Why do we have a deficit?
The Coalition will tell you it’s because Labor locked in unsustainable spending and that cutting services is the only way to fix it.
This is untrue.
We have a deficit because our government insists on pandering to the demands of business.
First they insisted that the proposed changes to fringe benefits tax must go to save the car industry – or not.
Then they insisted that the carbon tax must go because it was costing jobs and restricting investment. Except business investment has fallen for three straight years, employment in manufacturing fell 6 percent in 2015 alone, and some NSW families are now paying the highest electricity prices in the world.
The mining tax was the next to go because apparently it was stopping investment whilst raising no money – somewhat like the Coalition’s negative gearing scare campaign which said Labor’s policy was going to smash house prices but negative gearing had nothing to do with inflating them.
The temporary budget repair levy on high income earners will also go because, despite us still needing budget repair, we only pay attention to the ‘temporary’ part of the equation – unless we are talking about the superannuation guarantee or the medicare rebate freezes.
New Zealand’s call to halt fossil fuel subsidies fell on deaf ears with the Australian contingent in Paris. Not only will they stay, we now also pay the polluters from our taxpayer-funded emission reduction fund.
Much of the royalties collected from mining is spent building infrastructure specifically for the mining companies. We now have a $5 billion Northern Development fund to build them some more.
Despite stagnant wages and negative GNI, business lobbyists insist penalty rates must go. They are quick to shed staff when times are tight but they always find the millions to pay the CEO’s salary, even if it leaves creditors and workers’ entitlements unpaid.
Businesses insist that they must import 457 visa workers and the government obliges despite the many examples of exploitation both of the rules and of the workers.
The Coalition government has increased defence spending above and beyond budget allocations every year and, much to the delight of foreign arms manufacturers, plan to spend $400 billion on defence materiel over the next two decades.
The Science and Innovation package seems to be mostly about protecting and incentivising investors and the Medical Research Fund sits there accumulating a store of cash to eventually be given to big pharma.
But all of this pales into insignificance when compared to the tax avoidance facilitated by our government and the big four accounting firms who advise them.
At least $US1 trillion in tax revenue is lost worldwide, and $50 billion in Australia, as a result of aggressive tax minimisation schemes established by the four giant firms who audit the books of nearly all the world’s major companies, said George Rozvany, a 32-year veteran of the corporate tax industry.
“It’s very clear to me that the big four accounting firms are the masterminds of international tax avoidance. They work with government to deliver what they want for their clients. It’s not set in a social context; it’s designed to deliver an outcome for their clients. The people who are most affected are the most underprivileged in our society, those without a voice. The homeless, foreign aid programs.”
So what does the Liberal Party do?
Offer substantial tax cuts to the very people who are hampering the nation’s ability to do anything about climate change or inequality, to the people who cry “anti-business” whenever they are asked to pay their share, to the people who want to pay workers less so they can pay their foreign shareholders more.
Until business groups start fulfilling their part of the social contract, they have no place dictating policy.
As Richard Denniss said, “If the business community do want a seat at the reform table they need to abandon the idea that they will sit at its head. They need to figure out what they are willing to help other groups achieve. They must admit there are more pressing goals than delivering tax cuts to themselves.”
To Jennifer Westacott, Kate Carnell, Innes Willox and others, the time has come to say fair’s fair, to pay the rent, to pay your share.