PASSWORD RESET

Magazine of the Socialist Party, Australian section of the CWI

The GST has got to go!

Make the rich pay!

The capitalist press barons think that if they call Prime Minister Howard ‘Honest John’ often enough, we’ll get to believe them. In fact Little Johnny heads up a government of liars and con-merchants whose sole purpose in life is to bash the workers and the poor in the interests of their rich masters. His plans for so-called ‘tax reforms’, which centre on the hated Goods and Services Tax (GST), are no exception.

Howard’s nickname is as believable as the corruptions of language in George Orwell’s book 1984, where official lies became truth and hatred became love. A Liberal ‘consultant’ has even advised him that the GST should be renamed the ‘equity tax’!

Howard won office on a whole raft of false promises. No worker would be worse off, he assured us. His real agenda is to cut wages and now he wants to introduce a GST. Strange, that. Before the election he promised that the GST was ‘dead in the water’, but now he’s jumped out of his sick bed with all the zeal of a convert and we will have Dr Johnny’s medicine whether we like it or not.

A hated and regressive tax

The GST is rightly hated as a regressive tax that will slug the poor and middle income earners. Remember John Hewson? He lost an election because of it back in 1993 despite all the pundits predicting that he would ‘walk it in’ over the discredited Paul Keating.

But the Libs never gave up Hewson’s ‘Fightback’ programme. Their journalistic and academic hirelings were always saying how the GST kept ‘popping back up’ in the press. Of course it did! The media is largely owned by two super-rich individuals called Murdoch and Packer who support any ‘reform’ that will swell their moneybags at our expense.

The sweetener is to be lower personal taxation. We shouldn’t fall for that one. They used the same line in Canada and the result was that the lower income earners shouldered a larger share of the tax burden.

That’s what the GST is designed to do.

Even Victorian Premier Kennett’s got in on the act, promising us an ‘exciting’ new package of state taxes including a GST. When Kennett gets excited, working people should watch their wallets.

Taxation myths

The ruling class has been preparing the ground for this for a long time by cultivating the myth of Australia as a high taxation country.

‘Myth?’ you ask, pointing to the big hole in your pay packet each week. Well, to be sure, PAY AS YOU EARN (PAYE) taxpayers are slugged. But we shouldn’t assume that the same taxation rates apply to the silvertails and corporations.

When Howard and Kennett get all hot in the trousers about ‘taxation relief’ they aren’t thinking about any benefit for the workers and poor. It’s those poor devils like ‘Goanna’ Packer and Ron Walker that they’re concerned about. They know that if we pay more through new taxes like the GST that the rich will pay even less than they do now.

Lower and middle income earners will pay a disproportionately high share of the expected $66bn in taxes this year. Company taxes will bring in less than $26bn. Howard might lower income tax rates for middle and lower income earners marginally, but will more than make up for it through the GST.

Tall poppies become shrinking violets

It is an absolute myth that Australia is, overall, a high taxation country. In fact, taxation receipts amount to about 34% of GDP, compared to the OECD* average of 44%. Moreover, our taxation structure favours the rich already. The greedy slugs just want more. Even under Malcolm Fraser, company taxes made up around 49% of total tax revenues collected. That fell to 33% by 1993 and has risen slightly since – causing the rich to squeal like pigs.

Two of the biggest uglies – Rupert Murdoch’s NewsCorp and John Elliott’s Foster’s Brewing, paid less than 6% of their operating profits in taxation in 1995.

And this doesn’t take into account the various scams and rorts the capitalists use to avoid paying what they should. It is difficult to compute the actual incomes of the wealthy as they use legal shysters to cover their pecuniary tracks. Tall poppies become shrinking violets where their loot is concerned.

Still, a conservative estimate would be that they avoid paying over $8bn a year. And that doesn’t include ‘legal’ rorts such as negative gearing which even Howard admits cost the public purse around $8bn. Collection of these sums would easily plug up the biggest ‘black hole’ Treasurer Costello could imagine.

That’s the other question. Why are the rich to be given ‘tax relief’ when Costello sliced $4.45bn from public expenditure in 1996 and plans to cut $7.2bn in 1997/98?

A truly crazy situation

This is crazy but then capitalism itself is a crazy system. It’s based on greed and the greed of the rich knows no moderation. In the mid 1970s the workers’ share of national income was around 63%. Since then it’s fallen to just over half. By the mid 1980s the top 1% of wealth holders owned almost 20% of total wealth. The top 10% had over 55% and the top 20% had over 98%. By contrast, half of all adult income earners take home under $15,000 before tax, and that is the poverty line.

Paul Keating must have been on jungle juice when he said that Australia was an ‘egalitarian society’. ‘Honest John’ Howard should change his name to Phineas T. Barnum after the American snake oil seller who claimed there was a sucker born every day.

We deserve better than this.

We say:

-Stop the corporate crooks
-Make them pay up the billions they rip off from the public purse
-Jail them for tax fraud if they resist
-Lift company taxes to the OECD average for starters
-Introduce strict wealth taxes and death duties
-Introduce an equitable sliding scale of personal taxation that recognises the vast inequalities of income in this country
-No more cuts to education, health and welfare.
-Make the rich pay for the crisis of their system!

By John Tully

Originally published in the September 1997 edition of The Militant, the predecessor of The Socialist.