- by Anna Pha
- The Guardian
- Issue #1964
“COVID-19 has been likened to an x-ray, revealing fractures in the fragile skeleton of the societies we have built. It is exposing fallacies and falsehoods everywhere: the lie that free markets can deliver healthcare for all; the fiction that unpaid care work is not work; the delusion that we live in a post-racist world; the myth that we are all in the same boat. While we are all floating on the same sea, it’s clear that some are in super yachts, while others are clinging to the drifting debris.”
Antonio Guterres, UN Secretary General
The description could not be more apt in describing the global impact of the pandemic.
OXFAM released a report, The Inequality Virus, in January this year. It pointed out that the ten richest billionaires had increased their wealth by US$540 billion (AU$700 billion). Worldwide, billionaires’ wealth increased by a staggering US$3 trillion dollars between the 18th of March and the 31st of December 2020.
“History will remember the COVID-19 pandemic for taking close to two million lives worldwide. It will remember hundreds of millions being pushed into destitution and poverty,” the report said. Existing gender, racial and other inequalities have been widened.
Australia, despite not being as severely hit as many other parts of the world, experienced a widening of inequality. It has been and still is difficult for millions of Australians facing lockdowns, reduced hours of work, precarious employment, unemployment, declining or stagnant wages, and the uncertainty of what lies ahead. At the same time, the global experience has been repeated here, with a relatively small number of billionaires making a matza during the pandemic.
The Financial Review’s Rich 200 list, published at the end of May, reveals just how much richer the rich got. And they did get richer! The wealthiest 200 Australian individuals and families increased their combined net wealth by a whopping $55.6 billion to a total of $479.6 billion. Their combined wealth is now equivalent in magnitude to one quarter of Australia’s Gross Domestic Product!
These valuations are minimal and based on publicly available information and in some instances, from private interviews. Moreover, they make no allowance for cash stowed away in secret offshore tax havens.
The Rich did not make their billions or millions from Morrison’s “have a go to get a go,” or hard yakka. Neither did they have to endure the struggles that ordinary people have faced during the pandemic. Instead, they swanned the globe in their private jets and were permitted to self-isolate wherever they landed. No nasty hotel quarantine with cockroaches for company and slops for meals.
They have their teams of accountants, lawyers, managers, and advisers who minimise their taxes and enhance their profits and the ear of prime ministers, premiers, resources, environmental, and other key government ministers.
TOP OF THE LEAGUE
With the exception of Andrew Pratt and family (manufacturing), the top ten accumulated their billions from resources, property or technology. The Pratt family’s (No 4 with $20.09 billion) Visy packaging and recycling companies benefited from the upsurge in online shopping.
The three largest Australian mining magnates Gina Rinehart (No 1, $31.06 billion), Andrew (Twiggy) Forrest (No 2, $27.25b), and Clive Palmer (No 7, $13.01b) are the beneficiaries of sales to China during a period of booming iron ore prices. Their interests lie in good relations with China, putting them at odds with the government’s current aggressive policy stance towards China.
This division in the ruling class has been developing for some time. At present China’s steel manufacturers rely heavily on Australia for 60 per cent of their iron ore imports, but this will not last forever. China is developing alternative sources of iron ore.
The mining sector is notorious for its fly-in-fly-out (FIFO) workforce who are subjected to poor living conditions and wage theft. The amount they are paid does not adequately compensate for the long hours they work and the time they are away from their families.
The sector is also now notorious for casualising its workforce and attempting to shut out trade unions, making it extremely difficult for them to protect workers with union-negotiated agreements.
These companies have an extremely high concentration of wealth, are not labour intensive (largely automated), pay peppercorn royalties, and make super-profits off the backs of the workers they exploit. As a result, they have the highest rate of exploitation of any industry.
Their profits are based on the theft of the land that was never ceded by the First Nations people. The traditional owners fight endless court battles for Native Title, and even when they win a case, they have another battle on their hands over exploration and mining rights.
The Morrison government gave more than $102 million to thirteen large corporations under the Indigenous Advantage Strategy (IAS) in one year including Forrest’s Fortescue Metals Group (FMG).
Forrest designed the IAS for the Coalition government. FMG received $3.48 million in 2019-20 under the scheme he designed! In the same year, FMG’s post-tax profit increased by forty-nine per cent to US$4.7 billion (AU$6.07 billion). The underlying return on equity (net value of assets) was a whopping forty per cent! One has to wonder how much of it was funnelled back in political donations. It is worth noting that in February FMG reported a profit of $5.29 billion for the December half-year!
Victorian Greens Senator Lidia Thorpe, a proud Gunnai Gunditjmara and Djab Wurrung woman, told the Koori Mail that it was outrageous the government was granting millions of dollars to corporate Australia in the name of Indigenous employment programs. “I call it systemic racism,” she said. “It’s looking after your mates. It’s a rort. They are rorting money meant to empower and enable our communities to self-determine their own destiny.”
“It’s not designed to look after the people, and it perpetuates inequality,” Thorpe said. “When the IAS came in, so many grass roots organisations lost their funding, including small groups and women’s groups […]. It was devastating because funding went up for tender to anybody who said that they’d do the right thing for Blackfellas, including mining companies and big corporations.”
“Our communities need this money …”
Forrest’s FMG and the other big mining corporations paid scant respect for the wishes of the First Nations’ people whose land and its resources they stole and profit from.
PROFITS FROM COVID
With the shift to online-work practices, the pandemic generated huge profits from the tech companies of Mike Cannon-Brookes (No 3, $20.1 billion) who co-founded Atlassian in 2002 with university friend Scott Farquhar (No 5, $20 billion).
Melanie Perkins & Cliff Obrecht (No 10, $7.98 billion) have more than doubled their wealth in the past year from graphic design technology for businesses.
After a slight dip early in 2020, the three property developers experienced large increases in their wealth as record-low interest rates saw property prices surge.
Capitalists are fuelled by rapacious greed. They can never rip enough profits out of the pockets of workers and the planet’s natural resources. Some such as Forrest are now moving into renewable energy as a new source of lucrative profit-making.
They can’t stop themselves. That is capitalism. It would take thousands of years for some of them to spend their riches. Some, such as Forrest, attempt to put a human face on capitalism through philanthropy. Capitalism has no human face. It is a moribund, decaying system over-due for replacement by one based on the needs of the people, on equality, and one that protects the planet.