Last year, Treasurer Joe Hockey famously declared that Australia needed to be a nation of “lifters, not leaners”.
The Coalition wants us to believe workers and the poor have it easy—and that the funds for their coveted budget surplus should be taken from our pockets. Labor leaders, for their part, largely agree.
But a look at the facts demonstrates that it’s the big end of town that’s doing the leaning—and while they tax evade and profiteer, for those of us doing the lifting, inequality and poverty is on the increase.
Recent revelations have exposed the extent of tax evasion by the big corporates.
Neil Chenoweth in the Australian Financial Review tells us that Apple, “has shifted an estimated $8.9 billion in untaxed profits from its Australian operations to a tax haven structure in Ireland in the last decade.” It’s not just one bad Apple.
As The Tax Justice Network and United Voice report, Who pays for our common wealth? says:
Overall, the effective tax rate of ASX 200 companies over the last decade is only 23 per cent.
If the largest Australian listed companies paid taxes at the statutory corporate tax rate of 30 per cent, it would produce an additional $8.4 billion in annual revenues.
Within the ASX 200 companies nearly one-third have an average effective tax rate (ETR) of 10 per cent or less and 57 per cent disclose subsidiaries in secrecy jurisdictions (tax havens).
According to the Senate Inquiry into Big Business Tax Avoidance multinational pharmaceutical companies extracted $8 billion in revenue from Australia.
That includes $3.5 billion from the Pharmaceutical Benefits Scheme. They paid just $80 million in Australian tax, or 1 per cent of revenue.
Laura Tingle said in 2011 in the Australian Financial Review that mining magnate Andrew “Twiggy” Forrest, “has never signed a corporate income tax cheque for any of the listed companies he has run in the past 16 years. And FMG has another $700 million in tax losses still to bring to account before he will have to do so.”
According to Sarah Kimmorley in Business Insider, Clive Palmer’s companies, Mineralogy Group, QNI Resources and QNI Metals, have not paid income tax for the last 6 years.
The Australia Institute has told us that mining companies also receive $4.5 billion in taxpayer funded subsidies.
Google has arranged its affairs so that in 2013 it paid just $470,000 tax in Australia on revenues from Australia of more than $2 billion. One estimate is that it should be paying around $136 million in tax Australia.
In 2013 Rupert Murdoch’s News Corp group got back $882 million in tax, a refund which was a big contributor to the increase in the budget deficit Hockey announced in December 2013.
Hockey then used that deficit increase to justify the brutal 2014 budget attacks on the poor and working class.
And while business has being paying so little tax, they have been increasing their share of profits. According to the Australian Bureau of Statistics the share of total factor income going to labour has fallen dramatically over time while that going to capital has exploded. The share of national factor income going to capital increased markedly over the same time.
Bosses haven’t been working harder for the last three decades—we have. They have pocketed the gains from increasing exploitation through productivity “gains” and longer working hours.
And while their bank balances grow, the gap between rich and poor is growing. As the Australian Council of Social Service (ACOSS) puts it in its June 2015 report Inequality in Australia: A Nation Divided:
A person in the top 20 per cent income group receives around five times as much income as a person in the bottom 20 per cent. A person in the top 20 per cent wealth group has a staggering 70 times as much wealth as a person in the bottom 20 per cent.
The report also found that over the last 20 years the share of income going to those at the top has risen, while the share flowing to those in the middle and at the bottom has declined.
The same is true for wealth, with the bottom and middle having lost ground to those at the top.
The wealth of the top 20 per cent wealth group increased by 28 per cent over the period from 2004 to 2012, while by comparison the wealth of the bottom increased by just 3 per cent.
In its Poverty in Australia Report 2014 ACOSS revealed that “poverty is growing in Australia with an estimated 2.5 million people or 13.9 per cent of all people living below the internationally accepted poverty line.”
Tell me again who the real leaners are?
By John Passant