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Magazine of the Socialist Party in Australia

Corporate fraud unchecked while welfare recipients demonised

The Turnbull government is continuing its war on the poor with more attacks on welfare recipients. The government is now out to recoup $4 billion in what they claim are incorrect welfare payments.

Thousands of people received letters from Centrelink accusing them of welfare fraud. The government claims to have compared income declared to the Australian Taxation Office (ATO) with the income declared to Centrelink. They have used a new automated system that operates without human oversight.

According to the Minister for Human Services, $4.5 million a day in welfare debt has been found by this new system. The system however is full of major flaws.

Firstly, the ATO’s complies its data yearly, whereas Centrelink’s records are compiled fortnightly. In a lot of cases, especially where people have casual jobs and no fixed income, the system has incorrectly calculated that people have been overpaid.

Secondly, they are using figures from as far back as six years ago. If a disparity is found, they say that it is up to the accused to prove that the system is wrong. They are expecting people to have kept payslips and records from this time.

Not only are low paid and casual workers discriminated against but the system violates basic rights as it deems people guilty before proven innocent.

People who want to dispute the governments claims have had to spend hours on the phone to under-staffed call centres, with some being told to pay the debt now, plus service charges, before any appeal is even heard!

That even some MPs are now calling for the system to be reviewed shows the lack of confidence that many have in a system that is designed to ruthlessly cut public service jobs, and be a tool to demonise welfare recipients.

The government claims that the measures are designed to help balance the budget, but their focus on welfare recipients shows whose interest they serve. Clearly, they prefer to attack vulnerable welfare recipients instead of looking into the affairs of the big end of town.

While wanting to crack down on so-called welfare fraud the government argues for the corporate tax rate to be cut to a mere 25%. It is a false notion to claim that giving tax cuts to the rich will encourage them to invest. Capitalists only invest when they can make a profit.

In reality, cuts to company tax rates is a form of corporate welfare. Reducing the tax rate to 25% would cost $50 billion over 10 years. This at a time when many companies are already making record profits. At the same time the ATO has reported that more than a third of the biggest companies in Australia paid no tax at all in the last financial year.

The double standard is stark: while ordinary people struggling on welfare are scrutinised and attacked, corporations and the super-rich are treated with kid gloves and given handouts. While preparing to forgo $50 billion, the government hopes to recover a mere $4 billion from a crackdown on welfare recipients. It is an absolute disgrace.

The real issue is that the system of capitalism, that the major parties run, is designed to serve the profit interests of corporations. People are only seen as things to exploit. The corporations finance, and therefore control the major parties. They own the media and rig the legal system in order to get their way.

Socialists outright oppose the draconian crackdowns on welfare recipients. It is capitalism itself that relegates people to the ranks of the unemployed. Instead we demand that taxes on corporations and the super-rich are increased and that the biggest corporations are brought into public ownership. On that basis, we could utilise their resources and easily afford to create jobs, build homes and provide services to all.

By Tim Tran