The problem here is since the private sector cannot borrow as cheaply as the public sector, and must pay dividends to shareholders,  the increased ‘cost structures’ are passed on – hurting the entire economy.  But as the Federal Election approaches Malcolm Turnbull is considering more tax cuts. (eg: Company Tax)  When will we learn our lesson?

SA Premier Jay Weatherill and the Debate on the GST; And the 'Revenue Problem' for Health and Education

Regarding his discussion of raising the GST; On the positive side at least South Australian Labor Premier Jay Weatherill IS saying there’s a revenue problem we have and not a spending problem. It’s good to actually confront that issue - and to prioritise health and education. The problem is that he's undermining Shorten on the GST – which could be crucial in the coming election. The best reply Shorten can come up with is promising to address BOTH the revenue problem and the Health crisis - including Aged Care. There are a host of possible measures. Hit superannuation concessions. Gradually rescind dividend imputation. Reform capital gains tax concessions. Rescind negative gearing. Restructure and increase the Medicare Levy. DON'T cut Company Tax.  Shorten has options! Outlining those options NOW - AS OPPOSED TO THE GST can answer Jay Weatherill's concerns re: 'the revenue problem'.   And we can then enjoy serious reform of Education and Health including Aged Care - where tens of billions new funding combined are necessary to make a serious difference. In response to the answering of those concerns Weatherill will probably then 'fall into line' on opposing the GST.


  1. The first thought that comes to mind when considering cutting super concessions for the wealthy is "where will they park their money to continue minimising their tax burden? I doubt they'll just give up and pay the balance.

  2. Then you combine reform of Superannuation Concessions with reform of Dividend Imputation. And virtually no other country in the world has DI. Gradual rescission should not hurt the economy. But keep it gradual and you will avoid big economic shocks anyway.

  3. Wonderful that the newspapers pretend to offer a letters editor and allow anyone to write letters to him ? her? The moderator on The Australian deleted all my strongly worded remarks on the industrial liberties of trade unionists! Suppose that in this world dissidents need to take opportunities use our civil rights letters petitions leaflets to the full!

  4. I agree with all you've put forward. I would also argue that we need an increase in the company tax, put it back to where it was in 1987. Closing the loopholes which allow so many capitalists to get away with paying no or very little tax is something which Labor is already suggesting. Getting rid of the billions in subsidies to the mining capitalists should also be on Labor's agenda as well as rescinding Costello's income tax cuts of 2005, cuts which overwhelmingly benefited the upper 10%. Truth be told, there would be no budget deficit if those measures were taken, in fact there would be a large budget surplus.

    Labor should get rid of its Blairite, Hawke-Keating beliefs that privatising public goods is a step toward creating a stronger economy. The Commonwealth Bank is a good example. Perhaps it's time to put the issue of government lending for mortgages on the agenda, combined with a social housing program for those priced out of the marketplace for homes. I think such a policy would be quite popular amongst 90% of the population who see their kids living at home or with no prospect of ever owning their own abode.

  5. I left (a different version of) this message at the ALP Socialist Left Forum group... Maybe some other people reading this are willing to write to Jay Weatherill on the issue of the GST as well?

    "ok - Who is willing to WRITE to Jay Weatherill asking him to run an agenda of PROGRESSIVE TAX REFORM *INSTEAD* of hiking the GST? To pose a REAL alternative for Shorten to follow... If everyone who reads this commits to doing so - And goes ahead and actually does it - then maybe he (Weatherill) will actually notice?

    1. I have 'tweet' critiqued Comrade Weatherill. I believe I also sent him a link to my youtube spiel on the subject. Will do that again today and copy SA Labor.

    2. Here's today's tweet:

      @JayWeatherill @alpsa Why we shouldn't raise the GST.

  6. This comment has been removed by the author.

  7. SA Premier Jay Weatherill was not alone. Canberra's right-wing ALP Chief Minister, Andrew Barr also supported increasing the GST.

    His statements upset ACT Branch Council, not because of the GST, but he was expressing policy that had never been discussed or supported by the ALP. He was running his own "Captain's Pick" agenda.

    While the GST is now hibernating, the politics of taxation still threaten the living standards of wage and salary earners. This is best understood within the framework of class analysis. As I posted earlier - labour income and consumption are taxed heavily, capital income and consumption are taxed lightly.

    Capital can go on strike whenever it is strategic - labour is penalised if it goes on strike except in heavily restricted circumstances.

    One possibility is to increase taxation of shares transactions and foreign exchange. The amount of capital flow here is enormous. A low rate of tax here (1-2%) would scarcely be noticed among all the normal volatility seen in financial markets today.

  8. Chirs Warren ; Though take the example of Sweden ; Wages are taxed strongly ; but there is a large spectrum of incomes in the form of wage labour. Should we really get upset if a wage labourer on $100,000 is taxed more than a wage labourer on $35,000? Wage labour is not a single concentrated mass. There are a wide range of differences ; and many (what some call the labour aristocracy) are relatively privileged, and because of that identify with the capitalist class. Surely taxation of wage labourers can also be thought of as a politics of solidarity across the labouring classes.

    That said I agree with taxing capital more. I agree tax capital movements. But that on its own is not enough to radically extend the social wage and social insurance. Sam Dastyari says corporates evade $30 billion in tax every year. How much can we do about that ; and how much money can we bring in?

    But at the end of the day capitalism isn't ending any time soon. We have to think of solidarity across the broad field that is the labouring classes and not just of expropriating capital. We have to think of how far we can progress towards a 'good society' right now - when most people recognise the path to socialism as we once thought of it is blocked.

  9. I think Morrison and his ilk, excuse me, party are attempting to find ways to protect the wealth of the upper 10% and the companies they own during this inevitable downturn in 'the economy'.

    If the market just had all that money sloshing around in the tax sheltered accounts of the bourgeoisie…..

    The market is us. Overproduction? The capitalists can’t sell what they would have their wage-slaves produce and therein lies the crisis of profitability, unemployment and a lowering of our standard of living via cuts to public health, education and welfare so that cuts mostly benefitting the upper 20% can be made. It's a vote getter. Labor will be hard pressed to defeat this appeal because of its nationalist class collaborationist credo.

    Anyway, that's the way I see it.